UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


(Mark One)
☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended ~~September 30, 2017~~March 31, 2019
OR
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to

Commission file number 001-33892

AMC ENTERTAINMENT HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization)	26-0303916 (I.R.S. Employer Identification No.)
One AMC Way 11500 Ash Street, Leawood, KS (Address of principal executive offices)	66211 (Zip Code)

Registrant’s telephone number, including area code: (913) 213-2000

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulations S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐☒

Accelerated filer ☒☐

Non‑accelerated filer ☐
(Do not check if a
smaller reporting company)

Smaller reporting company ☐

Emerging growth company ☐

If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standard provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Securities registered pursuant to Section 12(b) of the Act:

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AMC ENTERTAINMENT HOLDINGS, INC.

INDEX

Table of Contents

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements. (Unaudited)

AMC ENTERTAINMENT HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

~~(in millions, except share and per share data)~~


	Three Months Ended				Nine Months Ended				Three Months Ended
	September 30, 2017		September 30, 2016		September 30, 2017		September 30, 2016
(in millions, except share and per share amounts)									March 31, 2019		March 31, 2018
	(unaudited)				(unaudited)				(unaudited)
Revenues
Admissions	$	753.5	$	496.8	$	2,332.4	$	1,460.6	$	731.5	$	875.0
Food and beverage		361.4		248.9		1,133.1		736.6		368.8		405.8
Other theatre		63.8		34.1		196.9		112.6		100.1		102.8
Total revenues		1,178.7		779.8		3,662.4		2,309.8		1,200.4		1,383.6
Operating costs and expenses
Film exhibition costs		364.8		259.1		1,164.2		784.4		365.3		426.5
Food and beverage costs		60.7		33.9		182.6		102.0		61.5		66.2
Operating expense		383.2		211.6		1,128.8		613.9
Operating expense, excluding depreciation and amortization below										402.8		411.9
Rent		200.7		121.9		590.9		369.3		242.0		189.7
General and administrative:
Merger, acquisition and transaction costs		5.6		4.9		57.2		15.1		3.3		4.7
Other		32.8		19.8		113.4		58.9
Other, excluding depreciation and amortization below										46.2		44.2
Depreciation and amortization		135.2		63.1		393.9		185.8		113.0		130.5
Operating costs and expenses		1,183.0		714.3		3,631.0		2,129.4		1,234.1		1,273.7
Operating income (loss)		(4.3)		65.5		31.4		180.4		(33.7)		109.9
Other expense (income):
Other expense (income)		(0.6)		0.1		(2.3)		—
Other expense										29.8		1.2
Interest expense:
Corporate borrowings		60.8		24.6		171.7		74.4		71.3		61.7
Capital and financing lease obligations		10.6		2.1		31.7		6.4		2.1		10.3
Non-cash NCM exhibitor services agreement										10.2		10.5
Equity in (earnings) loss of non-consolidated entities		1.8		(12.0)		199.1		(28.1)		(6.5)		9.0
Investment (income) expense		(16.6)		0.2		(21.6)		(9.6)
Investment income										(16.1)		(5.2)
Total other expense		56.0		15.0		378.6		43.1		90.8		87.5
Earnings (loss) before income taxes		(60.3)		50.5		(347.2)		137.3		(124.5)		22.4
Income tax provision (benefit)		(17.6)		20.1		(136.4)		54.6
Income tax provision										5.7		4.7
Net earnings (loss)	$	(42.7)	$	30.4	$	(210.8)	$	82.7	$	(130.2)	$	17.7
Earnings (loss) per share:
Basic	$	(0.33)	$	0.31	$	(1.65)	$	0.84	$	(1.25)	$	0.14
Diluted	$	(0.33)	$	0.31	$	(1.65)	$	0.84	$	(1.25)	$	0.14
Average shares outstanding:
Basic (in thousands)		131,077		98,194		127,902		98,196		103,783		128,046
Diluted (in thousands)		131,077		98,284		127,902		98,211		103,783		128,046
Dividends declared per basic and diluted common share	$	0.20	$	0.20	$	0.60	$	0.60

See Notes to Consolidated Financial Statements.

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AMC ENTERTAINMENT HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

~~(in millions)~~


	Three Months Ended				Nine Months Ended				Three Months Ended
	September 30, 2017		September 30, 2016		September 30, 2017		September 30, 2016
	(unaudited)				(Unaudited)
(in millions)									March 31, 2019		March 31, 2018
Net earnings (loss)	$	(42.7)	$	30.4	$	(210.8)	$	82.7	$	(130.2)	$	17.7
Other comprehensive income (loss)
Unrealized foreign currency translation adjustment, net of tax		34.4		0.2		109.3		0.8
Unrealized foreign currency translation adjustment										(25.4)		11.7
Realized loss on foreign currency transactions reclassified into other expense, net of tax										0.5		—
Pension and other benefit adjustments:
Amortization of net gain reclassified into general and administrative: other, net of tax		—		—		(0.5)		—
Marketable securities:
Unrealized net holding gain arising during the period, net of tax		0.2		0.2		0.5		0.6
Realized net gain reclassified into investment income, net of tax		—		—		(0.1)		(1.8)
Net gain (loss) arising during the period, net of tax										0.1		(1.1)
Equity method investees' cash flow hedge:
Unrealized net holding gain (loss) arising during the period, net of tax		0.1		—		—		(0.6)		(0.1)		0.2
Realized net loss (gain) reclassified into equity in earnings of non-consolidated entities, net of tax		(1.0)		0.1		(0.9)		0.3
Realized net gain reclassified into equity in earnings of non-consolidated entities, net of tax										—		(0.1)
Other comprehensive income (loss)		33.7		0.5		108.3		(0.7)		(24.9)		10.7
Total comprehensive income (loss)	$	(9.0)	$	30.9	$	(102.5)	$	82.0	$	(155.1)	$	28.4

See Notes to Consolidated Financial Statements.

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AMC ENTERTAINMENT HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS

~~(Unaudited in millions, except share data)~~(Unaudited)


	September 30, 2017		December 31, 2016
(In millions, except share data)					March 31, 2019		December 31, 2018
ASSETS
Current assets:
Cash and cash equivalents	$	260.0	$	207.1	$	184.6	$	313.3
Restricted cash		6.8		—		10.6		10.7
Receivables, net		128.9		213.6		193.8		259.5
Assets held for sale		—		70.4
Other current assets		226.3		192.5		162.6		197.8
Total current assets		622.0		683.6		551.6		781.3
Property, net		3,244.5		3,035.9		2,600.8		3,039.6
Operating right-of-use assets, net						4,809.2		—
Intangible assets, net		387.8		365.1		199.0		352.1
Goodwill		4,889.5		3,933.0		4,787.9		4,788.7
Deferred tax asset, net		222.2		90.4		31.0		28.6
Other long-term assets		544.7		533.8		493.7		505.5
Total assets	$	9,910.7	$	8,641.8	$	13,473.2	$	9,495.8
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	469.1	$	501.8	$	382.8	$	452.6
Accrued expenses and other liabilities		337.4		329.0		342.4		378.5
Deferred revenues and income		284.6		277.2		370.1		414.8
Current maturities of corporate borrowings and capital and financing lease obligations		89.1		81.2
Current maturities of corporate borrowings						15.2		15.2
Current maturities of finance lease liabilities						11.6		—
Current maturities of operating lease liabilities						570.7		—
Current maturities of capital and financing lease obligations						—		67.0
Total current liabilities		1,180.2		1,189.2		1,692.8		1,328.1
Corporate borrowings		4,277.4		3,745.8		4,737.7		4,707.8
Capital and financing lease obligations		594.4		609.3
Finance lease liabilities						117.0		493.2
Operating lease liability						4,826.6		—
Exhibitor services agreement		538.4		359.3		561.6		564.0
Deferred tax liability, net		47.4		21.0		45.8		41.6
Other long-term liabilities		847.7		706.5		188.2		963.1
Total liabilities		7,485.5		6,631.1		12,169.7		8,097.8
Commitments and contingencies
Class A common stock (temporary equity) ($.01 par value, 112,817 shares issued; 76,048 shares outstanding as of September 30, 2017 and 140,014 shares issued; 103,245 shares outstanding as of December 31, 2016)		0.8		1.1
Class A common stock (temporary equity) ($.01 par value, 0 shares issued; 0 shares outstanding as of March 31, 2019 and 75,712 shares issued; 38,943 shares outstanding as of December 31, 2018)						—		0.4
Stockholders’ equity:
Class A common stock ($.01 par value, 524,173,073 shares authorized; 55,002,524 shares issued and 53,934,224 outstanding as of September 30, 2017; 34,236,561 shares issued and outstanding as of December 31, 2016)		0.5		0.3
Class B common stock ($.01 par value, 75,826,927 shares authorized; 75,826,927 shares issued and outstanding as of September 30, 2017 and December 31, 2016)		0.8		0.8
Class A common stock ($.01 par value, 524,173,073 shares authorized; 55,805,941 shares issued and 52,073,316 outstanding as of March 31, 2019; 55,401,325 shares issued and 51,705,469 outstanding as of December 31, 2018)						0.5		0.5
Class B common stock ($.01 par value, 75,826,927 shares authorized; 51,769,784 shares issued and outstanding as of March 31, 2019 and December 31, 2018)						0.5		0.5
Additional paid-in capital		2,240.0		1,627.3		2,001.7		1,998.4
Treasury stock (1,105,069 shares as of September 30, 2017 and 36,769 shares as of December 31, 2016, at cost)		(17.2)		(0.7)
Treasury stock (3,732,625 shares as of March 31, 2019 and December 31, 2018, at cost)						(56.4)		(56.4)
Accumulated other comprehensive income (loss)		105.8		(2.5)		(19.4)		5.5
Accumulated earnings		94.5		384.4
Accumulated deficit						(623.4)		(550.9)
Total stockholders’ equity		2,424.4		2,009.6		1,303.5		1,397.6
Total liabilities and stockholders’ equity	$	9,910.7	$	8,641.8	$	13,473.2	$	9,495.8

See Notes to Consolidated Financial Statements.

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AMC ENTERTAINMENT HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)


	Nine Months Ended
	September 30, 2017		September 30, 2016		Three Months Ended
	(unaudited)				March 31, 2019		March 31, 2018
Cash flows from operating activities:					(Unaudited)
Net earnings (loss)	$	(210.8)	$	82.7	$	(130.2)	$	17.7
Adjustments to reconcile net earnings (loss) to net cash provided by operating activities:
Depreciation and amortization		393.9		185.8		113.0		130.5
Loss on NCM charged to merger, acquisition and transaction costs		22.6		—
Loss on extinguishment of debt		0.5		—
Deferred income taxes		(137.9)		45.6		4.1		1.5
Amortization of net premium on corporate borrowings		(1.9)		0.2
Amortization of net discount (premium) on corporate borrowings						2.2		(0.9)
Amortization of deferred charges to interest expense		9.2		3.8		4.4		3.8
Theatre and other closure expense		1.1		3.6
Non-cash portion of stock-based compensation		3.9		4.5		4.0		2.8
Gain on dispositions		(4.5)		(2.7)		(12.9)		(1.2)
Loss on disposition of NCM		22.2		—		—		1.1
Gain on sale of Open Road		(17.2)		—
Repayment of Nordic interest rate swaps		(2.7)		—
Equity in (earnings) and loss from non-consolidated entities, net of distributions		(0.1)		(13.7)
NCM other-than-temporary impairment loss		204.5		—
Loss on derivative asset and derivative liability						28.4		—
Equity in earnings from non-consolidated entities, net of distributions						—		11.3
NCM held-for-sale impairment loss						—		16.0
Landlord contributions		76.4		77.3		35.2		42.1
Non-cash rent - purchase accounting						7.6		—
Deferred rent		(35.2)		(23.4)		(18.1)		(39.3)
Net periodic benefit cost (credit)		0.6		0.6
Net periodic benefit cost						0.1		0.2
Change in assets and liabilities, excluding acquisitions:
Receivables		104.5		51.7		68.3		114.0
Other assets		(3.6)		0.3		14.5		(3.3)
Accounts payable		(116.3)		(116.9)		(76.7)		(107.1)
Accrued expenses and other liabilities		(71.9)		(87.2)		(48.0)		(28.3)
Other, net		(8.2)		(0.9)		5.5		4.5
Net cash provided by operating activities		229.1		211.3		1.4		165.4
Cash flows from investing activities:
Capital expenditures		(467.7)		(256.6)		(114.8)		(107.3)
Acquisition of Nordic Cinemas Group, net of cash acquired		(583.5)		—
Acquisition of Starplex Cinemas		—		0.7
Proceeds from sale leaseback transaction		128.4		—
Proceeds from disposition of NCM, Inc. shares, net		89.4		—
Proceeds from disposition of Open Road		9.2		—
Proceeds from disposition of long-term assets		22.5		19.4		17.3		3.8
Investments in non-consolidated entities, net		(10.0)		(10.5)		(0.1)		(10.7)
Other, net		(3.6)		(1.3)		(0.9)		(0.6)
Net cash used in investing activities		(815.3)		(248.3)		(98.5)		(114.8)
Cash flows from financing activities:
Proceeds from issuance of Senior Subordinated Sterling Notes due 2024		327.8		—
Proceeds from issuance of Senior Subordinated Notes due 2027		475.0		—
Payment of Nordic SEK Term Loan		(144.4)		—
Payment of Nordic EUR Term Loan		(169.5)		—
Net proceeds from equity offering		616.8		—
Borrowings (repayments) under Revolving Credit Facility		60.0		(55.0)
Principal payment of Bridge Loan due 2017		(350.0)		—
Repayments under revolving credit facilities						(3.8)		—
Principal payments under Term Loan		(9.1)		(6.6)		(3.4)		(3.5)
Principal payments under capital and financing lease obligations		(54.1)		(6.3)		(3.8)		(17.9)
Cash used to pay for deferred financing costs		(29.8)		(0.8)
Cash used to pay dividends		(78.7)		(59.1)		(21.8)		(25.8)
Taxes paid for restricted unit withholdings		(6.5)		—		(1.1)		(1.7)
Purchase of treasury stock		(16.5)		—		—		(13.5)
Net cash provided by (used in) financing activities		621.0		(127.8)
Effect of exchange rate changes on cash and equivalents		18.1		(0.1)
Net increase (decrease) in cash and equivalents		52.9		(164.9)
Cash and equivalents at beginning of period		207.1		211.2
Cash and equivalents at end of period	$	260.0	$	46.3
Net cash used in financing activities						(33.9)		(62.4)
Effect of exchange rate changes on cash and cash equivalents and restricted cash						2.2		6.0
Net increase in cash and cash equivalents and restricted cash						(128.8)		(5.8)
Cash and cash equivalents and restricted cash at beginning of period						324.0		318.3
Cash and cash equivalents and restricted cash at end of period					$	195.2	$	312.5
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest (including amounts capitalized of $0.2 million and $0.1 million)	$	161.5	$	67.9
Interest (including amounts capitalized of $0.3 million and $0.1 million)					$	38.1	$	35.7
Income taxes paid, net	$	9.6	$	4.6	$	2.5	$	4.5
Schedule of non-cash operating and investing activities:
Investment in NCM (See Note 4-Investments)	$	235.2	$	—
See Note 2-Acquisitions for non-cash activities related to acquisitions
Schedule of non-cash activities:
Investment in NCM (See Note 5—Investments)					$	1.4	$	(6.3)
Construction payables at period end					$	83.8	$	75.8

See Notes to Consolidated Financial Statements.

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AMC ENTERTAINMENT HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~September 30, 2017~~March 31, 2019

(Unaudited)

NOTE 1—BASIS OF PRESENTATION

AMC Entertainment Holdings, Inc. (“Holdings”), through its direct and indirect subsidiaries, including American Multi-Cinema, Inc. and its subsidiaries, (collectively with Holdings, unless the context otherwise requires, the “Company” or “AMC”), is principally involved in the theatrical exhibition business and owns, operates or has interests in theatres located in the United States and Europe. Holdings is an indirect subsidiary of Dalian Wanda Group Co., Ltd. (“Wanda”), a Chinese private conglomerate.

As of ~~September 30, 2017,~~March 31, 2019, Wanda owned approximately ~~58.42%~~49.85% of Holdings’ outstanding common stock and ~~80.82%~~74.89% of the combined voting power of Holdings’ outstanding common stock and has the power to control Holdings’ affairs and policies, including with respect to the election of directors (and, through the election of directors, the appointment of management), entering into mergers, sales of substantially all of the Company’s assets and other extraordinary transactions.

Use of Estimates: The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant estimates and assumptions are used for, but not limited to: (1) Impairments, (2) Film exhibition costs, (3) Income and operating taxes, (4) Fair value of acquired assets and liabilities, and (5) Gift card and exchange ticket income.period. Actual results could differ from those estimates.

Principles of Consolidation: The accompanying unaudited consolidated financial statements include the accounts of Holdings and all subsidiaries, as discussed above, and should be read in conjunction with the Company’s Annual Report on Form 10–K for the year ended December 31, ~~2016.~~2018. The accompanying consolidated balance sheet as of December 31, ~~2016,~~2018, which was derived from audited financial statements, and the unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and in accordance with the instructions to Form 10–Q. Accordingly, they do not include all of the information and footnotes required by the accounting principles generally accepted in the United States of America for complete consolidated financial statements. In the opinion of management, these interim financial statements reflect all adjustments (consisting of normal recurring adjustments) necessary for a fair statement of the Company’s financial position and results of operations. All significant intercompany balances and transactions have been eliminated in consolidation. There are no noncontrolling (minority) interests in the Company’s consolidated subsidiaries; consequently, all of its stockholders’ equity, net earnings ~~(loss)~~ and total comprehensive income ~~(loss)~~ for the periods presented are attributable to controlling interests. Due to the seasonal nature of the Company’s business, results for the ~~year-to-date period~~three months ended ~~September 30, 2017~~March 31, 2019 are not necessarily indicative of the results to be expected for the year ending December 31, ~~2017.~~2019. The Company manages its business under two reportable segments for its theatrical exhibition operations, U.S. markets and International markets.

~~Presentation:~~ In the Consolidated Balance Sheets, assets held for sale within current assets have been presented separately from other current assets in the current year presentation with conforming reclassifications made for the prior period presentation.

Accumulated depreciation and amortization: Accumulated depreciation was ~~$1,106.8~~$1,543.6 million and ~~$792.3~~$1,697.1 million at ~~September 30, 2017~~March 31, 2019 and December 31, ~~2016,~~2018, respectively, related to property. Accumulated amortization of intangible assets was $19.0 million and $72.9 million at March 31, 2019 and December 31, 2018, respectively.

Table of Contents

~~amortization~~

Other Expense: The following table sets forth the components of ~~intangible assets was $147.1 million and $35.4 million, at September 30, 2017 and December 31, 2016, respectively.~~other expense:


	Three Months Ended
(In thousands)	March 31, 2019		March 31, 2018
Derivative liability fair value adjustment for embedded conversion feature in the Convertible Notes due 2024	$	13.3	$	—
Derivative asset fair value adjustment for contingent call option related to the Class B common stock purchase and cancellation agreement		15.1		—
Loss on GBP forward contract		0.3		—
Foreign currency transactions losses		0.5		1.2
Non-operating components of net periodic benefit cost		0.1		—
Fees related to modification of term loans		0.2		—
Other		0.3		—
Total other expense	$	29.8	$	1.2

Accounting Pronouncements Recently Adopted

~~Sale~~Leases.The Company adopted the guidance of ASU No. 2016-02, Leases, (“ASC 842”) as of January 1, 2019 using the modified retrospective transition approach with the cumulative effect recognized at the date of initial application. The comparative information in the prior year has not been adjusted and ~~Leaseback Transaction:~~ continues to be reported under ASC 840, Leases, which was the accounting standard in effect for that period. ASC 842 requires lessees to recognize leases on-balance sheet and disclose key information about leasing arrangements. The new standard establishes a right-of-use model (“ROU”) that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases are classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. See Note 2~~On September 14, 2017,~~—Leases for the ~~Company completed the sale and leaseback~~required disclosures of the ~~real estate assets associated with seven theatres for proceeds net~~nature, amount, timing, and uncertainty of ~~closing costs of $128.4 million. The gain on sale of approximately $78.2 million has been deferred and will be amortized over the remaining lease term.~~cash flows arising from leases.

~~Early Adoption~~Accounting Pronouncements Issued Not Yet Adopted

Financial Instruments. In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of ~~New Accounting Pronouncements:~~ ~~The Company early adopted~~Credit Losses on Financial Instruments (“ASU 2016-13”), which provides new guidance regarding the ~~provisions~~measurement and recognition of ~~Accounting Standards Update (“ASU”) No. 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test~~credit impairment for ~~Goodwill Impairment (“ASU 2017-04”), as of the third quarter of 2017 on a prospective basis. The adoption of ASU 2017-04 was preferable because it simplifies~~certain financial assets. Such guidance will impact how the Company determines its allowance for estimated uncollectible receivables and evaluates its available-for-sale investments for impairment. ASU 2016-13 is ~~required to test goodwill~~effective for ~~impairment by eliminating Step 2 from~~ the ~~goodwill impairment test.~~Company in the first quarter of 2020. The Company ~~performed an interim goodwill impairment test during~~is currently evaluating the third quarter of 2017 due to the recent declines in equity values of the Company’s publicly traded stock. As a result of this test, the Company did not record a goodwill impairment loss during the nine months ended September 30, 2017. See Note 3—Goodwill for further information regarding the interim goodwill impairment testeffect that ASU 2016-13 will have on its consolidated financial statements and ~~Management’s Discussion and Analysis —New Accounting Pronouncements for further information on ASU 2017-04.~~related disclosures.

Fair Value Measurement.In ~~January 2017,~~August 2018, the ~~Financial Accounting Standards Board~~FASB issued ASU ~~2017-01, Business Combinations~~2018-13, Fair Value Measurement (Topic ~~805)~~820): ~~Clarifying~~Disclosure Framework–Changes to the ~~Definition~~Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”), which eliminates, adds, and modifies certain disclosure requirements for fair value measurements as part of ~~a Business. The standard provides guidance~~its disclosure framework project. Entities will no longer be required to ~~assist entities with evaluating whether transactions should~~disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, but will be ~~accounted~~required to disclose the range and weighted average used to develop significant unobservable inputs for ~~as acquisitions (or disposals) of assets or businesses. The definition of a~~ ~~business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation.~~Level 3 fair value measurements. ASU ~~2017-01~~2018-13 is effective for ~~annual periods beginning after December 15, 2017, including interim periods within those periods, with early~~the Company in the first quarter of 2020. Early adoption is permitted. The Company ~~early adopted~~is currently evaluating the ~~standard in the third quarter of 2017~~effect that ASU 2018-13 will have on ~~a prospective basis and it did not have a material impact on the Company’s consolidated financial position, cash flows, or results of operations.~~its fair value measurement disclosures.

~~NOTE 2—ACQUISITIONS~~

~~Nordic Cinema Group Holding AB~~

~~On March 28, 2017,~~Cloud Computing Arrangement. In August 2018, the FASB issued ASU 2018-15, Intangibles–Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (“ASU 2018-15”). ASU 2018-15 requires a customer in a cloud computing arrangement (i.e., hosting arrangement) that is a service contract to follow the internal-use software guidance in ASC 350-40 to determine which implementation, setup, and other upfront costs to capitalize as assets or expense as incurred. ASU 2018-15 is effective for the Company ~~completed~~in the ~~acquisition~~first quarter of ~~Nordic Cinema Group Holding AB (“Nordic”) for cash. The purchase price for Nordic was approximately SEK 5,756 million ($654.9 million), which includes payment~~2020. Early adoption is permitted. Entities have the option to apply the guidance prospectively to all implementation costs incurred after the date of interest on the equity value and repayment of shareholder loans. As a result of the acquisition, the Company assumed the indebtedness of Nordic of approximately SEK 1,269 million ($144.4 million) and indebtedness of approximately €156 million ($169.5 million) as of March 28, 2017, which was refinanced subsequent to the acquisition.adoption or retrospectively in accordance with ASC 250-10-45. The Company ~~also assumed approximately SEK 13.5 million ($1.6 million) and approximately €1.0 million ($1.1 million) of interest rate swaps related to~~is currently evaluating the ~~indebtedness which were repaid following the acquisition. All amounts~~effect that ASU 2018-15 will have ~~been converted into US Dollar amounts assuming an SEK/USD exchange rate of 0.11378 and an EUR/USD exchange rate of 1.0865, which were the exchange rates~~ on March 27, 2017. Nordic operated 71 theatres, 467 screens, and approximately 67,000 seats in nearly 50 large and medium-sized cities in the Nordic and Baltic nations, and holds a substantial minority investment in another 51 associated theatres with 216 screens, to which Nordic provides a variety of shared services. Nordic is the largest theatre operator in Scandinavia and the Nordic and Baltic Regions of Europe. Nordic operates or holds partial interests in theatres in seven countries in the northern region of Europe: Sweden, Finland, Estonia, Latvia, Lithuania, Norway and Denmark. its consolidated financial statements.

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NOTE 2—LEASES

The ~~acquisition~~Company adopted ASC 842 on January 1, 2019 using the modified retrospective transition method; and therefore, the comparative information has not been adjusted for the three months ended March 31, 2018 or as of December 31, 2018. Upon transition to the new standard, the Company elected the package of practical expedients, which permitted the Company not to reassess under the new standard its prior conclusions about lease identification, lease classification and initial direct costs.

The Company leases theatres and equipment under operating and finance leases. The majority of the Company’s operations are conducted in premises occupied under lease agreements with initial base terms ranging generally from 12 to 15 years, with certain leases containing options to extend the leases for up to an additional 20 years. The Company typically does not believe that exercise of the renewal options is ~~being treated~~reasonably assured at the inception of the lease agreements and, therefore, considers the initial base term as the lease term. Lease terms vary but generally the leases provide for fixed and escalating rentals, contingent escalating rentals based on the Consumer Price Index and other indexes not to exceed certain specified amounts and variable rentals based on a percentage of revenues. The Company often receives contributions from landlords for renovations at existing locations. The Company records the amounts received from landlords as an adjustment to the right-of-use asset and amortizes the balance as a ~~purchase in accordance with Accounting Standards Codification Topic 805, Business Combinations (“ASC 805, Business Combinations”), which requires allocation~~reduction to rent expense over the base term of the ~~purchase price~~lease agreement.

Operating lease right-of-use assets and lease liabilities were recognized at commencement date based on the present value of minimum lease payments over the remaining lease term. The minimum lease payments include base rent and other fixed payments, including fixed maintenance costs. The Company’s leases have remaining lease terms of approximately 1 year to 25 years, which may include the option to extend the lease when it is reasonably certain the Company will exercise that option. The present value of the lease payments is calculated using the incremental borrowing rate for operating leases, which was determined using a portfolio approach based on the rate of interest that the Company would have to pay to borrow an amount equal to the ~~estimated fair values~~lease payments on a collateralized basis over a similar term. Operating lease expense is recognized on a straight-line basis over the lease term.

The Company’s lease agreements do not contain any material residual value guarantees. Additionally, equipment leases (primarily digital projectors and food and beverage equipment), short-term leases and sublease arrangements are immaterial. The Company elected the practical expedient to not separate lease and non-lease components and also elected the short-term practical expedient for all leases that qualify. As a result, the Company will not recognize right-of-use assets or liabilities for short-term leases that qualify for the short-term practical expedient, but instead will recognize the lease payments as lease cost on a straight-line basis over the lease term.

As a result of adopting ASC 842, the Company’s consolidated balance sheet includes additional operating ROU assets and total operating lease liabilities ~~acquired in~~of $4,809.2 million and $5,397.3 million, respectively, at March 31, 2019. The difference between the transaction. The allocation of purchase price is based on management’s judgment after evaluating several factors, including a preliminary valuation assessment. Because the values assigned to assets acquired and liabilities assumed are based on preliminary estimates of fair value available as of the date of this Quarterly Report on Form 10–Q, amounts may be adjusted during the measurement period of up to twelve months from the date of acquisition as further information becomes available. Any changes in the fair values of assets acquired and liabilities assumed during the measurement period may result in adjustments to goodwill. The allocation of purchase price is preliminary and subject to changes as appraisals of tangible and intangibleROU assets and total lease liabilities ~~including working capital are finalized, purchase price adjustments are completed~~upon initial measurement at January 1, 2019, was primarily due to the reclassification of (i) deferred rent, landlord allowances, unfavorable lease balances, and ~~additional information regarding~~theatre closure liabilities previously recorded in other long-term liabilities, (ii) current portions of theatre closure liabilities previously recorded in accrued expenses and other liabilities; (iii) favorable lease balances previously recorded in intangible assets; and, (iv) prepaid rents recorded in other current assets within the ~~tax bases of assets and liabilities at~~consolidated balance sheets as an offset or addition to the ~~acquisition date becomes available. The following is a summary of a preliminary allocation of the purchase price:~~opening ROU asset balances, as required by ASC 842.

(In millions)

March 28, 2017

Changes

September 30, 2017
Cash

$
70.5

$
0.9

$
71.4
Restricted cash

—

5.9

5.9
Receivables

25.0

(11.6)

13.4
Other current assets

14.0

8.9

22.9
Property (1)

89.8

54.8

144.6
Intangible assets (1) (4)

—

23.8

23.8
Goodwill (2)

872.1

(78.5)

793.6
Deferred tax asset

5.5

(5.1)

0.4
Other long-term assets

41.0

27.5

68.5
Accounts payable

(30.3)

0.1

(30.2)
Accrued expenses and other liabilities

(26.5)

(6.0)

(32.5)
Deferred revenues and income

(43.5)

—

(43.5)
Term Loan Facility (SEK)

(144.4)

—

(144.4)
Term Loan Facility (EUR)

(169.5)

—

(169.5)
Capital lease and financing lease obligations (1)(3)

(29.2)

14.1

(15.1)
Deferred tax liability

(5.2)

(16.9)

(22.1)
Other long-term liabilities (5)

(14.4)

(17.9)

(32.3)
Total estimated purchase price

$
654.9

$
—

$
654.9

~~(1)~~

~~Amounts recorded for property include land, buildings, capital lease assets, leasehold improvements, furniture, fixtures and equipment.~~ During the nine months ended September 30, 2017, the Company recorded measurement period adjustments primarily related to the preliminary valuation of property, intangible assets, equity method investments, financing lease obligations and related tax adjustments.

~~(2)~~

~~Amounts recorded for goodwill are not expected to be deductible for tax purposes.~~

~~(3)~~

~~Including current portion of approximately $3.5 million.~~

~~(4)~~

~~Additional information for intangible assets acquired on March 28, 2017 is presented below:~~

Weighted Average

Gross
(In millions)

Amortization Period

Carrying Amount
Acquired intangible assets:

Amortizable intangible assets:

Favorable leases

7.0 years

$
3.2
Favorable subleases

4.5 years

1.3
Screen advertising agreement

5.0 years

8.3
Trade name agreement

4.0 years

1.0
Total, amortizable

5.3 years

$
13.8
Unamortized intangible assets:

Trade names

$
10.0

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The following table provides the operating and finance ROU assets and lease liabilities:


(In millions)	Balance Sheet Classification	March 31, 2019
Assets
Operating lease right-of-use assets (1)	Operating lease right-of-use assets	$	4,809.2
Finance lease right-of-use assets (2)	Property, net		97.0
Total leased assets		$	4,906.2

Liabilities
Current
Operating lease liabilities (1)	Current maturities of corporate borrowings and lease liabilities	$	570.7
Finance lease liabilities (2)	Current maturities of corporate borrowings and lease liabilities		11.6
Noncurrent
Operating lease liabilities (1)	Operating lease liabilities		4,826.6
Finance lease liabilities (2)	Finance lease liabilities		117.0
Total lease liabilities		$	5,525.9

~~(5)~~(1)

~~Amounts~~Included in the operating right-of-use assets and operating lease liabilities are assets and liabilities for leases related to previous build-to-suit failed sale-leaseback transactions, that were derecognized and recorded ~~for other long-term liabilities include unfavorable~~as a cumulative effect adjustment to accumulated deficit upon adoption of ASC 842. These leases ~~of approximately $18.5 million.~~were classified and remeasured at January 1, 2019 as operating right-of-use assets and operating lease liabilities.

The fair value measurement of tangible and intangible assets and liabilities were based on significant inputs not observable in the market and thus represent Level 3 measurements within the fair value measurement hierarchy. Level 3 fair market values were determined using a variety of information, including estimated future cash flows, appraisals, and market comparables.

The purchase price paid by the Company in the acquisition resulted in recognition of goodwill because it exceeded the estimated fair value of the assets acquired and liabilities assumed. The Company paid a price in excess of estimated fair value of the assets acquired and liabilities assumed because the acquisition of Nordic enhances its position as the largest movie exhibition company in Europe and broadens and diversifies its European platform. The Company also expects to realize synergy and cost savings related to the acquisition because of purchasing and procurement economies of scale.

During the three and nine months ended September 30, 2017, the Company incurred acquisition-related and transition costs for Nordic of approximately $0.6 million and $8.9 million, respectively, which were included in general and administrative expense: merger, acquisition and transaction costs in the Consolidated Statements of Operations. The revenues for Nordic during the three and nine months ended September 30, 2017 were $80.2 million and $152.6 million, respectively, and net earnings (loss) was an immaterial amount for the three and nine months ended September 30, 2017.

~~Odeon and UCI Cinemas Holdings Limited.~~

On November 30, 2016, the Company completed the acquisition of Odeon and UCI Cinemas Holdings Limited. (“Odeon”) for approximately £510.4 million ($637.1 million) comprised of cash of approximately £384.8 million ($480.3 million) and 4,536,466 shares of the Company’s Class A common stock with a fair value of approximately £125.6 million ($156.7 million) based on a closing share price of $34.55 per share on November 29, 2016. The amounts set forth above are based on a GBP/USD exchange rate of approximately 1.25 on November 30, 2016. As of November 30, 2016, Odeon operated 244 theatres and 2,243 screens in four major European markets: United Kingdom, Spain, Italy, and Germany; and three smaller markets: Austria, Portugal and Ireland.

(2)

Corresponding with the adoption of ASC 842, the Company renamed previously classified capital lease assets and capital lease obligations under ASC 840 as finance right-of-use assets and finance lease liabilities, respectively. The Company recognized the finance right-of-use assets and finance lease liabilities on January 1, 2019 at the carrying amount of the capital lease asset and capital lease obligation as of December 31, 2018.

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The ~~acquisition~~cumulative effect adjustment to accumulated deficit at January 1, 2019 is ~~being treated~~ as a purchase in accordance with ASC 805, Business Combinations, which requires allocation of the purchase price to the estimated fair values of assets and liabilities acquired in the transaction. The allocation of purchase price is based on management’s judgment after evaluating several factors, including a preliminary valuation assessment. Because the values assigned to assets acquired and liabilities assumed are based on preliminary estimates of fair value available as of the date of this Quarterly Report on Form 10–Q, amounts may be adjusted during the measurement period of up to twelve months from the date of acquisition as further information becomes available. Any changes in the fair values of assets acquired and liabilities assumed during the measurement period may result in adjustments to goodwill. The allocation of purchase price is preliminary and subject to changes as appraisals of tangible and intangible assets and liabilities including working capital are finalized, purchase price adjustments are completed and additional information regarding the tax bases of assets and liabilities at the acquisition date becomes available. follows:


	Accumulated
(In millions)	Deficit
Balance as of December 31, 2018	$	(550.9)
Derecognition of existing assets for certain sale leaseback transactions previously recorded in property, net		(405.9)
Derecognition of existing liabilities for certain sale leaseback transactions previously recorded in current maturities of corporate borrowings and capital and financing lease obligations		427.5
Derecognition of deferred gains from the sale and leaseback transactions previously recorded in other long-term liabilities		102.4
Difference in fair value compared to the basis of the right-of-use assets for previously impaired asset groups		(49.0)
Deferred taxes		3.8
Cumulative effect adjustment to accumulated deficit		78.8
Balance as of January 1, 2019	$	(472.1)

The following is ~~a summary of a preliminary allocation~~the impact of the ~~purchase price:~~adoption of ASC 842 on the Company’s consolidated income statement for the three months ended March 31, 2019:

(In millions)

November 30, 2016

Changes

September 30, 2017
Cash

$
41.6

$
—

$
41.6
Receivables

26.2

—

26.2
Other current assets

58.1

—

58.1
Property (1)

755.9

(20.1)

735.8
Intangible assets (2)

112.1

—

112.1
Goodwill (3)

898.6

21.3

919.9
Deferred tax asset

18.7

—

18.7
Other long-term assets

29.6

—

29.6
Accounts payable

(78.9)

—

(78.9)
Accrued expenses and other liabilities

(118.2)

—

(118.2)
Deferred revenues and income

(20.4)

0.8

(19.6)
9% Senior Secured Note GBP due 2018

(382.9)

—

(382.9)
4.93% Senior Secured Note EUR due 2018

(213.7)

—

(213.7)
Capital lease and financing lease obligations (4)

(365.3)

(2.0)

(367.3)
Deferred tax liability

(21.3)

—

(21.3)
Other long-term liabilities (5)

(103.0)

—

(103.0)
Total estimated purchase price

$
637.1

$
—

$
637.1


	Three Months Ended March 31, 2019
	Without Adoption of		U.S. Markets		International Markets
(In millions)	ASC 842		Adjustments		Adjustments		As Reported
Operating costs and expenses
Rent (1)(2)(4)	$	211.6	$	17.4	$	13.0	$	242.0
Depreciation and amortization (2)(3)		137.0		(13.4)		(10.6)		113.0
Operating costs and expenses		1,227.7		4.0		2.4		1,234.1
Operating income (loss)		(27.3)		(4.0)		(2.4)		(33.7)

Other expense (income)
Interest expense:
Capital and financing lease obligations (1)		9.0		(3.3)		(3.6)		2.1
Net earnings (loss)		(130.7)		(0.7)		1.2		(130.2)

(1)

~~Amounts recorded~~Cash rent payments for ~~property include land, buildings, capital lease assets, leasehold improvements, furniture, fixtures~~build-to-suit failed sale leasebacks of $11.0 million and ~~equipment.~~$9.9 million for U.S. markets and International markets, respectively, are accounted for as operating leases under ASC 842 that were previously accounted for as financing leases under ASC 840. ~~During~~Corresponding with the ~~nine months ended September 30, 2017,~~adoption of ASC 842, the Company ~~recorded measurement period adjustments primarily related to~~renamed the ~~preliminary valuation~~consolidated statements of ~~property~~operations line item from capital and financing lease ~~obligations.~~ ~~During the nine months ended September 30, 2017, the Company sold one theatre and reduced the carrying value~~obligations to ~~fair value.~~finance lease liabilities.

(2)

~~Amounts recorded~~Non-cash amortization expense for ~~intangible assets include~~ favorable ~~leases, management agreements~~lease terms of $4.6 million and ~~trade names.~~$3.1 million, for U.S. markets and international markets, respectively, reclassified to rent expense and amortized over the shorter base lease term under ASC 842.

(3)

~~Amounts recorded for goodwill~~Depreciation on build-to-suit failed sale leaseback buildings that are ~~not expected to be deductible for tax purposes.~~eliminated upon adoption of ASC 842.

(4)

~~Including current portion~~Amortization of ~~approximately $26.4 million.~~

~~(5)~~

A~~mounts recorded~~deferred gains on sale leaseback transactions of $1.8 million for ~~other long-term liabilities include unfavorable leases~~U.S. markets is eliminated upon adoption of ~~approximately $48.3 million.~~ASC 842.

The preliminary fair value measurement of tangible and intangible assets and liabilities were based on significant inputs not observable in the market and thus represent Level 3 measurements within the fair value measurement hierarchy. Level 3 fair market values were determined using a variety of information, including estimated future cash flows, appraisals, and market comparables.

The purchase price paid by the Company in the acquisition resulted in recognition of goodwill because it exceeded the estimated fair value of the assets acquired and liabilities assumed. The Company paid a price in excess of estimated fair value of the assets acquired and liabilities assumed because the acquisition of Odeon allows considerable opportunity in the European markets where it operates to leverage theatre renovations, including power recliners, enhanced food and beverage offerings and premium large format experiences, among others, to drive future growth and value. Odeon also provides the Company with a strong and scalable platform to pursue future international growth opportunities. The Company also expects to realize synergy and cost savings related to the acquisition because of

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~~purchasing and procurement economies of scale.~~

The following table reflects the lease costs for the three months ended March 31, 2019:

During the three and nine months ended September 30, 2017, the Company incurred acquisition-related and transition costs for Odeon of approximately $1.5 million and $6.4 million, respectively, which were included in general and administrative expense: merger, acquisition and transaction costs in the Consolidated Statements of Operations. The revenues for Odeon during the three and nine months ended September 30, 2017 were $251.4 million and $760.2 million, respectively, and the net loss was $9.4 million and $14.9 million, respectively.

~~Carmike Cinemas, Inc.~~


		Three Months Ended
(In millions)	Consolidated Statement of Operations	March 31, 2019
Operating lease cost
Theatre properties	Rent	$	218.9
Theatre properties	Operating expense		1.7
Equipment	Operating expense		3.5
Office and other	General and administrative: other		1.3
Finance lease cost
Amortization of finance lease assets	Depreciation and amortization		2.7
Interest on lease liabilities	Finance lease liabilities		2.1
Variable lease cost
Theatre properties	Rent		23.0
Equipment	Operating expense		10.7
Total lease cost		$	263.9

~~On December 21, 2016,~~The following table represents the ~~Company completed the acquisition~~weighted-average remaining lease term and discount rate as of Carmike Cinemas, Inc. (“Carmike”) for approximately $858.2 million comprised of cash of approximately $584.3 million and 8,189,808 shares of the Company’s Class A common stock with a fair value of approximately $273.9 million (based on a closing share price of $33.45 per share on December 20, 2016). The Company also ~~assumed debt of $230.0 million aggregate principal amount of 6.00% Senior Secured Notes due June 15, 2023 (the “Senior Secured Notes due 2023”). As of December 21, 2016,~~ ~~Carmike operated 271 theatres and 2,923 screens located in 41 states.~~March 31, 2019:


	As of March 31, 2019
	Weighted Average		Weighted Average
	Remaining		Discount
Lease Term and Discount Rate	Lease Term (years)		Rate
Operating leases		10.1		7.3%
Finance leases		12.9		6.6%

~~The acquisition~~

Cash flow and supplemental information is being treated as a purchase in accordance with ASC 805, Business Combinations, which requires allocation of the purchase price to the estimated fair values of assets and liabilities acquired in the transaction. The allocation of purchase price is based on management’s judgment after evaluating several factors, including a preliminary valuation assessment. Because the values assigned to assets acquired and liabilities assumed are based on preliminary estimates of fair value available as of the date of this Quarterly Report on Form 10–Q, amounts may be adjusted during the measurement period of up to twelve months from the date of acquisition as further information becomes available. Any changes in the fair values of assets acquired and liabilities assumed during the measurement period may result in adjustments to goodwill. The allocation of purchase price is preliminary and subject to changes as appraisals of tangible and intangible assets and liabilities including working capital are finalized, purchase price adjustments are completed and additional information regarding the tax bases of assets and liabilities at the acquisition date becomes available. The following is a summary of a preliminary allocation of the purchase price:presented below:

(In millions)

December 21, 2016

Changes

September 30, 2017
Cash

$
86.5

$

$
86.5
Receivables

12.3

—

12.3
Other current assets

14.2

—

14.2
Property (1)

719.6

(2.8)

716.8
Intangible assets (2)

25.9

—

25.9
Goodwill (3)

624.8

2.5

627.3
Other long-term assets

19.4

—

19.4
Accounts payable

(37.0)

—

(37.0)
Accrued expenses and other liabilities

(53.0)

0.2

(52.8)
Deferred revenues and income

(19.9)

—

(19.9)
Deferred tax liability

(19.5)

1.5

(18.0)
6% Senior Secured Notes due 2023

(242.1)

—

(242.1)
Capital and financing lease obligations (4)

(222.0)

(2.0)

(224.0)
Other long-term liabilities (5)

(51.0)

0.6

(50.4)
Total estimated purchase price

$
858.2

$
—

$
858.2


	Three Months
	Ended
(In millions)	March 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used in finance leases	$	(2.1)
Operating cash flows used in operating leases		(236.0)
Financing cash flows used in finance leases		(3.8)

Landlord contributions included in the measurement of ROU assets:
Operating cashflows provided by operating leases		35.2
Supplemental disclosure of noncash leasing activities:
Right-of-use assets obtained in exchange for new operating lease liabilities (1)		21.0

(1)

~~Amounts recorded for property includes land, buildings, capital~~Includes lease ~~assets, leasehold improvements, furniture, fixtures~~extensions and ~~equipment. During the nine months ended September 30, 2017, the Company sold 13 theatres and reduced the carrying value to fair value.~~an option exercise.

Minimum annual payments required under existing operating and finance lease liabilities, (net present value thereof) that have initial or remaining non-cancelable terms in excess of one year as of March 31, 2019 are as follows:

~~(2)~~

~~Amounts recorded for intangible assets include favorable leases and trade name.~~

~~(3)~~

~~Amounts recorded for goodwill are not expected to be deductible for tax purposes.~~


	Operating Lease		Financing Lease
(In millions)	Payments (1)(2)		Payments
Nine months ended December 31, 2019	$	685.2	$	14.8
2020		920.3		19.6
2021		869.7		18.6
2022		805.7		18.0
2023		711.8		14.7
2024		637.7		13.6
Thereafter		3,421.3		92.6
Total lease payments		8,051.7		191.9
Less imputed interest		(2,301.7)		(63.3)
Total	$	5,750.0	$	128.6

~~(4)~~

~~Including current portion of approximately $30.4 million.~~

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(1)

Included in this column upon adoption of ASC 842 are liabilities for leases that were previously classified as build-to-suit failed sale-leaseback transactions that were included in the capital and finance lease obligations columns in the prior year.

~~(5)~~(2)

~~Amounts recorded for other long-term liabilities include unfavorable leases~~Included in this column upon adoption of ~~approximately $50.4 million.~~ASC 842 are fixed executory costs that were previously excluded as part of the minimum lease payments. Fixed executory costs, which primarily consist of common area maintenance, insurance and taxes that meet the classification of fixed payments are included as part of the minimum lease payments.

As of March 31, 2019, the Company had signed additional operating lease agreements for 17 theatres that have not yet commenced, which are expected to commence during 2019 and 2020, and carry lease terms of approximately 5 to 25 years. The ~~preliminary fair value measurement~~timing of ~~tangible~~lease commencement is dependent on the landlord providing the Company with control and ~~intangible assets and liabilities were based on significant inputs not observable in~~access to the market and thus represent Level 3 measurements within the fair value measurement hierarchy. Level 3 fair market values were determined using a variety of information, including estimated future cash flows, appraisals, and market comparables.related facility.

~~The purchase price paid by the Company in the acquisition resulted in recognition of goodwill because it exceeded the estimated fair~~Minimum annual payments required under operating lease liabilities and capital and failed sale-leaseback, finance lease obligations, (net present value ~~of the assets acquired and liabilities assumed. The Company paid a price~~thereof) that have initial or remaining non-cancelable terms in excess of ~~estimated fair value~~one year as of the assets acquired and liabilities assumed because the acquisition of Carmike increased and diversified its domestic footprint and made the Company the largest theatre operator in the United States in terms of revenues and offers a unique opportunity to introduce guest-focused strategic initiatives to millions of Carmike’s movie-goers. The Company also expects to realize significant synergy and cost savings related to the acquisition because of purchasing and procurement economies of scale and general and administrative expense savings, particularly with respect to the consolidation of corporate related functions and elimination of redundancies. December 31, 2018 were as follows:


			Capital and Finance Lease Obligations
	Minimum Operating		Minimum Lease
(In millions)	Lease Payments		Payments		Less Interest		Principal
2019	$	810.2	$	100.7	$	33.7	$	67.0
2020		801.9		96.6		29.4		67.2
2021		748.9		87.8		25.2		62.6
2022		687.5		82.7		21.1		61.6
2023		597.1		70.4		17.3		53.1
Thereafter		3,367.6		331.5		82.7		248.8
Total minimum payments required	$	7,013.2	$	769.7	$	209.4	$	560.3

During the three ~~and nine~~ months ended ~~September 30, 2017,~~March 31, 2018, the Company ~~incurred acquisition-related and transition costs for Carmike~~modified the terms of ~~approximately $1.5 million and $14.7 million, respectively, which were included in general and administrative expense: merger, acquisition and transaction costs in~~an existing operating lease to reduce the ~~Consolidated Statements of Operations. Carmike was acquired on December 21, 2016 and the Company immediately began integrating the operations.~~lease term. The ~~revenues for the three and nine months ended September 30, 2017 were $148.8 million and $516.8 million, respectively, and the net loss was $(16.1) million and $(7.9) million, respectively.~~

~~Department of Justice Final Judgment~~ - In connection with the acquisition of Carmike the Company entered into a Final Judgment with the United States Department of Justice (“DOJ”) on March 7, 2017, pursuant to which the Company agreed to take certain actions to enable it to complete its acquisition of Carmike, including the divestiture of 17 movie theatres (and certain related assets) in the 15 local markets where the Company and Carmike are direct competitors to one or more acquirers acceptable to the DOJ (the Company received ~~gross proceeds of $25.1~~a $35.0 million ~~related~~incentive from the landlord to ~~divested theatre assets that were held for sale and sold during~~enter into the ~~nine months ended September 30, 2017); establish firewalls to ensure the~~new lease agreement. The Company does not obtain National CineMedia, LLC’s (“NCM LLC”), National CineMedia, Inc. (“NCM, Inc” and collectively with NCM LLC “NCM”) Screenvision’s or other exhibitors competitively sensitive information; relinquish seats on NCM’s board of directors and all other NCM governance rights; and transfer 24 theatres comprising 384 screens (which represent less than 2% of NCM’s total network) to the Screenvision network. This includes five Carmike theatres that implemented the Screenvision network prior to completionhas recorded amortization of the ~~Carmike acquisition, an AMC theatre required~~lease incentive as a reduction to extend its existing term with the Screenvision network, and an AMC theatre that was also included in the divestitures. The settlement agreement also requires the Company to divest the majority of its equity interests in NCM LLC, so that by June 20, 2019, it owns no more than 4.99% of NCM’s outstanding equity interestsrent expense on a ~~fully converted~~straight-line basis ~~per~~over the following schedule: (i) on or before December 20, 2017, AMC must own no more than 15% of NCM’s outstanding equity interests; (ii) on or before December 20, 2018, AMC must own no more than 7.5% of NCM’s outstanding equity interests; and (iii) on or before June 20, 2019 AMC must own no more than 4.99% of NCM’s outstanding equity interests. The Company sold 14,800,000 NCM, Inc. common sharesremaining lease term which reduced rent expense by $24.2 million during the three months ended September 30, 2017 and has satisfied the DOJ divestiture requirements related to NCM for calendar 2017 as calculated pursuant to the Final Judgment. In addition, in accordance with the terms of the settlement, effective December 20, 2016, Craig R. Ramsey, executive vice president and Chief Financial Officer of the Company, resigned his position as a member of the Board of Directors of NCM, Inc. March 31, 2018.

~~Pro Forma Results of Operations (Unaudited)~~

The following selected comparative unaudited pro forma results of operation information for the three months and nine months ended September 30, 2017 and September 30, 2016 assumes that the Odeon, Carmike, and Nordic acquisitions occurred at the beginning of 2016, and reflects the full results of operations for the years presented. The pro forma results have been prepared for comparative purposes only and do not purport to indicate the results of operations which would actually have occurred had the combination been in effect on the dates indicated, or which may occur in the future. These amounts have been calculated after applying the Company’s accounting policies and adjusting the results of Odeon, Carmike, and Nordic to reflect the preliminary fair value adjustments to property

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and equipment and financing obligations. The pro forma financial information presented includes the effects of adjustments related to preliminary values assigned to long-lived assets, including depreciation charges from acquired property and equipment, interest expense and incremental shares issued from financing the acquisitions and the related income tax effects and the elimination of Carmike and AMC historical revenues and expenses for theatres in markets that were divested as required by the Department of Justice. Merger, acquisition and transaction costs directly related to the acquisitions have not been removed.

Pro Forma Three Months Ended

Pro Forma Nine Months Ended

September 30,

September 30,
(In millions)

2017

2016

2017

2016
Revenues

$
1,178.7

$
1,307.3

$
3,739.2

$
3,908.7
Operating income (loss)

$
(4.3)

$
61.2

$
38.4

$
185.7
Net earnings (loss)

$
(42.7)

$
(25.1)

$
(209.0)

$
(91.0)
Income (loss) per share:

Basic

$
(0.33)

$
(0.19)

$
(1.63)

$
(0.69)
Diluted

$
(0.33)

$
(0.19)

$
(1.63)

$
(0.69)

NOTE 3—~~GOODWILL~~REVENUE RECOGNITION

~~The~~Disaggregation of Revenue: Revenue is disaggregated in the following ~~table summarizes the changes in goodwill~~tables by ~~reportable operating segment for the nine months ended September 30, 2017:~~major revenue types and by timing of revenue recognition:

(In millions)

U.S. Markets

International Markets (2)

Total
Balance as of December 31, 2016

$
3,044.8

$
888.2

$
3,933.0
Acquisition of Nordic

—

872.1

872.1
Adjustments to acquisition of Nordic Cinemas (1)

—

(78.5)

(78.5)
Adjustments to acquisition of Odeon Cinemas (1)

—

21.3

21.3
Adjustments to acquisition of Carmike Cinemas (1)

2.5

—

2.5
Effect of foreign currency exchange

—

139.1

139.1
Balance as of September 30, 2017

$
3,047.3

$
1,842.2

$
4,889.5


	Three Months Ended		Three Months Ended
(In millions)	March 31, 2019		March 31, 2018
Major revenue types
Admissions	$	731.5	$	875.0
Food and beverage		368.8		405.8
Other theatre:
Advertising		34.5		37.6
Other theatre		65.6		65.2
Other theatre		100.1		102.8
Total revenues	$	1,200.4	$	1,383.6


	Three Months Ended		Three Months Ended
(In millions)	March 31, 2019		March 31, 2018
Timing of revenue recognition
Products and services transferred at a point in time	$	1,110.0	$	1,333.2
Products and services transferred over time (1)		90.4		50.4
Total revenues	$	1,200.4	$	1,383.6

(1)

~~Change in goodwill from purchase price allocations adjustments. See Note 2~~Amounts primarily include ~~—Acquisitions for further information.~~

~~(2)~~

~~As of September 30, 2017, the goodwill for the Odeon Theatres reporting unit~~subscription and ~~the Nordic Theatres reporting unit was $987.2 and $855.0, respectively.~~advertising revenues.

The ~~Company evaluates goodwill for impairment annually as~~following tables provide the balances of ~~the beginning of the fourth fiscal quarter~~receivables and any time an event occurs or circumstances change that would more likely than not reduce the fair value for a reporting unit below its carrying amount. A decline in our common stock price and the resulting impact on market capitalization is one of several qualitative factors we consider when making this evaluation. Based on recent declines in the trading price of the Company’s Class A common stock, the Company performed an interim goodwill impairment test during the third quarter of 2017. See Note 1—Basis of Presentation regarding the change in accounting principle.deferred revenue income:

The Company believes the decline in market capitalization was precipitated by poor box office performance during 2017 and other uncertainties affecting the outlook for performance by the Company and the industry. The Company has three reporting units that were separately evaluated for possible goodwill impairment. Those reporting units include the U.S. Markets Domestic Theatres and the International Markets Odeon Theatres and Nordic Theatres. Management estimated fair value of each reporting unit using an equally weighted combination of the income approach which utilizes discounted cash flows and the market approach which utilizes market comparable multiples of cash flows.


(In millions)	March 31, 2019		December 31, 2018
Current assets:
Receivables related to contracts with customers	$	99.6	$	183.2
Miscellaneous receivables		94.2		76.3
Receivables, net	$	193.8	$	259.5


(In millions)	March 31, 2019		December 31, 2018
Current liabilities:
Deferred revenue related to contracts with customers	$	366.8	$	412.8
Miscellaneous deferred income		3.3		2.0
Deferred revenue and income	$	370.1	$	414.8

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The significant changes in contract liabilities with customers included in deferred revenues and income are as follows:


	Deferred Revenues
	Related to Contracts
(In millions)	with Customers
Balance as of December 31, 2018	$	412.8
Cash received in advance (1)		101.6
Customer loyalty rewards accumulated, net of expirations:
Admission revenues (2)		7.7
Food and beverage (2)		16.6
Other theatre (2)		3.4
Reclassification to revenue as the result of performance obligations satisfied:
Admission revenues (3)		(121.6)
Food and beverage (3)		(22.6)
Other theatre (4)		(28.9)
Disposition of Austria theatres		(1.2)
Foreign currency translation adjustment		(1.0)
Balance as of March 31, 2019	$	366.8

(1)

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

(2)

Amount of rewards accumulated, net of expirations, that are attributed to AMC Stubs® and other loyalty programs.

(3)

Amount of rewards redeemed that are attributed to gift cards, exchange tickets, movie tickets, AMC Stubs® loyalty programs and other loyalty programs.

(4)

Amounts relate to income from non-redeemed or partially redeemed gift cards, non-redeemed exchange tickets, AMC Stubs® loyalty membership fees and other loyalty programs.

The significant changes to contract liabilities included in the exhibitor services agreement, classified as long-term liabilities in the consolidated balance sheets, are as follows:


	Exhibitor Services
(In millions)	Agreement
Balance as of December 31, 2018	$	564.0
Common Unit Adjustment–additions of common units (1)		1.4
Reclassification of the beginning balance to other theatre revenue, as the result of performance obligations satisfied		(3.8)
Balance as of March 31, 2019	$	561.6

(1)

Represents the fair value amount of the National CineMedia, LLC (“NCM”) common units that were received under the annual Common Unit Adjustment (“CUA”). Such amount will increase the deferred revenues that are being amortized to other theatre revenues over the remainder of the 30-year term of the Exhibitor Service Agreement (“ESA”) ending in February 2037. See Note 5—Investments for further information.

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Transaction Price Allocated to the Remaining Performance Obligations: The following table includes the amount of NCM ESA, included in deferred revenues and income in the Company’s consolidated balance sheets, that is expected to be recognized as revenues in the future related to performance obligations that are unsatisfied as of March 31, 2019:


(In millions)	Nine Months Ended December 31, 2019		Year Ended 2020		Year Ended 2021		Year Ended 2022		Year Ended 2023		Year Ended 2024		Years Ended 2025 through February 2037
Exhibitor services agreement	$	11.9	$	16.9	$	18.1	$	19.5	$	20.9	$	22.5	$	451.8

The total amount of non-redeemed gifts cards and exchange tickets included in deferred revenues and income as of March 31, 2019 was $286.2 million. This will be recognized as revenues as the gift cards and exchange tickets are redeemed or as the non-redeemed gift card and exchange ticket revenues are recognized in proportion to the pattern of actual redemptions, which is estimated to occur over the next 24��months.

As of March 31, 2019, the amount of deferred revenue allocated to the AMC Stubs® loyalty programs included in deferred revenues and income was $54.7 million. The earned points will be recognized as revenue as the points are redeemed, which is estimated to occur over the next 24 months. The annual membership fee is recognized ratably over the one-year membership period.

The Company applies the practical expedient in ASC 606-10-50-14 and does not disclose information about remaining performance obligations that have original expected durations of one year or less.

NOTE 4—GOODWILL

The following table summarizes the changes in goodwill by reportable operating segment for the three months ended March 31, 2019:


(In millions)	U.S. Markets		International Markets		Total
Balance as of December 31, 2018	$	3,072.6	$	1,716.1	$	4,788.7
Currency translation adjustment		—		(0.8)		(0.8)
Balance as of March 31, 2019	$	3,072.6	$	1,715.3	$	4,787.9

NOTE 4—5—INVESTMENTS

Investments in non-consolidated affiliates and certain other investments accounted for under the equity method generally include all entities in which the Company or its subsidiaries have significant influence, but not more than 50% voting control, and are recorded in the Consolidated Balance Sheets in other long-term assets. Investments in non-consolidated affiliates as of ~~September 30, 2017~~March 31, 2019 include ~~a 15.2% interest in NCM LLC, a 29.0% interest~~interests in Digital Cinema Implementation Partners, LLC (“DCIP”) of 29.0%, ~~a 14.6% interest in~~ Digital Cinema Distribution Coalition, LLC (“DCDC”) of 14.6%, ~~a 32.0% interest in~~ AC JV, LLC (“AC JV”), owner of Fathom Events, ~~a 16.8% interest in~~of 32.0%, SV Holdco LLC, owner of Screenvision, ~~a 50.0% interest in~~18.4%, and Digital Cinema Media (“DCM”), of 50.0% ~~interest~~. The Company also has partnership interests in ~~five~~four U.S. motion picture theatres ~~and one IMAX~~® ~~screen~~(“Theatre Partnerships”) and approximately 50.0% interest in 5158 theatres in Europe (Nordic theatre JVs) acquired in the Odeon and Nordic ~~acquisition.~~acquisitions. Indebtedness held by equity method investees is non-recourse to the Company.

~~RealD Inc. Common Stock.~~ ~~During the nine months ended September 30, 2016, the Company sold all~~

Table of ~~its 1,222,780 shares in RealD Inc. and recognized a gain on sale of $3.0 million.~~Contents

~~Dreamscape and Central Services Studios Preferred Stock.~~ During the three months ended September 30, 2017, the Company invested $5.0 million in the non-public preferred shares of Dreamscape Immersive, Inc. (“Dreamscape”) and invested $5.0 million in the non-public preferred shares Central Services Studios, Inc. (“Central Services Studios”) as a part of its virtual reality technologies strategy. The Company will invest an additional $5.0 million in preferred shares in each of Dreamscape and Central Services Studios in January 2018. The Company does not have significant influence over these entities and will follow the cost method of accounting.

Equity in Earnings (Loss) of Non-Consolidated Entities

Aggregated condensed financial information of the Company’s significant non-consolidated equity method ~~investments (DCIP and NCM)~~investment (DCIP) is shown below:


	Three Months Ended				Nine Months Ended				Three Months Ended
(In millions)	September 30, 2017		September 30, 2016		September 30, 2017		September 30, 2016		March 31, 2019		March 31, 2018
Revenues	$	156.3	$	161.8	$	417.9	$	438.7	$	37.7	$	121.2
Operating costs and expenses		99.3		110.9		303.6		321.4		19.2		102.7
Net earnings	$	57.0	$	50.9	$	114.3	$	117.3	$	18.5	$	18.5

The components of the Company’s recorded equity in earnings (loss) of non-consolidated entities are as follows:

Three Months Ended

Nine Months Ended
(In millions)

September 30, 2017

September 30, 2016

September 30, 2017

September 30, 2016
National CineMedia (1)

$
(11.1)

$
3.4

$
(216.8)

$
6.2
Digital Cinema Implementation Partners, LLC

6.0

7.9

21.2

20.6
Open Road

0.9

—

(8.0)

—
Other

2.4

0.7

4.5

1.3
The Company’s recorded equity in earnings (loss) (1)

$
(1.8)

$
12.0

$
(199.1)

$
28.1

~~(1)~~

Equity in earnings (loss) of non-consolidated entities includes an other-than-temporary impairment of the Company’s investment in NCM LLC and NCM, Inc. of $204.5 million for the nine months ended September 30, 2017. ~~The~~ ~~other-than-temporary~~ impairment charge under the U.S. markets segment reflects recording our units and shares at the publicly quoted per share price on June 30, 2017 of $7.42 based on the Company’s determination that the decline in the price per share during the respective quarter was other than temporary.


	Three Months Ended
(In millions)	March 31, 2019		March 31, 2018
NCM and NCM, Inc.	$	—	$	(17.5)
Digital Cinema Implementation Partners, LLC		5.6		6.6
Other		0.9		1.9
The Company’s recorded equity in earnings (loss)	$	6.5	$	(9.0)

NCM ~~Transactions.~~Transaction. ~~On September 7, 2017,~~ In March 2019, the NCM CUA resulted in a positive adjustment of 197,118 common units for the Company. The Company ~~converted 14,600,000~~received the units and recorded the common ~~membership~~ units ~~in NCM LLC~~as an addition to ~~common shares~~deferred revenues for the ESA at fair value of ~~NCM, Inc. On September 18, 2017, the Company entered into an agreement to sell 12,000,000 common shares in NCM Inc. for approximately $73.1~~$1.4 million, ~~representing~~based upon a price per share of ~~$6.09 per~~

~~Table~~ National CineMedia, Inc. (“NCM, Inc.”)of ~~Contents~~

~~share.~~$7.24 on March 14, 2019. The ~~sale was completed on September 20, 2017~~Company does not have significant influence over this entity and the Company recognized a loss on sale of approximately $17.9 million including transaction costs on the sale of these units. On September 29, 2017, the Company sold its remaining 2,800,000 common shares of NCM, Inc. for approximately $18.2 million, representing a price per share of $6.49. The Company recognized a loss on sale of approximately $3.1 million including transaction costs on the sale of these units. As of September 30, 2017, the Company owned 23,392,630 common membership units, or a 15.2% interest, in NCM LLC and no common shares of NCM, Inc. The estimatedinvestment is recorded at fair ~~market~~ value ~~of the common units in NCM LLC was approximately $163.3 million based on the publicly quoted price per share of NCM, Inc. on September 29, 2017 of $6.98 per share.~~ each period.

~~The Company recorded the following related party transactions with NCM:~~

As of

As of

(In millions)

September 30, 2017

December 31, 2016

Due from NCM for on-screen advertising revenue

$
1.7

$
2.6

Due to NCM for Exhibitor Services Agreement

6.7

1.4

Promissory note payable to NCM

4.2

4.2

Three Months Ended

Nine Months Ended
(In millions)

September 30, 2017

September 30, 2016

September 30, 2017

September 30, 2016
Net NCM screen advertising revenues

$
6.7

$
10.4

$
28.0

$
31.1
NCM beverage advertising expense

1.7

1.5

5.3

4.5

~~The Company recorded the following changes in the carrying amount of its investment in NCM, LLC and equity in loss of NCM, LLC during the nine months ended September 30, 2017:~~

Accumulated





G&A: Mergers


Exhibitor

Other



and

Investment

Services

Comprehensive

Cash

Equity in

Acquisitions

Advertising

(In millions)

in NCM (1)

Agreement (2)

(Income)/Loss

Received

Loss (3)

Expense

(Revenue)

Ending balance at December 31, 2016

$
323.9

$
(359.2)

$
(4.0)



Receipt of common units

235.2

(235.2)

—



Receipt of excess cash distributions

(20.5)

—

—

$
20.5

$
—

$
—

$
—

Surrender of common units for transferred theatres

(36.4)

35.7

—

—


0.7

—

—

Surrender of common units for make whole agreement

(23.1)

—

—

—


0.5

22.6

—

Other-than-temporary impairment loss - held for sale (4)

(203.3)

—

—

—


203.3

—

—

Units exchanged for NCM, Inc. common shares

(109.1)

—

—

—


—

Equity in earnings

8.4

—

1.5

—


(9.9)

—

—

Amortization of ESA

—

20.4

—

—


—

—

(20.4)

For the period ended or balance as of September 30, 2017

$
175.1

$
(538.3)

$
(2.5)

$
20.5

$
194.6

$
22.6

$
(20.4)

~~(1)~~

~~The following table represents AMC’s investment in common membership units including units received under the Common Unit Adjustment Agreement dated as of February 13, 2007:~~

~~Table of Contents~~

Common

Membership Units

Common Shares


Tranche 1

Tranche 2 (a)

NCM, Inc.
Beginning balance at December 31, 2012

17,323,782

—

Additional units received in the quarter ended June 30, 2013

—

1,728,988

Additional units received in the quarter ended June 30, 2014

—

141,731

Additional units received in the quarter ended June 30, 2015

—

469,163

Additional units received in the quarter ended December 31, 2015

—

4,399,324

Units exchanged for NCM, Inc. shares in December 2015

—

(200,000)

200,000
Additional units received in the quarter ended March 31, 2017

—

18,787,315

Surrender of units for transferred theatres in March 2017

—

(2,850,453)

Surrender of units for exclusivity waiver in March 2017

—

(1,807,220)

Conversion of units to NCM, Inc. common shares in September 2017

—

(14,600,000)

14,600,000
Sale of NCM, Inc. common shares in September 2017

—

-

(14,800,000)
Ending balance at September 30, 2017

17,323,782

6,068,848

—

~~(a)~~

The additional units received in June 2013, June 2014, June 2015, December 2015, and March 2017 were measured at fair value (Level 1) using NCM, Inc.’s stock price of $15.22, $15.08, $14.52, $15.75 and $12.52, respectively.

~~(2)~~

Represents the unamortized portion of the Exhibitor Services Agreement (“ESA”) with NCM. Such amounts are being amortized to other theatre revenues over the remainder of the 30-year term of the ESA ending in 2037, using a units-of-revenue method, as described in ASC 470-10-35 (formerly EITF 88-18, ~~Sales of Future Revenues~~).

~~(3)~~

Excludes an other-than-temporary impairment loss of $1.2 million related to the Company’s common stock investment in NCM, Inc. See Note 8–Fair Value Measurements for further information regarding an other-than-temporary impairment losses.

~~(4)~~

~~The Company recorded an~~ ~~other-than-temporary~~ ~~impairment loss for NCM, Inc. of $1.2 million and NCM LLC of $203.3 million for a total~~ ~~other-than-temporary~~ ~~impairment of $204.5 million during the nine months ended September 30, 2017. The~~ ~~other-than-temporary~~ impairment charges reflect recording our units and shares at the publicly quoted per share price on June 30, 2017 of $7.42 based on the Company’s determination that the decline in the price per share during the second quarter was other than temporary. See Note 8–Fair Value Measurements for further information regarding an other-than-temporary impairment loss.

Cash

NCM Inc.

Investment in

Received

Equity in
(In millions)

NCM Inc.

(Paid)

Loss
Ending balance at December 31, 2016

$
2.7

$
—

$
—
Receipt of cash dividends

(0.1)

0.1

—
Other-than-temporary impairment loss

(1.2)

—

1.2
NCM, LLC Units exchanged for NCM Inc. Common Shares

109.1

—

—
Net proceeds from sale of NCM Inc. Common Shares

—

89.4

(89.4)
Carrying value of NCM Inc. shares sold

(110.5)

—

110.5
Ending balance September 30, 2017

$
—

$
89.5

$
22.3

During the nine months ended September 30, 2017 and September 30, 2016, the Company recorded investment income, net of related amortization of $5.5 million and $7.2 million, respectively, related to the NCM tax receivable agreement.

~~NCM Agreement~~

On March 9, 2017, the Company reached an agreement with NCM to implement the requirements of the final judgment entered in connection with the DOJ approval of the Carmike transaction, as discussed in Note 2–Acquisitions. Pursuant to the agreement, the Company received 18,425,423 NCM LLC common units in March 2017 related to annual attendance at the Carmike theatres and 361,892 NCM LLC common units related to the 2016 common unit adjustment.

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Because the Carmike theatres were subject to a pre-existing agreement with a third party and will not receive advertising services from NCM, the Company will be obligated to make quarterly payments to NCM reflecting the estimated value of the advertising services at the Carmike theatres as if NCM had provided such services. The quarterly payments will continue until the earlier of (i) the date the theatres are transferred to the NCM network or (ii) expiration of the ESA with NCM. All calculations will be made pursuant to the terms of the existing ESA and Common Unit Adjustment Agreement with NCM. With regard to the existing AMC theatres on the NCM network that are required under the final judgment to be transferred to another advertising provider, the Company returned 2,850,453 (valued at $36.4 million) NCM common units to NCM in March 2017, calculated under the Common Unit Adjustment Agreement as if such theatres had been disposed of on March 3, 2017. The Company is not obligated to make quarterly payments with respect to the transferred theatres. In addition, the Company returned 1,807,220 additional NCM LLC common units (valued at $22.6 million) in exchange for a waiver of exclusivity by NCM as to the required transferred theatres for the term of the final judgment, which was classified as general and administrative: Merger, acquisition and transaction costs when the common units were returned to NCM during the three months ended March 31, 2017. The Company recorded a loss of $1.2 million on the return of NCM LLC common units as per the Common Unit Adjustment Agreement and exclusivity waiver for the difference between the average carrying value of the units and the fair value on the date of return. As a result of the agreement, the Company received 14,129,642 net additional NCM LLC common units, valued at $176.9 million based on the market price of NCM, Inc. stock on March 16, 2017 of $12.52. Due to the structure of the transactions, the Company will no longer anticipate recognizing taxable gain upon receipt of new NCM common units. The Company also agreed to reimburse NCM up to $1.0 million for expenses related to the negotiation of this agreement. The Company sold 14,800,000 NCM, Inc. shares during the three months ended September 30, 2017 and has satisfied the DOJ divestiture requirements related to NCM dispositions for calendar 2017. The Company recorded in: Equity in (earnings) loss of non-consolidated entities an other-than-temporary impairment charge of $204.5 million to reduce the carrying value of its investment in NCM to Level 1 fair value during the nine months ended September 30, 2017. The other-than-temporary impairment charge reflects recording our units and shares at the publicly quoted per share price on June 30, 2017 of $7.42 based on the Company’s determination that the decline in the price per share during the respective quarter was other than temporary.

Digital Cinema Media. The Company acquired its equity investment in ~~DCM~~Digital Cinema Media Ltd (“DCM”) on November 30, 2016 in connection with the acquisition of Odeon. The Company receives advertising services from DCM for its Odeon theatres in International markets through a joint venture in which it has a ~~50%~~50.0% ownership interest. ~~During the three and nine months ended September 30, 2017, the~~

The Company recorded ~~revenue of $5.7 million and $17.8 million, respectively, and a recorded receivable as of September 30, 2017 of $0.8 million for cinema advertising.~~the following related party transactions with DCM:


	As of		As of
(In millions)	March 31, 2019		December 31, 2018
Due from DCM for on-screen advertising revenue	$	1.8	$	2.8
Loan receivable from DCM		0.7		0.6


	Three Months Ended
(In millions)	March 31, 2019		March 31, 2018
DCM screen advertising revenues	$	3.9	$	1.3

DCIP Transactions. The Company pays equipment rent monthly and records the equipment rental expense on a straight-line basis over 12 years.

The Company recorded the following related party transactions with DCIP:


	As of		As of		As of		As of
(In millions)	September 30, 2017		December 31, 2016		March 31, 2019		December 31, 2018
Due from DCIP for equipment and warranty purchases	$	2.6	$	2.1
Due from DCIP for warranty expenditures					$	3.5	$	3.4
Deferred rent liability for digital projectors		8.2		8.4		0.9		7.8


	Three Months Ended				Nine Months Ended				Three Months Ended
(In millions)	September 30, 2017		September 30, 2016		September 30, 2017		September 30, 2016		March 31, 2019		March 31, 2018
Digital equipment rental expense	$	1.4	$	1.4	$	4.3	$	3.8	$	1.1	$	1.4

~~Open Road Transactions.~~ During the three and nine months ended September 30, 2017, the Company recorded additional equity earnings (loss) in Open Road Releasing, LLC (“Open Road”) of $0.9 million and $(8.0) million, respectively, related to certain advances to and on behalf of Open Road.

On August 4, 2017, the Company and Regal Entertainment Group consummated a transaction for the sale of all the issued and outstanding ownership interests in Open Road for total proceeds of $28.8 million of which the Company received $14.0 million in net proceeds after transaction expenses for its 50% investment including collection of amounts due from Open Road of $4.8 million and recognized a gain on sale of $17.2 million. The Company and Open Road have entered into a new marketing agreement with respect to films released by Open Road after the closing date.

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AC JV Transactions. The Company recorded the following related party transactions with AC JV:

As of

(In millions)

September 30, 2017

December 31, 2016

March 31, 2019

December 31, 2018

Due to AC JV for Fathom Events programming

1.5

0.6

1.3

2.5


	Three Months Ended				Nine Months Ended				Three Months Ended
(In millions)	September 30, 2017		September 30, 2016		September 30, 2017		September 30, 2016		March 31, 2019		March 31, 2018
Film exhibition costs:
Gross exhibition cost on Fathom Events programming	$	2.2	$	2.1	$	9.0	$	5.8	$	7.3	$	2.7

Screenvision Transactions. The Company recorded the following related party transactions with Screenvision:


	As of		As of		As of		As of
(In millions)	September 30, 2017		December 31, 2016		March 31, 2019		December 31, 2018
Due from Screenvision for on-screen advertising revenue	$	1.6	$	1.7	$	1.4	$	2.7


	Three Months Ended				Nine Months Ended				Three Months Ended
(In millions)	September 30, 2017		September 30, 2016		September 30, 2017		September 30, 2016		March 31, 2019		March 31, 2018
Screenvision screen advertising revenues	$	3.5	$	0.2	$	9.9	$	0.7	$	3.5	$	3.7

Nordic JVs. The Company recorded the following related party transactions with the Nordic theatre JVs (“Nordic JVs”):


	As of		As of
(In millions)	March 31, 2019		December 31, 2018
Due from Nordic JVs	$	3.5	$	2.6
Due to Nordic JVs for management services		2.3		1.7

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NOTE 5—6—CORPORATE BORROWINGS

A summary of the carrying value of corporate borrowings and capital and ~~financing~~finance lease obligations is as follows:


(In millions)	September 30, 2017		December 31, 2016		March 31, 2019		December 31, 2018
Revolving Credit Facility Due 2020 (5.75% as of September 30, 2017)	$	60.0	$	—
Senior Secured Credit Facility-Term Loan due 2022 (3.48% as of September 30, 2017)		865.2		871.8
Senior Secured Credit Facility-Term Loan due 2023 (3.48% as of September 30, 2017)		497.5		500.0
Bridge Loan Agreement due 2017 (7%)		—		350.0
Odeon Revolving Credit Facility Due 2022 (2.5% + Base Rate of 0.75% as of March 31, 2019)					$	8.2	$	11.9
Senior Secured Credit Facility-Term Loan due 2022 (4.7338% as of March 31, 2019)						852.0		854.2
Senior Secured Credit Facility-Term Loan due 2023 (4.7338% as of March 31, 2019)						490.0		491.2
6.0% Senior Secured Notes due 2023						230.0		230.0
2.95% Senior Unsecured Convertible Notes due 2024						600.0		600.0
5.0% Promissory Note payable to NCM due 2019		4.2		4.2		1.3		1.3
5.875% Senior Subordinated Notes due 2022		375.0		375.0		375.0		375.0
6.0% Senior Secured Notes due 2023		230.0		230.0
6.375% Senior Subordinated Notes due 2024 (£500 million par value)		669.7		308.4		652.1		634.1
5.75% Senior Subordinated Notes due 2025		600.0		600.0		600.0		600.0
5.875% Senior Subordinated Notes due 2026		595.0		595.0		595.0		595.0
6.125% Senior Subordinated Notes due 2027		475.0		—		475.0		475.0
Capital and financing lease obligations, 5.75% - 11.5%		668.3		675.4
Deferred charges		(106.6)		(82.9)
Net premiums		27.6		9.4
Finance lease obligations						128.6		560.3
Debt issuance costs						(101.3)		(104.4)
Net discounts						(61.7)		(64.4)
Derivative liability						37.3		24.0
		4,960.9		4,436.3		4,881.5		5,283.2
Less: current maturities		(89.1)		(81.2)
Less:
Current maturities corporate borrowings						(15.2)		(15.2)
Current maturities finance lease obligations						(11.6)		—
Current maturities capital and financing lease obligations						—		(67.0)
	$	4,871.8	$	4,355.1	$	4,854.7	$	5,201.0

~~Bridge Loan Agreement~~Senior Unsecured Convertible Notes due 2024

Carrying value (in millions) as of March 31, 2019:


	Carrying Value				Carrying Value
	as of		Increase to		as of
	December 31, 2018		Net Loss		March 31, 2019
Principal balance	$	600.0	$	—	$	600.0
Discount		(86.7)		3.1		(83.6)
Debt issuance costs		(13.0)		0.4		(12.6)
Derivative liability		24.0		13.3		37.3
Carrying Value	$	524.3	$	16.8	$	541.1

On ~~December 21, 2016,~~September 14, 2018, the Company ~~entered into a bridge loan agreement with Citicorp North America, Inc., as administrative agent and the other lenders party thereto~~issued $600.0 million aggregate principal amount of its 2.95% Senior Unsecured Convertible Notes due 2024 (the ~~“Bridge Loan Agreement”~~"Convertible Notes due 2024"). The Convertible Notes due 2024 mature on September 15, 2024, subject to earlier conversion by the holders thereof, repurchase by the Company ~~borrowed $350.0 million of interim bridge loans (the “Interim Bridge Loans”) on December 21, 2016 under~~at the ~~Bridge Loan Agreement and recorded approximately $4.4 million in deferred financing costs. The proceeds~~option of the ~~Interim Bridge~~holders or redemption by the Company upon the occurrence of certain contingencies, as discussed below. Upon maturity, the $600.0 million principal amount of the Convertible Notes due 2024 will be payable in cash. The Company will pay interest in cash on the Convertible Notes due 2024 at 2.95% per annum, semi-annually in arrears on September 15th and March 15th, commencing on March 15, 2019. The Company used the net proceeds from the sale of the Convertible Notes due 2024 to repurchase and retire 24,057,143 shares of Class B common stock held by Wanda for $17.50 per share or approximately $421.0 million, associated legal fees of $2.6 million, and to pay a special dividend of $1.55 per share of Class A common stock and Class B common stock, or approximately $160.5 million on September 28, 2018 to shareholders of record on September 25, 2018.

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~~Loans were used to partially finance~~

The Company bifurcated the ~~acquisition of Carmike.~~

~~On February 13, 2017,~~conversion feature from the ~~Company repaid the aggregate~~ principal ~~amount of Interim Bridge Loans of $350.0 million with a portion~~balance of the ~~proceeds from its public offering~~Convertible Notes due 2024 as a derivative liability because (1) a conversion feature is not clearly and closely related to the debt instrument and the reset of ~~shares of Holdings Class A common stock, as~~the conversion price discussed in ~~Note 6–Stockholders’ Equity.~~the following paragraph causes the conversion feature to not be considered indexed to the Company’s equity, (2) the conversion feature standing alone meets the definition of a derivative, and (3) the Convertible Notes due 2024 are not remeasured at fair value each reporting period with changes in fair value recorded in the consolidated statement of operations. The ~~Company recorded a loss~~derivative liability of ~~$0.4~~$90.4 million ~~in other income, which included a write-off of deferred financing costs of $3.7 million, partially~~is offset by a ~~refund of fees of $3.3 million on the extinguishment of indebtedness related~~discount to the ~~redemption~~principal balance and is amortized to interest expense resulting in an effective rate of 5.98% over the term of the ~~interim bridge loan.~~

~~Third Amendment to Credit Agreement~~

On May 9, 2017, the Company entered into the Third Amendment to Credit Agreement with Citicorp North America, Inc., as administrative agent and the other lenders party thereto (the Third Amendment”), amending the Credit Agreement dated as of April 30, 2013. The Third Amendment decreased the applicable margin for the term loans outstanding under the Credit Agreement from 1.75% to 1.25% with respect to base rate borrowings and 2.75% to 2.25% with respect to LIBOR borrowings.Convertible Notes due 2024. The Company ~~expensed $1.0 million during the nine months ended September 30, 2017 for third party fees~~ ~~related to the Third Amendment to the Company’s Senior Secured Credit Agreement~~.

~~Fourth Amendment to Credit Agreement~~

On June 13, 2017, the Company entered into the Fourth Amendment to Credit Agreement with Citicorp North America, Inc., as administrative agent and the other lenders party thereto (the “Fourth Amendment”), amending the Credit Agreement dated as of April 30, 2013. The Fourth Amendment increased the revolving loan commitment under the Credit Agreement from $150.0 million to $225.0 million.

~~Notes Due 2027~~

~~On March 17, 2017, the Company issued $475.0 million aggregate principal amount of its 6.125% Senior Subordinated Notes due 2027 (the "Notes due 2027"). The Company~~also recorded ~~deferred financing~~debt issuance costs of approximately ~~$19.8~~$13.6 million related to the issuance of the Convertible Notes due ~~2027. The~~2024 and will amortize those costs to interest expense under the effective interest method over the term of the Convertible Notes due ~~2027 mature on May 15, 2027.~~2024. The Company ~~will pay~~recorded interest expense for the three months ended March 31, 2019 of $8.0 million. The derivative liability is remeasured at fair value each reporting period with changes in fair value recorded in the consolidated statement of operations as other expense or income. See Note 9—Fair Value Measurements for a discussion of the valuation methodology. For the three months ended March 31, 2019, this resulted in a charge of $13.3 million. The if-converted value of the Convertible Notes due 2024 is less than the principal balance by approximately $129.8 million as of March 31, 2019 based on the closing price per share of the Company’s common stock of $14.85 per share.

The Convertible Notes due ~~2027~~2024 are generally not convertible to equity in the first year after issuance. Upon conversion by a holder thereof, the Company shall deliver, at ~~6.125%~~its election, either cash, shares of the Company’s Class A common stock or a combination of cash and shares of the Company’s Class A common stock at a conversion rate of 52.7704 per ~~annum, semi-annually~~$1,000 principal amount of the Convertible Notes due 2024 (which represents an initial conversion price of $18.95), in ~~arrears~~each case subject to customary anti-dilution adjustments. As of March 31, 2019, the $600.0 million principal balance of the Convertible Notes due 2024 would be convertible into 31,662,269 shares of Class A common stock. In addition to typical anti-dilution adjustments, in the event that the then-applicable conversion price is greater than 120% of the average of the volume-weighted average price of the Company’s Class A common stock for the ten days prior to the second anniversary of issuance (the “Reset Conversion Price”), the conversion price for the Convertible Notes due 2024 is subject to a reset provision that would adjust the conversion price downward to such Reset Conversion Price. However, this conversion price reset provision is subject to a conversion price floor such that the shares of the Company’s Class A common stock issuable upon conversion would not exceed 30% of the Company’s then outstanding fully-diluted share capital after giving effect to the conversion. In addition, a trigger of the reset provision would result in up to 5,666,000 shares of the Company’s Class B common stock held by Wanda becoming subject to forfeiture and retirement by the Company at no additional cost pursuant to the stock repurchase agreement between the Company and Wanda discussed in Note 7—Stockholders’ Equity. This cancellation agreement is a contingent call option for the forfeiture shares, which is a freestanding derivative measured at fair value on ~~May 15th~~a recurring basis. The feature is contingent on the same reset of the conversion price which is part of the conversion feature. The initial derivative asset of $10.7 million is offset by a credit to stockholders’ equity related to the Class B common stock purchase and ~~November 15th, commencing on November 15, 2017.~~ cancellation. The forfeiture shares feature is not clearly and closely related to the Convertible Notes due 2024 host and it is bifurcated and accounted for as a derivative asset measured at fair value through earnings each reporting period with changes in fair value recorded in the consolidated statement of operations as other expense or income. See Note 9 – Fair Value Measurements for a discussion of the valuation methodology. For the three months ended March 31, 2019, this resulted in other expense of $15.4 million. Additionally, the conversion rate will be adjusted if any cash dividend or distribution is made to all or substantially all holders of the Company’s common stock (other than the special dividend referenced above and a regular, quarterly cash dividend that does not exceed $0.20 per share until the second anniversary of issuance and $0.10 per share thereafter). Any Convertible Notes due 2024 that are converted in connection with a Make-Whole Fundamental Change (as defined in the Indenture (the “Indenture”) governing the Convertible Notes due 2024) are, under certain circumstances, entitled to an increase in the conversion rate.

The Company ~~may~~has the option to redeem ~~some or all of~~ the Convertible Notes due ~~2027 at any time~~2024 for cash on or after ~~May 15, 2022~~the fifth anniversary of issuance at ~~103.063%~~par if the price for the Company’s Class A common stock is equal to or greater than 150% of the then applicable conversion price for 20 or more trading days out of a consecutive 30 day trading period (including the final three trading days), at which time the holders have the option to convert. The Company also has the option to redeem the Convertible Notes due 2024, between the second and third anniversary of issuance, if the reset provision described above is triggered at a redemption price in cash that would result in the noteholders realizing a 15% IRR from the date of issuance regardless of when any particular noteholder acquired its Convertible Notes due 2024. The Company also bifurcated this redemption feature from the principal balance of the Convertible Notes due 2024 and considered it as a part of the overall fair value of the derivative liability. During the three months ended March 31, 2019, the Company recorded a charge to other expense for $13.3 million as an increase in fair value of its derivative liability for the

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Convertible Notes due 2024.

With certain exceptions, upon a change of control of the Company or if the Company’s Class A common stock is not listed for trading on The New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market, the holders of the Convertible Notes due 2024 may require that the Company repurchase in cash all or part of the principal amount ~~thereof, declining ratably~~of the Convertible Notes due 2024 at a purchase price equal to ~~100% of~~ the principal amount ~~thereof on or after May 15, 2025,~~ plus accrued and unpaid interest ~~to the redemption date.~~ ~~In addition, the Company may redeem~~ up to, 35% of the aggregate principal amount of the Notes due 2027 using net proceeds from certain equity offerings completed on or prior to May 15, 2020 at a redemption price as set forth in the indenture governing the Notes due 2027. The Company may redeem some or all of the Notes due 2027 at any time prior to May 15, 2022 at a redemption price equal to 100% of their aggregate principal amount and accrued and unpaid interest to, but ~~not including,~~excluding, the date of ~~redemption, plus an applicable make-whole premium.~~ repurchase. The Indenture includes restrictive covenants that, subject to specified exceptions and parameters, limit the ability of the Company ~~used~~to incur additional debt and limit the ~~net proceeds from~~ability of the Company to incur liens with respect to the Company’s senior subordinated notes or any debt incurred to refinance the Company’s senior subordinated notes. The Indenture also includes customary events of default, which may result in the acceleration of the maturity of the Convertible Notes due ~~2027 private offering to pay a portion of~~2024 under the ~~consideration for the acquisition of Nordic plus related refinancing of Nordic debt assumed in the acquisition.~~Indenture.

The Convertible Notes due ~~2027~~2024 are general unsecured senior ~~subordinated~~ obligations of the Company and are fully and unconditionally guaranteed on a joint and several senior ~~subordinated~~ unsecured basis by all ~~of its~~the Company’s existing and future domestic restricted subsidiaries that guarantee its other indebtedness. ~~Following the closing of the Nordic acquisition on March 28, 2017, neither Nordic nor any of its subsidiaries guaranteed the Notes due 2027.~~

~~The indenture governing the Notes due 2027 contains covenants limiting other indebtedness, dividends, purchases or redemptions of stock, transactions with affiliates, and mergers and sales of assets.~~

On ~~March 17, 2017,~~September 14, 2018, in connection with the issuance of the Notes due 2027, the Company entered into a registration rights agreement. Subject to the terms of the registration rights agreement, the Company is required to (1) file one or more registration statements with the SEC not later than 270 days from the issuance date with respect to the registered offer to exchange the notes for new notes of the Company having terms identical in all material respects to the notes and (2) use its commercially reasonable efforts to cause the exchange offer registration statement to be declared effective under the Securities Act within 365 days of the issuance date. The Company filed its Form S–4 registration statement related to the registration rights agreement with the Securities and Exchange Commission on April 19, 2017, and it was declared effective June 7, 2017. All of the original notes were exchanged as of July 12, 2017.

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~~Sterling Notes Due 2024~~

On March 17, 2017, the Company issued £250.0 million additional aggregate principal amount of its 6.375% Senior Subordinated Notes due 2024 (the "Sterling Notes due 2024") at 106% plus accrued interest from November 8, 2016 in a private offering. These additional Sterling Notes due 2024 were offered as additional notes under an indenture pursuant to which the Company had previously issued and has outstanding £250.0 million aggregate principal amount of its 6.375% Sterling Notes due 2024. The Company recorded deferred financing costs of approximately $12.7 million related to the issuance of the additional Sterling Notes due 2024. The Sterling Notes due 2024 mature on November 15, 2024. The Company will pay interest on the Sterling Notes due 2024 at 6.375% per annum, semi-annually in arrears on May 15th and November 15th, commencing on May 15, 2017. ~~Interest on the additional Sterling Notes will accrue from November 8, 2016.~~ The Company may redeem some or all of the Sterling Notes due 2024 at any time on or after November 15, 2019 at 104.781% of the principal amount thereof, declining ratably to 100% of the principal amount thereof on or after November 15, 2022, plus accrued and unpaid interest to the redemption date. In addition, the Company may redeem up to 35% of the aggregate principal amount of the Sterling Notes due 2024 using net proceeds from certain equity offerings completed on or prior to November 15, 2019. On or prior to November 15, 2019, the Company may redeem the Sterling Notes due 2024 at par, including accrued and unpaid interest plus a make-whole premium. The Company used the net proceeds from the additional Sterling Notes to pay a portion of the consideration for the acquisition of Nordic plus related refinancing of Nordic debt assumed in the acquisition.

The Sterling Notes due 2024 are general unsecured senior subordinated obligations of the Company and are fully and unconditionally guaranteed on a joint and several senior subordinated unsecured basis by all of its existing and future domestic restricted subsidiaries that guarantee its other indebtedness. Following the closing of the Nordic acquisition on March 28, 2017, neither Nordic or any of its subsidiaries guaranteed the Sterling Notes due 2024.

The indenture governing the Sterling Notes due 2024 contains covenants limiting other indebtedness, dividends, purchases or redemptions of stock, transactions with affiliates, and mergers and sales of assets.

~~On March 17, 2017, in connection with the issuance of the additional Sterling~~Convertible Notes due 2024, the Company entered into aan investment agreement (the “Investment Agreement”) providing for, among other things, registration rights ~~agreement.~~with respect to the Convertible Notes due 2024 and the shares of Class A common stock underlying the Convertible Notes due 2024. Subject to the terms of the ~~registration rights agreement,~~Investment Agreement, the Company iswas required to ~~(1)~~ file ~~one or more~~a registration ~~statements~~statement with the SEC not later than ~~270 days~~three months from ~~November 8, 2016 with respect to~~ the ~~registered offer to exchange the notes for new notes~~issuance date of the ~~Company having terms identical~~Convertible Notes in ~~all material respects~~order to the notes and (2) use its commercially reasonable efforts to cause the exchange offer registration statement to be declared effective under the Securities Act within 365 days of November 8, 2016. The Company filed its Form S–~~4 registration statement related to the registration rights agreement with the Securities and Exchange Commission on April 19, 2017, and it was declared effective June 7, 2017. All~~provide for resales of the ~~original notes were exchanged as of July 12, 2017.~~

~~As of September 30, 2017,~~Convertible Notes due 2024 and the ~~Company was in compliance with all financial debt covenants.~~

~~NOTE 6—STOCKHOLDERS’ EQUITY~~

~~Common Stock Rights and Privileges~~

The rights of the holders of Holdings’ Class A common stock and Holdings’ Class B common stock are identical, except with respect to voting and conversion applicable to the Class B common stock. Holders of Holdings’ Class A common stock are entitled to one vote per share and holders of Holdings’ Class B common stock are entitled to three votes per share. Holdersshares of Class A common stock ~~and Class B common stock will share ratably (based~~underlying the Convertible Notes to be made on a delayed or continuous basis pursuant to Rule 415 under the ~~number of shares of common stock held) in any dividend declared by~~Securities Act. The Company filed a registration statement with the ~~board of directors, subject~~SEC on December 14, 2018 to any preferential rights of any outstanding preferred stock. The Class A common stock is not convertible into any other shares of Holdings’ capital stock. Each share of Class B common stock is convertible at any time at the option of the holder into one share of Class A common stock. In addition, each share of Class B common stock shall convert automatically into one share of Class A common stock upon any transfer, whether or not for value, except for certain transfers described in Holdings’ certificate of incorporation.fulfill this requirement.

NOTE 7—STOCKHOLDERS’ EQUITY

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Dividends

The following is a summary of dividends and dividend equivalents paid to stockholders during the ~~nine~~three months ended ~~September 30, 2017:~~March 31, 2019:


			Amount per		Total Amount
			Share of		Declared
Declaration Date	Record Date	Date Paid	Common Stock		(In millions)
February 15, 2019	March 11, 2019	March 25, 2019	$	0.20	$	21.3

During the nine months ended September 30, 2017, the Company paid dividends and dividend equivalents of $78.7 million, decreased additional paid-in capital for 191,429 shares surrendered to pay payroll and income taxes of $6.4 million and accrued $0.9 million for the remaining unpaid dividends at September 30, 2017. The aggregate dividends declared for Class A common stock and Class B common stock, were approximately $33.7 million and $45.7 million, respectively.

On ~~October 27, 2017,~~May 3, 2019, the Holdings’ Board of Directors declared a cash dividend in the amount of $0.20 per share ofon its Class A and Class B common stock, payable on ~~December 18, 2017~~June 24, 2019 to stockholders of record on ~~December 4, 2017.~~June 10, 2019.

On February 13, 2017, the Company completed an additional public offering of 20,330,874 shares of Class A common stock at a price of $31.50 per share ($640.4 million), resulting in net proceeds of $616.8 million after underwriters commission and other professional fees. The Company used a portion of the net proceeds to repay the aggregate principal amount of the Interim Bridge Loan of $350.0 million and general corporate purposes.

~~Treasury Stock~~

~~On August 3, 2017, Holdings’ Board of Directors approved a $100.0 million share repurchase program to repurchase AMC Class A common stock over a two-year period.~~

Repurchases may be made at management's discretion from time to time through open-market transactions including block purchases, through privately negotiated transactions, or otherwise over the next two years in accordance with all applicable securities laws and regulations. The extent to which AMC repurchases its shares, and the timing of such repurchases, will depend upon a variety of factors, including liquidity, capital needs of the business, market conditions, regulatory requirements, and other corporate considerations, as determined by AMC’s management team. Repurchases may be made under a Rule 10b5-1 plan, which would permit common stock to be repurchased when the Company might otherwise be precluded from doing so under insider trading laws. The repurchase program does not obligate the Company to repurchase any minimum dollar amount or number of shares and may be suspended for periods or discontinued at any time. During the three months ended September 30, 2017, the Company repurchased 1,068,300 shares of AMC Class A common stock at cost of $16.5 million. As of September 30, 2017, the Company had approximately $83.5 million remaining under its repurchase authorization.Related Party Transactions

Subsequent to September 30, 2017 through October 31, 2017, the Company repurchased 826,905 shares of its common stock under the August 3, 2017 repurchase authorization. These shares were repurchased for approximately $11.9 million, at an average share price of $14.39. As of ~~October~~March 31, ~~2017, the Company had approximately $71.6 million remaining authorized for repurchase.~~

~~Related Party Transactions~~

~~As of September 30, 2017,~~2019 and December 31, ~~2016,~~2018, the Company recorded a receivable due from Wanda of ~~$0.1~~$0.5 million and ~~$10.6~~$0.9 million, respectively, for reimbursement of general administrative and other expense incurred on behalf of ~~Wanda and a pledged capital contribution.~~Wanda. During the ~~nine~~three months ended ~~September 30, 2017,~~March 31, 2019, the Company recorded ~~$0.4~~$0.1 million of cost reductions for general and administrative services provided on behalf of Wanda. Wanda owns Legendary Entertainment, a motion picture production company. The Company will occasionally play Legendary’s films in its theatres as a result of transactions with independent film distributors.

On September 14, 2018, the Company entered into the Investment Agreement with Silver Lake Alpine, L.P., an affiliate of Silver Lake Group, L.L.C. (“Silver Lake”), relating to the issuance to Silver Lake (or its designated affiliates) of $600.0 million principal amount of the Convertible Notes due 2024. See Note 6—Corporate Borrowings- Senior Unsecured Convertible Notes due 2024 for more information.

On September 14, 2018, the Company, Silver Lake and Wanda entered into a Right of First Refusal Agreement (the “ ROFR Agreement”), which provides Silver Lake certain rights to purchase shares of the Company’s common

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stock that Wanda proposes to sell during a period of two years from the date of execution of the ROFR Agreement or, if earlier, until such time that Wanda and its affiliates cease to beneficially own at least 50.1% of the total voting power of the Company’s voting stock. The right of first refusal applies to both registered and unregistered transfers of shares. Under the ROFR Agreement, in the event that Wanda and its affiliates cease to beneficially own at least 50.1% of the total voting power of the Company’s voting stock, then the Company will have the same right of first refusal over sales of the Company’s common stock by Wanda as described above until the expiration of the two-year period beginning on the date of execution of the ROFR Agreement. In such event, the Company may exercise such right to purchase shares from Wanda from time to time pursuant to the ROFR Agreement in its sole discretion, subject to approval by the disinterested directors of the Board. If the Company determines to exercise its right to purchase shares from Wanda pursuant to the ROFR Agreement, it will have the obligation under the Investment Agreement to offer to sell to Silver Lake a like number of shares of the Company’s Class A Common Stock, at the same per share price at which it purchased the Wanda shares.

On September 14, 2018, the Company used the proceeds from the Convertible Notes due 2024, and pursuant to a stock repurchase agreement between the Company and Wanda, repurchased 24,057,143 shares of Class B common stock at a price of $17.50 per share or $421.0 million and associated legal fees of $2.6 million. As of March 31, 2019, Wanda owns 49.85% of AMC through its 51,769,784 shares of Class B common stock. With the three-to-one voting ratio between the Company’s Class B and Class A common stock, Wanda retains voting control of AMC with 74.89% of the voting power of the Company’s common stock. As discussed in Note 6—Corporate Borrowings up to 5,666,000 shares of Class B common stock are subject to forfeiture for no consideration in connection with the reset provision contained in the Indenture.

Temporary Equity

Certain members of management have the right to require Holdings to repurchase the Class A common stock held by them under certain limited circumstances pursuant to the terms of a stockholders’ agreement. Beginning on January 1, 2016 (or upon the termination of a management stockholder’s employment by the Company without cause, by the management stockholder for good reason, or due to the management stockholder’s death or disability) management stockholders will have the right, in limited circumstances, to require Holdings to purchase shares that are not fully and freely tradeable at a price equal to the price per share paid by such management stockholder with appropriate adjustments for any subsequent events such as dividends, splits, or combinations. The shares of Class A common stock, subject to the stockholder agreement, are classified as temporary equity, apart from permanent equity, as a result of the contingent redemption feature contained in the stockholder agreement. The Company determined the amount reflected in temporary equity for the Class A common ~~stock based~~stock-based on the price paid per share by the management stockholders and Wanda on August 30, 2012, the date Wanda acquired Holdings.

~~During~~As of January 1, 2019, the ~~nine months ended September 30, 2017, a former employee~~temporary equity program expired and management employees who held ~~27,197~~75,712 shares relinquished ~~his~~their put ~~right,~~rights, therefore the related share amount of ~~$0.3~~$0.4 million was reclassified to additional paid in capital, a component of stockholders’ equity.

Stock-Based Compensation

Holdings adopted a stock-based compensation plan in December of 2013.

The Company recognized stock-based compensation expense of ~~$(0.1)~~$4.0 million and ~~$1.7~~$2.8 million within general and administrative: other during the three months ended ~~September 30, 2017~~March 31, 2019 and 2016, respectively, and $3.9 million and $4.5 million during the nine months ended September 30, 2017 and 2016, respectively. The Company’s financial statements reflect an increase to additional paid-in capital related to stock-based compensation of $2.2 million during the nine months ended September 30, 2017.

During the nine months ended September 30, 2017, the Company determined that achieving the three-year performance thresholds of the 2016 Performance Stock Units was improbable and reversed $2.0 million of stock-based compensation expense and ceased accruing any additional expense on these units. If the Company later determines that the performance thresholds of the 2016 Performance Stock Units is probable, then historical expense would be reinstated and accruals would resume.

During the three months ended September 30, 2017, the Company determined that achieving the three-year performance thresholds of the 2017 Performance Stock Units was improbable and reversed $1.8 million of stock-based compensation expense and ceased accruing any additional expense on these units. If the Company later determines that the performance thresholds of the 2017 Performance Stock Units is probable, then historical expense would be reinstated and accruals would resume.

During the three months ended September 30, 2017, the Company determined that achieving the one-year performance thresholds of the 2017 Performance Stock Units Transition was improbable and reversed $0.4 million of stock-based compensation expense and ceased accruing any additional expense on these units.

As of September 30, 2017, including the 2017 grants, there was approximately $10.6 million of total estimated unrecognized compensation cost, assuming attainment of the performance targets at 100%, related to stock-based compensation arrangements expected to be recognized during the remainder of calendar 2017, calendarMarch 31, 2018, and calendar 2019. The Company expects to recognize compensation cost with respect to RSU awards of $1.6 million, $5.6 million, and $3.3 million during the remainder of calendar 2017, calendar 2018, and calendar 2019, respectively.

~~2013 Equity Incentive Plan~~

The 2013 Equity Incentive Plan provides for grants of non-qualified stock options, incentive stock options, stock appreciation rights, restricted stock awards, restricted stock units, performance stock units, stock awards, and cash performance awards. The maximum number of shares of Holdings’ common stock available for delivery pursuant to awards granted under the 2013 Equity Incentive Plan is 9,474,000 shares. At September 30, 2017, the aggregate number of shares of Holdings’ common stock remaining available for grant was 7,257,686 shares.

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The components of the Company’s recorded and unrecognized stock-based compensation expense are as follows:


					Additional
	Amount Recognized		Amount		Expected to		Expected to		Expected to
	Three Months Ended		Unrecognized		Recognize		Recognize		Recognize
Grant Tranche	March 31, 2019		March 31, 2019		2019		2020		2021
2019 Board of Directors	$	0.4	$	—	$	—	$	—	$	—
2019 RSU awards		0.4		10.7		3.3		3.7		3.7
2019 PSU awards		0.7		10.4		5.8		3.3		1.3
2018 RSU awards		0.9		5.7		2.4		3.3		—
2018 PSU awards		0.8		3.4		2.2		1.2		—
2017 RSU awards		0.5		1.4		1.4		—		—
2017 RSU NEO awards		0.3		1.0		1.0		—		—
2017 PSU awards (1)		—		—		—		—		—
	$	4.0	$	32.6	$	16.1	$	11.5	$	5.0

(1)

During the year ended December 31, 2017, the Company determined that achieving the three-year performance thresholds of the 2017 Performance Stock Units was improbable and reversed all previously recorded expense and ceased accruing any additional expense on these units. If the Company later determines that the performance thresholds become probable, then historical expense would be reinstated, and the Company would resume recognizing expense.

Awards Granted in ~~2017~~2019

The Company’s Board of Directors approved awards of stock, restricted stock units (“RSUs”), and performance stock units (“PSUs”) to certain of the Company’s employees and directors under the ~~2013 Equity Incentive~~ Plan. The fair value of the stock at the grant ~~dates~~date of March ~~31, 2017, May 11, 2017, and June 5, 2017,~~6, 2019 was ~~$31.45~~$15.13 per share ~~$27.50 per share and $25.00 per share, respectively,~~ and was based on the closing price of Holdings’ stock.

The award agreements generally had the following features:

Stock Award: On March ~~31, 2017,~~6, 2019, five members of Holdings’ Board of Directors were granted awards of ~~13,684~~25,703 fully vested shares of Class A common stock in the aggregate. The Company recognized approximately $0.4 million of expense in general and administrative: other expense during the ~~nine~~three months ended ~~September 30, 2017,~~March 31, 2019, in connection with these share grants.

Restricted Stock Unit Awards: On March 6, 2019, RSU awards of 730,167 units were granted to certain members of management and executive officers. The grant date fair value was approximately $11.0 million based on a stock price of $15.13 on March 6, 2019. Each RSU represents the right to receive one share of Class A common stock at a future date. The RSUs vest over 3 years with 1/3 vesting on each of January 2, ~~2018, 2019,~~2020, 2021, and ~~2020.~~2022. The RSUs will be settled within 30 days of vesting. A dividend equivalent equal to the amount paid in respect of one share of Class A common stock underlying the RSUs began to accrue with respect to the RSUs on the date of grant. Such accrued dividend equivalents are paid to the holder upon vesting of the RSUs.

On March 31, 2017, RSU awards of 189,109 units were granted to certain members of management. The grant date fair value was approximately $5.9 million based on a stock price of $31.45 on March 31, 2017.

~~On May 11, 2017, RSU awards of 2,301 units were granted to certain members of management. The grant date fair value was approximately $0.1 million based on a stock price of $27.50 on May 11, 2017.~~

~~On June 5, 2017, RSU awards of 10,316 units were granted to certain members of management. The grant date fair value was approximately $0.3 million based on a stock price of $25.00 on June 5, 2017.~~

During the three and nine months ended September 30, 2017, the Company recognized $0.7 million and $1.3 million expense in general and administrative: other expense in connection with these awards, respectively.

On March 31, 2017, RSU awards of 129,214 units were granted to certain executive officers covered by Section 162(m) of the Internal Revenue Code. The RSUs will be forfeited if Holdings does not achieve a specified cash flow from operating activities target for each of the years ending December 31, 2017, 2018 and 2019. The RSUs vest over 3 years with 1/3 vesting in each of 2018, 2019 and 2020 upon certification that the cash flow from operating activities target was met for the previous year. The vested RSUs will be settled within 30 days of vesting. A dividend equivalent equal to the amount paid in respect of one share of Class A common stock underlying the RSUs began to accrue with respect to the RSUs on the date of grant. Such accrued dividend equivalents are paid to the holder upon vesting of the RSUs. The grant date fair value was approximately $4.1 million based on the probable outcome of the performance targets and a stock price of $31.45 on March 31, 2017.

During the three and nine months ended September 30, 2017, the Company recognized $0.4 million and $0.9 million expense in general and administrative: other expense in connection with these awards, respectively.

~~Table of Contents~~

Performance Stock Unit Award: On March ~~31, 2017, May 11, 2017 and June 5, 2017,~~6, 2019, PSU awards of 730,167 were granted to certain members of management and executive officers, with three-year cumulative adjusted EBITDA, diluted earnings per share, and net profit performance target conditions and service conditions, covering a performance period beginning January 1, ~~2017~~2019 and ending on December 31, ~~2019.~~2021. The PSUs will vest based on achieving 80% to 120% of the performance targets with the corresponding vested unit amount ranging from 30% to 200%. If the performance target is met at 100%, the PSU awards granted on March ~~31, 2017, May 11, 2017, and June 5, 2017,~~6, 2019, will vest at ~~318,323~~730,167 units ~~2,301 units and 10,316 units, respectively.~~in the aggregate. No PSUs will vest if Holdings does not achieve 80% of the three-year cumulative adjusted EBITDA, diluted earnings per share, and net profit ~~minimum~~ performance target. Additionally, unvested PSU’s shall be ratably forfeited upon termination of service prior to December 31, ~~2019.~~2021. If service terminates prior to January 2, ~~2018,~~2020, all unvested PSU’s shall be forfeited, if service terminates prior to January 2, ~~2019,~~2021, 2/3 of unvested PSU’s shall be forfeited and if service terminates prior to January ~~2, 2020,~~4, 2022, 1/3 of unvested PSU’s shall be forfeited. The vested PSUs will be settled within

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30 days of vesting which will occur upon certification of performance ~~results.~~results by the Compensation Committee of the Board of Directors. A dividend equivalent equal to the amount paid in respect of one share of Class A common stock underlying the PSUs began to accrue with respect to the PSUs on the date of grant. Such accrued dividend equivalents are paid to the holder upon vesting of the PSUs. ~~During the three months ended September 30, 2017, the Company deemed that these awards were improbable of vesting and reversed $1.8 million previously recognized compensation cost.~~

~~Performance Stock Unit Transition Award:~~ In recognition of the shift from one-year to three-year performance periods for annual equity awards in 2016, on March 31, 2017, PSU transition awards were granted to certain members of management and executive officers, with 2017 adjusted EBITDA, diluted earnings per share, and net profit performance target conditions and service condition, covering a performance period beginning January 1, 2017 and ending on December 31, 2017. The PSUs will vest based on achieving 80% to 120% of the performance target with the corresponding vested unit amount ranging from 30% to 150%. If the performance target is met at 100%, the transition PSU awards granted on March 31, 2017 will vest at 39,908 units. No PSUs will vest if Holdings does not achieve the adjusted EBITDA, diluted earnings per share, and net profit performance target conditions or the participant’s service does not continue through the last day of the performance period. The vested PSUs will be settled within 30 days of vesting which will occur upon certification of performance results. A dividend equivalent equal to the amount paid in respect of one share of Class A common stock underlying the PSUs began to accrue with respect to the PSUs on the date of grant. Such accrued dividend equivalents are paid to the holder upon vesting of the PSUs. During the three months ended September 30, 2017, the Company deemed that these awards were improbable of vesting and reversed $0.4 million previously recognized compensation cost.

The following table represents the nonvested RSU and PSU activity for the ~~nine~~three months ended ~~September~~March 30, ~~2017:~~2019:


		Weighted
		Average
	Shares of RSU	Grant Date
	and PSU	Fair Value
Beginning balance at January 1, 2019	1,934,447	$	21.50
Granted	1,460,334		15.13
Vested	(303,201)		21.76
Forfeited	(3,122)		18.58
Cancelled (1)	(100,840)		21.46
Nonvested at March 31, 2019	2,987,618	$	17.62

(1)

Represents vested RSUs surrendered in lieu of taxes and returned to the 2013 Equity Incentive Plan.

Weighted

Average

Shares of RSU

Grant Date

and PSU

Fair Value
Beginning balance at January 1, 2017

556,510

$
24.88
Granted

701,788

31.23
Vested

(191,429)

24.68
Forfeited

(42,205)

31.39
Nonvested at September 30, 2017

1,024,664

$
28.95

(1)

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Consolidated Statements of Stockholders’ Equity

For the Three Months Ended March 31, 2019


												Accumulated
	Class A Voting			Class B Voting			Additional					Other		Accumulated		Total
	Common Stock			Common Stock			Paid-in		Treasury Stock			Comprehensive		Earnings		Stockholders’
(In millions, except share and per share data)	Shares	Amount		Shares	Amount		Capital		Shares	Amount		Income (Loss)		(Deficit)		Equity
Balances December 31, 2018	55,401,325	$	0.5	51,769,784	$	0.5	$	1,998.4	3,732,625	$	(56.4)	$	5.5	$	(550.9)	$	1,397.6
Cumulative effect adjustments for the adoption of new accounting principles (ASU 842)	—		—	—		—		—	—		—		—		78.8		78.8
Net loss	—		—	—		—		—	—		—		—		(130.2)		(130.2)
Other comprehensive income	—		—	—		—		—	—		—		(24.9)		—		(24.9)
Dividends declared:
Class A common stock, $0.20/share, net of forfeitures	—		—	—		—		—	—		—		—		(10.7)		(10.7)
Class B common stock, $0.20/share	—		—	—		—		—	—		—		—		(10.4)		(10.4)
Taxes paid for restricted unit withholdings	—		—	—		—		(1.1)	—		—		—		—		(1.1)
Reclassification from temporary equity	75,712		—	—		—		0.4	—		—		—		—		0.4
Stock-based compensation	328,904		—	—		—		4.0	—		—		—		—		4.0
Balances March 31, 2019	55,805,941	$	0.5	51,769,784	$	0.5	$	2,001.7	3,732,625	$	(56.4)	$	(19.4)	$	(623.4)	$	1,303.5

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Consolidated Statements of Stockholders’ Equity

For the Three Months Ended March 31, 2018


												Accumulated
	Class A Voting			Class B Voting			Additional					Other		Accumulated		Total
	Common Stock			Common Stock			Paid-in		Treasury Stock			Comprehensive		Earnings		Stockholders’
(In millions, except share and per share data)	Shares	Amount		Shares	Amount		Capital		Shares	Amount		Income (Loss)		(Deficit)		Equity

Balances December 31, 2017	55,010,160	$	0.5	75,826,927	$	0.8	$	2,241.6	3,232,625	$	(48.2)	$	125.6	$	(207.9)	$	2,112.4
Cumulative effect adjustments for the adoption of new accounting principles (ASU 606, ASU 2016-01 and ASU 2018-02)	—		—	—		—		—	—		—		4.4		(36.2)		(31.8)
Net earnings	—		—	—		—		—	—		—		—		17.7		17.7
Other comprehensive income	—		—	—		—		—	—		—		10.7		—		10.7
Dividends declared:
Class A common stock, $0.20/share	—		—	—		—		—	—		—		—		(10.8)		(10.8)
Class B common stock, $0.20/share	—		—	—		—		—	—		—		—		(15.2)		(15.2)
Reversed dividend accrual for nonvested PSU's	—		—	—		—		—	—		—		—		0.7		0.7
RSUs surrendered to pay for payroll taxes	—		—	—		—		(1.8)	—		—		—		—		(1.8)
Reclassification from temporary equity	27,195		—	—		—		0.3	—		—		—		—		0.3
Stock-based compensation	354,060		—	—		—		2.8	—		—		—		—		2.8
Balances March 31, 2018	55,391,415	$	0.5	75,826,927	$	0.8	$	2,242.9	3,232,625	$	(48.2)	$	140.7	$	(251.7)	$	2,085.0

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NOTE 7—8—INCOME TAXES

The Company’s worldwide effective income tax rate is based on expected income, statutory rates, valuation allowances against deferred tax assets and tax planning opportunities available in the various jurisdictions in which it operates. For interim financial reporting, the Company estimates the worldwide annual income tax rate based on projected taxable income for the full year and records a quarterly income tax provision or benefit in accordance with the anticipated annual rate, adjusted for discrete items, if any. The Company refines the estimates of the year’s taxable income as new information becomes available, including actual year-to-date financial results. This continual estimation process often results in a change to the expected

~~Table of Contents~~

worldwide effective income tax rate for the year. When this occurs, the Company adjusts the income tax provision during the quarter in which the change in estimate occurs so that the year-to-date provision reflects the expected income tax rate. Significant judgment is required in determining the effective tax ~~rate and in evaluating tax positions.~~rate. The Company recognizes income tax-related interest expense and penalties as income tax expense and general and administrative expense, respectively.

~~The worldwide effective tax rate based on annual projected earnings for the year ending~~At March 31, 2019 and December 31, ~~2017 is projected to be 43.3%. The effective rate for~~2018, the ~~nine months ended September 30, 2017 is 39.3%.~~

Company has net deferred tax liabilities of $14.8 million and $13.0 million, respectively. During the ~~nine months ended September 30,~~fourth quarter of 2017, the Company ~~recorded three discrete~~determined that it was appropriate to record a valuation allowance against U.S. deferred tax ~~benefits. The first related to excess~~assets. In addition, several international jurisdictions carry valuation allowances against their deferred tax ~~benefits recognized under Accounting Standards Update 2016-09 “Compensation – Stock Compensation” of approximately $2.6 million. The second related to~~assets. As a result, the ~~tax benefit on the NCM other-than-temporary impairment of approximately $79.7 million. The third related to the tax benefit on the change in Illinois state tax rate of approximately $0.4 million.~~

~~The Company’s consolidated~~effective tax rate for the ~~nine months~~period ended ~~September 30, 2017 differs from~~March 31, 2019 reflects the ~~statutory tax rate primarily due to the foreign tax rate differential driven by Odeon and Nordic earnings,~~impact of these valuation allowances ~~recorded in the Odeon jurisdictions, the domestic discrete items, state income taxes, permanent items~~against U.S. and ~~credits.~~

Tax contingencies and other income tax liabilities were $15.4 million and $12.7 million as of September 30, 2017 and December 31, 2016, respectively, and are included in other long-term liabilities. The increase relates primarily to state income taxes and state income tax credits.

The Company also continues to be subject to examination by the IRS and the fiscal year ended March 29, 2012 (tax year 2011) is currently under extended statute. The Company believes its allowances for income tax contingencies are adequate. Based on the information currently available, the Company does not anticipate a material (or significant) increase or decrease to its tax contingencies within the next 12 months.

The Company is subject to income tax in many jurisdictions outside the U.S. The Company’s operations in certain jurisdictions remain subject to examination for tax years 2012 to 2016, some of which are currently under audit by local tax authorities. The resolutions of these audits are not expected to be material to the Company’s consolidated financial statements.

~~At September 30, 2017 and December 31, 2016, the Company recorded net~~international deferred tax assets generated during the three month period. For the remainder of ~~$174.8 million~~2019, the Company anticipates income tax expense will relate solely to domestic state tax expense and ~~$69.4 million, respectively.~~ international tax expense incurred in certain profitable jurisdictions. The Company evaluates its deferred tax assets each period to determine if a valuation allowance is required based on whether it is “more likely than not” that some portion of the deferred tax assets would not be realized. The ultimate realization of these deferred tax assets is dependent upon the generation of sufficient taxable income during future periods on a federal, state and foreign jurisdiction basis. The Company conducts its evaluation by considering all available positive and negative ~~evidence. This evaluation considers, among other factors,~~evidence, including historical operating results, forecasts of future profitability, the duration of statutory carryforward periods, and the outlooks for the U.S. motion picture and broader ~~economy.~~economy, among others.

The projected worldwide effective tax rate based on annual projected earnings for the year ending December 31, 2019 is (6.1)%. The actual effective rate for the three months ended March 31, 2019 was (4.5)%. The Company’s consolidated tax rate for the three months ended March 31, 2019 differs from the U.S. statutory tax rate primarily due to the valuation allowances in U.S. and foreign jurisdictions, foreign tax rate differences, federal and state tax credits partially offset by state income taxes, permanent differences related to interest, compensation, and other discrete items.

Tax contingencies and other income tax liabilities were $25.6 million and $22.0 million as of March 31, 2019 and December 31, 2018, respectively, and are included in other long-term liabilities. The increase relates primarily to state income taxes and state income tax credits. The Company also continues to be subject to examination by the IRS and the fiscal year ended March 29, 2012 (tax year 2011) is currently under extended statute. The Company’s operations in certain jurisdictions outside of the U.S. remain subject to examination for tax years 2012 to 2018, some of which are currently under audit by local tax authorities. The resolutions of these audits are not expected to be material to the Company’s consolidated financial statements. The Company believes its allowances for income tax contingencies are adequate. Based on the ~~Company’s evaluation through September 30, 2017,~~information currently available, the Company ~~continued~~does not anticipate a material (or significant) increase or decrease to ~~reserve a portion of~~ its ~~net deferred~~ tax ~~assets due to uncertainty of their realization and dependence upon future taxable income.~~contingencies within the next 12 months.

While the Tax Reform Act provides for a territorial tax system, beginning in 2018, it includes the global intangible low-taxed income (“GILTI”) provisions. The ~~accounting for deferred taxes is based upon~~GILTI provisions require the Company to include in its U.S. income tax return foreign subsidiary earnings in excess of an ~~estimate of future results. Differences between estimated and actual results could have a material impact~~allowable return on the Company’s consolidated results of operations, its financial position and the ability to fully realize its deferred tax assets over time. Changes in existing tax laws could also affect actual tax results and the realization of deferred tax assets over time. If future results are significantly different from the Company’s estimates and judgments,foreign subsidiary’s tangible assets. For 2019, the Company ~~may be required to record~~does not anticipate a ~~valuation allowance against some or all of its deferred tax assets prospectively.~~GILTI inclusion.

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NOTE 8—9—FAIR VALUE MEASUREMENTS

Fair value refers to the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the market in which the entity transacts business. The inputs used to develop

~~Table of Contents~~

these fair value measurements are established in a hierarchy, which ranks the quality and reliability of the information used to determine the fair values. The fair value classification is based on levels of inputs. Assets and liabilities that are carried at fair value are classified and disclosed in one of the following categories:

Level 1:	Quoted market prices in active markets for identical assets or liabilities.
Level 2:	Observable market based inputs or unobservable inputs that are corroborated by market data.
Level 3:	Unobservable inputs that are not corroborated by market data.

Recurring Fair Value Measurements. The following table summarizes the fair value hierarchy of the Company’s financial assets and liabilities carried at fair value on a recurring basis as of ~~September 30, 2017:~~March 31, 2019:



			Fair Value Measurements at September 30, 2017 Using								Fair Value Measurements at March 31, 2019 Using
	Total Carrying						Significant								Significant
	Value at		Quoted prices in		Significant other		unobservable		Total Carrying		Quoted prices in		Significant other		unobservable
	September 30,		active market		observable inputs		inputs		Value at		active market		observable inputs		inputs
(In millions)	2017 (1)		(Level 1)		(Level 2)		(Level 3)		March 31, 2019		(Level 1)		(Level 2)		(Level 3)
Other long-term assets:
Money market mutual funds	$	0.2	$	0.2	$	—	$	—	$	0.5	$	0.5	$	—	$	—
Derivative asset										40.6		—		—		40.6
Investments measured at net asset value (1)										10.9		—		—		—
Equity securities, available-for-sale:
Mutual fund large U.S. equity		2.6		2.6		—		—
Mutual fund small/mid U.S. equity		3.7		3.7		—		—
Mutual fund international		1.3		1.3		—		—
Mutual fund balanced		0.6		0.6		—		—
Mutual fund fixed income		1.5		1.5		—		—
Investment in NCM										1.4		1.4		—		—
Total assets at fair value	$	9.9	$	9.9	$	—	$	—	$	53.4	$	1.9	$	—	$	40.6

Corporate Borrowings:
Derivative liability									$	37.3	$	—	$	—	$	37.3
Total liabilities at fair value									$	37.3	$	—	$	—	$	37.3

(1)

The investments relate to a non-qualified deferred compensation arrangement on behalf of certain members of management. The Company has an equivalent liability for this related-party transaction recorded in other long-term liabilities for the deferred compensation obligation.

Valuation Techniques. The Company’s money market mutual funds are invested in funds that seek to preserve principal, are highly liquid, and therefore are recorded on the balance sheet at the principal amounts deposited, which equals fair value. The equity securities, available-for-sale, primarily consist of common stock and mutual funds invested in equity, fixed income, and international funds and are measured at fair value using quoted market prices. See Note 10—Accumulated Other Comprehensive Income for the unrealized gain on the equity securities recorded in accumulated other comprehensive income.

~~Nonrecurring Fair Value Measurements.~~On September 14, 2018, the Company issued Convertible Notes due 2024 with a conversion feature that gave rise to an embedded derivative instrument and a stock purchase and cancellation agreement that gave rise to a derivative asset (See Note 6 ~~Equity interests~~—Corporate Borrowings). The derivative features have been valued using a Monte Carlo simulation approach. The Monte Carlo simulation approach consists of simulated common stock prices from the valuation date to the maturity of the Convertible Notes and to September 14, 2020 for the contingent call option for forfeiture shares. Increases or decreases in ~~NCM, Inc.~~the Company’s share price, the volatility of the share price, the passage of time, risk-free interest rate, discount yield, and ~~NCM LLC were considered impaired and were written down to their fair~~dividend yield will all impact the value ~~during~~of the ~~six months ended June 30, 2017.~~derivative instruments. The Company ~~has not~~re-values the derivative instruments at the end of each reporting period and any changes are recorded ~~an additional impairment for remaining NCM LLC units as they are not classified as held for sale and~~in other expense (income) in the ~~decline in fair value as~~consolidated statements of September 30, 2017 is temporary given the short period of duration of the decline (one quarter) and the severity of the decline (7% below carrying value). The Company has observed closing prices of NCM, Inc. subsequent to September 30, 2017 in excess of our carrying value.operations.

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



			Fair Value Measurements at September 30, 2017 Using								Fair Value Measurements at March 31, 2019 Using
					Significant other		Significant						Significant other		Significant
	Total Carrying		Quoted prices in		observable		unobservable		Total Carrying		Quoted prices in		observable		unobservable
	Value at		active market		inputs		inputs		Value at		active market		inputs		inputs
(In millions)	September 30, 2017		(Level 1)		(Level 2)		(Level 3)		March 31, 2019		(Level 1)		(Level 2)		(Level 3)
Current maturities of corporate borrowings	$	15.2	$	—	$	14.0	$	1.4	$	15.2	$	—	$	14.0	$	1.4
Corporate borrowings		4,277.4		—		4,343.0		2.8		4,737.7		—		4,112.3		515.4

Valuation Technique. Quoted market prices and observable market based inputs were used to estimate fair

~~Table of Contents~~

value for Level 2 inputs. The Level 3 fair value measurement represents the transaction price of the corporate borrowings under market conditions. On September 14, 2018, the Company issued $600.0 million of Convertible Notes due 2024. These notes were issued by private placement, as such there is no observable market for these Convertible Notes. The Company valued these notes at principal value less a discount reflecting a market yield to maturity. See Note 6—Corporate Borrowings for further information.

~~In addition, the Company is required to disclose the fair value~~The carrying amounts of financial instruments that are not recognized at fair value in the statement of financial position for which it is practicable to estimate that value. The methods and assumptions used to estimate the fair value of each class of financial instrument are as follows:

~~Cash~~cash and cash equivalents, accounts receivable, accounts payable, and accrued ~~liabilities:~~

~~The carrying amounts~~liabilities approximate fair value because of the short maturity of these instruments.

NOTE ~~9—THEATRE AND OTHER CLOSURE AND DISPOSITION OF ASSETS~~

~~A rollforward of reserves for theatre and other closure and disposition of assets is as follows:~~

Nine Months Ended
(In millions)

September 30, 2017

September 30, 2016
Beginning balance

$
34.6

$
43.0
Theatre and other closure expense

1.1

3.6
Transfer of assets and liabilities

1.2

—
Foreign currency translation adjustment

1.0

(0.8)
Cash payments

(8.3)

(8.9)
Ending balance

$
29.6

$
36.9

In the accompanying Consolidated Balance Sheets, as of September 30, 2017, the current portion of the ending balance totaling $8.8 million is included with accrued expenses and other liabilities and the long-term portion of the ending balance totaling $20.8 million is included with other long-term liabilities. Theatre and other closure reserves for leases that have not been terminated were recorded at the present value of the future contractual commitments for the base rents, taxes and maintenance.

During the three months ended September 30, 2017 and the 2016, the Company recognized theatre and other closure (income) expense of $(0.6) million and $1.0 million, respectively, and during the nine months ended September 30, 2017 and 2016, the Company recognized theatre and other closure expense of $1.1 million and $3.6 million, respectively. Theatre and other closure expense included the accretion on previously closed properties with remaining lease obligations.

~~NOTE~~ 10—ACCUMULATED OTHER COMPREHENSIVE INCOME

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

Unrealized Net

Unrealized Net

Pension and

Gain from

Gain from Equity

Foreign

Other

Marketable

Method Investees’

(In millions)

Currency

Benefits (1)

Securities

Cash Flow Hedge

Total

Balance, December 31, 2016

$
(1.8)

$
(3.6)

$
0.3

$
2.6

$
(2.5)

Other comprehensive income (loss) before reclassifications

109.3

—

0.5

—

109.8

Amounts reclassified from accumulated other comprehensive income

—

(0.5)

(0.1)

(0.9)

(1.5)

Other comprehensive income (loss)

109.3

(0.5)

0.4

(0.9)

108.3

Balance, September 30, 2017

$
107.5

$
(4.1)

$
0.7

$
1.7

$
105.8

~~Table of Contents~~


					Unrealized Net		Unrealized Net								Unrealized Net		Unrealized Net
			Pension and		Gain from		Gain from Equity						Pension and		Gain from		Gain from Equity
	Foreign		Other		Marketable		Method Investees’				Foreign		Other		Marketable		Method Investees’
(In millions)	Currency		Benefits (1)		Securities		Cash Flow Hedge		Total		Currency		Benefits (1)		Securities		Cash Flow Hedge		Total
Balance, December 31, 2015	$	2.1	$	(3.3)	$	1.5	$	2.5	$	2.8
Balance, December 31, 2018											$	7.2	$	(1.8)	$	—	$	0.1	$	5.5
Other comprehensive income (loss) before reclassifications		0.8		—		0.6		(0.6)		0.8		(25.4)		0.1		—		(0.1)		(25.4)
Amounts reclassified from accumulated other comprehensive income		—		—		(1.8)		0.3		(1.5)		0.5		—		—		—		0.5
Other comprehensive income (loss)		0.8		—		(1.2)		(0.3)		(0.7)
Balance, September 30, 2016	$	2.9	$	(3.3)	$	0.3	$	2.2	$	2.1
Balance, March 31, 2019											$	(17.7)	$	(1.7)	$	—	$	—	$	(19.4)

The tax effects allocated to each component of other comprehensive income (loss) during the three months ended ~~September 30, 2017~~March 31, 2019 and ~~2016~~March 31, 2018 are as follows:

Three Months Ended

September 30, 2017

September 30, 2016




Tax





Tax


Pre-Tax

(Expense)

Net-of-Tax

Pre-Tax

(Expense)

Net-of-Tax
(In millions)

Amount

Benefit

Amount

Amount

Benefit

Amount
Unrealized foreign currency translation adjustment

$
39.0

$
(4.6)

$
34.4

$
0.3

$
(0.1)

$
0.2
Marketable securities:

Unrealized net holding gain (loss) arising during the period

0.4

(0.2)

0.2

0.2

—

0.2
Equity method investees' cash flow hedge:

Unrealized net holding loss arising during the period

0.1

—

0.1

0.1

(0.1)

—
Realized net loss reclassified into equity in earnings of non-consolidated entities

(1.6)

0.6

(1.0)

0.2

(0.1)

0.1
Other comprehensive income (loss)

$
37.9

$
(4.2)

$
33.7

$
0.8

$
(0.3)

$
0.5

~~The tax effects allocated to each component of other comprehensive income (loss) during the nine months ended September 30, 2017 and 2016 are as follows:~~

Nine Months Ended

September 30, 2017

September 30, 2016




Tax





Tax


Pre-Tax

(Expense)

Net-of-Tax

Pre-Tax

(Expense)

Net-of-Tax

(In millions)

Amount

Benefit

Amount

Amount

Benefit

Amount

Unrealized foreign currency translation adjustment (1)

$
120.4

$
(11.1)

$
109.3

$
1.3

$
(0.5)

$
0.8

Pension and other benefit adjustments:

Amortization of net (gain) loss reclassified into general and administrative: other

(0.5)

—

(0.5)

—

—

—

Marketable securities:

Unrealized net holding gain (loss) arising during the period

0.9

(0.4)

0.5

0.9

(0.3)

0.6

Realized net gain reclassified into investment expense (income)

(0.1)

—

(0.1)

(2.9)

1.1

(1.8)

Equity method investees' cash flow hedge:

Unrealized net holding gain (loss) arising during the period

—

—

—

(0.9)

0.3

(0.6)

Realized net (gain) loss reclassified into equity in earnings of non-consolidated entities

(1.5)

0.6

(0.9)

0.5

(0.2)

0.3

Other comprehensive income (loss)

$
119.2

$
(10.9)

$
108.3

$
(1.1)

$
0.4

$
(0.7)


	Three Months Ended
	March 31, 2019						March 31, 2018
			Tax						Tax
	Pre-Tax		(Expense)		Net-of-Tax		Pre-Tax		(Expense)		Net-of-Tax
(In millions)	Amount		Benefit		Amount		Amount		Benefit		Amount
Unrealized foreign currency translation adjustment (1)	$	(25.4)	$	—	$	(25.4)	$	11.4	$	0.3	$	11.7
Realized loss on foreign currency transactions		0.5		—		0.5		—		—		—
Pension and other benefit adjustments:
Net gain arising during the period		0.1		—		0.1		(1.4)		0.3		(1.1)
Equity method investees' cash flow hedge:
Unrealized net holding loss arising during the period		(0.1)		—		(0.1)		0.2		—		0.2
Realized net loss reclassified into equity in earnings of non-consolidated entities		—		—		—		(0.1)		—		(0.1)
Other comprehensive income (loss)	$	(24.9)	$	—	$	(24.9)	$	10.1	$	0.6	$	10.7

(1)

Deferred tax impacts of foreign currency translation for the Odeon and Nordic international operations have not been recorded due to the Company’s intent to remain permanently invested.

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NOTE 11—OPERATING SEGMENTS

The Company reports information about operating segments in accordance with ASC 280-10, Segment Reporting, which requires financial information to be reported based on the way management organizes segments within a company for making operating decisions and evaluating performance. Beginning with the Company’s acquisition of Odeon in 2016, the Company has identified two reportable segments and reporting units for its theatrical exhibition operations, U.S. markets and International markets. The International markets reportable ~~segments consist of two operating segments (Odeon Theatres and Nordic Theatres) with~~segment has operations in or partial interest in theatres in the United Kingdom, Germany, Spain, Italy, Ireland, ~~Austria,~~ Portugal, Sweden, Finland, Estonia, Latvia, Lithuania, Norway, and Denmark. Each segment’s revenue is derived from admissions, food and beverage sales and other ancillary revenues, primarily screen advertising, AMC Stubs® membership fees and other loyalty programs, ticket sales, gift card income and exchange ticket income. The two international operating segments are combined into one reportable segment (International markets) because they have similar economic characteristics and meet the aggregation criteria described in the accounting guidance for segment reporting. The measure of segment profit and loss the Company uses to evaluate performance and allocate its resources is Adjusted EBITDA, as defined in the reconciliation table below. The Company does not report asset information by segment because that information is not used to evaluate the performance of or allocate resources between segments.

Below is a breakdown of select financial information by reportable operating segment:


	Three Months Ended				Nine Months Ended				Three Months Ended
Revenues (In millions)	September 30, 2017		September 30, 2016		September 30, 2017		September 30, 2016		March 31, 2019		March 31, 2018
U.S. markets	$	845.7	$	778.3	$	2,745.2	$	2,305.0	$	867.2	$	982.1
International markets		333.0		1.5		917.2		4.8		333.2		401.5
Total revenues	$	1,178.7	$	779.8	$	3,662.4	$	2,309.8	$	1,200.4	$	1,383.6


	Three Months Ended				Nine Months Ended				Three Months Ended
Adjusted EBITDA (1) (In millions)	September 30, 2017		September 30, 2016		September 30, 2017		September 30, 2016		March 31, 2019		March 31, 2018
U.S. markets (2)	$	107.6	$	144.5	$	420.6	$	420.5	$	77.5	$	208.4
International markets		39.8		(0.1)		113.7		(0.1)		30.7		69.5
Total Adjusted EBITDA	$	147.4	$	144.4	$	534.3	$	420.4	$	108.2	$	277.9

(1)

The Company presents Adjusted EBITDA as a supplemental measure of its performance. The Company defines Adjusted EBITDA as net earnings (loss) plus (i) income tax provision (benefit), (ii) interest expense and (iii) depreciation and amortization, as further adjusted to eliminate the impact of certain items that the Company does not consider indicative of its ongoing operating performance and to include attributable EBITDA from equity investments in theatre operations in international markets and any cash distributions of earnings from its other equity method investees. The measure of segment profit and loss the Company uses to evaluate performance and allocate its resources is Adjusted EBITDA, which is consistent with how Adjusted EBITDA is defined in ~~our~~its debt indentures.

(2)

Distributions from NCM are reported entirely within the U.S. markets segment.


	Three Months Ended				Nine Months Ended				Three Months Ended
Capital Expenditures (In millions)	September 30, 2017		September 30, 2016		September 30, 2017		September 30, 2016		March 31, 2019		March 31, 2018
U.S. markets	$	126.9	$	116.3	$	416.6	$	256.6	$	75.5	$	71.0
International markets		22.8		—		51.1		—		39.3		36.3
Total capital expenditures	$	149.7	$	116.3	$	467.7	$	256.6	$	114.8	$	107.3

~~Financial Information About Geographic Area:~~

Three Months Ended

Nine Months Ended
Revenues (In millions)

September 30, 2017

September 30, 2016

September 30, 2017

September 30, 2016
United States

$
845.7

$
778.3

$
2,745.2

$
2,305.0
United Kingdom

127.8

1.5

366.9

4.8
Sweden

47.9

—

89.2

—
Italy

33.2

—

125.9

—

Table of Contents

Spain

47.4

—

132.3

—
Germany

26.6

—

86.6

—
Finland

21.9

—

41.5

—
Other foreign countries

28.2

—

74.8

—
Total

$
1,178.7

$
779.8

$
3,662.4

$
2,309.8

Financial Information About Geographic Area:

As of

As of
Long-term assets, net (In millions)

September 30, 2017

December 31, 2016
United States

$
6,283.8

$
6,156.9
International

3,004.9

1,801.3
Total long-term assets (1)

$
9,288.7

$
7,958.2


	Three Months Ended
Revenues (In millions)	March 31, 2019		March 31, 2018
United States	$	867.2	$	982.1
United Kingdom		102.1		130.5
Spain		41.4		49.6
Sweden		45.7		60.6
Italy		53.2		60.9
Germany		31.6		32.8
Finland		25.7		28.0
Ireland		8.0		10.5
Other foreign countries		25.5		28.6
Total	$	1,200.4	$	1,383.6


	As of		As of
Long-term assets, net (In millions)	March 31, 2019		December 31, 2018
United States	$	8,989.2	$	5,826.5
International		3,932.4		2,888.0
Total long-term assets (1)	$	12,921.6	$	8,714.5

(1)

Long-term assets are comprised of property, intangible assets, goodwill, deferred income tax assets and other long-term assets, and for 2019, right-of-use assets.

The following table sets forth a reconciliation of net earnings (loss) to Adjusted EBITDA:


	Three Months Ended				Nine Months Ended				Three Months Ended
(In millions)	September 30, 2017		September 30, 2016		September 30, 2017		September 30, 2016		March 31, 2019		March 31, 2018
Net earnings (loss)	$	(42.7)	$	30.4	$	(210.8)	$	82.7	$	(130.2)	$	17.7
Plus:
Income tax provision (benefit)		(17.6)		20.1		(136.4)		54.6
Income tax provision										5.7		4.7
Interest expense		71.4		26.7		203.4		80.8		83.6		82.5
Depreciation and amortization		135.2		63.1		393.9		185.8		113.0		130.5
Certain operating expenses (1)		3.7		5.8		12.5		13.0		2.5		3.7
Equity in (earnings) loss of non-consolidated entities (2)		1.8		(12.0)		199.1		(28.1)		(6.5)		9.0
Cash distributions from non-consolidated entities (3)		6.5		3.4		33.1		21.6		10.5		24.3
Attributable EBITDA (4)		0.8		—		1.8		—		0.9		2.0
Investment (income) expense		(16.6)		0.2		(21.6)		(9.6)
Investment expense (income)										(16.1)		(5.2)
Other expense (income) (5)		(0.6)		0.1		(1.8)		—		29.9		1.2
General and administrative expense—unallocated:
Merger, acquisition and transaction costs (6)		5.6		4.9		57.2		15.1
Stock-based compensation expense (7)		(0.1)		1.7		3.9		4.5
Non-cash rent - purchase accounting (6)										7.6		—
General and administrative — unallocated:
Merger, acquisition and transaction costs (7)										3.3		4.7
Stock-based compensation expense (8)										4.0		2.8
Adjusted EBITDA	$	147.4	$	144.4	$	534.3	$	420.4	$	108.2	$	277.9

(1)

Amounts represent preopening expense related to temporarily closed screens under renovation, theatre and other closure expense for the permanent closure of screens including the related accretion of interest, non-cash deferred digital equipment rent expense, and disposition of assets and other non-operating gains or losses included in operating expenses. The Company has excluded these items as they are non-cash in nature, include components of interest cost for the time value of money or are non-operating in nature.

(2)

~~Equity~~During the three months ended March 31, 2019, the Company recorded $5.6 million in ~~(earnings)~~earnings from DCIP. During the three months ended March 31, 2018, equity in loss of non-consolidated entities includes ~~an other-than-temporary~~a lower of carrying value impairment ofloss on the ~~Company’s investment in~~held-for-sale portion of NCM of ~~$204.5 million for the nine months ended September 30, 2017.~~ $16.0 million. The ~~other-than-temporary~~ impairment ~~charge reflects~~charges reflect recording ~~our~~its held-for-sale units and other-than-temporary impaired shares at the publicly quoted per share price on ~~June 30, 2017~~March 31, 2018 of ~~$7.42 based on the Company’s determination that the decline in the price per share during the quarter was other than temporary.~~$5.19. Equity in (earnings) loss of non-consolidated entities also includes ~~loss on~~ the ~~sale~~

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surrender (disposition) of a portion of ~~the Company’s~~its investment in NCM of ~~$21.0 million and $22.2~~$1.1 million during the three ~~and nine~~ months ended ~~September 30, 2017, respectively.~~March 31, 2018.

(3)

~~Table of Contents~~

distributions is an appropriate reflection of the contribution of these investments to its operations.

(4)

Attributable EBITDA includes the EBITDA from equity investments in theatre operators in certain international markets. See below for a reconciliation of the Company’s equity ~~earnings~~loss of non-consolidated entities to attributable EBITDA. Because these equity investments are in theatre operators in regions where the Company holds a significant market share, the Company believes attributable EBITDA is more indicative of the performance of these equity investments and management uses this measure to monitor and evaluate these equity investments. The Company also provides services to these theatre operators including information technology systems, certain on-screen advertising services and ~~our~~its gift card and package ticket program. As these investments relate only to our Nordic acquisition, the second quarter of 2017 represents the first time the Company has made this adjustment and does not impact prior historical presentations of Adjusted EBITDA.


	Three Months Ended				Nine Months Ended				Three Months Ended
(In millions)	September 30, 2017		September 30, 2016		September 30, 2017		September 30, 2016		March 31, 2019		March 31, 2018
Equity in loss of non-consolidated entities	$	1.8	$	—	$	199.1	$	—
Equity in (earnings) loss of non-consolidated entities									$	(6.5)	$	9.0
Less:
Equity in loss of non-consolidated entities excluding international theatre JV's		2.1		—		199.6		—
Equity in earnings of International theatre JV's		0.3		—		0.5		—
Equity in (earnings) loss of non-consolidated entities excluding international theatre JV's										(6.0)		10.3
Equity in earnings (loss) of International theatre JV's										0.5		1.3
Investment income										(0.2)		—
Depreciation and amortization		0.5		—		1.3		—		0.6		0.7
Attributable EBITDA	$	0.8	$	—	$	1.8	$	—	$	0.9	$	2.0

(5)

Other ~~income~~ expense (income) for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2019 includes ~~$3.2~~a loss of $28.4 million as a result of a decrease in fair value of its derivative asset and an increase in fair value of its derivative liability for the Convertible Notes due 2024, also included are financing losses and financing related foreign currency transaction losses. During the three months ended March 31, 2018, the Company recorded expense of $1.6 million financing related foreign currency transaction ~~gains,~~losses, partially offset by ~~$1.0 million in fees relating to third party fees related to the Third Amendment to our Senior Secured Credit Agreement and a~~ $0.4 million ~~loss on the redemption of the Bridge Loan Facility. Other income~~ ~~for~~ ~~the three months ended September 30, 2017 includes $0.5 million related to financing related foreign~~forward currency ~~transaction~~contract gains.

(6)

Reflects amortization of certain intangible assets reclassified from depreciation and amortization to rent expense, due to the adoption of ASC 842.

(7)

Merger, acquisition and transition costs are excluded as they are non-operating in nature.

~~(7)~~(8)

~~Non-cash or non-recurring~~Stock-based compensation expense is non-cash expense included in general and administrative: other.

~~NOTE 12—EMPLOYEE BENEFIT PLANS~~

In the U.S., the Company sponsors frozen non-contributory qualified and non-qualified defined benefit pension plans generally covering all employees who, prior to the freeze, were age 21 or older and had completed at least 1,000 hours of service in their first twelve months of employment, or in a calendar year ending thereafter, and who were not covered by a collective bargaining agreement. The Company also offered eligible retirees the opportunity to participate in a health plan. Certain employees were eligible for subsidized postretirement medical benefits. The eligibility for these benefits was based upon a participant’s age and service as of January 1, 2009. The Company also sponsors a postretirement deferred compensation plan.

~~Net periodic benefit cost (credit) recognized for the plans in general and administrative: other during the three months ended September 30, 2017 and 2016 consists of the following:~~

U.S. Pension Benefits

International Pension Benefits
(In millions)

September 30, 2017

September 30, 2016

September 30, 2017

September 30, 2016
Components of net periodic benefit cost:

Service cost

$
—

$
—

$
0.1

$
—
Interest cost

1.1

1.1

0.7

—
Expected return on plan assets

(0.8)

(0.9)

(0.8)

—
Net periodic benefit cost (credit)

$
0.3

$
0.2

$
—

$
—

~~Table of Contents~~

~~Net periodic benefit cost (credit) recognized for the plans in general and administrative: other during the nine months ended September 30, 2017 and 2016 consists of the following:~~

U.S. Pension Benefits

International Pension Benefits

(In millions)

September 30, 2017

September 30, 2016

September 30, 2017

September 30, 2016

Components of net periodic benefit cost:

Service cost

$
—

$
—

$
0.2

$
—

Interest cost

3.2

3.3

2.0

—

Expected return on plan assets

(2.4)

(2.7)

(2.4)

—

Net periodic benefit cost (credit)

$
0.8

$
0.6

$
(0.2)

$
—

NOTE ~~13—~~12—COMMITMENTS AND CONTINGENCIES

The Company, in the normal course of business, is a party to various ordinary course claims from vendors (including food and beverage suppliers and film distributors), landlords, competitors, and other legal proceedings. If management believes that a loss arising from these actions is probable and can reasonably be estimated, the Company records the amount of the loss, or the minimum estimated liability when the loss is estimated using a range and no point is more probable than another. As additional information becomes available, any potential liability related to these actions is assessed and the estimates are revised, if necessary. Management believes that the ultimate outcome of such matters discussed below, individually and in the aggregate, will not have a material adverse effect on the Company’s ~~consolidated~~ financial position or overall trends in results of operations. However, litigation and claims are subject to inherent uncertainties and unfavorable outcomes can occur. An unfavorable outcome might include monetary damages. If an unfavorable outcome were to occur, there exists the possibility of a material adverse impact on the results of operations in the period in which the outcome occurs or in future periods.

On ~~May 28, 2015, the Company received a Civil Investigative Demand (“CID”) from the Antitrust Division of the United States Department of Justice in connection with an investigation under Sections 1~~January 12, 2018 and 2 of the Sherman Antitrust Act. Beginning in May 2015, the Company also received CIDs from the Attorneys General for the States of Ohio, Texas, Washington, Florida, New York, Kansas, and from the District of Columbia, regarding similar inquiries under those states’ antitrust laws. The CIDs request the production of documents and answers to interrogatories concerning potentially anticompetitive conduct, including film clearances and participation in certain joint ventures. The Company may receive additional CIDs from antitrust authorities in other jurisdictions in which it operates. The Company does not believe it has violatedJanuary 19, 2018, two putative federal ~~or state antitrust laws and is cooperating with the relevant governmental authorities. However, the Company cannot predict the ultimate scope, duration or outcome of these investigations.~~

securities class actions, captioned Hawaii

3332

Table of Contents

Structural Ironworkers Pension Trust Fund v. AMC Entertainment Holdings, Inc., et al., Case No. 1:18-cv-00299-AJN (the “Hawaii Action”), and Nichols v. AMC Entertainment Holdings, Inc., et al., Case No. 1:18-cv-00510-AJN (the “Nichols Action,” and together with the Hawaii Action, the “Actions”), respectively, were filed against the Company in the U.S. District Court for the Southern District of New York. The Actions, which name certain of the Company’s officers and directors and, in the case of the Hawaii Action, the underwriters of the Company’s February 8, 2017 secondary public offering, as defendants, asserted claims under some or all of Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 with respect to alleged material misstatements and omissions in the registration statement for the secondary public offering and in certain other public disclosures. On May 30, 2018, the court consolidated the Actions and appointed the International Union of Operating Engineers Pension Fund of Eastern Pennsylvania and Delaware as lead plaintiff. On August 13, 2018, lead plaintiff and additional named plaintiff Hawaii Structural Ironworkers Pension Trust Fund (“Plaintiffs”) filed an Amended Class Action Complaint. On November 21, 2018, Plaintiffs filed a Second Amended Class Action Complaint. On January 22, 2019, the defendants moved to dismiss the Second Amended Class Action Complaint.

On May 21, 2018, a stockholder derivative complaint, captioned Gantulga v. Aron, et al., Case No. 2:18-cv-02262-JAR-TJJ (the “Gantulga Action”), was filed against certain of the Company’s officers and directors in the U.S. District Court for the District of Kansas. The Gantulga Action, which was filed on behalf of the Company, asserts claims under Section 14(a) of the Securities Exchange Act of 1934 and for breaches of fiduciary duty and unjust enrichment based on allegations substantially similar to the Actions. On August 27, 2018, defendants and the Company as nominal defendant filed a motion to dismiss or, in the alternative, to transfer the action to the U.S. District Court for the Southern District of New York. On September 17, 2018, plaintiff filed an amended complaint. On October 12, 2018, the parties filed a joint motion to transfer the action to the U.S. District Court for the Southern District of New York, which the court granted on October 15, 2018. When the action was transferred to the Southern District of New York, it was re-captioned Gantulga v. Aron, et al., Case No. 1:18-cv-10007-AJN. The parties filed a joint stipulation to stay the action, which the court granted on December 17, 2018.

On April 22, 2019, a putative stockholder class and derivative complaint, captioned Lao v. Dalian Wanda Group Co., Ltd., et al., C.A. No. 2019-0303-JRS (the “Lao Action”), was filed against certain of the Company’s directors, Dalian Wanda Group Co., Ltd. (“Wanda”), two of Wanda’s affiliates, Silver Lake Group, L.L.C. (“Silver Lake”), and one of Silver Lake’s affiliates in the Delaware Court of Chancery. The Lao Action asserts claims directly, on behalf of a putative class of Company stockholders, and derivatively, on behalf of the Company, for breaches of fiduciary duty and aiding and abetting breaches of fiduciary duty with respect to transactions that the Company entered into with affiliates of Wanda and Silver Lake on September 14, 2018, and the special cash dividend of $1.55 per share of common stock that was payable on September 28, 2018 to the Company’s stockholders of record as of September 25, 2018.

The Company remains contingently liable for lease payments under certain leases of theatres that it previously divested, in the event that such assignees are unable to fulfill their future lease payment obligations. Due to the variety of remedies available, the Company believes that if the current tenant defaulted on the leases it would not have a material effect on the Company’s financial condition, results of operations or cash flows.

NOTE ~~14—~~13—EARNINGS (LOSS) PER SHARE

Basic net earnings (loss) per share is computed by dividing net earnings (loss) by the weighted-average number of common shares outstanding. Diluted earnings per share includes the effects of unvested RSU’s with a service condition only and unvested contingently issuable RSUs ~~and PSUs~~ that have service and performance conditions, if dilutive, as well as potential dilutive shares from the conversion feature of the Convertible Notes due 2024, if dilutive.

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The following table sets forth the computation of basic and diluted earnings (loss) per common share:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,				Three Months Ended
(In millions)	2017		2016		2017		2016		March 31, 2019		March 31, 2018
Numerator:
Net earnings (loss) from continuing operations	$	(42.7)	$	30.4	$	(210.8)	$	82.7
Net earnings (loss) for basic earnings (loss) per share									$	(130.2)	$	17.7
Net earnings (loss) for diluted earnings (loss) per share									$	(130.2)	$	17.7

Denominator (shares in thousands):
Weighted average shares for basic earnings per common share		131,077		98,194		127,902		98,196
Common equivalent shares for RSUs and PSUs		—		90		—		15
Shares for diluted earnings per common share		131,077		98,284		127,902		98,211
Weighted average shares for basic earnings (loss) per common share										103,783		128,046
Weighted average shares for diluted earnings (loss) per common share										103,783		128,046
Basic earnings (loss) per common share	$	(0.33)	$	0.31	$	(1.65)	$	0.84	$	(1.25)	$	0.14
Diluted earnings (loss) per common share	$	(0.33)	$	0.31	$	(1.65)	$	0.84	$	(1.25)	$	0.14

Vested RSUs and PSU’s have dividend rights identical to the Company’s Class A and Class B common stock and are treated as outstanding shares for purposes of computing basic and diluted earnings per share. Certain unvested RSUs and unvested PSUs are subject to performance conditions and are included in diluted earnings per share, if dilutive, based on the number of shares, if any, that would be issuable under the terms of the Company’s 2013 Equity Incentive Plan ~~(“Plan”)~~ if the end of the reporting period were the end of the contingency period. During the three ~~and nine~~ months ended ~~September 30, 2017,~~March 31, 2019, unvested PSU’s of 504,253 at the minimum performance target were not included in the computation of diluted earnings (loss) per share because they would not be issuable if the end of the reporting period were the end of the contingency period and ~~Transition~~unvested RSU’s of 43,073 were not included in the computation of diluted earnings per share because they would not be issuable if the end of the reporting period were the end of the contingency period or they would be anti-dilutive.

During the three months ended March 31, 2018, unvested PSU’s of ~~187,468~~371,631 at the minimum performance target were not included in the computation of diluted loss per share since the shares would not be issuable under the terms of the Plan, if the end of the reporting period were the end of the contingency period and they would also be anti-dilutive. During the three ~~and nine~~ months ended ~~September 30, 2017,~~March 31, 2018, unvested RSU’s of ~~366,773~~911,719 were not included in the computation of diluted loss per share because they would be anti-dilutive.

The Company uses the if-converted method for calculating any potential dilutive effect of the Convertible Notes due 2024 that were issued on September 14, 2018. The Company has not adjusted net loss for the three months ended March 31, 2019 to eliminate the interest expense and the loss for the derivative liability related to the Convertible Notes due 2024 of $8.0 million and $13.3 million, respectively in the computation of diluted loss per share because the effects would be anti-dilutive. The Company has not included in diluted weighted average shares approximately 31.7 million shares issuable upon conversion for the three months ended March 31, 2019, as the effects would be anti-dilutive. Based on the current conversion price of $18.95 per share the Convertible Notes due 2024 are convertible into 31,662,269 Class A common shares.

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NOTE ~~15—~~14—CONDENSED CONSOLIDATING FINANCIAL INFORMATION

The accompanying condensed consolidating financial information has been prepared and presented pursuant to SEC Regulation S-X Rule 3-10, Financial statements of guarantors and issuers of guaranteed securities registered or being registered. Each of the subsidiary guarantors are 100% owned by Holdings. The subsidiary guarantees of the Company’s Notes due 2022, the Sterling Notes due 2024, the Notes due 2025, the Notes due 2026, and the Notes due 2027 are full and unconditional and joint and several and subject to customary release provisions. The Company and its subsidiary guarantors’ investments in its consolidated subsidiaries are presented under the equity method of accounting.

Consolidating Statement of Operations

Three Months Ended ~~September 30, 2017:~~March 31, 2019:


			Subsidiary		Subsidiary		Consolidating		Consolidated				Subsidiary		Subsidiary		Consolidating		Consolidated
(In millions)	Holdings		Guarantors		Non-Guarantors		Adjustments		Holdings		Holdings		Guarantors		Non-Guarantors		Adjustments		Holdings
Revenues
Admissions	$	—	$	438.2	$	315.3	$	—	$	753.5	$	—	$	422.2	$	309.3	$	—	$	731.5
Food and beverage		—		222.0		139.4		—		361.4		—		225.3		143.5		—		368.8
Other theatre		—		36.7		27.1		—		63.8		—		58.1		42.0		—		100.1
Total revenues		—		696.9		481.8		—		1,178.7		—		705.6		494.8		—		1,200.4
Operating costs and expenses
Film exhibition costs		—		221.5		143.3		—		364.8		—		229.3		136.0		—		365.3
Food and beverage costs		—		33.5		27.2		—		60.7		—		35.0		26.5		—		61.5
Operating expense		—		216.5		166.7		—		383.2
Operating expense, excluding depreciation and amortization												—		230.1		172.7		—		402.8
Rent		—		123.0		77.7		—		200.7		—		141.2		100.8		—		242.0
General and administrative:
Merger, acquisition and transaction costs		—		3.7		1.9		—		5.6		—		1.2		2.1		—		3.3
Other		0.3		16.7		15.8		—		32.8
Other, excluding depreciation and amortization												—		27.5		18.7		—		46.2
Depreciation and amortization		—		72.9		62.3		—		135.2		—		67.2		45.8		—		113.0
Operating costs and expenses		0.3		687.8		494.9		—		1,183.0		—		731.5		502.6		—		1,234.1
Operating income (loss)		(0.3)		9.1		(13.1)		—		(4.3)
Operating loss												—		(25.9)		(7.8)		—		(33.7)
Other expense (income):
Equity in net (earnings) loss of subsidiaries		38.9		20.9		—		(59.8)		—
Other income		—		(0.4)		(0.2)		—		(0.6)
Equity in net loss of subsidiaries												294.7		198.9		—		(493.6)		—
Other expense												28.9		0.5		0.4		—		29.8
Interest expense:
Corporate borrowings		60.3		57.7		0.5		(57.7)		60.8		70.8		71.0		0.7		(71.2)		71.3
Capital and financing lease obligations		—		1.9		8.7		—		10.6		—		0.4		1.7		—		2.1
Equity in (earnings) loss of non-consolidated entities		—		3.8		(2.0)		—		1.8
Non-cash NCM exhibitor service agreement												—		10.2		—		—		10.2
Intercompany interest expense												—		—		197.5		(197.5)		—
Equity in earnings of non-consolidated entities												—		(6.1)		(0.4)		—		(6.5)
Investment income		(56.8)		(17.0)		(0.5)		57.7		(16.6)		(264.2)		(9.6)		(11.0)		268.7		(16.1)
Total other expense (income)		42.4		66.9		6.5		(59.8)		56.0		130.2		265.3		188.9		(493.6)		90.8
Earnings (loss) before income taxes		(42.7)		(57.8)		(19.6)		59.8		(60.3)
Income tax provision (benefit)		—		(18.9)		1.3		—		(17.6)
Loss before income taxes												(130.2)		(291.2)		(196.7)		493.6		(124.5)
Income tax provision												—		3.5		2.2		—		5.7
Net loss	$	(42.7)	$	(38.9)	$	(20.9)	$	59.8	$	(42.7)	$	(130.2)	$	(294.7)	$	(198.9)	$	493.6	$	(130.2)

Table of Contents

Consolidating Statement of Operations

Three Months Ended ~~September 30, 2016:~~March 31, 2018:


			Subsidiary		Subsidiary		Consolidating		Consolidated						Subsidiary			Subsidiary			Consolidating			Consolidated
(In millions)	Holdings		Guarantors		Non-Guarantors		Adjustments		Holdings		Holdings			Guarantors			Non-Guarantors			Adjustments			Holdings
Revenues
Admissions	$	—	$	495.8	$	1.0	$	—	$	496.8		$	—		$	497.1		$	377.9		$	—		$	875.0
Food and beverage		—		248.5		0.4		—		248.9			—			245.7			160.1			—			405.8
Other theatre		—		34.0		0.1		—		34.1			—			61.0			41.8			—			102.8
Total revenues		—		778.3		1.5		—		779.8			—			803.8			579.8			—			1,383.6
Operating costs and expenses
Film exhibition costs		—		258.6		0.5		—		259.1			—			260.7			165.8			—			426.5
Food and beverage costs		—		33.8		0.1		—		33.9			—			36.4			29.8			—			66.2
Operating expense		—		210.8		0.8		—		211.6
Operating expense, excluding depreciation and amortization													—			225.4			186.5			—			411.9
Rent		—		121.5		0.4		—		121.9			—			107.5			82.2			—			189.7
General and administrative:
Merger, acquisition and transaction costs		—		4.9		—		—		4.9			—			4.0			0.7			—			4.7
Other		—		19.8		—		—		19.8
Other, excluding depreciation and amortization													—			26.3			17.9			—			44.2
Depreciation and amortization		—		63.1		—		—		63.1			—			69.8			60.7			—			130.5
Operating costs and expenses		—		712.5		1.8		—		714.3			—			730.1			543.6			—			1,273.7
Operating income (loss)		—		65.8		(0.3)		—		65.5
Operating income													—			73.7			36.2			—			109.9
Other expense (income):
Equity in net (earnings) loss of subsidiaries		(28.3)		0.2		—		28.1		—
Equity in net earnings of subsidiaries													(21.3)			(23.3)			—			44.6			—
Other expense (income)		—		0.1		—		—		0.1			—			(0.2)			1.4			—			1.2
Interest expense:
Corporate borrowings		24.6		26.9		—		(26.9)		24.6			60.7			62.7			1.0			(62.7)			61.7
Capital and financing lease obligations		—		2.1		—		—		2.1			—			1.8			8.5			—			10.3
Equity in earnings of non-consolidated entities		—		(12.0)		—		—		(12.0)
Non-cash NCM exhibitor service agreement													—			10.5			—						10.5
Equity in (earnings) loss of non-consolidated entities													—			10.1			(1.1)			—			9.0
Investment income		(26.7)		0.1		(0.1)		26.9		0.2			(57.1)			(10.3)			(0.5)			62.7			(5.2)
Total other expense (income)		(30.4)		17.4		(0.1)		28.1		15.0			(17.7)			51.3			9.3			44.6			87.5
Earnings (loss) before income taxes		30.4		48.4		(0.2)		(28.1)		50.5
Earnings before income taxes													17.7			22.4			26.9			(44.6)			22.4
Income tax provision		—		20.1		—		—		20.1			—			1.1			3.6			—			4.7
Net earnings (loss)	$	30.4	$	28.3	$	(0.2)	$	(28.1)	$	30.4
Net earnings												$	17.7		$	21.3		$	23.3		$	(44.6)		$	17.7

Table of Contents

Consolidating Statement of ~~Operations~~Comprehensive Loss

~~Nine~~Three Months Ended ~~September 30, 2017:~~March 31, 2019:

Subsidiary

Subsidiary

Consolidating

Consolidated
(In millions)

Holdings

Guarantors

Non-Guarantors

Adjustments

Holdings
Revenues















Admissions

$
—

$
1,402.3

$
930.1

$
—

$
2,332.4
Food and beverage

—

707.4

425.7

—

1,133.1
Other theatre

—

118.8

78.1

—

196.9
Total revenues

—

2,228.5

1,433.9

—

3,662.4
Operating costs and expenses

Film exhibition costs

—

738.8

425.4

—

1,164.2
Food and beverage costs

—

100.5

82.1

—

182.6
Operating expense

—

652.7

476.1

—

1,128.8
Rent

—

370.9

220.0

—

590.9
General and administrative:

Merger, acquisition and transaction costs

—

54.3

2.9

—

57.2
Other

1.8

66.0

45.6

—

113.4
Depreciation and amortization

—

219.4

174.5

—

393.9
Operating costs and expenses

1.8

2,202.6

1,426.6

—

3,631.0
Operating income (loss)

(1.8)

25.9

7.3

—

31.4
Other expense (income):

Equity in net (earnings) loss of subsidiaries

199.8

19.0

—

(218.8)

—
Other expense (income)

—

(2.1)

(0.2)

—

(2.3)
Interest expense:

Corporate borrowings

170.1

167.1

1.5

(167.0)

171.7
Capital and financing lease obligations

—

5.8

25.9

—

31.7
Equity in (earnings) loss of non-consolidated entities

—

201.2

(2.1)

—

199.1
Investment income

(160.9)

(27.3)

(0.4)

167.0

(21.6)
Total other expense (income)

209.0

363.7

24.7

(218.8)

378.6
Loss before income taxes

(210.8)

(337.8)

(17.4)

218.8

(347.2)
Income tax provision (benefit)

—

(138.0)

1.6

—

(136.4)
Net loss

$
(210.8)

$
(199.8)

$
(19.0)

$
218.8

$
(210.8)


			Subsidiary		Subsidiary		Consolidating		Consolidated
(In millions)	Holdings		Guarantors		Non-Guarantors		Adjustments		Holdings
Net loss	$	(130.2)	$	(294.7)	$	(198.9)	$	493.6	$	(130.2)
Other comprehensive income (loss):
Equity in other comprehensive loss of subsidiaries		(24.9)		(15.6)		—		40.5		—
Unrealized foreign currency translation adjustment, net of tax		—		(9.7)		(15.7)		—		(25.4)
Realized loss on foreign currency transactions reclassified into other expense, net of tax		—		0.5		—		—		0.5
Pension and other benefit adjustments:
Net gain arising during the period, net of tax		—		—		0.1		—		0.1
Equity method investees’ cash flow hedge:
Unrealized net holding gain arising during the period, net of tax		—		(0.1)		—		—		(0.1)
Other comprehensive loss		(24.9)		(24.9)		(15.6)		40.5		(24.9)
Total comprehensive loss	$	(155.1)	$	(319.6)	$	(214.5)	$	534.1	$	(155.1)

Consolidating Statement of Comprehensive Income

Three Months Ended March 31, 2018:


			Subsidiary		Subsidiary		Consolidating		Consolidated
(In millions)	Holdings		Guarantors		Non-Guarantors		Adjustments		Holdings
Net earnings	$	17.7	$	21.3	$	23.3	$	(44.6)	$	17.7
Other comprehensive income (loss):
Equity in other comprehensive income (loss) of subsidiaries		10.7		15.8		—		(26.5)		—
Unrealized foreign currency translation adjustment, net of tax		—		(5.2)		16.9		—		11.7
Pension and other benefit adjustments:
Net loss arising during period, net of tax		—		—		(1.1)		—		(1.1)
Equity method investees’ cash flow hedge:
Unrealized net holding gain arising during the period, net of tax		—		0.2		—		—		0.2
Realized net holding gain reclassified to equity in earnings of non-consolidated entities, net of tax		—		(0.1)		—		—		(0.1)
Other comprehensive income		10.7		10.7		15.8		(26.5)		10.7
Total comprehensive income	$	28.4	$	32.0	$	39.1	$	(71.1)	$	28.4

Table of Contents

Consolidating ~~Statement~~Balance Sheet

As of ~~Operations~~

~~Nine Months Ended September 30, 2016:~~March 31, 2019:

Subsidiary

Subsidiary

Consolidating

Consolidated
(In millions)

Holdings

Guarantors

Non-Guarantors

Adjustments

Holdings
Revenues















Admissions

$
—

$
1,457.5

$
3.1

$
—

$
1,460.6
Food and beverage

—

735.3

1.3

—

736.6
Other theatre

—

112.2

0.4

—

112.6
Total revenues

—

2,305.0

4.8

—

2,309.8
Operating costs and expenses

Film exhibition costs

—

782.9

1.5

—

784.4
Food and beverage costs

—

101.7

0.3

—

102.0
Operating expense

—

611.4

2.5

—

613.9
Rent

—

367.9

1.4

—

369.3
General and administrative:

Merger, acquisition and transaction costs

—

15.1

—

—

15.1
Other

—

58.9

—

—

58.9
Depreciation and amortization

—

185.8

—

—

185.8
Operating costs and expenses

—

2,123.7

5.7

—

2,129.4
Operating income (loss)

—

181.3

(0.9)

—

180.4
Other expense (income):

Equity in net (earnings) loss of subsidiaries

(76.5)

0.4

—

76.1

—
Interest expense:

Corporate borrowings

74.3

86.1

—

(86.0)

74.4
Capital and financing lease obligations

—

6.4

—

—

6.4
Equity in earnings of non-consolidated entities

—

(28.1)

—

—

(28.1)
Investment income

(80.5)

(14.6)

(0.5)

86.0

(9.6)
Total other expense (income)

(82.7)

50.2

(0.5)

76.1

43.1
Earnings (loss) before income taxes

82.7

131.1

(0.4)

(76.1)

137.3
Income tax provision

—

54.6

—

—

54.6
Net earnings (loss)

$
82.7

$
76.5

$
(0.4)

$
(76.1)

$
82.7


			Subsidiary		Subsidiary		Consolidating		Consolidated
(In millions)	Holdings		Guarantors		Non-Guarantors		Adjustments		Holdings
Assets
Current assets:
Cash and cash equivalents	$	0.3	$	91.3	$	93.0	$	—	$	184.6
Restricted cash		—		—		10.6		—		10.6
Receivables, net		—		107.9		88.2		(2.3)		193.8
Other current assets		—		100.9		61.7		—		162.6
Total current assets		0.3		300.1		253.5		(2.3)		551.6
Investment in equity of subsidiaries		630.9		1,251.7		—		(1,882.6)		—
Property, net		—		1,495.5		1,105.3		—		2,600.8
Operating right-of-use assets		—		2,818.1		1,991.1		—		4,809.2
Intangible assets, net		—		126.9		72.1		—		199.0
Intercompany advances		5,433.2		(3,377.7)		(2,055.5)		—		—
Goodwill		(2.1)		2,422.1		2,367.9		—		4,787.9
Deferred tax asset, net		—		—		99.7		(68.7)		31.0
Other long-term assets		44.1		310.4		139.2		—		493.7
Total assets	$	6,106.4	$	5,347.1	$	3,973.3	$	(1,953.6)	$	13,473.2
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	—	$	248.0	$	137.1	$	(2.3)	$	382.8
Accrued expenses and other liabilities		59.6		146.2		136.6		—		342.4
Deferred revenues and income		—		286.0		84.1		—		370.1
Current maturities of corporate borrowings		13.8		1.4		—		—		15.2
Current maturities of finance lease liabilities		—		3.2		8.4		—		11.6
Current maturities of operating lease liabilities		—		356.6		214.1		—		570.7
Total current liabilities		73.4		1,041.4		580.3		(2.3)		1,692.8
Corporate borrowings		4,729.5		—		8.2		—		4,737.7
Finance lease liabilities		—		15.2		101.8		—		117.0
Operating lease liabilities		—		2,886.0		1,940.6				4,826.6
Exhibitor services agreement		—		561.6		—		—		561.6
Deferred tax liability, net		—		89.5		25.0		(68.7)		45.8
Other long-term liabilities		—		122.5		65.7		—		188.2
Total liabilities		4,802.9		4,716.2		2,721.6		(71.0)		12,169.7
Stockholders’ equity		1,303.5		630.9		1,251.7		(1,882.6)		1,303.5
Total liabilities and stockholders’ equity	$	6,106.4	$	5,347.1	$	3,973.3	$	(1,953.6)	$	13,473.2

~~Table of Contents~~

~~Consolidating Statement of Comprehensive Loss~~

~~Three Months Ended September 30, 2017:~~

Subsidiary

Subsidiary

Consolidating

Consolidated

(In millions)

Holdings

Guarantors

Non-Guarantors

Adjustments

Holdings

Net loss

$
(42.7)

$
(38.9)

$
(20.9)

$
59.8

$
(42.7)

Other comprehensive income (loss)

Equity in other comprehensive income (loss) of subsidiaries

33.7

34.6

—

(68.3)

—

Unrealized foreign currency translation adjustment, net of tax

—

(0.2)

34.6

—

34.4

Marketable securities:

Unrealized holding gain arising during the period, net of tax

—

0.2

—

—

0.2

Equity method investees’ cash flow hedge:

Unrealized net holding gain arising during the period, net of tax

—

0.1

—

—

0.1

Realized net holding gain reclassified to equity in earnings of non-consolidated entities, net of tax

—

(1.0)

—

—

(1.0)

Other comprehensive income

33.7

33.7

34.6

(68.3)

33.7

Total comprehensive income (loss)

$
(9.0)

$
(5.2)

$
13.7

$
(8.5)

$
(9.0)

~~Table of Contents~~

~~Consolidating Statement of Comprehensive Income~~

~~Three Months Ended September 30, 2016:~~

Subsidiary
Subsidiary
Consolidating
Consolidated

(In millions)

Holdings

Guarantors

Non-Guarantors

Adjustments
Holdings

Net earnings (loss)

$
30.4

$
28.3

$
(0.2)

$
(28.1)

$
30.4

Other comprehensive income (loss)

Equity in other comprehensive income of subsidiaries

0.5

0.1

—

(0.6)

—

Unrealized foreign currency translation adjustment, net of tax

—

0.1

0.1

—

0.2

Marketable securities:

Unrealized holding gain arising during the period, net of tax

—

0.2

—

—

0.2

Equity method investees’ cash flow hedge:

Realized net holding loss reclassified to equity in earnings of non-consolidated entities, net of tax

—

0.1

—

—

0.1

Other comprehensive income

0.5

0.5

0.1

(0.6)

0.5

Total comprehensive income (loss)

$
30.9

$
28.8

$
(0.1)

$
(28.7)

$
30.9

~~Table of Contents~~

~~Consolidating Statement of Comprehensive Loss~~

~~Nine Months Ended September 30, 2017:~~

Subsidiary
Subsidiary
Consolidating
Consolidated

(In millions)

Holdings
Guarantors
Non-Guarantors

Adjustments
Holdings

Net earnings (loss)

$
(210.8)

$
(199.8)

$
(19.0)

$
218.8

$
(210.8)

Other comprehensive income (loss)

Equity in other comprehensive income (loss) of subsidiaries

108.3

109.0

—

(217.3)

—

Unrealized foreign currency translation adjustment, net of tax

—

(0.2)

109.5

—

109.3

Pension and other benefit adjustments:

Amortization of net loss (gain) reclassified into general and administrative: other, net of tax

—

—

(0.5)

—

(0.5)

Marketable securities:

Unrealized holding gain arising during the period, net of tax

—

0.5

—

—

0.5

Realized net gain reclassified into investment income, net of tax

—

(0.1)

—

—

(0.1)

Equity method investees’ cash flow hedge:

Realized net holding loss (gain) reclassified to equity in earnings of non-consolidated entities, net of tax

—

(0.9)

—

—

(0.9)

Other comprehensive income

108.3

108.3

109.0

(217.3)

108.3

Total comprehensive income (loss)

$
(102.5)

$
(91.5)

$
90.0

$
1.5

$
(102.5)

~~Table of Contents~~

~~Consolidating Statement of Comprehensive Income~~

~~Nine Months Ended September 30, 2016:~~

Subsidiary
Subsidiary
Consolidating
Consolidated

(In millions)

Holdings
Guarantors
Non-Guarantors

Adjustments
Holdings

Net earnings (loss)

$
82.7

$
76.5

$
(0.4)

$
(76.1)

$
82.7

Other comprehensive income (loss)

Equity in other comprehensive income (loss) of subsidiaries

(0.7)

1.0

—

(0.3)

—

Unrealized foreign currency translation adjustment, net of tax

—

(0.2)

1.0

—

0.8

Marketable securities:

Unrealized holding loss arising during the period, net of tax

—

0.6

—

—

0.6

Realized net gain reclassified into net investment income, net of tax

—

(1.8)

—

—

(1.8)

Equity method investees’ cash flow hedge:

Unrealized net holding gain arising during the period, net of tax

—

(0.6)

—

—

(0.6)

Realized net holding loss reclassified to equity in earnings of non-consolidated entities, net of tax

—

0.3

��

—

0.3

Other comprehensive income (loss)

(0.7)

(0.7)

1.0

(0.3)

(0.7)

Total comprehensive income

$
82.0

$
75.8

$
0.6

$
(76.4)

$
82.0

~~Table of Contents~~

~~Consolidating Balance Sheet~~

~~As of September 30, 2017:~~

Subsidiary

Subsidiary

Consolidating

Consolidated

(In millions)

Holdings

Guarantors

Non-Guarantors

Adjustments

Holdings

Assets
















Current assets:

Cash and cash equivalents

$
0.1

$
126.8

$
133.1

$
—

$
260.0

Restricted cash

—

—

6.8

—

6.8

Receivables, net

—

74.5

54.4

—

128.9

Other current assets

0.2

105.2

120.9

—

226.3

Total current assets

0.3

306.5

315.2

—

622.0

Investment in equity of subsidiaries

2,726.4

1,436.8

—

(4,163.2)

—

Property, net

—

1,664.4

1,580.1

—

3,244.5

Intangible assets, net

—

221.2

166.6

—

387.8

Intercompany advances

4,044.1

(1,994.6)

(2,049.5)

—

—

Goodwill

(2.1)

2,422.1

2,469.5

—

4,889.5

Deferred tax asset, net

—

215.4

6.8

—

222.2

Other long-term assets

6.3

409.5

128.9

—

544.7

Total assets

$
6,775.0

$
4,681.3

$
2,617.6

$
(4,163.2)

$
9,910.7

Liabilities and Stockholders’ Equity

Current liabilities:

Accounts payable

$
—

$
318.9

$
150.2

$
—

$
469.1

Accrued expenses and other liabilities

61.4

154.6

121.4

—

337.4

Deferred revenues and income

—

199.5

85.1

—

284.6

Current maturities of corporate borrowings and capital and financing lease obligations

13.8

11.6

63.7

—

89.1

Total current liabilities

75.2

684.6

420.4

—

1,180.2

Corporate borrowings

4,274.6

2.8

—

—

4,277.4

Capital and financing lease obligations

—

76.1

518.3

—

594.4

Exhibitor services agreement

—

538.4

—

—

538.4

Deferred tax liability, net

—

—

47.4

—

47.4

Other long-term liabilities

—

653.0

194.7

—

847.7

Total liabilities

4,349.8

1,954.9

1,180.8

—

7,485.5

Temporary equity

0.8

—

—

—

0.8

Stockholders’ equity

2,424.4

2,726.4

1,436.8

(4,163.2)

2,424.4

Total liabilities and stockholders’ equity

$
6,775.0

$
4,681.3

$
2,617.6

$
(4,163.2)

$
9,910.7

Table of Contents

Consolidating Balance Sheet

As of December 31, ~~2016:~~2018:


			Subsidiary		Subsidiary		Consolidating		Consolidated				Subsidiary		Subsidiary		Consolidating		Consolidated
(In millions)	Holdings		Guarantors		Non-Guarantors		Adjustments		Holdings		Holdings		Guarantors		Non-Guarantors		Adjustments		Holdings
Assets
Current assets:
Cash and cash equivalents	$	3.0	$	94.7	$	109.4	$	—	$	207.1	$	0.3	$	169.5	$	143.5	$	—	$	313.3
Restricted cash												—		—		10.7		—		10.7
Receivables, net		0.2		165.8		47.6		—		213.6		—		157.3		106.6		(4.4)		259.5
Assets held for sale		—		56.3		14.1		—		70.4
Other current assets		1.8		95.6		95.1		—		192.5		—		120.8		77.0		—		197.8
Total current assets		5.0		412.4		266.2		—		683.6		0.3		447.6		337.8		(4.4)		781.3
Investment in equity of subsidiaries		2,330.7		709.7		—		(3,040.4)		—		654.3		1,494.8		—		(2,149.1)		—
Property, net		—		1,585.6		1,450.3		—		3,035.9		—		1,534.9		1,504.7		—		3,039.6
Intangible assets, net		—		228.3		136.8		—		365.1		—		209.6		142.5		—		352.1
Intercompany advances		3,443.8		(1,781.3)		(1,662.5)		—		—		5,427.0		(3,541.1)		(1,885.9)		—		—
Goodwill		(2.1)		2,422.1		1,513.0		—		3,933.0		(2.1)		2,422.1		2,368.7		—		4,788.7
Deferred tax asset, net		—		87.5		2.9		—		90.4		—		—		97.3		(68.7)		28.6
Other long-term assets		7.7		475.9		50.2		—		533.8		59.8		307.5		138.2		—		505.5
Total assets	$	5,785.1	$	4,140.2	$	1,756.9	$	(3,040.4)	$	8,641.8	$	6,139.3	$	2,875.4	$	2,703.3	$	(2,222.2)	$	9,495.8
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	—	$	381.0	$	120.8	$	—	$	501.8	$	—	$	301.5	$	155.6	$	(4.5)	$	452.6
Accrued expenses and other liabilities		17.6		197.6		113.8		—		329.0		31.5		176.4		170.5		0.1		378.5
Deferred revenues and income		—		232.3		44.9		—		277.2		—		313.0		101.8		—		414.8
Current maturities of corporate borrowings and capital and financing lease obligations		13.8		10.8		56.6		—		81.2
Current maturities of corporate borrowings												13.8		1.4		—		—		15.2
Current maturities of capital and financing lease obligations												—		9.7		57.3		—		67.0
Total current liabilities		31.4		821.7		336.1		—		1,189.2		45.3		802.0		485.2		(4.4)		1,328.1
Corporate borrowings		3,743.0		2.8		—		—		3,745.8		4,696.0		—		11.8		—		4,707.8
Capital and financing lease obligations		—		83.8		525.5		—		609.3		—		63.8		429.4		—		493.2
Exhibitor services agreement		—		359.3		—		—		359.3		—		564.0		—		—		564.0
Deferred tax liability, net		—		—		21.0		—		21.0		—		86.4		23.9		(68.7)		41.6
Other long-term liabilities		—		541.9		164.6		—		706.5		—		704.9		258.2		—		963.1
Total liabilities		3,774.4		1,809.5		1,047.2		—		6,631.1		4,741.3		2,221.1		1,208.5		(73.1)		8,097.8
Temporary equity		1.1		—		—		—		1.1		0.4		—		—		—		0.4
Stockholders’ equity		2,009.6		2,330.7		709.7		(3,040.4)		2,009.6		1,397.6		654.3		1,494.8		(2,149.1)		1,397.6
Total liabilities and stockholders’ equity	$	5,785.1	$	4,140.2	$	1,756.9	$	(3,040.4)	$	8,641.8	$	6,139.3	$	2,875.4	$	2,703.3	$	(2,222.2)	$	9,495.8

4439

Table of Contents

Consolidating Statement of Cash Flows

~~Nine~~Three Months Ended ~~September 30, 2017:~~March 31, 2019:


			Subsidiary		Subsidiary		Consolidating		Consolidated				Subsidiary		Subsidiary		Consolidating		Consolidated
(In millions)	Holdings		Guarantors		Non-Guarantors		Adjustments		Holdings		Holdings		Guarantors		Non-Guarantors		Adjustments		Holdings
Cash flows from operating activities:
Net cash provided by operating activities	$	42.0	$	64.1	$	123.0	$	—	$	229.1	$	228.0	$	(252.5)	$	25.9	$	—	$	1.4
Cash flows from investing activities:
Capital expenditures		—		(320.5)		(147.2)		—		(467.7)		—		(61.4)		(53.4)		—		(114.8)
Acquisition of Nordic, net of cash acquired		—		(654.9)		71.4		—		(583.5)
Proceeds from sale leaseback transaction		—		128.4		—		—		128.4
Proceeds from disposition of NCM shares		—		89.4		—		—		89.4
Proceeds from disposition of Open Road		—		9.2		—		—		9.2
Proceeds from disposition of long-term assets		—		9.1		13.4		—		22.5		—		0.7		16.6		—		17.3
Investments in non-consolidated entities, net		—		(11.6)		1.6		—		(10.0)		—		(0.1)		—		—		(0.1)
Other, net		—		(3.4)		(0.2)		—		(3.6)		—		(0.9)		—		—		(0.9)
Net cash used in investing activities		—		(754.3)		(61.0)		—		(815.3)		—		(61.7)		(36.8)		—		(98.5)
Cash flows from financing activities:
Proceeds from issuance of Senior Subordinated Sterling Notes due 2024		327.8		—		—		—		327.8
Proceeds from issuance of Senior Subordinated Notes due 2027		475.0		—		—		—		475.0
Payment of Nordic SEK Term Loan		(144.4)		—		—		—		(144.4)
Payment of Nordic EUR Term Loan		(169.5)		—		—		—		(169.5)
Net proceeds from additional public offering		616.8		—		—		—		616.8
Net borrowings under Revolving Credit Facility		60.0		—		—		—		60.0		—		—		(3.8)		—		(3.8)
Principal payment of Bridge Loan due 2017		(350.0)		—		—		—		(350.0)
Principal payments under Term Loan		(9.1)		—		—		—		(9.1)		(3.4)		—		—		—		(3.4)
Principal payments under capital and financing lease obligations		—		(6.9)		(47.2)		—		(54.1)		—		(0.8)		(3.0)		—		(3.8)
Cash used to pay deferred financing costs		(29.8)		—		—		—		(29.8)
Cash used to pay dividends		(78.7)		—		—		—		(78.7)		(21.8)		—		—		—		(21.8)
Taxes paid for restricted unit withholdings		(6.5)		—		—		—		(6.5)		(1.1)		—		—		—		(1.1)
Purchase of treasury stock		(16.5)		—		—		—		(16.5)
Change in intercompany advances		(771.4)		773.7		(2.3)		—		—		(219.6)		254.4		(34.8)		—		—
Net cash provided by (used in) financing activities		(96.3)		766.8		(49.5)		—		621.0		(245.9)		253.6		(41.6)		—		(33.9)
Effect of exchange rate changes on cash and equivalents		51.4		(44.5)		11.2		—		18.1
Net increase (decrease) in cash and equivalents		(2.9)		32.1		23.7		—		52.9
Cash and equivalents at beginning of period		3.0		94.7		109.4		—		207.1
Cash and equivalents at end of period	$	0.1	$	126.8	$	133.1	$	—	$	260.0
Effect of exchange rate changes on cash and cash equivalents and restricted cash												17.9		(17.6)		1.9		—		2.2
Net increase (decrease) in cash and cash equivalents and restricted cash												—		(78.2)		(50.6)		—		(128.8)
Cash and cash equivalents and restricted cash at beginning of period												0.3		169.5		154.2		—		324.0
Cash and cash equivalents and restricted cash at end of period											$	0.3	$	91.3	$	103.6	$	—	$	195.2

4540

Table of Contents

Consolidating Statement of Cash Flows

~~Nine~~Three Months Ended ~~September 30, 2016:~~March 31, 2018:


			Subsidiary		Subsidiary		Consolidating		Consolidated				Subsidiary		Subsidiary		Consolidating		Consolidated
(In millions)	Holdings		Guarantors		Non-Guarantors		Adjustments		Holdings		Holdings		Guarantors		Non-Guarantors		Adjustments		Holdings
Cash flows from operating activities:
Net cash provided by operating activities	$	19.6	$	193.7	$	(2.0)	$	—	$	211.3	$	46.8	$	81.1	$	37.5	$	—	$	165.4
Cash flows from investing activities:
Capital expenditures		—		(256.6)		—		—		(256.6)		—		(58.5)		(48.8)		—		(107.3)
Acquisition of Starplex Cinemas, net of cash acquired		—		0.7		—		—		0.7
Proceeds from disposition of long-term assets		—		19.4		—		—		19.4		—		0.2		3.6		—		3.8
Investments in non-consolidated entities, net		—		(10.5)		—		—		(10.5)		—		(10.7)		—		—		(10.7)
Other, net		—		(1.3)		—		—		(1.3)		—		(0.9)		0.3		—		(0.6)
Net cash used in investing activities		—		(248.3)		—		—		(248.3)		—		(69.9)		(44.9)		—		(114.8)
Cash flows from financing activities:
Net borrowings under Revolving Credit Facility		(55.0)		—		—		—		(55.0)
Principal payments under Term Loan		(6.6)		—		—		—		(6.6)		(3.5)		—		—		—		(3.5)
Principal payments under capital and financing lease obligations		—		(6.3)		—		—		(6.3)		—		(2.5)		(15.4)		—		(17.9)
Cash used to pay deferred financing costs		(0.8)		—		—		—		(0.8)
Cash used to pay dividends												(25.8)		—		—		—		(25.8)
Taxes paid for restricted unit withholdings												(1.7)		—		—		—		(1.7)
Purchase of treasury stock												(13.5)		—		—		—		(13.5)
Change in intercompany advances		101.9		(62.2)		(39.7)		—		—		(27.5)		(5.5)		33.0		—		—
Cash used to pay dividends		(59.1)		—		—		—		(59.1)
Net cash used in financing activities		(19.6)		(68.5)		(39.7)		—		(127.8)
Effect of exchange rate changes on cash and equivalents		—		—		(0.1)		—		(0.1)
Net decrease in cash and equivalents		—		(123.1)		(41.8)		—		(164.9)
Cash and equivalents at beginning of period		1.9		167.0		42.3		—		211.2
Cash and equivalents at end of period	$	1.9	$	43.9	$	0.5	$	—	$	46.3
Net cash provided by (used in) financing activities												(72.0)		(8.0)		17.6		—		(62.4)
Effect of exchange rate changes on cash and cash equivalents and restricted cash												25.2		(25.5)		6.3		—		6.0
Net increase (decrease) in cash and cash equivalents and restricted cash												—		(22.3)		16.5		—		(5.8)
Cash and cash equivalents and restricted cash at beginning of period												1.1		85.0		232.2		—		318.3
Cash and cash equivalents and restricted cash at end of period											$	1.1	$	62.7	$	248.7	$	—	$	312.5

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NOTE 15—SUBSEQUENT EVENT

On April 22, 2019 the Company entered into $2,000.0 million of term loans maturing on April 22, 2026 (the “Term Loan due 2026”) pursuant to the Sixth Amendment to the Senior Secured Credit Facility and extended the maturity of the Revolving Credit Facility to April 22, 2024. The Term Loan due 2026 will bear interest at a rate of LIBOR plus 3.0%. The Company recorded deferred financing costs of approximately $0.8 million and a discount of 0.5% or $10 million related to the Term Loan due 2026 and deferred financing costs of approximately $8.1 million related to the Revolving Credit Facility. The Company used the net proceeds from the Term Loan due 2026 to retire $849.8 million aggregate principle amount of Term Loan due 2022 at par; $488.7 million aggregate principle amount of Term Loan due 2023 at par; $230.0 million aggregate principle amount of 6.00% Senior Secured Notes due 2023 at 104.5% of the principal amount thereof; and to retire $375.0 million aggregate principle amount of 5.875% Senior Subordinated Notes due 2022 at 1.01469% of the principle amount thereof. The Company expects to record a loss on extinguishment of approximately $16 million related to the debt repayments.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Forward-Looking Statements

In addition to historical information, this Quarterly Report on Form 10–Q contains “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as “may,” “will,” “forecast,” “estimate,” “project,” “intend,” “plan,” “expect,” “should,” “believe” and other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. Similarly, certain statements made herein and elsewhere regarding our recent acquisitions are also forward-looking statements, including statements regarding the expected benefits of the acquisition on our future business, operations and financial performance and our ability to successfully integrate the recently acquired businesses. These forward-looking statements are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. These forward-looking statements involve known and unknown risks, uncertainties, assumptions and other factors, including those discussed in “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to, the following:

~~•risks relating to motion picture production and performance;~~

risks relating to motion picture production and performance;

~~•our lack of control over distributors of films;~~

our lack of control over distributors of films;

~~•intense competition in the geographic areas in which we operate;~~

intense competition in the geographic areas in which we operate;

~~•increased use of alternative film delivery methods or other forms of entertainment;~~

increased use of alternative film delivery methods or other forms of entertainment;

~~•shrinking exclusive theatrical release windows;~~

shrinking exclusive theatrical release windows;

~~•general and international economic, political, social and financial market conditions and other risks including the effects of the exit of the United Kingdom from the European Union;~~

AMC Stubs® A-List may not meet anticipated revenue projections which could result in a negative impact upon operating results;

~~•risks and uncertainties relating to our significant indebtedness;~~

general and international economic, political, social and financial market conditions and other risks including the effects of the exit of the United Kingdom from the European Union;

~~•limitations on the availability of capital may prevent us from deploying strategic initiatives;~~

risks and uncertainties relating to our significant indebtedness;

~~•certain covenants in the agreements that govern our indebtedness may limit our ability to take advantage of certain business opportunities;~~

limitations on the availability of capital may prevent us from deploying strategic initiatives and continue our share repurchase program;

~~•our ability to achieve expected synergies, benefits and performance from our recent strategic theatre acquisitions and strategic initiatives;~~

certain covenants in the agreements that govern our indebtedness may limit our ability to take advantage of certain business opportunities;

•our ability to comply with, and the effects of, a settlement we entered into with the United States Department of Justice pursuant to which we agreed to divest theatres, transfer advertising rights of certain theatres, and divest our holdings in NCM;

our ability to achieve expected synergies, benefits and performance from our recent strategic theatre acquisitions and strategic initiatives;

~~•our ability to refinance our indebtedness on terms favorable to us;~~

our ability to refinance our indebtedness on terms favorable to us;

~~•optimizing our theatre circuit through construction and the transformation of our existing theatres may be subject to delay and unanticipated costs;~~

optimizing our theatre circuit through new construction and the transformation of our existing theatres may be subject to delay and unanticipated costs;

~~•failures, unavailability or security breaches of our information systems;~~

failures, unavailability or security breaches of our information systems;

~~•risks relating to impairment losses, including with respect to goodwill and other intangibles, and theatre and other closure charges;~~

risks relating to impairment losses, including with respect to goodwill and other intangibles, and theatre and other closure charges;

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~~•our ability to utilize net operating loss carryforwards to reduce our future tax liability or valuation allowances taken with respect to deferred tax assets;~~

our ability to utilize net operating loss carryforwards to reduce our future tax liability or valuation allowances taken with respect to deferred tax assets;

~~•review by antitrust authorities in connection with acquisition opportunities;~~

review by antitrust authorities in connection with acquisition opportunities;

~~•our investment and equity in earnings from NCM may be negatively impacted by the competitive environment in which NCM operates and by the risks associated with its strategic initiatives;~~

risks relating to unexpected costs or unknown liabilities relating to recently completed acquisitions;

~~•risks relating to unexpected costs or unknown liabilities relating to recently completed acquisitions;~~

risks relating to the incurrence of legal liability, including costs associated with recently filed securities class action lawsuits;

~~•risks relating to the incurrence of legal liability;~~

dependence on key personnel for current and future performance and our ability to attract and retain senior executives and other key personnel, including in connection with any future acquisitions;

•dependence on key personnel for current and future performance and our ability to attract and retain senior executives and other key personnel, including in connection with our recently completed and any future acquisitions;

risks of poor financial results may prevent us from deploying strategic initiatives;

~~•risks of poor financial results may prevent us from deploying strategic initiatives;~~

operating a business in international markets AMC is unfamiliar with, including acceptance by movie-goers of AMC initiatives that are new to those markets;

~~•operating a business in international markets AMC is unfamiliar with, including acceptance by movie-goers of AMC initiatives that are new to those markets;~~

increased costs in order to comply or resulting from failure to comply with governmental regulation, including the General Data Protection Regulation (“GDPR”) and pending future domestic privacy laws and regulations; and

•increased costs in order to comply with governmental regulation and the impact of governmental investigations concerning potentially anticompetitive conduct, including film clearances and partnering with other major exhibitors in joint ventures; and

•we may not generate sufficient cash flows or have sufficient restricted payment capacity under our Senior Secured Credit Facility or the indentures governing our debt securities to pay our intended dividends on our Class A and Class B common stock.

we may not generate sufficient cash flows or have sufficient restricted payment capacity under our Senior Secured Credit Facility or the indentures governing our debt securities to pay our intended dividends on our Class A and Class B common stock.

This list of factors that may affect future performance and the accuracy of forward-looking statements is illustrative but not exhaustive. In addition, new risks and uncertainties may arise from time to time. Accordingly, all forward-looking statements should be evaluated with an understanding of their inherent uncertainty.

Readers are urged to consider these factors carefully in evaluating the forward-looking statements. For further information about these and other risks and uncertainties as well as strategic initiatives, see Item 1A. “Risk Factors” and Item 1. “Business” in our Annual Report on Form 10–K for the year ended December 31, ~~2016~~2018 and our other public filings.

All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by these cautionary statements. The forward-looking statements included herein are made only as of the date of this Quarterly Report on Form 10–Q, and we do not undertake any obligation to release publicly any revisions to such forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

Overview

AMC is ~~one of~~ the world’s largest theatrical exhibition ~~companies~~company and an industry leader in innovation and operational excellence. We operate ~~productive~~ theatres in 15 countries and are the market leader in nine of those. In the United States, ~~top markets,~~ AMC has the No. 1 or No. 2 market share in the top ~~three~~two markets, New York and Los ~~Angeles and Chicago.~~Angeles.

Our theatrical exhibition revenues are generated primarily from box office admissions and theatre food and beverage sales. The balance of our revenues are generated from ancillary sources, including on-screen advertising, fees earned from our AMC Stubs® customer frequency membership program, rental of theatre auditoriums, income from gift card and exchange ticket sales, on-line ticketing fees and arcade games located in theatre lobbies. As of ~~September 30, 2017,~~March 31, 2019, we owned, operated or had interests in ~~1,006~~1,001 theatres and ~~11,046~~10,995 screens.

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Film Content

Box office admissions are our largest source of revenue. We predominantly license “first-run” films from distributors owned by major film production companies and from independent distributors on a film-by-film and ~~theatre-by-theatre~~theatre-

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by-theatre basis. Film exhibition costs are accrued based on the applicable admissions revenues and estimates of the final settlement pursuant to our film licenses. Licenses that we enter into typically state that rental fees are based on aggregate terms established prior to the opening of the picture. In certain circumstances and less frequently, our rental fees are based on a mutually agreed settlement upon the conclusion of the picture. Under an aggregate terms formula, we pay the distributor a specified percentage of box office gross or pay based on a scale of percentages tied to different amounts of box office gross. The settlement process allows for negotiation based upon how a film actually performs.

During the ~~2016~~2018 calendar year, films licensed from our seven largest distributors based on revenues accounted for approximately 90% of our U.S. admissions revenues. 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.

Our revenues are dependent upon the timing and popularity of film releases by distributors. The most marketable films have historically been released during the summer and the calendar year-end holiday seasons. Our results of operations may vary significantly from quarter to quarter and from year to year based on the timing onand popularity of film releases.

Fathom Events (‘‘Fathom’’) is a joint venture with several major exhibitors and is the recognized leader in the alternative entertainment industry, offering a variety of one-of-a-kind entertainment events in movie theaters nationwide that include live, high-definition performances of the Metropolitan Opera, the performing arts, Broadway shows, original programming featuring entertainment’s biggest stars, socially relevant documentaries with audience Q&A and much more.

AMC Movie Screens

During the ~~nine~~three months ended ~~September 30, 2017,~~March 31, 2019, we opened 7two new theatres with a total of 6420 screens, ~~acquired 126 theatres with 720 screens, which includes the acquisition of Nordic,~~ permanently closed ~~257~~68 screens, ~~including theatre divestitures required as a condition of our acquisition of Carmike,~~ temporarily closed ~~492~~120 screens and reopened ~~453~~72 screens ~~to implement our strategy~~ to install consumer experience upgrades. On March 28, 2017, we completed the acquisition of Nordic. As of September 30, 2017, Nordic operated or held a partial interest in 118 theatres with 683 screens (including 51 joint venture theatres with 216 screens) in seven European countries, which further complements our International markets segment.

As of ~~September 30, 2017,~~March 31, 2019, we had ~~5,361~~5,369 3D enabled screens, including ~~204~~214 IMAX®, and ~~108~~114 Premium Large Format (“PLF”) screens; approximately ~~48%~~49% of our screens were 3D enabled screens, including IMAX® 3D enabled screens, and approximately 2% of our screens were IMAX® 3D enabled screens. The following table identifies the upgrades to our theatre circuit during the periods indicated:


	Number of	Number of	Number of	Number of
	Screens As of	Screens As of	Screens As of	Screens As of
Format	September 30, 2017	December 31, 2016	March 31, 2019	December 31, 2018
Digital	11,046	10,558	10,995	11,091
3D enabled	5,361	5,070	5,369	5,411
IMAX® (3D enabled)	204	196	214	216
Dolby CinemaTM at AMC	82	48	131	127
Other PLF (3D enabled)	108	82	114	112
Dine-in theatres	430	342	413	437
Premium seating	2,423	1,984	3,363	3,279

~~IMAX~~®. ~~IMAX~~® ~~is one of the world’s leading entertainment technology companies, specializing in motion picture technologies and presentations. IMAX~~® offers a unique end-to-end cinematic solution combining proprietary software, theater architecture and equipment to create the highest-quality, most immersive motion picture experience for which the IMAX® ~~brand has become known globally. Top filmmakers and studios utilize IMAX~~® theaters to connect with audiences in innovative ways, and as such, IMAX®’s theater network is among the most important and successful theatrical distribution platforms for major event films around the world.

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As of ~~September 30, 2017,~~March 31, 2019, AMC is the largest IMAX® exhibitor in the U.S. with a 51% market share, and each of our IMAX® local installations is protected by geographic exclusivity. As of ~~September 30, 2017,~~March 31, 2019, our ~~IMAX®~~IMAX® screen count is ~~100%~~97% greater than our closest competitor. We believe that we have had considerable success with our ~~IMAX® partnership, and in June 2016 we announced an agreement to expand the number of~~ IMAX® ~~screens in our legacy AMC U.S. theatres to 185 by the end of 2019.~~partnership.

~~Dolby Cinema™ at AMC.~~ In May 2015, we partnered with Dolby Laboratories, Inc. to unveil a premium cinema offering for movie-goers that combined state-of-the-art image and sound technologies with inspired theatre design and comfort. Dolby Cinema™ at AMC includes Dolby Vision™ laser projection and object oriented Dolby Atmos® ~~audio technology, as well as AMC’s plush power reclining seats with seat transducers that vibrate with the action on screen.~~

As of ~~September 30, 2017,~~March 31, 2019, we have 82131 fully operational Dolby Cinema™ at AMC screens in the U.S. In August 2016, we announced the acceleration of our Dolby Cinema™ at AMC deployment. We expect to have ~~160~~140 Dolby Cinema™ at AMC screens operational by the end of ~~2018.~~

~~Other PLF.~~ We believe there is considerable opportunity to add a private label PLF format in many of our locations, with superior sight and sound technology and enhanced seating as contrasted with our traditional auditoriums. These PLF formats (whose branding varies market to market) give AMC the capability to add a premium screen in theatres where an IMAX® ~~and/or Dolby Cinema™ at AMC might not be feasible, or where an additional premium format could complement existing premium format screens.~~

~~Technical innovation has allowed us to enhance the consumer experience through premium formats such as 3D, IMAX~~®, and other large screen formats. When combined with our major markets’ customer base, the operating flexibility of digital technology enhances our programming flexibility. This enables us to achieve higher capacity utilization and ticket prices for premium formats, as well as provide incremental revenue from the exhibition of alternative content. Within each of our major markets, we are able to charge a premium for these services relative to our smaller markets. We intend to continue to broaden our content offerings and enhance the customer experience in operating IMAX® ~~screens and through the installation of additional Dolby Cinema™ at AMC screens, our PLF screen concepts, and the presentation of attractive alternative content.~~2019.

Guest Amenities

We continually upgrade the quality of our theatre circuit through substantial renovations featuring our seating concepts, acquisitions, new builds (including expansions), expansion of food and beverage offerings (including dine-in theatres), and by disposing of older screens through closures and sales. ~~We believe we are an industry leader in the development and operation of theatres.~~ Typically, our theatres have 12 or more screens and offer amenities to enhance the movie-going experience, such as stadium seating, ~~providing unobstructed viewing,~~ digital sound and premium seat design.

Recliner seating is the key feature of theatre renovations. ~~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, upgrade the sight and sound experience, install modernized points of sale and ~~most importantly,~~ replace traditional theatre seats with plush, electric ~~recliners that allow customers to deploy a leg rest and fully recline at the push of a button.~~recliners. The renovation process typically involves losing up to two-thirds of a given auditorium’s

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seating capacity. ~~For an industry historically focused on quantity, this reduction in seating capacity could be viewed as counter-intuitive and harmful to revenues. However, the~~The quality improvement in the customer experience is driving a 40% increase in attendance on average at these locations in their first-year post renovation. ~~Our customers have responded favorably to the significant personal space gains from ample row depths, ability to recline or stretch their legs, extra-wide pillowed chaise and oversized armrests.~~ The reseated theatres attract more midweek audiences than normal theatres and tend to draw more adults who pay higher ticket prices than teens or young ~~children. We typically do not change ticket prices in the first year after construction, however, in subsequent years~~children, as well as more customers who upgrade their tickets to premium formats. Upon reopening a remodeled theatre, we typically increase ~~our~~the ticket ~~prices at our reseated theatres by amounts well in excess of~~ price ~~adjustments for our non-renovated theatres.~~to reflect that enhanced consumer experience.

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As of ~~September 30, 2017,~~March 31, 2019, we now feature recliner seating in approximately ~~250~~354 theatres, including Dine-in-Theatres, totaling approximately ~~2,423~~3,363 screens. By the end of ~~2017,~~2019, we expect to convert an additional ~~229~~525 screens to recliner seating.

Rebalancing of the new supply-demand relationship created by recliner seating presents us two further opportunities to improve customer convenience and maximize operating results: open-source internet ticketing and reserved seating.

Open-source internet ticketing makes our AMC seats (over ~~1.2~~1.1 million) in all our U.S. theatres and auditoriums, for all our showtimes as available as possible, on as many websites as possible. This is a significant departure from the years prior to 2012, when tickets to any one of our theatres were only available on one website. We most recently deployed new technology by partnering with Atom Tickets to allow guests to utilize Atom’s mobile movie ticketing platform to purchase our tickets. Atom’s technology allows movie-goers to check movie reviews and AMC show times, coordinate movie outings among friends while allowing them to pay separately, and pre-pay for food and beverage items. Our tickets are currently on sale over the internet, directly or through mobile apps, at our own website and app, ~~and~~ Fandango, Movietickets.com, ~~Flixster~~ and Atom Tickets. We believe increased online access is important because it captures customers’ purchase intent more immediately and directly than if we wait for their arrival at the theatre box office to make a purchase. Carefully monitoring internet pre-sales also lets us adjust capacity in real time, moving movies that are poised to over perform to larger capacity auditoriums or adding additional auditoriums, thereby maximizing yield.

~~Reserved seating,~~ at some of our busiest theatres, and now available at all of our Manhattan, New York City locations, allows our customers to choose a specific seat in advance of the movie. We believe that knowing there is a specifically chosen seat waiting for a show that promises to be a sellout is comforting to our customers, reduces anxiety around the experience and compels ticket purchases. We believe reserved seating will become increasingly prevalent to the point of being a prerequisite in the medium-term future.

We believe the comfort and personal space gains from recliner seating, coupled with the immediacy of demand captured from open-source internet ticketing and the appeal of reserved seating make a powerful economic combination for us.

Food and beverage sales are our second largest source of revenue after box office admissions. Food and beverage items traditionally include popcorn, soft drinks, candy and hot dogs. Different varieties of food and beverage items are offered at our theatres based on preferences in the particular geographic region. Our traditional food and beverage strategy emphasizes prominent and appealing food and beverage offerings designed for rapid service and efficiency, including a customer friendly self-serve experience. We design our theatres to have more food and beverage capacity to make it easier to serve larger numbers of customers. Strategic placement of large food and beverage operations within theatres increases their visibility, aids in reducing the length of lines, allows flexibility to introduce new concepts and improves traffic flow around the food and beverage stands.

To address recent consumer trends, we ~~are expanding~~have expanded our menu of enhanced food and beverage products to include made-to-order drinks and meals, customized coffee, healthy snacks, premium beers, wine and mixed drinks, flatbread pizzas, more varieties of hot dogs, four flavors of popcorn and other menu items. We plan to invest across a spectrum of enhanced food and beverage formats, ranging from simple, less capital-intensive food and beverage design improvements to the development of new dine-in theatre options. The costs of these conversions in some cases are partially covered by investments from the theatre landlord. We currently operate 2829 Dine-In Theatres that deliver chef-inspired menus with seat-side or delivery service to luxury recliners with tables. Our recent Dine-In Theatre concepts are designed to capitalize on the latest food service trend, the fast casual eating experience.

~~Coca Cola Freestyle~~® puts customers in charge with over 140 drink flavor options in a compact footprint. Our operational excellence and history of innovation rewarded us with first-mover advantage on this new technology, which, as of September 30, 2017, was deployed in substantially all of our legacy AMC theatres. We expect to install Coca Cola Freestyle® ~~machines in 100% of AMC’s domestic theatres, including all former Carmike theatres, by the end of 2017, and we have already begun the rollout at the Odeon theatres.~~

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AMC Stubs®

AMC Stubs® is a customer loyalty program for our U.S. markets which allows members to earn rewards, receive discounts and participate in exclusive members-only offerings and services. ~~In July 2016, we completed a national relaunch of our AMC Stubs~~® ~~loyalty program featuring~~It features both a traditional paid tier called AMC Stubs PremiereTM and a ~~new~~ non-paid tier called AMC Stubs InsiderTM. Both programs reward loyal guests for their patronage of AMC Theatres. ~~The~~

On June 20, 2018, we announced the launch of AMC Stubs ~~Insider~~TM® A-List, a new tier ~~rewards~~of our AMC Stubs® loyalty program. This program offers guests ~~for simply coming~~admission to the movies at AMC up to three times per week including multiple movies per day and ~~benefits include free refills on certain food items, discount ticket offers, a birthday gift and 20 reward points earned~~repeat visits to already seen movies for ~~every dollar spent. For a $15 annual membership fee,~~$19.95 to $23.95 per month depending upon geographic market. AMC Stubs ~~Premiere~~TM® members enjoy express service with specially marked shorter lines at the box office and concession stand, free size upgrades on certain food and beverage items, discount ticket offers, a birthday gift, discounted online ticketing fees and 100 points for every dollar spent. Some of the rewards earned are redeemable on future purchasesA-List also includes premium offerings including IMAX®, Dolby Cinema™ at AMC, ~~locations. Once an~~RealD Holdings Inc., Prime and BigD. AMC Stubs ~~Premiere~~TM® orA-List members can book tickets on-line in advance and select specific seats at AMC ~~Stubs Insider~~TM ~~member accumulates 5,000 points they will earn a $5 virtual reward.~~Theatres with reserved seating.

As of ~~September 30, 2017,~~March 31, 2019, we had ~~10,123,000 active~~19,164,000 member households in the AMC Stubs® program. ~~Our~~ AMC Stubs® members represented approximately ~~25%~~44% of ~~our~~AMC U.S. markets attendance during ~~2017 with~~the three months ended March 31, 2019, driving an average ~~ticket price 7% lower than our non-members and food and beverage expenditures per patron 12% lower than~~2.1x higher total gross revenue versus non-members. ~~We believe movie-goers want to be recognized and rewarded for attending our theatres and as a result, our new AMC Stubs~~® ~~program is designed to strengthen guest loyalty, attract new guests and drive additional return visits.~~ Our much larger database of identified movie-goers also provides us with additional insight into our customers’ movie preferences, and this enables us to have both a larger and a more targeted marketing effort to support our Hollywood studio partners.

The portion of the admissions and food and beverage revenues attributed to the rewards is deferred as a reduction of admissions and food and beverage revenues and is allocated between admissions and food and beverage revenues based on expected member redemptions.

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Upon redemption, deferred rewards are recognized as revenues along with associated cost of goods. ~~Points are forfeited upon expiration and recognized as admissions or food and beverage revenues. For~~We estimate point breakage in assigning value to the ~~paid tier~~points at the time of ~~the program (AMC Stubs Premiere~~TM~~), the~~sale based on historical trends. 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 is recognized ~~ratably~~as the rights are redeemed based on estimated utilization, over the one-year membership ~~period.~~period in admissions, food and beverage, and other revenues. 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 recognized as the rights are redeemed or expire.

~~The following tables reflect AMC Stubs~~® ~~activity during the three and nine months ended September 30, 2017:~~

AMC Stubs® Revenue for

Three Months Ended September 30, 2017


Deferred





Food and


Other Theatre

Membership

Deferred

Admissions

Beverage

Ticketing

Revenues
(In millions)

Fees

Rewards

Revenues

Revenues

Revenues

(Membership Fees)
Balance, June 30, 2017

$
16.5

$
24.5

Membership fees received

5.4

—

$
—

$
—

$
—

$
—
Rewards accumulated, net of expirations:

Admissions

—

6.7

(6.7)

—

—

—
Food and beverage

—

11.4

—

(11.4)

—

—
Rewards redeemed:

Admissions

—

(7.0)

7.0

—

—

—
Food and beverage

—

(10.2)

—

10.2

—

—
Amortization of deferred revenue

(6.5)

—

0.8

1.5

0.7

3.4
For the period ended or balance as of September 30, 2017

$
15.4

$
25.4

$
1.1

$
0.3

$
0.7

$
3.4

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AMC Stubs® Revenue for

Nine Months Ended September 30, 2017


Deferred





Food and


Other Theatre

Membership

Deferred

Admissions

Beverage

Ticketing

Revenues
(In millions)

Fees

Rewards

Revenues

Revenues

Revenues

(Membership Fees)
Balance, December 31, 2016

$
12.5

$
23.3

Membership fees received

21.6

—

$
—

$
—

$
—

$
—
Rewards accumulated, net of expirations:

Admissions

—

20.2

(20.2)

—

—

—
Food and beverage

—

32.2

—

(32.2)

—

—
Rewards redeemed:

Admissions

—

(20.1)

20.1

—

—

—
Food and beverage

—

(30.2)

—

30.2

—

—
Amortization of deferred revenue

(18.7)

—

2.2

4.4

2.2

9.8
For the period ended or balance as of September 30, 2017

$
15.4

$
25.4

$
2.1

$
2.4

$
2.2

$
9.8

~~The following tables reflect AMC Stubs~~® ~~activity during the three and nine months ended September 30, 2016:~~

AMC Stubs® Revenue for

Three Months Ended September 30, 2016


Deferred





Food and


Other Theatre

Membership

Deferred

Admissions

Beverage

Ticketing

Revenues
(In millions)

Fees

Rewards

Revenues

Revenues

Revenues

(Membership Fees)
Balance, June 30, 2016

$
12.8

$
16.3

Membership fees received

4.2

—

$
—

$
—

$
—

$
—
Rewards accumulated, net of expirations:

Admissions

—

6.2

(6.2)

—

—

—
Food and beverage

—

6.3

—

(6.3)

—

—
Rewards redeemed:

Admissions

—

(6.0)

6.0

—

—

—
Food and beverage

—

(6.1)

—

6.1

—

—
Amortization of deferred revenue

(6.1)

—

0.7

1.4

0.7

3.2
For the period ended or balance as of September 30, 2016

$
10.9

$
16.7

$
0.5

$
1.2

$
0.7

$
3.2

AMC Stubs® Revenue for

Nine Months Ended September 30, 2016


Deferred





Food and


Other Theatre

Membership

Deferred

Admissions

Beverage

Ticketing

Revenues
(In millions)

Fees

Rewards

Revenues

Revenues

Revenues

(Membership Fees)
Balance, December 31, 2015

$
12.1

$
17.0

Membership fees received

17.1

—

$
—

$
—

$
—

$
—
Rewards accumulated, net of expirations:

Admissions

—

15.9

(15.9)

—

—

—
Food and beverage

—

19.3

—

(19.3)

—

—
Rewards redeemed:

Admissions

—

(16.0)

16.0

—

—

—
Food and beverage

—

(19.5)

—

19.5

—

—
Amortization of deferred revenue

(18.3)

—

0.7

1.4

0.7

15.5
For the period ended or balance as of September 30, 2016

$
10.9

$
16.7

$
0.8

$
1.6

$
0.7

$
15.5

~~Table of Contents~~

~~Significant Events~~

Critical Accounting Policies – and Estimates

Goodwill

We evaluate goodwill for impairment annually as of the beginning of the fourth fiscal quarter or more frequently as specific events or circumstances dictate. A decline in our common stock price and the resulting impact on market capitalization is one of several qualitative factors we consider when making this evaluation. Based on recent declines in the trading price of our Class A common stock, we performed an interim goodwill impairment test during the third quarter of 2017. We believe the decline in market capitalization was precipitated by poor box office performance during 2017 and other uncertainties affecting the outlook for performance by us and the industry. For further information see Note 3 – Goodwill in the Notes to the Consolidated Financial Statements.

~~The following table sets forth the historical closing prices per share of our Class A common stock for the calendar periods indicated:~~

Closing
Date

Price Per Share
January 31, 2017

$
33.75
February 28, 2017

31.35
March 31, 2017

31.45
April 28, 2017

30.30
May 31, 2017

22.50
June 30, 2017

22.75
July 31, 2017

20.40
August 31, 2017

13.40
September 29, 2017

14.70
October 31, 2017

13.90
November 8, 2017

11.80

As described in Note 1—Basis of Presentation, we elected to early adopt the new accounting guidance, ASU 2017-04, that simplifies the test for goodwill impairment and ASU 2017-07, Business Combinations (Topic 805) –that clarifies the definition of a business. The impairment test for goodwill involves estimating the fair value of each reporting unit and comparing that value to its carrying value. If the estimated fair value of the reporting unit is less than its carrying value, the difference is recorded as a goodwill impairment charge, not to exceed the total amount of goodwill allocated to that reporting unit.

We determined fair value of our 3 reporting units (Domestic Theatres, Odeon Theatres and Nordic Theatres) by using an enterprise valuation methodology and an equally weighted combination of the income approach which utilizes discounted cash flows and the market approach which utilizes market comparable multiples of cash flows. There was considerable management judgment with respect to cash flow estimates and appropriate multiples and discount rates to be used in estimating fair value, which are classified as Level 3 in the fair value hierarchy. The income approach provides an estimate of fair value by measuring estimated annual cash flows over a discrete projection period and applying a present value discount rate to the cash flows. The present value of the cash flows is then added to the present value equivalent of the residual value of the business to arrive at an estimated fair value of the reporting units. The residual value represents the present value of the projected cash flows beyond the discrete projection period. The discount rates were determined using a rate of return deemed appropriate for the risk of achieving the projected cash flows. The market approach used cash flow multiples based on a comparison of growth and profitability of the reporting units and publicly traded peer companies and a 25% control premium based on analysis of comparable transactions.

~~Table of Contents~~

~~Key rates used in the income and market approach were as follow:~~

Domestic

Odeon

Nordic

Theatres

Theatres

Theatres
Description

September 30, 2017
Weighted average cost of capital/discount rate

8.5%

10.5%

9.5%
Long-term growth rate

2.5%

2.0%

2.0%
Control premium

25%

25%

25%
Selected cash flow multiple

7.5 x

10.0 x

11.0 x

The fair value of the Domestic Theatres, Odeon Theatres, and Nordic Theatres reporting units exceeded their carrying values by approximately 7.2%, 4.2%, and 1.2%, respectively. Accordingly, there was no goodwill impairment recorded as of September 30, 2017.

Prior to completing the goodwill impairment test, we tested the recoverability of long-lived assets and indefinite-lived intangible assets, and concluded these assets were not impaired as of September 30, 2017.

While the fair values of our reporting units exceed the carrying values at the present time, the performance of the reporting units requires continued improvement in future periods to sustain their carrying values. A further decline in the trading price of our Class A common stock and/or small changes in certain key input assumptions could have a significant impact on estimated fair value, and therefore, a future impairment could result for a portion of the goodwill, long-lived assets or intangible assets. For illustrative purposes, the following table presents the percentages at which estimated fair value exceeds (deceeds) the carrying value assuming hypothetical changes in key assumptions for the income approach and market approach:

% Fair Value

Increase In

Decrease in

Decrease in

Decrease in

Carrying

Estimated Fair

Exceeds

WACC

Growth Rate

Control Premium

Multiple

Value

Value

Carrying Value

0.50%

0.50%

5.00%

0.5 x
Domestic Theatres

$
1,049.3

$
1,124.9

7.2%

-9.2%

-6.9%

5.0%

-6.0%
Odeon Theatres

665.9

693.8

4.2%

-4.0%

-1.3%

2.1%

-10.1%
Nordic Theatres

709.2

717.9

1.2%

-3.2%

-1.8%

-3.3%

-1.4%
Total

$
2,424.4

$
2,536.6

4.6%

If the market price of our common stock ~~remains at current levels or further~~ declines from current levels, or if other events or circumstances change that would more likely than not reduce the fair value of our reporting units below their respective carrying value, all or a portion of our goodwill may be impaired in future periods. Examples of such adverse events or circumstances that could change include (i) an adverse change in macroeconomic conditions; (ii) increased cost factors that have a negative effect on our earnings and cash flows; (iii) negative or overall declining financial performance compared with our actual and projected results of relevant prior periods; and (iv) a sustained decrease in our share price. Any impairment charges that we may take in the future could be material to our results of operations and financial condition.

~~Disposition of Open Road.~~ On August 4, 2017, AMC and Regal Entertainment Group consummated a transaction for the sale of all the issued and outstanding ownership interests in Open Road for total proceeds of $28.8 million of which we received $14.0 million in net proceeds after transaction expenses for our 50% investment and for collection of amounts due from Open Road and recognized a gain on sale of $17.2 million. AMC and Open Road have entered into a new marketing agreement with respect to films released by Open Road after the Our closing ~~date.~~

~~Sale Leaseback Transaction.~~ On September 14, 2017, we completed the sale and leaseback of the real estate assets associated with seven theatres for proceeds net of closing costs of $128.4 million. The gain on sale of $78.2 million has been deferred and will be amortized over the remaining lease term.

~~Third Amendment to Credit Agreement.~~ On May 9, 2017, we entered into the Third Amendment to Credit Agreement with Citicorp North America, Inc., as administrative agent and the other lenders party thereto (the Third Amendment”), amending the Credit Agreement dated as of April 30, 2013. The Third Amendment decreased the applicable margin for the term loans outstanding under the Credit Agreement from 1.75% to 1.25% with respect to base rate borrowings and 2.75% to 2.25% with respect to LIBOR borrowings. We expensed third party fees of $1.0 million in

~~Table of Contents~~

~~Other expense (income)~~ ~~related to the Third Amendment to our Senior Secured Credit Agreement~~.

~~Fourth Amendment to Credit Agreement.~~ On June 13, 2017, we entered into the Fourth Amendment to Credit Agreement with Citicorp North America, Inc., as administrative agent and the other lenders party thereto (the “Fourth Amendment”), amending the Credit Agreement dated as of April 30, 2013. The Fourth Amendment increased the revolving loan commitment under the Credit Agreement from $150.0 million to $225.0 million.

~~Nordic Cinema Group Holding AB.~~ On March 28, 2017, we completed the acquisition of Nordic for cash. The purchase price for Nordic was SEK 5,756 million ($654.9 million), which includes payment of interest on the equity value and repayment of shareholder loans. As a result of the acquisition, we assumed the indebtedness of Nordic of approximately SEK 1,269 million ($144.4 million) and indebtedness of approximately €156 million ($169.5 million) as of March 28, 2017, which was refinanced subsequent to the acquisition. We also repaid approximately 13.5 million SEK ($1.6 million) and approximately €1.0 million ($1.1 million) of interest rate swaps related to the indebtedness, which were repaid following the acquisition. All amounts have been converted into US Dollar amounts assuming an SEK/USD exchange rate of 0.11378 and an EUR/USD exchange rate of 1.0865, which were the exchange rates on March 27, 2017. Nordic operated or held a partial interest in 122 theatres with 683 screens in seven European countries: Sweden, Finland, Estonia, Latvia, Lithuania, Norway and Denmark.

~~Additional Public Offering.~~ On February 13, 2017, we completed an additional public offering of 20,330,874 shares of Class A common stock at a price of $31.50 per share ($640.4 million), resulting in net proceeds of $616.8 million after underwriters commission and other professional fees. We used a portion of the net proceeds to repay the aggregate principal amount of the Interim Bridge Loan of $350.0 million and general corporate purposes.

~~NCM Agreement.~~ On March 9, 2017, we reached an agreement with NCM to implement the requirements of the final judgment entered in connection with the DOJ approval of the Carmike transaction. Pursuant to the agreement, we received 18,425,423 NCM common units in March 2017 related to annual attendance at the Carmike theatres and 361,892 NCM common units related to the 2016 common unit adjustment. Because the Carmike theatres were subject to a pre-existing agreement with a third party and will not receive advertising services from NCM, we will be obligated to make quarterly payments to NCM reflecting the estimated value of the advertising services at the Carmike theatres as if NCM had provided such services. The quarterly payments will continue until the earlier of (i) the date the theatres are transferred to the NCM network or (ii) expiration of the ESA with NCM. All calculations will be made pursuant to the terms of the existing ESA and Common Unit Adjustment Agreement with NCM. With regard to the existing AMC theatres on the NCM network that are required under the final judgment to be transferred to another advertising provider, we returned 2,850,453 NCM LLC common units (valued at $36.4 million) to NCM in March 2017, calculated under the Common Unit Adjustment Agreement as if such theatres had been disposed of on March 3, 2017. We are not obligated to make quarterly payments with respect to the transferred theatres. In addition, we returned 1,807,220 additional NCM LLC common units (valued at $22.6 million) in exchange for a waiver of exclusivity by NCM as to the required transferred theatres for the term of the final judgment, which was classified as General and administrative: Merger, acquisition and transaction costs when the common units were returned to NCM during the three months ended March 31, 2017. We recorded a loss of $1.2 million on the return of NCM LLC common units as per the Common Unit Adjustment Agreement and exclusivity waiver for the difference between the average carrying value of the units and the fair value on the date of return. As a result of the agreement, the we received 14,129,642 net additional NCM LLC common units, valued at $176.9 million based on the market price of NCM, Inc. stock on March 16, 2017 of $12.52. Due to the structure of the transactions, we will no longer anticipate recognizing taxable gains upon the receipt of the new NCM LLC common units. We also agreed to reimburse NCM up to $1.0 million for expenses related to the negotiation of this agreement. We recorded in the line item, Equity in (earnings) loss of non-consolidated entities, an other-than-temporary impairment charge of $204.5 million in the nine months ending September 30, 2017, to reduce the carrying value of our equity interests in NCM, Inc. common shares and NCM, LLC common units to Level 1 fair value as of June 30, 2017. The other-than-temporary impairment charge reflects recording our units and shares at the publicly quoted per share price on June 30, 2017 of $7.42 based on our determination that the decline in the price per share during the respective quarter was other than temporary. Our equity interests in common shares and common units had been in an unrealized loss position for approximately three months at June 30, 2017. The impairment analysis requires significant judgment to identify events or circumstances that would likely have a significant adverse effect on the future value of the investment. Consideration was given to financial condition and near-term prospects of the issuer and ability to retain the equity interests in the issuers for a period of time sufficient to allow for any anticipated recovery in market

~~Table of Contents~~

~~value.~~

~~On September 18, 2017, we entered into an agreement to sell 12,000,000 common shares in NCM, Inc. for approximately $73.1 million, representing a~~ price per share of ~~$6.09. The sale was completed on September 20, 2017 and we recognized a loss on sale~~our common stock of approximately $17.4 million including transaction costs on the sale of the shares. On September 29, 2017, we sold our remaining 2,800,000 common shares of NCM, Inc. for approximately $18.2 million representing a price per share of $6.49, we recognized a loss on sale of approximately $3.1 million including transaction costs on the sale of the shares.

The carrying value of our remaining 23,392,630 NCM common units exceeded the fair value by approximately $11.8 million as of September 30, 2017 based on a September 30, 2017 closing price for NCM of $6.98 per share. Should the market value of our investment in NCM further decline below our carrying value of $7.49, additional impairment may be warranted on the remaining 23,392,630 common units of NCM LLC and so deemed to be an other- than-temporary decline. We believe the decline in fair value as of September 30, 2017$14.85 is temporary given the short period of duration of the decline (1 quarter) and the severity of the decline (7% below carrying value). We also have observed quoted market prices of NCM, Inc. common shares subsequent to September 30, 2017 in excess of our $12.55 carrying value per ~~share.~~share as of March 31, 2019.

Leases

~~Notes due 2027.~~We adopted ASC Topic 842 effective January 1, 2019 and as a result our lease accounting policy has been modified as discussed in Note 2 ~~On March 17, 2017, we completed an offering of $475.0 million aggregate principal amount of our Senior Subordinated~~—Leases in the Notes ~~due 2027 (the “Notes due 2027”).We capitalized deferred financing costs of approximately $19.8 million, related~~ to the issuance of the Notes due 2027. The Notes due 2027 mature on May 15, 2027. We will pay interest on the Notes due 2027 at 6.125% per annum, semi-annually in arrears on May 15th and November 15th, commencing on November 15, 2017. We may redeem some or all of the Notes due 2027 at any time on or after May 15, 2022, at the redemption prices set forth in the indenture. In addition, we may redeem up to 35% of the aggregate principal amount of the Notes due 2027 using net proceeds from certain equity offerings completed on or prior to May 15, 2020 at a redemption price as set forth in the indenture governing the Notes due 2027. We may redeem some or all of the Notes due 2027 at any time prior to May 15, 2022 at a redemption price equal to 100% of their aggregate principal amount and accrued and unpaid interest to, but not including, the date of redemption, plus an applicable make-whole premium. We used the net proceeds from the Notes due 2027 private offering, together with a portion of the net proceeds from the Sterling Notes due 2024 (see below) to pay a portion of the consideration for the acquisition of Nordic plus related transaction fees and expenses.

~~Additional Sterling Notes due 2024.~~ On March 17, 2017, we completed an offering of £250.0 million additional aggregate principal amount of our Sterling Notes due 2024 at 106% plus accrued interest from November 8, 2016, in a private offering. We capitalized deferred financing costs of approximately $12.7 million, related to the issuance of the additional Sterling Notes due 2024. The Sterling Notes due 2024 mature on November 15, 2024. We will pay interest on the Sterling Notes due 2024 at 6.375% per annum, semi-annually in arrears on May 15th and November 15th, commencing on May 15, 2017. We may redeem some or all of the Sterling Notes due 2024 at any time on or after November 15, 2019, at the redemption prices set forth in the Indenture. In addition, we may redeem up to 35% of the aggregate principal amount of the Sterling Notes due 2024 using net proceeds from certain equity offerings completed on or prior to November 15, 2019 at a redemption price as set forth in the Indenture. We may redeem some or all of the Sterling Notes due 2024 at any time prior to November 15, 2019 at a redemption price equal to 100% of their aggregate principal amount and accrued and unpaid interest to, but not including, the date of redemption, plus an applicable make-whole premium. We used the net proceeds from the Sterling Notes due 2024 private offering, together with a portion of the net proceeds from the Notes due 2027 to pay a portion of the consideration for the acquisition of Nordic plus related transaction fees and expenses.Consolidated Financial Statements under Item 1.

~~Odeon and UCI Cinemas Holdings Limited.~~ In November 2016, we completed the acquisition of Odeon for cash and stock. The purchase price for Odeon was $637.1 million, comprised of cash of $480.3 million and 4,536,466 shares of Class A common stock with a fair value of $156.7 million (based on a closing sale price of $34.55 per share on November 29, 2017). In addition, we repaid indebtedness of Odeon of approximately $593.2 million at closing. As of November 30, 2016, Odeon operated 244 theatres and 2,243 screens in four major markets: United Kingdom, Spain, Italy, and Germany; and three smaller markets: Austria, Portugal and Ireland, and is included within our International markets segment. We expect to realize approximately $10.0 million of synergies and cost savings related to this acquisition as a result of purchasing and procurement economies of scale.

~~Carmike Cinemas, Inc.~~ ~~We completed the acquisition of Carmike for cash and stock on December 21, 2016.~~

~~Table of Contents~~

The purchase price for Carmike was $858.2 million comprised of cash of $584.3 million and 8,189,808 shares of our Class A common stock with a fair value of $273.9 million (based on a closing share price of $33.45 per share on December 20, 2016). We also assumed $230.0 million aggregate principal amount of 6.00% Senior Secured Notes due June 15, 2023 (the “Senior Secured Notes due 2023”), in connection with the acquisition of Carmike. As of December 21, 2016, Carmike operated 271 theatres with 2,923 screens in small and mid-sized markets in 41 states, which further complements our U.S. markets segment. We expect to realize approximately $35.0 million of synergies and cost savings related to this acquisition as a result of purchasing and procurement economies of scale and general and administrative expense savings, particularly with respect to the consolidation of corporate related functions and elimination of redundancies.

~~Bridge Loan Agreement.~~ On December 21, 2016, we entered into a bridge loan agreement with Citicorp North America, Inc., as administrative agent and the other lenders party thereto (the “Bridge Loan Agreement”). We borrowed $350.0 million of interim bridge loans (the “Interim Bridge Loans”) on December 21, 2016 under the Bridge Loan Agreement. The proceeds from the Interim Bridge Loans were used to pay a portion of the acquisition of Carmike.

~~On February 13, 2017, we repaid the aggregate principal amount of the Interim Bridge Loan of $350.0 million with a portion of the proceeds from our additional public offering.~~

Dividends. The following is a summary of dividends and dividend equivalents declared to stockholders:

Amount per

Total Amount

Share of

Declared

Declaration Date

Record Date

Date Paid

Common Stock

(In millions)

February 14, 2017

March 13, 2017

March 27, 2017

$
0.20

$
26.2

April 27, 2017

June 5, 2017

June 19, 2017

0.20

26.5

August 3, 2017

September 11, 2017

September 25, 2017

0.20

26.5

February 25, 2016

March 7, 2016

March 21, 2016

0.20

19.8

April 27, 2016

June 6, 2016

June 20, 2016

0.20

19.8

July 25, 2016

September 6, 2016

September 19, 2016

0.20

19.8

November 3, 2016

December 5, 2016

December 19, 2016

0.20

20.7


			Amount per		Total Amount
			Share of		Declared
Declaration Date	Record Date	Date Paid	Common Stock		(In millions)
February 15, 2019	March 11, 2019	March 25, 2019	$	0.20	$	21.3
November 1, 2018	December 10, 2018	December 26, 2018		0.20		21.2
September 14, 2018	September 25, 2018	September 28, 2018		1.55		162.9
July 24, 2018	September 10, 2018	September 24, 2018		0.20		25.8
May 3, 2018	June 11, 2018	June 25, 2018		0.20		26.0
February 28, 2018	March 12, 2018	March 26, 2018		0.20		26.0

During the ~~nine~~three months ~~ended September 30, 2017~~ending March 31, 2019 and ~~2016,~~March 31, 2018, we paid dividends and dividend equivalents of ~~$78.7~~$21.8 million and ~~$59.1~~$25.8 million, respectively. As of ~~September 30, 2017,~~March 31, 2019, we accrued ~~$0.9~~$3.4 million for the remaining unpaid dividends.

On ~~October 27, 2017,~~May 3, 2019, we declared a cash dividend in the amount of $0.20 per share ofon our Class A and Class B common stock, payable on ~~December 18, 2017~~June 24, 2019 to stockholders of record on ~~December 4, 2017.~~June 10, 2019.

Stock Repurchases. On August 3, 2017, we announced that our Board of Directors had approved a $100.0 million share repurchase program to repurchase our Class A common stock over a two-year period.

Table of Contents

such repurchases, will depend upon a variety of factors, including liquidity, capital needs of the business, market conditions, regulatory requirements, and other corporate considerations, as determined by AMC’s management team. Repurchases may be made under a Rule 10b5-1 plan, which would permit common stock to be repurchased when our management might otherwise be precluded from doing so under insider trading laws. The repurchase program does not obligate ~~the~~ us to repurchase any minimum dollar amount or number of shares and may be suspended for periods or discontinued at any time. ~~During~~As of March 31, 2019, we had $44.3 million remaining available for repurchases under this plan.

AMC Shares Repurchased from Wanda: On September 14, 2018, we issued $600.0 million of Convertible Notes due 2024. Using proceeds from the ~~three months ended~~Convertible Notes, we repurchased 24,057,143 shares at a price of $17.50 per share or $421.0 million and associated legal fees of $1.9 million. As of September 30, ~~2017, we repurchased 1,068,300~~2018, Wanda owns 50.01% of AMC through its 51,769,784 shares of Class AB common ~~stock at a cost~~stock. With the 3 to 1 voting rights of ~~$16.5 million.~~

Class B common shares, Wanda retains voting control of AMC.

5848

Table of Contents

Operating Results

The following table sets forth our consolidated revenues, operating costs and expenses.


	Three Months Ended						Nine Months Ended						Three Months Ended
(In millions)	September 30, 2017		September 30, 2016		% Change		September 30, 2017		September 30, 2016		% Change		March 31, 2019		March 31, 2018		% Change
Revenues
Admissions	$	753.5	$	496.8	51.7	%	$	2,332.4	$	1,460.6	59.7	%	$	731.5	$	875.0	(16.4)	%
Food and beverage		361.4		248.9	45.2	%		1,133.1		736.6	53.8	%		368.8		405.8	(9.1)	%
Other theatre		63.8		34.1	87.1	%		196.9		112.6	74.9	%		100.1		102.8	(2.6)	%
Total revenues	$	1,178.7	$	779.8	51.2	%	$	3,662.4	$	2,309.8	58.6	%	$	1,200.4	$	1,383.6	(13.2)	%
Operating Costs and Expenses
Film exhibition costs	$	364.8	$	259.1	40.8	%	$	1,164.2	$	784.4	48.4	%	$	365.3	$	426.5	(14.3)	%
Food and beverage costs		60.7		33.9	79.1	%		182.6		102.0	79.0	%		61.5		66.2	(7.1)	%
Operating expense		383.2		211.6	81.1	%		1,128.8		613.9	83.9	%
Operating expense, excluding depreciation and amortization below														402.8		411.9	(2.2)	%
Rent		200.7		121.9	64.6	%		590.9		369.3	60.0	%		242.0		189.7	27.6	%
General and administrative expense:
General and administrative:
Merger, acquisition and transaction costs		5.6		4.9	14.3	%		57.2		15.1	*	%		3.3		4.7	(29.8)	%
Other		32.8		19.8	65.7	%		113.4		58.9	92.5	%
Other, excluding depreciation and amortization below														46.2		44.2	4.5	%
Depreciation and amortization		135.2		63.1	*	%		393.9		185.8	*	%		113.0		130.5	(13.4)	%
Operating costs and expenses		1,183.0		714.3	65.6	%		3,631.0		2,129.4	70.5	%		1,234.1		1,273.7	(3.1)	%
Operating income (loss)		(4.3)		65.5	*	%		31.4		180.4	(82.6)	%		(33.7)		109.9	*	%
Other expense (income):
Other (income) expense		(0.6)		0.1	*	%		(2.3)		—	*	%
Other expense														29.8		1.2	*	%
Interest expense:
Corporate borrowings		60.8		24.6	*	%		171.7		74.4	*	%		71.3		61.7	15.6	%
Capital and financing lease obligations		10.6		2.1	*	%		31.7		6.4	*	%		2.1		10.3	(79.6)	%
Non-cash NCM exhibitor service agreement														10.2		10.5	(2.9)	%
Equity in (earnings) loss of non-consolidated entities (1)		1.8		(12.0)	*	%		199.1		(28.1)	*	%		(6.5)		9.0	*	%
Investment (income) expense		(16.6)		0.2	*	%		(21.6)		(9.6)	*	%
Total other (income) expense		56.0		15.0	*	%		378.6		43.1	*	%
Investment income														(16.1)		(5.2)	*	%
Total other expense														90.8		87.5	3.8	%
Earnings (loss) before income taxes		(60.3)		50.5	*	%		(347.2)	��	137.3	*	%		(124.5)		22.4	*	%
Income tax provision (benefit)		(17.6)		20.1	*	%		(136.4)		54.6	*	%
Income tax provision														5.7		4.7	21.3	%
Net earnings (loss)	$	(42.7)	$	30.4	*	%	$	(210.8)	$	82.7	*	%	$	(130.2)	$	17.7	*	%

~~(1)~~

~~Equity in (earnings) loss of non-consolidated entities includes an other-than-temporary impairment of our investment in NCM of $204.5 million for the nine months ended September 30, 2017.~~

* Percentage change in excess of 100%

~~Table of Contents~~

Three Months Ended

Nine Months Ended

September 30, 2017

September 30, 2016

September 30, 2017

September 30, 2016
Operating Data:

Screen additions

22

—

64

12
Screen acquisitions

15

15

720

26
Screen dispositions

21

—

257

38
Construction openings (closures), net

(53)

(54)

(39)

(131)
Average screens (1)

10,707

5,240

10,640

5,278
Number of screens operated

11,046

5,295

11,046

5,295
Number of theatres operated

1,006

388

1,006

388
Screens per theatre

11.0

13.6

11.0

13.6
Attendance (in thousands) (1)

79,451

51,895

254,441

153,136

~~(1)~~

~~Includes consolidated theatres only and excludes screens offline due to construction.~~

~~Table of Contents~~

~~Segment Operating Results~~

~~The following table sets forth our revenues, operating costs and expenses by reportable segment.~~

U.S. Markets

International Markets

Consolidated

Three Months Ended

Three Months Ended

Three Months Ended

September 30,

September 30,

September 30,
(In millions)

2017

2016

2017

2016

2017

2016
Revenues

Admissions

$
531.7

$
495.8

$
221.8

$
1.0

$
753.5

$
496.8
Food and beverage

278.3

248.5

83.1

0.4

361.4

248.9
Other theatre

35.7

34.0

28.1

0.1

63.8

34.1
Total revenues

845.7

778.3

333.0

1.5

1,178.7

779.8
Operating Costs and Expenses

Film exhibition costs

269.2

258.6

95.6

0.5

364.8

259.1
Food and beverage costs

41.2

33.8

19.5

0.1

60.7

33.9
Operating expense

272.9

210.9

110.3

0.7

383.2

211.6
Rent

148.2

121.5

52.5

0.4

200.7

121.9
General and administrative expense:

Merger, acquisition and transaction costs

3.7

4.9

1.9

—

5.6

4.9
Other

16.9

19.8

15.9

—

32.8

19.8
Depreciation and amortization

98.9

63.1

36.3

—

135.2

63.1
Operating costs and expenses

851.0

712.6

332.0

1.7

1,183.0

714.3
Operating income (loss)

(5.3)

65.7

1.0

(0.2)

(4.3)

65.5
Other expense (income):

Other (income) expense

(0.4)

0.1

(0.2)

—

(0.6)

0.1
Interest expense:

Corporate borrowings

60.3

24.6

0.5

—

60.8

24.6
Capital and financing lease obligations

5.0

2.1

5.6

—

10.6

2.1
Equity in (earnings) loss of non-consolidated entities

2.7

(12.0)

(0.9)

—

1.8

(12.0)
Investment (income) expense

(17.0)

0.2

0.4

—

(16.6)

0.2
Total other expense

50.6

15.0

5.4

—

56.0

15.0
Earnings (loss) before income taxes

(55.9)

50.7

(4.4)

(0.2)

(60.3)

50.5
Income tax provision (benefit)

(18.9)

20.1

1.3

—

(17.6)

20.1
Net earnings (loss)

$
(37.0)

$
30.6

$
(5.7)

$
(0.2)

$
(42.7)

$
30.4

U.S. Markets

International Markets

Consolidated

Three Months Ended

Three Months Ended

Three Months Ended

September 30,

September 30,

September 30,

2017

2016

2017

2016

2017

2016
Segment Operating Data:

Screen additions

21

—

1

—

22

—
Screen acquisitions

15

15

—

—

15

15
Screen dispositions

16

—

5

—

21

—
Construction openings (closures), net

(30)

(54)

(23)

—

(53)

(54)
Average screens (1)

8,028

5,224

2,679

16

10,707

5,240
Number of screens operated

8,139

5,279

2,907

16

11,046

5,295
Number of theatres operated

645

387

361

1

1,006

388
Screens per theatre

12.6

13.6

8.1

16.0

11.0

13.6
Attendance (in thousands) (1)

54,269

51,750

25,182

145

79,451

51,895

~~(1)~~

~~Includes consolidated theatres only and excludes screens offline due to construction.~~

~~Table of Contents~~

U.S. Markets

International Markets

Consolidated

Nine Months Ended

Nine Months Ended

Nine Months Ended

September 30,

September 30,

September 30,
(In millions)

2017

2016

2017

2016

2017

2016
Revenues

Admissions

$
1,716.3

$
1,457.5

$
616.1

$
3.1

$
2,332.4

$
1,460.6
Food and beverage

904.7

735.3

228.4

1.3

1,133.1

736.6
Other theatre

124.2

112.2

72.7

0.4

196.9

112.6
Total revenues

2,745.2

2,305.0

917.2

4.8

3,662.4

2,309.8
Operating Costs and Expenses

Film exhibition costs

904.7

783.0

259.5

1.4

1,164.2

784.4
Food and beverage costs

129.7

101.7

52.9

0.3

182.6

102.0
Operating expense

824.3

611.4

304.5

2.5

1,128.8

613.9
Rent

445.6

367.9

145.3

1.4

590.9

369.3
General and administrative expense:

Merger, acquisition and transaction costs

54.3

15.1

2.9

—

57.2

15.1
Other

67.8

58.9

45.6

—

113.4

58.9
Depreciation and amortization

294.3

185.8

99.6

—

393.9

185.8
Operating costs and expenses

2,720.7

2,123.8

910.3

5.6

3,631.0

2,129.4
Operating income (loss)

24.5

181.2

6.9

(0.8)

31.4

180.4
Other expense (income):

Other (income) expense

(2.1)

—

(0.2)

—

(2.3)

—
Interest expense:

—

Corporate borrowings

170.2

74.4

1.5

—

171.7

74.4
Capital and financing lease obligations

15.3

6.4

16.4

—

31.7

6.4
Equity in (earnings) loss of non-consolidated entities (1)

200.1

(28.1)

(1.0)

—

199.1

(28.1)
Investment (income) expense

(22.3)

(9.6)

0.7

—

(21.6)

(9.6)
Total other expense

361.2

43.1

17.4

—

378.6

43.1
Earnings (loss) before income taxes

(336.7)

138.1

(10.5)

(0.8)

(347.2)

137.3
Income tax provision (benefit)

(138.0)

54.6

1.6

—

(136.4)

54.6
Net earnings (loss)

$
(198.7)

$
83.5

$
(12.1)

$
(0.8)

$
(210.8)

$
82.7

~~(1)~~

~~Equity in (earnings) loss of non-consolidated entities includes an other-than-temporary impairment of our investment in NCM of $204.5 million for the nine months ended September 30, 2017.~~


	U.S. Markets		International Markets		Consolidated		Three Months Ended
	Nine Months Ended		Nine Months Ended		Nine Months Ended		March 31,
	September 30,		September 30,		September 30,		March 31, 2019	March 31, 2018
	2017	2016	2017	2016	2017	2016
Segment Operating Data:
Operating Data:
Screen additions	30	12	34	—	64	12	21	23
Screen acquisitions	37	26	683	—	720	26	—	22
Screen dispositions	218	38	39	—	257	38	68	90
Construction openings (closures), net	(3)	(131)	(36)	—	(39)	(131)	(49)	(53)
Average screens (1)	8,083	5,262	2,557	16	10,640	5,278	10,684	10,790
Number of screens operated	8,139	5,279	2,907	16	11,046	5,295	10,995	11,071
Number of theatres operated	645	387	361	1	1,006	388	1,001	1,008
Screens per theatre	12.6	13.6	8.1	16.0	11.0	13.6	11.0	11.0
Attendance (in thousands) (1)	179,041	152,717	75,400	419	254,441	153,136	79,825	90,932

(1)

Includes consolidated theatres only and excludes screens offline due to construction.

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Segment Operating Results

The following table sets forth our revenues, operating costs and expenses by reportable segment.


	U.S. Markets				International Markets				Consolidated
	Three Months Ended				Three Months Ended				Three Months Ended
	March 31, 2019				March 31, 2019				March 31, 2019
(In millions)	2019		2018		2019		2018		2019		2018
Revenues
Admissions	$	515.4	$	604.7	$	216.1	$	270.3	$	731.5	$	875.0
Food and beverage		287.6		311.5		81.2		94.3		368.8		405.8
Other theatre		64.2		65.9		35.9		36.9		100.1		102.8
Total revenues		867.2		982.1		333.2		401.5		1,200.4		1,383.6
Operating Costs and Expenses
Film exhibition costs		277.3		316.2		88.0		110.3		365.3		426.5
Food and beverage costs		43.0		44.3		18.5		21.9		61.5		66.2
Operating expense		285.6		281.9		117.2		130.0		402.8		411.9
Rent		176.6		133.2		65.4		56.5		242.0		189.7
General and administrative expense:
Merger, acquisition and transaction costs		1.2		4.0		2.1		0.7		3.3		4.7
Other		27.5		26.4		18.7		17.8		46.2		44.2
Depreciation and amortization		83.6		94.1		29.4		36.4		113.0		130.5
Operating costs and expenses		894.8		900.1		339.3		373.6		1,234.1		1,273.7
Operating income (loss)		(27.6)		82.0		(6.1)		27.9		(33.7)		109.9
Other expense (income):
Other (income) expense		29.4		(0.2)		0.4		1.4		29.8		1.2
Interest expense:
Corporate borrowings		70.6		60.7		0.7		1.0		71.3		61.7
Capital and financing lease obligations		0.7		4.6		1.4		5.7		2.1		10.3
Non-cash NCM exhibitor service agreement		10.2		10.5		—		—		10.2		10.5
Equity in (earnings) loss of non-consolidated entities		(6.1)		10.3		(0.4)		(1.3)		(6.5)		9.0
Investment (income) expense		(4.8)		(5.1)		(11.3)		(0.1)		(16.1)		(5.2)
Total other expense		100.0		80.8		(9.2)		6.7		90.8		87.5
Earnings (loss) before income taxes		(127.6)		1.2		3.1		21.2		(124.5)		22.4
Income tax provision		3.5		1.1		2.2		3.6		5.7		4.7
Net earnings (loss)	$	(131.1)	$	0.1	$	0.9	$	17.6	$	(130.2)	$	17.7


	U.S. Markets		International Markets		Consolidated
	Three Months Ended		Three Months Ended		Three Months Ended
	March 31,		March 31,		March 31,
	2019	2018	2019	2018	2019	2018
Segment Operating Data:
Screen additions	21	9	—	14	21	23
Screen acquisitions	—	14	—	8	—	22
Screen dispositions	23	81	45	9	68	90
Construction openings (closures), net	(35)	(30)	(14)	(23)	(49)	(53)
Average screens (1)	8,000	8,096	2,684	2,694	10,684	10,790
Number of screens operated	8,077	8,136	2,918	2,935	10,995	11,071
Number of theatres operated	636	642	365	366	1,001	1,008
Screens per theatre	12.7	12.7	8.0	8.0	11.0	11.0
Attendance (in thousands) (1)	54,979	61,856	24,846	29,076	79,825	90,932

(1)

Includes consolidated theatres only and excludes screens offline due to construction.

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Adjusted EBITDA

We present Adjusted EBITDA as a supplemental measure of our performance. We define Adjusted EBITDA as net earnings (loss) plus (i) income tax provision (benefit), (ii) interest expense and (iii) depreciation and amortization, as further adjusted to eliminate the impact of certain items that we do not consider indicative of our ongoing operating performance and to include attributable EBITDA from equity investments in theatre operations in international markets and any cash distributions of earnings from other equity method investees. These further adjustments are itemized below. You are encouraged to evaluate these adjustments and the reasons we consider them appropriate for supplemental analysis. In evaluating Adjusted EBITDA, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in this presentation. Our presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.

Adjusted EBITDA ~~increased~~decreased by ~~$3.0~~$169.7 million ~~or 2.1%~~ during the three months ended ~~September 30, 2017~~March 31, 2019 compared to the three months ended ~~September 30, 2016.~~March 31, 2018. Adjusted EBITDA in U.S. markets decreased by ~~$36.9~~$130.9 million ~~or 25.5%~~primarily due ~~primarily~~ to decreases in attendance ~~per average screen~~ and ~~increases~~the modification of a lease in the prior year that reduced rent expense in 2018 by $24.2 million and ~~partially offset by increases in cash distributions from non-consolidated entities.~~the new lease standard ASC 842 that reduced Adjusted EBITDA ~~in international markets increased $39.9 million due primarily to increases in attendance from the Odeon acquisition and the Nordic acquisition.~~

~~Adjusted EBITDA increased~~ by ~~$113.9 million or 27.1% during the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016. Adjusted EBITDA in U.S. markets increased by $0.1~~approximately $12.7 million. Adjusted EBITDA in international markets ~~increased $113.8~~decreased $38.8 million primarily due ~~primarily~~ to ~~increases~~decreases in attendance ~~from~~and increased rent due to the ~~Odeon acquisition~~new lease standard ASC 842 that reduced Adjusted EBITDA by approximately $10.0 million and ~~Nordic acquisition.~~a decrease foreign currency translation rates. See Note 2—Leases in the Notes to the Consolidated Financial Statements under Item 1 for the impact of ASC 842 – lease accounting.

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


	Three Months Ended				Nine Months Ended				Three Months Ended
Adjusted EBITDA (In millions)	September 30, 2017		September 30, 2016		September 30, 2017		September 30, 2016		March 31, 2019		March 31, 2018
U.S. markets (1)	$	107.6	$	144.5	$	420.6	$	420.5	$	77.5	$	208.4
International markets		39.8		(0.1)		113.7		(0.1)		30.7		69.5
Total Adjusted EBITDA	$	147.4	$	144.4	$	534.3	$	420.4	$	108.2	$	277.9

(1)

Distributions from NCM are reported entirely within the U.S. markets segment.

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	Three Months Ended				Nine Months Ended				Three Months Ended
(In millions)	September 30, 2017		September 30, 2016		September 30, 2017		September 30, 2016		March 31, 2019		March 31, 2018
Net earnings (loss)	$	(42.7)	$	30.4	$	(210.8)	$	82.7	$	(130.2)	$	17.7
Plus:
Income tax provision (benefit)		(17.6)		20.1		(136.4)		54.6
Income tax provision										5.7		4.7
Interest expense		71.4		26.7		203.4		80.8		83.6		82.5
Depreciation and amortization		135.2		63.1		393.9		185.8		113.0		130.5
Certain operating expenses (1)		3.7		5.8		12.5		13.0		2.5		3.7
Equity in (earnings) loss of non-consolidated entities (2)		1.8		(12.0)		199.1		(28.1)		(6.5)		9.0
Cash distributions from non-consolidated entities (3)		6.5		3.4		33.1		21.6		10.5		24.3
Attributable EBITDA (4)		0.8		—		1.8		—		0.9		2.0
Investment (income) expense		(16.6)		0.2		(21.6)		(9.6)
Investment expense (income)										(16.1)		(5.2)
Other expense (income) (5)		(0.6)		0.1		(1.8)		—		29.9		1.2
General and administrative expense—unallocated:
Merger, acquisition and transaction costs (6)		5.6		4.9		57.2		15.1
Stock-based compensation expense (7)		(0.1)		1.7		3.9		4.5
Non-cash rent - purchase accounting (6)										7.6		—
General and administrative — unallocated:
Merger, acquisition and transaction costs (7)										3.3		4.7
Stock-based compensation expense (8)										4.0		2.8
Adjusted EBITDA	$	147.4	$	144.4	$	534.3	$	420.4	$	108.2	$	277.9

(1)

Amounts represent preopening expense related to temporarily closed screens under renovation, theatre and other closure expense for the permanent closure of screens including the related accretion of interest, non-cash deferred digital equipment rent expense, and disposition of assets and other non-operating gains or losses included in operating expenses. We have excluded these items as they are non-cash in nature, include components of interest cost for the time value of money or are non-operating in nature.

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(2)

~~Equity~~During the three months ended March 31, 2018, we recorded equity in ~~(earnings)~~ loss of non-consolidated entities includes ~~an other-than-temporary~~a lower of carrying value or fair value impairment loss of the held-for sale portion of our investment in NCM of ~~$204.5 million for the nine months ended September 30, 2017.~~ $16.0 million. The ~~other-than-temporary~~ impairment ~~charge reflects~~charges reflect recording our held-for-sale units and other-than-temporary impaired shares at the publicly quoted per share price on ~~June 30, 2017~~March 31, 2018 of ~~$7.42 based on our determination that the decline in the price per share during the respective quarter was other than temporary.~~$5.19. Equity in ~~(earnings)~~ loss of non-consolidated entities also includes loss on the ~~sale~~surrender (disposition) of a portion of our investment in NCM of ~~$21.0 million and $22.2~~$1.1 million during the three ~~and nine~~ months ended ~~September 30, 2017, respectively.~~March 31, 2018.

(3)

Includes U.S. non-theatre distributions from equity method investments and International non-theatre distributions from equity method investments to the extent received. We believe including cash distributions is an appropriate reflection of the contribution of these investments to our operations.

(4)

Attributable EBITDA includes the EBITDA from equity investments in theatre operators in certain international markets. See below for a reconciliation of our equity ~~earnings~~(earnings) 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. We also provide services to these theatre operators including information technology systems, certain on-screen advertising services and our gift card and package ticket program. As these investments relate only to our Nordic acquisition, the second quarter of 2017 represents the first time we have made this adjustment and does not impact prior historical presentations of Adjusted EBITDA.


	Three Months Ended
(In millions)	March 31, 2019		March 31, 2018
Equity in (earnings) loss of non-consolidated entities	$	(6.5)	$	9.0
Less:
Equity in (earnings) loss of non-consolidated entities excluding international theatre JV's		(6.0)		10.3
Equity in earnings (loss) of International theatre JV's		0.5		1.3
Investment income		(0.2)		—
Depreciation and amortization		0.6		0.7
Attributable EBITDA	$	0.9	$	2.0

~~Table of Contents~~

Three Months Ended

Nine Months Ended
(In millions)

September 30, 2017

September 30, 2016

September 30, 2017

September 30, 2016
Equity in loss of non-consolidated entities

$
1.8

$
—

$
199.1

$
—
Less:

Equity in loss of non-consolidated entities excluding international theatre JV's

2.1

—

199.6

—
Equity in earnings of International theatre JV's

0.3

—

0.5

—
Depreciation and amortization

0.5

—

1.3

—
Attributable EBITDA

$
0.8

$
—

$
1.8

$
—

(5)

Other ~~income~~ expense (income) for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2019 includes ~~$3.2~~a loss of $28.4 million as a result of a decrease in fair value of our derivative asset and an increase in fair value of our derivative liability for the Convertible Notes due 2024, also included are financing losses and financing related foreign currency transaction losses. During the three months ended March 31, 2018, we recorded expense of $1.6 million financing related foreign currency transaction ~~gains,~~losses, partially offset by ~~$1.0 million in fees relating to third party fees related to the Third Amendment to our Senior Secured Credit Agreement and a~~ $0.4 million ~~loss on the redemption of the Bridge Loan Facility. Other income~~ ~~for~~ ~~the three months ended September 30, 2017 includes $0.5 million related to financing related foreign~~forward currency ~~transaction~~contract gains.

(6)

Reflects amortization of certain intangible assets reclassified from depreciation and amortization to rent expense, due to the adoption of ASC 842.

(7)

Merger, acquisition and transition costs are excluded as they are non-operating in nature.

~~(7)~~(8)

~~Non-cash or non-recurring~~Stock-based compensation expense is non-cash expense included in general and administrative: other

Adjusted EBITDA is a non-GAAP financial measure commonly used in our industry and should not be construed as an alternative to net earnings (loss) as an indicator of operating performance (as determined in accordance with U.S. GAAP). Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies. We have included Adjusted EBITDA because we believe it provides management and investors with additional information to measure our performance and estimate our value.

Adjusted EBITDA has important limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for analysis of our results as reported under U.S. GAAP. For example, Adjusted EBITDA:

does not reflect our capital expenditures, future requirements for capital expenditures or contractual commitments;

does not reflect changes in, or cash requirements for, our working capital needs;

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does not reflect the significant interest expenses, or the cash requirements necessary to service interest or principal payments, on our debt;

excludes income tax payments that represent a reduction in cash available to us; ~~and~~

does not reflect any cash requirements for the assets being depreciated and amortized that may have to be replaced in the future; and

does not reflect the impact of divestitures that ~~may be~~were required in connection with recently completed acquisitions.

~~New Segment Information~~

Our historical results of operation for the three and nine months ended September 30, 2017 and September 30, 2016 reflect the results of operations for our two Theatrical Exhibition operating segments, U.S. markets and International markets.

Prior to the acquisition of Odeon on November 30, 2016, we reported one reportable segment, Theatrical Exhibition. Our historical results of operations for the three and nine months ended September 30, 2016, includes one theatre in the U.K. which is now reported as part of our International markets reportable segment effective with the

~~Table of Contents~~

~~Odeon acquisition on November 30, 2016.~~

Results of Operations— For the Three Months Ended ~~September 30, 2017~~March 31, 2019 and ~~September 30, 2016~~March 31, 2018

Consolidated Results of Operations

Revenues. Total revenues ~~increased 51.2%~~decreased 13.2% or ~~$398.9~~$183.2 million during the three months ended ~~September 30, 2017~~March 31, 2019 compared to the three months ended ~~September 30, 2016.~~March 31, 2018. Admissions revenues ~~increased 51.7%~~decreased 16.4%, or ~~$256.7~~$143.5 million during the three months ended ~~September 30, 2017~~March 31, 2019 compared to the three months ended ~~September 30, 2016,~~March 31, 2018, primarily due to a ~~53.1% increase~~12.2% decrease in attendance ~~partially offset by~~and a ~~0.9%~~4.8% decrease in average ticket price. The ~~increase~~decrease in attendance was primarily due to the ~~acquisition~~popularity of ~~Odeon~~films (for U.S. markets and International markets) released in ~~November 2016,~~ the ~~acquisition of Carmike~~quarter as compared to the same period a year ago as well as temporary screen closures for theatre refurbishments and increased competition in ~~December 2016 and the acquisition of Nordic in March 2017.~~international markets. The decrease in average ticket price was primarily due to strategic pricing initiatives put in place over the ~~acquisition~~last year; decreases in the popularity of ~~Odeon where the average ticket price~~3D and IMAX premium content, and declines in our International markets is lower than in our U.S. markets. Total admissions revenues were increased by rewards redeemed, net of deferrals of $1.1 million and $0.5 million related to rewards accumulated under AMC Stubs® ~~during the three months ended September 30, 2017 and September 30, 2016, respectively. The rewards accumulated under AMC Stubs~~® ~~are deferred and recognized in future periods upon redemption or expiration of customer rewards.~~foreign currency translation rates.

Food and beverage revenues ~~increased 45.2%~~decreased 9.1%, or ~~$112.5~~$37.0 million, during the three months ended ~~September 30, 2017~~March 31, 2019 compared to the three months ended ~~September 30, 2016,~~March 31, 2018, primarily due to ~~the increase~~decrease in attendance, partially offset by a ~~5.2% decrease~~3.6% increase in food and beverage revenues per patron. ~~The decrease in food~~Food and beverage revenues per patron ~~was primarily due to the acquisitions~~increased as a result of ~~Odeon and Nordic where~~strategic price increases, our food and beverage ~~revenues per patron~~initiatives including theatre renovations, and our Feature Fare menu, partially offset by declines in International markets is much lower than in our U.S. markets. Total food and beverage revenues were increased by rewards redeemed, net of deferrals, of $0.3 million and were decreased by rewards redeemed, net of deferrals, of $1.2 million related to rewards accumulated under AMC Stubs® ~~during the three months ended September 30, 2017 and September 30, 2016, respectively.~~ foreign currency translation rates.

Total other theatre revenues ~~increased 87.1%~~decreased 2.6%, or ~~$29.7~~$2.7 million during the three months ended ~~September 30, 2017~~March 31, 2019 compared to the three months ended ~~September 30, 2016,~~March 31, 2018, primarily due to ~~increases from~~declines in ticket fees and the ~~Odeon, Carmike and Nordic acquisitions. Other theatre revenues include revenues for ticketing fees, advertising, and theatre rentals.~~declines in foreign currency translation rates

Operating costs and expenses. Operating costs and expenses ~~increased 65.6%~~decreased 3.1%, or ~~$468.7~~$39.6 million during the three months ended ~~September 30, 2017~~March 31, 2019 compared to the three months ended ~~September 30, 2016. The increase was primarily due to the acquisition of Odeon in November 2016, the acquisition of Carmike in December 2016 and the acquisition of Nordic in~~ March ~~2017.~~31, 2018. Film exhibition costs ~~increased 40.8%~~decreased 14.3%, or ~~$105.7~~$61.2 million, during the three months ended ~~September 30, 2017~~March 31, 2019 compared to the three months ended ~~September 30, 2016,~~March 31, 2018, primarily due to the ~~increase~~decrease in admissions revenues. As a percentage of admissions revenues, film exhibition costs were ~~48.4%~~49.9% for the three months ended ~~September 30, 2017~~March 31, 2019 and ~~52.2%~~48.7% for the three months ended ~~September 30, 2016. Film exhibition costs as a percentage of admissions revenues in our International markets are much lower than in our U.S. markets.~~March 31, 2018.

Food and beverage costs ~~increased 79.1%~~decreased 7.1%, or ~~$26.8~~$4.7 million during the three months ended ~~September 30, 2017~~March 31, 2019 compared to the three months ended ~~September 30, 2016.~~March 31, 2018. The decrease in food and beverage costs was primarily due to the decrease in food and beverage revenues. As a percentage of food and beverage revenues, food and beverage costs were ~~16.8%~~16.7% for the three months ended ~~September 30, 2017~~March 31, 2019 and ~~13.6%~~16.3% for the three months ended September 30, 2016 due to the acquisition of Odeon and Nordic where food and beverage costs as a percentage of food and beverage revenues are much higher in our International markets than in our U.S. markets. The increase in food and beverage costs was primarily due to the increase in food and beverage revenues.March 31, 2018. Food and beverage gross profit per patron ~~decreased 8.7%,~~increased 4.0% and is calculated as food and beverage revenues less food and beverage costs divided by attendance. ~~The decrease is primarily due to lower gross profit per patron in our International markets.~~

As a percentage of revenues, operating expense was ~~32.5%~~33.6% for the three months ended ~~September 30, 2017~~March 31, 2019 and ~~27.1%~~29.8% for the three months ended ~~September 30, 2016.~~March 31, 2018. Rent expense increased ~~64.6%~~27.6%, or ~~$78.8~~$52.3 million during the three months ended ~~September 30, 2017~~March 31, 2019 compared to the three months ended ~~September 30, 2016,~~March 31, 2018, primarily ~~from the increase in the number of theatres operated~~ due to a prior year modification of a theatre lease which reduced rent by $24.2 million in 2018 and the ~~acquisitions~~adoption of ~~Odeon, Carmike~~ASC 842 for lease accounting where approximately $20.9 million of principal and ~~Nordic.~~

interest payments were reclassified as rent expense during the three months ended March 31, 2019 related to build-to-suit financing lease obligations, $1.8 million of deferred gain amortization for sale leaseback transactions that previously reduced rent expense was eliminated and $7.7 million of non-cash expense from purchase accounting was recorded as rent expense, which was previously

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classified as depreciation and amortization expense. See Note 2—Leases in the Notes to the Consolidated Financial Statements under Item 1 for the impact of ASC 842 – lease accounting. During the three months ended March, 31, 2018, the modification of a theatre lease in the U.S. markets reduced rent expense by $24.2 million.

Merger, acquisition and transaction costs. Merger, acquisition and transaction costs were ~~$5.6~~$3.3 million during the three months ended ~~September 30, 2017~~March 31, 2019 compared to ~~$4.9~~$4.7 million during the three months ended ~~September 30, 2016,~~March 31, 2018, primarily due to ~~an increase~~expenses incurred in ~~professional~~connection with the Carmike Cinemas, Inc. (“Carmike”), Odeon and ~~consulting costs and increased merger and acquisition activity associated with our Carmike acquisition, Odeon acquisition,~~UCI Cinemas Holdings Limited (“Odeon”) and Nordic ~~acquisition. The merger, acquisition and transaction costs are~~ Cinema Group Holdings AB (“Nordic”)~~costs and expenses incurred principally at the corporate office in the investigation, negotiation, financing and transition of~~ acquisitions.

Other. Other general and administrative expense increased ~~$13.0~~$2.0 million during the three months ended ~~September 30, 2017~~March 31, 2019 compared to the three months ended ~~September 30, 2016,~~March 31, 2018, primarily due ~~primarily~~ to ~~the acquisitions of Odeon and Nordic and~~ increases in ~~development costs, salaries~~our Non-Qualified Deferred Compensation plan expense related to an increase in market values of the underlying investments, and ~~benefits.~~$0.8 million in higher stock-based compensation expense.

Depreciation and amortization. Depreciation and amortization ~~increased $72.1~~decreased $17.5 million during the three months ended ~~September 30, 2017~~March 31, 2019 compared to the three months ended ~~September 30, 2016,~~March 31, 2018, primarily due to the ~~increase~~adoption of ASC 842 lease accounting where the financing lease building and related depreciation were eliminated. See Note 2—Leases in ~~depreciable assets resulting from~~ the ~~acquisitions~~Notes to the Consolidated Financial Statements under Item 1 for the impact of ~~Odeon, Carmike and Nordic, as well as capital expenditures of $467.7 million during the nine months ended September 30, 2017 and $421.7 million during the year ended December 31, 2016.~~ASC 842 – lease accounting.

Other Expense (Income):

Other ~~expense (income).~~expense. Other ~~income~~expense of ~~$0.6~~$29.8 million during the three months ended ~~September 30, 2017~~March 31, 2019 is primarily due to a decrease in fair value of our derivative asset for the contingent call option related to the Class B common stock purchase and cancellation agreement of $15.1 million and an increase of $13.3 million in fair value of our derivative liability for the embedded conversion feature in our Convertible Notes due 2024 which resulted in an expense of $28.4 million. During the three months ended March 31, 2018, other income included $1.6 million financing related foreign currency transaction ~~gains~~. losses, partially offset by $0.4 million forward foreign currency contract gains.

Interest expense. Interest expense increased ~~$44.7~~$1.1 million to ~~$71.4~~$83.6 million for the three months ended ~~September 30, 2017~~March 31, 2019 compared to ~~$26.7~~$82.5 million during the three months ended March 31, 2018. The increase is primarily due to the issuance of our 2.95% $600.0 million Convertible Notes due 2024 on September 14, 2018, partially offset by the reclassification to rent expense of $6.9 million of financing lease obligation interest as a result of the adoption of ASC 842 – lease accounting. See Note 2—Leases in the Notes to the Consolidated Financial Statements under Item 1 for the impact of ASC 842 – lease accounting.

Equity in losses of non-consolidated entities. Equity in earnings of non-consolidated entities were $6.5 million for the three months ended ~~September 30, 2016 primarily due~~March 31, 2019 compared to ~~issuance~~equity losses of $595.0 million of our 5.875% Notes due 2026 and £250.0 million ($334.8 million) of our 6.375% Sterling Notes due 2024 on November 8, 2016 for the Odeon acquisition, issuance of $500.0 million of new Term loans due 2023 on November 30, 2016, the assumption from Carmike of $230.0 million of 6.0% Notes due 2023 on December 21, 2016 for the Carmike acquisition, issuance of $475.0 million of our 6.125% Notes due 2027 on March 17, 2017, and the issuance of additional £250.0 million ($334.8 million) of our 6.375% Sterling Notes due 2024 on March 17, 2017 for the Nordic acquisition. The interest rate on the new Term Loans due 2023 was 3.48% as of September 30, 2017. We also assumed $224.0 million of capital and financing lease obligations from Carmike, $367.3 million of capital and financing lease obligations from Odeon and $15.1 million of capital and financing lease obligations from Nordic with interest rates ranging from 5.1% to 6.4%.

~~Equity in (earnings) loss of non-consolidated entities.~~ ~~Equity in loss of non-consolidated entities were $1.8~~$9.0 million for the three months ended ~~September 30, 2017 compared to equity in earnings~~March 31, 2018. The loss for the three months ended March 31, 2018 includes a $16.0 million lower of ~~$12.0~~carrying value or fair value impairment loss on 9,492,820 NCM units and 1,000,000 NCM, Inc. common shares held-for-sale and a $1.1 million loss on the return of 915,150 NCM units as a part of the annual common unit adjustment under the NCM ESA.

Investment income. Investment income was $16.1 million for the three months ended ~~September 30, 2016. The decrease in equity in earnings~~March 31, 2019 compared to investment income of ~~non-consolidated entities of $13.8 million was primarily due to loss on sales of NCM shares of $21.0 million, partially offset by an increase in earnings from NCM of $6.7 million.See “Significant Events—NCM Agreement” above for further information regarding the loss on sale of NCM shares.~~

~~Investment (income) expense.~~ ~~Investment income was $16.6~~$5.2 million for the three months ended ~~September 30, 2017 compared to investment expense~~March 31, 2018. Investment income includes a gain on the sale of ~~$0.2~~our Austria theatres of $11.1 million for the three months ended ~~September 30, 2016. The increase in investment income was primarily due~~March 31, 2019 and includes payments received related to the ~~$17.2~~NCM tax receivable agreement of $4.0 million ~~gain on the sale of Open Road.~~

~~Income tax provision (benefit).~~ ~~The income tax benefit was $17.6~~and $5.4 million for the three months ended ~~September 30, 2017~~March 31, 2019 and March 31, 2018, respectively.

Income tax (benefit) provision. The income tax provision was ~~$20.1~~$5.7 million for the three months ended ~~September 30, 2016.~~March 31, 2019 and income tax provision was $4.7 million for the three months ended March 31, 2018. See Note 78—Income Taxes of the Notes to the Consolidated Financial Statements in Item 1 of Part I of this Form 10–Q10-Q for further information.

Net earnings (loss). Net loss was $130.2 million and net earnings were $17.7 million during the three months ended March 31, 2019 and March 31, 2018, respectively. Net loss during the three months ended March 31, 2019 compared to the three months ended March 31, 2018 was impacted by lower attendance which negatively impacted

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~~Net earnings (loss).~~ ~~Net loss was $42.7 million~~admissions revenue and net earnings was $30.4 million during the three months ended September 30, 2017 and September 30, 2016, respectively. Net loss during the three months ended September 30, 2017 compared to net earnings during the three months ended September 30, 2016 were negatively impacted by the decreases in average ticket price, decreases in food and beverage ~~per patron,~~revenue, higher rent expense, increased other expense related to our derivative asset and ~~increases~~liability, and a decline in ~~operating expense, rent,~~foreign currency translation rates, offset by decreases in depreciation and amortization expense ~~loss on sale of NCM shares, interest expense,~~ and ~~general and administrative expense (other and merger, acquisition and transaction costs), partially offset by the increase~~increased equity in ~~attendance related to the Odeon, Carmike and Nordic acquisitions, the $17.2 million gain on sale of Open Road and increase in income tax benefit.~~ earnings from non-consolidated entities.

Theatrical Exhibition–U.S. Markets

Revenues. Total revenues ~~increased 8.7%~~decreased 11.7% or ~~$67.4~~$114.9 million during the three months ended ~~September 30, 2017~~March 31, 2019 compared to the three months ended ~~September 30, 2016.~~March 31, 2018. Admissions revenues ~~increased 7.2%~~decreased 14.8%, or ~~$35.9~~$89.3 million during the three months ended ~~September 30, 2017~~March 31, 2019 compared to the three months ended ~~September 30, 2016,~~March 31, 2018, primarily due to a ~~4.8% increase~~11.1% decrease in attendance and a ~~2.3% increase~~4.1% decrease in average ticket price. The ~~increase~~decrease in attendance was primarily due to the ~~acquisition~~popularity of ~~Carmike~~films released in ~~December 2016.~~the quarter as compared to the same period a year ago as well as temporary screen closures for theatre refurbishments. The ~~increase~~decrease in average ticket price was primarily due to ~~increases~~strategic pricing initiatives and decreases in premium format attendance ~~for PLF~~of 3D and ~~IMAX~~® premium formats and increases in prices for traditional that were partially offset by declines in attendance for 3D premium formats. Total admissions revenues were increased by rewards redeemed, net of deferrals of $1.1 million and $0.5 million related to rewards accumulated under AMC Stubs® ~~during the three months ended September 30, 2017 and September 30, 2016, respectively. The rewards accumulated under AMC Stubs~~® ~~are deferred and recognized in future periods upon redemption or expiration of customer rewards.~~IMAX.

Food and beverage revenues ~~increased 12.0%~~decreased 7.7%, or ~~$29.8~~$23.9 million during the three months ended ~~September 30, 2017~~March 31, 2019 compared to the three months ended ~~September 30, 2016,~~March 31, 2018, primarily due to the ~~increase~~decrease in attendance, ~~due to the Carmike acquisition and the~~partially offset by an increase in food and beverage revenues per patron of ~~6.9%~~3.9%. ~~The increase in food~~Food and beverage revenues per patron ~~was primarily due to~~increased as a result of strategic price increases ~~in prices~~ and ~~the success of~~ our ~~initiatives.~~food and beverage initiatives including our Feature Fare menu and theatre renovations.

Total other theatre revenues ~~increased 5.0%~~decreased 2.6%, or $1.7 million during the three months ended ~~September 30, 2017~~March 31, 2019 compared to the three months ended ~~September 30, 2016,~~March 31, 2018, primarily due to ~~increases from the Carmike acquisition for internet ticketing~~decreased ticket fees ~~partially offset by declines in income from exchange tickets~~of 8.0% primarily due to ~~declines~~the decrease in ~~sales volume and estimated rates of non-presentment.~~ attendance.

Operating costs and expenses. Operating costs and expenses ~~increased 19.4%~~decreased 0.6%, or ~~$138.4~~$5.3 million during the three months ended ~~September 30, 2017~~March 31, 2019 compared to the three months ended ~~September 30, 2016.~~March 31, 2018. Film exhibition costs ~~increased 4.1%~~decreased 12.3%, or ~~$10.6~~$38.9 million, during the three months ended ~~September 30, 2017~~March 31, 2019 compared to the three months ended ~~September 30, 2016,~~March 31, 2018, primarily due to the ~~increase~~decrease in admissions revenues. As a percentage of admissions revenues, film exhibition costs were ~~50.6%~~53.8% and 52.3% for the three months ended ~~September 30, 2017 compared to 52.2% for the three months ended September 30, 2016, due to the popularity of films in the prior year which typically results in higher film rent terms.~~March 31, 2019 and March 31, 2018, respectively.

Food and beverage costs ~~increased 21.9%~~decreased 2.9%, or ~~$7.4~~$1.3 million, during the three months ended ~~September 30, 2017~~March 31, 2019 compared to the three months ended ~~September 30, 2016.~~March 31, 2018. As a percentage of food and beverage revenues, food and beverage costs were ~~14.8%~~15.0% for the three months ended ~~September 30, 2017~~March 31, 2019 and ~~13.6%~~14.2% for the three months ended ~~September 30, 2016.~~March 31, 2018. The increase in food and beverage costs as a percentage of food and beverage revenues was primarily due to higher cost items in the ~~increase cost associated with our~~ new ~~enhanced menu items included in~~ Feature ~~Fare.~~Fare menu. Food and beverage gross profit per patron increased ~~5.3%,~~3.0% and is calculated as food and beverage revenues less food and beverage costs divided by attendance.

As a percentage of revenues, operating expense was ~~32.3%~~32.9% for the three months ended ~~September 30, 2017~~March 31, 2019 and ~~27.1%~~28.7% during the three months ended ~~September 30, 2016.~~March 31, 2018. Rent expense increased ~~22.0%~~32.6%, or ~~$26.7~~$43.4 million during the three months ended ~~September 30, 2017~~March 31, 2019 compared to the three months ended ~~September 30, 2016, primarily from~~March 31, 2018. Rent expense increased due to a prior year modification of a theatre lease which reduced rent expense by $24.2 million and the ~~increase~~adoption of ASC 842 for lease accounting that caused increases in cash rent expense for build-to-suit financing lease obligations of $11.0 million, non-cash rent expense – purchase accounting included in rent expense of $4.6 million and eliminated $1.8 million of deferred gain amortization. See Note 2—Leases in the ~~number~~Notes to the Consolidated Financial Statements under Item 1 for the impact of ~~theatres operated, including the acquisition of Carmike.~~ASC 842 – lease accounting.

General and Administrative Expense:

Merger, acquisition and transaction costs. Merger, acquisition and transaction costs were ~~$3.7~~$1.2 million during the three months ended ~~September 30, 2017~~March 31, 2019 compared to ~~$4.9~~$4.0 million during the three months ended ~~September 30, 2016. The merger, acquisition and transaction costs are~~ ~~costs and~~March 31, 2018, primarily due to declines in expenses incurred ~~principally at~~in connection with the Carmike, Odeon and Nordic acquisitions and severance costs.

Other. Other general and administrative expense increased $1.1 million, during the three months ended March 31, 2019 compared to the three months ended March 31, 2018, primarily due to increases in the Non-Qualified Deferred Compensation plan as a result of increases in market values of the underlying investments, and $0.8 million in higher stock-based compensation expense.

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~~corporate office in the investigation, negotiation, financing and transition of acquisitions.~~

~~Other.~~ Other general and administrative expense decreased $2.9 million during the three months ended September 30, 2017 compared to the three months ended September 30, 2016, due primarily to decreases in bonuses and a reversal of stock-based compensation expense as a result of operating performance.

Depreciation and amortization. Depreciation and amortization ~~increased $35.8~~decreased $10.5 million during the three months ended ~~September 30, 2017~~March 31, 2019 compared to the three months ended ~~September 30, 2016,~~March 31, 2018, primarily due to the ~~increase~~adoption of ASC 842 - lease accounting where the financing lease buildings and related depreciation were eliminated. See Note 2—Leases in ~~depreciable assets resulting from~~ the ~~acquisition~~Notes to the Consolidated Financial Statements under Item 1 for the impact of ~~Carmike, as well as capital expenditures of $416.6 million during the nine months ended September 30, 2017 and $412.8 million during the year ended December 31, 2016.~~ASC 842 – lease accounting.

Other Expense (Income):

Other ~~expense (income).~~expense. Other ~~income~~expense of ~~$0.4~~$29.4 million during the three months ended ~~September 30, 2017~~March 31, 2019 is primarily due to ~~financing~~a decrease in fair value of our derivative asset for the contingent call option related to the Class B common stock purchase and cancellation agreement of $15.1 million and an increase of $13.3 million in fair value of our derivative liability for the embedded conversion feature in our Convertible Notes due 2024 which resulted in an expense of $28.4 million. Other income in the prior year was primarily due to a foreign currency transaction ~~gains.~~gain.

Interest expense. Interest expense increased ~~$38.6~~$5.7 million to ~~$65.3~~$81.5 million for the three months ended ~~September 30, 2017~~March 31, 2019 compared to ~~$26.7~~$75.8 million the three months ended March 31, 2018 primarily due to the interest expense related to our 2.95% $600.0 million Convertible Notes due 2024 issued on September 14, 2018, partially offset by the reclassification to rent expense of $3.3 million of financing lease obligation interest as a result of the adoption of ASC 842 – lease accounting. See Note 2—Leases in the Notes to the Consolidated Financial Statements under Item 1 for the impact of ASC 842 – lease accounting.

Equity in (earnings) losses of non-consolidated entities. Equity in earnings of non-consolidated entities were $6.1 million for the three months ended ~~September 30, 2016 primarily due~~March 31, 2019 compared to ~~issuance~~equity in losses of $595.0 million of our 5.875% Notes due 2026 and £250.0 million ($334.8 million) of our 6.375% Sterling Notes due 2024 on November 8, 2016 for the Odeon acquisition, issuance of $500.0 million of new Term loans due 2023 on November 30, 2016, the assumption from Carmike of $230.0 million of 6.0% Notes due 2023 on December 21, 2016 for the Carmike acquisition, issuance of $475.0 million of our 6.125% Notes due 2027 on March 17, 2017, and the issuance of additional £250.0 million ($334.8 million) of our 6.375% Sterling Notes due 2024 on March 17, 2017 for the Nordic acquisition. The interest rate on the new Term Loans due 2023 was 3.48% as of September 30, 2017. We also assumed $224.0 million of capital and financing lease obligations from Carmike with interest rates ranging from 5.75% to 6.25%.

~~Equity in (earnings) loss of non-consolidated entities.~~ ~~Equity in loss of non-consolidated entities were $2.7~~$10.3 million for the three months ended ~~September 30, 2017 compared to equity earnings~~March 31, 2018. The loss for the three months ended March 31, 2018 includes a $16.0 million impairment loss on 9,492,820 NCM units and 1,000,000 NCM, Inc. common shares held-for-sale and a $1.1 million loss on the return of ~~$12.0~~915,150 NCM units as a part of the annual cumulative unit adjustment under the NCM ESA.

Investment income. Investment income was $4.8 million for the three months ended ~~September 30, 2016. The decrease in equity in earnings~~March 31, 2019 compared to investment income of ~~non-consolidated entities of $14.7 million was primarily due to loss on sales of NCM, Inc. shares of $21.0 million, partially offset by an increase in earnings from NCM of $6.7 million.See “Significant Events—NCM Agreement” above for further information regarding the loss on sale.~~

~~Investment (income) expense.~~ ~~Investment income was $17.0 million and investment loss of $0.2~~$5.1 million for the three months ended ~~September 30, 2017 and three months ended September 30, 2016, respectively. The increase in investment~~March 31, 2018. Investment income ~~was primarily due~~includes payments received related to the ~~$17.2~~NCM tax receivable agreement of $4.0 million ~~gain on the sale of Open Road.~~

~~Income tax provision (benefit).~~ ~~The income tax benefit was $18.9~~and $5.4 million for the three months ended ~~September 30, 2017~~March 31, 2019 and March 31, 2018, respectively.

Income tax provision. The income tax provision was ~~$20.1~~$3.5 million for the three months ended ~~September 30, 2016.~~March 31, 2019 and income tax provision was $1.1 million for the three months ended March 31, 2018. See Note 78—Income Taxes of the Notes to the Consolidated Financial Statements in Item 1 of Part I of this Form 10–Q10-Q for further information.

Net earnings (loss). Net loss was ~~$37.0~~$131.1 million and net earnings ~~was $30.6~~were $0.1 million during the three months ended ~~September 30, 2017~~March 31, 2019 and ~~September 30, 2016,~~March 31, 2018, respectively. Net loss during the three months ended ~~September 30, 2017~~March 31, 2019 compared to ~~net earnings during~~ the three months ended ~~September 30, 2016 were~~March 31, 2018 was impacted by lower attendance which negatively impacted admissions revenue and food and beverage revenue, higher rent expense, increased other expense related to our derivative asset and liability, offset by ~~the loss on sale of NCM, Inc. shares of $21.0 million, rent,~~decreases in depreciation and amortization expense and ~~interest expense related to the Carmike acquisition, partially offset by the increase~~increased equity in attendance related to the Carmike acquisition, increases in food and beverage revenues per patron, average ticket prices, the $17.2 million gain on the sale of Open Road and declines in general and administrative expense (other and merger, acquisition and transaction costs).earnings from non-consolidated entities.

~~Theatrical Exhibition - International Markets~~

~~Revenues.~~ Total revenues increased $331.5 million during the three months ended September 30, 2017 compared to the three months ended September 30, 2016. Admissions revenues increased $220.8 million during the three months ended September 30, 2017 compared to the three months ended September 30, 2016, primarily due to an increase in attendance due to the acquisitions of Odeon on November 30, 2016 and Nordic on March 28, 2017. Prior to the acquisition of Odeon, we operated one theatre in the UK, which is now included in the International markets operating segment.

~~Table of Contents~~

Food and beverage revenues increased $82.7 million during the three months ended September 30, 2017 compared to the three months ended September 30, 2016, primarily due to the increase in attendance due to the acquisitions of Odeon and Nordic.

Total other theatre revenues increased $28.0 million during the three months ended September 30, 2017 compared to the three months ended September 30, 2016, primarily due to the acquisition of Odeon and Nordic. Other theatre revenues include revenues for advertising and theatre rentals.

~~Operating costs and expenses.~~ Operating costs and expenses increased $330.3 million during the three months ended September 30, 2017 compared to the three months ended September 30, 2016 due to the acquisitions. Film exhibition costs increased $95.1 million during the three months ended September 30, 2017 compared to the three months ended September 30, 2016, primarily due to the increase in admissions revenues. As a percentage of admissions revenues, film exhibition costs were 43.1% for the three months ended September 30, 2017 and 50.0% for the three months ended September 30, 2016.

Food and beverage costs increased $19.4 million during the three months ended September 30, 2017 compared to the three months ended September 30, 2016. The increase in food and beverage costs was primarily due to the increase in food and beverage revenues due to the acquisitions of Odeon and Nordic. As a percentage of food and beverage revenues, food and beverage costs were 23.5% for the three months ended September 30, 2017 and 25.0% for the three months ended September 30, 2016.

As a percentage of revenues, operating expense was 33.1% for the three months ended September 30, 2017 and 46.7% during the three months ended September 30, 2016. Rent expense increased $52.1 million during the three months ended September 30, 2017 compared to the three months ended September 30, 2016 due to the increase in the number of theatres operated as a result of the Odeon and Nordic acquisitions.

~~General and Administrative Expense:~~

~~Merger, acquisition and transaction costs.~~ Merger, acquisition and transaction costs increased $1.9 million during the three months ended September 30, 2017 compared to the three months ended September 30, 2016, primarily due to costs associated with the Nordic acquisition. The majority of our consolidated merger, acquisition and transaction costs related to Odeon and Nordic are included in our Theatrical Exhibition – U.S. markets operating segment. The merger, acquisition and transactions costs are ~~costs and expenses incurred principally at the corporate office in the investigation, negotiation, financing and transition of acquisitions.~~

~~Other.~~ Other general and administrative expense increased $15.9 million during the three months ended September 30, 2017 compared to the three months ended September 30, 2016 due to the Odeon and Nordic acquisitions.

~~Depreciation and amortization.~~ Depreciation and amortization increased $36.3 million during the three months ended September 30, 2017 compared to the three months ended September 30, 2016, due to the increase in depreciable assets resulting from the Odeon and Nordic acquisitions.

~~Interest expense.~~ Interest expense increased $6.1 million for the three months ended September 30, 2017 compared to the three months ended September 30, 2016, primarily due to interest expense related to approximately $367.3 million of capital and financing lease obligations assumed from Odeon and $15.1 million of capital and financing lease obligations from Nordic with interest rates ranging from 5.1% to 6.4%.

~~Income tax provision (benefit).~~ ~~The income tax provision increased $1.3 million for the three months ended September 30, 2017. See Note 7~~—~~Income Taxes of the Notes to Consolidated Financial Statements in Item 1 of Part I of this Form 10~~–~~Q for further information.~~

~~Net earnings (loss).~~ ~~Net loss increased $5.5 million during the three months ended September 30, 2017 as a result of the Odeon and Nordic acquisitions.~~

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~~Results of Operations—For the Nine Months Ended September 30, 2017 and September 30, 2016~~

~~Consolidated Results of Operations~~

~~Revenues.~~ Total revenues increased 58.6% or $1,352.6 million during the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016. Admissions revenues increased 59.7%, or $871.8 million during the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016, primarily due to a 66.2% increase in attendance partially offset by a 3.9% decrease in average ticket price. The increase in attendance was primarily due to the acquisition of Odeon in November 2016, the acquisition of Carmike in December 2016 and the acquisition of Nordic in March 2017. The decrease in average ticket price was primarily due to the acquisition of Odeon where the average ticket price in our International markets is lower than in our U.S. markets. Total admissions revenues were increased by rewards redeemed, net of deferrals of $2.1 million and $0.8 million during the nine months ended September 30, 2017 and September 30, 2016, respectively. The rewards accumulated under AMC Stubs® ~~are deferred and recognized in future periods upon redemption or expiration of customer rewards.~~

Food and beverage revenues increased 53.8%, or $396.5 million, during the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016, primarily due to the increase in attendance due to the acquisitions, partially offset by a 7.5% decrease in food and beverage revenues per patron. The decrease in food and beverage revenues per patron was primarily due to the acquisitions of Odeon and Nordic where food and beverage revenues per patron in International markets is much lower than in our U.S. markets. Total food and beverage revenues were increased by rewards redeemed, net of deferrals, of $1.2 million and $1.6 million during the nine months ended September 30, 2017 and September 30, 2016, respectively.

Total other theatre revenues increased 74.9%, or $84.3 million during the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016, primarily due to increases from the Odeon, Carmike and Nordic acquisitions.

~~Operating costs and expenses.~~ Operating costs and expenses increased 70.5%, or $1,501.6 million during the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016. Film exhibition costs increased 48.4%, or $379.8 million, during the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016, primarily due to the increase in admissions revenues as a result of the acquisitions. As a percentage of admissions revenues, film exhibition costs were 49.9% for the nine months ended September 30, 2017 and 53.7% for the nine months ended September 30, 2016. Film exhibition costs as a percentage of admissions revenues in our International markets are much lower than in our U.S. markets.

Food and beverage costs increased 79.0%, or $80.6 million during the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016. As a percentage of food and beverage revenues, food and beverage costs were 16.1% for the nine months ended September 30, 2017 and 13.8% for the nine months ended September 30, 2016 due to the acquisition of Odeon and Nordic where food and beverage costs as a percentage of food and beverage revenues are much higher in our International markets than in our U.S. markets. The increase in food and beverage costs was primarily due to the increase in food and beverage revenues. Food and beverage gross profit per patron decreased 9.7%, and is calculated as food and beverage revenues less food and beverage costs divided by attendance. The decrease is primarily due to lower gross profit per patron in our International markets.

As a percentage of revenues, operating expense was 30.8% for the nine months ended September 30, 2017 and 26.6% for the nine months ended September 30, 2016. Rent expense increased 60.0%, or $221.6 million during the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016, primarily from the increase in the number of theatres operated due to the acquisitions of Odeon, Carmike and Nordic.

~~Merger, acquisition and transaction costs.~~ Merger, acquisition and transaction costs were $57.2 million during the nine months ended September 30, 2017 compared to $15.1 million during the nine months ended September 30, 2016. This increase was primarily due to expenses incurred in connection with the DOJ final judgment for the Carmike acquisition, an increase in professional and consulting costs and increased merger and acquisition activity associated with our Carmike, Odeon, and Nordic acquisitions. The merger, acquisition and transaction costs are ~~costs and expenses incurred principally at the corporate office in the investigation, negotiation, financing and transition of acquisitions.~~

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~~In conjunction with the Carmike acquisition and the DOJ final judgment, we~~ returned 1,807,220 additional NCM LLC common units (valued at $22.6 million) in exchange for a waiver of exclusivity by NCM which resulted in $22.6 million of expense during the nine months ended September 30, 2017.

~~Other.~~ Other general and administrative expense increased $54.5 million during the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016, due primarily to the acquisitions of Odeon and Nordic and increases in development costs, salaries and benefits.

~~Depreciation and amortization.~~ Depreciation and amortization increased $208.1 million during the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016, primarily due to the increase in depreciable assets resulting from the acquisitions of Odeon, Carmike and Nordic, as well as capital expenditures of $467.7 million during the nine months ended September 30, 2017 and $421.7 million during the year ended December 31, 2016.

~~Other Expense (Income):~~

~~Other income.~~ Other income of $2.3 million during the nine months ended September 30, 2017 is primarily due to financing related foreign currency transaction gains of $3.2 million and a $0.4 million recovery for business interruption, offset by $1.0 million of third party fees related to the Third Amendment to our Senior Secured Credit Agreement and a $0.4 million loss on the repayment of the Bridge Loan Facility.

~~Interest expense.~~ Interest expense increased $122.6 million to $203.4 million for the nine months ended September 30, 2017 compared to $80.8 million for the nine months ended September 30, 2016 primarily due to issuance of $595.0 million of our 5.875% Notes due 2026 and £250.0 million ($334.8 million) of our 6.375% Sterling Notes due 2024 on November 8, 2016 for the Odeon acquisition, issuance of $500.0 million of new Term loans due 2023 on November 30, 2016, issuance of our 7.0% Bridge Loan due 2017 of $350.0 million on December 21, 2016 (repaid in February 2017), and the assumption from Carmike of $230.0 million of 6.0% Notes due 2023 on December 21, 2016 for the Carmike acquisition, issuance of $475.0 million of our 6.125% Notes due 2027 on March 17, 2017, and the issuance of additional £250.0 million ($334.8 million) of our 6.375% Sterling Notes due 2024 on March 17, 2017 for the Nordic acquisition. The interest rate on the new Term Loans due 2023 was 3.48% as of September 30, 2017. We also assumed $224.0 million of capital and financing lease obligations from Carmike, $367.3 million of capital and financing lease obligations from Odeon, and $15.1 million of capital and financing lease obligations from Nordic with interest rates ranging from 5.1% to 6.4%.

~~Equity in (earnings) loss of non-consolidated entities.~~ Equity in loss of non-consolidated entities was $199.1 million for the nine months ended September 30, 2017 compared to equity earnings of $28.1 million for the nine months ended September 30, 2016. The decrease in equity in earnings of non-consolidated entities of $227.2 million was primarily due to an ~~other-than-temporary~~ impairment loss on NCM of $204.5 million, loss on sales of NCM shares of $22.2 million, an increase in loss from Open Road of $8.9 million, partially offset by an increase in earnings from NCM, LLC of $4.9 million and an increase in earnings from DCIP of $2.6 million. See “Significant Events—NCM Agreement” above for further information regarding the other-than-temporary impairment loss and loss on sale of NCM shares.

~~Investment income.~~ Investment income was $21.6 million for the nine months ended September 30, 2017 compared to investment income of $9.6 million for the nine months ended September 30, 2016. The increase in investment income was primarily due to the $17.2 million gain on the sale of Open Road. Investment income includes income related to the NCM tax receivable agreement of $5.5 million and $7.2 million for the nine months ended September 30, 2017 and September 30, 2016, respectively. Investment income includes a $3.0 million gain on the sale of RealD during the nine months ended September 30, 2016.

~~Income tax provision (benefit).~~ ~~The income tax benefit was $136.4 million for the nine months ended September 30, 2017 and income tax provision was $54.6 million for the nine months ended September 30, 2016. See Note 7~~—~~Income Taxes of the Notes to Consolidated Financial Statements in Item 1 of Part I of this Form 10~~–~~Q for further information.~~

~~Net earnings (loss).~~ Net loss was $210.8 million and net earnings was $82.7 million during the nine months ended September 30, 2017 and September 30, 2016, respectively. Net loss during the nine months ended September 30, 2017 compared to net earnings during the nine months ended September 30, 2016 was negatively impacted by the ~~other-~~

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~~than-temporary~~ impairment loss on NCM of $204.5 million and loss on sale of NCM shares of $22.2 million, decreases in average ticket price, food and beverage revenues per patron, and increases in rent, depreciation and amortization expense, interest expense, and general and administrative expense (other and merger, acquisition and transaction costs), partially offset by the increase in attendance related to the Odeon, Carmike and Nordic acquisitions, the $17.2 million gain on sale of Open Road and increase in income tax benefit.

~~Theatrical Exhibition–U.S. Markets~~

~~Revenues.~~ Total revenues increased 19.1% or $440.2 million during the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016. Admissions revenues increased 17.8%, or $258.8 million during the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016, primarily due to a 17.2% increase in attendance and a 0.5% increase in average ticket price. The increase in attendance was primarily due to the acquisition of Carmike in December 2016. Total admissions revenues were increased by rewards redeemed, net of deferrals of $1.1 million and $0.8 million during the nine months ended September 30, 2017 and September 30, 2016, respectively. The rewards accumulated under AMC Stubs® ~~are deferred and recognized in future periods upon redemption or expiration of customer rewards.~~

Food and beverage revenues increased 23.0%, or $169.4 million during the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016, primarily due to the increase in attendance due to the Carmike acquisition and the increase in food and beverage revenues per patron of 5.0% due to price increases and the introduction of enhanced menu offerings.

Total other theatre revenues increased 10.7%, or $12.0 million during the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016, primarily due to increases from the Carmike acquisition for internet ticketing fees and advertising revenues, partially offset by a decline in membership fees for AMC Stubs® ~~and declines in income from exchange tickets due to declines in sales volume and estimated non-presentment rates.~~

~~Operating costs and expenses.~~ Operating costs and expenses increased 28.1%, or $596.9 million during the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016. Film exhibition costs increased 15.5%, or $121.7 million, during the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016. This increase was primarily due to the increase in admissions revenues due to acquisitions. As a percentage of admissions revenues, film exhibition costs were 52.7% for the nine months ended September 30, 2017 and 53.7% for the nine months ended September 30, 2016.

Food and beverage costs increased 27.5%, or $28.0 million, during the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016. As a percentage of food and beverage revenues, food and beverage costs were 14.3% for the nine months ended September 30, 2017 and 13.8% for the nine months ended September 30, 2016. The increase in food and beverage costs was primarily due to the increase in food and beverage revenues. Food and beverage gross profit per patron increased 4.3%, and is calculated as food and beverage revenues less food and beverage costs divided by attendance.

As a percentage of revenues, operating expense was 30.0% for the nine months ended September 30, 2017 and 26.5% for the nine months ended September 30, 2016. Rent expense increased 21.1%, or $77.7 million during the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016, primarily from the increase in the number of theatres operated including the acquisition of Carmike.

~~General and Administrative Expense:~~

~~Merger, acquisition and transaction costs.~~ Merger, acquisition and transaction costs were $54.3 million during the nine months ended September 30, 2017 compared to $15.1 million during the nine months ended September 30, 2016, primarily due to an increase in professional and consulting costs and increased merger and acquisition activity associated with our Carmike acquisition, Odeon acquisition, and Nordic acquisition. The merger, acquisition and transaction costs are ~~costs and expenses incurred principally at the corporate office in the investigation, negotiation, financing and transition of acquisitions.~~

~~In conjunction with the Carmike acquisition and the DOJ final judgment, we~~ ~~returned 1,807,220 additional NCM LLC common units (valued at $22.6 million) in exchange for a waiver of exclusivity by NCM which resulted in~~

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~~$22.6 million of expense during the nine months ended September 30, 2017.~~

~~Other.~~ Other general and administrative expense increased $8.9 million during the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016, due primarily to increases in salaries and benefits, company meetings, and advertising expense.

~~Depreciation and amortization.~~ Depreciation and amortization increased $108.5 million during the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016, primarily due to the increase in depreciable assets resulting from the acquisition of Carmike, as well as capital expenditures of $416.6 million during the nine months ended September 30, 2017 and $412.8 million during the year ended December 31, 2016.

~~Other Expense (Income):~~

~~Other income.~~ Other income of $2.1 million during the nine months ended September 30, 2017 is primarily due to financing related foreign currency transaction gains of $3.2 million and a $0.4 million recovery for business interruption, partially offset by $1.0 million of third party fees related to the Third Amendment to our Senior Secured Credit Agreement and a $0.4 million loss on the repayment of the Bridge Loan Facility.

~~Interest expense.~~ Interest expense increased $104.7 million to $185.5 million for the nine months ended September 30, 2017 compared to $80.8 million for the nine months ended September 30, 2016 primarily due to issuance of $595.0 million of our 5.875% Notes due 2026 and £250.0 million ($334.8 million) of our 6.375% Sterling Notes due 2024 on November 8, 2016 for the Odeon acquisition, issuance of $500.0 million of new Term loans due 2023 on November 30, 2016, issuance of our 7.0% Bridge Loan due 2017 of $350.0 million on December 21, 2016 (repaid in February 2017), the assumption from Carmike of $230.0 million of 6.0% Notes due 2023 on December 21, 2016 for the Carmike acquisition, issuance of $475.0 million of our 6.125% Notes due 2027 on March 17, 2017, and the issuance of additional £250.0 million ($334.8 million) of our 6.375% Sterling Notes due 2024 on March 17, 2017 for the Nordic acquisition. The interest rate on the new Term Loans due 2023 was 3.48% as of September 30, 2017. We also assumed $224.0 million of capital and financing lease obligations from Carmike with interest rates ranging from 5.75% to 6.25%.

~~Equity in (earnings) loss of non-consolidated entities.~~ Equity in loss of non-consolidated entities were $200.1 million for the nine months ended September 30, 2017 compared to equity earnings of $28.1 million for the nine months ended September 30, 2016. The decrease in equity in earnings of non-consolidated entities of $228.2 million was primarily due to an ~~other-than-temporary~~ impairment loss on NCM of $204.5 million, loss on sales of NCM shares of $22.2 million and recognition of previously suspended loss from Open Road of $8.9 million, partially offset by an increase in earnings from DCIP of $2.6 million and an increase in earnings from NCM, LLC of $4.9 million. See “Significant Events—NCM Agreement” above for further information regarding the other-than-temporary impairment loss.

~~Investment income.~~ Investment income was $22.3 million for the nine months ended September 30, 2017 compared to investment income of $9.6 million for the nine months ended September 30, 2016. The primary increase in investment income was primarily due to the $17.2 million gain on the sale of Open Road. Investment income includes income related to the NCM tax receivable agreement of $5.5 million and $7.2 million for the nine months ended September 30, 2017 and September 30, 2016, respectively. Investment income includes a $3.0 million gain on the sale of RealD during the nine months ended September 30, 2016.

~~Income tax provision (benefit).~~ ~~The income tax benefit was $138.0 million for the nine months ended September 30, 2017 and income tax provision was $54.6 million for the nine months ended September 30, 2016. See Note 7~~—~~Income Taxes of the Notes to Consolidated Financial Statements in Item 1 of Part I of this Form 10~~–~~Q for further information.~~

~~Net earnings (loss).~~ Net loss was $198.7 million and net earnings were $83.5 million during the nine months ended September 30, 2017 and September 30, 2016, respectively. Net loss during the nine months ended September 30, 2017 compared to net earnings during the nine months ended September 30, 2016 was negatively impacted by an ~~other-than-temporary~~ impairment loss on NCM of $204.5 million, and loss on sale of NCM, Inc. shares of $22.2 million, increases in rent, depreciation and amortization expense, interest expense, and general and administrative expense (other and merger, acquisition and transaction costs), partially offset by the increase in attendance related to the Carmike acquisition, increases in average ticket price and food and beverage revenue per patron, the $17.2 million gain on sale of

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~~Open Road and the increase in income tax benefit.~~

Theatrical Exhibition - International Markets

Revenues. Total revenues ~~increased $912.4~~decreased 17.0% or $68.3 million during the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2019 compared to the ~~nine~~three months ended ~~September 30, 2016.~~March 31, 2018. Admissions revenues ~~increased $613.0~~decreased 20.1% or $54.2 million during the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2019 compared to the ~~nine~~three months ended ~~September 30, 2016,~~March 31, 2018, primarily due to an ~~increase~~overall decrease in attendance and a decline in foreign currency translation rates. The decrease in attendance was primarily due to the ~~acquisitions~~popularity of ~~Odeon on November 30, 2016 and Nordic on March 28, 2017. Prior~~films released in the quarter as compared to the ~~acquisition of Odeon, we operated one~~same period a year ago as well as temporary screen closures for theatre ~~in the UK which is now included in the International markets operating segment.~~refurbishments.

Food and beverage revenues ~~increased $227.1~~decreased 13.9% or $13.1 million, during the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2019 compared to the ~~nine~~three months ended ~~September 30, 2016,~~March 31, 2018, primarily due to the ~~increase~~overall decrease in attendance ~~as a result~~and decline in foreign currency translation rates.

Table of ~~the acquisitions of Odeon and Nordic.~~Contents

Total other theatre revenues ~~increased $72.3~~decreased $1.0 million during the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2019 compared to the ~~nine~~three months ended ~~September 30, 2016,~~March 31, 2018, primarily due to ~~the acquisition of Odeon and Nordic. Total other theatre revenues include revenues for advertising and theatre rentals.~~a decline in foreign currency translation rates.

Operating costs and expenses. Operating costs and expenses ~~increased $904.7~~decreased $34.0 million during the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2019 compared to the ~~nine~~three months ended ~~September 30, 2016.~~March 31, 2018. Film exhibition costs ~~increased $258.1~~decreased $22.3 million during the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2019 compared to the ~~nine~~three months ended ~~September 30, 2016,~~March 31, 2018, primarily due to the ~~increase~~decrease in admissions ~~revenues as a result of the acquisitions.~~revenues. As a percentage of admissions revenues, film exhibition costs were ~~42.1%~~40.7% for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2019 and ~~45.2%~~40.8% for the ~~nine~~three months ended ~~September 30, 2016.~~March 31, 2018.

Food and beverage costs ~~increased $52.6~~decreased $3.4 million during the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2019 compared to the ~~nine~~three months ended ~~September 30, 2016.~~March 31, 2018. The ~~increase~~decrease in food and beverage costs was primarily due to the ~~increase~~decrease in food and beverage revenues. As a percentage of food and beverage revenues, food and beverage costs were 22.8% for the three months ended March 31, 2019 and 23.2% for the ~~nine~~three months ended ~~September 30, 2017 and 23.1% for the nine months ended September 30, 2016.~~March 31, 2018.

As a percentage of revenues, operating expense was ~~33.2%~~35.2% for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2019 and ~~52.1%~~32.4% during the ~~nine~~three months ended ~~September 30, 2016.~~March 31, 2018. Rent expense increased ~~$143.9~~$8.9 million during the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2019 compared to the ~~nine~~three months ended ~~September 30, 2016,~~March 31, 2018 primarily due to the ~~increase~~adoption of ASC 842 for lease accounting where approximately $9.9 million of prior year principal and interest payments were reclassified as rent expense during the three months ended March 31, 2019 related to build-to-suit financing lease obligations and $3.1 million of non-cash rent expense - purchase accounting was recorded as rent expense, offset by a decline in foreign currency translation rates. See Note 2—Leases in the ~~number~~Notes to the Consolidated Financial Statements under Item 1 for the impact of ~~theatres operated as a result of the Odeon and Nordic acquisitions.~~ASC 842 – lease accounting.

General and Administrative Expense:

Merger, acquisition and transaction costs. Merger, acquisition and transaction costs increased ~~$2.9~~$1.4 million during the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2019 compared to the ~~nine~~three months ended September 30, 2016, primarily due to costs associated with the Nordic acquisition. The majority of our consolidated merger, acquisition and transaction costs related to Odeon and Nordic are included in our Theatrical Exhibition – U.S. markets operating segment. The merger, acquisition and transactions costs are ~~costs and expenses incurred principally at the corporate office in the investigation, negotiation, financing and transition of acquisitions.~~March 31, 2018.

Other. Other general and administrative expense increased ~~$45.6~~$0.9 million, during the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2019 compared to the ~~nine~~three months ended ~~September 30, 2016 due to the Odeon and Nordic acquisitions.~~March 31, 2018.

Depreciation and amortization. Depreciation and amortization ~~increased $99.6~~decreased $7.0 million during the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2019 compared to the ~~nine~~three months ended ~~September 30, 2016,~~March 31, 2018 primarily due to the ~~increase~~adoption of ASC 842 – lease accounting where the financing lease buildings and depreciation were eliminated and a decline in ~~depreciable assets resulting from~~foreign currency translation rates. See Note 2—Leases in the ~~Odeon and Nordic acquisitions.~~Notes to the Consolidated Financial Statements under Item 1 for the impact of ASC 842 – lease accounting.

Interest expense. Interest expense ~~increased $17.9~~decreased $4.6 million for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2019 compared to the ~~nine~~three months ended ~~September 30, 2016,~~March 31, 2018, primarily due to the adoption of ASC 842 – lease accounting which reclassified build-to-suit finance lease obligation interest expense ~~related~~ to ~~approximately $367.3 million of capital~~rent and ~~financing lease obligations from Odeon and $15.1 million of capital and financing lease obligations from Nordic with interest rates ranging from 5.1 to 6.4%.~~ a decline in foreign currency translation rates.

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Income tax provision. The income tax provision ~~increased $1.6~~is $2.2 million for the ~~nine~~three months ended ~~September 30, 2017. The~~March 31, 2019 as compared to income tax provision ~~is increased by valuation allowances recorded against deferred tax assets in various European jurisdictions.~~ of $3.6 million for the three months ended March 31, 2018. See Note 78—Income Taxes of the Notes to the Consolidated Financial Statements in Item 1 of Part I of this Form 10–Q10-Q for further information.

Net ~~earnings (loss).~~earnings. Net ~~loss increased $11.3~~earnings decreased $16.7 million during the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2019 as a result of lower attendance and the ~~Odeon~~related decrease in revenues and ~~Nordic acquisitions.~~a decline in foreign currency translation rates.

LIQUIDITY AND CAPITAL RESOURCES

Our consolidated revenues are primarily collected in cash, principally through box office admissions and food and beverage sales. We have an operating “float” which partially finances our operations, and which generally permits us to maintain a smaller amount of working capital capacity. This float exists because admissions revenues are received in cash, while exhibition costs (primarily film rentals) are ordinarily paid to distributors from 20 to 45 days following receipt of box office admissions revenues. Film distributors generally release the films which they anticipate will be the most successful during the summer and year-end holiday seasons. Consequently, we typically generate higher revenues

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during such periods.

We had working capital deficits (excluding restricted cash) as of ~~September 30, 2017~~March 31, 2019 and December 31, ~~2016~~2018 of ~~$565.0 million~~$(1,151.8 million) and ~~$505.6 million,~~$(557.5 million), respectively. Working capital included ~~$284.6~~$570.7 million and ~~$277.2~~$0 of operating lease liabilities as of March 31, 2019 and December 31, 2018, respectively. Working capital included $370.1 million and $414.8 million of deferred revenues ~~and income~~ as of ~~September 30, 2017~~March 31, 2019 and December 31, ~~2016,~~2018, respectively. We have the ability to borrow under our ~~Senior Secured~~Revolving Credit Facility to meet obligations as they come due (subject to limitations on the incurrence of indebtedness in our various debt instruments). As of ~~September 30, 2017,~~March 31, 2019, we had ~~$152.1~~$211.6 million available for borrowing, net of letters of credit, under our Revolving Credit Facility. We also maintain a £100.0 million ($130.4 million based on the foreign currency translation rate of 1.3042 on March 31, 2019) revolving credit facility at our Odeon subsidiary. As of March 31, 2019, we had drawn down on the revolving credit facility by $8.2 million and had issued $21.7 million standby letters of credit in the ordinary course of business, leaving £77.0 million ($100.5 million) available for borrowing.

We believe that cash generated from operations, existing cash and cash equivalents, availability under our Revolving Credit Facility and ~~sales of non-strategic assets~~Odeon’s revolving credit facility will be sufficient to fund operations, planned capital expenditures ~~dividends~~ and ~~repurchases of our common stock~~dividends currently and for at least the next 12 months and enable us to maintain compliance with all financial debt covenants.

As of ~~September 30, 2017,~~March 31, 2019, we were in compliance with all financial debt covenants.

Cash Flows from Operating Activities

Cash flows provided by operating activities, as reflected in the Consolidated Statements of Cash Flows, were ~~$229.1~~$1.4 million and ~~$211.3~~$165.4 million during the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2019 and ~~September 30, 2016,~~March 31, 2018, respectively. The ~~increase~~decrease in cash flows provided by operating activities was primarily due to ~~an increase in collection of receivables.~~decreased attendance levels which drove lower operating results.

Cash Flows used in Investing Activities

Cash flows used in investing activities, as reflected in the Consolidated Statements of Cash Flows, were ~~$815.3~~$98.5 million and ~~$248.3~~$114.8 million during the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2019 and ~~September 30, 2016,~~March 31, 2018, respectively. Cash outflows from investing activities include ~~the acquisition of Nordic, net of cash, of $583.5 million and~~ capital expenditures of ~~$467.7~~$114.8 million and ~~$256.6~~$107.3 million during the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2019 and ~~September 30, 2016,~~March 31, 2018, respectively. Our capital expenditures primarily consisted of strategic growth initiatives and remodels, capital improvements to existing locations in our theatre circuit, and technology upgrades. During the three months ended March 31, 2019, cash inflows from investing activities included the proceeds from the disposition of our Austria theatres of $13.3 million and disposition of assets of $4.0 million. During the three months ended March 31, 2018, cash outflows from investing activities included the investment in Dreamscape Immersive, Inc. and Central Service Studios, Inc. of $10.0 million. We expect that our gross cash outflows for capital expenditures will be approximately ~~$600.0 million to $670.0~~$450.0 million for ~~2017, before giving effect to expected landlord contributions of approximately $100.0 million to $120.0 million.~~

During the nine months ended September 30, 2017 we received proceeds from divestitures of $25.1 million for the sale of theatres as required by the Department of Justice related to the Carmike acquisition, $4.0 million for the sale of an aircraft acquired with the Carmike acquisition, $2.9 million for the sale of administrative buildings acquired with the Carmike acquisition, partially offset by disbursements of $11.0 million for the sale of one theatre acquired with the Odeon acquisition as required by the United Kingdom’s Competition and Markets Authority. We also received net

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proceeds of $128.4 million from the sale and leaseback of the real estate assets associated with seven of our theatres, $89.4 million from the partial sale of our investment in NCM and $14.0 million from the sale of our investment in Open Road of which $9.2 million is classified as an investing activity and $4.8 million is classified as an operating activity for collection of amounts due from Open Road. During the nine months ended September 30, 2016, we received proceeds from the sale of our shares in RealD Inc. of $13.5 million and proceeds from the sale of two Starplex divestiture theatres of $5.4 million.

During the nine months ended September 30, 2017, we acquired $5.0 million in non-public preferred shares in each of Dreamscape and Central Services Studios as a part of our investment in virtual reality technologies and will invest an additional $5.0 million in each of these entities in January 2018.calendar 2019.

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. We generally lease our theatres pursuant to long-term non-cancelable operating leases which may require the developer, who owns the property, to reimburse us for the construction costs. We may decide to own the real estate assets of new or acquired theatres and, following construction or acquisition, sell and leaseback the real estate assets pursuant to long-term non-cancelable operating leases. See Commitments and Contingencies below for additional discussion of the potential cash ~~outflows and future sources of liquidity.~~outflows.

Cash Flows from Financing Activities

Cash flows ~~provided by (used in)~~used in financing activities, as reflected in the Consolidated Statements of Cash Flows, were ~~$621.0~~$33.9 million and ~~$(127.8)~~$62.4 million during the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2019 and ~~September 30, 2016,~~March 31, 2018, respectively.

~~During the nine months ended September 30, 2017, we repurchased 1,068,300 shares of our Class A common stock~~Principal payments under ~~our share repurchase program for a total consideration of $16.5 million. As of September 30, 2017, $83.5~~finance lease obligations declined by $14.1 million remains available for repurchase under the program authorized by our Board of Directors in August 2017. We will continue to repurchase shares under this program, which will be dependent on a number of factors, including the price of our common stock. Although we may continue to repurchase shares, there is no assurance that we will repurchase updue to the ~~full amount remaining under~~adoption of ASC 842 where build-to-suit finance lease obligations are reclassified as operating leases and the ~~program.~~cash flows are classified as operating activities.

On March 17, 2017, we issued $475.0 million aggregate principal amount of our 6.125% Senior Subordinated Notes due 2027 in a private offering. We recorded deferred financing costs of approximately $19.8 million related to the issuance of the Notes due 2027. The Notes due 2027 mature on May 15, 2027. We will pay interest on the Notes due 2027 at 6.125% per annum, semi-annually in arrears on May 15th and November 15th, commencing on November 15, 2017. We may redeem some or all of the Notes due 2027 at any time on or after May 15, 2022 at 103.063% of the principal amount thereof, declining ratably to 100% of the principal amount thereof on or after May 15, 2025, plus accrued and unpaid interest to the redemption date. In addition, we may redeem up to 35% of the aggregate principal amount of the Notes due 2027 using net proceeds from certain equity offerings completed on or prior to May 15, 2020 at a redemption price as set forth in the indenture governing the Notes due 2027. We may redeem some or all of the Notes due 2027 at any time prior to May 15, 2022 at a redemption price equal to 100% of their aggregate principal amount and accrued and unpaid interest to, but not including, the date of redemption, plus an applicable make-whole premium. ~~We used the net proceeds from the Notes due 2027 private offering to pay the consideration for the acquisition of Nordic plus related refinancing of Nordic debt assumed in the acquisition.~~

On March 17, 2017, we issued £250.0 million ($327.8 million) additional aggregate principal amount of our Sterling Notes due 2024 at 106% plus accrued interest from November 8, 2016 in a private offering. The additional Sterling Notes were offered as additional notes under an indenture pursuant to which we have previously issued on November 8, 2016 and have outstanding as of September 30, 2017, £500.0 million aggregate principal amount of our 6.375% Senior Subordinated Notes due 2024. We recorded deferred financing costs of approximately $12.7 million related to the issuance of the additional Sterling Notes due 2024. The Sterling Notes due 2024 mature on November 15, 2024. We will pay interest on the Sterling Notes due 2024 at 6.375% per annum, semi-annually in arrears on May 15th and November 15th, commencing on May 15, 2017. ~~Interest on the additional Sterling Notes due 2024 will accrue from November 8, 2016.~~ We may redeem some or all of the Sterling Notes due 2024 at any time on or after November 15, 2019 at 104.781% of the principal amount thereof, declining ratably to 100% of the principal amount thereof on or after November 15, 2022, plus accrued and unpaid interest to the redemption date. In addition, we may

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redeem up to 35% of the aggregate principal amount of the Sterling Notes due 2024 using net proceeds from certain equity offerings completed on or prior to November 15, 2019. On or prior to November 15, 2019, we may redeem the Sterling Notes due 2024 at par, including accrued and unpaid interest plus a make-whole premium. We used the net proceeds from the Sterling Notes due 2024 private offering to pay the consideration for the acquisition of Nordic plus related refinancing of Nordic debt assumed in the acquisition.

On March 28, 2017, we paid the Nordic SEK Term Loan of $144.4 million and we paid the Nordic EUR Term Loan of $169.5 million aggregate principal amount in connection with the acquisition of Nordic using proceeds from our ~~Senior Subordinated Notes due 2027 and Sterling Notes due 2024.~~

In February 2017, we completed an additional public offering of 20,330,874 shares of Class A common stock at a price of $31.50 per share ($640.4 million), resulting in net proceeds of $616.8 million after underwriters commission. We used a portion of the net proceeds to repay the aggregate principal amount of Bridge Loan of $350.0 million.

On February ~~14, 2017,~~15, 2019, our Board of Directors declared a cash dividend in the amount of $0.20 per share of Class A and Class B common stock, paid on March ~~27, 2017~~25, 2019 to stockholders of record on March ~~13, 2017.~~11, 2019. We paid dividends and dividend equivalents of $21.8 million during the three months ended March 31, 2019 and paid dividends and dividend equivalents of $25.8 million during the three months ended March 31, 2018.

On ~~April 27, 2017, our Board of Directors~~May 3, 2019, we declared a cash dividend in the amount of $0.20 per share ~~of Class A and Class B common stock, paid~~ on ~~June 19, 2017 to stockholders of record on June 5, 2017.~~

~~On August 3, 2017,~~ our ~~Board of Directors declared a cash dividend in the amount of $0.20 per share of Class A and Class B common stock, paid on September 25, 2017 to stockholders of record on September 11, 2017.~~

~~During the nine months ended September 30, 2017, we made tax payments for restricted units withholdings of $6.5 million.~~

We paid dividends and dividend equivalents of $26.2 million during the three months ended September 30, 2017 and paid dividends and dividend equivalents of $19.7 million during the three months ended September 30, 2016. We paid dividends and dividend equivalents of $78.7 million during the nine months ended September 30, 2017 and paid dividends and dividend equivalents of $59.1 million during the nine months ended September 30, 2016.

~~On October 27, 2017, our Board of Directors declared a cash dividend in the amount of $0.20 per share of~~ Class A and Class B common stock, payable on ~~December 18, 2017~~June 24, 2019 to stockholders of record on ~~December 4,~~June 10, 2019.

We made tax payments for restricted stock units withholdings of $1.1 million and $1.7 million during the three months ended March 31, 2019 and March 31, 2018, respectively.

During the three months ended March 31, 2018, we paid $13.5 million for treasury stock purchased at the end of 2017.

~~As of September 30, 2017, we had $60.0 million of borrowings outstanding under our Revolving Credit Facility~~Contractual Obligations, Commitments and ~~$12.9 million in outstanding standby letters of credit in the ordinary course of business.~~

~~Investment in NCM LLC~~Contingencies

~~We hold an investment of 15.2% (23,392,630 common units) in NCM LLC accounted for under the equity method as of September~~ 30~~, 2017. The estimated fair market value of our investment in NCM LLC and NCM, Inc. was approximately $163.3 million, based upon the publicly quoted price per share of NCM, Inc. on~~ ~~September 30, 2017 of $6.98 per share. We have little tax basis in these units, therefore the sale of all these units at~~ ~~September 30~~, 2017 would require us to report taxable income of approximately $233.0 million, including distributions received from NCM LLC that were previously deferred. We expect that any sales we may make of NCM, Inc. common shares would be made in such a manner to most efficiently manage any related tax liability. We have available net operating loss carryforwards which could reduce a portion of any related tax liability. See Note 4–Investments in Part I Item 1 of this Form 10–Q for additional information about our divestiture requirement for NCM.

~~Commitments and Contingencies~~

We have commitments and contingencies for capital and financing leases, corporate borrowings, operating leases, capital related betterments and pension funding that were summarized in a table in our Annual Report on Form 10–K for the year ended December 31, ~~2016.~~2018. Since December 31, ~~2016,~~2018, there have been no material changes to the commitments and contingencies of the Company outside the ordinary course of business ~~except as otherwise~~

~~Table of Contents~~

~~disclosed regarding the sale lease-back transaction and the issuance of $475.0 million Senior Subordinated Notes due 2027 and £250.0 million Senior Subordinated Notes due 2024.~~.

~~New Accounting Pronouncements~~

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2016-02, Leases, which requires lessees to recognize leases on-balance sheet and disclose key information about leasing arrangements. The new standard establishes a right-of-use model (“ROU”) that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. The new standard is effective for us on January 1, 2019, with early adoption permitted. We plan to adopt the guidance on January 1, 2019. A modified retrospective transition approach is required for leases existing at, or entered into after the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available.

We expect that this standard will have a material effect on our consolidated financial statements. While we are continuing to assess the effect of adoption, we currently believe the most significant changes relate to (1) the recognition of new ROU assets and lease liabilities on our balance sheet for theatres currently subject to operating leases; (2) the derecognition of existing assets and liabilities for certain sale-leaseback transactions (including those arising from build-to-suit lease arrangements for which construction is complete and we are leasing the constructed asset) that currently do not qualify for sale accounting; and (3) the derecognition of existing assets and liabilities for certain assets under construction in build-to-suit lease arrangements that we will lease when construction is complete. We do not expect a significant change in our leasing activity between now and adoption. We expect to elect all of the standard’s available practical expedients on adoption. However, we have not quantified the effects of these expected changes from the new standard.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), (“ASC 606”), which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. ASC 606 will replace most existing revenue recognition guidance in U.S. generally accepted accounting principles when it becomes effective. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from the contracts with customers. On July 9, 2015, the FASB decided to delay the effective date of ASC 606 by one year. The new standard is effective for us on January 1, 2018. The standard permits the use of either a retrospective or modified retrospective transition method. We plan to adopt the guidance on January 1, 2018 and have selected the modified retrospective transition method. We continue to evaluate and quantify the effect that ASC 606 will have on our consolidated financial statements. While we do not believe the adoption of ASC 606 will have a material impact to our results of operations or cash flows, we do expect ASC 606 to materially impact the classification of revenue and related expenses. We currently expect the following impacts:

We believe our Exhibitor’s Services Agreement with NCM includes a significant financing component due to the significant length of time necessary to fulfill the performance obligation as compared to the advanced payment received. Upon adoption of ASC 606, we expect advertising revenues will significantly increase with a similar offsetting increase in noncash interest expense. We do not expect these changes to have a material impact on our results of operations or cash flows from operations.

We currently record online ticket fee revenues net of third-party commission or service fees. In accordance with ASC 606 guidance, we believe that we are a principal (as opposed to agent) in the arrangement with third-party internet ticketing companies in regards to sale of online tickets to customers, and therefore, we expect to recognize ticket fee revenues based on a gross transaction price. This change will have the effect of materially increasing other revenues and other operating expenses but will have no impact on net income or cash flows from operations.

With respect to other areas impacted by ASC 606 such as non-redeemed exchange tickets, loyalty programs, other customer incentives and gift card commission expenses, we do not expect those accounting changes to have a material impact to our net income or cash flows from operations.

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In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. The purpose of ASU 2016-15 is to reduce the diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. ASU 2016-15 is effective for fiscal years beginning after December 15, 2017, including interim periods within that year. The new standard is effective for us on January 1, 2018. We are currently evaluating this new guidance to determine the impact it will have on our consolidated financial statements.

In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory, which requires that an entity recognize the income tax consequences of intra-entity transfers of assets other than inventory at the time of the transfer instead of deferring the tax consequences until the asset has been sold to an outside party, as current U.S. GAAP requires. ASU 2016-16 is effective for annual periods, and interim periods therein, beginning after December 15, 2017. The new standard is effective for us on January 1, 2018. Early application is permitted in any interim or annual period. We are currently evaluating this new guidance to determine the impact it will have on our consolidated financial statements.

In January 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The purpose of ASU 2017-04 is to simplify how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. ASU 2017-04 is effective for fiscal years beginning after December 15, 2019, including interim periods within that year. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The adoption of ASU 2017-04 may impact the results of future goodwill impairment tests and therefore could impact our consolidated financial position and results of operations. We early adopted ASU 2017-04 in the third quarter of 2017 on a prospective basis and applied the new guidance to our interim goodwill impairment tests performed in the third quarter of 2017. See Note 1—Basis of Presentation regarding the change in accounting principle.

In May 2017, the FASB issued ASU 2017-09, Scope of Modification Accounting, which amends the scope of modification accounting for share-based payment arrangements and provides guidance on the types of changes to the terms or conditions of the share-based payment awards to which an entity would be required to apply modification accounting under ASC 718. For all entities, the ASU is effective for annual reporting periods, including interim periods within those annual reporting periods, beginning after December 15, 2017. The new standard is effective for us on January 1, 2018. Early adoption is permitted, including adoption in any interim period. We are currently evaluating this new guidance to determine the impact it will have on our consolidated financial statements.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

WeIn the ordinary course of business, our financial results are exposed to fluctuations in interest ~~rate market risk~~rates and foreign currency exchange ~~risk.~~rates. In accordance with applicable guidance, we presented a sensitivity analysis showing the potential impact to net income of changes in interest rates and foreign currency exchange rates. For the three months ended March 31, 2019, our analysis utilized a hypothetical 100 basis-point increase or decrease to the average interest rate on our variable rate debt instruments to illustrate the potential impact to interest expense of changes in interest rates. For the three months ended March 31, 2019, our analysis utilized a hypothetical 100 basis-point increase or decrease to market interest rates on our fixed rate debt instruments to illustrate the potential impact to fair value of changes in interest rates.

Similarly, for the same period, our analysis used a uniform and hypothetical 10% strengthening of the U.S. dollar versus the average exchange rates of applicable currencies to depict the potential impact to net income of changes in foreign exchange rates. These market risk instruments and the potential impacts to the consolidated statements of operations for the current year, have not materially fluctuated, individually or in the aggregate from the preceding year; thus, only current year information is presented below.

Market risk on variable‑rate financial instruments. At ~~September 30, 2017,~~March 31, 2019, we maintained a Senior Secured Credit Facility comprised of a $225.0 million revolving credit facility, ~~$865.2~~$852.0 million of Senior Secured Term Loans due 2022 and ~~$497.5~~$490.0 million of Senior Secured Term Loans due 2023. The Senior Secured Credit Facility provides for borrowings at a rate equal to an applicable margin plus, at our option, either a base rate or LIBOR + 2.25%. The rate in effect at ~~September 30, 2017~~March 31, 2019 for the outstanding Senior Secured Term Loans due 2022 and 2023 was ~~3.48%~~4.7338% per annum. Increases in market interest rates would cause interest expense to increase and earnings before income taxes to decrease. The change in interest expense and earnings before income taxes would be dependent upon the weighted average outstanding borrowings during the reporting period following an increase in market interest rates. At ~~September 30, 2017,~~March 31, 2019, we had ~~$60.0~~$8.2 million variable-rate borrowings outstanding under our revolving credit ~~facility~~facilities and had an aggregate principal balance of ~~$1,362.7~~$1,342.0 million outstanding under the Senior Secured Term Loans due 2022 and 2023. A ~~100 basis~~100-basis point change in market interest rates would have increased or decreased interest expense on the Senior Secured Credit Facility by ~~$10.7~~$3.4 million during the ~~nine~~three months ended ~~September 30, 2017.~~March 31, 2019.

Market risk on fixed-rate financial instruments. Included in long-term corporate borrowings at ~~September 30, 2017~~March 31 2019 were principal amounts of $600.0 million of our Convertible Notes due 2024, $230.0 million of our Senior Secured Notes due 2023, $600.0 million of our Notes due 2025, $375.0 million of our Notes due 2022, $595.0 million of our Notes due 2026, $475.0 million of our Notes due 2027, and £500.0 million ($~~669.7~~652.1 million) of our Sterling Notes due 2024. ~~Increases~~A 100-basis point change in market interest rates would ~~generally cause a decrease~~have caused an increase or (decrease) in the fair value of ~~the Notes due 2023, Notes due 2025, Notes due 2022, Notes due 2026, Notes due 2027~~our fixed rate financial instruments of approximately $165.1 million and ~~Sterling Notes due 2024 and a decrease in market interest rates would generally cause an~~($155.3) million, respectively.

~~Table of Contents~~

~~increase in fair value of the Notes due 2023, Notes due 2025, Notes due 2022, Notes due 2026, Notes due 2027, and Sterling Notes due 2024.~~

Foreign currency exchange rate risk. We are also exposed to market risk arising from changes in foreign currency exchange rates as a result of our ownership of Odeon and Nordic. Odeon’s revenues and operating expenses are transacted in British Pounds and Euros, and Nordic’s revenues and operating expenses are transacted primarily in Swedish Krona and Euros. U.S. GAAP requires that our subsidiaries use the currency of the primary economic environment in which they operate as their functional currency. If Odeon and Nordic operate in a highly inflationary economy, U.S. GAAP requires that the U.S. dollar be used as the functional currency for Odeon and Nordic. Currency fluctuations in the countries in which we operate result in us reporting exchange gains (losses) or foreign currency translation adjustments. Based upon our ownership in Odeon and Nordic as of ~~September 30, 2017,~~March 31, 2019, holding everything else constant, a 10% immediate, simultaneous, ~~unfavorable~~favorable change in all of the foreign currency exchange rates to which we are exposed, would increase the aggregate net ~~loss~~earnings of our International markets reportable segment for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2019 by approximately ~~$0.6 million and $1.2 million, respectively.~~$0.1 million.

Our foreign currency translation rates decreased by approximately 7.9% for the three months ended March 31, 2019 as compared to the three months ended March 31, 2018, which did not significantly impact our net loss for the three months ended March 31, 2019.

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Item 4. Controls and Procedures.

(a)Evaluation of disclosure controls and procedures.

The Company maintains a set of disclosure controls and procedures designed to ensure that material information required to be disclosed in its filings under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that material information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. The Company’s Chief Executive Officer and Chief Financial Officer have evaluated these disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10–Q and have determined that such disclosure controls and procedures were effective.

(b)Changes in internal control.

As part of the adoption of ASC Topic 842, the Company implemented certain changes to its internal control activities related to lease accounting to ensure adequate evaluation of its lease contracts and proper assessment of the impact of the new accounting standard. We implemented new internal controls to ensure we adequately evaluated our contracts and properly assessed the new accounting standards related to leases on our financial statements. There ~~has been~~were no ~~change~~other significant changes in ~~our~~the Company’s internal control over financial reporting due to the adoption of the new standard, and no other changes in its internal control over financial reporting as defined in Exchange Act Rule 13a-15(f) during ~~our most recent calendar~~the quarter ended March 31, 2019, that has materially affected, or is reasonably likely to materially affect, ~~our~~the Company’s internal control over financial reporting.

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PART II—OTHER INFORMATION

Item 1. Legal Proceedings

Reference is made to Note ~~13–~~12—Commitments and Contingencies of the Notes to the Company’s Consolidated Financial Statements contained ~~elsewhere~~ in Part I of this quarterly report on Form 10–Q for information on certain litigation to which we are a party.

Item 1A. Risk Factors

Reference is made to Part I Item 1A. Risk Factors in our Annual Report on Form 10–K for the year ended December 31, ~~2016,~~2018, which sets forth information relating to important risks and uncertainties that could materially adversely affect our business, financial condition or operating results. There have been no material changes to the risk factors contained in our Annual Report on Form 10-K for the year ended December 31, ~~2016, except as set forth below.~~

~~We may incur future impairment charges to goodwill or long-lived assets and future theatre and other closure charges.~~

We review long‑lived assets, including goodwill, indefinite lived intangible assets and other intangible assets, marketable securities and non‑consolidated entities for impairment as part of our annual budgeting process and whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. The review for goodwill compares the fair value for each of our reporting units to its associated carrying value, including goodwill. Factors that could lead to impairment of goodwill and intangible assets include adverse industry or economic trends, reduced estimates of future cash flows, and declines in the market price of our common stock. Our valuation methodology for assessing impairment requires management to make judgments and assumptions based on historical experience and projections of future operating performance. We may be required to record future charges to earnings during the period in which an impairment of goodwill or intangible assets is determined to exist. During the years ended December 31, 2016, December 31, 2015, and December 31, 2014, we recorded impairment charges of $5.5 million, $1.7 million, and $3.1 million, respectively.

We have a significant amount of goodwill on our balance sheet as a result of acquisitions. As of September 30, 2017, goodwill recorded on our consolidated balance sheet totaled $4,889.5 million. In light of the decline in the market price of our common stock during the third quarter of 2017, we performed an interim goodwill impairment test as of September 30, 2017. Based on the results of that test, we determined that the goodwill recorded on our consolidated balance sheet was not impaired. However, If the market price of our common stock remains at current levels or further declines from current levels, or if other events or circumstances change that would more likely than not reduce the fair value of our reporting units below their respective carrying value, all or a portion of our goodwill may be impaired in future periods. Examples of such adverse events or circumstances that could change include (i) an adverse change in macroeconomic conditions; (ii) increased cost factors that have a negative effect on our earnings and cash flows; (iii) negative or overall declining financial performance compared with our actual and projected results of relevant prior periods; and (iv) a sustained decrease in our share price. Any impairment charges that we may take in the future could be material to our results of operations and financial condition.

The opening of new theatres by us and certain of our competitors has drawn audiences away from some of our older theatres. In addition, demographic changes and competitive pressures have caused some of our theatres to become unprofitable. Since not all theatres are appropriate for our new initiatives, we may have to close certain theatres or recognize impairment losses related to the decrease in value of particular theatres. Deterioration in the performance of our theatres could require us to recognize additional impairment losses and close additional theatres, which could have an adverse effect on the results of our operations. We continually monitor the performance of our theatres, and factors such as changing consumer preferences and our inability to sublease vacant retail space could negatively impact operating results and result in future closures, sales, dispositions and significant theatre and other closure charges prior to expiration of underlying lease agreements.

~~Table of Contents~~

The value of our deferred tax assets may not be realizable to the extent our future profits are less than we have projected and we may be required to record valuation allowances against previously-recorded deferred tax assets, which may have a material adverse effect on our results of operations and our financial condition.

Our income tax expense includes deferred income taxes arising from changes in temporary differences between the financial reporting and tax bases of assets and liabilities, credit carry-forwards and net operating losses. We evaluate the realizability of our deferred income tax assets and assess the need for a valuation allowance on an ongoing basis. In evaluating our deferred income tax assets, we consider whether it is more likely than not that the deferred income tax assets will be realized. The ultimate realization of our deferred income tax assets depends upon generating sufficient future taxable income during the periods in which our temporary differences become deductible and before our credit carry-forwards and net operating losses expire. Our assessment of the realizability of our deferred income tax assets requires significant judgment. If we fail to achieve our projections or if we need to lower our projections, we may not have sufficient evidence of our ability to realize our deferred tax assets, and we may need to increase our valuation allowance. If for example, our U.S. cumulative pretax losses raise uncertainty about the likelihood of realization of our deferred tax assets, we may need to record a valuation allowance against a significant portion of the U.S. deferred tax assets. There is no assurance that we will not record a valuation allowance in future periods against previously-recorded deferred tax assets. Any increase in the valuation allowance would result in additional deferred income tax expense which could have a material adverse effect on our results of operations and financial condition.2018.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

(a)

None.

~~(c) Issuer Purchases of Equity Securities~~

Purchases of Equity Securities

Approximate Dollar

Total Number of

Value of Shares that

Shares Purchased as

May Yet Be

Part of Publicly

Purchased Under the

Total Number of

Average Price Paid

Announced Plans or

Plans or Program (a)
Period

Shares Purchased

Per Share

Programs (a)

(in millions)
July 1, 2017 through July 31, 2017

—

$
—

—

$
—
August 1, 2017 through August 31, 2017

—

$
—

—

$
100.0
September 1, 2017 through September 30, 2017

1,068,300

$
15.48

1,068,300

$
83.5
Total

1,068,300

1,068,300

(b)

None.

(c)

Issuer Purchases of Equity Securities


	Purchases of Equity Securities
					Approximate Dollar
				Total Number of	Value of Shares that
				Shares Purchased as	May Yet Be
				Part of Publicly	Purchased Under the
	Total Number of	Average Price Paid		Announced Plans or	Plans or Program (a)
Period	Shares Purchased	Per Share		Programs (a)	(in millions)
January 1, 2019 through January 31, 2019	—	$	—	—	$	44.3
February 1, 2019 through February 28, 2019	—	$	—	—	$	44.3
March 1, 2019 through March 31, 2019	—	$	—	—	$	44.3
Total	—			—

(a)

As announced on August 3, 2017, our Board of Directors authorized a share repurchase program for an aggregate purchase of up to $100.0 million of our common stock, excluding transaction costs. As of September 30, ~~2017, $83.5~~2018, $44.3 million remained available for repurchase under this plan. A two-year time limit has been set for the completion of this program, expiring August 2, 2019.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

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Item 6. Exhibits.

EXHIBIT INDEX


EXHIBIT NUMBER		DESCRIPTION

* 10.1		~~First~~Sixth Amendment to Credit Agreement, dated ~~October 19, 2017, to the Employment Agreement between~~as of April 22, 2019, by and among AMC Entertainment Holdings, Inc., as ~~successor in interest to AMC Entertainment,~~borrower, the lenders party thereto and Citicorp North America, Inc. ~~and Elizabeth Frank and amends the Employment Agreement between Company and Executive which commenced August 18, 2010.~~

*10.2		~~First Amendment dated October 13, 2017,~~, as administrative agent (incorporated by reference from Exhibit 10.1 to the Employment Agreement between AMC Entertainment Holdings, Inc. as successor in interest to AMC Entertainment, Inc. and Stephen Colanero and amends the Employment Agreement between Company and Executive which commenced November 24, 2009.Company’s Current Report on Form 8-K (File No. 1-33892) filed on April 25, 2019).

*31.1		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Acts of 2002.

*31.2		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Acts of 2002.

*32.1		Section 906 Certifications of Adam M. Aron (Chief Executive Officer) and Craig R. Ramsey (Chief Financial Officer) furnished in accordance with Securities Act Release 33-8212.

**101.INS		XBRL Instance Document

**101.SCH		XBRL Taxonomy Extension Schema Document

**101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document

**101.DEF		XBRL Taxonomy Extension Definition Linkbase Document

**101.LAB		XBRL Taxonomy Extension Label Linkbase Document

**101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

* Filed herewith

** Submitted electronically with this Report.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	AMC ENTERTAINMENT HOLDINGS, INC.


Date: ~~November~~May 9, ~~2017~~2019	/s/ ADAM M. ARON
	Adam M. Aron
	Chief Executive Officer, Director and President


Date: ~~November~~May 9, ~~2017~~2019	/s/ CRAIG R. RAMSEY
	Craig R. Ramsey
	Executive Vice President and Chief Financial Officer

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		Page Number
	PART I—FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	3
	Consolidated Statements of Operations	3
	Consolidated Statements of Comprehensive Income (Loss~~(Loss)~~)	4
	Consolidated Balance Sheets	5
	Consolidated Statements of Cash Flows	6
	Notes to Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	47 43
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	80 60
Item 4.	Controls and Procedures	81 61
	PART II—OTHER INFORMATION
Item 1.	Legal Proceedings	82 62
Item 1A.	Risk Factors	82 62
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	83 62
Item 3.	Defaults Upon Senior Securities	83 62
Item 4.	Mine Safety Disclosures	83 62
Item 5.	Other Information	83 62
Item 6.	Exhibits	84 63
	Signatures	85 64


(In millions)	March 28, 2017		Changes		September 30, 2017
Cash	$	70.5	$	0.9	$	71.4
Restricted cash		—		5.9		5.9
Receivables		25.0		(11.6)		13.4
Other current assets		14.0		8.9		22.9
Property (1)		89.8		54.8		144.6
Intangible assets (1) (4)		—		23.8		23.8
Goodwill (2)		872.1		(78.5)		793.6
Deferred tax asset		5.5		(5.1)		0.4
Other long-term assets		41.0		27.5		68.5
Accounts payable		(30.3)		0.1		(30.2)
Accrued expenses and other liabilities		(26.5)		(6.0)		(32.5)
Deferred revenues and income		(43.5)		—		(43.5)
Term Loan Facility (SEK)		(144.4)		—		(144.4)
Term Loan Facility (EUR)		(169.5)		—		(169.5)
Capital lease and financing lease obligations (1)(3)		(29.2)		14.1		(15.1)
Deferred tax liability		(5.2)		(16.9)		(22.1)
Other long-term liabilities (5)		(14.4)		(17.9)		(32.3)
Total estimated purchase price	$	654.9	$	—	$	654.9


	Weighted Average		Gross
(In millions)	Amortization Period		Carrying Amount
Acquired intangible assets:
Amortizable intangible assets:
Favorable leases		7.0 years	$	3.2
Favorable subleases		4.5 years		1.3
Screen advertising agreement		5.0 years		8.3
Trade name agreement		4.0 years		1.0
Total, amortizable		5.3 years	$	13.8
Unamortized intangible assets:
Trade names			$	10.0


(In millions)	November 30, 2016		Changes		September 30, 2017
Cash	$	41.6	$	—	$	41.6
Receivables		26.2		—		26.2
Other current assets		58.1		—		58.1
Property (1)		755.9		(20.1)		735.8
Intangible assets (2)		112.1		—		112.1
Goodwill (3)		898.6		21.3		919.9
Deferred tax asset		18.7		—		18.7
Other long-term assets		29.6		—		29.6
Accounts payable		(78.9)		—		(78.9)
Accrued expenses and other liabilities		(118.2)		—		(118.2)
Deferred revenues and income		(20.4)		0.8		(19.6)
9% Senior Secured Note GBP due 2018		(382.9)		—		(382.9)
4.93% Senior Secured Note EUR due 2018		(213.7)		—		(213.7)
Capital lease and financing lease obligations (4)		(365.3)		(2.0)		(367.3)
Deferred tax liability		(21.3)		—		(21.3)
Other long-term liabilities (5)		(103.0)		—		(103.0)
Total estimated purchase price	$	637.1	$	—	$	637.1


(In millions)	December 21, 2016		Changes		September 30, 2017
Cash	$	86.5	$		$	86.5
Receivables		12.3		—		12.3
Other current assets		14.2		—		14.2
Property (1)		719.6		(2.8)		716.8
Intangible assets (2)		25.9		—		25.9
Goodwill (3)		624.8		2.5		627.3
Other long-term assets		19.4		—		19.4
Accounts payable		(37.0)		—		(37.0)
Accrued expenses and other liabilities		(53.0)		0.2		(52.8)
Deferred revenues and income		(19.9)		—		(19.9)
Deferred tax liability		(19.5)		1.5		(18.0)
6% Senior Secured Notes due 2023		(242.1)		—		(242.1)
Capital and financing lease obligations (4)		(222.0)		(2.0)		(224.0)
Other long-term liabilities (5)		(51.0)		0.6		(50.4)
Total estimated purchase price	$	858.2	$	—	$	858.2


	Pro Forma Three Months Ended				Pro Forma Nine Months Ended
	September 30,				September 30,
(In millions)	2017		2016		2017		2016
Revenues	$	1,178.7	$	1,307.3	$	3,739.2	$	3,908.7
Operating income (loss)	$	(4.3)	$	61.2	$	38.4	$	185.7
Net earnings (loss)	$	(42.7)	$	(25.1)	$	(209.0)	$	(91.0)
Income (loss) per share:
Basic	$	(0.33)	$	(0.19)	$	(1.63)	$	(0.69)
Diluted	$	(0.33)	$	(0.19)	$	(1.63)	$	(0.69)


(In millions)	U.S. Markets		International Markets (2)		Total
Balance as of December 31, 2016	$	3,044.8	$	888.2	$	3,933.0
Acquisition of Nordic		—		872.1		872.1
Adjustments to acquisition of Nordic Cinemas (1)		—		(78.5)		(78.5)
Adjustments to acquisition of Odeon Cinemas (1)		—		21.3		21.3
Adjustments to acquisition of Carmike Cinemas (1)		2.5		—		2.5
Effect of foreign currency exchange		—		139.1		139.1
Balance as of September 30, 2017	$	3,047.3	$	1,842.2	$	4,889.5


					Accumulated						G&A: Mergers
			Exhibitor		Other						and
	Investment		Services		Comprehensive		Cash		Equity in		Acquisitions		Advertising
(In millions)	in NCM (1)		Agreement (2)		(Income)/Loss		Received		Loss (3)		Expense		(Revenue)
Ending balance at December 31, 2016	$	323.9	$	(359.2)	$	(4.0)
Receipt of common units		235.2		(235.2)		—
Receipt of excess cash distributions		(20.5)		—		—	$	20.5	$	—	$	—	$	—
Surrender of common units for transferred theatres		(36.4)		35.7		—		—		0.7		—		—
Surrender of common units for make whole agreement		(23.1)		—		—		—		0.5		22.6		—
Other-than-temporary impairment loss - held for sale (4)		(203.3)		—		—		—		203.3		—		—
Units exchanged for NCM, Inc. common shares		(109.1)		—		—		—		—
Equity in earnings		8.4		—		1.5		—		(9.9)		—		—
Amortization of ESA		—		20.4		—		—		—		—		(20.4)
For the period ended or balance as of September 30, 2017	$	175.1	$	(538.3)	$	(2.5)	$	20.5	$	194.6	$	22.6	$	(20.4)


	Common
	Membership Units		Common Shares
	Tranche 1	Tranche 2 (a)	NCM, Inc.
Beginning balance at December 31, 2012	17,323,782	—
Additional units received in the quarter ended June 30, 2013	—	1,728,988
Additional units received in the quarter ended June 30, 2014	—	141,731
Additional units received in the quarter ended June 30, 2015	—	469,163
Additional units received in the quarter ended December 31, 2015	—	4,399,324
Units exchanged for NCM, Inc. shares in December 2015	—	(200,000)	200,000
Additional units received in the quarter ended March 31, 2017	—	18,787,315
Surrender of units for transferred theatres in March 2017	—	(2,850,453)
Surrender of units for exclusivity waiver in March 2017	—	(1,807,220)
Conversion of units to NCM, Inc. common shares in September 2017	—	(14,600,000)	14,600,000
Sale of NCM, Inc. common shares in September 2017	—	-	(14,800,000)
Ending balance at September 30, 2017	17,323,782	6,068,848	—


			Cash		NCM Inc.
	Investment in		Received		Equity in
(In millions)	NCM Inc.		(Paid)		Loss
Ending balance at December 31, 2016	$	2.7	$	—	$	—
Receipt of cash dividends		(0.1)		0.1		—
Other-than-temporary impairment loss		(1.2)		—		1.2
NCM, LLC Units exchanged for NCM Inc. Common Shares		109.1		—		—
Net proceeds from sale of NCM Inc. Common Shares		—		89.4		(89.4)
Carrying value of NCM Inc. shares sold		(110.5)		—		110.5
Ending balance September 30, 2017	$	—	$	89.5	$	22.3

Spain		47.4		—		132.3		—
Germany		26.6		—		86.6		—
Finland		21.9		—		41.5		—
Other foreign countries		28.2		—		74.8		—
Total	$	1,178.7	$	779.8	$	3,662.4	$	2,309.8


	U.S. Pension Benefits				International Pension Benefits
(In millions)	September 30, 2017		September 30, 2016		September 30, 2017		September 30, 2016
Components of net periodic benefit cost:
Service cost	$	—	$	—	$	0.1	$	—
Interest cost		1.1		1.1		0.7		—
Expected return on plan assets		(0.8)		(0.9)		(0.8)		—
Net periodic benefit cost (credit)	$	0.3	$	0.2	$	—	$	—


					AMC Stubs® Revenue for
					Three Months Ended September 30, 2017
	Deferred						Food and				Other Theatre
	Membership		Deferred		Admissions		Beverage		Ticketing		Revenues
(In millions)	Fees		Rewards		Revenues		Revenues		Revenues		(Membership Fees)
Balance, June 30, 2017	$	16.5	$	24.5
Membership fees received		5.4		—	$	—	$	—	$	—	$	—
Rewards accumulated, net of expirations:
Admissions		—		6.7		(6.7)		—		—		—
Food and beverage		—		11.4		—		(11.4)		—		—
Rewards redeemed:
Admissions		—		(7.0)		7.0		—		—		—
Food and beverage		—		(10.2)		—		10.2		—		—
Amortization of deferred revenue		(6.5)		—		0.8		1.5		0.7		3.4
For the period ended or balance as of September 30, 2017	$	15.4	$	25.4	$	1.1	$	0.3	$	0.7	$	3.4


					AMC Stubs® Revenue for
					Nine Months Ended September 30, 2017
	Deferred						Food and				Other Theatre
	Membership		Deferred		Admissions		Beverage		Ticketing		Revenues
(In millions)	Fees		Rewards		Revenues		Revenues		Revenues		(Membership Fees)
Balance, December 31, 2016	$	12.5	$	23.3
Membership fees received		21.6		—	$	—	$	—	$	—	$	—
Rewards accumulated, net of expirations:
Admissions		—		20.2		(20.2)		—		—		—
Food and beverage		—		32.2		—		(32.2)		—		—
Rewards redeemed:
Admissions		—		(20.1)		20.1		—		—		—
Food and beverage		—		(30.2)		—		30.2		—		—
Amortization of deferred revenue		(18.7)		—		2.2		4.4		2.2		9.8
For the period ended or balance as of September 30, 2017	$	15.4	$	25.4	$	2.1	$	2.4	$	2.2	$	9.8


					AMC Stubs® Revenue for
					Three Months Ended September 30, 2016
	Deferred						Food and				Other Theatre
	Membership		Deferred		Admissions		Beverage		Ticketing		Revenues
(In millions)	Fees		Rewards		Revenues		Revenues		Revenues		(Membership Fees)
Balance, June 30, 2016	$	12.8	$	16.3
Membership fees received		4.2		—	$	—	$	—	$	—	$	—
Rewards accumulated, net of expirations:
Admissions		—		6.2		(6.2)		—		—		—
Food and beverage		—		6.3		—		(6.3)		—		—
Rewards redeemed:
Admissions		—		(6.0)		6.0		—		—		—
Food and beverage		—		(6.1)		—		6.1		—		—
Amortization of deferred revenue		(6.1)		—		0.7		1.4		0.7		3.2
For the period ended or balance as of September 30, 2016	$	10.9	$	16.7	$	0.5	$	1.2	$	0.7	$	3.2


					AMC Stubs® Revenue for
					Nine Months Ended September 30, 2016
	Deferred						Food and				Other Theatre
	Membership		Deferred		Admissions		Beverage		Ticketing		Revenues
(In millions)	Fees		Rewards		Revenues		Revenues		Revenues		(Membership Fees)
Balance, December 31, 2015	$	12.1	$	17.0
Membership fees received		17.1		—	$	—	$	—	$	—	$	—
Rewards accumulated, net of expirations:
Admissions		—		15.9		(15.9)		—		—		—
Food and beverage		—		19.3		—		(19.3)		—		—
Rewards redeemed:
Admissions		—		(16.0)		16.0		—		—		—
Food and beverage		—		(19.5)		—		19.5		—		—
Amortization of deferred revenue		(18.3)		—		0.7		1.4		0.7		15.5
For the period ended or balance as of September 30, 2016	$	10.9	$	16.7	$	0.8	$	1.6	$	0.7	$	15.5


	Closing
Date		Price Per Share
January 31, 2017	$	33.75
February 28, 2017		31.35
March 31, 2017		31.45
April 28, 2017		30.30
May 31, 2017		22.50
June 30, 2017		22.75
July 31, 2017		20.40
August 31, 2017		13.40
September 29, 2017		14.70
October 31, 2017		13.90
November 8, 2017		11.80


	Domestic	Odeon	Nordic
	Theatres	Theatres	Theatres
Description	September 30, 2017
Weighted average cost of capital/discount rate	8.5%	10.5%	9.5%
Long-term growth rate	2.5%	2.0%	2.0%
Control premium	25%	25%	25%
Selected cash flow multiple	7.5 x	10.0 x	11.0 x


					% Fair Value		Increase In	Decrease in	Decrease in	Decrease in
	Carrying		Estimated Fair		Exceeds		WACC	Growth Rate	Control Premium	Multiple
	Value		Value		Carrying Value		0.50%	0.50%	5.00%	0.5 x
Domestic Theatres	$	1,049.3	$	1,124.9		7.2%	-9.2%	-6.9%	5.0%	-6.0%
Odeon Theatres		665.9		693.8		4.2%	-4.0%	-1.3%	2.1%	-10.1%
Nordic Theatres		709.2		717.9		1.2%	-3.2%	-1.8%	-3.3%	-1.4%
Total	$	2,424.4	$	2,536.6		4.6%

Title of each class

Trading Symbol

Name of each exchange on which registered

Class A common stock

New York Stock Exchange

Title of each class of common stock

Number of shares
outstanding as of ~~October 31, 2017~~May 3, 2019

Class A common stock
Class B common stock

~~53,184,885~~52,073,316
~~75,826,927~~51,769,784