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 March 31, ~~2020~~2021
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 every Interactive Data File required to be submitted 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 ☐

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:


Title of each class	Trading Symbol	Name of each exchange on which registered
Class A common stock	AMC	New York Stock Exchange

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

Title of each class of common stock

Number of shares
outstanding as of ~~June~~May 2, ~~2020~~2021

Class A common stock
~~Class B common stock~~

~~52,549,593~~450,280,240

~~51,769,784~~

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~~EXPLANATORY NOTE~~

AMC Entertainment Holdings, Inc., (the “Company”), is filing this Form 10-Q for the period ended March 31, 2020 after the May 11, 2020 deadline in reliance on the 45-day extension provided by the Securities and Exchange Commission’s Order Under Section 36 of the Securities Exchange Act of 1934, as amended (the “Exchange Act” Modifying Exemptions from the Reporting Delivery Requirements for Public Companies dated March 25, 2020 (Release No. 34-88465) (the “Order”) due to the circumstances related to the COVID-19 pandemic. COVID-19 has created substantial disruption in the Company’s operations including the suspension of all theatre operations worldwide resulting in the cessation of essentially all revenues. As a result, all corporate-level employees have been either fully or partially furloughed, significantly limiting the resources available to prepare the Form 10-Q. Furthermore, to the extent corporate-level employees continue to work, they are working from home which has decreased efficiency in fulfilling the tasks necessary to complete the Form 10-Q. Due to these operational challenges, the Company could not file this Form 10-Q within the time period specified under the Exchange Act. Pursuant to the requirements of the Order, the Company filed a Form 8-K with the SEC on April 29, 2020 indicating its intention to rely upon the Order with respect to the filing of this Form 10-Q which is being filed within the 45-day extension period provided by the Order.

AMC ENTERTAINMENT HOLDINGS, INC.

INDEX

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PART I—FINANCIAL INFORMATION

Item 1. Financial Statements. (Unaudited)

AMC ENTERTAINMENT HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended
(In millions, except share and per share amounts)

March 31, 2020

March 31, 2019

(unaudited)
Revenues

Admissions

$
568.0

$
731.5
Food and beverage

288.1

368.8
Other theatre

85.4

100.1
Total revenues

941.5

1,200.4
Operating costs and expenses

Film exhibition costs

271.7

365.3
Food and beverage costs

53.4

61.5
Operating expense, excluding depreciation and amortization below

356.9

402.8
Rent

237.8

242.0
General and administrative:

Merger, acquisition and other costs

0.2

3.3
Other, excluding depreciation and amortization below

33.2

46.2
Depreciation and amortization

122.5

113.0
Impairment of long-lived assets, indefinite-lived intangible assets and goodwill

1,851.9

—
Operating costs and expenses

2,927.6

1,234.1
Operating loss

(1,986.1)

(33.7)
Other expense (income):

Other expense

26.9

29.8
Interest expense:

Corporate borrowings

71.3

71.3
Finance lease obligations

1.6

2.1
Non-cash NCM exhibitor services agreement

9.9

10.2
Equity in (earnings) loss of non-consolidated entities

2.9

(6.5)
Investment expense (income)

9.4

(16.1)
Total other expense, net

122.0

90.8
Loss before income taxes

(2,108.1)

(124.5)
Income tax provision

68.2

5.7
Net loss

$
(2,176.3)

$
(130.2)
Loss per share:

Basic

$
(20.88)

$
(1.25)
Diluted

$
(20.88)

$
(1.25)
Average shares outstanding:

Basic (in thousands)

104,245

103,783
Diluted (in thousands)

104,245

103,783


	Three Months Ended
(In millions, except share and per share amounts)	March 31, 2021		March 31, 2020

	(unaudited)
Revenues
Admissions	$	69.5	$	568.0
Food and beverage		50.1		288.1
Other theatre		28.7		85.4
Total revenues		148.3		941.5
Operating costs and expenses
Film exhibition costs		22.0		271.7
Food and beverage costs		9.7		53.4
Operating expense, excluding depreciation and amortization below		179.7		356.9
Rent		192.1		237.8
General and administrative:
Merger, acquisition and other costs		6.7		0.2
Other, excluding depreciation and amortization below		51.8		33.2
Depreciation and amortization		114.1		122.5
Impairment of long-lived assets, definite and indefinite-lived intangible assets and goodwill		—		1,851.9
Operating costs and expenses		576.1		2,927.6
Operating loss		(427.8)		(1,986.1)
Other expense (income):
Other expense (income)		(17.4)		26.9
Interest expense:
Corporate borrowings		151.5		71.3
Finance lease obligations		1.4		1.6
Non-cash NCM exhibitor services agreement		9.9		9.9
Equity in loss of non-consolidated entities		2.8		2.9
Investment expense (income)		(2.0)		9.4
Total other expense, net		146.2	��	122.0
Net loss before income taxes		(574.0)		(2,108.1)
Income tax provision (benefit)		(6.8)		68.2
Net loss		(567.2)		(2,176.3)
Less: Net loss attributable to noncontrolling interests		(0.3)		—
Net loss attributable to AMC Entertainment Holdings, Inc.	$	(566.9)	$	(2,176.3)
Net loss per share attributable to AMC Entertainment Holdings, Inc.'s common stockholders:
Basic	$	(1.42)	$	(20.88)
Diluted	$	(1.42)	$	(20.88)
Average shares outstanding:
Basic (in thousands)		400,111		104,245
Diluted (in thousands)		400,111		104,245

See Notes to Condensed Consolidated Financial Statements.

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AMC ENTERTAINMENT HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS


	Three Months Ended
(In millions)	March 31, 2020		March 31, 2019		March 31, 2021		March 31, 2020

	(unaudited)				(unaudited)
Net loss	$	(2,176.3)	$	(130.2)	$	(567.2)	$	(2,176.3)
Other comprehensive loss:
Unrealized foreign currency translation adjustments		(93.6)		(25.4)
Realized loss on foreign currency transactions reclassified into other expense		—		0.5
Other comprehensive income (loss):
Unrealized foreign currency translation adjustments, net of tax						(54.7)		(93.6)
Pension adjustments:
Realized net loss reclassified into other expense, net of tax		0.1		0.1
Equity method investee's cash flow hedge:
Unrealized net holding loss arising during the period		—		(0.1)
Net gain arising during the period						3.5		0.1
Other comprehensive loss		(93.5)		(24.9)		(51.2)		(93.5)
Total comprehensive loss	$	(2,269.8)	$	(155.1)		(618.4)		(2,269.8)
Comprehensive loss attributable to noncontrolling interests						(0.5)		0
Comprehensive loss attributable to AMC Entertainment Holdings, Inc.					$	(617.9)	$	(2,269.8)

See Notes to Condensed Consolidated Financial Statements.

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AMC ENTERTAINMENT HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


(In millions, except share data)	March 31, 2020		December 31, 2019		March 31, 2021		December 31, 2020
ASSETS
Current assets:
Cash and cash equivalents	$	299.8	$	265.0	$	813.1	$	308.3
Restricted cash		10.0		10.5		29.0		13.1
Receivables, net		126.8		254.2		86.0		91.0
Other current assets		115.2		143.4		87.9		74.6
Total current assets		551.8		673.1		1,016.0		487.0
Property, net		2,520.4		2,649.2		2,200.3		2,322.5
Operating lease right-of-use assets, net		4,602.3		4,796.0		4,348.7		4,451.5
Intangible assets, net		175.1		195.3		158.3		163.2
Goodwill		2,938.0		4,789.1		2,491.0		2,547.3
Deferred tax asset, net		0.5		70.1		1.3		0.3
Other long-term assets		450.2		503.0		273.1		304.6
Total assets	$	11,238.3	$	13,675.8	$	10,488.7	$	10,276.4
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	337.1	$	543.3	$	264.9	$	298.8
Accrued expenses and other liabilities		263.0		324.6		291.7		257.8
Deferred revenues and income		400.3		449.2		404.3		405.4
Current maturities of corporate borrowings		20.0		20.0		20.0		20.0
Current maturities of finance lease liabilities		10.2		10.3		12.5		12.9
Current maturities of operating lease liabilities		581.5		585.8		591.1		583.6
Total current liabilities		1,612.1		1,933.2		1,584.5		1,578.5
Corporate borrowings		5,020.8		4,733.4		5,439.4		5,695.8
Finance lease liabilities		85.0		89.6		77.8		83.1
Operating lease liabilities		4,784.3		4,913.8		4,908.9		4,957.8
Exhibitor services agreement		550.4		549.7		524.0		537.6
Deferred tax liability, net		47.7		46.0		34.0		40.5
Other long-term liabilities		212.0		195.9		207.1		241.3
Total liabilities		12,312.3		12,461.6		12,775.7		13,134.6
Commitments and contingencies
Stockholders’ equity:
Class A common stock ($.01 par value, 524,173,073 shares authorized; 56,282,218 shares issued and 52,549,593 outstanding as of March 31, 2020; 55,812,702 shares issued and 52,080,077 outstanding as of December 31, 2019)		0.5		0.5
Class B common stock ($.01 par value, 51,769,784 shares authorized, issued and outstanding as of March 31, 2020 and December 31, 2019)		0.5		0.5
Stockholders’ deficit:
AMC Entertainment Holdings, Inc.'s stockholders' deficit:
Class A common stock ($.01 par value, 524,173,073 shares authorized; 454,012,865 shares issued and 450,280,240 outstanding as of March 31, 2021; 176,295,874 shares issued and 172,563,249 outstanding as of December 31, 2020)						4.5		1.8
Class B common stock ($.01 par value, 0 shares authorized, issued and outstanding as of March 31, 2021 and 51,769,784 shares authorized, issued and outstanding as of December 31, 2020)						—		0.5
Additional paid-in capital		2,003.6		2,001.9		3,657.1		2,465.6
Treasury stock (3,732,625 shares as of March 31, 2020 and December 31, 2019, at cost)		(56.4)		(56.4)
Accumulated other comprehensive loss		(119.6)		(26.1)
Treasury stock (3,732,625 shares as of March 31, 2021 and December 31, 2020, at cost)						(56.4)		(56.4)
Accumulated other comprehensive income (loss)						(12.3)		38.7
Accumulated deficit		(2,902.6)		(706.2)		(5,902.3)		(5,335.3)
Total stockholders’ equity (deficit)		(1,074.0)		1,214.2
Total liabilities and stockholders’ equity	$	11,238.3	$	13,675.8
Total AMC Entertainment Holdings, Inc.'s stockholders’ deficit						(2,309.4)		(2,885.1)
Noncontrolling interests						22.4		26.9
Total deficit						(2,287.0)		(2,858.2)
Total liabilities and stockholders’ deficit					$	10,488.7	$	10,276.4

See Notes to Condensed Consolidated Financial Statements.

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AMC ENTERTAINMENT HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS



	Three Months Ended				Three Months Ended
(In millions)	March 31, 2020		March 31, 2019		March 31, 2021		March 31, 2020

Cash flows from operating activities:	(unaudited)				(unaudited)
Net loss	$	(2,176.3)	$	(130.2)	$	(567.2)	$	(2,176.3)
Adjustments to reconcile net loss to net cash provided by operating activities:
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization		122.5		113.0		114.1		122.5
Deferred income taxes		71.2		4.1		(6.2)		71.2
Impairment of long-lived assets, indefinite-lived intangible assets and goodwill		1,851.9		—
Amortization of net discount on corporate borrowings		3.1		2.2
Amortization of deferred charges to interest expense		4.1		4.4
Impairment of long-lived assets, definite and indefinite-lived intangible assets and goodwill						—		1,851.9
Amortization of net premium on corporate borrowings to interest expense						42.3		3.1
Amortization of deferred financing costs to interest expense						12.1		4.1
PIK interest expense						52.7		—
Non-cash portion of stock-based compensation		2.7		4.0		5.4		2.7
Gain on dispositions		(1.0)		(12.9)		—		(1.0)
Loss on derivative asset and derivative liability		19.6		28.4		—		19.6
Equity in loss from non-consolidated entities, net of distributions		11.2		—		2.8		11.2
Landlord contributions		16.1		35.2		3.7		16.1
Other non-cash rent		2.3		7.6
Other non-cash rent expense (benefit)						(7.5)		2.3
Deferred rent		(18.3)		(18.1)		(21.8)		(18.3)
Net periodic benefit cost		0.3		0.1		(0.2)		0.3
Change in assets and liabilities:
Receivables		129.4		68.3		(2.7)		129.4
Other assets		29.2		14.5		(13.0)		29.2
Accounts payable		(169.8)		(76.7)		(11.9)		(169.8)
Accrued expenses and other liabilities		(105.7)		(48.0)		96.4		(105.7)
Other, net		23.5		5.5		(11.9)		23.5
Net cash provided by (used in) operating activities		(184.0)		1.4
Net cash used in operating activities						(312.9)		(184.0)
Cash flows from investing activities:
Capital expenditures		(91.7)		(114.8)		(11.9)		(91.7)
Proceeds from disposition of long-term assets		3.4		17.3		5.2		3.4
Investments in non-consolidated entities, net		—		(0.1)		(9.3)		—
Other, net		0.9		(0.9)		—		0.9
Net cash used in investing activities		(87.4)		(98.5)		(16.0)		(87.4)
Cash flows from financing activities:
Proceeds from issuance of Odeon Term Loan due 2023						534.3		—
Proceeds from First Lien Toggle Notes due 2026						100.0		—
Borrowings (repayments) under revolving credit facilities		325.1		(3.8)		(335.0)		325.1
Scheduled principal payments under Term Loans		(5.0)		(3.4)
Scheduled principal payments under Term Loan due 2026						(5.0)		(5.0)
Proceeds from Class A common stock issuance						581.6		—
Payments related to sale of noncontrolling interest						(0.3)		—
Principal payments under finance lease obligations		(2.3)		(3.8)		(1.9)		(2.3)
Cash used to pay for deferred financing costs		(0.1)		—		(19.0)		(0.1)
Cash used to pay dividends		(4.3)		(21.8)		—		(4.3)
Taxes paid for restricted unit withholdings		(1.0)		(1.1)		—		(1.0)
Net cash provided by (used in) financing activities		312.4		(33.9)
Net cash provided by financing activities						854.7		312.4
Effect of exchange rate changes on cash and cash equivalents and restricted cash		(6.7)		2.2		(5.1)		(6.7)
Net increase (decrease) in cash and cash equivalents and restricted cash		34.3		(128.8)
Net increase in cash and cash equivalents and restricted cash						520.7		34.3
Cash and cash equivalents and restricted cash at beginning of period		275.5		324.0		321.4		275.5
Cash and cash equivalents and restricted cash at end of period	$	309.8	$	195.2	$	842.1	$	309.8
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest (including amounts capitalized of $0.3 million for both periods)	$	34.6	$	38.1
Income taxes paid, net	$	1.7	$	2.5
Schedule of non-cash activities:
Investment in NCM	$	4.5	$	1.4
Construction payables at period end	$	58.4	$	83.8

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Interest (including amounts capitalized of $0.2 million and $0.3 million)	$	26.2	$	34.6
Income taxes (received) paid, net	$	(9.0)	$	1.7
Schedule of non-cash activities:
Investment in NCM	$	5.8	$	4.5
Construction payables at period end	$	10.0	$	58.4

See Notes to Condensed Consolidated Financial Statements.

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AMC ENTERTAINMENT HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, ~~2020~~2021

(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 March 31, 2020, Wanda owned approximately 49.63% of Holdings’ outstanding common stock and 74.72% 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 transactions.

Temporarily ~~Suspended Operations.~~suspended or limited operations. As of or before March 17, 2020, the Company temporarily suspended all theatre operations in its U.S. markets and International markets in compliance with local, state, and federal governmental restrictions and recommendations on social gatherings to prevent the spread of COVID-19 and as a precaution to help ensure the health and safety of the Company’s guests and theatre staff. The Company resumed limited operations in the International markets in early June 2020 and limited operations in the U.S. markets in late August 2020. A COVID-19 resurgence during the fourth quarter of 2020 resulted in additional local, state, and federal governmental restrictions and many previously reopened theatres in International markets temporarily suspended operations again.As a result of these temporarily suspended or limited operations, the Company’s revenues and expenses for the three months ended March 31, ~~2020~~2021 are significantly lower than the revenues and expenses for the three months ended March 31, ~~2019.~~2020.

As of January 1, 2021, the Company was operating at 394 domestic theatres with limited seating capacities, representing approximately 67% of its domestic theatres. During the three months ended March 31, 2021, in response to eased restrictions by state and local governments, the Company resumed operations in key markets such as New York and Los Angeles. As of March 31, 2021, the Company was operating at 585 domestic theatres with limited seating capacities, representing approximately 99% of its domestic theatres. As of January 1, 2021, the Company was operating at 109 International leased and partnership theatres, with limited seating capacities, representing approximately 30% of its International theatres. As of March 31, 2021, the Company was operating at 97 International theatres with limited seating capacities, representing approximately 27% of its International theatres. The ~~Company will continue to monitor this situation closely and remain flexible on reopening its theatres in accordance with~~Company’s average screens operated during the ~~Centers for Disease Control and Prevention and governmental directives.~~three months ended March 31, 2021 declined by 24.2% from the prior year.

Liquidity. In response to the COVID-19 pandemic, the Company ~~has taken~~adjusted certain elements of its business strategy and ~~is continuing~~took and continues to take significant steps to preserve cash by eliminating non-essential costs, including reductions to ~~executive compensation~~its variable costs and elements of its fixed cost ~~structure:~~structure, including, but not limited to:

●

Suspended non-essential operating expenditures, including some marketing &and promotional and travel and entertainment ~~expenses;~~expenses, and where possible, ~~for example:~~ utilities and reduced essential operating expenditures to minimum levels necessary while theatres are closed.

●

Terminated or deferred all non-essential capital expenditures to minimum levels necessary while theatres are operating for limited hours or closed.

●

Implemented measures to reduce corporate-level employment costs while closed, including full or partial furloughs of all corporate-level Company employees for a period of time, including senior executives, with individual work load and salary reductions ranging from 20% to 100%; cancellation of pending annual merit pay increases; and elimination or reduction of non-healthcare benefits. With the resumption of operations, the Company eliminated the full and partial furloughs and employment costs increased. The increase in employment costs during the three months ended March 31, 2021 was primarily due to increases in bonus expense, stock-based compensation expense as a result of the modification and acceleration of vesting of awards during the current and prior year and increases in non-qualified deferred compensation expense due to increases in the fair values of related investments.

●

All domestic theatre-level crew members ~~have been~~were fully furloughed and theatre-level ~~management has been~~managements’ hours were reduced to the minimum ~~level~~levels necessary to begin resumption of operations when permitted. Similar efforts to reduce theatre-level and corporate employment costs ~~are being~~were undertaken internationally consistent with applicable laws across the jurisdictions in which the Company operates. As the Company resumed limited operations,

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employment costs increased.

●

Working with the Company’s landlords, vendors, and other business partners to manage, defer, and/or abate the related rent expenses and operating ~~expenses during the disruptions caused by the COVID-19 pandemic.~~expenses.

●

Introduced an active cash management process, which, among other things, requires senior management approval of all outgoing payments.

●

Since April 24, 2020, the Company has been prohibited from making dividend payments in accordance with the covenant suspension conditions in its Credit Agreement (as defined below). The Company ~~does not expect~~had also previously elected to ~~continue dividend payments which, when considered in tandem with~~decrease the dividend ~~decrease of $0.17 per share~~ paid in the first quarter of 2020 ~~when compared~~by $0.17 per share. The cash savings as a result of the prior decrease and current prohibition on making dividend payments was $4.3 million during the three months ended March 31, 2021 in comparison to the ~~dividend payments made in the first quarter of 2019, results in aggregate quarterly cash savings of $17.5 million.~~three months ended March 31, 2020.

●

The Company ~~does not expect to make~~is prohibited from making purchases under its ~~recently~~ authorized stock repurchase program ~~for~~in accordance with the ~~duration of 2020.~~covenant suspension conditions in its Senior Secured Credit Facility Agreement.

~~On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was signed~~

~~Table of Contents~~

into law. The CARES Act provides opportunities for additional liquidity, loan guarantees, and other government programs to support companies affected by the COVID-19 pandemic and their employees. Based on the Company’s preliminary analysis of the CARES Act, the Company expects to recognize the following benefits:

●

Approximately $18.5 million of cash tax refunds from overpayments and refundable alternative minimum tax credits with the filing of the Company’s 2019 federal tax return, amending 2018 state tax returns and filing 2019 state tax returns in which the Company expects a refund.

●

~~Deferral of social security payroll tax matches that would otherwise be required in 2020.~~

●

Receipt of a payroll tax credit in 2020 for expenses related to paying wages and health benefits to employees who are not working as a result of temporarily suspended operations and reduced receipts associated with COVID-19.

The Company intends to seek any available potential benefits, ~~under the CARES Act,~~ including loans, investments or guarantees, ~~and any other such current or~~under future government programs for which the Company qualifies domestically and internationally. The Company has taken advantage of many forms of governmental assistance in the U.S. and internationally including ~~those described above.~~but not limited to revenue and fixed cost reimbursements, payroll subsidies, rent support programs, direct grants, and property tax holidays. The Company cannot predict the manner in which such benefits will be allocated or administered, and the Company cannot assure ~~the reader that~~ it will be able to access such benefits in a timely manner or at all.

~~The~~In addition to preserving cash, the Company ~~believes~~enhanced liquidity through debt issuances, debt exchanges and equity sales as follows. See Note 6—Corporate Borrowings and Finance Lease Obligations and Note 7—Stockholders’ Equity for further information.

●

The April 2020 issuance of $500 million of 10.5% first lien notes due 2025 (the “First Lien Notes due 2025”).

●

The July 2020 completion of a debt exchange offer in which the Company issued approximately $1.46 billion aggregate principal amount of 10%/12% Cash/PIK toggle second lien subordinated notes due 2026 (the “Second Lien Notes due 2026”) in exchange for approximately $2.02 billion principal amount of the Company’s senior subordinated notes, reducing the principal amounts of the Company’s debt by approximately $555 million and extending maturities on approximately $1.7 billion of debt to 2026, most of which was maturing in 2024 and 2025 previously. Interest on the Second Lien Notes due 2026 for the first three six-month interest periods after the issue date is expected to be paid all or in part on an in-kind basis pursuant to the terms of the Second Lien Notes due 2026.

●

The July 2020 issuance of the 10.5% first lien secured notes due 2026 (the “First Lien Notes due 2026”) in which the Company received proceeds of $270.0 million, net of discounts and deferred charges.

●

The launch of several “at-the-market” equity offerings to raise capital through the sale of the Company’s Class A common stock. During the year ended December 31, 2020, the Company sold 91.0 million shares, generating $272.8 million in gross proceeds and paid fees to sales agents of $6.8 million. In January 2021, the Company sold 187.1 million shares, generating $596.9 million in gross proceeds and paid fees to sales agents of $14.9 million and other fees of $0.4 million. See Note 13—Subsequent Event for information regarding the additional at-the-market offerings of 43 million shares related to the Company’s remaining authorized shares of Class A common stock.

●

The December 2020 issuance of 21,978,022 shares of Class A common stock to Mudrick Capital Management, LP (“Mudrick”) in exchange for $104.5 million aggregate principal amount of the Second Lien Notes due 2026 and a commitment from Mudrick to purchase $100 million aggregate principal amount of 15%/17% Cash/PIK toggle first lien secured notes due 2026 (“First Lien Toggle Notes due 2026”) which the Company issued to Mudrick in January 2021 for cash.

●

The January 2021 conversion by holders of all $600 million of the Company’s 2.95% Convertible Senior Secured Notes due 2026 into shares of the Company’s Class A common stock at a conversion price of $13.51 which resulted in the issuance of 44,422,860 shares of its Class A Common Stock and reduced annual cash interest expense by $17.7 million.

●

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obligations (including principal, interest, fees and cash collateralized letters of credit) under its existing revolving credit facility and the remaining net proceeds will be used for general corporate purposes.

If attendance levels increase consistent with the Company’s assumptions described below, it currently estimates that its cash balance as of March 31, 2020 was sufficient to withstand a global suspension of operations until a partial reopening in July 2020. After giving effect to the proceeds of $500.0 million received from the issuance of the 10.5% first lien notes due 2025 (the “First Lien Notes due 2025”) on April 24, 2020, existing cash and cash equivalents ~~and cash generated from operations upon reopening, the Company may have~~will be sufficient to comply with minimum liquidity torequirements under its debt covenants, fund operations, and ~~essential~~satisfy obligations including cash outflows for increased rent and planned capital expenditures currently and through early May of 2022. This requires that the Company achieve significant increases in attendance levels beginning in the third quarter of 2021 and ultimately reaching 85% of pre COVID-19 attendance levels by the fourth quarter of 2021 and through the first and second quarters of 2022, as the vaccine rollout continues and more Hollywood product is released in its theatres. The Company entered into the Ninth Amendment (as defined below) to the Credit Agreement (as defined below) pursuant to which the requisite revolving lenders party thereto agreed to extend the suspension period for the ~~next 12 months. Further,~~financial covenant applicable to the Senior Secured Revolving Credit Facility (as defined below) from March 31, 2021 to March 31, 2022, as ~~discussed in Note 14—Subsequent Events,~~described, and on the ~~Company’s lenders have granted relief from the maintenance covenants in the revolving credit agreements~~terms and conditions specified, therein. As a result, the Company ~~believes it~~ will ~~maintain compliance~~be subject to the financial covenant beginning with ~~all financial debt covenants~~the quarter ending June 30, 2022. The Company is subject to minimum liquidity requirements of approximately $145 million of which $100 million is required under the conditions for the ~~next 12 months. Therefore,~~Extended Covenant Suspension Period under the ~~Company believes it has~~Senior Secured Revolving Credit Facility during the ~~cash resources to reopen its theatres~~Extended Covenant Suspension Period, as amended, and ~~resume operations this summer or later.~~£32.5 million (approximately $45 million) required under the Odeon Term Loan Facility. The Company’s liquidity needs thereafter will depend, among other things, on the timing of a full resumption of operations, the timing of movie releases and its ability to generate ~~revenues.~~cash from operations.

~~While~~The Company continues to explore potential sources of additional liquidity, including:

●

Additional equity financing. On April 27, 2021, the Company’s Board of Directors (the “Board”) determined not to seek stockholder approval of the proposal to approve an amendment to the Company’s Third Amended and Restated Certificate of Incorporation to increase the total number of shares of Class A common stock (par value $0.01 per share) the Company shall have the authority to issue by 500,000,000 shares to a total of 1,024,173,073 shares of Class A common stock (“Proposal 1”), and has withdrawn Proposal 1 from the agenda for the 2021 annual meeting of stockholders (the “Annual Meeting”). The Board reserves the right to propose an amendment of the Certificate of Incorporation to increase the authorized shares or for other items at any point in the future.

The Company plans to pursue equity issuances for its remaining authorized shares. See Note 13—Subsequent Event for information regarding the additional at-the-market offerings of 43 million shares related to the Company’s remaining authorized shares of Class A common stock. The amount of liquidity the Company ~~has used~~might generate will primarily depend on the market price of its ~~best~~Class A common stock, trading volumes, which impact the number of shares the Company is able to sell, and the available periods during which sales may be made. Because the Company’s market price and trading volumes are volatile, there is no guarantee as to the amounts of liquidity it might generate or that its prior experience accurately predicts the results the Company will achieve.

●

Landlord negotiations. Commencing in 2021, the Company’s cash expenditures for rent are scheduled to increase significantly as a result of rent obligations that had been deferred to 2021 and future years that were approximately $473.0 million as of March 31, 2021. In light of the Company’s liquidity challenges, and in order to establish its long-term viability, the Company believes it must continue to reach accommodations with its landlords to abate or defer a substantial portion of the Company’s rent obligations, in addition to generating sufficient amounts of liquidity through equity issuances and the other potential financing arrangements discussed below. Accordingly, the Company entered into additional landlord negotiations to seek material reductions, abatements and deferrals in its rent obligations. In connection with these negotiations, the Company has finalized agreements or agreements in principle with the landlords for a majority of leases where the Company has entered into negotiations. To the extent the Company achieves substantial deferrals but not abatements, its cash requirements will increase substantially in the future.

●

Other creditor discussions. While the liquidity the Company has raised has substantially extended its liquidity runway, the new debt the Company has issued or that has been committed, together with the higher interest rate payments that will be required in the future but have largely been deferred, will substantially increase its leverage and future cash requirements. These future cash requirements, like the Company’s deferred rent obligations, will present a challenge to its long-term viability if its operating income does not return to pre-COVID levels. Even then, the Company believes it will need to engage in discussions with its creditors to substantially reduce its leverage. The Company expects to continue to explore alternatives that include new-

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money financing and may involve converting debt to equity, which would help manage its leverage but could be dilutive to holders of its common stock. These discussions may not result in any agreement on commercially acceptable terms.

●

Covenant suspension. The Company entered into the Ninth Amendment, pursuant to which the requisite revolving lenders party thereto agreed to extend the suspension period for the financial covenant applicable to the Senior Secured Revolving Credit Facility from March 31, 2021 to March 31, 2022, as described, and on the terms and conditions specified, therein. See Note 6—Corporate Borrowings and Finance Lease Obligations for further information.

●

Joint-venture or other arrangements with existing business partners and minority investments in capital stock. The Company continues to explore other potential arrangements, including equity investments, to generate additional liquidity.

It is very difficult to estimate the Company’s liquidity requirements, future cash burn rates and future attendance levels. Depending on the Company’s assumptions regarding the timing and ability to achieve more normalized levels of operating revenue, the estimates ~~based~~of amounts of required liquidity vary significantly. Similarly, it is very difficult to predict when theatre attendance levels will normalize, which the Company expects will depend on ~~currently available information,~~the widespread availability and use of effective vaccines for the coronavirus. However, the Company’s current cash burn rates are not sustainable. Further, the Company cannot ~~assure~~accurately predict what future changes may occur to the ~~reader~~supply or release date of movie titles available for theatrical exhibition once moviegoers are prepared to return in large numbers. Nor can the Company know with certainty the impact on consumer movie-going behavior of Warner Bros.’s decision to release its entire 2021 slate of movies on HBO Max at the same time as the movies debut in theatres, or the potential attendance impact of other studio decisions to accelerate in home availability of their theatrical movies. Studio negotiations regarding evolving theatrical release models and film licensing terms are ongoing. There can be no assurance that ~~its~~the attendance levels and other assumptions used to estimate ~~its~~the Company’s liquidity requirements and future cash burn rates will be correct,—~~including but not limited to attendance, food~~ and ~~beverage revenues, rent relief, cost savings, and capital expenditures~~—~~because the Company has never previously experienced a complete cessation of its operations, and as a consequence,~~ its ability to be predictive is ~~uncertain.~~uncertain due to the unknown magnitude and duration of the COVID-19 pandemic. Further, there can be no assurances that the Company will be successful in generating the additional liquidity necessary to meet its obligations beyond twelve months from the issuance of these financial statements on terms acceptable to the Company or at all. If the Company ~~does not recommence operations within~~is unable to maintain or renegotiate its ~~estimated timeline,~~minimum liquidity covenant requirements, it could have a significant adverse effect on the Company’s business, financial condition and operating results.

The Company also realized significant cancellation of debt income (“CODI”) in connection with its debt restructuring. As a result of such CODI, the Company estimates a significant portion of its net operating losses will ~~require additional capital and~~be eliminated as a result of tax attribute reductions. Any loss of tax attributes as a result of such CODI may also require additional financing if, for example, its operations do not generate the expected revenues or a recurrence of COVID-19 were to cause another suspension of operations. Such additional financing may not be available on favorable terms or at all. Due to these factors, substantial doubt exists aboutadversely affect the Company’s cash flows and therefore its ability to ~~continue as a going concern for a reasonable period of time.~~service its indebtedness.

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 condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Principles of Consolidation. The accompanying unaudited condensed consolidated financial statements include the accounts of AMC, 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, ~~2019.~~2020. The accompanying condensed consolidated balance sheet as of December 31, ~~2019,~~2020, which was derived from audited financial statements, and the unaudited condensed 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~~Majority-owned subsidiaries that the Company has control of are ~~0 noncontrolling interests~~consolidated in the Company’s consolidated subsidiaries; consequently, ~~all~~a portion of its stockholders’ equity, net earnings (loss) and total comprehensive income (loss) for the periods presented are attributable to ~~controlling~~noncontrolling interests. Due to the seasonal nature of the Company’s business and the suspension of operations at all the Company’s theatres due to the COVID-19 pandemic, results for the three months ended March 31, 2021 are not necessarily indicative of the results to be expected

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for the year ending December 31, 2021. The Company manages its business under 2 reportable segments for its theatrical exhibition operations, U.S. markets and International markets.

Baltics’ theatre sale agreement. On August 28, 2020, the Company entered into an agreement to sell its equity interest in Forum Cinemas OU, which consists of 9 theatres located in the Baltics’ region (Latvia, Lithuania and Estonia) and was included in the Company’s International markets reportable segment, for total consideration of approximately €77.25 million, including cash of approximately €64.35 million or $76.6 million prior to any transaction costs. This transaction was undertaken by the Company to further increase its liquidity and strengthen its balance sheet at a transaction multiple that demonstrates that market participants ascribe positive value to the business. The completion of the sale will take place in several steps and is contingent upon clearance from each regulatory competition council in each country. The Company received $37.5 million (€31.53 million) cash consideration upon entering into the sale agreement on August 28, 2020, transferred an equity interest of 49% in Forum Cinemas OU to the purchaser and recorded an initial noncontrolling interest of $34.9 million in total equity (deficit). During the three months ended March 31, 2021 and the three months ended December 31, 2020, the Company received cash consideration for the remaining interest in Estonia and Latvia of $4.1 million (€3.4 million) and $6.4 million (€5.4 million), respectively. Transaction costs of $1.4 million and net gain of $1.2 million related to the sale of 49% equity interest of Lithuania and Estonia and the 100% disposal of Latvia were recorded in additional paid-in capital during the six months ended December 31, 2020. Additional transaction costs of $0.1 million and net gain of $0.3 million related to the sale of 51% equity interest of Estonia were recorded in additional paid-in capital during the three months ended March 31, 2021. The transaction costs and net gain recorded in additional paid-in capital will be recognized in earnings when the remaining 51% interest in Lithuania is disposed. At March 31, 2021, the carrying amounts of the major classes of assets and liabilities included as part of the disposal group that were previously included in the International markets reportable segment were; goodwill of $36.3 million, property, net, of $9.1 million, operating lease right-of-use assets, net of $12.4 million, and current and long-term operating lease liabilities of $1.2 million and $11.4 million, respectively. The remaining cash consideration of approximately $31.9 million (€26.3 million) was paid upon completion of the sale of the remaining 51% equity interest in Lithuania on May 6, 2021. At March 31, 2021, the Company’s noncontrolling interest of 49% in Lithuania was $22.4 million in net assets.

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


	Foreign
(In millions)	Currency		Pension Benefits		Total
Balance December 31, 2020	$	60.1	$	(21.4)	$	38.7
Other comprehensive (income) loss		(54.5)		3.5		(51.0)
Balance March 31, 2021	$	5.6	$	(17.9)	$	(12.3)

Accumulated depreciation and amortization. Accumulated depreciation was $2,330.0 million and $2,243.1 million at March 31, 2021 and December 31, 2020, respectively, related to property. Accumulated amortization of intangible assets was $42.4 million and $42.0 million at March 31, 2021 and December 31, 2020, respectively.

Other expense (income). The following table sets forth the components of other expense (income):


	Three Months Ended
(In millions)	March 31, 2021		March 31, 2020
Derivative liability fair value adjustment for embedded conversion feature in the Convertible Notes	$	—	$	(0.5)
Derivative asset fair value adjustment for contingent call option related to the Class B common stock purchase and cancellation agreement		—		20.1
Credit losses (income) related to contingent lease guarantees		(2.0)		5.3
Governmental assistance due to COVID-19		(12.4)		—
Foreign currency transaction (gains) losses		(3.8)		2.0
Non-operating components of net periodic benefit cost		(0.2)		—
Financing fees related to modification of debt agreements		1.0		—
Total other expense (income)	$	(17.4)	$	26.9

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ended March 31, 2020 are not necessarily indicative of the results to be expected for the year ending December 31, 2020. The Company manages its business under 2 reportable segments for its theatrical exhibition operations, U.S. markets and International markets.

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

Pension and

Foreign

Other

(In millions)

Currency

Benefits

Total

Balance December 31, 2019

$
(8.8)

$
(17.3)

$
(26.1)

Other comprehensive loss before reclassifications

(93.6)

—

(93.6)

Amounts reclassified from accumulated other comprehensive loss

—

0.1

0.1

Balance March 31, 2020

$
(102.4)

$
(17.2)

$
(119.6)

~~Accumulated depreciation and amortization.~~ Accumulated depreciation was $1,937.4 million and $1,820.1 million at March 31, 2020 and December 31, 2019, respectively, related to property. Accumulated amortization of intangible assets was $23.7 million and $22.8 million at March 31, 2020 and December 31, 2019, respectively.

~~Other expense.~~ ~~The following table sets forth the components of other expense:~~

Three Months Ended
(In thousands)

March 31, 2020

March 31, 2019
Derivative liability fair value adjustment for embedded conversion feature in the Convertible Notes due 2024

$
(0.5)

$
13.3
Derivative asset fair value adjustment for contingent call option related to the Class B common stock purchase and cancellation agreement

20.1

15.1
Credit losses related to contingent lease guarantees

5.3

—
Loss on Pound sterling forward contract

—

0.3
Foreign currency transactions losses

2.0

0.5
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

$
26.9

$
29.8

Impairments. The following table summarizes the Company’s assets that were impaired:

Three Months Ended

March 31,

March 31,
(In millions)

2020

2019
Impairment of long-lived assets

$
91.3

$
—
Impairment of indefinite-lived intangible assets

8.3

—
Impairment of definite-lived intangible assets

8.0

—
Impairment of goodwill (1)

1,744.3

—
Investment expense

7.2

—
Total impairment loss

$
1,859.1

$
—

~~(1)~~

~~See Note 4~~—~~Goodwill for information regarding goodwill impairment.~~


	Three Months Ended
(In millions)	March 31, 2021		March 31, 2020
Impairment of long-lived assets	$	—	$	91.3
Impairment of definite-lived intangible assets		—		8.0
Impairment of indefinite-lived intangible assets		—		8.3
Impairment of goodwill		—		1,744.3
Impairment of long-lived assets, definite and indefinite-lived intangible assets and goodwill		—		1,851.9
Impairment of other assets recorded in investment expense (income)		—		7.2
Total impairment loss	$	—	$	1,859.1

During the three months ended March 31, 2020, the enterprise fair values of the Domestic Theatres and International Theatres reporting units were less than their carrying values and goodwill impairment charges of $1,124.9 million and $619.4 million were recorded for the Company’s Domestic Theatres and International Theatres reporting units, respectively. The Step 1 quantitative goodwill impairment test was performed due to a decline in the common stock price and prices of the Company’s corporate borrowings and the resulting impact on market capitalization were two of several factors considered when making this evaluation, including the sustained declines during 2020 in the Company’s enterprise market capitalization and the temporary suspension of operations at all of the Company’s theatres on or before March 17, 2020 due to the COVID-19 pandemic. See Note 4—Goodwill for further information.

The Company evaluates definite-lived and indefinite-lived intangible assets for impairment annually or more frequently as specific events or circumstances dictate or changes in circumstances indicate that the carrying amount of the asset group may not be fully recoverable.

During the three months ended March 31, 2020, the Company recorded non-cash impairment of long-lived assets of $81.4 million on 57 theatres in the U.S. markets with 658 screens (in Alabama, Arkansas, California, District of Columbia, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Michigan, Minnesota, Missouri, Montana, New Hampshire, New Jersey, New York, North Carolina, North Dakota, Ohio, Pennsylvania, South Dakota, Tennessee, Texas, Washington, Wisconsin and Wyoming) and $9.9 million on 23 theatres in the International markets with 213 screens (in Germany, Italy, Spain, UK and Sweden). During the three months ended March 31, 2020, the Company

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recorded impairment losses related to definite-lived intangible assets of $8.0 million. In addition, the Company recorded an impairment loss of $7.2 million within investment expense (income), related to equity interest investments without a readily determinable fair value accounted for under the cost method.

During the three months ended March 31, 2020, the Company performed a quantitative impairment evaluation of its indefinite-lived intangible assets related to the AMC, Odeon and Nordic ~~tradenames~~trade names and recorded impairment charges of $5.9 million related to Odeon ~~tradenames~~trade names and $2.4 million related to Nordic ~~tradenames~~trade names during the three months ended March 31, 2020. To estimate fair value of the Company’s indefinite-lived trade names, the Company employed a derivation of the Income Approach known as the Royalty Savings. NaN impairment charges for indefinite-lived intangible assets were recorded during the three months ended March 31, 2021. The Company first assessed the qualitative factors to determine whether the existence of events and circumstances indicated that it was more likely than not the fair value amounts of any indefinite-lived intangible assets were less than their carrying amounts and concluded it was not more likely than not that the fair value amounts were less than their carrying amounts at March 31, 2021.

Accounting Pronouncements Recently Adopted

~~Financial Instruments.~~ In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which provides new guidance regarding the measurement and recognition of credit impairment for certain financial assets. Such guidance impacts how the Company determines its allowance for estimated uncollectible receivables and also contingent lease guarantees, where 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. ASU 2016-13 was effective for the Company in the first quarter of 2020. The Company recognized the cumulative effect upon adoption of the new standard related to credit losses for contingent lease guarantees of $16.9 million. See Note 11—Commitments and Contingencies for further information regarding contingent lease guarantees. The adoption impact on the Company’s allowance for estimated uncollectible receivables was immaterial as of January 1, 2020 and March 31, 2020. The cumulative effect of adoption was recorded to accumulated deficit under the modified retrospective adoption method.

~~Fair Value Measurement.~~ In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”), which eliminates, adds, and modifies certain disclosure requirements for fair value measurements as part of its disclosure framework project. Entities are no longer required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, but are required to disclose the range and weighted average used to develop significant observable inputs for Level 3 fair value measurements. The fair value measurement disclosure requirements of ASU 2018-13 was effective for the Company in the first quarter of 2020. See Note 9—Fair Value Measurements for the required disclosures for Level 3 fair value measurements.

~~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 was effective for the Company in the first quarter of 2020. Entities have the option to apply the guidance prospectively to all implementation costs incurred after the date of adoption or retrospectively in accordance with ASC 250-10-45. The Company adopted ASU 2018-15 prospectively and the adoption of ASU 2018-15 did not have a material impact on the Company’s consolidated financial statements and related disclosures.

~~Accounting Pronouncements Issued Not Yet Adopted~~

Income Taxes. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740) Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which is intended to improve consistency and simplify several areas of existing guidance. ASU 2019-12 removes certain exceptions to the general principles related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The new guidance also clarifies the accounting for transactions that result in a step-up in the tax basis for goodwill. ASU 2019-12 iswas effective for the Company in the first quarter of 2021. ~~Early~~The adoption ~~is permitted. The Company is currently evaluating the effect that~~of ASU 2019-12 ~~will~~did not have a material impact on ~~its~~the Company’s consolidated financial statements.

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NOTE 2—LEASES

The Company leases theatres and equipment under operating and finance leases. The Company typically does not believe that exercise of the renewal options is reasonably ~~assured~~certain at the ~~inception of the~~ lease ~~agreements~~commencement 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 reduction to rent expense over the base term of the lease agreement. Equipment leases primarily consist of ~~digital projectors and~~ food and beverage equipment.

The Company received, or is in process of negotiating, rent concessions provided by the lessors that aided, or will aid, in mitigating the economic effects of COVID-19. These concessions primarily consist of rent abatements and the deferral of rent payments. In instances where there were no substantive changes to the lease terms, i.e., modifications that resulted in total payments of the modified lease being substantially the same or less than the total payments of the existing lease, the Company elected the relief as provided by the FASB staff related to the accounting for certain lease concessions. The Company elected not to account for these concessions as a lease modification, and therefore the Company has remeasured the related lease liability and right-of-use asset but did not reassess the lease classification or change the discount rate to the current rate in effect upon the remeasurement. The deferred payment amounts have been recorded in the Company’s lease liabilities to reflect the change in the timing of payments. The deferred payment amounts included in current maturities of operating lease liabilities and long-term operating lease liabilities are reflected in the condensed consolidated statements of cash flows as part of the change in accrued expenses and other liabilities. Those leases that did not meet the criteria for treatment under the FASB relief were evaluated as lease modifications. The deferred payment amounts included in accounts payable for contractual rent amounts due and not paid are reflected in accounts payable on the condensed consolidated balance sheets and in the condensed consolidated statements of cash flows as part of the change in accounts payable. In addition, the Company included deferred lease payments in operating lease right-of-use assets as a result of lease remeasurements.

A summary of deferred payment amounts related to rent obligations for which payments have been deferred to 2021 and future years are provided below:


	As of				As of
	December 31,		Increase (decrease)		March 31,
(In millions)	2020		in deferred amounts		2021
Fixed operating lease deferred amounts (1) (2)	$	383.9	$	53.5	$	437.4
Finance lease deferred amounts		12.8		(4.6)		8.2
Variable lease deferred amounts (2)		53.3		(25.9)		27.4
Total deferred lease amounts	$	450.0	$	23.0	$	473.0

(1)

During the three months ended March 31, 2021, the increase in fixed operating lease deferred amounts is net of $19.1 million of decreases in the deferred balances as of December 31, 2020 related to payments and abatements.

(2)

During the three months ended March 31, 2021, decreases in variable lease deferred amounts were primarily due to resolution of contingencies, therefore, variable amounts became fixed and were reclassified to fixed operating lease deferred amounts.

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The following table reflects the lease costs for the three months ended March 31, ~~2020~~2021 and March 31, ~~2019:~~2020:


							Three Months Ended
		Three Months Ended				Consolidated Statement	March 31,		March 31,
(In millions)	Consolidated Statement of Operations	March 31, 2020		March 31, 2019		of Operations	2021		2020
Operating lease cost
Theatre properties	Rent	$	216.9	$	218.9	Rent	$	175.5	$	216.9
Theatre properties	Operating expense		2.2		1.7	Operating expense		0.8		2.2
Equipment	Operating expense		3.9		3.5	Operating expense		2.3		3.9
Office and other	General and administrative: other		1.3		1.3	General and administrative: other		1.4		1.3
Finance lease cost
Amortization of finance lease assets	Depreciation and amortization		1.9		2.7	Depreciation and amortization		1.3		1.9
Interest expense on lease liabilities	Finance lease obligations		1.6		2.1	Finance lease obligations		1.4		1.6
Variable lease cost
Theatre properties	Rent		20.9		23.0	Rent		16.6		20.9
Equipment	Operating expense		7.0		10.7	Operating expense		0.2		7.0
Total lease cost		$	255.7	$	263.9		$	199.5	$	255.7

Cash flow and supplemental information is presented below:


					Three Months Ended
	Three Months Ended				March 31,		March 31,
(In millions)	March 31, 2020		March 31, 2019		2021		2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used in finance leases	$	(1.6)	$	(2.1)	$	(1.0)	$	(1.6)
Operating cash flows used in operating leases (1)		(240.3)		(236.0)
Operating cash flows used in operating leases						(136.7)		(240.3)
Financing cash flows used in finance leases		(2.3)		(3.8)		(1.9)		(2.3)

Landlord contributions:
Operating cashflows provided by operating leases		16.1		35.2		3.7		16.1
Supplemental disclosure of noncash leasing activities:
Right-of-use assets obtained in exchange for new operating lease liabilities (2)		69.7		21.0
Right-of-use assets obtained in exchange for new operating lease liabilities (1)						23.5		69.7

(1)

Reflects contractual amounts due to be paid in cash. For the three months ended March 31, 2020, the Company deferred cash payments of $17.5 million of these amounts, which are included in the condensed consolidated statements of cash flows as part of the change in accounts payable.

~~(2)~~

Includes lease extensions and option exercises.

The following table represents the weighted-average remaining lease term and discount rate as of March 31, ~~2020:~~2021:

As of March 31, 2020

As of March 31, 2021

Weighted Average

Remaining

Discount

Remaining

Discount

Lease Term and Discount Rate

Lease Term (years)

Rate

Lease Term (years)

Rate

Operating leases

10.0

7.2%

10.2

9.9%

Finance leases

12.7

6.5%

13.1

6.4%

~~As of March 31, 2020, the Company had signed additional operating lease agreements for 9 theatres that have~~

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Minimum annual payments required under existing operating and finance leases and the net present value thereof as of March 31, 2021 are as follows:


	Operating Lease		Financing Lease
(In millions)	Payments		Payments
Nine months ending December 31, 2021 (1)	$	799.5	$	13.6
2022 (1)		999.0		15.0
2023		895.9		11.6
2024		792.0		9.8
2025		756.5		9.2
2026		691.1		9.0
Thereafter		3,719.8		66.5
Total lease payments		8,653.8		134.7
Less imputed interest		(3,153.8)		(44.4)
Total	$	5,500.0	$	90.3

(1)

Does not include amounts recorded in accounts payable for deferred rent.

As of March 31, 2021, the Company had signed additional operating lease agreements for 6 theatres that have not yet commenced of approximately ~~$194.9~~$150.0 million, which are expected to commence between ~~2020~~2021 and ~~2023,~~2024, and carry lease terms of approximately 5 to 2520 years. The timing of lease commencement is dependent on the landlord providing the Company with control and access to the related facility.

NOTE 3—REVENUE RECOGNITION

Disaggregation of Revenue. Revenue is disaggregated in the following tables by major revenue types and by timing of revenue recognition:


	Three Months Ended		Three Months Ended		Three Months Ended
(In millions)	March 31, 2020		March 31, 2019		March 31, 2021		March 31, 2020
Major revenue types
Admissions	$	568.0	$	731.5	$	69.5	$	568.0
Food and beverage		288.1		368.8		50.1		288.1
Other theatre:
Advertising		29.7		34.5
Screen advertising						16.9		29.7
Other theatre		55.7		65.6		11.8		55.7
Other theatre		85.4		100.1		28.7		85.4
Total revenues	$	941.5	$	1,200.4	$	148.3	$	941.5


	Three Months Ended				Three Months Ended
(In millions)	March 31, 2020		March 31, 2019		March 31, 2021		March 31, 2020
Timing of revenue recognition
Products and services transferred at a point in time	$	851.8	$	1,110.0	$	126.8	$	851.8
Products and services transferred over time (1)		89.7		90.4		21.5		89.7
Total revenues	$	941.5	$	1,200.4	$	148.3	$	941.5

~~(1)Amounts primarily include subscription and advertising revenues.~~

(1)

Amounts primarily include subscription and advertising revenues.

The following tables provide the balances of receivables and deferred revenue income:

(In millions)

March 31, 2020

December 31, 2019
Current assets:

Receivables related to contracts with customers

$
29.4

$
160.3
Miscellaneous receivables

97.4

93.9
Receivables, net

$
126.8

$
254.2

(In millions)

March 31, 2020

December 31, 2019
Current liabilities:

Deferred revenue related to contracts with customers

$
396.4

$
447.1
Miscellaneous deferred income

3.9

2.1
Deferred revenue and income

$
400.3

$
449.2


(In millions)	March 31, 2021		December 31, 2020
Current assets
Receivables related to contracts with customers	$	22.3	$	23.1
Miscellaneous receivables		63.7		67.9
Receivables, net	$	86.0	$	91.0

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(In millions)		March 31, 2021		December 31, 2020
Current liabilities
Deferred revenue related to contracts with customers	��	$	402.1	$	400.6
Miscellaneous deferred income			2.2		4.8
Deferred revenue and income		$	404.3	$	405.4

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


	Deferred Revenues		Deferred Revenues
	Related to Contracts		Related to Contracts
(In millions)	with Customers		with Customers
Balance December 31, 2019	$	447.1
Balance December 31, 2020			$	400.6
Cash received in advance (1)		71.3		15.6
Customer loyalty rewards accumulated, net of expirations:
Admission revenues (2)		4.8		0.5
Food and beverage (2)		12.5		0.8
Other theatre (2)		(0.2)		—
Reclassification to revenue as the result of performance obligations satisfied:
Admission revenues (3)		(89.5)		(7.2)
Food and beverage (3)		(23.8)		(3.9)
Other theatre (4)		(21.2)		(0.9)
Foreign currency translation adjustment		(4.6)		(3.4)
Balance March 31, 2020	$	396.4
Balance March 31, 2021			$	402.1

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

(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.~~

(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.~~

(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.~~

(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 Company suspended the recognition of deferred revenues related to certain loyalty programs, gift cards, and exchange tickets during the period in which its operations ~~are~~were temporarily suspended. As the Company re-opened theatres, A-List members had the option to reactivate their subscription, which restarted the monthly charge for the program. The Company resumed the recognition of deferred revenues related to certain loyalty programs, gift cards and exchange tickets.

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


	Exhibitor Services		Exhibitor Services
(In millions)	Agreement		Agreement (1)
Balance December 31, 2019	$	549.7
Common Unit Adjustment–additions of common units (1)		4.8
Balance December 31, 2020			$	537.6
Negative Common Unit Adjustment–reduction of common units				(9.2)
Reclassification of the beginning balance to other theatre revenue, as the result of performance obligations satisfied		(4.1)		(4.4)
Balance March 31, 2020	$	550.4
Balance March 31, 2021			$	524.0

~~(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.

(1)

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

Gift cards and exchange tickets. The total amount of non-redeemed gifts cards and exchange tickets included

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in deferred revenues and income as of March 31, ~~2020~~2021 was ~~$311.9~~$315.7 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~~redemptions. Historically, the Company has estimated this to occur over the next 24 ~~months.~~months, but due to the COVID-19 pandemic and the limited or temporary suspension of theatre operations, the pattern of actual redemptions may occur over a longer period of time.

Loyalty programs. As of March 31, ~~2020,~~2021, the amount of deferred revenue allocated to the loyalty programs included in deferred revenues and income was ~~$69.4~~$64.2 million. The earned points will be recognized as revenue as the points are ~~redeemed, which is~~redeemed. Historically, the Company has estimated this to occur over the next 24 ~~months.~~months, but due to the COVID-19 pandemic and the limited or temporary suspension of theatre operations, the recognition of points redeemed may occur over a longer period of time. The AMC ~~Stubs~~Stubs®^®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

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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 reporting unit for the three months ended March 31, ~~2020:~~2021:


(In millions)	Domestic Theatres		International Theatres		Total		Domestic Theatres		International Theatres		Total
Balance December 31, 2019	$	3,072.6	$	1,716.5	$	4,789.1
Impairment adjustment		(1,124.9)		(619.4)		(1,744.3)
Balance December 31, 2020							$	1,796.5	$	750.8	$	2,547.3
Currency translation adjustment		—		(106.8)		(106.8)		—		(52.6)		(52.6)
Balance March 31, 2020	$	1,947.7	$	990.3	$	2,938.0
Baltics disposition-Estonia (1)								—		(3.7)		(3.7)
Balance March 31, 2021							$	1,796.5	$	694.5	$	2,491.0

(1)

See Note 1—Basis of Presentationfor further information regarding the Baltics’ theatre sale agreement.

The Company evaluates goodwill recorded at the Company’s 2 reporting units (Domestic Theatres and International Theatres) for impairment annually as of the beginning of the fourth fiscal quarter 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. The impairment test for goodwill involves estimating the fair value of the 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 goodwill impairment charge, not to exceed the total amount of goodwill allocated to that reporting unit.

A decline in the common stock price and prices of the Company’s corporate borrowings and the resulting impact on market capitalization are two of several factors considered when making this evaluation. Based on sustained declines during 2020 in the Company’s enterprise market capitalization and the temporary suspension of operations at all the Company’s theatres on or before March 17, 2020 due to the COVID-19 pandemic, the Company performed a Step 1 quantitative goodwill impairment test of the Domestic and International reporting units as of March 31, 2020.

~~In performing the Step 1 quantitative goodwill impairment test as of March 31, 2020, the Company used an enterprise value approach to measure fair value of the reporting units. See Note 9~~—Fair Value Measurements for a discussion of the valuation methodology. The enterprise fair values of the Domestic Theatres and International Theatres reporting units were less than their carrying values and goodwill impairment charges of $1,124.9 million and $619.4 ~~million was recorded as of March 31, 2020 for the Company’s Domestic Theatres and International Theatres reporting units, respectively.~~

NOTE 5—INVESTMENTS

Investments in non-consolidated affiliates and certain other investments accounted for under the equity method generally include all entities in which the Company or its subsidiaries have significant influence, but not more than 50% voting control, and are recorded in the condensed consolidated balance sheets in other long-term assets. Investments in non-consolidated affiliates as of March 31, ~~2020~~2021 include interests in Digital Cinema Implementation Partners, LLC (“DCIP”) of 29.0%, Digital Cinema Distribution Coalition, LLC (“DCDC”) of 14.6%, AC JV, LLC (“AC JV”) owner of Fathom Events, of 32.0%, SV Holdco LLC (“SV Holdco”), owner of Screenvision, ~~18.2%~~of 18.3%, Digital Cinema Media Ltd. (“DCM”) of 50.0%, and Saudi Cinema Company LLC (“SCC”) of 10.0%. The Company also has partnership interests in 43 U.S. motion picture theatres (“Theatre Partnerships”) and approximately 50.0% ~~interest~~interests in 5554 theatres in Europe. Indebtedness held by equity method investees is non-recourse to the Company.

~~Equity in Earnings of Non-Consolidated Entities~~

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

Three Months Ended
(In millions)

March 31, 2020

March 31, 2019
Revenues

$
26.1

$
37.7
Operating costs and expenses

37.2

19.2
Net earnings (loss)

$
(11.1)

$
18.5

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~~The components of~~three months ended March 31, 2021 and March 31, 2020, the ~~Company’s~~Company recorded equity in ~~earnings (loss)~~loss of non-consolidated entities ~~are as follows:~~

Three Months Ended
(In millions)

March 31, 2020

March 31, 2019
DCIP

$
(1.9)

$
5.6
Other

(1.0)

0.9
The Company’s recorded equity in earnings (loss)

$
(2.9)

$
6.5

of $2.8 million and $2.9 million, respectively.

Related ~~Party Transactions~~party transactions with equity method investees.

At March 31, 2021 and December 31, 2020, the Company recorded net receivable amounts due from equity method investees of $4.6 million and $6.9 million, respectively, primarily related to projector warranty expenditures and other transactions. The Company recorded ~~the following~~ related party transactions with equity method ~~investees:~~

As of

As of
(In millions)

March 31, 2020

December 31, 2019
Due from DCM for on-screen advertising revenue

$
0.9

$
4.2
Loan receivable from DCM

0.6

0.7
Due from DCIP for warranty expenditures

—

3.5
Due to AC JV for Fathom Events programming

(1.0)

(0.8)
Due from Screenvision for on-screen advertising revenue

0.7

3.4
Due from Nordic JVs

2.3

2.5
Due to Nordic JVs for management services

(2.2)

(1.6)
Due from SCC related to the joint venture

9.3

8.3
Due to U.S. theatre partnerships

(0.8)

(1.0)

Three Months Ended
(In millions)

Condensed Consolidated Statement of Operations

March 31, 2020

March 31, 2019
DCM screen advertising revenues

Other revenues

$
3.6

$
3.9
DCIP equipment rental expense

Operating expense

1.3

1.1
Gross exhibition cost on AC JV Fathom Events programming

Film exhibition costs

2.4

7.3
Screenvision screen advertising revenues

Other revenues

2.1

3.5

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~~NOTE 6—CORPORATE BORROWINGS~~

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

(In millions)

March 31, 2020

December 31, 2019
Senior Secured Credit Facility-Term Loan due 2026 (4.61% as of March 31, 2020)

$
1,980.0

$
1,985.0
Revolving Credit Facility Due 2024 (4.75% as of March 31, 2020)

215.0

—
Odeon Revolving Credit Facility Due 2022 (3.17% as of March 31, 2020)

85.1

—
Odeon Revolving Credit Facility Due 2022 (2.6% as of March 31, 2020)

24.7

—
2.95% Senior Unsecured Convertible Notes due 2024

600.0

600.0
6.375% Senior Subordinated Notes due 2024 (£500 million par value)

617.3

655.8
5.75% Senior Subordinated Notes due 2025

600.0

600.0
5.875% Senior Subordinated Notes due 2026

595.0

595.0
6.125% Senior Subordinated Notes due 2027

475.0

475.0

$
5,192.1

$
4,910.8
Finance lease obligations

95.2

99.9
Debt issuance costs

(84.5)

(88.8)
Net discounts

(66.8)

(69.1)
Derivative liability

—

0.5

$
5,136.0

$
4,853.3
Less:

Current maturities corporate borrowings

(20.0)

(20.0)
Current maturities finance lease obligations

(10.2)

(10.3)

$
5,105.8

$
4,823.0

~~Senior Unsecured Convertible Notes due 2024~~

~~The table below sets forth the carrying value of the Senior Unsecured Convertible Notes due 2024:~~

Carrying Value

Increase

Carrying Value

as of

to Expense

as of
(In millions)

December 31, 2019

(Income)

March 31, 2020
Principal balance

$
600.0

$
—

$
600.0
Discount

(73.7)

3.4

(70.3)
Debt issuance costs

(11.2)

0.4

(10.8)
Derivative liability

0.5

(0.5)

—
Carrying value

$
515.6

$
3.3

$
518.9

On September 14, 2018, the Company issued $600.0 million aggregate principal amount of its 2.95% Senior Unsecured Convertible Notes due 2024 (the "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 at the option of the 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 bifurcated the conversion feature from the principal balance of the 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 the conversion price discussed in 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 condensed consolidated statement of operations. The initial derivative liability of $90.4 million is offset by a discount to the principal balance and is amortized to interest expense resulting in an effective rate of 5.98% over the term of the Convertible Notes due 2024. The Company also recorded debt issuance costs of approximately $13.6 million related to the issuance of the Convertible Notes due 2024 and will amortize those costs to interest expense under the effective interest method over the term of the Convertible Notes due 2024. The Company recorded interest expense for the three months ended March 31, 2020 and March 31, 2019 of $8.3 million and $8.0 million, respectively.

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The derivative liability is remeasured at fair value each reporting period with changes in fair value recorded in the condensed consolidated statements 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, 2020 and March 31, 2019, this resulted~~investees in other ~~expense (income)~~revenues, film exhibition costs, and operating expenses of $(0.5) million and $13.3 million, respectively. The if-converted value of the Convertible Notes due 2024 is less than the principal balance by approximately $499.9 million as of March 31, 2020 based on the closing price per share of the Company’s common stock of $3.16 per share.

Upon conversion by a holder of the Convertible Notes due 2024, the Company shall deliver, at 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 $1,000 principal amount of the Convertible Notes due 2024 (which represents an initial conversion price of $18.95), in each case subject to customary anti-dilution adjustments. As of March 31, 2020, 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 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 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 condensed 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, 2020 and March 31, 2019, this resulted in other expense of $20.1 million and $15.1 million, respectively. 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 has the option to redeem the Convertible Notes due 2024 for cash on or after the fifth anniversary of issuance at 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% internal rate of return from the date of issuance regardless of when any particular noteholder acquired its 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 of the Convertible Notes due 2024 at a purchase price equal to the principal amount plus accrued and unpaid interest up to, but excluding, the date of repurchase. The Indenture includes restrictive covenants that, subject to specified exceptions and parameters, limit the ability of the Company to incur additional debt and limit the 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 2024 under the Indenture.

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~~NOTE 7—STOCKHOLDERS’ EQUITY~~

~~Dividends~~

~~The following is a summary of dividends and dividend equivalents paid to stockholders during the three months ended March 31, 2020:~~

~~Related Party Transactions~~

As of March 31, 2020 and December 31, 2019, the Company recorded a receivable due from Wanda of $0.4 million and $0.8 million, respectively, for reimbursement of general administrative and other expense incurred on behalf of Wanda. For the three months ended March 31, 2020 and March 31, 2019, the Company recorded $0.1 million in both periods related to 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 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, 2020, Wanda owns 49.63% 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 74.72% 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.~~

$0.6

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million, $0.3 million, and $0.4 million, respectively, during the three months ended March 31, 2021 and $5.7 million, $2.4 million, and $1.3 million, respectively, during the three months ended March 31, 2020.

~~Condensed Consolidated Statements of Stockholders’ Equity~~

~~For the Three Months Ended March 31, 2020~~NOTE 6—CORPORATE BORROWINGS AND FINANCE LEASE OBLIGATIONS

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

Loss

(Deficit)

Equity (Deficit)
Balances December 31, 2019

52,080,077

$
0.5

51,769,784

$
0.5

$
2,001.9

3,732,625

$
(56.4)

$
(26.1)

$
(706.2)

$
1,214.2
Cumulative effect adjustment for the adoption of new accounting principle (ASU 2016-13)

—

—

—

—

—

—

—

—

(16.9)

(16.9)
Net loss

—

—

—

—

—

—

—

—

(2,176.3)

(2,176.3)
Other comprehensive loss

—

—

—

—

—

—

—

(93.5)

—

(93.5)
Dividends declared:

Class A common stock, $0.20/share, net of forfeitures

—

—

—

—

—

—

—

—

(1.6)

(1.6)
Class B common stock, $0.20/share

—

—

—

—

—

—

—

—

(1.6)

(1.6)
Taxes paid for restricted unit withholdings

—

—

—

—

(1.0)

—

—

—

—

(1.0)
Stock-based compensation

469,516

—

—

—

2.7

—

—

—

—

2.7
Balances March 31, 2020

52,549,593

$
0.5

51,769,784

$
0.5

$
2,003.6

3,732,625

$
(56.4)

$
(119.6)

$
(2,902.6)

$
(1,074.0)

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


(In millions)	March 31, 2021		December 31, 2020
First Lien Secured Debt:
Senior Secured Credit Facility-Term Loan due 2026 (3.195% as of March 31, 2021)	$	1,960.0	$	1,965.0
Senior Secured Credit Facility-Revolving Credit Facility due 2024		—		212.2
10.75% in Year 1, 11.25% thereafter Cash/PIK Odeon Term Loan Facility due 2023 (£140.0 million and €296.0 million par value as of March 31, 2021)		538.8		—
Odeon Revolving Credit Facility Due 2022		—		120.8
10.5% First Lien Notes due 2025		500.0		500.0
2.95% Senior Secured Convertible Notes due 2026		—		600.0
10.5% First Lien Notes due 2026		300.0		300.0
15%/17% Cash/PIK Toggle First Lien Secured Notes due 2026		100.0		—
Second Lien Secured Debt:
10%/12% Cash/PIK/Toggle Second Lien Subordinated Notes due 2026		1,423.6		1,423.6
Subordinated Debt:
6.375% Senior Subordinated Notes due 2024 (£4.0 million par value as of March 31, 2021)		5.5		5.4
5.75% Senior Subordinated Notes due 2025		98.3		98.3
5.875% Senior Subordinated Notes due 2026		55.6		55.6
6.125% Senior Subordinated Notes due 2027		130.7		130.7
	$	5,112.5	$	5,411.6
Finance lease obligations		90.3		96.0
Paid-in-kind interest		60.2		7.6
Deferred financing costs		(48.9)		(42.1)
Net premium (1)		335.6		338.7
	$	5,549.7	$	5,811.8
Less:
Current maturities corporate borrowings		(20.0)		(20.0)
Current maturities finance lease obligations		(12.5)		(12.9)
	$	5,517.2	$	5,778.9

(1)

The following table provides the net premium (discount) amounts of corporate borrowings:


	March 31,		December 31,
(In millions)	2021		2020
10%/12% Cash/PIK/Toggle Second Lien Subordinated Notes due 2026	$	423.5	$	445.1
2.95% Senior Secured Convertible Notes due 2026		—		(61.5)
15%/17% Cash/PIK/Toggle First Lien Secured Notes due 2026		(26.3)		—
10.5% First Lien Notes due 2026		(27.6)		(28.5)
10.5% First Lien Notes due 2025		(8.5)		(8.9)
Senior Secured Credit Facility-Term Loan due 2026		(7.2)		(7.5)
10.75% in Year 1, 11.25% thereafter Cash/PIK Odeon Term Loan Facility due 2023		(18.4)		—
6.375% Senior Subordinated Notes due 2024		0.1		—
	$	335.6	$	338.7

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The following table provides the principal payments required and maturities of corporate borrowings as of March 31, 2021:


	Principal
	Amount of
	Corporate
(In millions)	Borrowings
Nine months ended December 31, 2021	$	15.0
2022		20.0
2023		558.8
2024		25.5
2025		618.3
2026		3,744.2
Thereafter		130.7
Total	$	5,112.5

Senior Secured Credit Facilities

The Company is party to that certain Credit Agreement, dated as of April 30, 2013 (as amended by the First Amendment to Credit Agreement, dated as of December 11, 2015, that certain Second Amendment to Credit Agreement, dated as of November 8, 2016, that certain Third Amendment to Credit Agreement, dated as of May 9, 2017, that certain Fourth Amendment to Credit Agreement, dated as of June 13, 2017, that certain Fifth Amendment to Credit Agreement, dated as of August 14, 2018, the Sixth Amendment, dated as of April 22, 2019, the Seventh Amendment, dated as of April 23, 2020, the Eighth Amendment, dated as of July 31, 2020, the Ninth Amendment and the Tenth Amendment (as defined below), with the issuing banks and lenders from time to time party thereto and Wilmington Savings Fund Society, FSB, as administrative agent (as successor to Citicorp North America, Inc., the “Administrative Agent”), pursuant to which the lenders have agreed to provide senior secured financing consisting of (a) $2,000.0 million in aggregate principal amount of senior secured tranche B loans maturing April 22, 2026 (the “Senior Secured Term Loan Facility”) and (b) a $225.0 million senior secured revolving credit facility (which is also available for letters of credit and for swingline borrowings on same-day notice) maturing April 22, 2024 (the “Senior Secured Revolving Credit Facility” and, together with the Senior Secured Term Loan Facility, collectively, the “Senior Secured Credit Facilities”). The Senior Secured Credit Facilities are provided by a syndicate of banks and other financial institutions.

On March 8, 2021, the Company entered into the Ninth Amendment to Credit Agreement (the “Ninth Amendment”), with the requisite revolving lenders party thereto and the Administrative Agent, pursuant to which the requisite revolving lenders party thereto agreed to extend the suspension period for the financial covenant under its Credit Agreement from a period ending on March 31, 2021 to a period ending on March 31, 2022 (the “Extended Covenant Suspension Period”). During the Extended Covenant Suspension Period, the Company will not, and will not permit any of its restricted subsidiaries to, (i) make certain restricted payments, (ii) subject to certain exceptions, incur any indebtedness for borrowed money that is pari passu or senior in right of payment or security with the Revolving Loans (as defined in the Credit Agreement) or (iii) make any investment in or otherwise dispose of any assets to any subsidiary of the Company that is not a Loan Party (as defined in the Credit Agreement) to facilitate a new financing incurred by a subsidiary of the Company. In addition, as an ongoing condition to the suspension of the financial covenant, the Company also agreed to (i) a minimum liquidity test of $100 million, (ii) an anti-cash hoarding test at any time Revolving Loans are outstanding and (iii) additional reporting obligations. On March 8, 2021 the Company entered into the Tenth Amendment to Credit Agreement (the “Tenth Amendment”), with the requisite revolving lenders party thereto and the Administrative Agent, pursuant to which the Company agreed not to consent to certain modifications to the Credit Agreement described in the Tenth Amendment without the consent of the majority of the revolving lenders party to the Tenth Amendment.

Odeon Term Loan Facility

On February 15, 2021, Odeon Cinemas Group Limited (“Odeon”), a wholly-owned subsidiary of the Company entered into a new £140.0 million and €296.0 million term loan facility (the “Odeon Term Loan due 2023”) agreement (the “Odeon Term Loan Facility”), by and among Odeon, the subsidiaries of Odeon party thereto, the lenders and other loan parties thereto and Lucid Agency Services Limited as agent and Lucid Trustee Services Limited as security agent. Approximately £89.7 million and €12.8 million of the net proceeds from the Odeon Term Loan Facility were used to repay in full Odeon’s obligations (including principal, interest, fees, and cash collateralized letters of credit) under its existing revolving credit facility and the remaining net proceeds will be used for general corporate purposes. The

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Company recorded deferred financing cost write-off of $1.0 million in other expense during the three months ended March 31, 2021. The Odeon Term Loan Facility has a maturity of August 19, 2023 (2.5 years from the date on which it is first drawn). Borrowings under the Odeon Term Loan Facility bear interest at a rate equal to 10.75% per annum during the first year and 11.25% thereafter and each interest period shall be 3 months, or such other period agreed between the Company and the Agent. The interest is capitalized on the last day of each interest period and added to the outstanding principal amount, however Odeon has the option to elect to pay interest in cash. The principal amount of new funding is prior to deducting discounts of $19.1 million and deferred financing costs of $15.6 million related to the Odeon Term Loan Facility. The discount and deferred financing costs will be amortized to interest expense over the term using the effective interest method. All obligations under the Odeon Term Loan Facility are guaranteed by certain subsidiaries of Odeon. The Company is subject to minimum liquidity requirements of £32.5 million (approximately $45 million) required under the Odeon Term Loan Facility, measured at each quarter end date.

First Lien Toggle Notes due 2026

On January 15, 2021, the Company issued $100.0 million aggregate principal amount of its 15%/17% Cash/PIK Toggle First Lien Secured Notes due 2026 as contemplated by the previously disclosed commitment letter with Mudrick Capital Management, LP, dated as of December 10, 2020. The First Lien Toggle Notes due 2026 were issued pursuant to an indenture dated as of January 15, 2021 among the Company, the guarantors named therein and the U.S. Bank National Association, as trustee and collateral agent. The First Lien Toggle Notes due 2026 bear cash interest at a rate of 15% per annum payable semi-annually in arrears on January 15 and July 15, beginning on July 15, 2021. Interest for the first 3 interest periods after the issue date may, at the Company’s option, be paid in PIK interest at a rate of 17% per annum, and thereafter interest shall be payable solely in cash. The First Lien Toggle Notes due 2026 will mature on April 24, 2026. The indenture provides that the First Lien Toggle Notes due 2026 are general senior secured obligations of the Company and are secured on a pari passu basis with the Senior Credit Facilities, the First Lien Notes due 2026, and the First Lien Notes due 2025.

On December 14, 2020, Mudrick received a total of 21,978,022 shares of the Company’s Class A common stock; of which 8,241,758 shares (“Commitment Shares”) relates to consideration received for a commitment fee and 13,736,264 shares (“Exchange Shares”) as consideration received for the second lien exchange. Mudrick exchanged $100 million aggregate principal amount of the Second Lien Notes due 2026 that were held by Mudrick for the Exchange Shares (the “Second Lien Exchange”) and waived its claim to PIK interest of $4.5 million principal amount. The fair value of 21,978,022 shares of the Company’s Class A common stock was $70.1 million based on the market closing price of $3.19 per share on December 14, 2020. On December 14, 2020, the Class A common shares issued were recorded by the Company in stockholders’ deficit. During the three months ended March 31, 2021, the Company reclassified the prepaid commitment fee and deferred charges of $28.6 million to corporate borrowings from other long-term assets for the Commitment Shares and deferred charges. The prepaid commitment fee is recorded as a discount and together with deferred charges will be amortized to interest expense over the term of the First Lien Toggle Notes due 2026 using the effective interest method. The Company filed a shelf registration statement in December 2020, which was declared effective providing for the resale of the Exchange Shares.

Convertible Notes due 2026

On January 27, 2021, affiliates of Silver Lake and certain co-investors (collectively, the “Noteholders”) elected to convert (the “Conversion”) all $600.0 million principal amount of the Company’s Convertible Notes due 2026 (“Convertible Notes due 2026”) into shares of the Company’s Class A common stock at a conversion price of $13.51 per share. The non-cash Conversion settled on January 29, 2021 and resulted in the issuance of 44,422,860 shares of the Company’s Class A common stock to the Noteholders. The Company recorded $70.0 million of non-cash interest expense in the first quarter of 2021 for unamortized discount and deferred charges at the date of conversion following the guidance in ASC 815-15-40-1. The non-cash Conversion reduced the Company’s first-lien indebtedness by $600.0 million. Pursuant to the Stock Repurchase and Cancellation Agreement with Dalian Wanda Group Co., Ltd. (“Wanda”) dated as of September 14, 2018, 5,666,000 shares of the Company’s Class B common stock held by Wanda were forfeited and cancelled in connection with the Conversion.

During the three months ended March 31, 2020, the Company recorded other expense (income) of $(0.5) million related to the derivative liability fair value adjustment for the embedded conversion feature in the Convertible Notes due 2026. The derivative liability was remeasured at fair value each reporting period until the conversion price reset on September 14, 2020, with changes in fair value recorded in the condensed consolidated statements of operations as other expense or income. The Company bifurcated the conversion feature from the principal balance of the Convertible Notes due 2026 as a derivative liability because (1) a conversion feature was not clearly and closely related

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to the debt instrument and the reset of the conversion price caused the conversion feature to not be considered indexed to the Company’s equity, (2) the conversion feature standing alone met the definition of a derivative, and (3) the Convertible Notes due 2026 were not remeasured at fair value each reporting period with changes in fair value recorded in the condensed consolidated statement of operations.

During the three months ended March 31, 2020, the Company recorded other expense of $20.1 million related to the derivative asset fair value adjustment for the contingent call option related to the Class B common stock purchase and cancellation agreement. Pursuant to the Stock Repurchase and Cancellation Agreement between the Company and Wanda, the conversion feature of the Convertible Notes due 2026 would result in 5,666,000 shares of the Company’s Class B common stock held by Wanda being subject to forfeiture and retirement by the Company at no additional cost. This cancellation agreement was a contingent call option for the forfeiture shares and was a freestanding derivative. The forfeiture shares feature was not clearly and closely related to the Convertible Notes due 2026 host and it was bifurcated and accounted for as a derivative asset measured at fair value through earnings each reporting period until the conversion feature reset on September 14, 2020, with changes in fair value recorded in the condensed consolidated statement of operations as other expense or income.

NOTE 7—STOCKHOLDERS’ EQUITY

Equity Distribution Agreement. On December 11, 2020, the Company entered into an equity distribution agreement with Goldman Sachs & Co. LLC and B. Riley Securities, Inc., as sales agents to sell up to 178.0 million shares of the Company’s Class A common stock, par value $0.01 per share, through an “at-the-market” offering program. On January 25, 2021, the Company entered into equity distribution agreements with Goldman Sachs & Co. LLC and B. Riley Securities, Inc., as sales agents to sell up to 50.0 million shares of the Company’s Class A common stock, par value $0.01 per share, through an “at-the-market” offering program. During the three months ended March 31, 2021, the Company raised gross proceeds of approximately $596.9 million through its at-the-market offering for the remaining available shares under the equity distribution agreement of 187,066,293 shares of its Class A common stock and paid fees to the sales agents of approximately $14.9 million and other fees of $0.4 million. The Company intends to use the net proceeds from the sale of the Class A common stock pursuant to the equity distribution agreement for general corporate purposes, which may include the repayment, refinancing, redemption or repurchase of existing indebtedness or working capital, capital expenditures and other investments. See Note 13—Subsequent Event for information regarding the additional at-the-market offerings of 43 million shares of the Company’s Class A common stock.

Class B common stock. On January 27, 2021, pursuant to the Stock Repurchase and Cancellation Agreement with Wanda dated as of September 14, 2018 and in connection with the Conversion of the Convertible Notes due 2026 into shares of the Company’s Class A common stock by Silver Lake and certain co-investors, 5,666,000 shares of the Company’s Class B common stock held by Wanda were forfeited and cancelled.

On February 1, 2021, Wanda exercised their right to convert all outstanding Class B common stock of 46,103,784 to Class A common stock, thereby reducing the number of outstanding Class B common stock to zero, which resulted in the retirement of Class B common stock. The Third Amended and Restated Certificate of Incorporation of the Corporation provides that Class B common stock may not be reissued by the Company.

Dividends. There were 0 dividends declared to stockholders during the three months ended March 31, 2021. The following is a summary of dividends and dividend equivalents declared to stockholders during the three months ended March 31, 2020:


			Amount per		Total Amount
			Share of		Declared
Declaration Date	Record Date	Date Paid	Common Stock		(In millions)
February 26, 2020	March 9, 2020	March 23, 2020	$	0.03	$	3.2

Related Party Transactions. As of March 31, 2021 and December 31, 2020, the Company recorded a receivable due from Wanda of $0 and $0.7 million, respectively, for reimbursement of general administrative and other expense incurred on behalf of Wanda. For the three months ended March 31, 2021 and March 31, 2020, the Company recorded approximately $0 million and $0.1 million, respectively, of cost reductions for general and administrative services provided on behalf of Wanda.

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Stock-Based Compensation

The Company recorded stock-based compensation expense of $5.4 million and $2.7 million within general and administrative: other during the three months ended March 31, 2021 and March 31, 2020, respectively. As of March 31, 2021, the remaining unrecognized compensation cost related to stock-based compensation arrangements was approximately $43.1 million. The weighted average period over which this remaining compensation expense will be recognized is approximately 1.5 years.

Awards Granted in 2021

During the three months ended March 31, 2021, AMC’s Board of Directors approved awards of stock, restricted stock units (“RSUs”), and performance stock units (“PSUs”) to certain of the Company’s employees and directors under the 2013 Equity Incentive Plan. The grant date fair value of these awards during the three months ended March 31, 2021 was based on the closing price of AMC’s Class A common stock on February 23, 2021 of $7.70 per share. Each RSU and PSU held by a participant as of a dividend record date is entitled to a dividend equivalent equal to the amount paid with respect to one share of Class A common stock underlying the unit. Any such accrued dividend equivalents are paid to the holder upon vesting of the units. Each unit represents the right to receive one share of Class A common stock at a future date.

The 2021 award agreements generally had the following features:

●

Stock Award Agreement: The Company granted awards of 124,054 fully vested shares of Class A common stock to its independent members of AMC’s Board of Directors during the three months ended March 31, 2021 with a grant date fair value of $0.9 million.

●

Restricted Stock Unit Award Agreement: The Company granted RSU awards of 2,687,813 to certain members of management during the three months ended March 31, 2021 with a grant date fair value of $20.7 million. Each RSU represents the right to receive 1 share of Class A common stock at a future date. The RSUs vest over three years with 1/3 vesting in each year. These RSUs will be settled within 30 days of vesting.

●

Performance Stock Unit Award Agreement: During the three months ended March 31, 2021, total PSUs of 2,687,813 were awarded (“2021 PSU award”) to certain members of management and executive officers, with the total PSUs divided into 3 separate year tranches with each tranche allocated to a fiscal year within the performance period (“Tranche Year”). The PSUs within each Tranche Year are further divided between 2 performance targets; the Adjusted EBITDA performance target and free cash flow performance target. The 2021 PSU awards will vest based on achieving 80% to 120% of the performance targets with the corresponding vested unit amount ranging from 50% to 200%. If the performance targets are met at 100%, the 2021 PSU awards will vest at 2,687,813 units in the aggregate. NaN PSUs will vest for each Tranche Year if the Company does not achieve 80% of the Tranche Year’s Adjusted EBITDA and free cash flow targets. Additionally, vesting is subject to the participant’s continued employment through the end of the three-year cumulative period, ending on December 31, 2023. The vested PSUs will be settled within 30 days of vesting which will occur upon certification of performance results by the Compensation Committee of the Board of Directors.

The Compensation Committee establishes the annual performance targets at the beginning of each year, therefore, the grant date (and fair value measurement date) for each Tranche Year is the date at the beginning of each year when a mutual understanding of the key terms and conditions are reached per ASC 718-10-55-95. The 2021 PSU award grant date fair value on February 23, 2021 for the 2021 Tranche Year award of 895,951 units was approximately $6.9 million. In addition, the February 23, 2021 grant date fair value for the 2021 Tranche Year under the 2020 PSU award agreement of 438,244 units and the 2019 PSU award agreement of 181,916 units was approximately $3.4 million and $1.4 million, respectively.

●

Special Performance Stock Unit (“SPSU”) Executive Award Agreement: In January 2021, the market condition requirement for SPSUs awarded in calendar year 2020 was met as a result of exceeding the 20-day trailing volume weighted average stock price threshold target for tranche 5 and tranche 6 of $4 and $8, respectively. The stock-based compensation costs for SPSUs are recorded on a straight-line basis through October 30, 2021, which is the end of the service requirement period.

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The following table represents the nonvested RSU, PSU and SPSU activity for the three months ended March 31, 2021:


		Weighted
		Average
	Shares of RSU	Grant Date
	PSU and SPSU	Fair Value
Beginning balance at January 1, 2021 (1)	4,159,261	$	6.27
Granted (2)	3,583,764		7.70
Forfeited	(17,167)		5.22
Nonvested at March 31, 2021	7,725,858	$	6.94

(1)

Includes awards modified during 2020 where grant date fair value was not determined until 2021.

(2)

Excludes Tranche Years 2022 and 2023 awarded under the 2021 PSU award.

1924

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Condensed Consolidated Statements of Stockholders’ ~~Equity~~Deficit

For the Three Months Ended March 31, ~~2019~~2021


												Accumulated																	Accumulated
	Class A Voting			Class B Voting			Additional					Other		Accumulated		Total		Class A Voting			Class B Voting			Additional					Other		Accumulated		Total AMC
	Common Stock			Common Stock			Paid-in		Treasury Stock			Comprehensive		Earnings		Stockholders’		Common Stock			Common Stock			Paid-in		Treasury Stock			Comprehensive		Earnings		Stockholders’		Noncontrolling		Total
(In millions, except share and per share data)	Shares	Amount		Shares	Amount		Capital		Shares	Amount		Income (Loss)		(Deficit)		Equity		Shares	Amount		Shares	Amount		Capital		Shares	Amount		Income (Loss)		(Deficit)		Equity (Deficit)		Interests		Deficit
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 principle (ASU 842)	—		—	—		—		—	—		—		—		78.8		78.8
Balances December 31, 2020																		172,563,249	$	1.8	51,769,784	$	0.5	$	2,465.6	3,732,625	$	(56.4)	$	38.7	$	(5,335.3)	$	(2,885.1)	$	26.9	$	(2,858.2)
Net loss	—		—	—		—		—	—		—		—		(130.2)		(130.2)	—		—	—		—		—	—		—		—		(566.9)		(566.9)		(0.3)		(567.2)
Other comprehensive income	—		—	—		—		—	—		—		(24.9)		—		(24.9)
Dividends declared:
Class A common stock, $0.20/share	—		—	—		—		—	—		—		—		(10.7)		(10.7)
Class B common stock, $0.20/share	—		—	—		—		—	—		—		—		(10.4)		(10.4)
Other comprehensive loss																		—		—	—		—		—	—		—		(51.0)		—		(51.0)		(0.2)		(51.2)
Baltics noncontrolling capital contribution																		—		—	—		—		0.2	—		—		—		—		0.2		(4.0)		(3.8)
Class A common stock, accrued dividend equivalent adjustment																		—		—	—		—		—	—		—		—		(0.1)		(0.1)		—		(0.1)
Class A common stock issuance																		187,066,293		1.8	—		—		579.8	—		—		—		—		581.6		—		581.6
Wanda conversion of Class B shares to Class A shares																		46,103,784		0.5	(46,103,784)		(0.5)		—	—		—		—		—		—		—		—
Convertible Notes due 2026 stock conversion																		44,422,860		0.4	—		—		606.1	—		—		—		—		606.5		—		606.5
Wanda forfeit and cancellation of Class B shares																		—		—	(5,666,000)		—		—	—		—		—		—		—		—		—
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	124,054		—	—		—		5.4	—		—		—		—		5.4		—		5.4
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
Balances March 31, 2021																		450,280,240	$	4.5	—	$	—	$	3,657.1	3,732,625	$	(56.4)	$	(12.3)	$	(5,902.3)	$	(2,309.4)	$	22.4	$	(2,287.0)

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Condensed Consolidated Statements of Stockholders’ Deficit

For the Three Months Ended March 31, 2020


												Accumulated
	Class A Voting			Class B Voting			Additional					Other				Total
	Common Stock			Common Stock			Paid-in		Treasury Stock			Comprehensive		Accumulated		Stockholders’
(In millions, except share and per share data)	Shares	Amount		Shares	Amount		Capital		Shares	Amount		Loss		Deficit		Equity (Deficit)
Balances December 31, 2019	52,080,077	$	0.5	51,769,784	$	0.5	$	2,001.9	3,732,625	$	(56.4)	$	(26.1)	$	(706.2)	$	1,214.2
Cumulative effect adjustment for the adoption of new accounting principle (ASU 2016-13)	—		—	—		—		—	—		—		—		(16.9)		(16.9)
Net loss	—		—	—		—		—	—		—		—		(2,176.3)		(2,176.3)
Other comprehensive loss	—		—	—		—		—	—		—		(93.5)		—		(93.5)
Dividends declared:
Class A common stock, $0.03/share, net of forfeitures	—		—	—		—		—	—		—		—		(1.6)		(1.6)
Class B common stock, $0.03/share	—		—	—		—		—	—		—		—		(1.6)		(1.6)
Taxes paid for restricted unit withholdings	—		—	—		—		(1.0)	—		—		—		—		(1.0)
Stock-based compensation	469,516		—	—		—		2.7	—		—		—		—		2.7
Balances March 31, 2020	52,549,593	$	0.5	51,769,784	$	0.5	$	2,003.6	3,732,625	$	(56.4)	$	(119.6)	$	(2,902.6)	$	(1,074.0)

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NOTE 8—INCOME TAXES

The Company’s worldwide effective income tax rate is based on actual income (loss), statutory rates, valuation allowances against deferred tax assets and tax planning opportunities available in the various jurisdictions in which it operates. The Company is using a discrete income tax calculation for the ~~first quarter of 2020~~three months ended March 31, 2021 due to the inability to determine reliable annual estimates of taxable income (loss) due to COVID-19. Historically, for interim financial reporting, the Company ~~estimates~~estimated the worldwide annual income tax rate based on projected taxable income (loss) for the full year and ~~records~~recorded a quarterly income tax provision or benefit in accordance with the anticipated annual rate, adjusted for discrete items, if any. The Company will return to the historic approach of computing quarterly tax expense based on an annual effective rate in the future interim period when more reliable estimates of annual income become available. The Company recognizes income tax-related interest expense and penalties as income tax expense and general and administrative expense, respectively.

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, 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, among others.

~~During~~A valuation allowance is recorded against the ~~first quarter of 2020, the severe impact of COVID-19 on operations in Germany and Spain caused the Company to conclude the realizability of~~Company’s U.S. deferred tax assets ~~held in those jurisdictions~~and most of the Company’s International deferred tax assets as we have determined the realization of these assets does not meet the more likely than not ~~standard. As such, a charge~~criteria.

For purposes of ~~$33.1 million~~determining the current and ~~$40.1 million was recorded~~deferred tax provision, and uncertain tax positions for ~~Germany and Spain, respectively. During~~ the ~~fourth quarter of 2017,~~three months ended March 31, 2021, the Company ~~determined that it was appropriate to record~~estimated a ~~valuation allowance against U.S. deferred~~significant portion of its net operating losses and tax ~~assets. In addition, several other international jurisdictions carried valuation allowances against their deferred tax assets at the beginning of 2020.~~

Ascredits have been eliminated as a result of tax attribute reduction related to the debt exchange transaction that occurred in July 2020. The process of determining the attribute reduction is complex, subject to the taxpayer making certain elections regarding which attributes are to be reduced and cannot be calculated until the completion of taxable income for the year in which the CODI was incurred. Therefore, the estimated impact of the tax attribute reduction is subject to change until the finalization of its 2020 tax returns that will contain the tax consequences of the debt exchange.

The effective tax rate for the three months ended March 31, ~~2020~~2021 reflects the impact of these valuation allowances against U.S. and international deferred tax assets generated during the ~~three month~~three-month period. The actual effective rate for the three months ended March 31, ~~2020~~2021 was ~~(3.2)%~~1.2%. The Company’s consolidated tax rate for the three months ended March 31, ~~2020~~2021 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 goodwill impairments, interest, compensation,~~ and other discrete items. ~~No tax impact was recorded on the $1,744.3 million goodwill impairment charge incurred during the three months ended March 31, 2020, as the portion impaired was permanently non-deductible.~~ At March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, the Company has recorded net deferred tax liabilities of ~~$47.2~~$32.7 million and net deferred tax assets of ~~$24.1~~$40.2 million, respectively.

~~On March 27, 2020,~~Utilization of the U.S. government enacted the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”). The CARES Act, among other things, includes provisions relating to refundable payroll tax credits, deferment of employer side social security payments,Company’s net operating loss ~~carryback periods, alternative minimum~~carryforwards, disallowed business interest carryforwards and other tax ~~credit refunds, modifications~~attributes became subject to the Section 382 ownership change limitation due to changes in the Company’s stock ownership on January 27, 2021. Accordingly, the Company’s ability to utilize any net ~~interest deduction limitations~~operating loss carryforwards and ~~technical corrections~~other tax attributes may be significantly limited. Accordingly, although they are fully valued and there would be no financial statement impact, the Company’s ability to utilize any net operating loss carryforwards and other tax ~~depreciation methods for qualified improvement property, as well as loans to certain qualifying businesses. The Company continues to examine the impacts that the CARES Act~~attributes in future periods may have on its business. While the Company may take advantage of certain CARES Act’s cash deferral provisions, many of the provisions are not applicable to the Company. Additionally, as of the date of this filing, the Company has not participated in CARES Act loans.be significantly limited.

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NOTE 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 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 March 31, ~~2020:~~2021:


			Fair Value Measurements at March 31, 2020 Using								Fair Value Measurements at March 31, 2021 Using
							Significant								Significant
	Total Carrying		Quoted prices in		Significant other		unobservable		Total Carrying		Quoted prices in		Significant other		unobservable
	Value at		active market		observable inputs		inputs		Value at		active market		observable inputs		inputs
(In millions)	March 31, 2020		(Level 1)		(Level 2)		(Level 3)		March 31, 2021		(Level 1)		(Level 2)		(Level 3)
Other long-term assets:
Money market mutual funds	$	0.6	$	0.6	$	—	$	—	$	1.1	$	1.1	$	—	$	—
Derivative asset		17.9		—		—		17.9
Investments measured at net asset value (1)		9.8		—		—		—		10.7		—		—		—
Marketable equity securities:
Investment in NCM		4.5		4.5		—		—		5.8		5.8		—		—
Total assets at fair value	$	32.8	$	5.1	$	—	$	17.9	$	17.6	$	6.9	$	—	$	—

(1)

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

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.

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—~~Corporate Borrowings for further information.~~ 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. At March 31, 2020, the Company used a share price of $3.16, volatility rate of 13%, risk-free interest rate of 0.14%, and dividend yield of 0% to the value of the derivative instrument. The Company re-values the derivative instruments at the end of each reporting period and any changes are recordedinvestment in ~~other expense (income) in the condensed consolidated statements of operations.~~

~~Table of Contents~~

~~Nonrecurring Fair Value Measurements.~~ ~~The following table summarizes the fair value hierarchy of the Company’s assets that were~~NCM was measured at fair value ~~on a nonrecurring basis:~~

Fair Value Measurements at March 31, 2020 Using






Significant other

Significant

Total Carrying

Quoted prices in

observable

unobservable

Value at

active market

inputs

inputs

Total
(In millions)

March 31, 2020

(Level 1)

(Level 2)

(Level 3)

Losses
Property, net:

Property net

$
40.5

$
—

$
—

$
40.5

$
30.9
Operating lease right-of-use assets

Operating lease right-of-use assets

124.0

—

—

124.0

60.4
Intangible assets, net

Definite-lived intangible assets

6.6

—

—

6.6

8.0
Indefinite-lived intangible assets

50.3

—

—

50.3

8.3
Goodwill

Goodwill

2,938.0

—

—

2,938.0

1,744.3
Other long-term assets

Cost method investments

—

—

—

—

7.2
Total

$
3,159.4

$
—

$
—

$
3,159.4

1,859.1

~~Long-lived assets held and used, operating lease right-of-use assets, intangible assets, and cost method investments were considered impaired and were written down to their fair value~~using National CineMedia, Inc.’s underlying stock price at ~~March 31, 2020~~the date of $3,159.4 million. There is considerable management judgment with respect to cash flow estimates and discount rates used in determining fair value, and therefore are classified as Level 3 measurements within the fair value measurement hierarchy.

~~Valuation Techniques.~~ There are a number of estimates and significant judgments that were made by management in performing these impairment evaluations. Such judgments and estimates include estimates of future attendance, revenues, cash flows, rent relief, cost savings, capital expenditures, and the cost of capital, among others. Attendance is expected to be significantly below historical levels for the first several months following reopening but is expected to increase as customers become more comfortable with the experience. The Company believes it used reasonable and appropriate business judgments. The Company used weighted average cost of capital (discount rate) input for the Domestic Theatres and International Theatres reporting units of 11.5% and 13.0%, respectively, and a long-term growth rate input of 2.0% for both of the reporting units. There is considerable management judgment with respect to cash flow estimates and appropriate discount rates to be used in determining fair value, and, accordingly, actual results could vary significantly from such estimates, which fall under Level 3 within the fair value measurement hierarchy. These estimates determine whether impairments have been incurred, and quantify the amount of any related impairment charge.measurement.

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 March 31, 2020 Using								Fair Value Measurements at March 31, 2021 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)	March 31, 2020		(Level 1)		(Level 2)		(Level 3)		March 31, 2021		(Level 1)		(Level 2)		(Level 3)
Current maturities of corporate borrowings	$	20.0	$	—	$	15.1	$	—	$	20.0	$	—	$	17.4	$	—
Corporate borrowings		5,020.8		—		2,630.6		239.2		5,439.4		—		3,838.9		719.5

Valuation Technique. Quoted market prices and observable market based inputs were used to estimate fair value for Level 2 inputs. The Level 3 fair value measurement represents the transaction price of the corporate borrowings under estimated 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 aan estimated discount reflecting a market yield to maturity. See Note 6—Corporate Borrowings and Finance Lease Obligations for further information.

The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, and accrued liabilities approximate fair value because of the short maturity of these instruments.

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NOTE 10—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. The Company has identified 2 reportable segments and reporting units for its theatrical exhibition operations, U.S. markets and International markets. The International markets reportable segment has operations in or partial interest in theatres in the United Kingdom, Germany, Spain, Italy, Ireland, Portugal, Sweden, Finland, Lithuania, Norway, Denmark, and Saudi Arabia. On August 28, 2020, the Company divested of 49% of its interest in Estonia, Latvia, and Lithuania ~~Norway,~~operations. The Company completed the 100% divestiture of Latvia during the three months ended December 31, 2020 and ~~Denmark.~~Estonia during the three months ended March 31, 2021. See Note 1—Basis of Presentation for further information on the Baltics theatre sale agreement. Each segment’s revenue is derived from admissions, food and beverage sales and other ancillary revenues, primarily screen advertising, AMC ~~Stubs~~^®Stubs® membership fees and other loyalty programs, ticket sales, gift card income and exchange ticket income. 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				Three Months Ended
Revenues (In millions)	March 31, 2020		March 31, 2019		March 31, 2021		March 31, 2020
U.S. markets	$	661.3	$	867.2	$	137.2	$	661.3
International markets		280.2		333.2		11.1		280.2
Total revenues	$	941.5	$	1,200.4	$	148.3	$	941.5


	Three Months Ended				Three Months Ended
Adjusted EBITDA (1) (In millions)	March 31, 2020		March 31, 2019
Adjusted EBITDA (In millions)					March 31, 2021		March 31, 2020
U.S. markets ~~(2)~~	$	(3.8)	$	77.5	$	(200.4)	$	(3.8)
International markets		6.9		30.7		(94.3)		6.9
Total Adjusted EBITDA(1)	$	3.1	$	108.2	$	(294.7)	$	3.1

(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 the Company’s 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 the Company’s debt indentures.

~~(2)~~

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


	Three Months Ended				Three Months Ended
Capital Expenditures (In millions)	March 31, 2020		March 31, 2019		March 31, 2021		March 31, 2020
U.S. markets	$	56.9	$	75.5	$	6.6	$	56.9
International markets		34.8		39.3		5.3		34.8
Total capital expenditures	$	91.7	$	114.8	$	11.9	$	91.7


	As of		As of		As of		As of
Long-term assets, net (In millions)	March 31, 2020		December 31, 2019		March 31, 2021		December 31, 2020
U.S. markets	$	7,698.7	$	9,039.6	$	6,727.9	$	6,895.3
International markets		2,987.8		3,963.1		2,744.8		2,894.1
Total long-term assets (1)	$	10,686.5	$	13,002.7	$	9,472.7	$	9,789.4

(1)

Long-term assets are comprised of property, operating lease right-of-use assets, intangible assets, goodwill, deferred tax assets, and other long-term assets.

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


	Three Months Ended				Three Months Ended
(In millions)	March 31, 2020		March 31, 2019		March 31, 2021		March 31, 2020
Net loss	$	(2,176.3)	$	(130.2)	$	(567.2)	$	(2,176.3)
Plus:
Income tax provision (1)		68.2		5.7
Income tax provision (benefit)						(6.8)		68.2
Interest expense		82.8		83.6		162.8		82.8
Depreciation and amortization		122.5		113.0		114.1		122.5
Impairment of long-lived assets, indefinite-lived intangible assets and goodwill (2)		1,851.9		—
Certain operating expenses (3)		2.1		2.5
Equity in (earnings) loss of non-consolidated entities (4)		2.9		(6.5)
Impairment of long-lived assets, definite and indefinite-lived intangible assets and goodwill (1)						—		1,851.9
Certain operating expense (2)						2.3		2.1
Equity in loss of non-consolidated entities						2.8		2.9
Cash distributions from non-consolidated entities ~~(5)~~(3)		7.6		10.5		0.3		7.6
Attributable EBITDA ~~(6)~~(4)		(0.1)		0.9		(0.8)		(0.1)
Investment expense (income)		9.4		(16.1)		(2.0)		9.4
Other expense (7)		26.9		29.9
Other non-cash rent (8)		2.3		7.6
Other expense (income) (5)						(4.8)		26.9
Other non-cash rent expense (benefit) (6)						(7.5)		2.3
General and administrative — unallocated:
Merger, acquisition and other costs ~~(9)~~(7)		0.2		3.3		6.7		0.2
Stock-based compensation expense (10)		2.7		4.0
Stock-based compensation expense (8)						5.4		2.7
Adjusted EBITDA	$	3.1	$	108.2	$	(294.7)	$	3.1

(1)

~~For information regarding the income tax provision, see Note 8~~—~~Income Taxes.~~

~~(2)~~

During the three months ended March 31, 2020, the Company recorded non-cash impairment charges of $1,124.9 million and $619.4 million related to the enterprise fair values of its Domestic Theatres and International Theatres reporting units, respectively. The Company recorded non-cash impairment charges related to its long-lived assets of $81.4 million on 57 theatres in the U.S. markets with 658 screens which were related to property, net, operating lease right-of-use assets, net and other long-term assets and $9.9 million on 23 theatres in the International markets with 213 screens which were related to property, net and operating lease right-of-use assets, net, during the three months ended March 31, 2020. The Company recorded non-cash impairment charges related to its indefinite-lived intangible assets of $5.9 million and $2.4 million related to the Odeon and Nordic ~~tradenames,~~trade names, respectively, during the three months ended March 31, 2020. The Company also recorded non-cash impairment charges of $8.0 million related to its definite-lived intangible assets.

~~(3)~~(2)

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 or are non-operating in nature.

~~(4)~~

Equity in (earnings) loss of non-consolidated entities was primarily due to equity in loss from DCIP of $1.9 million for the three months ended March 31, 2020 and equity in earnings from DCIP of $5.6 million for the three months ended March 31, 2019.

~~(5)~~(3)

Includes U.S. non-theatre distributions from equity method investments and International non-theatre distributions from equity method investments to the extent received. The Company believes including cash distributions is an appropriate reflection of the contribution of these investments to the Company’s operations.

~~(6)~~(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 in (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 the Company’s gift card and package ticket program.

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~~and package ticket program.~~


	Three Months Ended				Three Months Ended
(In millions)	March 31, 2020		March 31, 2019		March 31, 2021		March 31, 2020
Equity in (earnings) loss of non-consolidated entities	$	2.9	$	(6.5)
Equity in loss of non-consolidated entities					$	2.8	$	2.9
Less:
Equity in (earnings) loss of non-consolidated entities excluding International theatre joint ventures		2.1		(6.0)
Equity in earnings (loss) of International theatre joint ventures		(0.8)		0.5
Equity in loss of non-consolidated entities excluding International theatre joint ventures						1.2		2.1
Equity in loss of International theatre joint ventures						(1.6)		(0.8)
Income tax benefit		(0.1)		—		(0.2)		(0.1)
Investment income		(0.2)		(0.2)		—		(0.2)
Depreciation and amortization		0.8		0.6		0.9		0.8
Other expense		0.2		—		0.1		0.2
Attributable EBITDA	$	(0.1)	$	0.9	$	(0.8)	$	(0.1)

~~(7)~~(5)

Other expense (income) for the three months ended March 31, ~~2020 and March 31, 2019 was primarily due to the decrease in the fair value~~2021 included foreign currency transaction gains of ~~the Company’s derivative asset for the contingent call option related to the Class B common stock purchase and cancellation agreement of $20.1~~$3.8 million and $15.1 million expense, respectively, the change in fair value of the Company’s derivative liability for the embedded conversion feature in the Company’s Convertible Notes due 2024 of a gain of $0.5 million and loss of $13.3 million, respectively, credit lossesincome related to contingent lease guarantees of ~~$5.3 million and $0, respectively, and foreign currency transaction losses of~~ $2.0 million, ~~and $0.5~~partially offset by financing fees of $1.0 million ~~respectively.~~primarily related to deferred financing cost write-off for the Odeon revolving credit facility.

During the three months ended March 31, 2020, the Company recorded a loss of $20.1 million for the fair value adjustment of the derivative asset related to the Convertible Notes due 2026, credit losses related to contingent lease guarantees of $5.3 million, and foreign currency transaction losses of $2.0 million, partially offset by a gain of $0.5 million for the fair value adjustment of the derivative liability related to the Convertible Notes due 2026.

~~(8)~~(6)

Reflects amortization expense for certain intangible assets reclassified from depreciation and amortization to rent expense due to the adoption of ASC 842, Leases and deferred rent benefit related to the impairment of right-of-use operating lease ~~assets in calendar year 2019 due to the adoption of ASC 842.~~assets.

~~(9)~~(7)

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

~~(10)~~(8)

Non-cash expense included in general and administrative: other.

NOTE 11—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 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 January 12, 2018 and January 19, 2018, 2 putative federal securities class actions, captioned Hawaii 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, assert claims under 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 (the “Exchange Act”) 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. On January 22, 2019, ~~the~~ defendants moved to dismiss the Second Amended Class Action Complaint. On September 23, 2019, the court granted the motion to dismiss in part and denied it in part. On March 2, 2020, plaintiffs moved to certify the purported class. On March 30, 2021, the court granted the motion to certify the class.

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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 Exchange Act and for breaches of fiduciary duty and unjust enrichment based on allegations substantially similar to the Actions. 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 October 2, 2019, a stockholder derivative complaint, captioned Kenna v. Aron, et al., Case No. 1:19-cv-09148-AJN (the “Kenna Action”), was filed in the U.S. District Court for the Southern District of New York. The parties filed a joint stipulation to stay the action, which the court granted on October 17, 2019. On April 20, 2020, the plaintiff filed an amended complaint. The Kenna Action asserts claims under Sections 10(b), 14(a), and 21D of the Exchange Act and for breaches of fiduciary duty and unjust enrichment based on allegations substantially similar to the Actions and the Gantulga Action. The action remains stayed.

On March 20, 2020, a stockholder derivative complaint, captioned Manuel v. Aron, et al., Case No. 1:20-cv-02456-AJN (the “Manuel Action”), was filed in the U.S. District Court for the Southern District of New York. The Manuel Action asserts claims under Sections 10(b), 21D, and 29(b) of the Exchange Act and for breaches of fiduciary duty based on allegations substantially similar to the Actions, the Gantulga Action, and the Kenna Action. The parties filed a joint stipulation to stay the action, which the court granted on May 18, 2020.

On April 7, 2020, a stockholder derivative complaint, captioned Dinkevich v. Aron, et al., Case No. 1:20-cv-02870-AJN (the “Dinkevich Action”), was filed in the U.S. District Court for the Southern District of New York. The Dinkevich Action asserts the same claims as the Manuel Action based on allegations substantially similar to the Actions, the Gantulga Action, the Kenna Action, and the Manuel Action. The parties ~~have~~ filed a joint stipulation to stay the ~~action.~~

~~On February 3, 2020, the Company received a books and records demand pursuant to 8~~ ~~Del. C.~~ ~~§ 220, seeking to investigate the conduct challenged in the Actions. AMC rejected the demand~~action, which was granted on ~~February 10,~~June 25, 2020.

On December 31, 2019, the Company received a stockholder litigation demand, requesting that the ~~Company’s board of directors~~Board investigate the allegations in the Actions and pursue claims on the Company’s behalf based on those allegations. On May 5, 2020, the Board determined not to pursue the claims sought in the demand at this time.

On July 15, 2020, the Company received a second stockholder litigation demand requesting substantially the same action as the stockholder demand it received on December 31, 2019. On September 23, 2020, the Board determined not to pursue the claims sought in the demand at this time.

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, Wanda, two of Wanda’s affiliates, Silver Lake, and one of Silver Lake’s affiliates in the Delaware Court of Chancery. The Lao Action asserts claims directly, on behalf of a putative class of Company stockholders, and derivatively, on behalf of the Company, for breaches of fiduciary duty and aiding and abetting breaches of fiduciary duty with respect to transactions that the Company entered into with affiliates of Wanda and Silver Lake on September 14, 2018, and the special cash dividend of $1.55 per share of common stock that was payable on September 28, 2018 to the Company’s stockholders of record as of September 25, 2018. On July 18, 2019, the Company’s Board of Directors formed a Special Litigation Committee to investigate and evaluate the claims and allegations asserted in the Lao Action and make a determination as to how the Company should proceed with respect to the Lao Action. On ~~October 25, 2019, the court granted a motion to stay the action for six months to allow~~January 8, 2021, the Special Litigation Committee ~~to complete its investigation. On March 17, 2020,~~filed a report with the court ~~extended~~recommending that the ~~stay until August 7, 2020.~~court dismiss all of the claims asserted in the Lao Action, and moved to dismiss all of the claims in the Lao Action. The court has not yet ruled on the Special Litigation Committee’s motion to dismiss.

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. During the three months ended March 31, 2021 and March 31, 2020, the Company recorded ~~$5.3 million in~~ estimated credit losses (income) related to the contingent lease guarantees of $(2.0) million and $5.3 million, respectively, in other ~~expense.~~expense (income). The Company applied a probability weighted approach for the estimation of credit loss reserve for contingent lease guarantees expected to be funded over the lease term using the discounted cash flow method. ~~See Note 1~~—~~Basis of Presentation for further information regarding~~At March 31, 2021 and December 31, 2020, the ~~adoption of ASU 2016-13.~~

contingent lease liabilities recorded in other long-term liabilities was $11.2 million and $30.2 million, respectively.

2732

Table of Contents

NOTE 12—LOSS PER SHARE

Basic ~~net~~ loss per share is computed by dividing net loss by the weighted-average number of common shares outstanding. Diluted loss per share includes the effects of potential dilutive shares from the conversion feature of the Convertible Notes, ~~due 2024,~~ if dilutive.

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


					Three Months Ended
	Three Months Ended				March 31,		March 31,
(In millions)	March 31, 2020		March 31, 2019		2021		2020
Numerator:
Net loss for basic loss per share	$	(2,176.3)	$	(130.2)
Net loss for diluted loss per share	$	(2,176.3)	$	(130.2)
Net loss for basic loss per share attributable to AMC Entertainment Holdings, Inc.					$	(566.9)	$	(2,176.3)
Net loss for diluted loss per share attributable to AMC Entertainment Holdings, Inc.					$	(566.9)	$	(2,176.3)

Denominator (shares in thousands):
Weighted average shares for basic loss per common share		104,245		103,783		400,111		104,245
Weighted average shares for diluted loss per common share		104,245		103,783		400,111		104,245
Basic loss per common share	$	(20.88)	$	(1.25)	$	(1.42)	$	(20.88)
Diluted loss per common share	$	(20.88)	$	(1.25)	$	(1.42)	$	(20.88)

Vested RSUs, PSUs, and ~~PSU’s~~SPSUs 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. For the three months ended March 31, ~~2020~~2021 and March 31, ~~2019,~~2020, unvested ~~RSU’s~~RSUs of ~~2,210,736~~3,812,964 and ~~43,073,~~2,210,736, respectively, were not included in the computation of diluted loss per share because they would be anti-dilutive.

Unvested PSUs and SPSUs are subject to performance and market conditions, respectively, and are included in diluted earnings per share, if dilutive, based on the number of shares, if any, that would be issuable under the terms of the Company’s 2013 Equity Incentive Plan if the end of the reporting period were the end of the contingency period. Unvested PSUs of ~~793,932~~2,161,337 and ~~504,253~~793,932 at 100% performance ~~target~~targets for the three months ended March 31, ~~2020~~2021 and March 31, ~~2019,~~2020, respectively, and unvested SPSUs of 1,156,656 and 595,003 at the minimum market condition for ~~the~~ three months ended March 31, 2021 and March 31, 2020, respectively, were not included in the computation of diluted loss per share because they would not be issuable if the end of the reporting period were the end of the contingency ~~period.~~period or they would be anti-dilutive.

~~The~~On January 29, 2021, the $600.0 million principal amount of the Company’s Convertible Notes due 2026 were converted into the Company’s Class A common stock at a conversion price of $13.51 per share and resulted in the issuance of 44,422,860 shares. For the three months ended March 31, 2020, the Company ~~uses~~used the if-converted method for calculating any potential dilutive effect of the Convertible Notes due ~~2024 that were issued on September 14, 2018.~~2026. For the three months ended March 31, 2020, ~~and March 31, 2019,~~ the Company has not adjusted net loss to eliminate the interest expense of $8.3 million and ~~$8.0 million, respectively, and also~~ the ~~(gain)/loss~~other expense for the derivative liability related to the Convertible Notes due ~~2024~~2026 of $(0.5) million ~~and $13.3 million, respectively,~~ in the computation of diluted loss per share because the effects would be anti-dilutive. For the three months ended March 31, 2020, ~~and March 31, 2019,~~ the Company has not included in diluted weighted average shares approximately 31.7 million shares issuable upon conversion ~~in both periods~~ as the effects would be anti-dilutive. ~~Based on~~

NOTE 13—SUBSEQUENT EVENT

Additional equity financing. On April 27, 2021, the ~~current conversion price~~Company’s Board determined not to seek stockholder approval of ~~$18.95 per share~~ the ~~Convertible Notes due 2024 are convertible into 31,662,269~~proposal to approve an amendment to the Company’s Third Amended and Restated Certificate of Incorporation to increase the total number of shares of Class A common ~~shares.~~

~~Table~~stock (par value $0.01 per share) the Company shall have the authority to issue by 500,000,000 shares to a total of ~~Contents~~

~~NOTE 13—CONDENSED CONSOLIDATING FINANCIAL INFORMATION~~

1,024,173,073 shares of Class A common stock, and has withdrawn Proposal 1 from the agenda for the Annual Meeting. The ~~accompanying condensed consolidating financial information has been prepared and presented pursuant~~Board reserves the right to ~~SEC Regulation S-X Rule 3-10, Financial statements of guarantors and issuers of guaranteed securities registered or being registered. Each~~propose an amendment of the ~~subsidiary guarantors are 100% owned by Holdings. The subsidiary guarantees~~Certificate of Incorporation to increase the ~~Company’s~~authorized shares or for other items at any point in the Convertible Notes due 2024, 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.future. The Company plans to pursue equity issuances for its remaining authorized shares

On April 27, 2021, the Company entered into an equity distribution agreement with Goldman Sachs & Co. LLC, B. Riley Securities, Inc. and ~~its subsidiary guarantors’ investments in its consolidated subsidiaries are presented under the equity method~~Citigroup Global Markets Inc. as sales agents, to sell up to 43 million shares of ~~accounting.~~

The condensed consolidating information for the guarantors/non-guarantors has been retrospectively revised based on the structure that exists as of March 31, 2020 and reflecting changes as a result of the Sixth Amendment to the Senior Secured Credit Facility.

~~Condensed Consolidating Statement of Operations~~

~~Three Months Ended March 31, 2020:~~

Subsidiary

Subsidiary

Consolidating

Consolidated
(In millions)

Holdings

Guarantors

Non-Guarantors

Adjustments

Holdings
Revenues










Admissions

$
—

$
389.1

$
178.9

$
—

$
568.0
Food and beverage

—

216.6

71.5

—

288.1
Other theatre

—

55.6

29.8

—

85.4
Total revenues

—

661.3

280.2

—

941.5
Operating costs and expenses

Film exhibition costs

—

198.9

72.8

—

271.7
Food and beverage costs

—

34.9

18.5

—

53.4
Operating expense, excluding depreciation and amortization

—

251.9

105.0

—

356.9
Rent

—

174.4

63.4

—

237.8
General and administrative:

Merger, acquisition and other costs

—

0.3

(0.1)

—

0.2
Other, excluding depreciation and amortization

—

17.3

15.9

—

33.2
Depreciation and amortization

—

92.4

30.1

—

122.5
Impairment of long-lived assets, indefinite-lived intangible assets and goodwill

—

1,214.3

637.6

—

1,851.9
Operating costs and expenses

—

1,984.4

943.2

—

2,927.6
Operating loss

—

(1,323.1)

(663.0)

—

(1,986.1)
Other expense (income):

Equity in net loss of subsidiaries

2,158.2

744.2

—

(2,902.4)

—
Other expense

20.2

5.3

1.4

—

26.9
Interest expense:

Corporate borrowings

70.7

71.0

0.8

(71.2)

71.3
Financing lease obligations

—

0.4

1.2

—

1.6
Non-cash NCM exhibitor service agreement

—

9.9

—

—

9.9
Intercompany interest expense

—

—

6.0

(6.0)

—
Equity in loss of non-consolidated entities

—

1.9

1.0

—

2.9
Investment expense (income)

(72.8)

5.3

(0.3)

77.2

9.4
Total other expense, net

2,176.3

838.0

10.1

(2,902.4)

122.0
Loss before income taxes

(2,176.3)

(2,161.1)

(673.1)

2,902.4

(2,108.1)
Income tax provision (benefit)

—

(2.9)

71.1

—

68.2
Net loss

$
(2,176.3)

$
(2,158.2)

$
(744.2)

$
2,902.4

$
(2,176.3)

~~Table of Contents~~

~~Condensed Consolidating Statement of Operations~~

~~Three Months Ended March 31, 2019:~~

Subsidiary

Subsidiary

Consolidating

Consolidated
(In millions)

Holdings

Guarantors

Non-Guarantors

Adjustments

Holdings
Revenues















Admissions

$
—

$
515.4

$
216.1

$
—

$
731.5
Food and beverage

—

287.6

81.2

—

368.8
Other theatre

—

64.2

35.9

—

100.1
Total revenues

—

867.2

333.2

—

1,200.4
Operating costs and expenses

Film exhibition costs

—

277.3

88.0

—

365.3
Food and beverage costs

—

43.0

18.5

—

61.5
Operating expense, excluding depreciation and amortization

—

285.6

117.2

—

402.8
Rent

—

176.6

65.4

—

242.0
General and administrative:

Merger, acquisition and other costs

—

1.2

2.1

—

3.3
Other, excluding depreciation and amortization

—

27.5

18.7

—

46.2
Depreciation and amortization

—

83.6

29.4

—

113.0
Operating costs and expenses

—

894.8

339.3

—

1,234.1
Operating loss

—

(27.6)

(6.1)

—

(33.7)
Other expense (income):

Equity in net loss of subsidiaries

294.7

196.9

—

(491.6)

—
Other expense

28.9

0.5

0.4

—

29.8
Interest expense:

Corporate borrowings

70.8

71.0

0.7

(71.2)

71.3
Finance lease obligations

—

0.7

1.4

—

2.1
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

(264.2)

(9.6)

(11.0)

268.7

(16.1)
Total other expense

130.2

263.6

188.6

(491.6)

90.8
Loss before income taxes

(130.2)

(291.2)

(194.7)

491.6

(124.5)
Income tax provision

—

3.5

2.2

—

5.7
Net loss

$
(130.2)

$
(294.7)

$
(196.9)

$
491.6

$
(130.2)

~~Table of Contents~~

~~Condensed Consolidating Statement of Comprehensive Loss~~

~~Three Months Ended March 31, 2020:~~

Subsidiary

Subsidiary

Consolidating

Consolidated

(In millions)

Holdings

Guarantors

Non-Guarantors

Adjustments

Holdings

Net loss

$
(2,176.3)

$
(2,158.2)

$
(744.2)

$
2,902.4

$
(2,176.3)

Other comprehensive loss:

Equity in other comprehensive loss of subsidiaries

(93.5)

(108.6)

—

202.1

—

Unrealized foreign currency translation adjustments, net of tax

—

15.1

(108.7)

—

(93.6)

Pension adjustments:

Realized net loss reclassified into other expense, net of tax

—

—

0.1

—

0.1

Other comprehensive loss

(93.5)

(93.5)

(108.6)

202.1

(93.5)

Total comprehensive loss

$
(2,269.8)

$
(2,251.7)

$
(852.8)

$
3,104.5

$
(2,269.8)

~~Condensed Consolidating Statement of Comprehensive Loss~~

~~Three Months Ended March 31, 2019:~~

Subsidiary

Subsidiary

Consolidating

Consolidated

(In millions)

Holdings

Guarantors

Non-Guarantors

Adjustments

Holdings

Net loss

$
(130.2)

$
(294.7)

$
(196.9)

$
491.6

$
(130.2)

Other comprehensive loss:

Equity in other comprehensive loss of subsidiaries

(24.9)

(15.6)

—

40.5

—

Unrealized foreign currency translation adjustments, 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 adjustments:

Realized net loss reclassified into other expense, net of tax

—

—

0.1

—

0.1

Equity method investee's cash flow hedge:

Unrealized net holding loss 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)

$
(212.5)

$
532.1

$
(155.1)

~~Table of Contents~~

~~Condensed Consolidating Balance Sheet~~

~~As of March 31, 2020:~~

Subsidiary

Subsidiary

Consolidating

Consolidated
(In millions)

Holdings

Guarantors

Non-Guarantors

Adjustments

Holdings
Assets















Current assets:

Cash and cash equivalents

$
0.5

$
129.1

$
170.2

$
—

$
299.8
Restricted cash

—

—

10.0

—

10.0
Receivables, net

—

57.6

79.5

(10.3)

126.8
Other current assets

—

82.0

33.2

—

115.2
Total current assets

0.5

268.7

292.9

(10.3)

551.8
Investment in equity of subsidiaries

877.2

996.1

—

(1,873.3)

—
Property, net

—

1,889.2

631.2

—

2,520.4
Operating lease right-of-use assets, net

—

3,402.6

1,199.7

—

4,602.3
Intangible assets, net

—

121.7

53.4

—

175.1
Intercompany advances

3,002.5

(2,623.7)

(378.8)

—

—
Goodwill

(2.1)

1,949.8

990.3

—

2,938.0
Deferred tax asset, net

—

—

0.5

—

0.5
Other long-term assets

26.8

310.8

112.6

—

450.2
Total assets

$
3,904.9

$
6,315.2

$
2,901.8

$
(1,883.6)

$
11,238.3
Liabilities and Stockholders’ Equity

Current liabilities:

Accounts payable

$
—

$
157.2

$
190.3

$
(10.4)

$
337.1
Accrued expenses and other liabilities

47.9

124.8

90.2

0.1

263.0
Deferred revenues and income

—

320.6

79.7

—

400.3
Current maturities of corporate borrowings

20.0

—

—

—

20.0
Current maturities of finance lease liabilities

—

5.3

4.9

—

10.2
Current maturities of operating lease liabilities

—

453.2

128.3

—

581.5
Total current liabilities

67.9

1,061.1

493.4

(10.3)

1,612.1
Corporate borrowings

4,911.0

—

109.8

—

5,020.8
Finance lease liabilities

—

12.7

72.3

—

85.0
Operating lease liabilities

—

3,621.1

1,163.2

—

4,784.3
Exhibitor services agreement

—

550.4

—

—

550.4
Deferred tax liability, net

—

27.6

20.1

—

47.7
Other long-term liabilities

—

165.1

46.9

—

212.0
Total liabilities

4,978.9

5,438.0

1,905.7

(10.3)

12,312.3
Stockholders’ equity (deficit)

(1,074.0)

877.2

996.1

(1,873.3)

(1,074.0)
Total liabilities and stockholders’ equity

$
3,904.9

$
6,315.2

$
2,901.8

$
(1,883.6)

$
11,238.3

~~Table of Contents~~

~~Condensed Consolidating Balance Sheet~~

~~As of December 31, 2019:~~

Subsidiary

Subsidiary

Consolidating

Consolidated
(In millions)

Holdings

Guarantors

Non-Guarantors

Adjustments

Holdings
Assets















Current assets:

Cash and cash equivalents

$
0.3

$
94.9

$
169.8

$
—

$
265.0
Restricted cash

—

—

10.5

—

10.5
Receivables, net

—

160.1

104.0

(9.9)

254.2
Other current assets

—

108.5

34.9

—

143.4
Total current assets

0.3

363.5

319.2

(9.9)

673.1
Investment in equity of subsidiaries

452.6

1,962.8

—

(2,415.4)

—
Property, net

—

1,969.3

679.9

—

2,649.2
Operating lease right-of-use assets, net

—

3,491.8

1,304.2

—

4,796.0
Intangible assets, net

—

130.6

64.7

—

195.3
Intercompany advances

5,488.0

(5,097.7)

(390.3)

—

—
Goodwill

(2.1)

3,074.7

1,716.5

—

4,789.1
Deferred tax asset, net

—

—

70.1

—

70.1
Other long-term assets

47.4

328.0

127.6

—

503.0
Total assets

$
5,986.2

$
6,223.0

$
3,891.9

$
(2,425.3)

$
13,675.8
Liabilities and Stockholders’ Equity

Current liabilities:

Accounts payable

$
—

$
382.8

$
170.5

$
(10.0)

$
543.3
Accrued expenses and other liabilities

18.6

184.0

121.9

0.1

324.6
Deferred revenues and income

—

348.9

100.3

—

449.2
Current maturities of corporate borrowings

20.0

—

—

—

20.0
Current maturities of finance lease liabilities

—

5.3

5.0

—

10.3
Current maturities of operating lease liabilities

—

449.5

136.3

—

585.8
Total current liabilities

38.6

1,370.5

534.0

(9.9)

1,933.2
Corporate borrowings

4,733.4

—

—

—

4,733.4
Finance lease obligations

—

13.9

75.7

—

89.6
Operating lease liabilities

—

3,666.8

1,247.0

—

4,913.8
Exhibitor services agreement

—

549.7

—

—

549.7
Deferred tax liability, net

—

26.8

19.2

—

46.0
Other long-term liabilities

—

142.7

53.2

—

195.9
Total liabilities

4,772.0

5,770.4

1,929.1

(9.9)

12,461.6
Stockholders’ equity

1,214.2

452.6

1,962.8

(2,415.4)

1,214.2
Total liabilities and stockholders’ equity

$
5,986.2

$
6,223.0

$
3,891.9

$
(2,425.3)

$
13,675.8

Class

Table of Contents

~~Condensed Consolidating Statement of Cash Flows~~

~~Three Months Ended March 31, 2020:~~

Subsidiary

Subsidiary

Consolidating

Consolidated
(In millions)

Holdings

Guarantors

Non-Guarantors

Adjustments

Holdings
Cash flows from operating activities:















Net cash provided by (used in) operating activities

$
35.2

$
(259.6)

$
40.4

$
—

$
(184.0)
Cash flows from investing activities:

Capital expenditures

—

(56.9)

(34.8)

—

(91.7)
Proceeds from disposition of long-term assets

—

3.1

0.3

—

3.4
Other, net

—

0.9

—

—

0.9
Net cash used in investing activities

—

(52.9)

(34.5)

—

(87.4)
Cash flows from financing activities:

Borrowings under revolving credit facilities

215.0

—

110.1

—

325.1
Scheduled principal payments under Term Loans

(5.0)

—

—

—

(5.0)
Principal payments under finance lease obligations

—

(1.3)

(1.0)

—

(2.3)
Cash used to pay deferred financing costs

(0.1)

—

—

—

(0.1)
Cash used to pay dividends

(4.3)

—

—

—

(4.3)
Taxes paid for restricted unit withholdings

(1.0)

—

—

—

(1.0)
Change in intercompany advances

(201.5)

308.7

(107.2)

—

—
Net cash provided by financing activities

3.1

307.4

1.9

—

312.4
Effect of exchange rate changes on cash and cash equivalents and restricted cash

(38.1)

39.3

(7.9)

—

(6.7)
Net increase (decrease) in cash and cash equivalents and restricted cash

0.2

34.2

(0.1)

—

34.3
Cash and cash equivalents and restricted cash at beginning of period

0.3

94.9

180.3

—

275.5
Cash and cash equivalents and restricted cash at end of period

$
0.5

$
129.1

$
180.2

$
—

$
309.8

~~Table of Contents~~

~~Condensed Consolidating Statement of Cash Flows~~

~~Three Months Ended March 31, 2019:~~

Subsidiary

Subsidiary

Consolidating

Consolidated
(In millions)

Holdings
Guarantors

Non-Guarantors

Adjustments

Holdings
Cash flows from operating activities:















Net cash provided by (used in) operating activities

$
228.0

$
(231.3)

$
4.7

$
—

$
1.4
Cash flows from investing activities:

Capital expenditures

—

(75.6)

(39.2)

—

(114.8)
Proceeds from disposition of long-term assets

—

3.9

13.4

—

17.3
Investments in non-consolidated entities, net

—

(0.1)

—

—

(0.1)
Other, net

—

(0.9)

—

—

(0.9)
Net cash used in investing activities

—

(72.7)

(25.8)

—

(98.5)
Cash flows from financing activities:

Repayments under revolving credit facilities

—

—

(3.8)

—

(3.8)
Scheduled principal payments under Term Loans

(3.4)

—

—

—

(3.4)
Principal payments under finance lease obligations

—

(2.5)

(1.3)

—

(3.8)
Cash used to pay dividends

(21.8)

—

—

—

(21.8)
Taxes paid for restricted unit withholdings

(1.1)

—

—

—

(1.1)
Change in intercompany advances

(219.6)

242.9

(23.3)

—

—
Net cash provided by (used in) financing activities

(245.9)

240.4

(28.4)

—

(33.9)
Effect of exchange rate changes on cash and cash equivalents and restricted cash

17.9

(17.6)

1.9

—

2.2
Net decrease in cash and cash equivalents and restricted cash

—

(81.2)

(47.6)

—

(128.8)
Cash and cash equivalents and restricted cash at beginning of period

0.3

177.7

146.0

—

324.0
Cash and cash equivalents and restricted cash at end of period

$
0.3

$
96.5

$
98.4

$
—

$
195.2

~~NOTE 14—SUBSEQUENT EVENTS~~

~~Credit Facility Amendments.~~ ~~On April 23, 2020,~~A common stock, par value $0.01 per share, through an “at-the-market” offering program for its remaining authorized shares. The Company intends to use the ~~Company entered into an amendment to~~net proceeds from the ~~Senior Secured Credit Facility pursuant to which the requisite lenders thereunder granted a waiver~~sale of the ~~maintenance covenant thereunder~~Class A common stock for general corporate purposes, which may include working capital, the ~~period from~~repayment, refinancing, redemption or repurchase of existing indebtedness, capital expenditures and ~~after the effective date of the Senior Secured Credit Agreement Amendment to~~other investments. The Class A common stock is offered and including the earlier of (a) March 31, 2021 and (b) the day immediately preceding the last day of the Test Period (as defined in the Senior Secured Credit Facility). In addition, on April 24, 2020, Odeon Cinemas Group Limited entered into an amendment to the Odeon Revolving Credit Facility,sold pursuant to the requisite lenders thereunder granted a waiver of the maintenance covenant thereunder for the period from and after the effective date of the Odeon Amendment to and including the earlier of (a) March 31, 2021 and (b) the day immediately preceding the last day of the Relevant Period (as defined in the Odeon Amendment).

~~First Lien Notes due 2025.~~ On April 24, 2020, the Company issued $500.0 million aggregate principal amount of its 10.5% first lien notes due 2025 (the “First Lien Notes due 2025”), pursuant to an indenture, dated as of April 24, 2020 (the “Indenture”), with an original issue discount of $10.0 million. The First Lien Notes due 2025 bear interest at a rate of 10.5% per annum, payable semi-annuallyCompany’s shelf registration statement on Form S-3 filed on April ~~15 and October 15 each year, commencing October 15, 2020 and are secured, on a pari passu basis~~27, 2021 with the ~~Senior Secured Credit Facility. The First Lien Notes due 2025 will mature on April 15, 2025.~~

Securities and Exchange Commission (the “SEC”). The Company ~~may redeem some or all of the First Lien Notes due 2025 at any time on or after~~filed a prospectus supplement, dated April 15, 2022, at the redemption prices set forth in the Indenture. In addition, the Company may redeem up to 35% of the aggregate principal amount of the First Lien Notes due 2025 using net proceeds from certain equity offerings on or prior to April 15, 2022 at a redemption price equal to 110.5% of their aggregate principal amount and accrued and unpaid interest to, but not including, the date of redemption. The Company may redeem some or all of the First Lien Notes due 2025 at

~~Table of Contents~~

any time prior to April 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. In addition, the Company may, at any time prior to 120 days after the issue date, redeem up to 35% of the aggregate principal amount of the First Lien Notes due 2025 using net proceeds of any loan received pursuant to a Regulatory Debt Facility (as defined in the Indenture) at a redemption price equal to 105.25% of their aggregate principal amount and accrued and unpaid interest to, but not including, the date of redemption.

The Indenture contains covenants that limit the Company’s ability to, among other things: (i) incur additional indebtedness, including additional senior indebtedness; (ii) pay dividends on or make other distributions in respect of its capital stock; (iii) purchase or redeem capital stock or prepay subordinated debt or other junior securities; (iv) create liens ranking pari passu in right of payment with or subordinated in right of payment to First Lien Notes due 2025; (v) enter into certain transactions with its affiliates; and (vi) merge or consolidate with other companies or transfer all or substantially all of its assets. These covenants are subject to a number of important limitations and exceptions. The Indenture also provides for events of default, which, if any of them occurs, would permit or require the principal, premium, if any, interest and any other monetary obligations on all the then outstanding First Lien Notes due 2025 to be due and payable immediately.

~~On April 24, 2020, the Company entered into a supplemental indenture (the “Supplemental Indenture”)~~27, 2021, to the ~~Convertible Notes due 2024 indenture,~~prospectus, dated ~~as of September 14, 2018. The Supplemental Indenture amended~~April 27, 2021, with the ~~debt covenant under the Convertible Notes Indenture to permit the Company to issue the First Lien Notes due 2025, among other changes.~~

~~Senior Subordinated Debt Exchange Offer.~~On June 3, 2020, the Company announced that it has commenced private offers to exchange (the “Exchange Offers”) its outstanding 6.375% Senior Subordinated Notes due 2024, 5.75% Senior Subordinated Notes due 2025, 5.875% Senior Subordinated Notes due 2026 and 6.125% Senior Subordinated Notes due 2027 (and, together the “Existing Subordinated Notes”) for newly issued ~~12% Cash/PIK Second Lien Secured Notes due 2026~~ ~~(the “New Notes”). In~~SEC in connection with the ~~Exchange Offers,~~offer and sale of the Class A common stock. As of the trade date of May 5, 2021, the Company ~~is also soliciting consents (the “Consent Solicitations”) from eligible holders~~raised gross proceeds related to this equity distribution agreement of ~~the Existing Subordinated Notes to amend the indentures governing the Existing Subordinated Notes to eliminate or modify certain~~approximately $153 million through its at-the-market offering of ~~the covenants, restrictive provisions~~approximately 15.5 million shares of its Class A common stock and ~~events of default and to remove the existing subsidiary guarantees of the Existing Subordinated Notes. The Exchange Offers and Consent Solicitations are being made upon the terms and subject~~paid fees to the ~~conditions set forth in the offering memorandum, dated June 3, 2020.~~

The Exchange Offers will only be made (i) to qualified institutional buyers in the United States pursuant to Rule 144A (ii) outside the United States pursuant to Regulation S under the Securities Act and (iii) to institutions that can provide certificationssales agents and other ~~documentation satisfactory to the Company that they are institutional “accredited investors” as defined in subparagraphs (a)(1), (2), (3) or (7)~~fees of Rule 501 under the Securities Act. The New Notes have not been registered under the Securities Act or any securities laws of any jurisdiction, and may not be offered or sold within the United States or to U.S. persons (as such terms are defined under the Securities Act). The Exchange Offers are not being made to persons in any jurisdiction in which the making or acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction.

The aggregate maximum principal amount of New Notes to be issued in the Exchange Offers is limited to $640 million (subject to increase by the Company, the “New Notes Cap”). Notwithstanding the foregoing, if the consents from holders of a majority of each series of Existing Subordinated Notes are obtained in each of the Consent Solicitations, then the aggregate principal amount of New Notes to be issued in the Exchange Offers will not be subject to the New Notes Cap and any and all Existing Subordinated Notes validly tendered (and not validly withdrawn) will be accepted for exchange. The New Notes will be fully and unconditionally guaranteed on a joint and several basis by each of the Company’s subsidiaries that guarantee its obligations under the Company’s senior credit facilities (the “Senior Credit Facilities”) and will be secured by a second-priority lien on substantially all of the tangible and intangible assets owned by the Company and the guarantor subsidiaries that secure obligations under the Senior Credit Facilities (the “Collateral”). In the event that consents from holders of a majority of each series of Existing Subordinated Notes are received in each of the Consent Solicitations, the New Notes will be subordinated in right of payment to all indebtedness of the Company that is secured by a first-priority lien on the Collateral.approximately $3.8 million.

~~Table of Contents~~

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. Examples of forward-looking statements include statements we make regarding the impact of COVID-19, future attendance levels and our liquidity. 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 and speak only as of the date on which it is made. 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:

●

The risks and uncertainties relating to the sufficiency of our existing cash and cash equivalents and available borrowing capacity to comply with minimum liquidity requirements under our debt covenants, fund operations, and satisfy obligations including cash outflows for increased rent and planned capital expenditures currently and through early May of 2022. This requires that we achieve significant increases in attendance levels beginning in the third quarter of 2021 and ultimately reaching approximately 85% of pre COVID-19 attendance levels by the fourth quarter of 2021 and through the first and second quarters of 2022 as the vaccine rollout continues and more Hollywood product is released in our theatres. If we are unable to achieve more normalized levels of attendance and operating revenues as described above, we may be required to obtain additional liquidity. If such additional liquidity were not realized or insufficient we likely would seek an in-court or out-of-court restructuring of our liabilities, and in the event of such future liquidation or bankruptcy proceeding, holders of our common stock and other securities would likely suffer a total loss of their investment;

●

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

●

~~the manner, timing~~risks and ~~amount of benefit we receive under the Coronavirus Aid, Relief,~~uncertainties relating to our significant indebtedness, including our borrowings and ~~Economic Security Act (the “CARES Act”) or~~our ability to meet our financial maintenance and other ~~applicable governmental benefits and support for which we are eligible domestically and internationally;~~covenants;

●

shrinking exclusive theatrical release windows;

●

certain covenants in the agreements that govern our indebtedness may limit our ability to take advantage of certain business opportunities and limit or restrict our ability to pay dividends;

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●

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

●

risks relating to motion picture production and performance;

●

our lack of control over distributors of films;

●

intense competition in the geographic areas in which we operate;

●

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

●

~~shrinking exclusive theatrical release windows;~~

●

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

●

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

●

~~risks and uncertainties relating to our significant indebtedness, including our borrowing capacity under our revolving credit agreements;~~

●

~~our ability to execute cost cutting and revenue enhancement initiatives as previously disclosed and in connection with response to COVID-19;~~

●

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

~~Table of Contents~~

●

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

●

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

●

our ability to refinance our indebtedness on terms favorable to ~~us;~~us or at all;

●

~~optimizing~~our ability to optimize our theatre circuit through new construction, ~~and~~ the transformation of our existing theatres, and strategically closing underperforming theatres may be subject to delay and unanticipated costs;

●

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

●

failures, unavailability or security breaches of our information systems;

●

our ability to utilize interest expense deductions may be limited annually due to Section 163(j) of the Tax Cuts and Jobs Act of 2017;

●

our ability to recognize interest deduction carryforwards, ~~and~~ net operating loss carryforwards and other tax attributes to reduce our future tax liability;

●

our ability to recognize certain international deferred tax assets which currently do not have a valuation allowance recorded;

●

impact of the elimination of the calculation of USD LIBOR rates on our contracts indexed to USD LIBOR:

●

review by antitrust authorities in connection with acquisition opportunities;

●

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

●

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;

●

~~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;~~

●

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

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●

the dilution caused by recent and future sales of our Class A common stock could adversely affect the market price of the Class A common stock;

●

the market price and trading volume of our shares of Class A common stock has been and may continue to be volatile, and purchasers of our securities could incur substantial losses;

●

future offerings of debt, which would be senior to our Class A common stock for purposes of distributions or upon liquidation, could adversely affect the market price of our Class a common stock;

●

geopolitical events, including the threat of terrorism or cyber-attacks, or widespread health emergencies, such as the novel coronavirus or other pandemics or epidemics, causing people to avoid our theatres or other public places where large crowds are in attendance;

●

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

●

an issuance of preferred stock could dilute the ~~ability to obtain suitable equity and/or debt financing~~voting power of the common stockholders and adversely affect the ~~continued availability~~market value of ~~financing, in the amounts and on the terms necessary to support~~ our ~~future refinancing requirements and business;~~Class A common stock; and

●

other risks referenced from time to time in filings with the SEC.

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.~~uncertainty and we caution accordingly against relying on forward-looking statements.

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” of~~

~~Table of Contents~~

~~Part II of this Form 10-Q and Item 1A. “Risk~~ Factors,” and Item 1. “Business” in our Annual Report on Form 10–K for the year ended December 31, ~~2019,~~2020, 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.

Temporarily Suspended or Limited Operations

~~As of~~On or before March 17, 2020, we temporarily suspended all theatre operations in our U.S. markets and International markets in compliance with local, state, and federal governmental restrictions and recommendations on social gatherings to prevent the spread of COVID-19 and as a precaution to help ensure the health and safety of our guests and theatre staff. We resumed limited operations in the International markets in early June 2020 and limited operations in the U.S. markets in late August 2020. A COVID-19 resurgence during the fourth quarter of 2020 resulted in additional local, state, and federal governmental restrictions and many previously reopened theatres in International markets temporarily suspended operations again. As a result of these temporarily suspended or limited operations, our revenues and expenses for the three months ended March 31, ~~2020~~2021 are significantly lower than ~~our~~the revenues and expenses for the three months ended March 31, ~~2019. We will continue~~2020.

As of January 1, 2021, we were operating at 394 domestic theatres with limited seating capacities, representing approximately 67% of our domestic theatres. During the first quarter ended March 31, 2021, in response to ~~monitor this situation closely and remain flexible on commencing operating our theatres in accordance with the Centers for Disease Control and Prevention and federal,~~eased restrictions by state and local ~~governmental directives~~governments, we resumed operations in key markets such as New York and ~~recommendations.~~Los Angeles. As of March 31, 2021, we were operating at 585 domestic theatres with limited seating capacities, representing approximately 99% of our domestic theatres. As of January 1, 2021, we were operating at 109 International leased and partnership theatres, with limited seating capacities, representing approximately 30% of our International theatres. As of March 31, 2021, we were operating at 97 International theatres with limited seating capacities, representing approximately 27% of our International theatres. Our average screens operated during the three months ended March

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31, 2021 declined by 24.2% from the prior year.

Overview

AMC is the world’s largest theatrical exhibition company and an industry leader in innovation and operational excellence. We operate theatres in 1513 countries, including the U.S., Europe and ~~are the market leader in nine of those.~~Saudi Arabia.

Our theatrical exhibition revenues are generated primarily from box office admissions and theatre food and beverage sales. The balance of our revenues ~~are~~is generated from ancillary sources, including on-screen advertising, fees earned from our AMC ~~Stubs~~^®Stubs® customer ~~frequency membership~~loyalty program, rental of theatre auditoriums, income from gift card and exchange ticket sales, and online ticketing ~~fees and arcade games located in theatre lobbies.~~fees. As of March 31, ~~2020,~~2021, we owned, operated or had interests in ~~996~~945 theatres and ~~10,973~~10,518 screens.

Box Office Admissions and Film Content

Box office admissions are our largest source of revenue. We predominantly license “first-run” films from distributors owned by major film production companies and from independent distributors on a film-by-film and theatre-by-theatre basis. Film exhibition costs are accrued based on the applicable admissions revenues and estimates of the final settlement pursuant to our film licenses. ~~Licenses that we enter into~~These licenses typically state that rental fees are based on aggregate terms established prior to the opening of the picture. In certain circumstances and less frequently, our rental fees are based on a mutually agreed settlement upon the conclusion of the picture. In ~~certain circumstances and less frequently, our~~some European territories, rental fees are established on a weekly basis for the coming week’s percentage forecast. Some European licenses use a per capita agreement instead, paying a flat amount per ticket, where the sum is agreed in long-term agreements in advance of the film showing. Under an aggregate terms formula, we usually pay the distributor a specified percentage of box office gross or pay based on a scale of percentages tied to different amounts of box office gross, or in Europe, we pay based on the number of weeks since release. The settlement process allows for negotiation based upon how a film actually performs.

The North American and International industry box offices have also been significantly impacted by the COVID-19 pandemic during the three months ended March 31, 2021. As a result, studios have postponed new film releases or moved them to the home video market, and movie release dates may continue to move in the future. Major movie releases that were previously scheduled to be released in 2020 have either been rescheduled for 2021 or slated for direct to streaming or premium video on demand (“PVOD”) in lieu of a theatrical release, which left a reduced slate of movie releases for 2020, and release dates may continue to move. Certain competitors have decided to temporarily reclose their theatres in light of the ongoing pandemic and the reduced slate of movie releases, which may further exacerbate the trend described above. As a result of the reduced slate of first-run movie releases, we have licensed and exhibited a larger number of films that were released in prior years or decades and where the film rental terms are much lower than for first-run movie releases.

The combination of theatre closures, reopening restrictions and limited new film distribution has resulted in a significantly lower industry box office for the three months ended March 31, 2021 compared to the three months ended March 31, 2020. In response to the current low attendance levels, (in addition to any local capacity restrictions) we have made adjustments to theatre operating hours in those markets where we are open to align screen availability and associated theatre operating costs with attendance levels for each theatre. We also introduced AMC Private Screening, which allows moviegoers to reserve a separate AMC Safe & Clean auditorium for a private screening for up to 20 people, starting at $99 plus tax.

During 2020, we entered into an agreement with Universal, a division of Comcast Corporation (NASDAQ:CMCSA), to distribute films utilizing a minimum 17-day theatrical exhibition window, after which time Universal will have the option to make its titles available across PVOD platforms. This multi-year agreement preserves exclusivity for theatrical viewing for at least the first three weekends of a film’s release, during which time a considerable majority of a movie’s theatrical box office revenue typically is generated. AMC will also share in new revenue streams that will come to the movie ecosystem from PVOD.

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 results of operations may vary significantly from quarter to quarter and from year to year based on the timing and popularity of film releases.

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Movie Screens

During the three months ended March 31, 2020, we opened one new theatre with 8 screens, added three additional screens to existing theatres, permanently closed 74 screens, temporarily closed 18 screens to install consumer experience upgrades and reopened 11 screens to install consumer experience upgrades.

~~Table of Contents~~

The following table provides ~~details of~~detail with respect to digital delivery, 3D enabled projection, large screen formats, such as IMAX^® and our ~~theatre~~proprietary Dolby Cinema™, other Premium Large Format (“PLF”) screens, enhanced food and beverage offerings and our premium seating as deployed throughout our circuit ~~by segment~~on March 31, 2021. This data represents available services in a pre-COVID-19 environment. Due to mandated government attendance restrictions, the ability for ~~the periods indicated:~~guests to utilize all these amenities has been significantly curtailed:

U.S. Markets

International Markets


Number of

Number of

Number of

Number of

Screens As of

Screens As of

Screens As of

Screens As of
Format

March 31, 2020

March 31, 2019

March 31, 2020

March 31, 2019
IMAX®

188

188

35

29
Dolby CinemaTM

150

131

5

2
Other Premium Large Format ("PLF")

55

50

71

59
Dine-in theatres

725

635

8

2
Premium seating

3,282

2,970

470

393


	U.S. Markets		International Markets
	Number of	Number of	Number of	Number of
	Screens As of	Screens As of	Screens As of	Screens As of
Format	March 31, 2021	March 31, 2020	March 31, 2021	March 31, 2020
IMAX®	185	188	37	35
Dolby Cinema^TM	153	150	6	5
Other Premium Large Format ("PLF")	55	55	74	71
Dine-in theatres	735	725	8	8
Premium seating	3,339	3,282	531	470

Guest Amenities

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. As part of our long-term strategy, we seek to 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. As discussed above, certain aspects of our long-term strategy, such as growth capital expenditures, with the exception of prior commitments are suspended at this time as a result of the impact of the COVID-19 pandemic on our business. We cannot currently determine when we will be able to resume these aspects of our long-term growth strategy.

Recliner seating is the key feature of theatre ~~renovations, which drive a 34% increase in attendance, on average, at these locations in their first year post renovation.~~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~~upgrading the sight and sound experience, ~~install~~installing modernized points of sale and, most importantly, ~~replace~~replacing traditional theatre seats with plush, electric recliners that allow customers to deploy a leg rest and fully recline at the push of a button. As of December 31, 2019, prior to the COVID-19 pandemic, the quality improvement in the customer experience could drive a 33% increase in attendance, on average, at these locations in their first year post renovation. These increases will only continue post-COVID-19 pandemic if attendance returns to normalized pre-COVID-19 levels. Upon reopening a remodeled theatre, we typically increase the ticket price to reflect the enhanced consumer experience.

As of March 31, ~~2020,~~2021, in our U.S. markets we ~~now feature~~featured recliner seating in approximately ~~343~~345 U.S. theatres, including Dine-in-Theatres, totaling approximately ~~3,282~~3,339 screens and representing ~~40.8%~~43.5% of total U.S. screens. In our International markets, as of March 31, 2021, we ~~have~~had recliner seating in approximately 7483 International theatres, totaling approximately ~~470~~531 screens and representing ~~16.1%~~18.7% of total International screens.

Open-source internet ticketing makes our AMC seats ~~(over~~(approximately 1.1 ~~million)~~million as of March 31, 2021) in all our U.S. theatres and auditoriums, for all our showtimes as available as possible, on as many websites as possible. Our tickets are ~~sold over the internet,~~currently on sale either directly or through mobile apps, at our own website and ~~app,~~mobile apps and other third-party ticketing vendors.

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~~Our deployment initiatives also apply to 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.

~~To address recent consumer trends, we~~enhancements. We 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.~~gourmet products. Our long-term growth strategy calls for investment across a spectrum of enhanced food and beverage formats, ranging from simple, less capital-intensive food and beverage design improvements to the development of new dine-in theatre options. As a result of the COVID-19 pandemic, we have temporarily modified our food and beverage operations to include more simplified concession menus, cashless transactions technology, hand sanitizer and disinfecting wipes, and condiment and drink refills available by request, all in an effort to reduce the number of touch-

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points between guests and employees. We ~~operate 51 Dine-In Theatres~~have also upgraded our Coca Cola Freestyle beverage machines to include a mobile app allowing guests to dispense drinks without the need to utilize the machine’s touch screen.

Our MacGuffins Bar and Lounges (“MacGuffins”) give us an opportunity to engage our legal age customers. As of March 31, 2021, we offer alcohol in approximately 341 AMC theatres in the U.S. markets and ~~two Dine-In Theatres~~243 theatres in ~~Europe that deliver chef-inspired menus with seat-side or delivery service~~our International markets and continue to ~~luxury recliners with tables.~~

explore expansion globally.

Loyalty Programs and Other Marketing

In our U.S. markets, we begin the process of engagement with AMC Stubs® our customer loyalty program which allows members to earn rewards, receive discounts and participate in exclusive members-only offerings and services. It features a traditional paid tier called AMC Stubs Premiere™ for a $15 annual membership fee and a non-paid tier called AMC Stubs Insider™. Both programs reward loyal guests for their patronage of AMC theatres. Rewards earned are redeemable on future purchases at AMC locations.

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. Upon redemption, deferred rewards are ~~recognized~~recorded as revenues along

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with associated cost of goods. We estimate point breakage in assigning value to the points at the time of 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 ~~recognized~~recorded as the rights are redeemed based on estimated utilization, over the one-year membership 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~~recorded as the rights are redeemed or expire.

AMC ~~Stubs~~^®Stubs® A-List is our monthly subscription-based tier of ~~the~~our AMC ~~Stubs~~^®Stubs® loyalty program. This program offers guests admission to movies at AMC up to three times per week including multiple movies per day and repeat visits to already seen movies for $19.95 to $23.95 per month depending upon geographic market. AMC Stubs® A-List also includes premium offerings including IMAX®, Dolby Cinema™ at AMC, RealD, Prime and ~~BigD.~~other proprietary PLF brands. AMC Stubs® A-List members can book tickets on-line in advance and select specific seats at AMC Theatres with reserved seating. Upon the temporary suspension of theatre operations due to the COVID-19 pandemic, all monthly A-List subscription charges were put on hold. As we reopened theatres, A-List members had the option to reactivate their subscription, which restarted the monthly charge for the program.

As of March 31, ~~2020,~~2021, we had more than ~~23,100,000~~23,400,000 member households enrolled in AMC Stubs® A-List, AMC Stubs Premiere™ and AMC Stubs Insider™ programs, combined. Our AMC Stubs® members represented approximately ~~45%~~35% of AMC U.S. markets attendance during the ~~three months~~year ended March 31, ~~2020.~~2021. Our ~~much larger~~large database of identified movie-goers also provides us with additional insight into our customers’ movie preferences. This enables us to have a larger, more personalized and targeted marketing effort. ~~The programs have been paused during the suspension of operations at all of our theatres.~~

In our International markets, we currently have loyalty programs in the major territories in which we operate. The movie-goers can earn points for spending money at the theatre, and those points can be redeemed for tickets and concession items at a later date. ~~Odeon~~We currently ~~has~~have more than ~~8,700,000~~11,400,000 members in ~~these~~our various International loyalty programs. We are currently evaluating the Odeon loyalty programs to determine how best to reward our European movie-goers and heighten guest loyalty to drive additional attendance to Odeon theatres. ~~The programs have been paused during the suspension of operations at all of our theatres.~~

Our marketing efforts are not limited to our loyalty ~~programs~~program as we continue to improve our customer connections through our website and mobile apps and expand our online and movie offerings. ~~In select markets during 2019, we~~We continued to roll out our upgraded ~~our~~ mobile applications across the U.S. circuit with the ability to order food and beverage offerings via our mobile applications while ordering tickets ahead of scheduled showtimes. ~~Also, in 2019, we launched~~Our mobile applications also include AMC Theatres On Demand, a ~~new~~ service ~~where~~for members of the AMC ~~Stubs~~Stubs®^®loyalty program ~~can~~that allows them to rent or buy movies. ~~We believe our competitive advantage of a~~

In response to the COVID-19 pandemic, AMC’s robust ~~and easy-to-use~~ online and mobile ~~presence combined~~platforms in our U.S. markets offer customers the safety and convenience of enhanced social distancing by allowing them to purchase tickets and concession items online, avoid the ticket line, and limit other high-touch interactions with ~~an effective loyalty program that provides better market intelligence to anticipate customers’ future behavior should allow us to capture incremental share~~AMC employees and other guests. Online and mobile platforms are also available in our International markets.

Table of ~~both entertainment dollars and time.~~Contents

Critical Accounting Policies and Estimates

Long-lived ~~Assets Impairments.~~assets impairments. We evaluate indefinite-lived intangible assets for impairment annually or more frequently as specific events or circumstances dictate. We operate in a very competitive business environment and our revenues are highly dependent on movie content supplied by film producers. In addition, it is common for us to closely monitor certain locations where operating performance may not meet our expectations.

We review long-lived assets, including definite-lived intangible assets and theatre assets (including operating lease right-of-use assets) whenever events or changes in circumstances indicate that the carrying amount of the asset group may not be fully recoverable. We identify impairments related to internal use software when management determines that the remaining carrying value of the software will not be realized through future use. We evaluate events or circumstances, including competition in the markets where we operate that would indicate the carrying value of theatre assets may not be fully recoverable. We evaluate theatres using historical and projected data of theatre level cash flow as our primary indicator of potential impairment and consider the seasonality of our business when making these evaluations. If an event or circumstance is identified indicating carrying value may not be recoverable, the sum of future undiscounted cash flows is compared to the carrying value. If carrying value exceeds the future undiscounted cash flows, the carrying value of the asset is reduced to fair value. Assets are evaluated for impairment on an individual theatre basis, which management believes is the lowest level for which there are identifiable cash flows. The fair value of assets is determined as either the expected selling price less selling costs (where appropriate) or the present value of the estimated future cash flows, adjusted as necessary for market participant factors.

We ~~have~~ recorded impairment charges primarily related to long-lived assets and definite lived intangible assets of $106.5 million ~~and $0 million~~ during the three months ended March 31, ~~2020 and~~2020. No impairment charges were recorded during the three months ended March 31, ~~2019, respectively.~~

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2021. There are a number of estimates and significant judgments that are made by management in performing these impairment evaluations. Such judgments and estimates include estimates of future attendance, revenues, rent relief, cost savings, cash flows, capital expenditures, and the cost of capital, among others. Attendance is expected to be significantly below historical levels for the first several months following reopening but is expected to increase as customers become more comfortable with the experience. We believe we have used reasonable and appropriate business judgments. There is considerable management judgment with respect to cash flow estimates and appropriate discount rates to be used in determining fair value, and, accordingly, actual results could vary significantly from such estimates, which fall under Level 3 within the fair value measurement hierarchy. These estimates determine whether impairments have been incurred, and quantify the amount of any related impairment charge. Given the nature of our business and our recent history, future impairments are possible and they may be material, based upon business conditions that are constantly changing and the competitive business environment in which we operate.

During the three months ended March 31, 2020, we recorded non-cash impairment of long-lived assets of $81.4 million on 57 theatres in the U.S. markets with 658 screens (in Alabama, Arkansas, California, District of Columbia, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Michigan, Minnesota, Missouri, Montana, New Hampshire, New Jersey, New York, North Carolina, North Dakota, Ohio, Pennsylvania, South Dakota, Tennessee, Texas, Washington, Wisconsin and Wyoming) and $9.9 million on 23 theatres in the International markets with 213 screens (in Germany, Italy, Spain, UK and Sweden). During the three months ended March 31, 2020, we recorded impairment losses related to definite-lived intangible assets of $8.0 million. In addition, we recorded an impairment loss of $7.2 million within investment expense (income), related to equity interest investments without a readily determinable fair value accounted for under the cost method. No non-cash impairment charges of long-lived assets were recorded during the three months ended March 31, 2021.

During the three months ended March 31, 2020, we performed a quantitative impairment evaluation of our indefinite-lived intangible assets related to the AMC, Odeon and Nordic ~~tradenames~~trade names and recorded impairment charges of $5.9 million related to Odeon ~~tradenames~~trade names and $2.4 million related to Nordic ~~tradenames~~trade names during the three months ended March 31, 2020. To estimate fair value of our indefinite-lived trade names, we employed a derivation of the Income Approach known as the Royalty Savings Method. The Royalty Savings Method values an intangible asset by estimating the royalties saved through ownership of the asset. We applied royalty rates of 0.5% for AMC and Odeon ~~tradenames~~trade names and 1.0% for Nordic to the related theatre revenues on an after-tax basis using effective tax rates. Related cash flows were discounted at 12.5% for AMC and 14.0% for Odeon and Nordic. No impairment charges related to our indefinite-lived trade names were recorded during the three months ended March 31, 2021.

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Goodwill. We evaluate the goodwill recorded at our two reporting units (Domestic Theatres and International Theatres) for impairment annually as of the beginning of the fourth fiscal quarter or more frequently as specific events or circumstances dictate. ~~Our market capitalization has been below carrying value since May 24, 2019.~~

~~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
December 31, 2017

$
15.10
March 31, 2018

14.05
June 30, 2018

15.90
September 30, 2018

20.50
December 31, 2018

12.28
March 31, 2019

14.85
June 30, 2019

9.33
September 30, 2019

10.70
December 31, 2019

7.24
March 31, 2020

3.16

In accordance with ASC 350-20-35-30, we performed an assessment to determine whether there were any events or changes in circumstances that would warrant an interim ASC 350 impairment analysis as of March 31, ~~2020.~~2021. Based on ~~sustained declines during 2020~~increases in our enterprise market capitalization ~~and the temporary suspension of operations at all our theatres on or before~~from December 31, 2020 to March ~~17, 2020 due to the COVID-19 pandemic,~~31, 2021, we performed a qualitative impairment test to evaluate whether it is more likely than not that the fair value of our two reporting units is less than their respective carrying amounts as of March 31, 2021. We concluded that it is not more likely than not that the fair value of our two reporting units have been reduced below their respective carrying amounts. As a result, we concluded that an interim quantitative ~~goodwill~~ impairment test as of March 31, 2020. The impairment test for goodwill involves estimating the fair value of the reporting unit and comparing that value to its carrying value. If the estimated fair value of the reporting unit is less

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~~than its carrying value, the difference is recorded as a goodwill impairment charge,~~2021 was not ~~to exceed the total amount of goodwill allocated to that reporting unit.~~required.

~~In performing~~At March 31, 2020, we performed the Step 1 quantitative goodwill impairment test ~~as of March 31, 2020, we~~and used an enterprise value approach to measure fair value of the reporting units. The enterprise fair values of the Domestic Theatres and International Theatres reporting units were less than their carrying values and a goodwill impairment ~~charge~~charges of $1,124.9 million and $619.4 million, respectively, was recorded as of March 31, 2020 for our Domestic Theatres and International Theatres reporting ~~units, respectively.~~units.

Based on the suspension of operations at all of our theatres on or before March 17, 2020 due to the COVID-19 pandemic during the first quarter of 2020, the suspension of operations during the second and third quarters of 2020, the temporary suspension of operations of certain of our International Theatres during the fourth quarter of 2020 again after operations had previously been resumed, and the further delay or cancellation of film releases than originally estimated, we performed the Step 1 quantitative goodwill impairment test as of December 31, 2020. The ~~following tables reconcile enterprise~~impairment test for goodwill involves estimating the fair value of the reporting unit and comparing that value to our carrying value. If the estimated fair value of the reporting unit is less than our carrying value, the difference is recorded as a goodwill impairment charge, not to ~~carrying~~exceed the total amount of goodwill allocated to that reporting unit. In performing the Step 1 quantitative goodwill impairment test as of December 31, 2020, we used an enterprise value approach to measure fair value of ~~our stockholders’ equity~~the reporting units. The enterprise fair value of the Domestic Theatres and International Theatres reporting units were less than their carrying values as of March 31, 2020 ~~(the date of our quantitative goodwill impairment test) by reporting unit~~ and ~~reconciles estimated enterprise fair value to estimated~~September 30, 2020, and the fair value of ~~our stockholders’ deficit~~the International Theatres reporting unit was less than its fair value as of ~~March~~December 31, ~~2020:~~

Carrying Value

Corporate Borrowings

Carrying Value

Enterprise

and Finance

Stockholders'
(In millions)

Carrying Value

Lease Obligations

Equity (Deficit)
Domestic Theatres

$
2,499.9

$
(4,565.5)

$
(2,065.6)
International Theatres

1,562.0

(570.4)

991.6
Total

$
4,061.9

$
(5,135.9)

$
(1,074.0)

Estimated

Fair Value

Estimated

Estimated

Corporate Borrowings

Fair Value

Enterprise

and Finance

Stockholders'
(In millions)

Fair Value

Lease Obligations

Equity (Deficit)
Domestic Theatres

$
2,499.9

$
(2,649.1)

$
(149.2)
International Theatres

1,562.0

(331.0)

1,231.0
Total

$
4,061.9

$
(2,980.1)

$
1,081.8

Estimated

Estimated Enterprise Fair Value

Enterprise

Enterprise

exceeds Enterprise Carrying Value
(In millions)

Carrying Value

Fair Value

Amount

Percentage
Domestic Theatres

$
2,499.9

$
2,499.9

$
-

-
%
International Theatres

1,562.0

1,562.0

-

-
%
Total

$
4,061.9

$
4,061.9

$
-

-
%

~~We determined~~2020 and goodwill impairment charges of $1,276.1 million and $1,030.3 million, were recorded during the ~~fair value of~~year ended December 31, 2020 for our Domestic Theatres and International Theatres reporting units, ~~by using~~respectively.

Significant Events

Additional equity financing. On December 11, 2020, we entered into an equity distribution agreement with Goldman Sachs & Co. LLC and B. Riley Securities, Inc., as sales agents to sell up to 178.0 million shares of our Class A common stock, par value $0.01 per share, through an “at-the-market” offering program. On January 25, 2021, we entered into equity distribution agreements with Goldman Sachs & Co. LLC and B. Riley Securities, Inc., as sales agents to sell up to 50.0 million shares of our Class A common stock, par value $0.01 per share, through an “at-the-market” offering program. During the ~~income approach~~three months ended March 31, 2021, we raised gross proceeds of approximately $596.9 million through our at-the-market offering for the ~~enterprise valuation methodology, which utilizes discounted cash flows.~~remaining available shares under the equity distribution agreement of 187,066,293 shares of our Class A common stock and paid fees to the sales agents of approximately $14.9 million and other fees of $0.4 million. We ~~did not weight any~~intend to use the net proceeds from the sale of the ~~enterprise valuation methodology on~~Class A common stock pursuant to the ~~market approach. We believe that using 100% income approach provided a more reasonable measurement~~equity distribution agreement for general corporate purposes, which may include the repayment, refinancing, redemption or repurchase of existing indebtedness or working capital, capital expenditures and other investments. See Note 13—Subsequent Event in the Notes to the Condensed Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q for information regarding the additional at-the-market offerings of 43 million shares of the ~~enterprise~~Company’s Class A common stock.

Baltics’ theatre sale agreement. On August 28, 2020, we entered into an agreement to sell our equity interest in Forum Cinemas OU, which consists of nine theatres located in the Baltics’ region (Latvia, Lithuania and Estonia) and was included in our International markets reportable segment, for total consideration of approximately €77.25 million, including cash of approximately €64.35 million or $76.6 million prior to any transaction costs. This transaction was undertaken by us to further increase our liquidity and strengthen our balance sheet at a transaction multiple that demonstrates that market participants ascribe positive value ~~basis at~~to the business. The completion of the sale will take place in several steps and is contingent upon clearance from each regulatory competition council in each country. We received $37.5 million (€31.53 million) cash consideration upon entering into the sale agreement on August 28, 2020, transferred an equity interest of 49% in Forum Cinemas OU to the purchaser and recorded an initial noncontrolling interest of $34.9 million in total equity (deficit). During the three months ended March 31, ~~2020. Due to the volatility and unreliability in the market multiples, the lack of standalone Domestic and International public theatre companies,~~2021 and the ~~temporary suspension of operations due to the COVID-19 pandemic and the current impact on Adjusted EBITDA,~~three months ended December 31, 2020, we ~~did not believe that placing any weight on the market approach was appropriate for this valuation.~~

~~The income approach provides an estimate of fair value by measuring estimated annual~~received 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 unit. 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 appropriateconsideration for the ~~risk~~remaining interest in Estonia and Latvia of achieving the projected cash flows. There was considerable management judgment with respect to cash flow estimates and discount rates to be used in estimating fair value, which are classified as Level 3 in the fair value hierarchy.$4.1

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~~The following is a calculation~~million (€3.4 million) and $6.4 million (€5.4 million), respectively. Transaction costs of ~~our market~~$1.4 million and net gain of $1.2 million related to the sale of 49% equity ~~capitalization as~~interest of Lithuania and Estonia and the 100% disposal of Latvia were recorded in additional paid-in capital during the six months ended December 31, 2020. Additional transaction costs of $0.1 million and net gain of $0.3 million related to the sale of 51% equity interest of Estonia were recorded in additional paid-in capital during the three months ended March 31, ~~2020:~~

(In millions, except share data)

As of March 31, 2020
Total outstanding shares

104,319,377
Share price

$
3.16
Market equity capitalization

$
329.6

2021. The ~~following~~transaction costs and net gain recorded in additional paid-in capital will be recognized in earnings when the remaining 51% interest in Lithuania is ~~a comparison~~disposed. At March 31, 2021, the carrying amounts of ~~our estimated enterprise fair value to our market enterprise value indicating an implied premium to market~~the major classes of ~~22.7%:~~

(In millions)

As of March 31, 2020
Estimated enterprise fair value

$
4,061.9

Market equity capitalization

$
329.6
Estimated fair value corporate borrowings and finance lease obligations

2,980.1
Market enterprise value

$
3,309.7

Implied premium to market

22.7%

~~We believe a significant reason for~~assets and liabilities included as part of the difference in our market enterprise value as compared to our estimated enterprise fair value is due to a market participant acquisition premium. We believe a market participant acquisition premium is applicable and has been historically realized in our industry. In the event of an acquisition of control of our enterprise by another market participant, this premium for control would likely be realizeddisposal group that were previously included in the ~~form~~International markets reportable segment were; goodwill of ~~increased revenue opportunities, lower costs, better working capital terms~~$36.3 million, property, net, of $9.1 million, operating lease right-of-use assets, net of $12.4 million, and ~~lower cost~~current and long-term operating lease liabilities of ~~capital. We believe the uncertainty around the temporary suspension~~$1.2 million and $11.4 million, respectively. The remaining cash consideration of ~~our theatre operations during the COVID-19 pandemic and the behavior~~approximately $31.9 million (€26.3 million) was paid upon completion of the ~~movie-going public after we resume operations is a significant reason for the difference in our market enterprise value as compared to our estimated enterprise fair value.~~

~~Key rates used in the income approach were as follows:~~

March 31, 2020

Domestic

International
Description

Theatres

Theatres
Income approach:

Weighted average cost of capital/discount rate

11.5%

13.0%
Long-term growth rate

2.0%

2.0%

~~While the fair values of our reporting units approximate their respective carrying values at the present time, the performance~~sale of the ~~reporting units may require improvement~~remaining 51% equity interest in ~~future periods to maintain this level. Declines~~Lithuania on May 6, 2021. At March 31, 2021, our noncontrolling interest of 49% in ~~the operating performance of our Domestic and International Theatres, further declines~~Lithuania was $22.4 million in the fair value of our debt, further declines in the trading price of our Class A common stock, small changes in certain key input assumptions, and/or other events or circumstances could occur and could have a significant impact on the estimated fair values. Examples of adverse events or circumstances that could change include (i) the ultimate duration of the COVID-19 pandemic and the prolonged temporary suspension of our theatre operations as well as the behavior of the movie-going public after we resume operations; (ii) an adverse change in macroeconomic conditions; (iii) increased cost factors that have a negative effect on our earnings and cash flows; (iv) negative or overall declining financial performance compared with our actual and projected results of relevant prior periods; (v) further declines in the fair value of our debt, and (vi) a further sustained decrease in our share price. A future impairment could result for a portion of the goodwill, long-lived assets or intangiblenet assets. ~~Any impairment charges that we may take in the future could be material to our results of operations and financial condition.~~

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~~Significant Event~~

~~Stock Buyback Program.~~ On February 27, 2020, we announced that our Board of Directors had authorized a $200.0 million Company share buyback program to repurchase up to $200.0 million of our Class A common stock over a three-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 three 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 or may not 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 us to repurchase any minimum dollar amount or number of shares and may be suspended for periods or discontinued at any time. As consequence of our cash preservation measures following the outbreak of the COVID-19 pandemic and in compliance with certain restrictive covenants under the indenture dated April 24, 2020 (the “Indenture”) to the 10.5% first lien notes due 2025 (the “First Lien Notes due 2025”), we do not expect to make purchases under our recently authorized stock repurchase program for the duration of 2020.

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Operating Results

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


							Three Months Ended
	Three Months Ended						March 31,		March 31,
(In millions)	March 31, 2020		March 31, 2019		% Change		2021		2020		% Change
Revenues
Admissions	$	568.0	$	731.5	(22.4)	%	$	69.5	$	568.0	(87.8)	%
Food and beverage		288.1		368.8	(21.9)	%		50.1		288.1	(82.6)	%
Other theatre		85.4		100.1	(14.7)	%		28.7		85.4	(66.4)	%
Total revenues	$	941.5	$	1,200.4	(21.6)	%		148.3		941.5	(84.2)	%
Operating Costs and Expenses
Film exhibition costs	$	271.7	$	365.3	(25.6)	%		22.0		271.7	(91.9)	%
Food and beverage costs		53.4		61.5	(13.2)	%		9.7		53.4	(81.8)	%
Operating expense, excluding depreciation and amortization below		356.9		402.8	(11.4)	%		179.7		356.9	(49.6)	%
Rent		237.8		242.0	(1.7)	%		192.1		237.8	(19.2)	%
General and administrative:
Merger, acquisition and other costs		0.2		3.3	(93.9)	%		6.7		0.2	*	%
Other, excluding depreciation and amortization below		33.2		46.2	(28.1)	%		51.8		33.2	56.0	%
Depreciation and amortization		122.5		113.0	8.4	%		114.1		122.5	(6.9)	%
Impairment of long-lived assets, indefinite-lived intangible assets and goodwill		1,851.9		—	*	%
Impairment of long-lived assets, definite and indefinite-lived intangible assets and goodwill								—		1,851.9	(100.0)	%
Operating costs and expenses		2,927.6		1,234.1	*	%		576.1		2,927.6	(80.3)	%
Operating loss		(1,986.1)		(33.7)	*	%		(427.8)		(1,986.1)	(78.5)	%
Other expense (income):
Other expense		26.9		29.8	(9.7)	%
Other expense (income)								(17.4)		26.9	*	%
Interest expense:
Corporate borrowings		71.3		71.3	—	%		151.5		71.3	*	%
Finance lease obligations		1.6		2.1	(23.8)	%		1.4		1.6	(12.5)	%
Non-cash NCM exhibitor service agreement		9.9		10.2	(2.9)	%		9.9		9.9	—	%
Equity in (earnings) loss of non-consolidated entities		2.9		(6.5)	*	%
Equity in loss of non-consolidated entities								2.8		2.9	(3.4)	%
Investment expense (income)		9.4		(16.1)	*	%		(2.0)		9.4	*	%
Total other expense, net		122.0		90.8	34.4	%		146.2		122.0	19.8	%
Loss before income taxes		(2,108.1)		(124.5)	*	%
Income tax provision		68.2		5.7	*	%
Net loss before income taxes								(574.0)		(2,108.1)	(72.8)	%
Income tax provision (benefit)								(6.8)		68.2	*	%
Net loss	$	(2,176.3)	$	(130.2)	*	%		(567.2)		(2,176.3)	(73.9)	%
Less: Net loss attributable to noncontrolling interests								(0.3)		—	*	%
Net loss attributable to AMC Entertainment Holdings, Inc.							$	(566.9)	$	(2,176.3)	(74.0)	%

* Percentage change in excess of 100%

March 31, 2020

March 31, 2019
Operating Data:

Screen additions

13

21
Screen acquisitions

—

—
Screen dispositions

74

68
Construction openings (closures), net

(7)

(49)
Average screens (1)

8,873

10,684
Number of circuit screens

10,973

10,995
Number of circuit theatres

996

1,001
Screens per theatre

11.0

11.0
Attendance (in thousands) (1)

60,495

79,825

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	Three Months Ended
	March 31,	March 31,
Operating Data:	2021	2020
Screen additions	32	13
Screen dispositions	63	74
Construction openings (closures), net	6	(7)
Average screens (1)	6,724	8,873
Number of screens operated	8,329	—
Number of theatres operated	682	—
Total number of circuit screens	10,518	10,973
Total number of circuit theatres	945	996
Screens per theatre	11.1	11.0
Attendance (in thousands) (1)	6,797	60,495

(1)

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

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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				U.S. Markets				International Markets				Consolidated
	Three Months Ended				Three Months Ended				Three Months Ended				Three Months Ended				Three Months Ended				Three Months Ended
	March 31,				March 31,				March 31,				March 31,				March 31,				March 31,
(In millions)	2020		2019		2020		2019		2020		2019		2021		2020		2021		2020		2021		2020
Revenues
Admissions	$	389.1	$	515.4	$	178.9	$	216.1	$	568.0	$	731.5	$	64.9	$	389.1	$	4.6	$	178.9	$	69.5	$	568.0
Food and beverage		216.6		287.6		71.5		81.2		288.1		368.8		47.6		216.6		2.5		71.5		50.1		288.1
Other theatre		55.6		64.2		29.8		35.9		85.4		100.1		24.7		55.6		4.0		29.8		28.7		85.4
Total revenues		661.3		867.2		280.2		333.2		941.5		1,200.4		137.2		661.3		11.1		280.2		148.3		941.5
Operating Costs and Expenses
Film exhibition costs		198.9		277.3		72.8		88.0		271.7		365.3		20.2		198.9		1.8		72.8		22.0		271.7
Food and beverage costs		34.9		43.0		18.5		18.5		53.4		61.5		8.5		34.9		1.2		18.5		9.7		53.4
Operating expense		251.9		285.6		105.0		117.2		356.9		402.8		142.0		251.9		37.7		105.0		179.7		356.9
Rent		174.4		176.6		63.4		65.4		237.8		242.0		136.5		174.4		55.6		63.4		192.1		237.8
General and administrative expense:
Merger, acquisition and other costs		0.3		1.2		(0.1)		2.1		0.2		3.3		3.7		0.3		3.0		(0.1)		6.7		0.2
Other, excluding depreciation and amortization below		17.3		27.5		15.9		18.7		33.2		46.2		36.0		17.3		15.8		15.9		51.8		33.2
Depreciation and amortization		92.4		83.6		30.1		29.4		122.5		113.0		86.4		92.4		27.7		30.1		114.1		122.5
Impairment of long-lived assets, indefinite-lived intangible assets and goodwill		1,214.3		—		637.6		—		1,851.9		—
Impairment of long-lived assets, definite and indefinite-lived intangible assets and goodwill														—		1,214.3		—		637.6		—		1,851.9
Operating costs and expenses		1,984.4		894.8		943.2		339.3		2,927.6		1,234.1		433.3		1,984.4		142.8		943.2		576.1		2,927.6
Operating loss		(1,323.1)		(27.6)		(663.0)		(6.1)		(1,986.1)		(33.7)		(296.1)		(1,323.1)		(131.7)		(663.0)		(427.8)		(1,986.1)
Other expense (income):
Other expense		25.5		29.4		1.4		0.4		26.9		29.8
Other expense (income)														(3.5)		25.5		(13.9)		1.4		(17.4)		26.9
Interest expense:
Corporate borrowings		70.5		70.6		0.8		0.7		71.3		71.3		143.0		70.5		8.5		0.8		151.5		71.3
Finance lease obligations		0.4		0.7		1.2		1.4		1.6		2.1		0.2		0.4		1.2		1.2		1.4		1.6
Non-cash NCM exhibitor service agreement		9.9		10.2		—		—		9.9		10.2		9.9		9.9		—		—		9.9		9.9
Equity in (earnings) loss of non-consolidated entities		1.9		(6.1)		1.0		(0.4)		2.9		(6.5)
Equity in loss of non-consolidated entities														0.9		1.9		1.9		1.0		2.8		2.9
Investment expense (income)		9.4		(4.8)		—		(11.3)		9.4		(16.1)		(2.0)		9.4		—	��	—		(2.0)		9.4
Total other expense, net		117.6		100.0		4.4		(9.2)		122.0		90.8		148.5		117.6		(2.3)		4.4		146.2		122.0
Earnings (loss) before income taxes		(1,440.7)		(127.6)		(667.4)		3.1		(2,108.1)		(124.5)
Net loss before income taxes														(444.6)		(1,440.7)		(129.4)		(667.4)		(574.0)		(2,108.1)
Income tax provision (benefit)		(2.9)		3.5		71.1		2.2		68.2		5.7		(4.5)		(2.9)		(2.3)		71.1		(6.8)		68.2
Net earnings (loss)	$	(1,437.8)	$	(131.1)	$	(738.5)	$	0.9	$	(2,176.3)	$	(130.2)
Net loss														(440.1)		(1,437.8)		(127.1)		(738.5)		(567.2)		(2,176.3)
Less: net loss attributable to noncontrolling interests														—		—		(0.3)		—		(0.3)		—
Net loss attributable to AMC Entertainment Holdings, Inc.													$	(440.1)	$	(1,437.8)	$	(126.8)	$	(738.5)	$	(566.9)	$	(2,176.3)


	U.S. Markets		International Markets		Consolidated		U.S. Markets		International Markets		Consolidated
	Three Months Ended		Three Months Ended		Three Months Ended		Three Months Ended		Three Months Ended		Three Months Ended
	March 31,		March 31,		March 31,		March 31,		March 31,		March 31,
	2020	2019	2020	2019	2020	2019	2021	2020	2021	2020	2021	2020
Segment Operating Data:
Screen additions	11	21	2	—	13	21	31	11	1	2	32	13
Screen acquisitions	—	—	—	—	—	—
Screen dispositions	57	23	17	45	74	68	23	57	40	17	63	74
Construction openings (closures), net	—	(35)	(7)	(14)	(7)	(49)	6	—	—	(7)	6	(7)
Average screens (1)	6,665	8,000	2,208	2,684	8,873	10,684	6,390	6,665	334	2,208	6,724	8,873
Number of circuit screens	8,048	8,077	2,925	2,918	10,973	10,995
Number of circuit theatres	630	636	366	365	996	1,001
Number of screens operated							7,609	—	720	—	8,329	—
Number of theatres operated							585	—	97	—	682	—
Total number of circuit screens							7,682	8,048	2,836	2,925	10,518	10,973
Total number of circuit theatres							590	630	355	366	945	996
Screens per theatre	12.8	12.7	8.0	8.0	11.0	11.0	13.0	12.8	8.0	8.0	11.1	11.0
Attendance (in thousands) (1)	39,669	54,979	20,826	24,846	60,495	79,825	6,239	39,669	558	20,826	6,797	60,495

(1)

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

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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 decreased ~~$105.1~~$297.8 million during the three months ended March 31, ~~2020~~2021 compared to the three months ended March 31, ~~2019.~~2020. Adjusted EBITDA in U.S. markets decreased ~~$81.3~~$196.6 million, primarily due to the decrease in attendance largely attributable to the limited or temporary suspension of operations as consequence of the COVID-19 pandemic, the increase in general and aadministrative expense: other and the decrease in cash distributions from equity method investees, partially offset by ~~lower general and administrative expenses and lower~~decreases in operating expenses due to the decrease in ~~attendance.~~attendance, rent, and increases in governmental assistance for COVID-19. Adjusted EBITDA in International markets decreased ~~$23.8~~$101.2 million primarily due to the decreases in attendance largely attributable to the limited or temporary suspension of operations as consequence of the COVID-19 pandemic, partially offset by ~~lower~~decreases in operating expenses due to the decrease in ~~attendance.~~attendance, decreases in rent, and increases in governmental assistance for COVID-19.

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


	Three Months Ended				Three Months Ended
Adjusted EBITDA (In millions)	March 31, 2020		March 31, 2019		March 31, 2021		March 31, 2020
U.S. markets ~~(1)~~	$	(3.8)	$	77.5	$	(200.4)	$	(3.8)
International markets		6.9		30.7		(94.3)		6.9
Total Adjusted EBITDA	$	3.1	$	108.2	$	(294.7)	$	3.1


	Three Months Ended
(In millions)	March 31, 2021		March 31, 2020
Net loss	$	(567.2)	$	(2,176.3)
Plus:
Income tax provision (benefit)		(6.8)		68.2
Interest expense		162.8		82.8
Depreciation and amortization		114.1		122.5
Impairment of long-lived assets, definite and indefinite-lived intangible assets and goodwill (1)		—		1,851.9
Certain operating expense (2)		2.3		2.1
Equity in loss of non-consolidated entities		2.8		2.9
Cash distributions from non-consolidated entities (3)		0.3		7.6
Attributable EBITDA (4)		(0.8)		(0.1)
Investment expense (income)		(2.0)		9.4
Other expense (income) (5)		(4.8)		26.9
Other non-cash rent expense (benefit) (6)		(7.5)		2.3
General and administrative — unallocated:
Merger, acquisition and other costs (7)		6.7		0.2
Stock-based compensation expense (8)		5.4		2.7
Adjusted EBITDA	$	(294.7)	$	3.1

(1)

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

Three Months Ended

(In millions)

March 31, 2020

March 31, 2019

Net loss

$
(2,176.3)

$
(130.2)

Plus:

Income tax provision (1)

68.2

5.7

Interest expense

82.8

83.6

Depreciation and amortization

122.5

113.0

Impairment of long-lived assets, indefinite-lived intangible assets and goodwill (2)

1,851.9

—

Certain operating expenses (3)

2.1

2.5

Equity in (earnings) loss of non-consolidated entities (4)

2.9

(6.5)

Cash distributions from non-consolidated entities (5)

7.6

10.5

Attributable EBITDA (6)

(0.1)

0.9

Investment expense (income)

9.4

(16.1)

Other expense (7)

26.9

29.9

Other non-cash rent (8)

2.3

7.6

General and administrative — unallocated:

Merger, acquisition and other costs (9)

0.2

3.3

Stock-based compensation expense (10)

2.7

4.0

Adjusted EBITDA

$
3.1

$
108.2

~~(1)~~

~~For information on income tax provision, see Note 8~~—~~Income Taxes in the Notes to the Condensed Consolidated Financial Statements in Item 1 of Part I of this Form 10-Q.~~

~~(2)~~

During the three months ended March 31, 2020, we recorded non-cash impairment charges of $1,124.9 million and $619.4 million related to the enterprise fair values of our Domestic Theatres and International Theatres reporting units, respectively. We recorded non-cash impairment charges related to our long-lived

~~Table of Contents~~

assets of $81.4 million on 57 theatres in the U.S. markets with 658 screens which were related to property, net, operating lease right-of-use assets, net and other long-term assets and $9.9 million on 23 theatres in the

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International markets with 213 screens which were related to property, net and operating lease right-of-use assets, net, during the three months ended March 31, 2020. We recorded non-cash impairment charges related to our indefinite-lived intangible assets of $5.9 million and $2.4 million related to the Odeon and Nordic ~~tradenames,~~trade names, respectively, during the three months ended March 31, 2020. We also recorded non-cash impairment charges of $8.0 million related to our definite-lived intangible assets.

~~(3)~~(2)

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 or are non-operating in nature.

~~(4)~~

~~(5)~~(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.

~~(6)~~(4)

Attributable EBITDA includes the EBITDA from equity investments in theatre operators in certain International markets. See below for a reconciliation of our equity in (earnings) loss of non-consolidated entities to attributable EBITDA. 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.


	Three Months Ended				Three Months Ended
(In millions)	March 31, 2020		March 31, 2019		March 31, 2021		March 31, 2020
Equity in (earnings) loss of non-consolidated entities	$	2.9	$	(6.5)
Equity in loss of non-consolidated entities					$	2.8	$	2.9
Less:
Equity in (earnings) loss of non-consolidated entities excluding International theatre joint ventures		2.1		(6.0)
Equity in earnings (loss) of International theatre joint ventures		(0.8)		0.5
Equity in loss of non-consolidated entities excluding International theatre joint ventures						1.2		2.1
Equity in loss of International theatre joint ventures						(1.6)		(0.8)
Income tax benefit		(0.1)		—		(0.2)		(0.1)
Investment income		(0.2)		(0.2)		—		(0.2)
Depreciation and amortization		0.8		0.6		0.9		0.8
Other expense		0.2		—		0.1		0.2
Attributable EBITDA	$	(0.1)	$	0.9	$	(0.8)	$	(0.1)

~~(7)~~(5)

During the three months ended March 31, 2020, we recorded a loss of $20.1 million for the fair value adjustment of the derivative asset related to the Convertible Notes due 2026, credit losses related to contingent lease guarantees of $5.3 million, and foreign currency transaction losses of $2.0 million, partially offset by a gain of $0.5 million for the fair value adjustment of the derivative liability related to the Convertible Notes due 2026.

~~(8)~~(6)

~~(9)~~(7)

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

~~(10)~~(8)

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.

~~Table of Contents~~

We have included Adjusted EBITDA because we believe it provides management and investors with additional information to measure our performance and estimate our value.

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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;

●

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.

Segment Information

Our historical results of operations for the three months ended March 31, ~~2020~~2021 and March 31, ~~2019~~2020 reflect the results of operations for our two Theatrical Exhibition reportable segments, U.S. markets and International markets.

Results of Operations— For the Three Months Ended March 31, ~~2020,~~2021 Compared to the Three Months Ended March 31, ~~2019~~2020

Condensed Consolidated Results of Operations

Revenues. Total revenues decreased ~~21.6%~~84.2%, or ~~$258.9~~$793.2 million, during the three months ended March 31, ~~2020~~2021 compared to the three months ended March 31, ~~2019.~~2020. Admissions revenues decreased ~~22.4%~~87.8%, or ~~$163.5~~$498.5 million, during the three months ended March 31, ~~2020~~2021 compared to the three months ended March 31, ~~2019,~~2020, primarily due ~~a 24.2%~~to an 88.8% decrease in attendance, partially offset by ~~a 2.5%~~an 8.9% increase in average ticket price. The decrease in attendance was primarily due to the COVID-19 pandemic which prompted film distributors to delay or alternatively distribute films, deterred customers from attending our theatres and resulted in the temporary suspension of operations at ~~all~~ our theatres in U.S. markets and International markets on or before March 17, 2020. As some theatres across Europe began closing in late February 2020 and social distancing practices were initiated in the U.S. in response to the ensuing COVID-19 global pandemic, attendance and revenues began to deteriorate in early March.markets. The increase in average ticket price was primarily due to strategic pricing initiatives put in place over the prior year, an increase in foreign currency translation rates and lower frequency on our A-List subscription program, partially offset by decreases in attendance for 3D ~~IMAX and Alternative~~ premium ~~content and declines in foreign currency exchange rates.~~content.

Food and beverage revenues decreased ~~21.9%~~82.6%, or ~~$80.7~~$238.0 million, during the three months ended March 31, ~~2020~~2021 compared to the three months ended March 31, ~~2019,~~2020, primarily due to the decrease in ~~attendance, partially offset by a 3.0% increase in food and beverage revenues per patron.~~attendance. Food and beverage ~~revenues~~ per patron increased ~~as a result~~54.8% from $4.76 to $7.37 due to several contributing factors including increases in units sold per transaction and increases in the percentage of ~~strategic~~patrons making purchases due to higher child percentages, private theatre rentals, an increase in dine-in percentages, mobile orders along with price increases, ~~our food~~reduced loyalty program penetration and ~~beverage initiatives including theatre renovations, and our Feature Fare menu, partially offset by declines~~the increase in foreign currency translation rates.

Total other theatre revenues decreased ~~14.7%~~66.4%, or ~~$14.7~~$56.7 million, during the three months ended March 31, ~~2020~~2021 compared to the three months ended March 31, ~~2019,~~2020, primarily due to decreases in ~~screen advertising,~~ ticket fees, ~~theatre rentals,~~income from gift cards and ~~gift card income~~package tickets and screen advertising due to the decrease in ~~attendance.~~attendance, partially offset by increases in foreign currency translation rates.

Operating costs and expenses. Operating costs and expenses ~~increased $1,693.5~~decreased $2,351.5 million, during the three months ended March 31, ~~2020~~2021 compared to the three months ended March 31, ~~2019~~2020 primarily due to declines in the ~~non-cash~~ impairment ~~losses~~of long-lived assets of $1,851.9 ~~million.~~million and declines in operating expenses due to the decrease in attendance and a decrease in average screens operated, partially offset by an increase in foreign currency translation rates. Film exhibition costs decreased ~~25.6%~~91.9%, or ~~$93.6~~$249.7 million, during the three months ended March 31, ~~2020~~2021 compared to the three months ended March 31, ~~2019,~~2020, primarily due to the decrease in admissions revenues. As a percentage of admissions revenues, film exhibition costs were 31.7% for the three months ended March 31, 2021 and 47.8% for the three months ended March 31, ~~2020 and 49.9% for the three months ended March 31, 2019.~~2020. The decrease in film exhibition cost percentage is primarily due to the concentration of box office revenues in lower grossing films in the current year which typically results in lower film exhibition ~~costs.~~costs and library content.

Food and beverage costs decreased 81.8%, or $43.7 million, during the three months ended March 31, 2021

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~~Food and beverage costs decreased 13.2%, or $8.1 million, during the three months ended March 31, 2020~~ compared to the three months ended March 31, ~~2019.~~2020. The decrease in food and beverage costs was primarily due to the decrease in food and beverage ~~revenues, partially offset by an increase in food and beverage costs.~~revenues. As a percentage of food and beverage revenues, food and beverage costs were 19.4% for the three months ended March 31, 2021 and 18.5% for the three months ended March 31, ~~2020 and 16.7% for the three months ended March 31, 2019. The increase in food~~2020. Food and beverage costs ~~as a percentage of food~~included $1.3 million and ~~beverage revenue was primarily due to approximately~~ $2.7 million of charges for obsolete inventory during the three months ended March 31, 2021 and 2020 respectively, due to the suspension of theatre operations. ~~Food and beverage gross profit per patron increased 0.8% and is calculated as food and beverage revenues less food and beverage costs divided by attendance.~~

As a percentage of revenues, operating expense was 121.2% for the three months ended March 31, 2021 and 37.9% for the three months ended March 31, ~~2020 and 33.6% for the three months ended March 31, 2019 due to the decrease in attendance and the fixed nature of certain operating expense components.~~2020. Rent expense decreased ~~1.7%~~19.2%, or ~~$4.2~~$45.7 million, during the three months ended March 31, ~~2020~~2021 compared to the three months ended March 31, ~~2019~~2020 due primarily to cash rent abatements from landlords, declines in deferred rent expense due to the impairment of right-of-use assets in calendar 2019 and 2020, and theatre closures, partially offset by the increase in foreign currency translation ~~rates and declines~~rates. See Note 2—Leases in ~~contingent rentals due~~the Notes to the ~~decrease in revenues.~~Condensed Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q for further information on the impact of COVID-19 on leases and rent obligations of approximately $473 million that have been deferred to 2021 and future years as of March 31, 2021.

Merger, acquisition and other costs. Merger, acquisition and other costs were $6.7 million during the three months ended March 31, 2021 compared to $0.2 million during the three months ended March 31, 2020, ~~compared to $3.3 million during the three months ended March 31, 2019,~~ primarily due to ~~a decline~~increases in ~~merger~~legal and professional costs related ~~activities.~~to strategic contingent planning.

Other. Other general and administrative expense ~~decreased 28.1%~~increased 56.0% or ~~$13.0~~$18.6 million during the three months ended March 31, ~~2020~~2021 compared to the three months ended March 31, ~~2019,~~2020, primarily due to ~~a $6.0 million decrease~~increases in bonus expense, stock-based compensation expense as a result of the modification and ~~a $3.2 million decrease~~acceleration of vesting of awards during the current and prior year and increases in non-qualified deferred compensation expense due to ~~a decline~~increases in the fair ~~value~~values of ~~the~~ related investments. See Note 7—Stockholders’ Equity in the Notes to the Condensed Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q for additional information about stock-based compensation expense.

Depreciation and amortization. Depreciation and amortization ~~increased 8.4%~~decreased 6.9% or ~~$9.5~~$8.4 million during the three months ended March 31, ~~2020~~2021 compared to the three months ended March 31, ~~2019,~~2020, primarily due to ~~recent capital expenditures, partially offset by~~ lower depreciation expense on theatres impaired in calendar ~~2019.~~2019 and 2020, partially offset by the increase in foreign currency translation rates.

Impairment of long-lived ~~assets.~~assets, indefinite-lived intangible assets and goodwill. During the three months ended March 31, 2020, we recognized non-cash impairment losses of $81.4 million on 57 theatres in the U.S. markets with 658 screens (in Alabama, Arkansas, California, District of Columbia, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Michigan, Minnesota, Missouri, Montana, New Hampshire, New Jersey, New York, North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, South Dakota, Tennessee, Texas, Washington, Wisconsin and Wyoming) which were related to property, net, operating lease right-of-use assets, net and other long-term assets and $9.9 million on 23 theatres in the International markets with 213 screens (in Germany, Italy, Spain, UKSweden, and ~~Sweden)~~UK), which were related to property, net and operating lease right-of-use assets, net.

~~During~~ No non-cash impairment charges of long-lived assets were recorded during the three months ended March 31, ~~2020, we~~2021.

We performed a quantitative impairment ~~evaluation~~evaluations of our indefinite-lived intangible assets as of March 31, 2020 related to the AMC, Odeon and Nordic ~~tradenames~~trade names and recorded impairment charges of $8.3 million related to ~~these assets~~the Odeon and Nordic trade names during the three months ended March 31, 2020. In addition, we performed a quantitative impairment ~~evaluation~~evaluations of our definite-lived intangible assets as of March 31, 2020 and recorded impairment charges of $8.0 ~~million.~~

~~During~~million in U.S. markets. No impairment charges related to our indefinite-lived intangible assets were recorded during the three months ended March 31, ~~2020, we~~2021.

We performed a quantitative impairment ~~evaluation~~evaluations of our goodwill as of March 31, 2020 and recorded impairment charges of $1,124.9 million and $619.4 million during the three months ended March 31, 2020 for our Domestic Theatres and International Theatres reporting units, respectively. No goodwill impairment charges were recorded during the three months ended March 31, 2021.

Other ~~expense.~~expense (income). Otherincome of $17.4 million during the three months ended March 31, 2021 was primarily due to $12.4 million in government assistance related to COVID-19, foreign currency transaction gains of $3.8 million, and estimated credit income of $2.0 million related to contingent lease guarantees, partially offset by $1.0 million of financing fees related to the write-off of unamortized deferred charges on the Odeon revolver. Other expense of $26.9 million during the three months ended March 31, 2020 was primarily due to the decrease in fair value of our

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derivative asset for the contingent call option related to the Class B common stock purchase and cancellation agreement of $20.1 million and estimated credit losses related to contingent lease guarantees of $5.3 million, partially offset by income due to a decrease in fair value of our derivative liability for the embedded conversion feature in our Convertible Notes due 2024 of $0.5 million. During the three months ended March 31, 2019, other expense of $29.8 million was primarily due to $13.3 million of expense related to the increase in the fair value of our derivative liability for the embedded conversion feature in our Convertible Notes due 2024 and $15.1 million of expense related to the decrease in the fair value our derivative asset for the contingent call option related to the Class B common stock purchase and cancellation agreement. See Note 1—~~The Company and Significant Accounting Policies~~Basis of Presentation in the Notes to the Condensed Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q for additional information about the components of other expense.

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Interest expense. Interest expense ~~decreased $0.8~~increased $80.0 million to ~~$82.8~~$162.8 million for the three months ended March 31, ~~2020~~2021 compared to ~~$83.6~~$82.8 million during the three months ended March 31, ~~2019.~~2020 primarily due to:

●

the issuance of $500 million of 10.5% First Lien Notes due 2025 on April 24, 2020;

●

borrowings under revolving credit facilities of approximately $325.1 million during the three months ended March 31, 2020 that remained outstanding until February and March 2021;

●

the issuance of $300 million of 10.5% First Lien Notes due 2026 on July 31, 2020;

●

the issuance of $100 million of 15%/17% Cash/PIK/Toggle First Lien Notes due 2026 on January 15, 2021;

●

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

●

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

partially offset by:

●

a reduction in the effective interest rate from 6.37% to 4.46% on $2,017.5 million aggregate principal amount of our senior subordinated notes exchanged for $1,462.3 million aggregate principal amount of second lien notes on July 31, 2020;

●

the extinguishment of $104.5 million of Second Lien Notes due 2026 on December 14, 2020 in exchange for common shares;

●

the repayment of £89.7 million and €12.8 million outstanding amounts under the Odeon revolver on February 19, 2021;

●

a decline in interest rates related to borrowings under the Senior Secured Term Loan due 2026; and

●

the repayment in March 2021 of $212.2 million under the Senior Secured Revolving Credit Facility.

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

Equity in ~~(earnings)~~ loss of non-consolidated entities. Equity in ~~(earnings)~~ loss of non-consolidated entities ~~were~~was $2.8 million for the three months ended March 31, 2021 compared to $2.9 million for the three months ended March 31, ~~2020 compared to $(6.5) million for the three months ended March 31, 2019.~~2020. The decrease in equity in ~~earnings~~loss of ~~$9.4~~$0.1 million was primarily due to decreases in equity in ~~earnings~~losses from DCIP of ~~$7.5~~$1.9 million ~~as a result~~partially offset by increases in equity losses on other investments of ~~accelerated depreciation charges~~$1.8 million.

Investment (income) expense. Investment income was ($2.0) million for ~~digital projectors during~~ the three months ended March 31, ~~2020.~~

~~Investment~~2021 compared to investment expense ~~(income).~~ ~~Investment expense was~~of $9.4 million for the three months ended March 31, ~~2020 compared to investment~~2020. Investment income ~~of $16.1 million for~~includes increases in our non-qualified deferred compensation plan investments during the three months ended March 31, ~~2019.~~2021. Investment expense includes an impairment ~~charge~~charges of $7.2 million related to ~~an investment~~investments and declines in ~~fair value of~~ our non-qualified deferred compensation plan investments during the three months ended March 31, 2020. ~~Investment income includes a gain on the sale of our Austria theatres of $11.1 million and a payment of $4.0 million under the NCM tax receivable agreement for the three months ended March 31, 2019.~~

Income tax ~~provision.~~provision (benefit). The income tax provision (benefit) was ~~$68.2~~($6.8) million and ~~$5.7~~$68.2 million for the three months ended March 31, ~~2020~~2021 and March 31, ~~2019,~~2020, respectively. The ~~increase~~decrease in ~~the~~ income tax ~~provision~~expense is primarily due to the recording of ~~international~~International valuation allowances against deferred tax assets held in Spain of $40.1 million and Germany of $33.1 million during the three months ended March 31, 2020. See Note 8—Income Taxes in the Notes to the Condensed Consolidated Financial Statements inunder Item 1 of Part I of this Form 10-Q for further information.

Net loss. Net loss was ~~$2,176.3~~$567.2 million and ~~$130.2~~$2,176.3 million during the three months ended March 31, ~~2020~~2021 and

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March 31, ~~2019,~~2020, respectively. Net loss during the three months ended March 31, ~~2020~~2021 compared to net loss for the three months ended March 31, ~~2019~~2020 was ~~negatively~~positively impacted by the ~~decrease~~decline in ~~attendance as a result of the temporary suspension of operations at all our theatres on or before March 17, 2020,~~ impairment charges related to long-lived assets, definite and indefinite-lived intangible assets and goodwill, ~~increased~~decreased depreciation expense, ~~declines in investment income, declines in equity in earnings of non-consolidated entities and an increase in income tax provision, offset by reduced operating expenses,~~ lower amounts of rent expense, ~~declines~~increases in other income, increases in investment income and decreases in income tax provision, partially offset by the decrease in attendance as a result of the COVID-19 pandemic, higher interest expense and general and administrative ~~expenses~~costs, and ~~declines~~increases in ~~other expense.~~foreign currency translation rates.

Theatrical Exhibition–U.S. Markets

Revenues. Total revenues decreased ~~23.7%~~79.3%, or ~~$205.9~~$524.1 million, during the three months ended March 31, ~~2020~~2021 compared to the three months ended March 31, ~~2019.~~2020. Admissions revenues decreased ~~24.5%~~83.3%, or ~~$126.3~~$324.2 million, during the three months ended March 31, ~~2020~~2021 compared to the three months ended March 31, ~~2019,~~2020, primarily due to ~~a 27.8%~~an 84.3% decrease in attendance, partially offset by a ~~4.7%~~6.0% increase in average ticket price. The decrease in attendance was primarily due to the COVID-19 pandemic which prompted film distributors to delay or alternatively distribute films, deterred customers from attending our theatres and resulted in the temporary suspension of operations at ~~all~~ our theatres in U.S. ~~markets on~~markets. Our average screens operated during the three months ended March ~~17, 2020, and including~~31, 2021 declined by 4.1% from the ~~impact in early March when attendance began to deteriorate as social distancing practices were initiated in the U.S. in response to the ensuing COVID-19 global pandemic.~~prior year. The increase in average ticket price was primarily due to strategic pricing initiatives put in place over the prior year and lower frequency on our A-List subscription program, partially offset by decreases in attendance for 3D ~~IMAX and Alternative~~ premium content.

Food and beverage revenues decreased ~~24.7%~~78.0%, or ~~$71.0~~ $169.0 million, during the three months ended March 31, ~~2020~~2021 compared to the three months ended March 31, ~~2019,~~2020, primarily due to the decrease in ~~attendance, partially offset by a 4.4% increase in food and beverage revenues per patron.~~attendance. Food and beverage ~~revenues~~ per patron increased ~~as a result~~39.7% from $5.46 to $7.63 due to several contributing factors including increases in units sold per transaction and increases in the percentage of ~~strategic~~patrons making purchases due to higher child percentages, private theatre rentals, an increase in dine-in percentages, mobile orders along with price increases ~~our food~~ and ~~beverage initiatives including theatre renovations, and our Feature Fare menu.~~reduced loyalty program penetration.

Total other theatre revenues decreased ~~13.4%~~55.6%, or ~~$8.6~~$30.9 million, during the three months ended March 31, ~~2020~~2021 compared to the three months ended March 31, ~~2019,~~2020, primarily due to decreases in ~~screen advertising,~~ ticket fees, ~~theatre rentals,~~income from gift cards and ~~gift card income~~package tickets and screen advertising due to the decrease in attendance.

Operating costs and expenses. Operating costs and expenses ~~increased $1,089.6~~decreased $1,551.1 million, during the three months ended March 31, ~~2020~~2021 compared to the three months ended March 31, ~~2019~~2020 primarily due to declines in the ~~non-cash~~ impairment ~~losses~~of long-lived assets of $1,214.3 ~~million.~~million and declines in operating expenses due to the decrease in attendance and a decrease in average screens operated. Film exhibition costs decreased ~~28.3%~~89.8%, or ~~$78.4~~$178.7 million, during the three months ended March 31, ~~2020~~2021 compared to the three months ended March 31, ~~2019,~~2020, primarily due to the decrease in admissions revenues. As a percentage of admissions revenues, film exhibition costs were 31.1% for the three months ended March 31, 2021 and 51.1% for the three months ended March 31, ~~2020 and 53.8% for the three months ended March 31, 2019.~~2020. The decrease in film exhibition cost

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percentage is primarily due to the concentration of box office revenues in lower grossing films in the current year which typically results in lower film exhibition ~~costs.~~costs and library content.

Food and beverage costs decreased ~~18.8%~~75.6%, or ~~$8.1~~$26.4 million, during the three months ended March 31, ~~2020~~2021 compared to the three months ended March 31, ~~2019.~~2020. The decrease in food and beverage costs was primarily due to the decrease in food and beverage ~~revenues, partially offset by an increase in food and beverage costs.~~revenues. As a percentage of food and beverage revenues, food and beverage costs were 17.9% for the three months ended March 31, 2021 and 16.1% for the three months ended March 31, ~~2020 and 15.0% for the three months ended March 31, 2019. The increase in food~~2020. Food and beverage costs ~~as a percentage of food~~included $0.5 million and ~~beverage revenue was primarily due to approximately~~ $0.7 million of charges for obsolete inventory during the three months ended March 31, 2021 and 2020 respectively, due to the suspension of theatre operations. ~~Food and beverage gross profit per patron increased 2.9% and is calculated as food and beverage revenues less food and beverage costs divided by attendance.~~

As a percentage of revenues, operating expense was 103.5% for the three months ended March 31, 2021 and 38.1% for the three months ended March 31, ~~2020 and 32.9% for the three months ended March 31, 2019 due to the decrease in attendance and the fixed nature of certain operating expense components.~~2020. Rent expense decreased ~~1.2%~~21.7%, or ~~$2.2~~$37.9 million, during the three months ended March 31, ~~2020~~2021 compared to the three months ended March 31, ~~2019~~2020 due primarily to cash rent abatements from landlords, declines in ~~contingent rentals~~deferred rent expense due to the ~~decrease~~impairment of right-of-use assets in ~~revenues.~~calendar 2019 and 2020 and theatre closures. See Note 2—Leases in the Notes to the Condensed Consolidated Financial Statements under Item 1of Part I of this Form 10-Q for further information on the impact of COVID-19 on leases and rent obligations of approximately $370 million that have been deferred to 2021 and future years as of March 31, 2021.

Merger, acquisition and other costs. Merger, acquisition and other costs were $3.7 million during the three months ended March 31, 2021 compared to $0.3 million during the three months ended March 31, 2020, ~~compared to $1.2 million during the three months ended March 31, 2019,~~ primarily due to ~~a decline~~increases in ~~merger~~legal and professional costs related ~~activities.~~to strategic contingent planning.

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Other. Other general and administrative expense ~~decreased 37.1% or $10.2~~increased $18.7 million during the three months ended March 31, ~~2020~~2021 compared to the three months ended March 31, ~~2019,~~2020, primarily due to ~~a $6.0 million decrease~~increases in bonus expense, stock-based compensation expense as a result of the modification and ~~a $3.2 million decrease~~acceleration of vesting of awards during the current and prior year and increases in non-qualified deferred compensation expense due to ~~a decline~~increases in the fair ~~value~~values of ~~the~~ related investments. See Note 7—Stockholders’ Equity in the Notes to the Condensed Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q for additional information about stock-based compensation expense.

Depreciation and amortization. Depreciation and amortization ~~increased 10.5%~~decreased 6.5% or ~~$8.8~~$6.0 million during the three months ended March 31, ~~2020~~2021 compared to the three months ended March 31, ~~2019,~~2020, primarily due to ~~recent capital expenditures, partially offset by~~ lower depreciation expense on theatres impaired in calendar ~~2019.~~2019 and 2020.

~~During~~We performed quantitative impairment evaluations of our definite-lived intangible assets as of March 31, 2020 and recorded impairment charges of $8.0 million in U.S. markets.

We performed quantitative impairment evaluations of our goodwill as of March 31, 2020 and recorded impairment charges of $1,124.9 million during the three months ended March 31, 2020 ~~we performed a quantitative impairment evaluation~~for our Domestic Theatres reporting unit.

Other expense (income). Otherincome of ~~our definite-lived intangible assets and recorded impairment charges of $8.0 million.~~

~~During~~$3.5 million during the three months ended March 31, ~~2020, we performed a quantitative impairment evaluation~~2021 was primarily due to $4.2 million in government assistance related to COVID-19 and foreign currency transaction loss of ~~our goodwill and recorded an impairment charge of $1,124.9 million for our Domestic Theatres reporting unit.~~

~~Other expense.~~ $0.9 million. Other expense of $25.5 million during the three months ended March 31, 2020 was primarily due to the 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 $20.1 million and estimated credit losses related to contingent lease guarantees of $5.3 million, partially offset by income due to a decrease in fair value of our derivative liability for the embedded conversion feature in our Convertible Notes due 2024 of $0.5 million. During the three months ended March 31, 2019, other expense of $29.4 million was primarily due to $13.3 million of expense related to the increase in the fair value of our derivative liability for the embedded conversion feature in our Convertible Notes due 2024 and $15.1 million of expense related to the decrease in the fair value our derivative asset for the contingent call option related to the Class B common stock purchase and cancellation agreement. See Note 1—~~The Company and Significant Accounting Policies~~Basis of Presentation in the Notes to the Condensed Consolidated Financial Statements inunder Item 1 of Part I of this Form 10-Q for additional information about the components of other expense.

Interest expense. Interest expense ~~decreased $0.7~~increased $72.3 million to ~~$80.8~~$153.1 million for the three months ended March 31, ~~2020~~2021 compared to ~~$81.5~~$80.8 million during the three months ended March 31, ~~2019.~~2020 primarily due to:

●

the issuance of $500 million of 10.5% First Lien Notes due 2025 on April 24, 2020;

●

borrowings under revolving credit facilities of approximately $212.2 million during the three months ended March 31, 2020 that remained outstanding until February and March 2021;

●

the issuance of $300 million of 10.5% First Lien Notes due 2026 on July 31, 2020;

●

the issuance of $100 million of 15%/17% Cash/PIK/Toggle First Lien Notes due 2026 on January 15, 2021; and

●

~~Equity in (earnings) loss of non-consolidated entities.~~ ~~Equity in (earnings) loss of non-consolidated entities~~partially offset by:

●

the extinguishment of $104.5 million of Second Lien Notes due 2026 on December 14, 2020 in exchange for common shares;

●

a decline in interest rates related to borrowings under the Senior Secured Term Loan due 2026; and

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●

the repayment in March 2021 of $212.2 million under the Senior Secured Revolving Credit Facility.

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

Equity in loss of non-consolidated entities. Equity in loss of non-consolidated entities was $0.9 million for the three months ended March 31, 2021 compared to $1.9 million for the three months ended March 31, ~~2020 compared to $(6.1)~~ ~~million for the three months ended March 31, 2019.~~2020. The decrease in equity in ~~earnings~~loss of ~~$8.0~~1.0 million was primarily due to decreases in equity in ~~earnings~~losses from DCIP of ~~$7.5~~$1.9 million ~~as a result~~partially offset by increases in equity losses on other investments of ~~accelerated depreciation charges~~$0.9 million.

Investment (income) expense. Investment income was $2.0 million for ~~digital projectors during~~ the three months ended March 31, ~~2020.~~

~~Investment~~2021 compared to investment expense ~~(income).~~ ~~Investment expense was~~of $9.4 million for the three months ended March 31, ~~2020 compared to investment~~2020. Investment income ~~of $4.8 million for~~includes increases in our non-qualified deferred compensation plan investments during the three months ended March 31, ~~2019.~~2021. Investment expense includes an impairment ~~charge~~charges of $7.2 million related to ~~an investment~~investments and declines in ~~fair value of~~ our non-qualified deferred compensation plan investments during the three months ended March 31, 2020. ~~Investment income includes a payment of $4.0 million under the NCM tax receivable agreement for the three months ended March 31, 2019.~~

Income tax ~~provision (benefit).~~benefit. The income tax ~~provision~~ (benefit) was ~~$(2.9)~~$(4.5) million and ~~$3.5~~$(2.9) million for the three months ended March 31, ~~2020~~2021 and March 31, ~~2019,~~2020, respectively. ~~The decrease in the income tax provision is primarily due to reversal of an uncertain tax position during the three months ended March 31, 2020.~~ See Note 8—Income Taxes in the Notes to the Condensed Consolidated Financial Statements inunder Item 1 of Part I of this Form 10-Q for further information.

Net loss. Net loss was ~~$1,437.8~~$440.1 million and ~~$131.1~~ $1,437.8 million during the three months ended March 31, ~~2020~~2021 and March 31, ~~2019,~~2020, respectively. Net loss during the three months ended March 31, ~~2020~~2021 compared to net loss for the three months ended March 31, ~~2019~~2020 was ~~negatively~~positively impacted by the ~~decrease~~decline in ~~attendance as a result of the temporary suspension of operations at all our theatres on March 17, 2020,~~ impairment charges related to long-lived assets, definite and indefinite-lived intangible assets and goodwill, ~~increased~~decreased depreciation expense, ~~declines in investment income and declines in equity in earnings of non-consolidated entities, offset by reduced operating expenses,~~ lower amounts of rent expense, ~~declines~~increases in other income, increases in investment income and increases in income tax benefit, partially offset by the decrease in attendance as a result of the COVID-19 pandemic and higher interest expense and general and administrative ~~expenses, increased income tax benefit and declines in other expense.~~costs.

Theatrical Exhibition - International Markets

Revenues. Total revenues decreased ~~15.9%~~96.0%, or ~~$53.0~~$269.1 million, during the three months ended March 31, ~~2020~~2021 compared to the three months ended March 31, ~~2019.~~2020. Admissions revenues decreased ~~17.2%~~97.4%, or ~~$37.2~~$174.3 million, during the three months ended March 31, ~~2020~~2021 compared to the three months ended March 31, ~~2019,~~2020, primarily due to a ~~16.2%~~97.3% decrease in attendance and a ~~1.3%~~4.1% decrease in average ticket price. The decrease in attendance was primarily due to the COVID-19 pandemic which prompted film distributors to delay or alternatively distribute films, deterred customers from attending our theatres and resulted in the temporary suspension of operations at ~~all~~ our theatres in International ~~markets on or before~~markets. Our average screens operated during the three months ended March ~~17, 2020. As some theatres across Europe began closing in late February 2020 in response to~~31, 2021 declined by 84.9% from the ~~ensuing COVID-19 global pandemic, attendance and revenues began to deteriorate.~~prior year. The decrease in average ticket price ~~was primarily due to declines~~includes the impact of an increase in foreign currency ~~exchange rates.~~translation rates and reflects minimal volumes of attendance.

Food and beverage revenues decreased ~~11.9%~~96.5%, or ~~$9.7~~$69.0 million, during the three months ended March 31, ~~2020~~2021 compared to the three months ended March 31, ~~2019,~~2020, primarily due to the decrease in ~~attendance, partially offset by a 4.9% increase in food~~attendance. Food and beverage ~~revenues~~ per patron ~~including declines~~increased 30.6% from $3.43 to $4.48 due to minimal volumes of attendance and the increase in foreign currency translation rates.

Total other theatre revenues decreased ~~17.0%~~86.6%, or ~~$6.1~~$25.8 million, during the three months ended March 31, ~~2020~~2021 compared to the three months ended March 31, ~~2019,~~2020, primarily due to decreases in ~~screen advertising, theatre rentals, and~~ticket fees, income from gift ~~card~~cards and package ~~ticket income~~tickets and screen advertising due to the decrease in ~~attendance.~~attendance, partially offset by increases in foreign currency translation rates.

Operating costs and expenses. Operating costs and expenses ~~increased $603.9~~decreased $800.4 million, during the three months ended March 31, ~~2020~~2021 compared to the three months ended March 31, ~~2019~~2020 primarily due to ~~non-cash~~declines in the impairment ~~losses~~of long-lived assets of $637.6 ~~million.~~million and declines in operating expenses due to the decrease in attendance and a decrease in average screens operated, partially offset by an increase in foreign currency translation rates. Film exhibition costs decreased ~~17.3%~~97.5%, or ~~$15.2~~$71.0 million, during the three months ended March 31, ~~2020~~2021 compared to the three months ended March 31, ~~2019,~~2020, primarily due to the decrease in admissions revenues. As a percentage of admissions revenues, film exhibition costs were ~~40.7%~~39.1% for the three months ended March 31, ~~2020~~2021 and 40.7% for the three months ended March 31, ~~2019.~~2020.

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Food and beverage costs ~~were unchanged~~decreased 93.5%, or $17.3 million, during the three months ended March 31, ~~2020~~2021 compared to the three months ended March 31, ~~2019.~~2020. 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 48.0% for the three months ended March 31, 2021 and 25.9% for the three months ended March 31, ~~2020 and 22.8% for the three months ended March 31, 2019. The increase in food~~2020. Food and beverage costs ~~as a percentage of food~~included $0.8 million and ~~beverage revenue was primarily due to approximately~~ $2.0 million of charges for obsolete inventory during the three months ended March 31, 2021 and 2020 respectively, due to the suspension of theatre operations. ~~Food and beverage gross profit per patron increased 1.2% and is calculated as food and beverage revenues less food and beverage costs divided by attendance.~~

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As a percentage of revenues, operating expense was not meaningful for the three months ended March 31, 2021 due to the low levels of revenues and 37.5% for the three months ended March 31, ~~2020 and 35.2% for the three months ended March 31, 2019 due to the decrease in attendance and the fixed nature of certain operating expense components.~~2020. Rent expense decreased ~~3.1%~~12.3%, or ~~$2.0~~$7.8 million, during the three months ended March 31, ~~2020~~2021 compared to the three months ended March 31, ~~2019~~2020 due primarily to cash rent abatements from landlords, declines in deferred rent expense due to the impairment of right-of-use assets in calendar 2019 and 2020, and theatre closures, partially offset by the increase in foreign currency translation rates. See Note 2—Leases in the Notes to the Condensed Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q for further information on the impact of COVID-19 on leases and rent obligations of approximately $103 million that have been deferred to 2021 and future years as of March 31, 2021.

Merger, acquisition and other costs. Merger, acquisition and other costs were ~~$(0.1)~~$3.0 million during the three months ended March 31, 2021 compared to ($0.1) million during the three months ended March 31, 2020, ~~compared to $2.1 million during the three months ended March 31, 2019,~~ primarily due to ~~a decline~~increases in ~~merger~~legal and professional costs related ~~activities.~~to strategic contingent planning.

Other. Other general and administrative expense decreased ~~15.0%~~0.6% or ~~$2.8~~$0.1 million during the three months ended March 31, ~~2020~~2021 compared to the three months ended March 31, ~~2019.~~2020.

Depreciation and amortization. Depreciation and amortization ~~increased 2.4%~~decreased 8.0% or ~~$0.7~~$2.4 million during the three months ended March 31, ~~2020~~2021 compared to the three months ended March 31, ~~2019,~~2020, primarily due to ~~recent capital expenditures, partially offset by~~ lower depreciation expense on theatres impaired in calendar 2019 and ~~declines~~2020 partially offset by the increase in foreign currency translation rates.

Impairment of long-lived ~~assets.~~assets, indefinite-lived intangible assets and goodwill. During the three months ended March 31, 2020, we recognized non-cash impairment losses of $9.9 million on 23 theatres in the International markets with 213 screens (in Germany, Italy, Spain, UKSweden, and ~~Sweden)~~UK), which were related to property, net and operating lease right-of-use assets, net.

~~During the three months ended March 31, 2020, we~~We performed a quantitative impairment ~~evaluation~~evaluations of our indefinite-lived intangible assets as of March 31, 2020 related to the Odeon and Nordic ~~tradenames~~trade names and recorded impairment charges of $8.3 million related to ~~these assets~~the Odeon and Nordic trade names during the three months ended March 31, 2020.

~~During the three months ended~~We performed quantitative impairment evaluations of our goodwill as of March 31, 2020 ~~we performed a quantitative impairment evaluation of our goodwill~~ and recorded impairment charges of $619.4 ~~million for our International Theatres reporting unit.~~

~~Other expense.~~ ~~Other expense was $1.4 million and $0.4~~ million during the three months ended March 31, 2020 ~~and~~for our International Theatres reporting unit.

Other expense (income). Otherincome of $13.9 million during the three months ended March 31, ~~2019, respectively.~~2021 was primarily due to $8.2 million in government assistance related to COVID-19, foreign currency transaction gains of $4.7 million, and estimated credit income of $2.0 million related to contingent lease guarantees, partially offset by $1.0 million of financing fees related to the write-off of unamortized deferred charges on the Odeon revolver. See Note 1—Basis of Presentation in the Notes to the Condensed Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q for additional information about the components of other expense.

Interest expense. Interest expense ~~decreased $0.1~~increased $7.7 million to ~~$2.0~~$9.7 million for the three months ended March 31, ~~2020~~2021 compared to ~~$2.1~~$2.0 million during the three months ended March 31, ~~2019.~~2020 primarily due to:

●

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

partially offset by:

●

the repayment of £89.7 million and €12.8 million outstanding amounts under the Odeon revolver on February 19, 2021.

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indebtedness.

Equity in ~~(earnings)~~ loss of non-consolidated entities. Equity in ~~(earnings)~~ loss of non-consolidated entities ~~were~~was $1.9 million for the three months ended March 31, 2021 compared to $1.0 million for the three months ended March 31, ~~2020 compared to $(0.4)~~ 2020.

Investment (income) expense. Investment income was $0 million for the three months ended March 31, ~~2019.~~2021 and March 31, 2020.

~~Investment income.~~Income tax provision (benefit). ~~Investment~~The income tax provision (benefit) was ~~$0 for the three months ended March 31, 2020 compared to $11.3~~($2.3) million and $71.1 million for the three months ended March 31, ~~2019. Investment income includes a gain on the sale of our Austria theatres of $11.1 million. ~~

~~Income tax provision.~~ ~~The income tax provision was $71.1 million~~2021 and ~~$2.2 million for the three months ended~~ March 31, 2020, ~~and March 31, 2019,~~ respectively. The ~~increase~~decrease in ~~the~~ income tax ~~provision~~expense is primarily due to the recording of International valuation ~~allowance~~allowances against deferred tax assets held in Spain of $40.1 million and Germany of $33.1 million during the three months ended March 31, 2020. See Note 8—Income Taxes in the Notes to the ~~Condensed~~ Consolidated Financial Statements inunder Item 1 of Part I of this Form 10-Q for further information.

Net ~~earnings (loss).~~loss. Net ~~earnings (loss)~~loss was ~~($738.5)~~$127.1 million and ~~$0.9~~ $738.5 million during the three months ended March 31, ~~2020~~2021 and March 31, ~~2019,~~2020, respectively. Net loss during the three months ended March 31, ~~2020~~2021 compared to net ~~earnings~~loss for the three months ended March 31, ~~2019~~2020 was ~~negatively~~positively impacted by the ~~decrease~~decline in ~~attendance as a result of the temporary suspension of operations at all our theatres on or before March 17, 2020,~~ impairment charges related to long-lived assets, definite and indefinite-lived intangible assets and goodwill, ~~increased~~decreased depreciation expense, ~~declines in investment income, declines in equity in earnings of non-consolidated entities and an increase in income tax provision, offset by reduced operating expenses,~~ lower amounts of rent expense, ~~declines~~increases in other income and decreases in income tax provision, partially offset by the decrease in attendance as a result of the COVID-19 pandemic, higher interest expense and general and administrative ~~expenses~~costs, and ~~declines~~increases in ~~other expense.~~

foreign currency translation rates.

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LIQUIDITY AND CAPITAL RESOURCES

Our consolidated revenues are primarily collected in cash, principally through box office admissions and food and beverage sales. ~~We have~~Prior to the impact of COVID-19 on our business, we had an operating “float” which partially ~~finances~~financed our operations and which generally ~~permits~~permitted us to maintain a smaller amount of working capital capacity. This float ~~exists~~existed 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 during such periods.

We had working capital deficits (excluding restricted cash) as of March 31, ~~2020~~2021 and December 31, ~~2019~~2020 of ~~$1,070.3~~$597.5 million and ~~$1,270.6~~$1,104.6 million, respectively. As of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, working capital included ~~$581.5 million and $585.8 million, respectively, of~~ operating lease liabilities ~~and $400.3~~ of $591.1 million and ~~$449.2~~$583.6 million, respectively, and deferred revenues of ~~deferred revenues. We have~~$404.3 million and $405.4 million, respectively. At March 31, 2021, we had $211.9 million available for borrowing, net of letters of credit, under our $225.0 million Senior Secured Revolving Credit Facility. At December 31, 2020, we had borrowed all available amounts under our Senior Secured Revolving Credit ~~Facility to meet obligations as they come due. As of March 31, 2020, we~~Facility. We had borrowed ~~$215.0~~$212.2 million (the full availability net of standby letters of credit) under our $225.0 million Senior Secured Revolving Credit ~~Facility.~~ Facility as of December 31, 2020. We also ~~maintain~~maintained a revolving credit facility due February 14, 2022 at our Odeon subsidiary (the “Odeon Revolver”). This facility was replaced on February 15, 2021 by the Odeon Term Loan Facility. Reference is made to Note 6—Corporate Borrowings and Finance Lease Obligations in the Notes to the Condensed Consolidated Financial Statements thereof under Item 1 of Part I of this Form 10-Q for further information about the Odeon Term Loan Facility. As of ~~March~~December 31, 2020, we had borrowed ~~$109.8~~$120.8 million (the full availability net of standby letters of credit) under our £100.0 million Odeon Revolver ($~~123.5~~136.3 million based on the foreign currency translation rate of ~~1.2345~~1.3628 on ~~March~~December 31, 2020).

In response to the COVID-19 pandemic, ~~the Company has taken~~we adjusted certain elements of our business strategy and ~~is continuing~~took and continue to take significant steps to preserve cash by eliminating non-essential costs, including reductions to ~~executive compensation~~our variable costs and elements of our fixed cost ~~structure:~~structure, including, but not limited to:

●

Terminated or deferred all non-essential capital expenditures to minimum levels necessary while theatres are ~~closed.~~operating for limited hours or closed;

●

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pay increases; and elimination or reduction of non-healthcare benefits. With the resumption of operations, we eliminated the full and partial furloughs and employment costs increased. The increase in employment costs during the three months ended March 31, 2021 was primarily due to increases in bonus expense, stock-based compensation expense as a result of the modification and acceleration of vesting of awards during the current and prior year and increases in non-qualified deferred compensation expense due to increases in the fair values of related investments;

●

All domestic theatre-level crew members ~~have been~~were fully furloughed and theatre-level ~~management has been~~managements’ hours were reduced to the minimum ~~level~~levels necessary to begin resumption of operations when permitted. Similar efforts to reduce theatre-level and corporate employment costs ~~are being~~were undertaken internationally consistent with applicable laws across the jurisdictions in which ~~the Company operates.~~we operate. As we resumed limited operations, employment costs increased;

●

Working with our landlords, vendors, and other business partners to manage, defer, and/or abate the related rent expenses and operating ~~expenses during the disruptions caused by the COVID-19 pandemic.~~expenses;

●

Introduced an active cash management process, which, among other things, requires senior management approval of all outgoing ~~payments.~~payments;

●

~~The Company does not expect to continue~~Since April 24, 2020, we have been prohibited from making dividend payments ~~which, when considered~~ in ~~tandem~~accordance with the ~~dividend~~covenant suspension conditions in our Senior Secured Credit Facility Agreement. We had also previously elected to decrease ~~of $0.17 per share~~the dividend paid in the first quarter of 2020 ~~when compared~~by $0.17 per share. The cash savings as a result of the prior decrease and current prohibition on making dividend payments was $4.3 million during the three months ended March 31, 2021 in comparison to the ~~dividend payments made in the first quarter of 2019, results in aggregate quarterly cash savings of $17.5 million.~~three months ended March 31, 2020; and

●

We ~~do not expect to make~~are prohibited from making purchases under our ~~recently authorized~~ stock repurchase program ~~for~~in accordance with the ~~duration of 2020.~~covenant suspension conditions in our Senior Secured Credit Facility Agreement.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was signed into law. The CARES Act provides opportunities for additional liquidity, loan guarantees, and other government programs to support companies affected by the COVID-19 pandemic and their employees. Based on our preliminary analysis of the CARES Act, we expect to recognize the following benefits:

●

Approximately $18.5 million of cash tax refunds from overpayments and refundable alternative minimum tax credits with the filing of our 2019 federal tax return, amending 2018 state tax returns and filing 2019 state tax returns in which the Company expects a refund.

●

~~Deferral of social security payroll tax matches that would otherwise be required in 2020.~~

●

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We intend to seek any available potential benefits, ~~under the CARES Act,~~ including loans, investments or guarantees, ~~and any other such current or~~under future government programs for which we qualify domestically and internationally. We have taken advantage of many forms of governmental assistance in the U.S. and internationally including ~~those described above.~~but not limited to revenue and fixed cost reimbursements, payroll subsidies, rent support programs, direct grants, and property tax holidays. We cannot predict the manner in which such benefits will be allocated or administered, and we cannot assure ~~you~~ that weit will be able to access such benefits in a timely manner or at all.

~~We believe our~~In addition to preserving cash, ~~balance~~we enhanced liquidity through debt issuances, debt exchanges and equity sales as ~~of March 31, 2020 was sufficient to withstand a global suspension of operations until a partial reopening~~follows. See Note 6—Corporate Borrowings and Finance Lease Obligations and Note 7—Stockholders’ Equity in ~~July 2020. After giving effect~~the Notes to the ~~proceeds~~Condensed Consolidated Financial Statements in Item 1 of ~~$500.0 million received from the~~Part I in this Form 10-Q for further information.

●

The April 2020 issuance of $500 million of First Lien Notes due 2025.

●

The July 2020 completion of a debt exchange offer in which we issued approximately $1.46 billion aggregate principal amount of Second Lien Notes due 2026 in exchange for approximately $2.02 billion principal amount of our senior subordinated notes, reducing the principal amounts of our debt by approximately $555 million and extending maturities on approximately $1.7 billion of debt to 2026, most of which was maturing in 2024 and 2025 previously. Interest on the Second Lien Notes due 2026 for the first three six-month interest periods after the issue date is expected to be paid all or in part on an in-kind basis pursuant to the terms of the Second Lien Notes due 2026.

●

The July 2020 issuance of the First Lien Notes due 2026 in which we received proceeds of $270.0 million, net of discounts and deferred charges.

●

The launch of several “at-the-market” equity offerings to raise capital through the sale of our Class A common stock. During the year ended December 31, 2020, we sold 91.0 million shares, generating $272.8 million in gross proceeds and paid fees to sales agents of $6.8 million. In January 2021, we sold 187.1 million shares, generating $596.9 million in gross proceeds and paid fees to sales agents of $14.9 million and other fees of $0.4 million. See Note 13—Subsequent Event in the Notes to the Condensed Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q for information regarding the additional at-the-market offerings of 43 million shares related to our remaining authorized shares of Class A common stock.

●

Table of ~~the 10.5% first lien notes due 2025 (the “First Lien Notes due 2025”) on April 24, 2020,~~Contents

Cash/PIK Toggle First Lien Secured Notes due 2026 (“First Lien Toggle Notes due 2026”) which we issued to Mudrick in January 2021 for cash.

●

The January 2021 conversion by holders of all $600 million of our 2.95% Convertible Senior Secured Notes due 2026 into shares of our Class A common stock at a conversion price of $13.51 which resulted in the issuance of 44,422,860 shares of our Class A Common Stock and reduced annual cash interest expense by $17.7 million.

●

The February 2021 entry into a new £140.0 million and €296.0 million term loan facility agreement (the “Odeon Term Loan Facility”) by Odeon Cinemas Group Limited (“Odeon”). Approximately £89.7 million and €12.8 million of the net proceeds from the Odeon Term Loan Facility was used to repay in full Odeon’s obligations (including principal, interest, fees and cash collateralized letters of credit) under our existing revolving credit facility and the remaining net proceeds will be used for general corporate purposes.

If attendance levels increase consistent with our assumptions described below, we currently estimate that our existing cash and cash equivalents ~~and cash generated from operations upon reopening, we may have~~will be sufficient to comply with minimum liquidity torequirements under our debt covenants, fund operations, and ~~essential~~satisfy obligations including cash outflows for increased rent and planned capital expenditures currently and through early May of 2022. This requires that we achieve significant increases in attendance levels beginning in the third quarter of 2021 and ultimately reaching 85% of pre COVID-19 attendance levels by the fourth quarter of 2021 and through the first and second quarters of 2022 as the vaccine rollout continues and more Hollywood product is released in our theatres. We entered into the Ninth Amendment, pursuant to which the requisite revolving lenders party thereto agreed to extend the suspension period for the ~~next 12 months. Further,~~financial covenant applicable to the Senior Secured Revolving Credit Facility from March 31, 2021 to March 31, 2022, as ~~discussed in Note 14—Subsequent Events, our lenders have granted relief from~~described, and on the ~~maintenance covenants in the revolving credit agreements~~terms and ~~we believe~~conditions specified, therein. As a result, we will ~~maintain compliance~~be subject to the financial covenant beginning with ~~all financial debt covenants~~the quarter ending June 30, 2022. We are subject to minimum liquidity requirements of approximately $145 million of which $100 million is required under the conditions for the ~~next 12 months. Therefore, we believe we have~~Extended Covenant Suspension Period under the ~~cash resources to reopen our theatres~~Senior Secured Revolving Credit Facility during the Extended Covenant Suspension Period, as amended, and ~~resume operations this summer or later.~~£32.5 million (approximately $45 million) required under the Odeon Term Loan Facility. Our liquidity needs thereafter will depend, among other things, on the timing of a full resumption of operations, the timing of movie releases and our ability to generate ~~revenues.~~cash from operations.

~~While~~We continue to explore potential sources of additional liquidity, including:

●

Additional equity financing. On April 27, 2021, the Board of Directors (the “Board”) determined not to seek stockholder approval of the proposal to approve an amendment to our Third Amended and Restated Certificate of Incorporation to increase the total number of shares of Class A common stock (par value $0.01 per share) we shall have the authority to issue by 500,000,000 shares to a total of 1,024,173,073 shares of Class A common stock (“Proposal 1”), and has withdrawn Proposal 1 from the agenda for the 2021 annual meeting of stockholders (the “Annual Meeting”). The Board reserves the right to propose an amendment of the Certificate of Incorporation to increase the authorized shares or for other items at any point in the future.

We plan to pursue equity issuances for our remaining authorized shares. See Note 13—Subsequent Event in the Notes to the Condensed Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q for information regarding the additional at-the-market offerings of 43 million shares related to our remaining authorized shares of Class A common stock. The amount of liquidity we ~~have used~~might generate will primarily depend on the market price of our ~~best~~Class A common stock, trading volumes, which impact the number of shares we are able to sell, and the available periods during which sales may be made. Because our market price and trading volumes are volatile, there is no guarantee as to the amounts of liquidity we might generate or that our prior experience accurately predicts the results we will achieve.

●

Landlord negotiations. Commencing in 2021, our cash expenditures for rent are scheduled to increase significantly as a result of rent obligations that had been deferred to 2021 and future years that were approximately $473.0 million as of March 31, 2021. In light of our liquidity challenges, and in order to establish our long-term viability, we believe we must continue to reach accommodations with our landlords to abate or defer a substantial portion of our rent obligations, in addition to generating sufficient amounts of liquidity through equity issuances and the other potential financing arrangements discussed below. Accordingly, we entered into additional landlord negotiations to seek material reductions, abatements and deferrals in our rent obligations. In connection with these negotiations, we have finalized agreements or agreements in principle with the landlords for a majority of leases where we have entered into negotiations. To

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the extent we achieve substantial deferrals but not abatements, our cash requirements will increase substantially in the future.

●

Other creditor discussions. While the liquidity we have raised has substantially extended our liquidity runway, the new debt we have issued or that has been committed, together with the higher interest rate payments that will be required in the future but have largely been deferred, will substantially increase our leverage and future cash requirements. These future cash requirements, like our deferred rent obligations, will present a challenge to our long-term viability if our operating income does not return to pre-COVID levels. Even then, we believe we will need to engage in discussions with our creditors to substantially reduce our leverage. We expect to continue to explore alternatives that include new-money financing and may involve converting debt to equity, which would help manage our leverage but could be dilutive to holders of our common stock. These discussions may not result in any agreement on commercially acceptable terms.

●

Covenant suspension. We entered into the Ninth Amendment, pursuant to which the requisite revolving lenders party thereto agreed to extend the suspension period for the financial covenant applicable to the Senior Secured Revolving Credit Facility from March 31, 2021 to March 31, 2022, as described, and on the terms and conditions specified, therein. See Note 6—Corporate Borrowings and Finance Lease Obligations in the Notes to the Condensed Consolidated Financial Statements under Item 1 of the Part I thereof for further information.

●

Joint-venture or other arrangements with existing business partners and minority investments in our capital stock. We continue to explore other potential arrangements, including equity investments, to generate additional liquidity.

It is very difficult to estimate our liquidity requirements, future cash burn rates and future attendance levels. Depending on our assumptions regarding the timing and ability to achieve more normalized levels of operating revenue, the estimates ~~based~~of amounts of required liquidity vary significantly. Similarly, it is very difficult to predict when theatre attendance levels will normalize, which we expect will depend on ~~currently available information,~~the widespread availability and use of effective vaccines for the coronavirus. However, our current cash burn rates are not sustainable. Further, we cannot ~~assure~~accurately predict what future changes may occur to the ~~reader~~supply or release date of movie titles available for theatrical exhibition once moviegoers are prepared to return in large numbers. Nor can we know with certainty the impact on consumer movie-going behavior of Warner Bros.’s decision to release its entire 2021 slate of movies on HBO Max at the same time as the movies debut in theatres, or the potential attendance impact of other studio decisions to accelerate in home availability of their theatrical movies. Studio negotiations regarding evolving theatrical release models and film licensing terms are ongoing. There can be no assurance that ~~our~~the attendance levels and other assumptions used to estimate our liquidity requirements and future cash burn rates will be correct,—~~including but not limited to attendance, food~~ and ~~beverage revenues, rent relief, cost savings, and capital expenditures~~—~~because we have never previously experienced a complete cessation of our operations, and as a consequence,~~ our ability to be predictive is ~~uncertain. If we do not recommence operations within our estimated timeline,~~uncertain due to the unknown magnitude and duration of the COVID-19 pandemic. Further, there can be no assurances that we will ~~require~~be successful in generating the additional ~~capital and may also require additional financing if, for example,~~liquidity necessary to meet our ~~operations do not generate~~obligations beyond twelve months from the ~~expected revenues or a recurrence~~issuance of ~~COVID-19 were~~these financial statements on terms acceptable to ~~cause another suspension of operations. Such additional financing may not be available on favorable terms~~us or at all. ~~Due~~If we are unable to ~~these factors, substantial doubt exists about~~maintain or renegotiate our minimum liquidity covenant requirements, it could have a significant adverse effect on our business, financial condition and operating results.

We also realized significant cancellation of debt income (“CODI”) in connection with our debt restructuring. As a result of such CODI, we estimate a significant portion of our net operating losses will be eliminated as a result of tax attribute reductions. Any loss of tax attributes as a result of such CODI may adversely affect our cash flows and therefore our ability to ~~continue as a going concern for a reasonable period of time.~~service our indebtedness.

~~As of March 31, 2020, we were in compliance with all financial debt covenants.~~

Cash Flows from Operating Activities

Cash flows ~~provided by (used in)~~used in operating activities, as reflected in the condensed consolidated statements of cash flows, were ~~$(184.0)~~$312.9 million and ~~$1.4~~$184.0 million during the three months ended March 31, ~~2020~~2021 and March 31, ~~2019,~~2020, respectively. The ~~decrease~~increase in cash flows ~~provided by~~used in operating activities was primarily due to decreased attendance levels and temporary suspension of operations at all of our theatres on or before March 17, 2020, which resulted in lower operating results during the three months ended March 31, ~~2019 and higher payments for accounts payable and accrued expenses and other liabilities primarily due to timing.~~2021.

Cash Flows from Investing Activities

Cash flows used in investing activities, as reflected in the condensed consolidated statements of cash flows, were ~~$87.4~~$16.0 million and ~~$98.5~~$87.4 million during the three months ended March 31, 2020 and March 31, ~~2019,~~2020, respectively. Cash outflows from investing activities include capital expenditures of ~~$91.7~~$11.9 million and ~~$114.8~~$91.7 million during the three months ended March 31, ~~2020~~2021 and March 31, ~~2019,~~2020, respectively. ~~Our~~In 2020, as a result of the COVID-19 pandemic, we

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significantly reduced capital expenditures to maintenance levels and with the exception of prior commitments, have temporarily suspended growth capital expenditures at this time. During the three months ended March 31, 2021, cash flows used in investing activities included proceeds from the disposition of assets of $5.2 million, primarily ~~consisted~~related to the sale of ~~strategic growth initiatives~~our remaining interest in one of the Baltic’s theatres located in Estonia of $3.8 million and ~~remodels, capital improvements to existing locations~~proceeds received from the disposition of one property of $1.4 million. During the three months ended March 31, 2021, we made an additional investment of $9.3 million in ~~our theatre circuit, and technology upgrades.~~Saudi Cinema Company LLC. During the three months ended March 31, 2020, cash flows used in investing activities included the proceeds from the disposition of long-term assets of $3.4 million related to one property. 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.

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 ~~terminated or deferred all non-essential capital expenditures to minimum levels necessary while theatres are closed. We~~ expect capital expenditures (net of landlord contributions) to be between ~~$130~~$100 million and ~~$160~~$120 million for ~~calendar~~ year ~~2020, which includes $75.6 million net spend during the three months~~ ended ~~March~~December 31, ~~2020.~~2021, primarily to maintain operations.

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Cash Flows from Financing Activities

Cash flows provided by ~~(used in) in~~ financing activities, as reflected in the condensed consolidated statements of cash flows, were ~~$312.4~~$854.7 million and ~~$(33.9)~~$312.4 million during the three months ended March 31, ~~2020~~2021 and March 31, ~~2019,~~2020, respectively. The increase in cash flows from financing activities during the three months ended March 31, ~~2020 compared to March 31, 2019~~2021 was primarily due to the borrowings under ~~our~~the Odeon Term Loan Facility of $534.3 million, the issuance of First Lien Toggle Notes due 2026 of $100.0 million, and net proceeds from the sale of Class A common stock of $581.6 million, partially offset by the repayments under the revolving credit facilities of $335.0 million, payment for deferred financing costs of $19.0 million, and principal payments under the ~~reduction in cash dividends paid.~~

Term Loan due 2026 of $5.0 million.

~~Borrowings~~During the three months ended March 31, 2020, cash inflows from financing activities included borrowings under our revolving credit facilities were $325.1 million, ~~during~~partially offset by principal payments under the ~~three months ended March 31, 2020. During the three months ended March 31, 2019, we made repayments~~Term Loan due 2026 of ~~$3.8 million under our revolving credit facilities.~~

~~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 26, 2020

March 9, 2020

March 23, 2020

$
0.03

$
3.2
October 24, 2019

December 2, 2019

December 16, 2019

0.20

21.0
August 2, 2019

September 9, 2019

September 23, 2019

0.20

21.3
May 3, 2019

June 10, 2019

June 24, 2019

0.20

21.3
February 15, 2019

March 11, 2019

March 25, 2019

0.20

21.3

$5.0 million. During the three months ended March 31, 2020, ~~and March 31, 2019,~~ we paid dividends and dividend equivalents of $4.3 ~~million and $21.8 million, respectively. As~~million. The following is a summary of ~~March 31, 2020, we accrued $1.2 million for the remaining unpaid dividend equivalents. We do not expect~~dividends declared to ~~continue dividend payments in order to preserve cash.~~stockholders:


			Amount per		Total Amount
			Share of		Declared
Declaration Date	Record Date	Date Paid	Common Stock		(In millions)
February 26, 2020	March 9, 2020	March 23, 2020	$	0.03	$	3.2

Senior Secured Credit Facilities (Senior Secured Revolving Credit Facility and Senior Secured Term Loan due ~~2026.~~2026). On ~~April 23, 2020,~~March 8, 2021, we entered into ~~an amendment to~~ the ~~Senior Secured Credit Facility~~Ninth Amendment, pursuant to which the requisite revolving lenders ~~thereunder granted a waiver of~~party thereto agreed to extend the ~~maintenance covenant thereunder~~suspension period for the ~~period from the and after the effective date of the Senior secured~~financial covenant under our Credit Agreement ~~Amendment to and including the earlier of (a)~~from a period ending on March 31, 2021 to a period ending on March 31, 2022 (the “Extended Covenant Suspension Period”). As an ongoing condition to the suspension of the financial covenant, we also agreed to (i) a minimum liquidity test of $100 million, (ii) an anti-cash hoarding test at any time Revolving Loans are outstanding and ~~(b)~~(iii) additional reporting obligations. On March 8, 2021, we entered into the ~~day immediately preceding~~Tenth Amendment, pursuant to which we agreed not to consent to certain modifications to the Credit Agreement described in the Tenth Amendment without the consent of the majority of the revolving lenders party to the Tenth Amendment.

Odeon Term Loan Facility. On February 15, 2021, Odeon Cinemas Group Limited (“Odeon”), a wholly-owned subsidiary of the Company entered into a new £140.0 million and €296.0 million term loan facility agreement (the “Odeon Term Loan Facility”), by and among Odeon, the subsidiaries of Odeon party thereto, the lenders and other loan parties thereto and Lucid Agency Services Limited as agent and Lucid Trustee Services Limited as security agent. Approximately £89.7 million and €12.8 million of the net proceeds from the Odeon Term Loan Facility were used to repay in full Odeon’s obligations (including principal, interest, fees and cash collateralized letters of credit) under its existing revolving credit facility and the remaining net proceeds will be used for general corporate purposes. The Odeon Term Loan Facility has a maturity of 2.5 years from the date on which it is first drawn. Borrowings under the Odeon Term Loan Facility bear interest at a rate equal to 10.75% per annum during the first year and 11.25% thereafter. The interest is capitalized on the last day of ~~the Test Period (as defined in the Senior Secured Credit Facility).~~

~~Odeon Revolving Credit Facility.~~ ~~On April 24, 2020, we entered into an amendment~~each interest period and added to the outstanding principal amount, however Odeon ~~Revolving Credit Facility, pursuant~~has the option to ~~which the requisite lenders thereunder granted a waiver of the maintenance covenant thereunder for the period from and after the effective date of~~elect to pay interest in cash. All obligations under the Odeon ~~Amendment~~Term Loan Facility are guaranteed by certain subsidiaries of Odeon. We are subject to ~~and including the earlier~~minimum liquidity requirements of ~~(a) March 31, 2021 and (b) the day immediately preceding the last day of the Relevant Period (as defined in~~£32.5 million (approximately $45 million) required under the Odeon ~~Amendment).~~Term Loan Facility, measured at each quarter end date.

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~~Convertible~~First Lien Toggle Notes due ~~2024.~~2026. On April 24, 2020, we entered into a supplemental indenture (the “Supplemental Indenture”) to the Convertible Notes due 2024 indenture, dated as of September 14, 2018. The Supplemental Indenture amended the debt covenant under the Convertible Notes Indenture to permit us to issue the First Lien Notes due 2025, among other changes.

~~First Lien Notes due 2025.~~ ~~On April 24, 2020,~~January 15, 2021, we issued ~~$500.0~~$100.0 million aggregate principal amount of our ~~10.5% first lien notes~~First Lien Toggle Notes due ~~2025,~~2026 as contemplated by the previously disclosed commitment letter with ~~an original issue discount~~Mudrick Capital Management, LP, dated as of ~~$10.0 million.~~December 10, 2020. The First Lien Toggle Notes due ~~2025~~2026 were issued pursuant to an indenture dated as of January 15, 2021 among us, the guarantors named therein and the U.S. Bank National Association, as trustee and collateral agent. The First Lien Toggle Notes due 2026 bear cash interest at a rate of ~~10.5%~~15% per annum payable semi-annually in arrears on January 15 and July 15, beginning on July 15, 2021. Interest for the first three interest periods after the issue date may, at our option, be paid in PIK interest at a rate of 17% per annum, and thereafter interest shall be payable solely in cash. The First Lien Toggle Notes due 2026 will mature on April ~~15 and October 15 each year, commencing October 15, 2020~~24, 2026. The indenture provides that the First Lien Toggle Notes due 2026 are general senior secured obligations of the Company and are secured on a pari passu basis with the Senior ~~Secured~~ Credit ~~Facility. The~~Facilities, the First Lien Notes due 2026, the First Lien Notes due 2025, ~~will mature on April 15, 2025.~~

~~Senior Subordinated Debt Exchange Offers~~~~. On June 3, 2020,~~and the ~~Company announced that it has commenced private offers to exchange (the “Exchange Offers”) its outstanding 6.375% Senior Subordinated~~Convertible Notes due ~~2024, 5.75% Senior Subordinated Notes due 2025, 5.875% Senior Subordinated~~2026.

Convertible Notes. On January 27, 2021, affiliates of Silver Lake and certain co-investors (collectively, the “Noteholders”) elected to convert (the “Conversion”) all $600.0 million principal amount of our Convertible Notes due 2026 into shares of our Class A common stock at a conversion price of $13.51 per share. The Conversion settled on January 29, 2021 and ~~6.125% Senior Subordinated Notes due 2027 (and, together~~resulted in the ~~“Existing Subordinated Notes”~~issuance of 44,422,860 shares of our Class A common stock to the Noteholders. The Conversion reduced our first-lien indebtedness by $600.0 million. Pursuant to the Stock Repurchase and Cancellation Agreement with Dalian Wanda Group Co., Ltd. (“Wanda”) ~~for newly issued~~ ~~12% Cash/PIK Second Lien Secured Notes due 2026~~ ~~(the “New Notes”). In~~dated as of September 14, 2018, 5,666,000 shares of our Class B common stock held by Wanda were forfeited and cancelled in connection with the Exchange Offers, the Company is also soliciting consents (the “Consent Solicitations”) from eligible holders of the Existing Subordinated Notes to amend the indentures governing the Existing Subordinated Notes to eliminate or modify certain of the covenants, restrictive provisions and events of default and to remove the existing subsidiary guarantees of the Existing Subordinated Notes. The Exchange Offers and Consent Solicitations are being made upon the terms and subject to the conditions set forth in the offering memorandum, dated June 3, 2020.Conversion.

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See Note 6—Corporate Borrowings and ~~Note 14—Subsequent Event~~s Finance Lease Obligations in the Notes to the Condensed Consolidated Financial Statements in Item 1 of Part I of this Form 10-Q for further information regarding the above.

Contractual Obligations, Commitments and Contingencies

We have commitments and contingencies for ~~financing~~finance 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, ~~2019.~~2020. Except as set forth above and below with respect to corporate borrowings ~~under our revolving lines of credit~~ and ~~the issuance of the First Lien Notes due 2025,~~leases, since December 31, ~~2019,~~2020, there have been no material changes to the commitments and contingencies outside of the ordinary course of business.

We borrowed under our Odeon Term Loan Facility, issued First Lien Toggle Notes due 2026, and Silver Lake and certain co-investors elected to convert all of our Convertible Notes due 2026 into shares of our Class A common stock. See Note 6—Corporate Borrowings and Finance Lease Obligations in the Notes to the Condensed Consolidated Financial Statements in Item 1 of Part I of this Form 10-Q for further information, including a table that provides the principal payments required and maturities of corporate borrowings as of March 31, 2021.

We received rent concessions provided by the lessors that aided or will aid, in mitigating the economic effects of COVID-19. These concessions primarily consist of deferral of rent payments and rent abatements. See Note 2—Leases in the Notes to the Condensed Consolidated Financial Statements in Item 1 of Part I of this Form 10-Q for further information, including a table of the minimum annual payments required under existing operating and finance lease liabilities (net present value thereof) as of March 31, 2021.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

In the ordinary course of business, our financial results are exposed to fluctuations in interest rates and foreign currency exchange 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, 2021 and March 31, 2020, 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, 2021 and March 31, 2020, 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 condensed 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~~are presented below.

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Market risk on variable-rate financial instruments. At March 31, 2021 and March 31, 2020, we maintained a Senior Secured Credit ~~Facility~~Facilities comprised of a $225.0 million ~~revolving credit facility~~Senior Secured Revolving Credit Facility and $2,000.0 million of Senior Secured Term Loan due 2026. The Credit Agreement (which governs the Senior Secured Credit ~~Facility~~Facilities) provides for borrowings at a rate per annum equal to, at our option, either ~~(i) an applicable margin plus~~(1) a base rate determined by reference to the highest of (a) 0.50% per annum plus the Federal Funds Effective Rate, orand (b) the prime rate announced by the Administrative Agent or (2) LIBOR plus (x) in the case of ~~Citi~~the Senior Secured Term Loans, 2.0% for base rate loans or ~~(ii)~~3.0% for LIBOR loans or (y) in the ~~LIBOR + 3.0%~~case of the Senior Secured Revolving Credit Facility, an applicable margin based on the Secured Leverage Ratio (defined in the Credit Agreement). The rate in effect ~~at March 31, 2020~~ for the outstanding Senior Secured Term Loan due 2026 was 3.195% per annum at March 31, 2021 and 4.61% per ~~annum.~~ annum at March 31, 2020. At March 31, 2020, we also maintained a revolving credit facility due February 14, 2020 at our Odeon subsidiary.

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 March 31, ~~2020,~~2021, we had ~~an aggregate principal balance of $215.0 million~~no variable-rate borrowings outstanding under our revolving credit ~~facility, $109.8 million under the Odeon Revolver Credit Facility,~~facilities and had an aggregate principal balance of ~~$1,980.0~~$1,960.0 million outstanding under the Term Loan due 2026. A 100-basis point change in market interest rates would have increased or decreased interest expense on the Senior Secured Credit Facilities by $4.9 million during the three months ended March 31, 2021. At March 31, 2020, we had an aggregate principal balance of $215.0 million under our revolving credit facility, $109.8 million under the Odeon Revolver Credit Facility, and an aggregate principal balance of $1,980.0 million outstanding under the Senior Secured Term Loan due 2026. A 100-basis point change in market interest rates would have increased or decreased interest expense on our revolving credit facility and the Senior Secured Term Loan due 2026 by $5.5 million and on the Odeon Revolver Credit Facility by ~~$5.8~~$0.3 million during the three months ended March 31, 2020.

Market risk on fixed-rate financial instruments. Included in long-term corporate borrowings at March 31, 2021 were principal amounts of $500.0 million of our First Lien Notes due 2025, $1,423.6 million of our Second Lien Notes due 2026, $538.8 million (£140.0 million and €296.0 million) of our Odeon Term Loan due 2023, $300.0 million of our First Lien Notes due 2026, $100.0 million First Lien Toggle Notes due 2026, $98.3 million of our Notes due 2025, $55.6 million of our Notes due 2026, $130.7 million of our Notes due 2027, and £4.0 million ($5.5 million) of our Sterling Notes due 2024. A 100-basis point change in market interest rates would have caused an increase or (decrease) in the fair value of our fixed rate financial instruments of approximately $99.3 million and $(94.9) million, respectively, as of March 31, 2021.

Included in long-term corporate borrowings at March 31, 2020 were principal amounts of $600.0 million of our Convertible Notes due 2024, $600.0 million of our Notes due 2025, $595.0 million of our Notes due 2026, $475.0 million of our Notes due 2027, and £500.0 million ($617.3 million) of our Sterling Notes due 2024. A 100-basis point change in market interest rates would have caused an increase or (decrease) in the fair value of our fixed rate financial instruments of approximately $42.3 million and $(40.2) million, ~~respectively.~~respectively, as of March 31, 2020.

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 March 31, ~~2020,~~2021, holding everything else

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constant, a hypothetical 10% strengthening of the U.S. dollar versus the average exchange rates of applicable currencies to depict the potential impact to net income (loss) of changes in foreign exchange rates would decrease the aggregate net loss of our International theatres for the three months ended March 31, 2021 by approximately $12.6 million. Based upon our ownership in Odeon and Nordic as of March 31, 2020, holding everything else constant, a hypothetical 10% strengthening of the U.S. dollar versus the average exchange rates of applicable currencies to depict the potential impact to net loss of changes in foreign exchange rates would decrease the aggregate net earnings of our International theatres for the three months ended March 31, 2020 by approximately $73.8 million.

Our foreign currency translation rates ~~decreased~~increased by approximately ~~2.5%~~9.2% for the three months ended March 31, ~~2020~~2021 compared to the three months ended March 31, ~~2019, which did not significantly impact our consolidated net loss for the three months ended March 31,~~ 2020.

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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.

The Company has not experienced any material impact to its internal control over financial reporting as defined in Exchange Act Rule 13a-15(f) during the COVID-19 pandemic. Most of the Company’s employees worked remotely during the period in which we prepared these financial statements due to the impact of COVID-19. The Company enhanced its oversight and monitoring during the close and reporting process and assessed frequency of controls to align with decreased or no volume of transactions occurring during the limited or temporary suspension of theatre operations. Other than enhancing Company’s oversight and monitoring processes, the Company did not alter or compromise its disclosure controls and procedures. The Company is continually monitoring and assessing the need to modify or enhance its disclosure controls to ensure disclosure controls and procedures continue to be effective.

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PART II—OTHER INFORMATION

Item 1. Legal Proceedings

Reference is made to Note 11—Commitments and Contingencies of the Notes to the Company’s Condensed Consolidated Financial Statements contained 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, ~~2019. Except as set forth below, there~~2020. There have been no material changes to the risk factors contained in our ~~Annual~~Quarterly Report on Form ~~10-K~~10-Q for the ~~year~~three months ended ~~December~~March 31, ~~2019.~~

~~The COVID-19 pandemic has disrupted our business and will adversely affect our operations and results of operations.~~

The COVID-19 pandemic has had and will continue to have a significant and adverse impact on our business. As a result of the pandemic, the majority of our theatres worldwide have temporarily suspended operations through late June, and we are generating no revenue from admissions, food and beverage sales, or other revenue, which represent substantially all of our revenue and cash flow from operations. The ultimate duration of the pandemic and of responsive governmental regulations, including shelter-in-place orders and mandated business closures, is uncertain and we may need to extend such suspension with respect to some or all of our theatres. We cannot predict when or if our business will return to normal levels. If the coronavirus continues to spread in the parts of the world where we operate, we may elect on a voluntary basis to again halt operations (after their reopening) certain of our theatres, or governmental officials may order additional closures, impose further restrictions on travel or introduce social distancing measures such as limiting the number of people allowed in a theatre at any given time. While we plan to eliminate variable costs and reduce fixed costs to the extent possible, we continue to incur significant cash outflows, including interest payments, taxes, essential capital expenditures, and certain compensation and benefits payments. We cannot be certain that we will have access to sufficient liquidity to meet our obligations for the time required to allow our cash generating operations to resume or normalize. We may not be able to obtain additional liquidity and any relief provided by lenders, governmental agencies, and business partners may not be adequate and may include onerous terms. Due to these factors, substantial doubt exists about our ability to continue as a going concern for a reasonable period of time.

We may face difficulty in maintaining relationships with our landlords, vendors, motion picture distributors, customers, and employees during the suspension period. We are unable to predict the availability of supplies or workforce necessary to operate when we re-open. Since the outbreak of the COVID-19 virus, movie studios have suspended production of movies and delayed the release date of movies. Some movie studios have also reduced or eliminated the theatrical exclusive release window as theatres are not operating. The longer and more severe the pandemic, including repeat or cyclical outbreaks beyond the one we are currently experiencing, the more severe the adverse effects will be on our business, results of operations, liquidity, cash flows, financial condition, access to credit markets and ability to service our existing and future indebtedness.

Even when the COVID-19 pandemic subsides, we cannot guarantee that we will recover as rapidly as other industries, or that we will recover as rapidly as others within the industry due to our strong footprint in densely populated areas. For example, once applicable government restrictions are lifted, it is unclear how quickly theatres will be permitted to resume operations and how quickly patrons will return to our theatres once theatres resume operations, which may be a function of continued concerns over safety and social distancing and/or depressed consumer sentiment due to adverse economic conditions, including job losses, among other things. Even once theatres resume operations, a single case of COVID-19 in a theatre could result in additional costs and further closures, or a “second wave” or recurrence of COVID-19 cases could cause another widespread suspension of operations. If we do not respond appropriately to the pandemic, or if customers do not perceive our response to be adequate, we could suffer damage to our reputation, which could adversely affect our business. Furthermore, the effects of the pandemic on our business could be long-lasting and could continue to have adverse effects on our business, results of operations, liquidity, cash flows and financial condition, some of which may be significant, and may adversely impact our ability to operate our business after our temporary suspension ends on the same terms as we conducted business prior to the pandemic. Significant impacts on our business caused by the COVID-19 pandemic include and is likely to continue to include, among others:

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●

lack of availability of films in the short or long term, including as a result of (i) continued delay in film releases; (ii) release of scheduled films on alternative channels or (ii) disruptions of film production;

●

decreased attendance at our theatres after they resume operations, including due to (i) continued safety and health concerns, (ii) additional regulatory requirements limiting our seating capacity or (iii) a change in consumer behavior in favor of alternative forms of entertainment;

●

increased operating costs resulting from additional regulatory requirements enacted in response to the COVID-19 pandemic and from precautionary measures we voluntarily take at our facilities to protect the health and well-being of our customers and employees;

●

our inability to negotiate favorable rent payment terms with our landlords, which could impact our current or future cash flows with respect to the timing or amount of rent payments or lead to defaults, lease terminations, accelerated rent, and/or awards of other damages;

●

~~unavailability of employees and/or their inability or unwillingness to conduct work under any revised work environment protocols;~~

●

~~increased risks related to employee matters, including increased employment litigation and claims relating to terminations or furloughs caused by the suspension of theatre operations;~~

●

~~reductions and delays associated with planned operating and capital expenditures;~~

●

~~impairment charges;~~

●

our inability to generate significant cash flow from operations if our theatres continue to operate at significantly lower than historical levels, which could lead to a substantial increase in indebtedness and negatively impact our ability to comply with the financial covenants, if applicable, in our debt agreements;

●

our inability to access lending, capital markets and other sources of liquidity, if needed, on reasonable terms, or at all, or obtain amendments, extensions and waivers of financial maintenance covenants, among other material terms;

●

~~our inability to effectively meet our short- and long-term obligations; and~~

●

~~our inability to service our existing and future indebtedness.~~

The outbreak of COVID-19 has also significantly increased economic uncertainty. It is likely that the current outbreak or continued spread of COVID-19 will cause a global recession, which will further adversely affect our business, and such adverse effects may be material. We have never previously experienced a complete cessation of our operations, and as a consequence, our ability to be predictive regarding the impact of such a cessation on our operations and future prospects is uncertain. In addition, the magnitude, duration and speed of the global pandemic is uncertain. As a consequence, we cannot estimate the impact on our business, financial condition or near or longer-term financial or operational results with certainty.

In addition, although we are reviewing and intend to seek any available benefits under the CARES Act or any other governmental benefits and support for which we are eligible domestically or internationally, we cannot predict the manner in which such benefits will be allocated or administered and we cannot assure you that we will be able to access such benefits in a timely manner or at all. Certain of the benefits we seek to access under the CARES Act or other applicable benefits have not previously been administered on the present scale or at all. Government or third party program administrators may be unable to cope with the volume of applications in the near term and any benefits we receive may not be as extensive as we currently estimate, may impose additional conditions and restrictions on our operations or may otherwise provide less relief than we contemplate. Accessing these benefits and our response to the COVID-19 pandemic have required our management team to devote extensive resources and are likely to continue to do so in the near future, which negatively affects our ability to implement our business plan and respond to opportunities.

The COVID-19 pandemic (including governmental responses, broad economic impacts and market disruptions) has heightened the risks related to the other risk factors described in our Annual Report incorporated by reference herein and may also heighten many of the other risks described herein.

2021.

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

~~(a)~~

None.

~~(b)~~

~~None.~~

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~~(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)
February 27, 2020 through March 31, 2020 (1)

—

$
—

—

$
200.0
Total

—

—

~~(1)~~

As announced on February 27, 2020, our Board of Directors authorized a share repurchase program for an aggregate purchase of up to $200.0 million of our common stock. As of March 31, 2020, $200.0 million remained available for repurchase under this plan. A three-year time limit had been set for the completion of this program, expiring February 26, 2023.

Item 3. Defaults Upon Senior Securities

None.

Item 5. Other Information

Non-Qualified Deferred Compensation Plan Termination

~~As disclosed in Item 8.01~~On May 3, 2021, the Compensation Committee of the Board of Directors of the Company approved the termination and liquidation of the American Multi-Cinema, Inc. Non-Qualified Deferred Compensation Plan ("NQDC"), a non-qualified defined contribution plan benefiting a group of Company’s highly compensated employees.

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In connection with this action and to document the termination, the Compensation Committee approved an amendment to the NQDC (the NQDC Amendment”), which has been filed as an exhibit to this Form ~~8-K~~10-Q. Additional information regarding the NQDC, including the named executive officers with account balances under the NQDC, can be found in the Company’s Proxy Statement on Schedule 14A for its 2021 annual meeting of stockholders filed with the Securities and Exchange Commission on March 19, 2021 (the “Proxy Statement”).

In compliance with Section 409A of the Internal Revenue Code and Treasury regulations issued thereunder, (i) no further contributions shall be made to the NQDC after May 3, 2021, (ii) payments in liquidation of the NQDC are being made 12 months after termination, and (iii) participants shall receive distributions in the ordinary course of business prior to the liquidation date as prescribed by the ~~Company on April 29, 2020 (the “Form 8-K”),~~NQDC.

The aggregate balance of the NQDC was approximately $11.8 million as of March 31, 2021. Distributions from the NQDC will be made in cash from the investment balances included in the NQDC. See the Proxy Statement for information about the individual account balances for the named executive officers as of December 31, 2020.

The account balances in the NQDC have accumulated as a result of prior compensation earned by the participants and contributions reflect participant elective compensation deferrals.

Annual Meeting Postponement

On May 4, 2021, the Board of Directors of the Company ~~plans to hold its 2020~~postponed the Annual Meeting of Stockholders ~~(the “2020 Annual Meeting”) on~~from May 4, 2021, to July 29, ~~2020 with~~2021. The Board of Directors also set a ~~June 8, 2020~~new record date of June 2, 2021, for ~~the determination of~~ stockholders entitled to ~~receive notice~~attend and vote at ~~such~~the rescheduled meeting. The postponement was approved to provide additional time for the Company’s current stockholders vote and ~~location of~~for the ~~2020~~Company to solicit proxies in connection with certain proposals.

The Company filed a definitive proxy statement with the SEC on March 19, 2021, and will be filing a revised proxy statement with the SEC after the new record date. The postponement will provide stockholders additional time to review and consider such information prior to the Annual Meeting. Because a new record date has been established, stockholders will receive a new notice for the Annual Meeting and will need to resubmit their votes, even if they have previously voted.

The Company previouslyannouncedthatanystockholderproposalssubmittedpursuanttoRule14a-8undertheSecurities Exchange Act of 1934, as amended, in order to be ~~specified~~included in the ~~2020 Proxy. The 2020~~proxy materials for the Annual Meeting, ~~was postponed in response to~~must be received at the ~~ongoing COVID-19 pandemic due to concerns for the health and safety of the~~ Company’s ~~stockholders, officers and employees and to comply with continuing governmental orders limiting the size of gatherings. Because the 2020 Annual Meeting will be more~~principal executive offices no later than ~~thirty (30) days after the anniversary of the Company’s 2019 Annual Meeting of Stockholders, the Company disclosed a new deadline for the submission of~~December 31, 2020. No such stockholder proposals for inclusion in the 2020 Proxy pursuant to Rule 14a-8 under the Exchange Act (“Rule 14a-8”). In accordance with Rule 14a-5(f) of the Exchange Act, the Company informed stockholders in the Form 8-K that to be considered for inclusion in the 2020 Proxy, stockholder proposals submitted under Rule 14a-8 were ~~required to be in writing and~~ received by that deadline. Stockholderswishingtosubmitproposalsforthe rescheduled meeting outsidetheprocessofRule14a-8ornominateindividualstotheBoardofDirectorsmustcomplywiththeadvancenoticeandotherprovisionsofthe Company’sBylaws and,tobetimely,anoticefromthestockholdermustbedeliveredtotheCorporateSecretaryat the Company’s principal offices no later than 5:00 pm Central Time at One AMC Way, 11500 Ash Street, Leawood, Kansas 66211, no later than 5:00 pm Central Daylight Time on May 28, 2020, which the Company determined to be a reasonable time before it expects to begin to print and send its proxy materials. Such proposals were also required to comply with the remaining requirements of Rule 14a-8. Any proposal submitted after the foregoing deadline will not be considered timely and will be excluded from the 2020 Proxy.

Additionally, in accordance with the advance notice provisions set forth in the Company’s Bylaws, in order for a stockholder proposal submitted outside of Rule 14a-8 or a director nomination submitted by a stockholder to be considered timely, it must be received by the Corporate Secretary not earlier than May 30, ~~2020~~2021or laterthan June 29,2021.

Amendment to Bylaws

On May 4, 2021, the Board of Directors of the Company approved an amendment to Article II, Section 6 of the Company’s Bylaws to reduce the number of shares present at meeting of stockholders necessary to constitute a quorum to conduct business from a majority of issued and ~~no later than June 29, 2020.~~outstanding shares to one-third (1/3) of issued and outstanding shares. The amendment to the Bylaws has been filed as an exhibit to this Form 10-Q.

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Item 6. Exhibits.

EXHIBIT INDEX


EXHIBIT NUMBER		DESCRIPTION
~~4.1~~3.1(a)		~~Indenture, dated as~~Third Amended and Restated Bylaws of ~~April 24, 2020, among~~ AMC Entertainment Holdings, Inc. ~~the guarantors named therein and U.S. Bank National Association, as trustee and collateral agent, including the form of the 10.5% First Lien Notes due 2025~~ (incorporated by reference from Exhibit ~~4.1~~3.2 to the Company’s Registration Statement on Form S-1 (File No. 333-190904) filed on November 22, 2013, as amended).

3.1(b)		Amendment to the Third Amended and Restated Bylaws of AMC Entertainment Holdings, Inc., effective as of July 29, 2020 (incorporated by reference from Exhibit 3.2 to AMC’s Current Report on Form 8-K (File No. 1-33892) filed on ~~April 24,~~July 31, 2020).

*4.23.1(c)		Second ~~Supplemental Indenture with respect~~Amendment to ~~$600 million principal amount~~the Third Amended and Restated Bylaws of ~~2.95% Convertible Senior Notes due 2024, dated as of April 24, 2020, between~~ AMC Entertainment Holdings, Inc. ~~and U.S. bank National Association, as trustee.~~(incorporated by reference from Exhibit 3.2 to AMC’s Current Report on Form 8-K (File No. 1-33892) filed on January 25, 2021).

~~4.3~~*3.1(d)		~~Seventh~~Third Amendment to ~~Credit~~the Third Amended and Restated Bylaws of AMC Entertainment Holdings, Inc. effective as of May 4, 2021.

4.1		Term Loan Facility Agreement, dated as of ~~April 23, 2020,~~February 15, 2021, by and among Odeon Cinemas Group Limited, the subsidiaries of Odeon Cinemas Group Limited party thereto, the lenders and other loan parties thereto and Lucid Agency Services Limited, as agent and security agent (incorporated by reference from Exhibit 10.1 to AMC’s Current Report on Form 8-K (File No. 1-33892) filed on February 17, 2021).

4.2		Form of 15%/17% Cash/PIK Toggle First Lien Secured Notes due 2026 (incorporated by reference from Exhibit 4.2 (and is included in Exhibit 4.1) to AMC’s Current Report on Form 8-K (File No. 1-33892) filed on January 19, 2021).

4.3		Ninth Amendment, dated as of March 8, 2021, by and among AMC Entertainment Holdings, Inc., the lenders from time to time party thereto and ~~Citicorp North America, Inc.,~~Wilmington Savings Fund Society, FSB, as administrative agent (incorporated by reference from Exhibit 10.1 to AMC’s Current Report on Form 8-K (File No. 1-33892) filed on ~~April~~March 9, 2021).

4.4		Tenth Amendment, dated as of March 8, 2021, by and among AMC Entertainment Holdings, Inc. and the lenders from time to time party thereto (incorporated by reference from Exhibit 10.2 to AMC’s Current Report on Form 8-K (File No. 1-33892) filed on March 9, 2021).

4.5		Certificate of Retirement of 51,769,784 Shares of Class B Common Stock of AMC Entertainment Holdings, Inc., dated as of February 24, 2021 (incorporated by reference from Exhibit 4.32 to AMC’s Annual Report on Form 10-K (File No. 1-33892) filed on March 12, 2021).

10.1		Equity Distribution Agreement, dated as of December 11, 2020, by and between AMC Entertainment Holdings, Inc., Goldman Sachs & Co. LLC and B. Riley Securities, Inc. (incorporated by reference from Exhibit 1.1 to AMC’s Current Report on Form 8-K (File No. 1-33892) filed on December 11, 2020).

~~10.1~~10.2		~~Form~~Equity Distribution Agreement, dated as of ~~Special Performance Stock Unit Award Notice~~January 25, 2021, by and ~~Agreement under the~~between AMC Entertainment Holdings, Inc. ~~2013 Equity Incentive Plan~~, Goldman Sachs & Co. LLC and B. Riley Securities, Inc. (incorporated by reference from Exhibit 1.1 to AMC’s Current Report on Form 8-K (File No. 1-33892) filed on January 25, 2021).

***10.3		Amendment executed March 19, 2021, to the Employment Agreement between AMC Entertainment Holdings, Inc. and Sean D. Goodman executed on October 6, 2020 (incorporated by reference from Exhibit 10.1 to AMC’s Current Report on Form 8-K (File No. 1-33892) filed on March 19, 2021).

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*10.4		Termination Amendment to the American Multi-Cinema, Inc. Non-Qualified Defined Contribution Plan, effective May 3, ~~2020).~~2021.

~~10.2~~		Cooperation & Release Agreement, dated as of February 28, 2020, by and between Mark A. McDonald and American Multi-Cinema, Inc., on behalf of itself and its divisions, subsidiaries, parents, and affiliated companies, past and present (incorporated by reference from Exhibit 10.2 to AMC’s Current Report on Form 8-K (File No. 1-33892) filed on March 3, 2020).*31.1

*10.3		~~Form of Director Stock Award Notice and Agreement under the AMC Entertainment Holdings, Inc. 2013 Equity Incentive Plan.~~

*10.4		~~Form of Restricted and/or Performance Stock Unit Award Notice and Agreement under the AMC Entertainment Holdings, Inc. 2013 Equity Incentive Plan.~~

*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 Sean D. Goodman (Chief Financial Officer) furnished in accordance with Securities Act Release 33-8212.

**101.INS		Inline XBRL Instance Document

**101.SCH		Inline XBRL Taxonomy Extension Schema Document

**101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document

**101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document

**101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document

**101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document

**104		Cover Page Interactive Data File (formatted as inline XBRL and contained as Exhibit 101)

* Filed ~~herewith~~herewith.

** Submitted electronically with this Report.

***	Management contract, compensatory plan or arrangement.

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Table of Contents

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: ~~June 9, 2020~~May 6, 2021	/s/ Adam M. Aron
	Adam M. Aron
	Chief Executive Officer, Director and President


Date: ~~June 9, 2020~~May 6, 2021	/s/ Sean D. Goodman
	Sean D. Goodman
	Executive Vice President and Chief Financial Officer

6566

		Page Number
	PART I—FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	3
	Condensed Consolidated Statements of Operations	3
	Condensed Consolidated Statements of Comprehensive Loss	4
	Condensed Consolidated Balance Sheets	5
	Condensed Consolidated Statements of Cash Flows	6
	Notes to Condensed Consolidated Financial Statements	78
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3734
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	5960
Item 4.	Controls and Procedures	6062
	PART II—OTHER INFORMATION
Item 1.	Legal Proceedings	6162
Item 1A.	Risk Factors	6162
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	62
Item 3.	Defaults Upon Senior Securities	6362
Item 5.	Other Information	6362
Item 6.	Exhibits	64
	Signatures	6566


			Pension and
	Foreign		Other
(In millions)	Currency		Benefits		Total
Balance December 31, 2019	$	(8.8)	$	(17.3)	$	(26.1)
Other comprehensive loss before reclassifications		(93.6)		—		(93.6)
Amounts reclassified from accumulated other comprehensive loss		—		0.1		0.1
Balance March 31, 2020	$	(102.4)	$	(17.2)	$	(119.6)


	Three Months Ended
(In thousands)	March 31, 2020		March 31, 2019
Derivative liability fair value adjustment for embedded conversion feature in the Convertible Notes due 2024	$	(0.5)	$	13.3
Derivative asset fair value adjustment for contingent call option related to the Class B common stock purchase and cancellation agreement		20.1		15.1
Credit losses related to contingent lease guarantees		5.3		—
Loss on Pound sterling forward contract		—		0.3
Foreign currency transactions losses		2.0		0.5
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	$	26.9	$	29.8


		Three Months Ended
(In millions)	Condensed Consolidated Statement of Operations	March 31, 2020		March 31, 2019
DCM screen advertising revenues	Other revenues	$	3.6	$	3.9
DCIP equipment rental expense	Operating expense		1.3		1.1
Gross exhibition cost on AC JV Fathom Events programming	Film exhibition costs		2.4		7.3
Screenvision screen advertising revenues	Other revenues		2.1		3.5


	Carrying Value		Increase		Carrying Value
	as of		to Expense		as of
(In millions)	December 31, 2019		(Income)		March 31, 2020
Principal balance	$	600.0	$	—	$	600.0
Discount		(73.7)		3.4		(70.3)
Debt issuance costs		(11.2)		0.4		(10.8)
Derivative liability		0.5		(0.5)		—
Carrying value	$	515.6	$	3.3	$	518.9


			Subsidiary		Subsidiary		Consolidating		Consolidated
(In millions)	Holdings		Guarantors		Non-Guarantors		Adjustments		Holdings
Revenues
Admissions	$	—	$	389.1	$	178.9	$	—	$	568.0
Food and beverage		—		216.6		71.5		—		288.1
Other theatre		—		55.6		29.8		—		85.4
Total revenues		—		661.3		280.2		—		941.5
Operating costs and expenses
Film exhibition costs		—		198.9		72.8		—		271.7
Food and beverage costs		—		34.9		18.5		—		53.4
Operating expense, excluding depreciation and amortization		—		251.9		105.0		—		356.9
Rent		—		174.4		63.4		—		237.8
General and administrative:
Merger, acquisition and other costs		—		0.3		(0.1)		—		0.2
Other, excluding depreciation and amortization		—		17.3		15.9		—		33.2
Depreciation and amortization		—		92.4		30.1		—		122.5
Impairment of long-lived assets, indefinite-lived intangible assets and goodwill		—		1,214.3		637.6		—		1,851.9
Operating costs and expenses		—		1,984.4		943.2		—		2,927.6
Operating loss		—		(1,323.1)		(663.0)		—		(1,986.1)
Other expense (income):
Equity in net loss of subsidiaries		2,158.2		744.2		—		(2,902.4)		—
Other expense		20.2		5.3		1.4		—		26.9
Interest expense:
Corporate borrowings		70.7		71.0		0.8		(71.2)		71.3
Financing lease obligations		—		0.4		1.2		—		1.6
Non-cash NCM exhibitor service agreement		—		9.9		—		—		9.9
Intercompany interest expense		—		—		6.0		(6.0)		—
Equity in loss of non-consolidated entities		—		1.9		1.0		—		2.9
Investment expense (income)		(72.8)		5.3		(0.3)		77.2		9.4
Total other expense, net		2,176.3		838.0		10.1		(2,902.4)		122.0
Loss before income taxes		(2,176.3)		(2,161.1)		(673.1)		2,902.4		(2,108.1)
Income tax provision (benefit)		—		(2.9)		71.1		—		68.2
Net loss	$	(2,176.3)	$	(2,158.2)	$	(744.2)	$	2,902.4	$	(2,176.3)


	Closing
Date		Price Per Share
December 31, 2017	$	15.10
March 31, 2018		14.05
June 30, 2018		15.90
September 30, 2018		20.50
December 31, 2018		12.28
March 31, 2019		14.85
June 30, 2019		9.33
September 30, 2019		10.70
December 31, 2019		7.24
March 31, 2020		3.16


			Carrying Value
			Corporate Borrowings		Carrying Value
	Enterprise		and Finance		Stockholders'
(In millions)	Carrying Value		Lease Obligations		Equity (Deficit)
Domestic Theatres	$	2,499.9	$	(4,565.5)	$	(2,065.6)
International Theatres		1,562.0		(570.4)		991.6
Total	$	4,061.9	$	(5,135.9)	$	(1,074.0)


			Estimated
			Fair Value		Estimated
	Estimated		Corporate Borrowings		Fair Value
	Enterprise		and Finance		Stockholders'
(In millions)	Fair Value		Lease Obligations		Equity (Deficit)
Domestic Theatres	$	2,499.9	$	(2,649.1)	$	(149.2)
International Theatres		1,562.0		(331.0)		1,231.0
Total	$	4,061.9	$	(2,980.1)	$	1,081.8


			Estimated		Estimated Enterprise Fair Value
	Enterprise		Enterprise		exceeds Enterprise Carrying Value
(In millions)	Carrying Value		Fair Value		Amount		Percentage
Domestic Theatres	$	2,499.9	$	2,499.9	$	-	-	%
International Theatres		1,562.0		1,562.0		-	-	%
Total	$	4,061.9	$	4,061.9	$	-	-	%


(In millions, except share data)	As of March 31, 2020
Total outstanding shares		104,319,377
Share price	$	3.16
Market equity capitalization	$	329.6


(In millions)	As of March 31, 2020
Estimated enterprise fair value	$	4,061.9

Market equity capitalization	$	329.6
Estimated fair value corporate borrowings and finance lease obligations		2,980.1
Market enterprise value	$	3,309.7

Implied premium to market		22.7%


	March 31, 2020
	Domestic	International
Description	Theatres	Theatres
Income approach:
Weighted average cost of capital/discount rate	11.5%	13.0%
Long-term growth rate	2.0%	2.0%


	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)
February 27, 2020 through March 31, 2020 (1)	—	$	—	—	$	200.0
Total	—			—