# AMC ENTERTAINMENT HOLDINGS, INC. (AMC) FY 2022 MD&A

Verbatim Item 7 Management's Discussion and Analysis from AMC ENTERTAINMENT HOLDINGS, INC.'s 10-K for fiscal year 2022.

SEC filing source: https://www.sec.gov/Archives/edgar/data/1411579/000141157923000038/amc-20221231x10k.htm
Accession: 0001411579-23-000038
Filing date: 2023-02-28
Report date: 2022-12-31
Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary. Published MD&A gate trimmed front/tail over-capture.
Confidence: high

Company profile: /company/AMC/
All MD&A years: /company/AMC/mda/
Previous year: /company/AMC/mda/fy2021/ (FY 2021)
Next year: /company/AMC/mda/fy2023/ (FY 2023)

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

​

The following discussion relates to the consolidated audited financial statements of AMC Entertainment Holdings, Inc. (“AMC”) included elsewhere in this Annual Report on Form 10-K. This discussion contains forward-looking statements. Please see “Forward-Looking Statements” and “Risk Factors” for a discussion of the risks, uncertainties and assumptions relating to these statements.

Overview

AMC is the world’s largest theatrical exhibition company and an industry leader in innovation and operational excellence. As of December 31, 2022 we operated in 12 countries, throughout the United States, Europe, and the Middle East.

Our theatrical exhibition revenues are generated primarily from box office admissions and theatre food and beverage sales. The balance of our revenues are generated from ancillary sources, including on-screen advertising, fees earned from our AMC Stubs® customer loyalty program, rental of theatre auditoriums, income from gift card and exchange ticket sales, and online ticketing fees. As of December 31, 2022, we owned, operated or had interests in 940 theatres and 10,474 screens.

Temporarily Suspended or Limited Operations

During the first quarter of 2020, we temporarily suspended 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. As of March 17, 2020, all of our United States and International theatre operations were temporarily suspended. 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. The following table summarizes theatre operations for the Company in 2021:

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[[/GREPCENT_TABLE]]

​

During the year ended December 31, 2022, the Company operated essentially 100% of all its U.S. and International theatres. As of December 31, 2022 and 2021, there were no restrictions on operations in any of the U.S. or International theatres.

Box Office Admissions and Film Content

Box office admissions are our largest source of revenue. We predominantly license theatrical 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 based on a share of admissions revenues and are accrued based on estimates of the final settlement pursuant to our film licenses. These licenses typically state that rental fees are based on the box office performance of each film, though in certain circumstances and less frequently, our rental fees are based on a

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mutually agreed settlement rate that is fixed. In some European territories, film rental fees are established on a weekly basis and some licenses use a per capita agreement instead of a revenue share, paying a flat amount per ticket.

The North American and International industry box office have been significantly impacted by the COVID-19 pandemic. As a result, film distributors have postponed new film theatrical releases and/or shortened the period of theatrical exclusivity (the “window”) and reduced the number of theatrically released motion pictures. Theatrical releases may continue to be postponed and windows shortened while the box office suffers from COVID-19 impacts. As a result of the reduction in theatrical film releases, we have licensed and exhibited a larger number of previously released films that have lower film rental terms. We have made adjustments to theatre operating hours to align screen availability and associated theatre operating costs with attendance levels for each theatre.

During the year ended December 31, 2022, films licensed from our seven largest movie studio distributors based on revenues accounted for approximately 88% of our U.S. admissions revenues, which consisted of Universal, Disney, Paramount, Warner Bros., Sony, 20th Century Studios, and Lionsgate. In Europe, approximately 73% of our box office revenue came from films attributed to our four largest distributor groups; which consisted of Disney, Universal, Warner Bros, and Paramount. 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.

Movie Screens

The following table provides detail with respect to digital delivery, 3D enabled projection, large screen formats, such as IMAX® and our proprietary Dolby Cinema™, other Premium Large Format (“PLF”) screens, enhanced food and beverage offerings and our premium seating as deployed throughout our circuit:

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[[/GREPCENT_TABLE]]

​

As of December 31, 2022, AMC was the largest IMAX® exhibitor in the U.S. with a 55% market share. Each one of our IMAX® local installations is protected by geographic exclusivity, and as of December 31, 2022, our IMAX® screen count was 96% greater than our closest competitor. Additionally, as of December 31, 2022, our per screen grosses were 22% higher than our closest competition. We also operate 35 IMAX® screens in International markets. As part of our long-term growth strategy, we expect to continue to expand our IMAX® relationship across the U.S. and Europe, further strengthening our position as the largest IMAX® exhibitor in the U.S. and a leading IMAX® exhibitor in the United Kingdom and Europe. During the year ended December 31, 2022, we closed three IMAX screens in Europe.

As of December 31, 2022, we operated 156 Dolby Cinema™ at AMC auditoriums in the U.S. and nine Dolby Cinema™ Auditoriums in the International markets. We expect to expand the deployment of our innovative Dolby Cinema™ auditoriums in both our U.S. and International markets as part of our long-term growth strategy.

We also offer our private label PLF experience at many of our locations, with superior sight and sound technology and enhanced seating as contrasted with our traditional auditoriums. These proprietary PLF auditoriums offer an enhanced theatrical experience for movie-goers beyond our current core theatres, at a lower price premium than IMAX® and/or Dolby Cinema™. Therefore, it may be especially relevant in smaller or more price-sensitive markets. As of December 31, 2022, we operated 57 screens under proprietary PLF brand names in the U.S. markets and 83 in the International markets.

Guest Amenities

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.

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Our capital allocation strategy will be driven by the cash generation of our business and will be contingent on a required return threshold. We believe we are an industry leader in the development and operation of theatres. Typically, our theatres have 11 or more screens and offer amenities to enhance the movie-going experience, such as stadium seating providing unobstructed viewing, digital sound and premium seat design.

Recliner seating is the key feature of theatre renovations. We believe that maximizing comfort and convenience for our customers will be increasingly necessary to maintain and improve our relevance. These renovations, in conjunction with capital contributions from our landlords, involve stripping theatres to their basic structure in order to replace finishes throughout, upgrading the sight and sound experience, installing modernized points of sale and, most importantly, replacing traditional theatre seats with plush, electric recliners that allow customers to deploy a leg rest and fully recline at the push of a button. Upon reopening a remodeled theatre, we typically increase the ticket price to reflect the enhanced consumer experience.

As of December 31, 2022, in our U.S. markets we featured recliner seating in approximately 361 U.S. theatres, including Dine-In Theatres, totaling approximately 3,503 screens and representing 45.8% of total U.S. screens. In our International markets, as of December 31, 2022, we had recliner seating in approximately 96 International theatres, totaling approximately 621 screens and representing 22.0% of total International screens.

Open-source internet ticketing makes our AMC seats (approximately 1.0 million as of December 31, 2022) 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 currently on sale either directly or through mobile apps, at our own website and our mobile apps and other third-party ticketing vendors. For the year ended December 31, 2022, approximately 66% of our tickets were purchased online in the U.S., with approximately 81% of total online tickets being purchased through AMC’s website or mobile app.

Food and beverage sales are our second largest source of revenue after box office admissions. We offer enhanced food and beverage products that include meals, healthy snacks, premium liquor, beer and wine options, and other 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 menu improvements to the expansion of our Dine-In Theatre brand.

We currently operate 49 Dine-In Theatres in the U.S. and three Dine-In Theatres in Europe that deliver chef-inspired menus with seat-side or delivery service to luxury recliners with tables. Our recent Dine-In Theatre concepts are designed to capitalize on the latest food service trend, the fast and casual eating experience.

Our MacGuffins Bar and Lounges (“MacGuffins”) give us an opportunity to engage our legal age customers. As of December 31, 2022, we offer alcohol in approximately 357 AMC theatres in the U.S. markets and 236 theatres in our International markets and continue to 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 paid tier called AMC Stubs Premiere™ for a flat 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 recorded as revenues along 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 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 recorded as the rights are redeemed or expire.

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

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visits to already seen movies from $19.95 to $24.95 per month depending upon geographic market. AMC Stubs® A-List also includes premium offerings including IMAX®, Dolby Cinema™ at AMC, RealD, Prime and other proprietary PLF brands. AMC Stubs® A-List members can book tickets online in advance and select specific seats at AMC Theatres with reserved seating. Upon the temporary suspension of theatre operations due to the COVID-19 pandemic, all monthly A-List subscription charges were put on hold. As we reopened theatres, A-List members had the option to reactivate their subscription, which restarted the monthly charge for the program.

As of December 31, 2022, we had approximately 28,200,000 member households enrolled in AMC Stubs® A-List, AMC Stubs Premiere™ and AMC Stubs Insider™ programs, combined. Our AMC Stubs® members represented approximately 43% of AMC U.S. markets attendance during the year ended December 31, 2022. Our 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.

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. We currently have more than 14,400,000 members in our various International loyalty programs.

Our marketing efforts are not limited to our loyalty program as we continue to improve our customer connections through our website and mobile apps and expand our online and movie offerings. We 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.

In response to the COVID-19 pandemic, AMC’s robust online and mobile 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 AMC employees and other guests. Online and mobile platforms are also available in our International markets.

Significant Transactions

Equity Distribution Agreement. On September 26, 2022, we entered into an equity agreement (the “Equity Distribution Agreement”) with Citigroup Global Markets Inc., as a sales agent (“Sales Agent”), to sell up to 425.0 million shares of our AMC Preferred Equity Units, from time to time, through an “at-the-market” offering program (the “Offering”). Subject to terms and conditions of the Equity Distribution Agreement, the Sales Agent will use reasonable efforts consistent with their normal trading and sales practices, applicable law and regulations, and the rules of the NYSE to sell the AMC Preferred Equity Units from time to time based upon our instructions for the sales, including any price, time or size limits specified by us. We intend to use the net proceeds, if any, from the sale of AMC Preferred Equity Units pursuant to the Equity Distribution Agreement to repay, refinance, redeem or repurchase our existing indebtedness (including expenses, accrued interest and premium, if any) and otherwise for general corporate purposes.

We raised gross proceeds of approximately $228.8 million during the year ended December 31, 2022, through its at-the-market offering of approximately 207.7 million shares of its AMC Preferred Equity Units and paid fees to the sales agent and incurred other third-party issuance costs of approximately $5.7 million and $5.5 million, respectively. See Note 16—Subsequent Events for information about additional AMC Preferred Equity Unit issuances.

AMC Preferred Equity Units. On August 4, 2022, we announced that the Board of Directors declared a special dividend of one AMC Preferred Unit for each share of Class A common stock outstanding at the close of business on August 15, 2022, the record date. The dividend was paid at the close of business on August 19, 2022 to investors who held Class A common stock as of August 22, 2022, the ex-dividend date.

Each AMC Preferred Equity Unit is a depositary share and represents an interest in one one-hundredth (1/100th) of a share of Series A Convertible Participating Preferred Stock evidenced by a depositary receipt pursuant to a deposit agreement. We have 50,000,000 Preferred Stock shares authorized, 10,000,000 of which have currently been allocated and 7,245,872 have been issued under the depositary agreement as Series A Convertible Participating Preferred Stock, leaving 40,000,000 unallocated Preferred Stock shares. Each AMC Preferred Equity Unit is designed to have the same economic and voting rights as a share of Class A common stock. Trading of the AMC Preferred Equity Units on the NYSE began on August 22, 2022 under the ticker symbol “APE”. Due to the characteristics of the AMC Preferred Equity Units, the special dividend had the effect of a stock split pursuant to ASC 505-20-25-4. Accordingly, all references to made to share, per share, or common share amounts in the accompanying consolidated financial statements

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and applicable disclosures include Class A common stock and AMC Preferred Equity Units and have been retroactively adjusted to reflect the effects of the special dividend as a stock split. See Note 9—Stockholders’ Equity and Note 15—Loss Per Share in the Notes to the Consolidated Financial Statements under Part II, Item 8 of this Form 10-K for further information.

Investment in Hycroft. On March 14, 2022, we purchased 23.4 million units of Hycroft Mining Holding Corporation (NASDAQ: HYMC) (“Hycroft”) for $27.9 million, with each unit consisting of one common share of Hycroft and one common share purchase warrant. The units were priced at $1.193 per unit. Each warrant is exercisable for one common share of Hycroft at a price of $1.068 per share over a 5-year term through March 2027. We account for the common shares of Hycroft under the equity method and we have elected the fair value option in accordance with ASC 825-10. We account for the warrants as derivatives in accordance with ASC 815. Accordingly, the fair value of the investments in Hycroft are remeasured at each subsequent reporting period and unrealized gains and losses are reported in investment income. During the year ended December 31, 2022, the Company recorded unrealized losses related to the investment in Hycroft of $6.3 million in investment expense (income), respectively. See Note 12—Fair Value Measurements in the Notes to the Consolidated Financial Statements under Part II, Item 8 of this Form 10-K for further information.

First Lien Senior Secured Notes due 2029. On February 14, 2022, we issued $950.0 million aggregate principal amount of our 7.5% First Lien Senior Secured Notes due 2029 (“First Lien Notes due 2029”). We used the net proceeds from the sale of the notes, and cash on hand, to fund the full redemption of the $500 million aggregate principal amount of the First Lien Notes due 2025, the $300 million aggregate principal amount of the First Lien Notes due 2026, and $73.5 million aggregate principal amount of the First Lien Toggle notes due 2026 and to pay related accrued interest, fees, costs, premiums and expenses. We recorded a loss on debt extinguishment related to this transaction of $135.0 million in other expense in 2022.

Debt Repurchases. During the year ended December 31, 2022, we repurchased $118.3 million aggregate principal of the Second Lien Notes due 2026 for $68.3 million and recorded a gain on extinguishment of $75.0 million in other expense (income). Additionally, we repurchased $5.3 million aggregate principal of the Senior Subordinated Notes due 2027 for $1.6 million and recorded a gain on extinguishment of $3.7 million in other expense (income). Accrued interest of $4.5 million was paid in connection with the repurchases. These repurchases included a purchase of $15.0 million aggregate principal of the Second Lien Notes due 2026 from Antara, which subsequently became a related party on February 7, 2023, for $5.9 million and a gain on extinguishment of $12.0 million.

Odeon debt refinancing. The Odeon Term Loan Facility was set to mature on August 19, 2023. On October 20, 2022, Odeon Finco PLC, a direct subsidiary of Odeon Cinemas Group Limited (“OCGL”) and an indirect subsidiary of the Company issued $400.0 million aggregate principal amount of its 12.75% Odeon Senior Secured Notes due 2027 (“Odeon Notes due 2027”), at an issue price of 92.00%. The Odeon Notes due 2027 bear a cash interest rate of 12.75% per annum and will be payable semi-annually in arrears on May 1 and November 1, beginning on May 1, 2023. The Odeon Notes due 2027 are guaranteed on a senior secured basis by certain subsidiaries of Odeon and by Holdings on a standalone and unsecured basis. The Odeon Notes due 2027 contain covenants that limit Odeon and certain subsidiaries’ ability to, among other things: (i) incur additional indebtedness or guarantee indebtedness; (ii) create liens; (iii) declare or pay dividends, redeem stock or make other distributions to stockholders; (iv) make investments; (v) enter into transaction with affiliates; (vi) consolidate, merge, sell or otherwise dispose of all or substantially all of their respective assets; and (vii) impair the security interest in the collateral. These covenants are subject to a number of important limitations and exceptions. We used the $363.0 million net proceeds from the Odeon Notes due 2027 and $146.7 million of existing cash to fund the payment in full of the £147.6 million ($167.7) million and €312.2 million ($308.9) million aggregate principal amounts of the Odeon Term Loan Facility and to pay related accrued interest, fees, costs, premiums and expenses. We recorded a loss on debt extinguishment related to this transaction of $36.5 million in other expense in 2022.

Share issuances. During the years ended December 31, 2022, December 31, 2021 and December 31, 2020, we entered into various equity distribution agreements with sales agents to sell shares of our Class A common stock (“Common Stock”) and AMC Preferred Equity Units, from time to time, through “at-the-market” offering programs. Subject to the terms and conditions of the equity distribution agreements, the sales agents will use reasonable efforts consistent with their normal trading and sales practices, applicable law and regulations, and the rules of the NYSE to sell the Common Stock and AMC Preferred Equity Units from time to time based upon the Company’s instructions for the sales, including any price, time or size limits specified by the Company. The Company intends to use the net proceeds, from the sale of Common Stock and AMC Preferred Equity Units pursuant to the equity distribution agreements to

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repay, refinance, redeem or repurchase the Company’s existing indebtedness (including expenses, accrued interest and premium, if any), capital expenditures and otherwise for general corporate purposes.

During the years ended December 31, 2022, December 31, 2021 and December 31, 2020, we paid fees to the sales agents of approximately $5.7 million, $40.3 million and $8.1 million, respectively. During the year ended December 31, 2021, we paid other fees of $0.8 million.

The gross proceeds raised from the “at-the-market” sale of Common Stock and AMC Preferred Equity Units during the years ended December 31, 2022, December 31, 2021 and December 31, 2020, are summarized in the table below:

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[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","(1)","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\u2019s Common Stock and 178.0 million AMC Preferred Equity Units, of which approximately 40.93 million shares of Common Stock and 40.93 shares of AMC Preferred Equity Units were sold and settled during December 2020 and approximately 137.07 million shares of Common Stock and 137.07 million shares of AMC Preferred Equity Units were sold and settled during the year ended December 31, 2021."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","(2)","Included in the Common Stock shares and AMC Preferred Equity Unit shares sold of 43.0 million each was the reissuance of treasury stock shares of approximately 3.7 million shares. Upon the sales of treasury stock, the Company reclassified amounts recorded in treasury stock to additional paid-in capital of $37.1 million and loss of $19.3 million to retained earnings during the year ended December 31, 2021."]]
[[/GREPCENT_TABLE]]

Common Stock issuance to Mudrick. On June 1, 2021, we issued to Mudrick 8.5 million shares of our Common Stock and 8.5 million shares of our AMC Preferred Equity Units and raised gross proceeds of $230.5 million and paid fees of approximately $0.1 million related to this transaction. We issued the shares in reliance on an exemption from registration provided by section 4(a)(2) of the Securities Act of 1933. We intend to use the proceeds from the share sale primarily for the pursuit of value creating acquisitions of theatre assets and leases, as well as investments to enhance the consumer appeal of our theatres. In addition, with these funds, we intend to continue exploring deleveraging opportunities.

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 is

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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 to the business. The completion of the sale took place in several steps, as noted below, and was 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 and paid $0.5 million in transaction costs during the year ended December 31, 2020. We 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). 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 year ended December 31, 2020 and were recorded in earnings during the year ended December 31, 2021 when the remaining 51% interests in Lithuania and Estonia were disposed. Also, during the year ended December 31, 2020, we received cash consideration of $6.2 million (€5.3 million), net of cash of $0.2 million for the remaining 51% equity interest in Latvia. At December 31, 2020, our noncontrolling interest of 49% in Lithuania and Estonia was $26.9 million.

During the year ended December 31, 2021, we received cash consideration of $34.2 million (€29.4 million), net of cash disposed of $0.4 million and transaction costs of $1.3 million, for the remaining 51% equity interest in Estonia, 51% equity interest in Lithuania and eliminated our noncontrolling interest in Forum Cinemas OU. We recorded the net gain from the sale of our equity interest in Forum Cinemas OU of $5.5 million (net of transaction costs of $2.6 million) in investment expense (income), during the year ended December 31, 2021.

Exchange Offers. On July 31, 2020, we closed our previously announced Exchange Offer for our Existing Senior Subordinated Notes for new Second Lien Notes due 2026 and reduced the principal amount of the Company’s total debt by approximately $555 million, which represented approximately 23.9% of the previously outstanding amount of the Company’s subordinated notes. We raised $300 million in additional cash from the issuance of First Lien Notes due 2026, prior to deducting discounts of $30.0 million and deferred financing costs paid to lenders of $6.0 million. Additionally, certain holders of the Company’s Existing Senior Subordinated Notes that agreed to backstop the offering of $200 million of the Company’s First Lien Notes due 2026 received five million common shares, or 4.6% of AMC’s outstanding shares on July 31, 2020, worth $20.2 million at the market closing price on July 31, 2020 and five million shares of AMC Preferred Equity Units. The closing of the Exchange Offer also allowed us to extend maturities on approximately $1.7 billion of debt to 2026, most of which was maturing in 2024 and 2025 previously. Interest due for the coming 12 to 18 months on the Second Lien Notes due 2026 is expected to be paid all or in part on an in-kind basis, thereby generating a further near-term cash savings for us of between approximately $120 million and $180 million. See Note 8—Corporate Borrowings and Finance Lease Liabilities in the Notes to the Consolidated Financial Statements under Part II, Item 8 thereof for further information.

We performed an assessment on a lender by lender basis to identify certain lenders that met the criteria for troubled debt restructuring (“TDR”) under ASC 470-60, Troubled Debt Restructurings by Debtors (“ASC 470-60”) as we were experiencing financial difficulties and the lenders granted us a concession. The portion of the loans that did not meet the assessment of TDR under ASC 470-60 were treated as modifications. We accounted for the exchange of approximately $1,782.5 million principal amount of our Existing Senior Subordinated Notes for approximately $1,289.1 million principal amount of the Second Lien Notes due 2026 as TDR. We accounted for the exchange of the remaining approximately $235.0 million principal amount of our Existing Senior Subordinated Notes for approximately $173.2 million principal amount of the Second Lien Notes due 2026 as a modification of debt as the lenders did not grant a concession and the difference between the present value of the old and new cash flows was less than 10%. The TDR and modification did not result in a gain recognition and we established new effective interest rates based on the carrying value of the Existing Subordinated Notes and recorded the new fees paid to third parties of approximately $39.3 million in other expense, during the year ended December 31, 2020.

We realized $1.2 billion of cancellation of debt income (“CODI”) in connection with our 2020 debt restructuring. As a result, $1.2 billion of our federal net operating losses were eliminated due to tax attribute reduction to offset the CODI. The loss of these attributes may adversely affect our cash flows and therefore our ability to service our indebtedness.

50

Table of Contents

Selected Financial Data

[[GREPCENT_TABLE]]
[["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["\u200b","\u200b","Year Ended"],["\u200b","\u200b","December 31,"],["(In millions, except operating data)","\u200b","2022","\u200b","2021","\u200b","2020","\u200b","2019","\u200b","2018"],["Statement of Operations Data:","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Revenues:","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Admissions","\u200b","$","2,201.4","\u200b","$","1,394.2","\u200b","$","712.1","\u200b","$","3,301.3","\u200b","$","3,385.0"],["Food and beverage","\u200b","","1,313.7","\u200b","\u200b","857.3","\u200b","\u200b","362.4","\u200b","\u200b","1,719.6","\u200b","\u200b","1,671.5"],["Other revenue","\u200b","","396.3","\u200b","\u200b","276.4","\u200b","\u200b","167.9","\u200b","\u200b","450.1","\u200b","\u200b","404.3"],["Total revenues","\u200b","","3,911.4","\u200b","\u200b","2,527.9","\u200b","\u200b","1,242.4","\u200b","\u200b","5,471.0","\u200b","\u200b","5,460.8"],["Operating Costs and Expenses:","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Film exhibition costs","\u200b","","1,051.7","\u200b","\u200b","607.7","\u200b","\u200b","322.7","\u200b","\u200b","1,699.1","\u200b","\u200b","1,710.2"],["Food and beverage costs","\u200b","","228.6","\u200b","\u200b","137.9","\u200b","\u200b","88.8","\u200b","\u200b","278.7","\u200b","\u200b","270.9"],["Operating expense, excluding depreciation and amortization below","\u200b","","1,528.4","\u200b","\u200b","1,141.8","\u200b","\u200b","856.0","\u200b","\u200b","1,686.6","\u200b","\u200b","1,654.7"],["Rent","\u200b","","886.2","\u200b","\u200b","828.0","\u200b","\u200b","884.1","\u200b","\u200b","967.8","\u200b","\u200b","797.8"],["General and administrative:","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Merger, acquisition and other costs(1)","\u200b","","2.1","\u200b","\u200b","13.7","\u200b","\u200b","24.6","\u200b","\u200b","15.5","\u200b","\u200b","31.3"],["Other, excluding depreciation and amortization below","\u200b","","207.6","\u200b","\u200b","226.6","\u200b","\u200b","156.7","\u200b","\u200b","153.0","\u200b","\u200b","179.3"],["Depreciation and amortization","\u200b","","396.0","\u200b","\u200b","425.0","\u200b","\u200b","498.3","\u200b","\u200b","450.0","\u200b","\u200b","537.8"],["Impairment of long-lived assets, definite and indefinite-lived intangible assets and goodwill(2)","\u200b","","133.1","\u200b","\u200b","77.2","\u200b","\u200b","2,513.9","\u200b","\u200b","84.3","\u200b","\u200b","13.8"],["Operating costs and expenses","\u200b","","4,433.7","\u200b","\u200b","3,457.9","\u200b","\u200b","5,345.1","\u200b","\u200b","5,335.0","\u200b","\u200b","5,195.8"],["Operating income (loss)","\u200b","","(522.3)","\u200b","\u200b","(930.0)","\u200b","\u200b","(4,102.7)","\u200b","\u200b","136.0","\u200b","\u200b","265.0"],["Other expense (income)(3)","\u200b","","53.6","\u200b","\u200b","(87.9)","\u200b","\u200b","28.9","\u200b","\u200b","13.4","\u200b","\u200b","(108.1)"],["Interest expense:","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Corporate borrowings","\u200b","","336.4","\u200b","\u200b","414.9","\u200b","\u200b","311.0","\u200b","\u200b","292.8","\u200b","\u200b","262.3"],["Capital and financing lease obligations","\u200b","","4.1","\u200b","\u200b","5.2","\u200b","\u200b","5.9","\u200b","\u200b","7.6","\u200b","\u200b","38.5"],["Non-cash NCM exhibitor services agreement(4)","\u200b","\u200b","38.2","\u200b","\u200b","38.0","\u200b","\u200b","40.0","\u200b","\u200b","40.4","\u200b","\u200b","41.5"],["Equity in (earnings) losses of non-consolidated entities(5)","\u200b","","1.6","\u200b","\u200b","(11.0)","\u200b","\u200b","30.9","\u200b","\u200b","(30.6)","\u200b","\u200b","(86.7)"],["Investment expense (income)(6)","\u200b","","14.9","\u200b","\u200b","(9.2)","\u200b","\u200b","10.1","\u200b","\u200b","(16.0)","\u200b","\u200b","(6.2)"],["Earnings (loss) before income taxes","\u200b","","(971.1)","\u200b","\u200b","(1,280.0)","\u200b","\u200b","(4,529.5)","\u200b","\u200b","(171.6)","\u200b","\u200b","123.7"],["Income tax provision (benefit)(7)","\u200b","","2.5","\u200b","\u200b","(10.2)","\u200b","\u200b","59.9","\u200b","\u200b","(22.5)","\u200b","\u200b","13.6"],["Net earnings (loss)","\u200b","","(973.6)","\u200b","\u200b","(1,269.8)","\u200b","\u200b","(4,589.4)","\u200b","\u200b","(149.1)","\u200b","\u200b","110.1"],["Less: Net loss attributable to noncontrolling interests","\u200b","","\u2014","\u200b","\u200b","(0.7)","\u200b","\u200b","(0.3)","\u200b","\u200b","\u2014","\u200b","\u200b","\u2014"],["Net earnings (loss) attributable to AMC Entertainment Holdings, Inc.","\u200b","$","(973.6)","\u200b","$","(1,269.1)","\u200b","$","(4,589.1)","\u200b","$","(149.1)","\u200b","$","110.1"],["Earnings (loss) per share attributable to AMC Entertainment Holdings, Inc.'s common stockholders:","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Basic","\u200b","$","(0.93)","\u200b","$","(1.33)","\u200b","$","(19.58)","\u200b","$","(0.72)","\u200b","$","0.46"],["Diluted","\u200b","$","(0.93)","\u200b","$","(1.33)","\u200b","$","(19.58)","\u200b","$","(0.72)","\u200b","$","0.21"],["Average shares outstanding","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Basic (in thousands)","\u200b","","1,047,689","\u200b","","954,820","\u200b","","234,424","\u200b","","207,664","\u200b","","241,242"],["Diluted (in thousands)","\u200b","\u200b","1,047,689","\u200b","\u200b","954,820","\u200b","\u200b","234,424","\u200b","\u200b","207,664","\u200b","\u200b","260,210"],["Dividends declared per basic and diluted common share","\u200b","$","0.00","\u200b","$","0.00","\u200b","$","0.02","\u200b","$","0.40","\u200b","$","1.18"]]
[[/GREPCENT_TABLE]]

51

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​

[[GREPCENT_TABLE]]
[["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["\u200b","\u200b","Year Ended"],["\u200b","\u200b","December 31,"],["(In millions, except operating data)","\u200b","2022","\u200b","2021","\u200b","2020","\u200b","2019","\u200b","2018"],["Balance Sheet Data (at period end):","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Cash and cash equivalents","\u200b","$","631.5","\u200b","$","1,592.5","\u200b","$","308.3","\u200b","$","265.0","\u200b","$","313.3"],["Corporate borrowings","\u200b","","5,140.8","\u200b","","5,428.0","\u200b","","5,715.8","\u200b","","4,753.4","\u200b","","4,723.0"],["Other long-term liabilities(8)","\u200b","","105.1","\u200b","","165.0","\u200b","","241.3","\u200b","","195.9","\u200b","","963.1"],["Capital and financing lease obligations","\u200b","","58.8","\u200b","","72.7","\u200b","","96.0","\u200b","","99.9","\u200b","","560.2"],["AMC Entertainment Holdings, Inc.'s stockholder\u2019s equity (deficit)","\u200b","","(2,624.5)","\u200b","","(1,789.5)","\u200b","","(2,885.1)","\u200b","","1,214.2","\u200b","","1,397.6"],["Total assets","\u200b","","9,135.6","\u200b","","10,821.5","\u200b","","10,276.4","\u200b","","13,675.8","\u200b","","9,495.8"],["Other Data:","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Net cash provided by (used in) operating activities","\u200b","$","(628.5)","\u200b","$","(614.1)","\u200b","$","(1,129.5)","\u200b","$","579.0","\u200b","$","523.2"],["Capital expenditures","\u200b","","(202.0)","\u200b","","(92.4)","\u200b","","(173.8)","\u200b","","(518.1)","\u200b","","(576.3)"],["Screen additions","\u200b","","51","\u200b","","82","\u200b","","63","\u200b","","85","\u200b","","89"],["Screen acquisitions","\u200b","","157","\u200b","","140","\u200b","","14","\u200b","","70","\u200b","","39"],["Screen dispositions","\u200b","","323","\u200b","","166","\u200b","","593","\u200b","","210","\u200b","","211"],["Construction openings (closures), net","\u200b","","27","\u200b","","(37)","\u200b","","18","\u200b","","5","\u200b","","5"],["Average screens\u2014continuing operations(9)","\u200b","","10,118","\u200b","","8,998","\u200b","","5,049","\u200b","","10,669","\u200b","","10,696"],["Number of screens operated","\u200b","\u200b","10,474","\u200b","\u200b","10,448","\u200b","\u200b","6,048","\u200b","\u200b","11,041","\u200b","\u200b","11,091"],["Number of theatres operated","\u200b","\u200b","940","\u200b","\u200b","930","\u200b","\u200b","503","\u200b","\u200b","1,004","\u200b","\u200b","1,006"],["Total number of circuit screens","\u200b","","10,474","\u200b","","10,562","\u200b","","10,543","\u200b","","11,041","\u200b","","11,091"],["Total number of circuit theatres","\u200b","","940","\u200b","","946","\u200b","","950","\u200b","","1,004","\u200b","","1,006"],["Screens per theatre","\u200b","","11.1","\u200b","","11.2","\u200b","","11.1","\u200b","","11.0","\u200b","","11.0"],["Attendance (in thousands)\u2014continuing operations(9)","\u200b","","200,965","\u200b","","128,547","\u200b","","75,190","\u200b","","356,443","\u200b","","358,901"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","(1)","During the year ended December 31, 2022, expenses were primarily related to legal and professional costs related to strategic contingent planning. During the year ended December 31, 2021, expenses were primarily due to bonus expense and stock-based compensation expense. During the year ended December 31, 2020, expenses were primarily due to legal and professional costs related to strategic contingent planning. During the year ended December 31, 2019, expenses were primarily due to organizational design including one-time severance and outplacement costs of $9.8 million and acquisitions and divestitures including entity simplification costs of $4.0 million. The year ended December 31, 2018 includes the write-off of $8.0 million of deferred costs related to an Odeon proposed public offering and $6.3 million of expense related to an arbitration ruling on a pre-acquisition date rent dispute for Odeon."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","(2)","During the year ended December 31, 2022, we recorded non-cash impairment charges related to our long-lived assets of $73.4 million on 68 theatres in the U.S. markets with 817 screens which were related to property, net, and operating lease right-of-use assets, net and $59.7 million on 53 theatres in the International markets with 456 screens which were related to property, net and operating lease right-of-use assets, net. During the year ended December 31, 2021, we recorded non-cash impairment charges related to our long-lived assets of $61.3 million on 77 theatres in the U.S. markets with 805 screens which were related to property, net, operating lease right-of-use assets, net and other long-term assets and $15.9 million on 14 theatres in the International markets with 118 screens which were related to property, net and operating lease right-of-use assets, net. During the year ended December 31, 2020, we recorded goodwill non-cash impairment of $1,276.1 million and $1,030.3 million related to the enterprise fair values of the Domestic Theatres and International Theatres reporting units, respectively. During the year ended December 31, 2020, we recorded non-cash impairment charges related to our long-lived assets of $152.5 million on 101 theatres in the U.S. markets with 1,139 screens and $25.4 million on 37 theatres in the International markets with 340 screens and recorded impairment charges related to indefinite-lived intangible assets of $12.5 million and $2.7 million related to the Odeon and Nordic trade names, respectively, in the International markets. We also recorded non-cash impairment charges of $14.4 million for our definite-lived intangible assets in the Domestic Theatres reporting unit during the year ended December 31, 2020. During the year ended December 31, 2019, we recorded non-cash impairment of long-lived assets of $84.3 million on 40 theatres in the U.S. markets with 512 screens, 14 theatres in the International markets with 148 screens, and a U.S. property held and not used. During the fourth quarter of 2018, we recorded non-cash impairment losses of $13.8 million on 13 theatres in the U.S. markets with 150 screens and on 15 theatres in the International markets with 118 screens."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","(3)","Other expense for the year ended December 31, 2022 was primarily due to a loss on extinguishment of debt of $135.0 million related to the full redemption of the $500 million aggregate principal amount of the First"]]
[[/GREPCENT_TABLE]]

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[[GREPCENT_TABLE]]