●

~~incur or guarantee additional indebtedness;~~pay dividends, pre-pay debt, and also to refinance debt and to do so at favorable terms;

●

~~pay dividends or make other distributions to our stockholders;~~

●

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

●

~~make restricted payments;~~

●

risks relating to motion picture production and performance;

●

~~incur liens;~~

●

our lack of control over distributors of films;

●

~~engage in transactions with affiliates;~~

●

general and international economic, political, regulatory, social and financial market conditions, inflation, and other risks;

●

~~enter into business combinations.~~

These restrictions could limit our ability to obtain future financing, make acquisitions, fund needed capital expenditures, withstand economic downturns in our business or the economy in general, conduct operations or otherwise take advantage of business opportunities that may arise. At the same time, the covenants in the instruments governing our indebtedness may not provide investors with protections against transactions they may deem undesirable.

If our cash flows prove inadequate to service our debt and provide for our other obligations, we may be required to refinance all or a portion of our existing debt or future debt at terms unfavorable to us.

Our ability to make payments on and refinance our debt and other financial obligations and to fund our capital expenditures and acquisitions will depend on our ability to generate substantial operating cash flow. This will depend on our future performance, which will be subject to prevailing economic conditions and to financial, business and other factors beyond our control.

In addition, our debt obligations require us to repay or refinance our obligations when they come due. If our cash flows were to prove inadequate to meet our debt service, rental and other obligations in the future, we may be required to refinance all or a portion of our existing or future debt, on or before maturity, to sell assets or to obtain additional financing. We cannot give assurance that we will be able to refinance any of our indebtedness, including our Senior Secured Credit Facility and our notes, sell any such assets, or obtain additional financing on commercially reasonable terms or at all.

The terms of the agreements governing our indebtedness restrict, but do not prohibit us from incurring additional indebtedness. If we are in compliance with the financial covenants set forth in the Senior Secured Credit Facility and our other outstanding debt instruments, we may be able to incur substantial additional indebtedness. If we incur additional indebtedness, the related risks that we face may intensify.

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

●

an issuance of preferred stock could dilute the voting power of the common stockholders and ~~reductions to capital expenditures may delay or prevent deployment of strategic initiatives.~~

~~Implementation~~adversely affect the market value of our ~~key strategic initiatives, including recliner seating, enhanced food and beverage and premium sight and sound, require significant~~Common Stock;

●

limitations on the authorized number of common stock shares prevents us from raising additional capital expenditures. Our gross capital expenditures were approximately $518.1 million, $576.3 million, and $628.8 million for the years ended December 31, 2019, December 31, 2018 and, December 31, 2017, respectively. We estimate that our cash outflows for capital expenditures, net of landlord contributions, will be approximately $275.0 million to $300.0 million for the year ending December 31, 2020. The lack of available capital resources due to business performance or other financial commitments could prevent or delay the deployment of innovations in our theatres. We may reduce capital expenditures significantly or seek additional financing or issue additional securities, which may affect the timing and scope of growth strategy. We cannot be certain that we will be able to obtain new financing on favorable terms, or at all. In addition, covenants under our existing indebtedness limit through common stock issuances;

●

our ability to ~~incur additional~~achieve expected synergies, benefits and performance from our strategic initiatives;

●

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

●

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

●

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

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failures, unavailability or security breaches of our information systems;

●

our ability to ~~service the related indebtedness that we are permitted to incur.~~

~~Our results of operations~~utilize interest expense deductions may be ~~impacted~~limited annually due to Section 163(j) of the Tax Cuts and Jobs Act of 2017;

●

our ability to recognize interest deduction carryforwards, 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 ~~shrinking theatrical exclusive release windows.~~antitrust authorities in connection with acquisition opportunities;

~~Over the last decade, the average theatrical exclusive release window, which represents the time that elapses from the date of a film’s theatrical release~~
● risks relating to the ~~date a film is available~~incurrence of legal liability, including costs associated with the ongoing securities class action lawsuits;

●

dependence on key personnel for current and future performance and our ability to consumers in-home, has decreased from approximately six months to approximately three to four months. If distributors choose to further decrease or eliminate the theatrical exclusive release window or patrons choose to wait for in-home viewing options rather than attend a theatre for viewing the film, it may adversely impact our businessattract and ~~results of operations, financial condition~~retain senior executives and ~~cash~~

19other key personnel, including in connection with any future acquisitions;

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flows. We cannot give assurance that this release window, which is determined by the film studios, will not shrink further or be eliminated altogether, which could have an adverse impact on our business and results of operations.

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

~~We have a significant amount of goodwill on our balance sheet as a result of acquisitions. As of December 31, 2019, goodwill recorded on our consolidated balance sheet totaled $4,789.1 million.~~ Based on sustained declines in our market capitalization during 2019, we performed quantitative goodwill impairment tests as of September 30, 2019 and additional qualitative tests as of December 31, 2019~~. Considering the results of these tests,~~ ~~management judgment with respect to cash flow estimates and appropriate multiples and discount rates to be used in estimating fair value, and application of a market participant acquisition premium,~~ ~~we determined that the goodwill recorded on our consolidated balance sheet was not impaired.~~ In addition, following our adoption of ASC 842, certain data providers in the analyst community have characterized our operating lease liabilities as indebtedness, which has the impact of increasing our leverage as reported by these data providers and, we believe, has and may continue to negatively affect our share price and market capitalization. If the market price of our common stock sustains its current levels for an extended period or further declines, if the fair value of our debt declines, or if other events or circumstances change that would more likely than not reduce the fair value of our reporting units below their respective carrying value, all or a portion of our goodwill may be impaired in future periods.

~~Our business is subject to international economic, political and other risks that could negatively affect our business, results of operations and financial condition.~~

As a result of our international operations, 26.5% of our revenues were derived from countries outside the United States for the year ended December 31, 2019. The success of our international operations is dependent upon our ability to operate a business in markets where we have limited experience and is subject to risks that are beyond our control. Accordingly, our business is subject to risks associated with doing business internationally, including:

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~~difficulties and costs of staffing and managing international operations among diverse geographies, languages and cultures;~~

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~~the impact of regional or country-specific business cycles and economic instability;~~

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~~the impact of the United Kingdom’s exit from the European Union and the potential that other countries could also exit;~~

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fluctuations in foreign currency exchange rates which could lead to fluctuations in our reported results of operations or result in significant decreases in the value of our international investments as denominated in U.S. Dollars;

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increased ~~foreign interest rates, foreign exchange fees and other bank charges as a result of financing our foreign operations;~~

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exposure to anti-corruption laws, including the Foreign Corrupt Practices Act (“FCPA”) and the U.K. Bribery Act (the “Bribery Act”), and export-control regulations and economic sanctions regulations, including those promulgated by the Office of Foreign Assets Control, United States Department of Treasury (“OFAC”);

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~~exposure to local economic conditions and local laws and regulations;~~

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~~exposure to local labor and employment laws;~~

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~~relationships with local labor unions and works councils;~~

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~~limited borrowing capabilities relating to activities in non-U.S. countries;~~

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~~economic and/or credit conditions abroad;~~

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~~potential adverse changes in the political and/or economic stability of foreign countries or in their diplomatic relations with the United States;~~

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~~restrictions on the withdrawal of foreign investment and earnings;~~

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~~government policies against businesses owned by foreigners;~~

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~~investment restrictions or requirements;~~

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~~diminished ability to legally enforce our contractual rights in foreign countries;~~

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~~difficulty in protecting our brand, reputation and intellectual property;~~

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~~restrictions on the ability to obtain or retain licenses required for operation;~~

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~~foreign exchange restrictions;~~

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~~adverse changes in regulatory or tax requirements;~~

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~~restrictions on foreign ownership of subsidiaries;~~

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data protection and privacy laws, including GDPR, which became effective in May 2018 and similar pending domestic laws such as the California Privacy Act, which becomes effective in 2020, and other restrictions on transferring personally identifiable information outside of a jurisdiction; and

●

~~tariffs and other trade barriers.~~

~~If we are unable to manage the complexity of our global operations successfully, it could have a material adverse effect on our business, financial condition and results of operations.~~

~~The decision by British voters to exit the European Union may negatively impact our operations.~~

Effective as of January 31, 2020, the U.K. exited from the European Union (“Brexit”). While the U.K. has agreed to the terms of its exit from the European Union, both sides are deciding the future terms of their relationship through an implementation period that concludes on December 31, 2020. The final outcome of these negotiations between the U.K. and the European Union, could have an adverse effect on our business and financial results. The long-term effects of Brexit will depend on the terms negotiated during the implementation period and may include, among other things, greater restrictions on imports and exports between the U.K. and European Union countries, a fluctuation in currency exchange rates and additional regulatory complexity. Additional currency volatility could drive a weaker British pound, which increases the cost of goods imported into our U.K. operations and may decrease the profitability of our U.K. operations. A weaker British pound versus the U.S. dollar also causes local currency results of our U.K.

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operations to be translated into fewer U.S. dollars during a reporting period and currency volatility makes this translation less predictable. Our operations in the U.K. and Europe, as well as our United States operations, could be impacted by the global economic uncertainty caused by Brexit or the actual withdrawal by the U.K. from the European Union. If we are unable to manage any of these risks effectively, our business could be adversely affected. With a range of outcomes still possible, the impact from Brexit remains uncertain and will depend, in part, on the final outcome of tariff, trade, regulatory and other negotiations.

~~Optimizing our theatre circuit through new construction and the transformation of our existing theatres may be subject to delay and unanticipated costs.~~

~~The availability of attractive site locations for new construction is subject to various factors that are beyond our control. These factors include:~~

●

~~local conditions, such as scarcity of space or increase in demand for real estate, demographic changes and changes in zoning and tax laws; and~~

●

~~competition for site locations from both theatre companies and other businesses.~~

We typically require 18 to 24 months in the United States from the time we reach an agreement with a landlord to when a theatre opens. This timeframe may vary as we introduce this concept in international markets.

In addition, the improvement of our existing theatres through our enhanced food and beverage and recliner seating and premium sight and sound initiatives is subject to substantial risks, such as difficulty in obtaining permits, landlord approvals and operating licenses (e.g. liquor licenses). We may also experience cost overruns from delays or other unanticipated costs in ~~both new construction and facility improvements. Furthermore, our new sites and transformed locations may not perform~~order to ~~our expectations.~~

~~We rely on our information systems to conduct our business, and any~~comply or resulting from a failure to protect these systems against security breaches or failure of these systems themselves could adversely affect our business, results of operations and liquidity and could result in litigation and penalties. Additionally, if these systems fail or become unavailable for any significant period of time, our business could be harmed.

The efficient operation of our business is dependent on computer hardware and software systems. Among other things, these systems collect and store certain personal information from customers, vendors and employees and process customer payment information. Additionally, open-source internet ticketing allows tickets for all of our theatres to be sold by various third-party vendors on websites using information systems we do not control. Our information systems and those maintained by our third-party vendors and the sensitive data they are designed to protect are vulnerable to security breaches by computer hackers, cyber terrorists and other cyber attackers. We rely on industry-accepted security measures and technology to securely maintain confidential and proprietary information maintained on our information systems, and we rely on our third-party vendors to take appropriate measures to protect the confidentiality of the information on those information systems. However, these measures and technology may not adequately prevent security breaches. Our information systems may become unavailable or fail to perform as anticipated for any reason, including viruses, loss of power or human error. Any significant interruption or failure of our information systems or those maintained by our third-party vendors or any significant breach of security could adversely affect our reputation with our customers, vendors and employees and could adversely affect our business, results of operations and liquidity and could result in litigation against us or the imposition of penalties. A significant interruption, failure or breach of the security of our information systems or those of our third-party vendors could also require us to expend significant resources to upgrade the security measures and technology that guard sensitive data against computer hackers, cyber terrorists and other cyber attackers. We maintain cyber risk insurance coverage to protect against such risks, however, there can be no assurance that such coverage will be adequate.

~~We may be limited in our ability to utilize, or may not be able to utilize, interest deduction carryforwards or net operating loss carryforwards to reduce our future tax liability.~~

The Tax Cuts and Jobs Act legislation (the “2017 Tax Act”) included a number of significant tax provisions including (1) limiting interest deductions for years 2018 through 2021 to 30% of taxable EBITDA, (2) limiting interest deductions for 2022 and thereafter to 30% of taxable EBIT, (3) limiting the utilization of net operating losses generated in calendar year 2018 and thereafter to 80% of taxable income, and (4) providing an indefinite carryover period for interest expense carryforwards and net operating losses generated in calendar year 2018 and thereafter.

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Our current capital structure makes it highly likely we will have significant limitations on our currently deductible interest expense. There can be no assurance, however, that we will generate sufficient taxable income in the carryforward period to utilize any net operating loss carryforwards before they expire, but due to the limitations on deductible interest expense it appears likely we will be able to utilize a majority of our pre-calendar year 2018 net operating loss carryforwards before they expire. However, because any interest carryover amounts retain their character as interest, in future years we may not be able to realize the benefit of any accumulated interest carryforwards.

Although we have experienced numerous “ownership changes” within the meaning of Section 382(g) of the IRC, including our merger with Wanda in August 2012, the only remaining applicable restrictions are related to net operating losses acquired in the Carmike acquisition of approximately $22.4 million with annual limitation of $1.7 million. The remaining net operating losses of $358.5 million are not subject to any limitation.

We are subject to complex taxation, changes in tax rates, adoption of new United States, European Union or international tax legislation and disagreements with tax authorities that could adversely affect our business, financial condition or results of operations.

We are subject to many different forms of taxation in both the U.S. and in foreign jurisdictions where we operate. Current economic and political conditions, including Brexit and Organization for Economic Co-operation and Development’s (“OECD”) proposed recommendations around taxation in the Digital Economy, make tax rates, transfer pricing compliance and tax regulations, including in the U.S., U.K, and European Union subject to significant change. Recent examples include the Court of Justice of the European Union narrowing the EU Interest & Royalty withholding directive, OECD recommendations on Base Erosion and Profit Shifting (“BEPS”), the European Commission’s Anti-Tax Avoidance Package and the U.S. Tax Cuts and Jobs Act signed into law in December 2017.

~~The cost of compliance with these laws and regulations are high and are likely to increase in the future. Any failure on our part~~ to comply with ~~these laws~~governmental regulation, including the General Data Protection Regulation (“GDPR”), the California Consumer Privacy Act (“CCPA”) and ~~regulations can result in negative publicity and diversion of management time and effort and may subject us to significant liabilities and other penalties.~~

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

Our income tax expense includes deferred income taxes arising from changes in temporary differences between the financial reporting and the tax bases of assets and liabilities, credit carryforwards, interest expense carryforwards and net operating losses. We evaluate the realizability of our deferred income tax assets and assess the need for a valuation allowance jurisdiction by jurisdiction on an ongoing basis. In evaluating our deferred income tax assets, we consider whether it is more likely than not that the deferred income tax asset will be realized. The ultimate realization of our deferred income tax assets depends upon generating sufficient future taxable income during the periods in which our temporary differences become deductible and before our tax credit and net operating loss carryforwards expire. Our assessment of the realizability of our deferred income tax assets requires significant judgement. If we fail to achieve our projections or if we need to lower our projections, we may not have sufficient evidence of our ability to realize our deferred tax assets and we may need to increase our valuation allowance.

Our U.S. cumulative pretax losses have raised uncertainty about the likelihood of realizing our deferred tax assets, and as a result we recorded a valuation allowance against all of the U.S. deferred tax assets and liabilities, except those deemed indefinite-lived for the year ended December 31, 2017. For the year ended December 31, 2019, our domestic cumulative pre-tax losses continue to raise uncertainty about the likelihood of realizing our deferred tax assets. For our U.S. jurisdiction, we recorded an increase in valuation allowance of $49.7 million and total tax expense of $11.9 million for 2019.

An international valuation allowance previously established against deferred tax assets in Spain was released in the fourth quarter of 2019 resulting in a $41.5 million benefit to income tax expense. Cumulative statutory pretax profits over multiple years along with a sustained trend line of increasing profitability provided sufficient evidence that it was more likely than not the deferred assets would be realized.

There are no assurances that we will not increase or decrease the valuation allowances in future periods against deferred tax expense; likewise, any decrease would result in additional deferred tax benefit. Any deferred tax expense could have a material adverse effect on our results of operations and financial condition.

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~~The accounting methods for our convertible debt securities may have a material effect on our reported financial results.~~

In accounting for Convertible Notes due 2024, we identified certain features that are bifurcated and accounted for as derivatives. Under the applicable accounting guidance, the derivatives must be marked to market each reporting period. The fluctuation in the fair value between reporting periods is recorded in that period and impacts net earnings. These changes in the fair value will create volatility in our net earnings. Additionally, we recorded a debt discount based on the fair value of the derivative liability related to the conversion feature upon issuance, which will be accreted to interest expense over the term of the agreement. This will impact non-cash interest expense in the current period presented and future periods. Certain of these features will be determined in the third quarter of 2020 which may have a further impact upon diluted earnings per share based on applicable adjustments to the conversion rate under the Convertible Notes due 2024.

In addition, convertible debt instruments (such as the Convertible Notes due 2024) that may be settled in cash, shares or a combination of cash and shares may utilize the if-converted method which we have elected to use to compute earnings per share, the effect of which is that the shares issuable upon conversion of the notes are included in the calculation of diluted earnings per share to the extent that they are dilutive. Under the if-converted method the number of shares of common stock that would be necessary to settle all of the Convertible Notes due 2024 are included in diluted earnings per share. This may cause further volatility in our diluted earnings per share.

~~The elimination of the calculation of USD LIBOR rates may impact our contracts that are indexed to USD LIBOR.~~

In July 2017, the Financial Conduct Authority (the authority that regulates LIBOR) announced it intends to stop compelling banks to submit rates for the calculation of LIBOR after 2021. The Alternative Reference Rates Committee ("ARRC") has proposed that the Secured Overnight Financing Rate ("SOFR") is the rate that represents best practice as the alternative to USD-LIBOR for use in derivatives and other financial contracts that are currently indexed to USD-LIBOR. ARRC has proposed a paced market transition plan to SOFR from USD-LIBOR and organizations are currently working on industry wide and company specific transition plans as it relates to derivatives and cash markets exposed to USD-LIBOR. We have material contracts that are indexed to USD-LIBOR and we are monitoring this activity and evaluating the related risks.

~~We may be reviewed by antitrust authorities.~~

Given our size and market share, pursuit of acquisition opportunities that would increase the number of our theatres in markets where we have a leading market share would likely result in significant review by antitrust regulators in the applicable jurisdictions, and we may be required to dispose of theatres in order to complete such acquisition opportunities. As a result, we may not be able to succeed in acquiring other exhibition companies or we may have to dispose of a significant number of theatres in key markets in order to complete such acquisitions.

We operate in a consolidating industry that is scrutinized from time to time for compliance with antitrust and competition laws, including currently dormant investigations into film clearances and joint ventures among competing exhibitors. If we were found to have violated antitrust laws, it could have a material adverse effect on our operations and financial condition.

~~We are subject to substantial government regulation, which could entail significant cost.~~

We are subject to various federal, state and local laws, regulations and administrative practices both domestically and internationally affecting our business, and we must comply with provisions regulating antitrust, health and sanitation standards, equal employment, environmental, licensing for the sale of food and, in some theatres, alcoholic beverages, and data protection and privacy laws, including GDPR, CCPA, and other pending future domestic privacy laws and ~~regulations. Our new theatre openings could be delayed or prevented or~~regulations;

●

supply chain disruptions may negatively impact our ~~existing theatres could be impacted~~operating results;

●

the dilution caused by ~~difficulties or failures in our ability to obtain or maintain required approvals or licenses. Changes in existing laws or implementation of new laws, regulations~~recent and ~~practices could have a significant impact on our business. A significant portion~~potential future sales of our ~~theatre level employees are part time workers who are paid at or near~~Common Stock could adversely affect the ~~applicable minimum wage in~~market price of the ~~theatre’s jurisdiction. Increases in~~ Common Stock;

●

the ~~minimum wage~~market price and ~~implementation of reforms requiring the provision of additional benefits will increase our labor costs.~~

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cleanup of hazardous materials and the management of properties. We might in the future be required to participate in the cleanup of a property that we own or lease, or at which we have been alleged to have disposed of hazardous materials from onetrading volume of our ~~facilities. In certain circumstances, we might~~shares of Common Stock has been and may continue to be ~~solely responsible~~volatile, and purchasers of our securities could incur substantial losses;

●

future offerings of debt, which would be senior to our Common Stock for ~~any such liability under environmental laws, and such claims~~purposes of distributions or upon liquidation, could ~~be material.~~

Inadversely affect the ~~U.S.,~~market price of our theatres must comply with Title III of the Americans with Disabilities Act of 1990 (“ADA”). Compliance with the ADA requires that public accommodations, including websites and mobile apps for such public accommodations, “reasonably accommodate” individuals with disabilities and that new construction or alterations made to “commercial facilities” conform to accessibility guidelines unless “structurally impracticable” for new construction or technically infeasible for alterations. Non-compliance with the ADA could result in the imposition of injunctive relief, fines, and an award of damages to private litigants or additional capital expenditures to remedy such noncompliance, any of which could have a material adverse effect on our operations and financial condition. In Europe, all territories have similar national regulations relating to disabilities that our theatres operate in accordance with. Noncompliance with these regulations could carry financial, operational and reputation risks.

~~General political, social and economic conditions can reduce our attendance.~~Common Stock;

Our success depends on general political, social, and economic conditions and the willingness of consumers to spend money at movie theatres. If going to motion pictures becomes less popular or consumers spend less on food and beverage, our operations could be adversely affected. In addition, our operations could be adversely affected if consumers’ discretionary income falls as a result of an economic downturn. Geopolitical
● geopolitical events, including the threat of terrorism or cyber-attacks, or widespread health emergencies, such as the novel coronavirus or other pandemics or epidemics, ~~could cause~~causing people to avoid our theatres or other public places where large crowds are in ~~attendance. In addition, due to our concentration in certain markets, natural disasters such as hurricanes or earthquakes in those markets could adversely affect our overall results of operations.~~
~~We depend on key personnel for our current and future performance.~~attendance;

Our current and future performance depends to a significant degree upon the retention of our senior management team and other key personnel. The loss or unavailability of any member of our senior management team or a key employee could have a material adverse effect on our business, financial condition, and results of operations. We cannot give assurance that we would be able to locate or employ qualified replacements for senior management or key employees on acceptable terms.

● ~~Our controlling shareholder owns more than 74% of the combined voting power of our common stock and has significant influence over our corporate management and affairs.~~
Our Class B common stock has three votes per share, and our Class A common stock (the publicly traded stock) has one vote per share. As of December 31, 2019, Wanda owns 51,769,784 shares of Class B common stock, or 49.85% of our outstanding common stock, representing approximately 74.89% of the voting power of our outstanding common stock. As such, Wanda has significant influence over our reporting and corporate management and affairs, and, because of the three-to-one voting ratio between our Class B and Class A common stock, Wanda will continue to control a majority of the combined voting power of our common stock and therefore be able to control all matters submitted to our stockholders for approval (including election of directors and approval of significant corporate transactions, such as mergers) so long as the shares of Class B common stock owned by Wanda and its permitted transferees represent at least 30% of all outstanding shares of our Class A and Class B common stock. The shares of our Class B common stock automatically convert to shares of Class A common stock upon Wanda and its permitted transferees holding less than 30% of all outstanding shares of our Class A and Class B common stock.
~~There may be future dilution of our Class A common stock, which could adversely affect the market price of shares of our Class A common stock.~~
In the future, we may issue additional shares of Class A common stock to raise cash to refinance indebtedness, for working capital, to finance strategic initiatives and future acquisitions or for other purposes. We may also acquire interests in other companies by using a combination of cash and shares of Class A common stock or just shares of Class A common stock. We may also issue securities convertible into, or exchangeable for, or that represent the right to receive, shares of Class A common stock. Any of these events may dilute the ownership interests of current stockholders, reduce our earnings per share or have an adverse effect on the price of our shares of Class A common stock. In addition, the conversion of some or all of our Convertible Notes due 2024, to the extent we deliver shares of
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Class A common stock upon conversion thereof, would dilute the ownership interests of current stockholders, reduce our earnings per share and potentially have an adverse effect on the price of our shares of Class A common stock. As of December 31, 2019, the $600.0 million principal balance of our Convertible Notes due 2024 would be convertible into 31,662,269 shares of Class A common stock.
~~Future sales of our Class A common stock in the public market could adversely affect the market price of our Class A common stock.~~
We cannot predict the effect, if any, that market sales of shares of our Class A common stock or the availability of shares of our Class A common stock for sale will have on the prevailing market price of our Class A common stock. Sales of a substantial number of shares of our Class A common stock in the public market, or the perception that these sales may occur, could reduce the market price of our shares of Class A common stock.
Wanda holds shares of our Class B common stock, all of which constitute "restricted securities" under the Securities Act. The shares of our Class B common stock automatically convert to Class A common stock (1) if transferred to a person other than certain permitted transferees or (2) upon Wanda and its permitted transferees holding less than 30% of all outstanding shares of our Class A and Class B common stock. Provided the holders comply with the applicable volume limits and other conditions prescribed in Rule 144 under the Securities Act, all of these restricted securities are currently freely tradeable. Pursuant to a registration rights agreement dated December 23, 2013, we have agreed to use our best efforts to effect registered offerings upon request from Wanda and to grant incidental or "piggyback" registration rights with respect to any registrable securities held by Wanda. The obligation to effect any demand for registration by Wanda will be subject to certain conditions, including limitations on the number of demand registrations and limitations on the minimum value of securities to be registered. We have also agreed to use our best efforts to grant certain incidental or "piggyback" registration rights with respect to securities issued to certain current and former officers. In connection with the sale of our Convertible Notes due 2024, we have agreed, subject to certain conditions, to use our reasonable efforts to effect registered offerings on behalf of holders of the Convertible Notes due 2024 with respect to the securities held by them and the shares of Class A common stock issuable upon conversion thereof. We filed a registration statement with the SEC on December 14, 2018 to fulfill this requirement. The exercise of such registration rights by Wanda, the holders of the Convertible Notes due 2024 and/or the current and former officers may substantially increase the number of shares of Class A common stock in the public market and could reduce the market price of shares of our Class A common stock.
~~The super voting rights of our Class B common stock and other~~ anti-takeover protections in our amended and restated certificate of incorporation and our amended and restated bylaws may discourage or prevent a takeover of our Company, even if an acquisition would be beneficial to our ~~stockholders.~~stockholders; and

~~Provisions contained~~
● other risks referenced from time to time in ~~our amended and restated certificate~~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 and we caution accordingly against relying on forward-looking statements.

Except as required by law, we assume no obligation to publicly update or revise these forward-looking statements for any reason. Actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

Readers are urged to consider these factors carefully in evaluating the forward-looking statements. For further information about these and other risks and uncertainties as well as strategic initiatives, see Item 1A. “Risk Factors” and Item 1. “Business” in this Annual Report on Form 10-K.

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PART I

Item 1. Business.

General Development of Business

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 primarily located in the United States and Europe.

Our business was founded in Kansas City, Missouri in 1920. Holdings was incorporated under the laws of the state of Delaware on June 6, 2007. We maintain our principal executive offices at One AMC Way, 11500 Ash Street, Leawood, Kansas 66211.

COVID-19 Impact, Company Response and Change in Business Strategy

In March 2020, the World Health Organization declared the novel coronavirus (“COVID-19”) to be a pandemic. The COVID-19 pandemic has disrupted and could continue to materially affect our operating results, cash flows and/or financial condition for an extended period of time.

On 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. The U.S. local, state, and federal governmental restrictions and temporary International market operation suspensions remained in place for much of the first quarter of 2021, but the limited seat restrictions were substantially removed and the International market operations restored by the end of the second quarter of 2021.

The North American and International industry box offices have also been significantly impacted by the COVID-19 pandemic, and in response to the suspension of theatre operations by AMC and other theatre exhibitors and the COVID-19 related suspension of new movie production, studios have postponed new film releases beyond 2021 or moved them to the home video market, streaming, or premium video on demand (“PVOD”) platforms.

As a result of the suspended operations and limited new film content in 2020, our revenues and expenses for the year ended December 31, 2021 were higher than the revenues and expenses for the year ended December 31, 2020, but continued U.S. governmental restrictions, International market operation suspensions and limited new film content in 2021 resulted in significantly lower revenues and expenses for the year ended December 31, 2021 compared to the year ended December 31, 2019, prior to the COVID-19 pandemic.

The COVID-19 vaccines became widely available during 2021 and the number of previously delayed major movie title releases increased significantly in the second half of 2021, which had a material positive impact on our industry. However, the COVID-19 Delta variant generated a new surge in cases in the third quarter of 2021 and the COVID-19 Omicron variant has been generating infections since late November 2021. Overall for 2021, the industry box office remained considerably lower than the 2019 pre COVID-19 levels. A more robust slate of major movie releases is expected during 2022, which has generated optimism that movie theatre attendance levels will continue to improve gradually as we experienced in 2021. However, box office performance in 2022 could be impacted by the ongoing impact of COVID-19 which could lead to a return to social distancing restrictions or theatre operation suspensions, which together with direct or simultaneous release of movie titles to the home video or streaming markets in lieu of theatre exhibition, could have a material adverse impact on theatre attendance levels and our business.

●

As of ~~incorporation and amended and restated bylaws, as amended, as well as provisions of the Delaware General Corporation Law and the supermajority rights~~February 24, 2022, we were operating all of our ~~Class B common stockholder, could delay~~587 U.S. theatres. Some of our major markets in the U.S., such as Chicago, New York City, Los Angeles, San Francisco, and Seattle require proof of vaccination for guests to be able to attend. At the beginning of March 2022, we expect the proof of vaccination requirement will expire in Chicago and Seattle. During the fourth quarter of 2021, we experienced an overall attendance increase in the U.S. of approximately 35,544,000, or ~~make it more difficult to remove incumbent directors or for a third-party to acquire us, even if a takeover would benefit our stockholders. These provisions include:~~

●

a dual class common stock structure, which provides Wanda with the ability to control the outcome of matters requiring stockholder approval, even if they own significantly less than a majority of the shares of our outstanding Class A and Class B common stock;737.4%, compared

●

~~a classified board of directors;~~

●

~~the sole power of a majority of the board of directors to fix the number of directors;~~

●

~~limitations on the removal of directors;~~

●

~~the sole power of the board of directors to fill any vacancy on the board of directors, whether such vacancy occurs as a result of an increase in the number of directors or otherwise;~~

●

~~the ability of our board of directors to designate one or more series of preferred stock and issue shares of preferred stock without stockholder approval; and~~

●

~~the inability of stockholders to call special meetings.~~

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~~Our issuance~~
to the same period a year ago, and a decline of ~~shares~~approximately 21,955,000, or 35.2%, compared to the fourth quarter of ~~preferred stock could delay or prevent a change~~2019.
● As of ~~control~~February 24, 2022, we were operating all of our ~~company. Our board~~351 International theatres, with certain countries having limited seating capacities during limited opening hours. Spain, Italy, and Germany require proof of ~~directors has~~vaccination, or in certain locations a negative test is required, for guests to be able to attend. During the ~~authority~~fourth quarter of 2021, we experienced an overall attendance increase in our International theatres of approximately 16,046,000, or 490.4%, compared to ~~cause us~~the same period a year ago, and a decline of approximately 10,926,000, or 36.1%, compared to ~~issue, without any further vote~~the fourth quarter of 2019.

As of December 31, 2021, we had cash and cash equivalents of approximately $1.6 billion. In response to the COVID-19 pandemic, we adjusted certain elements of our business strategy and took significant steps to preserve cash. We are continuing to take significant measures to further strengthen our financial position and enhance our operations, by eliminating non-essential costs, including reductions to our variable costs and elements of our fixed cost structure, introducing new initiatives, and optimizing our theatrical footprint.

Additionally, we enhanced liquidity through debt issuances, debt exchanges and equity sales. See Note 8—Corporate Borrowings and Finance Lease Obligations, Note 9—Stockholders’ Equity, and Note 16—Subsequent Events in the Notes to the Consolidated Financial Statements under Part II, Item 8 thereof, for further information.

We believe our existing cash and cash equivalents, together with cash generated from operations, will be sufficient to fund our operations, satisfy our obligations, including cash outflows for increased rent and planned capital expenditures, and comply with minimum liquidity and financial covenant requirements under our debt covenants related to borrowings pursuant to the Senior Secured Revolving Credit Facility and Odeon Term Loan Facility for at least the next twelve months. In order to achieve net positive operating cash flows and long-term profitability, we believe we will need to continue to increase attendance levels significantly compared to 2021 and achieve levels in line with pre COVID-19 attendance. We believe the global re-opening of our theatres, the anticipated volume of titles available for theatrical release, and the anticipated broad appeal of many of those titles will result in increased attendance levels. We believe that the sequential increases in attendance experienced each quarter as 2021 progressed are positive signs of continued demand for the movie going experience. However, there remain significant risks that may negatively impact attendance, including a resurgence of COVID-19 related restrictions, potential movie-goer reluctance to attend theatres due to concerns about COVID-19 variant strains, movie studios release schedules and direct to streaming or other changing movie studio practices.

We entered the Ninth Amendment (as defined in Note 8—Corporate Borrowings and Finance Lease Obligations in the Notes to the Consolidated Financial Statements under Part II, Item 8 thereof) pursuant to which the requisite revolving lenders party thereto agreed to extend the fixed date for the termination of the suspension period for the financial covenant (the secured leverage ratio) applicable to the Senior Secured Revolving Credit Facility (as defined in Note 8—Corporate Borrowings and Finance Lease Obligations in the Notes to the Consolidated Financial Statements under Part II, Item 8 thereof) from March 31, 2021 to March 31, 2022, which was further extended by the Eleventh Amendment (as defined in Note 8—Corporate Borrowings and Finance Lease Obligations in the Notes to the Consolidated Financial Statements under Part II, Item 8 thereof) from March 31, 2022 to March 31, 2023, as described, and on the terms and conditions specified, therein. We are currently subject to minimum liquidity requirements of approximately $144 million, of which $100 million is required under the conditions for the Extended Covenant Suspension Period ending March 31, 2023, as amended, under the Senior Secured Revolving Credit Facility, and £32.5 million (approximately $44 million) of which is required under the Odeon Term Loan Facility. Following the expiration of the Extended Covenant Suspension Period ending March 31, 2023, the Company will be subject to the financial covenant under the Senior Secured Revolving Credit Facility as of the last day of each quarter on which the aggregate principal amount of revolving loans, and letters of credit (excluding letters of credit that are cash collateralized) in excess of $25 million, outstanding under the Senior Secured Revolving Credit Facility exceeds 35% of the principal amount of commitments under the Senior Secured Revolving Credit Facility then in effect, beginning with the quarter ending June 30, 2023. We currently expect we will be able to comply with this financial covenant, however, we do not anticipate the need to borrow under the Senior Secured Revolving Credit Facility during the next twelve months. See Note 8—Corporate Borrowings and Finance Lease Obligations in the Notes to the Consolidated Financial Statements under Part II, Item 8 thereof, for further information. Our liquidity needs thereafter will depend, among other things, on the timing of movie releases and our ability to generate cash from operations.

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Our cash expenditures for rent increased significantly in the second, third, and fourth quarters of 2021 as previously deferred rent payments and landlord concessions started to become current obligations. We received rent concessions provided by the lessors that aided in mitigating the economic effects of COVID-19 during the pandemic. These concessions primarily consisted of rent abatements and the deferral of rent payments. As a result, deferred lease amounts were approximately $315.1 million as of December 31, 2021. See Note 3—Leases in the Notes to the Consolidated Financial Statements under Part II, Item 8 thereof, for a summary of the estimated future repayment terms for the deferred lease amounts due to COVID-19.

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 significantly increased levels of operating revenue, the estimates of amounts of required liquidity vary significantly. Similarly, it is very difficult to predict when theatre attendance levels will return to pre COVID-19 levels, which we expect will depend on the continued widespread availability and use of effective vaccines for the coronavirus, and eventual abatement of more virulent strains of the virus, related government mandates on social distancing and mask use, and the supply of movie titles for theatrical exhibition. While our current cash burn rates have improved, these levels are not sustainable. Further, we cannot accurately predict what future changes may occur to the 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 studios who release movies to theatrical exhibition and their streaming platforms on the same date (“day and date”), 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 the attendance levels and other assumptions used to estimate our liquidity requirements and future cash burn rates will be correct, and our ability to be predictive is uncertain due to the unknown magnitude and duration of the COVID-19 pandemic. Further, there can be no assurances that we will be successful in generating the additional liquidity necessary to meet our obligations beyond twelve months from the issuance of these financial statements on terms acceptable to us or at all. If we are unable to maintain or renegotiate our minimum liquidity covenant requirements, it could have a significant adverse effect on our business, financial condition and operating results.

Please see “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations of Part II thereof for additional information.

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.

Narrative Description of Business

We are the world’s largest theatrical exhibition company and an industry leader in innovation and operational excellence. Over the course of our 100+ year history, we have pioneered many of the theatrical exhibition industry’s most important innovations. We introduced Multiplex theatres in the 1960s and the North American stadium-seated Megaplex theatre format in the 1990s. Most recently, we continued to innovate and evolve the movie-going experience with the deployment of our theatre renovations featuring plush, powered recliner seating and the launch of our U.S. subscription loyalty tier, AMC Stubs^® A-List. Our growth has been driven by a combination of organic growth through reinvestment in our existing assets and through the acquisition of some of the most significant companies in the theatrical exhibition industry.

Our business is operated in two Theatrical Exhibition reportable segments, U.S. markets and International markets. Prior to 2016, we primarily operated in the United States. Our international operations are largely a result of our acquisition of Odeon and UCI Cinemas Holdings Limited (“Odeon”) in November of 2016 and Nordic Cinema Group Holding AB (“Nordic”) in March of 2017.

Today, AMC is the largest theatre operator in the world. As of December 31, 2021, we owned, leased or operated 946 theatres and 10,562 screens in 12 countries, including 593 theatres with a total of 7,755 screens in the United States and 353 theatres and 2,807 screens in European markets and Saudi Arabia. During the year ended December 31, 2020, we sold 100% of our theatre operations in Latvia and divested of 49% of our interest in Lithuania and Estonia operations. During the year ended December 31, 2021, we sold the remaining 51% equity interest in Estonia and Lithuania. As of December 31, 2021, we were the market leader in the United States and Europe including in Italy,

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Spain, Sweden, Norway, and Finland; and a leading theatre operator in the United Kingdom, Ireland, Portugal and Germany. We have operations in four of the world’s 10 largest economies, including four of the six largest European economies (the United Kingdom, Spain, Italy and Germany) as of December 31, 2021.

As of December 31, 2021, in the U.S. markets, we owned, leased or operated theatres in 43 states and the District of Columbia, with approximately 49% of the U.S. population living within 10 miles of one of our theatres. We have a diversified footprint with complementary global geographic and guest demographic profiles, which we believe gives our circuit a unique profile and offers us strategic and operational advantages while providing our studio partners with a large and diverse distribution channel. As of December 31, 2021, we operated some of the most productive theatres in the top markets in the United States and were the market leader in the top two markets: New York and Los Angeles. As of December 31, 2021, our top five markets, in each of which we held the #1 share position, are Los Angeles, New York, Chicago, Atlanta and Philadelphia, according to data provided by Comscore.

As of December 31, 2021, in the International markets, we owned, leased or operated theatres in 10 European countries and in Saudi Arabia through Saudi Cinema Company, LLC, our joint venture with Saudi Entertainment Ventures. In all of these 11 countries, we operate productive assets in each of the country’s capitals. As of December 31, 2021, about a third of our international recliner renovations occurred in London, Berlin and Madrid; three of the largest Western European Capitals. Due to the population density in Europe as of December 31, 2019, prior to the effects of COVID-19 pandemic, each screen served on average twice the population of a U.S. screen in a less populated market.

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The following table provides detail with respect to the geographic location of our theatrical exhibition circuit as of December 31, 2021:


U.S. Markets	Theatres(1)	Screens(1)
Alabama	18	237
Arizona	12	197
Arkansas	4	45
California	58	780
Colorado	14	193
Connecticut	5	68
Delaware	1	14
Florida	40	622
Georgia	31	394
Idaho	1	11
Illinois	47	564
Indiana	24	321
Iowa	6	80
Kansas	9	132
Kentucky	3	48
Louisiana	6	89
Maryland	13	144
Massachusetts	10	142
Michigan	12	193
Minnesota	9	132
Missouri	11	132
Montana	5	55
Nebraska	2	21
Nevada	2	28
New Hampshire	1	10
New Jersey	26	332
New Mexico	1	12
New York	29	311
North Carolina	23	301
North Dakota	2	19
Ohio	14	176
Oklahoma	13	153
Oregon	2	25
Pennsylvania	27	308
South Carolina	5	52
South Dakota	1	10
Tennessee	21	253
Texas	44	643
Utah	3	29
Virginia	13	173
Washington	15	181
West Virginia	2	20
Wisconsin	7	91
District of Columbia	1	14
Total U.S. Markets	593	7,755

International Markets
Denmark	2	10
Finland	27	159
Germany	22	197
Ireland	11	77
Italy	41	412
Norway	13	94
Portugal	3	45
Saudi Arabia	10	66
Spain	40	463
Sweden	72	390
United Kingdom	112	894
Total International Markets	353	2,807
Total	946	10,562

(1)

Included in the above table are 74 theatres and 392 screens that we manage or ~~action by the stockholders, up to 50,000,000 shares of preferred stock, par value $0.01 per share,~~ in one or more series, to designate the number of shares constituting any series, and to fix the rights, preferences, privileges and restrictions thereof, including dividend rights, voting rights, rights and terms of redemption, redemption price or prices and liquidation preferences of such series. The issuance of shares of preferred stock may have the effect of delaying, deferring or preventing a change in control of our company without further action by the stockholders, even where stockholders are offered a premium for their shares.

Our incorporation under Delaware law, the ability of our board of directors to create and issue a new series of preferred stock or a stockholder rights plan and certain other provisions of our amended and restated certificate of incorporation and amended and restated bylaws, as amended, could impede a merger, takeover or other business combination involving our company or the replacement of our management or discourage a potential investor from making a tender offer for our Class A common stock, which ~~under certain circumstances, could reduce the market value of our Class A common stock.~~

~~Our issuance of preferred stock could dilute the voting power of the common stockholders and adversely affect the market value of our Class A common stock.~~

The issuance of shares of preferred stock with voting rights may adversely affect the voting power of the holders of our other classes of voting stock either by diluting the voting power of our other classes of voting stock if they vote together as a single class, or by giving the holders of any such preferred stock the right to block an action on which theywe have a ~~separate class vote even if~~partial ownership interest. In the ~~action were approved by~~U.S. markets segment, we manage or have a partial interest in seven theatres and 85 screens. In the ~~holders of our other classes of voting stock.~~

~~In addition, the issuance of shares of preferred stock with dividend~~International markets segment, we manage or conversion rights, liquidation preferences or other economic terms favorable to the holders of preferred stock could adversely affect the market price for our Class A common stock by making an investmenthave a partial interest in ~~the common stock less attractive. For example, investors may not wish to purchase Class A common stock~~67 theatres and 307 screens.

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Our theatrical exhibition revenues are generated primarily from box office admissions and theatre food and beverage sales. We offer consumers a broad range of entertainment alternatives including traditional film programming, private theatre rentals, independent and foreign films, performing arts, music and sports. We also offer food and beverage alternatives beyond traditional concession items, including made-to-order meals, customized coffee, healthy snacks, beer, wine, premium cocktails, and dine-in theatre options. The balance of our revenues are generated from ancillary sources, including on-screen advertising, fees earned from our customer loyalty program, rental of theatre auditoriums, income from gift card and exchange ticket sales, and online ticketing fees.

Our Strategy

We are committed to maintaining a leadership position in the exhibition industry by focusing on forward-thinking initiatives for the benefit of our guests. We do this through a combination of unique marketing outreach, seamless digital technology and innovative theatre amenities designed to 1) transform AMC into a world-class leader in customer engagement, 2) deliver the best in-person experience while at AMC theatres, 3) selectively adjust our footprint through expansion in certain markets and strategic closure of underperforming theatres, 4) pursue adjacent opportunities that extend the AMC brand, and 5) explore attractive acquisitions leveraging our existing capabilities and core competencies. Consistent with our history and culture of innovation, we believe our vision and relentless focus on these key elements, which apply strategic and marketing components to traditional theatrical exhibition, will drive our future success.

As discussed above, the COVID-19 pandemic has had a significant impact on our business. We have taken and continue to take steps to adapt our business strategy in the short-term in response to the COVID-19 pandemic, including adjusting our 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 and implementing a comprehensive set of cleaning and operational protocols across our theatres, which are further discussed below. We have also taken and continue to take significant steps to preserve cash by eliminating non-essential costs. Our capital allocation strategy will be driven by the cash generation of our business and will be contingent on maintaining adequate liquidity as well as a required return threshold.

In the U.S. markets, in response to the COVID-19 pandemic and under advisement of current & former faculty of Harvard University’s School of Public Health as well as the Clorox Company, we developed a comprehensive set of cleaning and operational protocols branded “AMC Safe and Clean” which have been implemented at every one of our U.S. theatres. AMC Safe & Clean protocols include enhanced cleaning procedures that include extra time between showtimes to allow for a full, thorough cleaning and nightly disinfecting, use of high-tech high-efficiency particulate air vacuums, upgraded air filtration efforts including the use of minimum efficiency reporting value-13 filters wherever possible, hand sanitizing stations throughout the theatre and the availability to guests of disinfectant wipes. In the International markets, in response to the COVID-19 pandemic, we developed a comprehensive set of cleaning and operational protocols branded “We Are Safer Cinema” which have been implemented across our European theatres. Protocols include enhanced cleaning procedures and hand sanitizing stations throughout the theatre. We strictly follow local guidelines in regard to guest and staff masking and vaccination policies.

Transform AMC into a price above the conversion price of a series of convertible preferred stock because the holders of the preferred stock would effectively be entitled to purchase Class A common stock at the lower conversion price causing economic dilution to the holders of Class A common stock.

~~Item~~ ~~1B. Unresolved Staff Comments.~~

~~None.~~

~~Item~~ 2. ~~Properties.~~

~~The following table sets forth the general character and ownership classification of our theatre circuit, excluding non-consolidated joint ventures and managed theatres, as of December 31, 2019:~~

Property Holding Classification

Theatres

Screens

Owned

62

561

Leased

875

10,148

Total

937

10,709

~~We lease our corporate headquarters~~World-Class Leader in ~~Leawood, Kansas. We believe our facilities are currently adequate for our operations.~~

Please refer to Narrative Description of Business under Part I, Item 1 of this Annual Report on Form 10-K for the geographic locations of our Theatrical Exhibition circuit as of December 31, 2019. See Note 3—~~Leases in the Notes to the Consolidated Financial Statements under Part II, Item 8 hereof.~~

Customer Engagement

AMC engages movie-goers through advances in technology and marketing activities to strengthen the bonds with our current guests and create new connections with potential customers that drive both growth and loyalty. AMC serves our guests, end-to-end, from before they enter our theatres, through their enjoyment of a comprehensive spectrum of film content while at our theatres and then again after the movie when they’ve left the theatre and are deciding what film to see the next time they visit.

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.

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 visits to already seen movies from $19.95 and $23.95 per month depending upon the geographic market. AMC Stubs^®

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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, 2021, we had more than 25,300,000 member households enrolled in AMC Stubs^® A-List, AMC Stubs Premiere™ and AMC Stubs Insider™ programs on a combined basis. Our AMC Stubs^® members represented approximately 40% of AMC’s U.S. market attendance during the year ended December 31, 2021. 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 12,800,000 members in our various International loyalty programs. We continue to evaluate 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.

Our marketing efforts are not limited to our loyalty program. 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. Our mobile applications also include AMC Theatres On Demand, a service for members of the AMC Stubs^®loyalty program that allows them to rent or buy movies.

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.

In June 2021, the Company launched AMC Investor Connect (“AIC”), an innovative new communication initiative to engage directly with its sizable retail shareholder base and convert shareholders into AMC consumers. AIC allows AMC shareholders to self-identify through the AMC website and receive AMC special offers and important Company updates. As part of AIC, members must sign up for an AMC Stubs account and provide additional personalized data that allows AMC to more precisely engage with our investor consumers. As of February 24, 2022, there were 613,807 global self-identified AMC shareholder members of AIC, which is comprised of both registered and beneficial shareholders.

During September 2021, we launched a multi-media global advertising campaign to engage customers and raise awareness about movie theatres’ unique experiences and how important theatrical exhibition is to the cultural fabric of society the world over. The multi-media campaign is anchored by a television commercial starring Oscar Winner Nicole Kidman, was directed by two-time Academy Award nominee Jeff Cronenweth and Tim Cronenweth, and was written by Academy Award screenwriter nominee Billy Ray. The campaign reinforces the communal and multi-sensory experience that can only be found in a movie theatre and introduces our new axiom: “AMC Theatres. We Make Movies Better.” This messaging will also be used in nine European countries by Odeon Cinema Group.

During the fourth quarter of 2021, we partnered with Sony Pictures to become the first theatrical exhibition company to offer AMC Stubs members a limited number of exclusive Spider-Man: No Way Home non-fungible tokens (“NFTs”) based on a ticket purchase and redemption of a Spider-Man ticket on the opening night of the film. Some 86,000 exclusive and limited edition NFTs offer guests a tradeable collectible commemorating the most successful film of 2021. This NFT is tradeable and in the future will offer discounts or other benefits to the then-current holders to generate future attendance. We will continue to implement innovative NFT offers to further engage and build loyalty with our guests.

~~Item~~ ~~3. Legal Proceedings.~~

~~The information required to be furnished by us under this Part I, Item 3 (Legal Proceedings) is incorporated by reference to the information contained in Note~~ 11—~~Commitments and Contingencies to the Consolidated Financial Statements included in Part II, Item 8 on this Annual Report on Form 10-K.~~

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Deliver the best in-person experience while at AMC theatres

In conjunction with our advances in technology and marketing initiatives, and consistent with our long-term growth strategy, we plan to continue investing in our theatres and enhancing the consumer experience to deliver the best in-person experience and take greater advantage of incremental revenue-generating opportunities, primarily through comfort and convenience innovations, imaginative food and beverage initiatives, and exciting premium large format (“PLF”) offerings. Our ability to implement our growth strategy, however, remains highly uncertain, as the full impact and duration of the COVID-19 pandemic continues to evolve as of the date of this Annual Report on Form 10-K.

Comfort and Convenience Innovations. Recliner seating is the key feature of our 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. 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 December 31, 2021, in our U.S. markets, we featured recliner seating in approximately 351 U.S. theatres, including Dine-in-Theatres, totaling approximately 3,395 screens and representing 43.8% of total U.S. screens. In our International markets, as of December 31, 2021, we had recliner seating in approximately 89 International theatres, totaling approximately 572 screens and representing 20.4% of total International screens.

Open-source internet ticketing makes AMC’s entire universe of seats in the U.S. (approximately 1.1 million as of December 31, 2021), for all our show times, as available as possible, on as many websites and mobile applications 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, 2021, approximately 67% of our tickets were purchased online in the U.S., with approximately 80% of total online tickets being purchased through AMC.

Traditional payment sources are evolving rapidly around the globe as the use of cryptocurrencies become more popular and convenient. In response, during the fourth quarter of 2021, we introduced the ability for consumers to pay for tickets, food and beverage items and associated gifts cards with cryptocurrencies in the U.S. markets, including Bitcoin, Ethereum, Litecoin and Bitcoin Cash. The acceptance of cryptocurrency is designed to offer guests greater flexibility and convenience, which we believe will increase attendance.

Imaginative Food and Beverage Initiatives.Our deployment initiatives also apply to food and beverage enhancements. We have expanded our menu of enhanced food and beverage products to include meals, healthy snacks, premium beers, wine and mixed drinks, 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 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 touchpoints between guests and employees. We 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 and we have expanded the capabilities of our online and mobile apps to include the ability to pre-order food and beverages when advanced tickets are purchased. Guests are able to order food and beverage items when buying tickets in advance and have the items ready upon arrival and available at dedicated pick-up areas or delivered to seat at select theatres.

Our MacGuffins Bar and Lounges (“MacGuffins”) give us an opportunity to engage our legal age customers. As of December 31, 2021, we offer alcohol in approximately 349 AMC theatres in the U.S. markets and 243 theatres in our International markets and continue to explore expansion globally.

Exciting Premium Large Format Offerings. PLF auditoriums generate our highest customer satisfaction scores, and we believe the investment in premium formats increases the value of the movie-going experience for our guests, ultimately leading to additional ticket revenue. To that end, we are committed to investing in and expanding our

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offerings of the best sight and sound experiences through a combination of our partnerships with IMAX^® and Dolby Cinema™ and the further development of our own proprietary PLF offering, AMC Prime.

●

IMAX^®. IMAX^® is one of the world’s leading entertainment technology companies, specializing in motion picture technologies and presentations.

As of December 31, 2021, AMC was the largest IMAX^® exhibitor in the U.S., with 186 (3D enabled) IMAX^® screens and a 57% market share. Each one of our IMAX^® local installations is protected by geographic exclusivity, and as of December 31, 2021, our IMAX^® screen count was 96% greater than our closest competitor. We also operate 35 IMAX® screens in Europe. 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.

●

Dolby Cinema™. Dolby Cinema™ offers a premium cinema offering for movie-goers that combines state-of-the-art image and sound technologies with inspired theatre design and comfort. Dolby Cinema™ at AMC includes Dolby Vision™ laser projection and object-oriented Dolby Atmos^® audio technology, as well as AMC’s plush power reclining seats with seat transducers that vibrate with the action on screen.

As of December 31, 2021, we operated 154 Dolby Cinema™ at AMC auditoriums in the U.S. In December 2018, we introduced the first United Kingdom Dolby Cinema Auditorium in our iconic Leicester Square theatre in the heart of London, ending 2021 with eight 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.

●

In-house PLF Brands. 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^® or Dolby Cinema™. Therefore, it may be especially relevant in smaller or more price-sensitive markets. As of December 31, 2021, we operated 56 screens under proprietary PLF brand names in the U.S. markets and 77 screens in the International markets.

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 PLF screens, enhanced food and beverage offerings and our premium seating as deployed throughout our circuit on December 31, 2021:


	U.S. Markets		International Markets
Format	Theatres	Screens	Theatres	Screens
IMAX®	185	186	38	38
Dolby Cinema™	154	154	8	8
Other PLF	56	56	76	77
Dine-in theatres	51	729	3	13
Premium seating	351	3,395	89	572

~~Item~~ ~~4. Mine Safety Disclosures.~~
3) Expand and Strategically Close Underperforming Theatres

Our long-term growth strategy includes the deployment of our strategic growth initiatives, opening new-build theatres and continued exploration of small acquisitions. By expanding our platform through disciplined new-build theatres and acquisitions, we are able to further deploy our proven strategic initiatives while further diversifying our consumer base, leading to greater appeal for more films. The additional scale achieved through new-build theatres and acquisitions also serves to benefit AMC through global procurement savings and increased overhead efficiencies. We believe that expansion offers us additional opportunities to introduce our proven guest-focused strategies to movie-goers and will generate meaningful benefits to guests, employees, studio partners and our shareholders. During the year ended December 31, 2021, we acquired 11 theatres with 140 screens, reopened one theatre with eight screens and built and opened 10 new theatres with 82 screens to implement our strategy to install consumer experience upgrades.

Our long-term strategy also includes strategically closing underperforming theatres. During the year ended December 31, 2021, we permanently closed 20 theatres with 166 screens for leased locations where we could not renegotiate an acceptable future rent term and also owned properties, where we are seeking to sell the real estate to monetize its value.

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The following table sets forth our historical information concerning new builds (including expansions), acquisitions and dispositions (including net construction closures) and end-of-period operated theatres and screens through December 31, 2021:


					Permanent/Temporary
					Closures/(Openings),
	New Builds		Acquisitions		net		Total Theatres
	Number of	Number of	Number of	Number of	Number of	Number of	Number of	Number of
Fiscal Year	Theatres	Screens	Theatres	Screens	Theatres	Screens	Theatres	Screens
Beginning balance							906	10,558
Calendar 2017	12	96	128	736	32	221	1,014	11,169
Calendar 2018	11	89	4	39	23	206	1,006	11,091
Calendar 2019	10	85	7	70	19	205	1,004	11,041
Calendar 2020	8	63	1	14	63	575	950	10,543
Calendar 2021	10	82	11	140	25	203	946	10,562
	51	415	151	999	162	1,410

~~Not applicable.~~
4) Pursue Adjacent Opportunities that Extend the AMC Brand

We believe there is considerable opportunity to extend and monetize the AMC brand outside of our movie theatre auditoriums. We plan to pursue opportunities that capitalize on our attractive customer base, our leading brand, our 100+ years of food and beverage expertise, and technology capabilities.

As part of that strategy, in the fourth quarter of 2021, we announced we would be expanding our food and beverage business beyond theatrical exhibition and enter the multi-billion dollar popcorn industry with the launch of AMC Theatres Perfectly Popcorn in the U.S. markets.

● ~~Table~~Beginning in 2022, we will sell freshly made AMC Theatres Perfectly Popcorn at select mall retail locations around the country. Kiosks, counters, and stores will feature real AMC movie theatre popcorn and other AMC movie theatre treats.
● Additionally, we also plan to make our AMC Theatres Perfectly Popcorn, freshly popped in nearby theatres, available through food delivery-to-home services. In this way, consumers will be able to enjoy a slice of ~~Contents~~the AMC experience when being entertained at home.
● We will sell “To Go” packages at our theatres of freshly popped popcorn for takeout and/or pickup.
● Also coming later in 2022, we plan to offer prepackaged and ready-to-pop microwaveable AMC Theatres Perfectly Popcorn, which will become available for purchase in supermarkets and convenience stores around the country.

AMC Theatres Perfectly Popcorn is an opportunity to diversify our business and to create a new food and beverage revenue stream for the Company.

Explore Attractive Acquisitions Leveraging Our Existing Capabilities and Core Competencies

As part of our plans to pursue value-enhancing initiatives that lead to diversification of our business, we will consider attractive and opportunistic acquisitions inside and outside the Exhibition industry that leverage AMC’s footprint and capabilities as well as the core competencies and experiences of AMC’s management team.

Our Competitive Strengths

We believe we have the following competitive strengths:

Leading guest engagement through digital marketing and technology platforms. Through our AMC Stubs^® loyalty program, we have developed a consumer database of some 25.3 million households, representing approximately 52 million individuals. Our digital marketing and technology platforms allow us to engage with these customers frequently, efficiently and on a very personalized level. We believe personalized data drives increased engagement, resulting in higher attendance.

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Leading Market Share in Important, Affluent and Diverse Markets. As of December 31, 2021, across our three biggest metropolitan markets in the United States—New York, Los Angeles and Chicago, representing 19% of the country’s total box office—we held a 44% combined market share. We had theatres located in the top 25 U.S. markets, holding the #1 or #2 position in 19 of those 25 markets based on box office revenue. We are also the #1 theatre operator in Italy, Sweden, Norway, Finland, and Spain; the #2 operator in the United Kingdom and Ireland; the #3 operator in Portugal; and the #4 operator in Germany as of December 31, 2021. We believe our strong presence in these top markets makes our theatres highly visible and therefore strategically more important to content providers, who rely on the large audiences and marketing momentum provided by major markets to drive opinion-making and deliver a movie’s overall box office results.

We also have a diversified footprint with complementary global geographic and guest demographic profiles. We have theatres in more densely populated major metropolitan markets, where there is also a scarcity of attractive retail real estate opportunities, as well as complementary suburban and rural markets. Guests from different demographic and geographic profiles have different tastes in movies, and we believe by broadening our geographic base, we can help mitigate the impact of film genre volatility on our box office revenues.

Well Located, Highly Productive Theatres. Our theatres are generally located in the top retail centers across the United States. We believe this provides for long-term visibility and higher productivity and is a key element in the success of our enhanced food and beverage and more comfort and convenience initiatives. Our location strategy, combined with our strong major market presence, enable us to deliver industry-leading theatre-level productivity. During the year ended December 31, 2021, eight of the 10 highest grossing theatres in the U.S. were AMC theatres, according to data provided by Comscore. During the same period, AMC’s U.S. markets average total revenues per theatre was approximately $3.2 million. This per unit productivity is important not only to content providers, but also to developers and landlords, for whom per location and per square foot sales numbers are critical measures.

AMC Classic theatres are located primarily in smaller, suburban and rural markets, which affects total revenues per theatre. However, in general, theatres located in smaller suburban and rural markets tend to have less competition and a lower cost structure.

In our International markets, many theatres are located in top retail centers in major metropolitan markets with high visibility. We believe that deploying our proven strategic initiatives in these markets will help drive attendance and greatly improve productivity. Other theatres are in larger and mid-sized cities and towns in affluent regions.

Deployment of unique pricing structures to enhance revenue. AMC has developed a dedicated pricing department and, as a result, we have deployed several different strategic pricing structures that have increased revenue and profitability.

In June 2018, we launched AMC Stubs^® A-List, a subscription pricing structure that offers members three movies a week, including premium formats, for a monthly fee ranging from $19.95 to $23.95 depending on geographical location. Around the same time, we launched “Discount Tuesday” which offers AMC Stubs^® members a reduced price for movie attendance on Tuesdays. Prior to the COVID-19 pandemic, the results showed an incremental increase in attendance and corresponding increase in admissions and food and beverage revenue.

Sources of Revenue

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 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 or disregarded the period of theatrical exclusivity (the “window”). Theatrical releases may continue to be postponed and windows shortened or disregarded 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

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terms. We have made adjustments to theatre operating hours to align screen availability and associated theatre operating costs with attendance levels for each theatre.

As we continue our recovery from the impacts of the COVID-19 pandemic on our business, our aggregate attendance levels remain significantly behind pre-pandemic levels. However, for the first time since 2019, substantially all of our worldwide theatres were open for the entirety of the third and fourth quarters of 2021.

During the year ended December 31, 2021, films licensed from our six largest movie studio distributors based on revenues accounted for approximately 87% of our U.S. admissions revenues, which consisted of Sony, Disney, Universal, Warner Bros., Paramount, and Lionsgate. In Europe, approximately 77% of our box office revenue came from films attributed to our four largest movie distributor groups; which consisted of Universal, Disney, Sony, and Warner Bros. 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.

Food and Beverage. Food and beveragesales 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. As a result of the COVID-19 pandemic, we have streamlined our concession menus to focus on our best-selling products and expanded cashless transactions technology through the deployment of mobile ordering across all brands, all in an effort to reduce the number of touchpoints between guests and employees. We have also upgraded our Coca-Cola Freestyle beverage software to allow guests to dispense drinks without the need to utilize the machine’s touch screen using the Coca-Cola Freestyle app.

We currently operate 51 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.

Theatrical Exhibition Industry and Competition

U.S. markets.In the U.S., the movie exhibition business is large, stable, and mature. While in any given calendar quarter the quantity and quality of movies can drive volatile results, box office revenues have generally advanced from 2011 to 2019. The industry’s best year ever, in terms of revenues, was 2018, with box office revenues of approximately $11.9 billion, an increase of approximately 7.1% from 2017, with 1.3 billion admissions in the U.S. and Canada. Due to the COVID-19 pandemic, local, state and federal governments issued stay-at-home orders and closure notices for certain businesses, including all theatres and studio production, for an extended portion of 2020. As a result, new film content production remained nearly non-existent, and a large portion of 2020 scheduled movies were released in the home on streaming platforms or moved into 2021.

We believe it is the quality of the movie-going experience that will define future success. Whether through enhanced food and beverage options (Food and Beverage Kiosks, Marketplaces, Coca-Cola Freestyle, MacGuffins or Dine-in Theatres), more comfort and convenience (recliner seating, open-source internet ticketing, reserved seating), engagement and loyalty (AMC Stubs^®, mobile apps, social media) or sight and sound (digital projectors, 3D, Dolby Cinema™ at AMC, other PLF screens or IMAX^®), it is the ease of use and the amenities that these innovations bring to customers that we believe will drive sustained profitability in the years ahead.

The following table represents information about the U.S./Canada exhibition industry obtained from the National Association of Theatre Owners, with the exception of box office revenues for calendar years 2021 and 2020

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obtained from Comscore. See Management’s Discussion and Analysis of Financial Condition and Results of Operations under Part II, Item 7 thereof for information regarding our operating data:


	Box Office			Average
	Revenues		Attendance	Ticket		Number of	Indoor
Calendar Year	(in millions)		(in millions)	Price		Theatres	Screens
2021	$	4,544	447	$	10.17	*	*
2020		2,205	240		9.18	5,477	40,200
2019		11,400	1,244		9.16	5,548	40,613
2018		11,880	1,304		9.11	5,482	40,313
2017		11,091	1,236		8.97	5,398	39,651
2016		11,372	1,314		8.65	5,472	40,009
2015		11,120	1,320		8.42	5,484	39,411
2014		10,400	1,270		8.19	5,463	39,356
2013		10,920	1,340		8.15	5,326	39,368
2012		10,790	1,360		7.93	5,317	39,056

* Number of theatres and indoor screens information was not available for calendar year 2021 as of the date of this filing.

Based on information obtained from Comscore, we believe that the three largest exhibitors, in terms of U.S./Canada box office revenue (AMC, Regal Entertainment Group, and Cinemark Holdings, Inc.) generated approximately 54% of the box office revenues in 2021.

International markets. Movie-going is a popular leisure activity with high penetration across key geographies in our International markets. Theatre appeal has proven resilient to competition for consumers’ leisure spending and to recessionary periods and we believe we will continue to benefit from increased spending across International markets. The European market lags the U.S. market across a number of factors, including annual spend per customer, number of IMAX^® screens and screens per capita that cause us to believe that the deployment of our customer initiatives will be successful in these markets. On the other hand, our European markets are more densely populated and operate with fewer screens per one million of population, making the screens we acquired more valuable.

Additionally, U.S. films generate the majority of the box office in Europe, but movie-goers in specific geographies welcome locally produced films with local actors and familiar story lines which can mitigate film genre attendance fluctuations. Going forward, we believe we will see positive growth in theatre attendance as we continue to deploy our proven guest-centered innovations like recliner seating, enhanced food and beverage offerings, and premium large format experiences. Like the U.S., the international industry box office suffered from months of theatre closures, significantly fewer new films and reopening restrictions and generated far fewer sales than 2019.

The following table provides information about the exhibition industry attendance for the International markets where we operate obtained from territory industry trade sources, see Management’s Discussion and Analysis of Financial Condition and Results of Operations under Part II, Item 7 thereof for information regarding our operating data:


	Calendar Year
(In millions)	2021	2020	2019	2018	2017
United Kingdom	74.6	44.0	176.0	177.3	170.6
Germany	42.5	37.3	119.9	104.2	122.3
Spain	41.5	28.7	105.8	97.8	99.8
Italy	26.6	30.2	104.7	91.8	99.0
Sweden	6.1	5.4	15.8	16.3	16.9
Ireland	6.1	3.9	15.1	15.8	16.1
Portugal	5.3	3.6	15.2	14.6	15.6
Norway	5.6	4.8	11.3	12.1	11.8
Finland	3.4	3.9	8.4	8.1	8.5
Total	211.7	161.8	572.2	538.0	560.6

Competition. Our theatres are subject to varying degrees of competition in the geographic areas in which they operate. Competition is often intense with respect to attracting patrons, licensing motion pictures and finding new theatre sites. Where real estate is readily available, it is easier to open a theatre near one of our theatres, which may adversely

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affect operations at our theatre. However, in certain of our densely populated major metropolitan markets, we believe a scarcity of attractive retail real estate opportunities enhances the strategic value of our existing theatres. We also believe the complexity inherent in operating in these major metropolitan markets is a deterrent to other less sophisticated competitors, protecting our market share position.

The theatrical exhibition industry faces competition from other forms of out-of-home entertainment, such as concerts, amusement parks and sporting events, and from other distribution channels for filmed entertainment, such as cable television, pay-per-view, video streaming services, PVOD, and home video systems, as well as from all other forms of entertainment.

We believe movie-going is a compelling consumer out-of-home entertainment experience. Movie theatres currently garner a relatively small share of overall consumer entertainment time and spend, and our industry benefits from available capacity to satisfy additional consumer demand without capital investment.

Seasonality

Our revenues are dependent upon the timing of motion picture releases by distributors. The most marketable motion pictures are usually released during the summer and the year-end holiday seasons. Therefore, our business is seasonal, with higher attendance and revenues generally occurring during the summer months and holiday seasons. During the COVID-19 pandemic, and in following periods, our business and results of operations have not and may continue to not experience our historically typical patterns of seasonality.

Regulatory Environment

The distribution of motion pictures is subject to regulation under federal and state antitrust laws and has been the subject of numerous antitrust cases. Consent decrees, resulting from one of those cases to which we were not a party, have had a material impact on the industry and us. Those consent decrees bound certain major motion picture distributors and limited how motion pictures could be distributed. The U.S. Department of Justice recently terminated the consent decrees, subject to a two-year sunset period for certain prohibitions, including block booking and circuit dealing. At this time, we cannot project what impact, if any, termination of the consent decrees may have on industry licensing practices.

Our theatres in the United States must comply with Title III of the Americans with Disabilities Act, or ADA. Compliance with the ADA requires that public accommodations, including websites and mobile apps for such accommodations, be accessible to individuals with disabilities and that new construction or alterations are made to conform to accessibility guidelines. Non-compliance with the ADA could result in the imposition of injunctive relief, fines, and awards of damages to private litigants and additional capital expenditures to remedy such noncompliance. As an employer covered by the ADA, we must make reasonable accommodations to the limitations of employees and qualified applicants with disabilities, provided that such reasonable accommodations do not pose an undue hardship on the operation of our business. In addition, many of our employees are covered by various government employment regulations, including minimum wage, overtime and working conditions regulations. In Europe, all territories have similar national regulations relating to disabilities.

Our operations also are subject to federal, state and local laws regulating such matters as construction, renovation and operation of theatres as well as wages and working conditions, citizenship, health and sanitation requirements, consumer and employee privacy rights, and licensing, including alcoholic beverage sales. We believe our theatres are in material compliance with such requirements.

We own and operate theatres and other properties in the United States, United Kingdom, Spain, Italy, Germany, Portugal, Ireland, Sweden, Finland, Norway, Denmark, and Saudi Arabia, which are subject to various federal, state and local laws and regulations. Certain of these laws and regulations, including those relating to environmental protection, may impose joint and several liability on certain statutory classes of persons for the costs of investigation or remediation of contamination, regardless of fault or the legality of original disposal. We believe our theatres are in material compliance with such requirements.

During the COVID-19 pandemic, our theatres have been subject to various governmental orders requiring us to take or refrain from certain activities including, but not limited to, suspending operations, reduction in seating capacities, enforcement of social distancing, establishment of enhanced cleaning protocols, restrictions on food and beverage sales, tracking the identity of guests, employee protection protocols, and limitation on operating hours. Although the orders

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have been modified frequently, we believe our theatres have maintained material compliance with such orders. We currently cannot predict when or if COVID-19 related governmental orders will be fully terminated and whether similar orders will be utilized more frequently during future public health outbreaks.

AMC Human Capital Resources

Our People.AMC associates are core to our commitment to delivering the best theatrical experience in the world. They uphold AMC’s mission of focusing on the guest experience in our theatres, an experience in which excellent customer service is complemented with amazing food and beverage, comfort and premium sight and sound.

COVID-19 Pandemic Impacts.The pandemic has had enormous impacts on our industry, guests and associates and has resulted in material variances in our associate metrics in calendar 2021 compared to the 2019 pre COVID-19 years. As of December 31, 2021, we employed a total of approximately 31,198 employees, including part-time employees, consisting of approximately 3,046 full-time and approximately 28,152 part-time employees, up from an aggregate of approximately 25,019 employees, including part-time and furloughed employees, consisting of approximately 3,449 full-time and approximately 21,570 part-time employees as of December 31, 2020, and down from an aggregate of approximately 38,872 employees consisting of approximately 3,952 full-time and approximately 34,920 part-time employees as of December 31, 2019.

Despite the challenges presented by the pandemic, our associates have been instrumental in delivering AMC’s Safe & Clean program, which launched upon the reopening of our theatres in the fall of 2020. Safe & Clean is a set of cleaning protocols and measures that we have implemented to protect the health and safety of our guests and associates. Our new policies and procedures are advised by faculty members at Harvard School of Public Health and have been developed with the Clorox Company.

Talent Acquisition, Development and Retention.Critical to our operations is the hiring, developing and retaining of employees who support our guest-focused mission in our theatres. Acquiring the right talent at speed and scale is a core capability that we regularly monitor and manage, given the need to rapidly staff our frontline operations. Once hired, we focus on the development of our associates, creating experiences and programs that promote performance, growth and career opportunities for those who are life-long passionate about our business. We sponsor numerous training, education and leadership development programs for associates at all levels, from hourly associates to executive officers. These programs are designed to enhance leadership and managerial capability, ensure quality execution of our programs, drive client satisfaction and increase return on investment.

Diversity, Equity and Inclusion.Our goal is to create a workforce as diverse as the guests we serve and the movies we show on our screens. As such, Diversity, Equity and Inclusion (“DEI”) are fundamental to our culture and critical to our success. In support of this goal, AMC established four councils in support of Women, Latinx, African American and LGBTQ+ associates. The purpose of these councils is to strengthen AMC’s culture by defining opportunities to embrace our diversity, lead with fairness and impartiality and create a more inclusive work environment by leveraging associate experiences. These councils are supported by the DEI function under the guidance of the Chief Human Resources Officer. This DEI focus ensures that all communities are represented in our long-term systemic approach. Our work has been recognized externally: AMC has received a perfect score for 14 consecutive years on the Human Rights Campaign Foundation’s Corporate Equality Index as one of the “Best Places to Work for LGBTQ Equality”; and for seven years running has been named one of the “Best Places to Work” for people with disabilities on the Disability Equality Index.

Compensation, Benefits, Safety and Wellness.In addition to offering market competitive salaries and wages, we offer comprehensive health and retirement benefits to eligible employees. Our health and welfare benefits are supplemented with specific programs to manage or improve common health conditions, a variety of voluntary benefits and paid time away from work programs. We also provide a number of innovative programs designed to promote physical, emotional and financial well-being. Our commitment to the safety and health of our associates continues to be a top priority.

PART II

Item 5.

~~Item~~ 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Item 6.

[Reserved]

Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Item 7A.

Quantitative and Qualitative Disclosures about Market Risk

Item 8.

Financial Statements and Supplementary Data

Item 9.

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

147

Item 9A.

Controls and Procedures

147

Item 9B.

Other Information

147

Item 9C.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

147

PART III

Item 10.

Directors, Executive Officers and Corporate Governance

148

Item 11.

Executive Compensation

148

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

148

Item 13.

Certain Relationships and Related Transactions, and Director Independence

148

Item 14.

Principal Accountant Fees and Services

148

~~Securities.~~PART IV

Item 15.

Exhibits, Financial Statement Schedules

149

Item 16

Form 10-K Summary

157

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Forward-Looking Statements

In addition to historical information, this Annual Report on Form 10-K 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. 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. 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 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:

~~Market Information~~

~~Our common equity consists~~
● the risks and uncertainties relating to the sufficiency of ~~Class A~~our existing cash and ~~Class B common stock. Our Class A common stock has traded on~~cash equivalents and available borrowing capacity to comply with minimum liquidity and financial requirements under our debt covenants related to borrowings pursuant to the ~~New York Stock Exchange since December 18, 2013 under~~Senior Secured Revolving Credit Facility and Odeon Term Loan Facility, fund operations, and satisfy obligations including cash outflows for deferred rent and planned capital expenditures currently and through the ~~symbol “AMC.” There is no established public trading market~~next twelve months. In order to achieve net positive operating cash flows and long-term profitability, the Company will need to continue to increase attendance levels significantly compared to 2021. Domestic industry box office grosses increased significantly to approximately $2.1 billion during the fourth quarter of calendar 2021 and were over 72% of domestic box office grosses of $2.9 billion during the fourth quarter of calendar 2019. We believe that the sequential increases in attendance experienced each quarter as 2021 progressed are positive signs of continued demand for the movie going experience. The Company believes the anticipated volume of titles available for theatrical release and the anticipated broad appeal of many of those titles will support increased attendance levels. However, there remain significant risks that may negatively impact attendance levels, including a resurgence of COVID-19 related restrictions, potential movie-goer reluctance to attend theatres due to concerns about the COVID-19 variant strains, movie studios release schedules and direct to streaming or other changing movie studio practices. If we are unable to achieve significantly increased levels of attendance and operating revenues, we may be required to obtain additional liquidity. If such additional liquidity were not realized or insufficient, we likely would seek an in-court or out-of-court restructuring of our ~~Class B common stock.~~
~~Holders~~liabilities, and in the event of ~~Common Stock~~
~~On February 21, 2020, there were 364 stockholders of record~~such future liquidation or bankruptcy proceeding, holders of our Class A common stock (“Common Stock” or “Common Shares”) and ~~one stockholder~~other securities would likely suffer a total loss of ~~record~~their investment;

●

the impact of the COVID-19 variant strains on us, the motion picture exhibition industry, and the economy in general, including our response to the COVID-19 variant strains 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 ~~Class B common stock.~~

~~Dividend Policy~~

Subject to legally available funds, we intend to pay a quarterly cash dividend at an annual rate equal to approximately $0.12 per share (or a quarterly rate equal to approximately $0.03 per share) on Holdings’ Class Acustomers and ~~Class B common stock. The quarterly dividend decrease of $0.17 per share compared~~employees;

●

risks and uncertainties relating to our ~~previous historical quarterly declarations~~significant indebtedness, including our borrowings and our ability to meet our financial maintenance and other covenants;

●

shrinking exclusive theatrical release windows or release of ~~$0.20 per share reduces~~movies to theatrical exhibition and streaming platforms on the ~~total dividend payout for the quarter by approximately $18.0 million, providing capital that can be deployed towards share buybacks and deleveraging. The payment~~same date;

●

increased use of ~~future dividends is subject to our Board~~alternative film delivery methods including premium video on demand or other forms of ~~Directors’ discretion and dependent on many considerations, including limitations imposed by covenants~~entertainment;

●

intense competition in the ~~agreements governing our indebtedness, operating results, capital requirements, strategic considerations and~~geographic areas in which we operate among exhibitors or from other ~~factors.~~

We will only be able to pay dividends from our available cash on hand and funds received from our subsidiaries. Their ability to make any payments to us will depend upon many factors, including our operating results, cash flows and the termsforms of the Senior Secured Credit Facility and the indentures governing our debt securities. Our ability to pay dividends to our stockholders will also be subject to the terms of the indebtedness. The declaration and payment of any future dividends will be at the sole discretion of our Board of Directors after taking into account various factors, including legal requirements, our subsidiaries’ ability to make payments to us, our financial condition, operating results, cash flow from operating activities, available cash and current and anticipated cash needs. We do not intend to borrow funds to pay the quarterly dividend described above. See the Liquidity and Capital Resources section of Item 7 of Part II hereof for further information regarding the dividend restrictions.

~~Securities Authorized for Issuance Under Equity Compensation Plans~~

~~See Item 12. of Part III of this Annual Report on Form 10-K.~~

~~Unregistered Sales of Equity Securities and Use of Proceeds~~

~~Sale of Unregistered Securities~~entertainment;

~~None.~~

~~Issuer Purchase of Equity Securities~~

~~None.~~

~~Performance Graph~~

The following stock price performance graph should not be deemed incorporated by reference by any general statement incorporating by reference this Annual Report on Form 10-K into any filing under the Exchange Act or the Securities Act of 1933, as amended, except to the extent that we specifically incorporate this information by reference and shall not otherwise be deemed filed under such acts.

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~~The following~~
● 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, pre-pay debt, and also to refinance debt and to do so at favorable terms;

●

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;

●

general and international economic, political, regulatory, social and financial market conditions, inflation, and other risks;

●

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

●

an issuance of preferred stock ~~performance graph compares, for~~could dilute the ~~period December 31, 2014 through December 31, 2019,~~voting power of the ~~cumulative total stockholder returns for AMC’s~~common stockholders and adversely affect the market value of our Common Stock;

●

limitations on the authorized number of common stock the Standard & Poor’s Corporation Composite 500 Index and a self-determined peer group consisting of Cinemark Holdings, Inc. (CNK) and IMAX Corporation (IMAX) (“2018-2019 Peer Group”). Prior to 2018, this peer group consisted of CNK and Regal Entertainment Group (“Regal”) (“2014-2017 Peer Group”). Regal was acquired in 2018 and is no longer a publicly traded company. With the loss of Regal as a publicly traded company in our peer group, we determined to add IMAX to our peer group in 2018. Measurement points are the last trading day for each month ended December 31, 2014shares prevents us from raising additional capital through ~~December 31, 2019. The graph assumes that $100.00 was invested on December 31, 2014 in our~~ common stock ~~and in our peer group and in the Standard & Poor’s Corporation Composite 500 Index and assumes reinvestment of any dividends.~~

~~The stock price performance below is not necessarily indicative of future stock price performance.~~

issuances;

COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*

●
~~Among AMC Entertainment Holdings, Inc., the S&P 500 Index,~~our ability to achieve expected synergies, benefits and ~~a 2014-2017 Peer Group and 2018-2019 Peer Group~~performance from our strategic initiatives;

*$100 invested
● our ability to refinance our indebtedness on ~~December 31, 2014~~terms favorable to us or at all;

●

our ability to optimize our theatre circuit through new construction, 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 ~~stock~~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, 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 ~~index,~~connection with acquisition opportunities;

●

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

~~Fiscal year ended December 31.~~

30
● 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;

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~~Copyright~~^© ~~2019 Standard & Poor's,~~
● increased costs in order to comply or resulting from a ~~division of S&P Global. All rights reserved.~~


12/14

3/15

6/15

9/15

12/15
AMC Entertainment Holdings, Inc.

100.00

136.34

118.70

98.17

94.29
S&P 500

100.00

100.95

101.23

94.71

101.38
Peer Group

100.00

121.23

119.86

98.73

102.90

3/16

6/16

9/16

12/16
AMC Entertainment Holdings, Inc.

110.82

110.07

124.76

135.83
S&P 500

102.75

105.27

109.33

113.51
Peer Group

102.99

102.92

106.38

109.74



3/17

6/17

9/17

12/17
AMC Entertainment Holdings, Inc.

127.81

93.24

61.15

63.71
S&P 500

120.39

124.11

129.67

138.29
Peer Group

124.88

101.25

97.37

95.71

3/18

6/18

9/18

12/18
AMC Entertainment Holdings, Inc.

60.04

68.89

96.52

58.63
S&P 500

137.24

141.95

152.90

132.23
Peer Group

97.60

96.35

111.58

95.38

3/19

6/19

9/19

12/19
AMC Entertainment Holdings, Inc.

71.86

45.99

53.66

37.20
S&P 500

150.27

156.74

159.40

173.86
Peer Group

109.14

98.92

106.98

95.78
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;

●

supply chain disruptions may negatively impact our operating results;

●

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

●

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

●

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

●

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 bylaws may discourage or prevent a takeover of our Company, even if an acquisition would be beneficial to our stockholders; and

●

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

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PART I

Item 1. Business.

General Development of Business

COVID-19 Impact, Company Response and Change in Business Strategy

●

As of February 24, 2022, we were operating all of our 587 U.S. theatres. Some of our major markets in the U.S., such as Chicago, New York City, Los Angeles, San Francisco, and Seattle require proof of vaccination for guests to be able to attend. At the beginning of March 2022, we expect the proof of vaccination requirement will expire in Chicago and Seattle. During the fourth quarter of 2021, we experienced an overall attendance increase in the U.S. of approximately 35,544,000, or 737.4%, compared

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to the same period a year ago, and a decline of approximately 21,955,000, or 35.2%, compared to the fourth quarter of 2019.

●

As of February 24, 2022, we were operating all of our 351 International theatres, with certain countries having limited seating capacities during limited opening hours. Spain, Italy, and Germany require proof of vaccination, or in certain locations a negative test is required, for guests to be able to attend. During the fourth quarter of 2021, we experienced an overall attendance increase in our International theatres of approximately 16,046,000, or 490.4%, compared to the same period a year ago, and a decline of approximately 10,926,000, or 36.1%, compared to the fourth quarter of 2019.

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Please see “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations of Part II thereof for additional information.

Narrative Description of Business

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The following table provides detail with respect to the geographic location of our theatrical exhibition circuit as of December 31, 2021:


U.S. Markets	Theatres(1)	Screens(1)
Alabama	18	237
Arizona	12	197
Arkansas	4	45
California	58	780
Colorado	14	193
Connecticut	5	68
Delaware	1	14
Florida	40	622
Georgia	31	394
Idaho	1	11
Illinois	47	564
Indiana	24	321
Iowa	6	80
Kansas	9	132
Kentucky	3	48
Louisiana	6	89
Maryland	13	144
Massachusetts	10	142
Michigan	12	193
Minnesota	9	132
Missouri	11	132
Montana	5	55
Nebraska	2	21
Nevada	2	28
New Hampshire	1	10
New Jersey	26	332
New Mexico	1	12
New York	29	311
North Carolina	23	301
North Dakota	2	19
Ohio	14	176
Oklahoma	13	153
Oregon	2	25
Pennsylvania	27	308
South Carolina	5	52
South Dakota	1	10
Tennessee	21	253
Texas	44	643
Utah	3	29
Virginia	13	173
Washington	15	181
West Virginia	2	20
Wisconsin	7	91
District of Columbia	1	14
Total U.S. Markets	593	7,755

International Markets
Denmark	2	10
Finland	27	159
Germany	22	197
Ireland	11	77
Italy	41	412
Norway	13	94
Portugal	3	45
Saudi Arabia	10	66
Spain	40	463
Sweden	72	390
United Kingdom	112	894
Total International Markets	353	2,807
Total	946	10,562

(1)

Included in the above table are 74 theatres and 392 screens that we manage or in which we have a partial ownership interest. In the U.S. markets segment, we manage or have a partial interest in seven theatres and 85 screens. In the International markets segment, we manage or have a partial interest in 67 theatres and 307 screens.

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Our Strategy

Transform AMC into a World-Class Leader in Customer Engagement

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Deliver the best in-person experience while at AMC theatres

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●

IMAX^®. IMAX^® is one of the world’s leading entertainment technology companies, specializing in motion picture technologies and presentations.

●

● ~~Item~~In-house PLF Brands. ~~6. Selected Financial Data.~~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^® or Dolby Cinema™. Therefore, it may be especially relevant in smaller or more price-sensitive markets. As of December 31, 2021, we operated 56 screens under proprietary PLF brand names in the U.S. markets and 77 screens in the International markets.


	U.S. Markets		International Markets
Format	Theatres	Screens	Theatres	Screens
IMAX®	185	186	38	38
Dolby Cinema™	154	154	8	8
Other PLF	56	56	76	77
Dine-in theatres	51	729	3	13
Premium seating	351	3,395	89	572

Expand and Strategically Close Underperforming Theatres

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					Permanent/Temporary
					Closures/(Openings),
	New Builds		Acquisitions		net		Total Theatres
	Number of	Number of	Number of	Number of	Number of	Number of	Number of	Number of
Fiscal Year	Theatres	Screens	Theatres	Screens	Theatres	Screens	Theatres	Screens
Beginning balance							906	10,558
Calendar 2017	12	96	128	736	32	221	1,014	11,169
Calendar 2018	11	89	4	39	23	206	1,006	11,091
Calendar 2019	10	85	7	70	19	205	1,004	11,041
Calendar 2020	8	63	1	14	63	575	950	10,543
Calendar 2021	10	82	11	140	25	203	946	10,562
	51	415	151	999	162	1,410

Year Ended

December 31,
(In millions, except operating data)

2019

2018

2017

2016

2015
Statement of Operations Data:

Revenues:

Admissions

$
3,301.3

$
3,385.0

$
3,229.5

$
2,049.4

$
1,892.0
Food and beverage

1,719.6

1,671.5

1,548.4

1,019.1

910.1
Other revenue

450.1

404.3

301.3

167.4

144.8
Total revenues

5,471.0

5,460.8

5,079.2

3,235.9

2,946.9
Operating Costs and Expenses:

Film exhibition costs

1,699.1

1,710.2

1,604.3

1,089.5

1,021.4
Food and beverage costs

278.7

270.9

252.1

142.2

128.6
Operating expense, excluding depreciation and amortization below

1,686.6

1,654.7

1,548.0

873.5

795.7
Rent

967.8

797.8

794.4

505.5

467.8
General and administrative:

Merger, acquisition and other costs(1)

15.5

31.3

63.0

47.9

3.4
Other, excluding depreciation and amortization below

153.0

179.3

133.2

90.0

76.4
Depreciation and amortization

450.0

537.8

538.6

268.2

233.0
Impairment of long-lived assets(2)

84.3

13.8

43.6

5.5

1.7
Operating costs and expenses

5,335.0

5,195.8

4,977.2

3,022.3

2,728.0
Operating income

136.0

265.0

102.0

213.6

218.9
Other expense (income)(3)

13.4

(108.1)

(1.5)

0.3

(7.5)
Interest expense:

Corporate borrowings

292.8

262.3

231.6

110.7

96.8
Capital and financing lease obligations

7.6

38.5

42.4

10.8

9.2
Non-cash NCM exhibitor services agreement(4)

40.4

41.5

—

—

—
Equity in (earnings) losses of non-consolidated entities(5)

(30.6)

(86.7)

185.2

(47.7)

(37.1)
Investment income(6)

(16.0)

(6.2)

(22.6)

(10.2)

(6.1)
Earnings (loss) before income taxes

(171.6)

123.7

(333.1)

149.7

163.6
Income tax provision (benefit)(7)

(22.5)

13.6

154.1

38.0

59.7
Net earnings (loss)

$
(149.1)

$
110.1

$
(487.2)

$
111.7

$
103.9
Earnings (loss) per share:

Basic

$
(1.44)

$
0.91

$
(3.80)

$
1.13

$
1.06
Diluted

$
(1.44)

$
0.41

$
(3.80)

$
1.13

$
1.06
Average shares outstanding

Basic (in thousands)

103,832

120,621

128,246

98,838

97,963
Diluted (in thousands)

103,832

130,105

128,246

98,872

98,029
Dividends declared per basic and diluted common share

$
0.80

$
2.35

$
0.80

$
0.80

$
0.80

Pursue Adjacent Opportunities that Extend the AMC Brand

●

Beginning in 2022, we will sell freshly made AMC Theatres Perfectly Popcorn at select mall retail locations around the country. Kiosks, counters, and stores will feature real AMC movie theatre popcorn and other AMC movie theatre treats.

●

Additionally, we also plan to make our AMC Theatres Perfectly Popcorn, freshly popped in nearby theatres, available through food delivery-to-home services. In this way, consumers will be able to enjoy a slice of the AMC experience when being entertained at home.

●

We will sell “To Go” packages at our theatres of freshly popped popcorn for takeout and/or pickup.

●

Also coming later in 2022, we plan to offer prepackaged and ready-to-pop microwaveable AMC Theatres Perfectly Popcorn, which will become available for purchase in supermarkets and convenience stores around the country.

AMC Theatres Perfectly Popcorn is an opportunity to diversify our business and to create a new food and beverage revenue stream for the Company.

Explore Attractive Acquisitions Leveraging Our Existing Capabilities and Core Competencies

Our Competitive Strengths

We believe we have the following competitive strengths:

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Sources of Revenue

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terms. We have made adjustments to theatre operating hours to align screen availability and associated theatre operating costs with attendance levels for each theatre.

Theatrical Exhibition Industry and Competition

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obtained from Comscore. See Management’s Discussion and Analysis of Financial Condition and Results of Operations under Part II, Item 7 thereof for information regarding our operating data:


	Box Office			Average
	Revenues		Attendance	Ticket		Number of	Indoor
Calendar Year	(in millions)		(in millions)	Price		Theatres	Screens
2021	$	4,544	447	$	10.17	*	*
2020		2,205	240		9.18	5,477	40,200
2019		11,400	1,244		9.16	5,548	40,613
2018		11,880	1,304		9.11	5,482	40,313
2017		11,091	1,236		8.97	5,398	39,651
2016		11,372	1,314		8.65	5,472	40,009
2015		11,120	1,320		8.42	5,484	39,411
2014		10,400	1,270		8.19	5,463	39,356
2013		10,920	1,340		8.15	5,326	39,368
2012		10,790	1,360		7.93	5,317	39,056

* Number of theatres and indoor screens information was not available for calendar year 2021 as of the date of this filing.


	Calendar Year
(In millions)	2021	2020	2019	2018	2017
United Kingdom	74.6	44.0	176.0	177.3	170.6
Germany	42.5	37.3	119.9	104.2	122.3
Spain	41.5	28.7	105.8	97.8	99.8
Italy	26.6	30.2	104.7	91.8	99.0
Sweden	6.1	5.4	15.8	16.3	16.9
Ireland	6.1	3.9	15.1	15.8	16.1
Portugal	5.3	3.6	15.2	14.6	15.6
Norway	5.6	4.8	11.3	12.1	11.8
Finland	3.4	3.9	8.4	8.1	8.5
Total	211.7	161.8	572.2	538.0	560.6

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Seasonality

Regulatory Environment

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AMC Human Capital Resources

Available Information

We make available free of charge on our website (www.amctheatres.com) under “Investor Relations” / Financial Performance”/ “SEC Filings,” annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy materials on Schedule 14A and amendments to those reports as soon as reasonably practicable after

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we electronically file or furnish such materials with the Securities and Exchange Commission. The contents of our Internet website are not incorporated into this report. The Securities and Exchange Commission maintains a website (www.sec.gov) that contains reports, proxy and information statements and other information about the Company.

Information about our Executive Officers

The following table sets forth certain information regarding our executive officers and key employees as of February 24, 2022:

Name

Age

Position(s) Held

Adam M. Aron

Year Ended

December 31,
(In millions, except operating data)

2019

2018

2017

2016

2015
Balance Sheet Data (at period end):

Cash and equivalents

$
265.0

$
313.3

$
310.0

$
207.1

$
211.3
Corporate borrowings

4,753.4

4,723.0

4,235.3

3,761.0

1,912.9
Other long-term liabilities(8)

195.9

963.1

903.8

706.6

462.6
Capital and financing lease obligations

99.9

560.2

651.4

675.4

101.9
Stockholder’s equity

1,214.2

1,397.6

2,112.4

2,009.7

1,538.7
Total assets

13,675.8

9,495.8

9,805.9

8,641.8

5,088.3
Other Data:

Net cash provided by operating activities

$
579.0

$
523.2

$
537.4

$
431.7

$
467.5
Capital expenditures

(518.1)

(576.3)

(626.8)

(421.7)

(333.4)
Screen additions

85

89

96

17

23
Screen acquisitions

70

39

736

5,201

410
Screen dispositions

210

211

258

38

14
Construction openings (closures), net

5

5

37

(48)

60
Average screens—continuing operations(9)

10,669

10,696

10,675

5,592

4,933
Number of screens operated

11,041

11,091

11,169

10,558

5,426
Number of theatres operated

1,004

1,006

1,014

906

387
Screens per theatre

11.0

11.0

11.0

11.7

14.0
Attendance (in thousands)—continuing operations(9)

356,443

358,901

346,763

215,145

196,902

Chairman of the Board, Chief Executive Officer and President

Sean D. Goodman

Executive Vice President, Chief Financial Officer and Treasurer

John D. McDonald

Executive Vice President, U.S. Operations

Elizabeth Frank

Executive Vice President, Worldwide Programming and Chief Content Officer

Stephen A. Colanero

Executive Vice President and Chief Marketing Officer

Kevin M. Connor

Senior Vice President, General Counsel and Secretary

Chris A. Cox

Senior Vice President and Chief Accounting Officer

Carla C. Chavarria

Senior Vice President, and Chief Human Resources Officer

Daniel Ellis

Senior Vice President, Domestic Development

All our current executive officers hold their offices at the pleasure of our board of directors, subject to rights under their respective employment agreements in some cases. There are no family relationships between or among any executive officers.

Mr. Adam Aron has served as Chief Executive Officer, President and Director of the Company since January 2016, and as Chairman of the Board of Directors since July 2021. From February 2015 to December 2015, Mr. Aron was Chief Executive Officer of Starwood Hotels and Resorts Worldwide, Inc. and served on the board from 2006 to 2015. Since 2006, Mr. Aron has served as Chairman and Chief Executive Officer of World Leisure Partners, Inc., a personal consultancy for matters related to travel and tourism, high-end real estate development, and professional sports, that he founded. Mr. Aron served as Chief Executive Officer and Co-Owner of the Philadelphia 76ers from 2011 to 2013, and remains an investor. From 2006 to 2015, Mr. Aron served as Senior Operating Partner of Apollo Management L.P. Mr. Aron currently serves on the board of directors of Norwegian Cruise Line Holdings, Ltd. and HBSE, which owns the NHL’s New Jersey Devils and the NBA’s Philadelphia 76ers. Mr. Aron briefly served on the board of directors of Centricus Acquisitions Corp. in 2021. He also served on the board of directors of Prestige Cruise Holdings Inc. from 2007 to 2014. Mr. Aron received a Master’s of Business Administration degree with distinction from the Harvard Business School and a Bachelor of Arts degree cum laude from Harvard College.

Mr. Sean D. Goodman has served as AMC’s Executive Vice President, Chief Financial Officer and Treasurer since January 2022, Executive Vice President and Chief Financial Officer from February 2020 to January 2022, and Executive Vice President Finance from December 2019 to February 2020. Prior to joining AMC, Mr. Goodman was the Chief Financial Officer of Asbury Automotive Group, Inc. (“ABG”) from July 2017 to November 2019. Before to joining ABG, Mr. Goodman served as the Chief Financial Officer of Unifi, Inc. between January 2016 to June 2017. Mr. Goodman also served as the Chief Financial Officer Americas for Landis+Gyr, AG., from April 2011 to January 2016. Earlier in his career, Mr. Goodman served in various roles with increasing responsibility at The Home Depot, Inc., from February 2006 to April 2011. Mr. Goodman began his career as an investment banker with Morgan Stanley, Inc. and in various consulting and accounting positions with Deloitte LLP. Mr. Goodman is a certified public accountant and has a Masters Degree in Business Administration from The Harvard Business School and a Bachelor of Business Science Degree (with honors) from the University of Cape Town in South Africa.

Mr. John D. McDonald has served as Executive Vice President, U.S. Operations of AMC since July 2009. Prior to July 2009, Mr. McDonald served as Executive Vice President, U.S. and Canada Operations effective October 1998. Mr. McDonald served as Senior Vice President, Corporate Operations from November 1995 to October 1998. Mr. McDonald is a member of the National Association of Theatre Owners Advisory board of directors, Chairman of the Technology Committee for the National Association of Theatre Owners, and member of the board of directors for Digital Cinema Distribution Coalition, LLC. Mr. McDonald has successfully managed the integration for the Gulf States, General Cinema, Loews, Kerasotes, and Carmike mergers and acquisitions. Mr. McDonald attended California State Polytechnic University where he studied economics and history.

~~(1)~~

~~Merger, acquisition and other costs related to expenses incurred in connection with the Carmike (acquired December 2016)~~

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Ms. Elizabeth Frank has served as Executive Vice President, Worldwide Programming and Chief Content Officer for AMC since July 2012. Between August 2010 and July 2012, Ms. Frank served as Senior Vice President, Strategy and Strategic Partnerships. From 2006 to 2010, Ms. Frank served as Senior Vice President of Global Programs for AmeriCares. From 2003 to 2006, Ms. Frank served as Vice President of Corporate Strategic Planning for Time Warner Inc. Prior to Time Warner Inc., Ms. Frank was a partner at McKinsey & Company for nine years. Ms. Frank holds a Bachelor of Business Administration degree from Lehigh University and a Masters of Business Administration from Harvard University.

Mr. Stephen A. Colanero has served as Executive Vice President and Chief Marketing Officer of AMC since December 2009. Prior to joining AMC, Mr. Colanero served as Vice President of Marketing for RadioShack Corporation from April 2008 to December 2009. Mr. Colanero also served as Senior Vice President of Retail Marketing for Washington Mutual Inc. from February 2006 to August 2007 and as Senior Vice President, Strategic Marketing for Blockbuster Inc. from November 1994 to January 2006. Mr. Colanero holds a B.S. degree in Accounting from Villanova University and a M.B.A. in Marketing and Strategic Management from The Wharton School at the University of Pennsylvania.

Mr. Kevin M. Connor has served as Senior Vice President, General Counsel and Secretary of AMC since April 2003. Prior to April 2003, Mr. Connor served as Senior Vice President, Legal beginning November 2002. Prior thereto, Mr. Connor was in private practice in Kansas City, Missouri as a partner with the firm Seigfreid Bingham, P.C. from October 1995. Mr. Connor holds a Bachelor of Arts degree in English and History from Vanderbilt University, a Juris Doctorate degree from the University of Kansas School of Law and LLM in Taxation from the University of Missouri-Kansas City.

Mr. Chris A. Cox has served as Senior Vice President and Chief Accounting Officer of AMC since June 2010. Prior thereto Mr. Cox served as Vice President and Chief Accounting Officer since May 2002. Prior to May 2002, Mr. Cox had served as Vice President and Controller since November 2000. Previously, Mr. Cox had served as Director of Corporate Accounting for the Dial Corporation from December 1999 until November 2000. Prior to Dial Corporation, Mr. Cox held various positions at PwC LLP. Mr. Cox holds a Bachelor of Business Administration in Accounting and Finance degree from the University of Iowa.

Ms. Carla C. Chavarria has served as Senior Vice President, Chief Human Resources Officer of AMC since January 2019 and Senior Vice President, Human Resources of AMC since January 2014. Ms. Chavarria served as Vice President, Human Resources Services from September 2006 to January 2014. Prior thereto, Ms. Chavarria served as Vice President, Recruitment and Development from April 2005 to September 2006. Ms. Chavarria’s prior experience includes human resources manager and director of employment practices. Ms. Chavarria holds a B.S. from The Pennsylvania State University.

Mr. Daniel Ellis has served as the Senior Vice President Development & International since March 2020. From December 21, 2016 to March 2020, he served as Senior Vice President, Domestic Development. From August 2011 until December 2016, Mr. Ellis was Senior Vice President, General Counsel and Secretary of Carmike Cinemas, Inc. From 1999 until 2011, Mr. Ellis served in several roles with Lodgian, Inc., Odeon (acquired November 2016) and Nordic (acquired March 2017) acquisitions. 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 as President, Chief Executive Officer, and a member of the Board of Directors from 2009 through 2010 and Senior Vice-President, General Counsel and Secretary from 2002 through 2009. Prior to joining Lodgian, Mr. Ellis was engaged in private law practice and also served as an Assistant District Attorney for the State of Georgia.

Item 1A. Risk Factors.

The following is a summary list of risk factors:

Risks Related to the COVID-19 Pandemic

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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 interruptions of operations at our theatres, personnel reductions and other cost-cutting measures and actions 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.

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Financial Risks

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our ability to obtain additional liquidity, which if not realized or insufficient, likely would result with us seeking an in-court or out-of-court restructuring of our liabilities absent more normalized levels of attendance and operating revenues, 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;

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our substantial level of indebtedness and our current liquidity constraints could adversely affect our financial condition and our ability to service our indebtedness, to pre-pay debt, and to refinance debt and to do so on favorable terms, and our ability to take advantage of certain business opportunities, which could negatively impact the ability of investors to recover their investment in the Common Stock;

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

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

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we are currently not paying dividends and in the future may not generate sufficient cash flows or have sufficient restricted payment capacity under our Senior Secured Credit Facilities or the indentures governing our debt securities to pay dividends on our Common Stock;

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

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

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

Operational Risks

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risks relating to motion picture production and theatrical performance;

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our lack of control over distributors of films;

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intense competition in the geographic areas in which we operate among exhibitors or from other forms of entertainment;

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

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

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

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failures, unavailability or security breaches of our information systems;

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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;

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

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the risk of severe weather events or other events caused by climate change disrupting or limiting operations;

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supply chain disruptions and labor shortages may negatively impact our operating results; and

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

Regulatory Risks

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general and international economic, political, regulatory, social and financial market conditions, economic unrest, terrorism, hostilities, cyber-attacks, war, widespread health emergencies, such as COVID-19 or other pandemics, and other geopolitical risks;

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review by antitrust authorities in connection with acquisition opportunities;

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

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

Risks Related to our Common Stock

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there has been significant recent dilution and potential future dilution of our Common Stock, which could adversely affect the market price of shares of our Common Stock;

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

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

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an issuance of preferred stock could dilute the voting power of the Common Stockholders and adversely affect the market value of our Common Stock.

Risk Related to the COVID-19 Pandemic

The COVID-19 pandemic has disrupted our business and will continue to adversely affect our business, theatres, results of operations and liquidity.

The COVID-19 pandemic has had and will continue to have a significant and adverse impact on our business.

Over the course of 2021, we reopened and were operating in nearly all of our domestic and international theatres, with seating capacity restrictions winding down or eliminated in most jurisdictions. Our reopened theatres are not generating the attendance and revenue from admissions and food and beverage sales compared to historical levels and our cash burn is higher than when theatres were closed. The extent of our cash burn in the future will primarily be dependent on attendance, which drives admission, food and beverage, and other revenue. The ultimate duration of the pandemic is uncertain, and there remain significant risks that may negatively impact attendance, including a resurgence of COVID-19, consequential related restrictions, potential movie-goer reluctance to attend theatres due to COVID-19 outbreaks or the emergence of variant strains, movie studio release schedules and direct-to-streaming or other changing movie-studio practices as a result of the pandemic. We cannot predict with certainty when or if our business will return to closer to normal levels. In addition, governmental officials may impose further restrictions on travel or introduce additional social distancing measures such as further limiting the number of people allowed in a theatre at any given time.

The resumption of operations has resulted in a ramp-up in costs to operate our business. While we plan to closely monitor our costs to the extent possible, we continue to incur significant cash outflows, including interest payments, taxes, critical maintenance capital expenditures, expenses associated with the resumption of operations, and certain compensation and benefits payments.

We may face difficulty in maintaining relationships with our landlords, vendors, motion picture distributors, customers, and employees during suspension and recovery periods. Since the outbreak of the COVID-19 virus, movie studios have, at various times, suspended production of movies and delayed the release date of movies. Some movie studios have also reduced or eliminated the theatrical exclusive release window or have skipped a theatrical release and released their movies through streaming or other channels, or have announced that future theatrical releases will be released concurrently through streaming channels, and studios may continue to do

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so with additional releases for the duration of the pandemic and after the pandemic has subsided. The longer and more severe the pandemic, including repeat or cyclical outbreaks beyond the spread of the Omicron variant, 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, even where applicable government restrictions are lifted or reduced, it is unclear how quickly patrons will return to our theatres, 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. The continued high level of COVID-19 cases may continue to significantly depress attendance levels. 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 significantly 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 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 are 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 (iii) disruptions of film production;

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decreased attendance at our theatres, including due to (i) continued safety and health concerns, (ii) additional regulatory requirements limiting our seating capacity, (iii) a change in consumer behavior in favor of alternative forms of entertainment, or (iv) resistance to locally imposed vaccination requirements in certain markets;

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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;

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our ability to negotiate favorable rent payment terms with our landlords;

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unavailability of employees and/or their inability or unwillingness to conduct work under any revised work environment protocols, including vaccination mandates, or due to general shortages in the labor market;

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supply chain disruptions that may affect the availability and costs of food, beverage, and other items that we sell in our theatres;

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

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reductions and delays associated with planned operating and capital expenditures;

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further impairment charges upon a portion of our goodwill, long-lived assets or intangible assets as consequence of failure to meet operating projections and other adverse events or circumstances, as a result of the impact on our prior impairment analysis due to delays in theatre reopenings or future interruptions in operations, which could be material to our results of operations and financial condition;

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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, as applicable, in our debt agreements;

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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;

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

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our inability to service our existing and future indebtedness or other liabilities, the failure of which could result in insolvency proceedings and result in a total loss of your equity investment.

The outbreak of COVID-19 has also significantly increased economic uncertainty and disrupted supply chains. It is possible that the current outbreak or continued spread of COVID-19 will cause a global recession, which could 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 predict 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.

The COVID-19 pandemic (including governmental responses, broad economic impacts and market disruptions) has heightened the risks related to the other risk factors described herein.

Financial Risks

In the absence of significant increases in attendance from current levels, or obtaining significant additional sources of liquidity, an investment in our Common Stock is highly speculative; holders of our Common Stock could suffer a total loss of their investment.

To remain viable beyond the next twelve months, the Company will require additional sources of liquidity, reductions or abatements of its rent obligations and/or significant increases in attendance levels, see Liquidity and Capital Resources—For the Year Ended December 31, 2021 Compared to the Year Ended December 31, 2020 included in Part II, Item 7 thereof for further information regarding attendance assumptions. The required amounts of additional liquidity may be material. Although the Company believes that cash flow from operations and the liquidity under its borrowing facilities will be sufficient to meet its material cash requirements over the next twelve months, it is actively continuing to explore additional sources of liquidity. The Company is unable to determine at this time whether any additional sources of liquidity will be available to it or if available, individually or taken together, will be sufficient to address its potential liquidity needs. There is significant uncertainty as to whether these potential sources of liquidity will be realized or that they will be sufficient to generate the material amounts of additional liquidity that may be required until the Company is able to achieve more normalized levels of attendance and operating revenues. Any individual source of liquidity that the Company is pursuing may not be sufficient to address all the Company’s future liquidity requirements, and even if all of the potential sources of liquidity that the Company is pursuing are available, they may not be sufficient to address the Company’s liquidity requirements. Further, any relief provided by lenders, governmental agencies, and business partners may not be adequate and may include onerous terms, particularly if we face additional rounds of suspension of operations at our theatres, scheduled movies releases fail to drive increased attendance, scheduled releases continue to be postponed or moved to the home video market, or if the attendance levels of, and revenues generated by, our reopened theatres normalize at a level that will not support our substantial amount of indebtedness, rent liabilities or other obligations. Due to these factors, if attendance levels do not increase significantly compared to 2021 and if the Company is unable to obtain the necessary additional sources of liquidity, an investment in our Common Stock is highly speculative.

In the event the Company’s attendance levels do not continue to increase significantly compared to 2021 and achieve levels in line with pre COVID-19 attendance, we would seek to negotiate with creditors changes to our balance sheet liabilities and continue to take steps to reach agreements with our landlords to reduce or abate its rent obligations. Ultimately, if attendance levels do not normalize and we are unsuccessful in restructuring our liabilities, we would face the risk of a future liquidation or bankruptcy proceeding, in which case holders of the Company’s Common Stock would likely suffer a total loss of their investment.

Our substantial level of indebtedness and our current liquidity constraints could adversely affect our financial condition and our ability to service our indebtedness, which could negatively impact your ability to recover your investment in the Common Stock.

We have a substantial amount of indebtedness, which requires significant interest payments. As of December 31, 2021, we had outstanding approximately $5,428.0 million of indebtedness ($5,169.1 million aggregate principal amount) and $72.7 million of existing finance lease obligations. As of December 31, 2021, we also had approximately $5.3 billion of discounted rental payments under operating leases (with a weighted average remaining lease term of 10.0 years).Subsequent to December 31, 2021, our indebtedness has increased due to the $950 million

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aggregate principal amount of 7.5% First Lien Senior Secured Notes due 2029 that were issued on February 14, 2022, partially offset by the full redemption of the $500 million aggregate principal amount of the First Lien Notes due 2025, the $300 million aggregate principal amount of our 10.5% First Lien Senior Secured Notes due 2026, and $73.5 million aggregate principal amount of our 15%/17% Cash/PIK Toggle First Lien Secured Notes due 2026.

The Company’s cash expenditures for rent increased significantly in the second, third, and fourth quarters of 2021 as previously deferred rent payments and landlord concessions started to become current obligations. The Company received rent concessions provided by the lessors that aided in mitigating the economic effects of COVID-19 during the pandemic. These concessions primarily consisted of rent abatements and the deferral of rent payments. As a result, deferred lease amounts were approximately $315.1 million as of December 31, 2021. See Note 3—Leases in the Notes to the Consolidated Financial Statements under Part II, Item 8 thereof, for a summary of the estimated future repayment terms for the deferred lease amounts due to COVID-19.

Our substantial level of indebtedness and the current constraints on our liquidity could have important consequences, including the following:

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we entered into the Ninth Amendment (as defined in Note 8—Corporate Borrowings and Finance Lease Obligations in the Notes to the Consolidated Financial Statements under Part II, Item 8 thereof), 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, which was further extended by the Eleventh Amendment (as defined in Note 8—Corporate Borrowings and Finance Lease Obligations in the Notes to the Consolidated Financial Statements under Part II, Item 8 thereof) from March 31, 2022 to March 31, 2023, as described, and on the terms and conditions specified, therein, including a minimum liquidity requirement of $100 million during the covenant suspension period in addition to the £32.5 million minimum liquidity required (approximately $44 million) required under the Odeon Term Loan Facility. A breach of any condition to the financial covenant suspension set forth in the Credit Agreement may result in an event of default under the Credit Agreement or resume testing of the financial covenant;

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we must use a substantial portion of our cash flow from operations to pay interest and principal on our indebtedness, which reduces or will reduce funds available to us for other purposes such as working capital, capital expenditures, other general corporate purposes and potential acquisitions;

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our ability to refinance such indebtedness or to obtain additional financing for working capital, capital expenditures, acquisitions or general corporate purposes may be impaired;

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we are exposed to fluctuations in interest rates because our senior credit facilities have variable rates of interest;

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our leverage may be greater than that of some of our competitors, which may put us at a competitive disadvantage and reduce our flexibility in responding to current and changing industry and financial market conditions;

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the loss of tax attributes resulting from the cancellation of indebtedness that occurred in connection with the exchange offers that closed on July 31, 2020, coupled with the inability to deduct all or significant portions of our interest expense for tax purposes, will ultimately increase the need to generate revenues to support our capital structure;

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there are significant constraints on our ability to generate liquidity through incurring additional debt; and

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we may be more vulnerable to economic downturn and adverse developments in our business.

We and our subsidiaries may be able to incur additional indebtedness in the future, subject to the restrictions contained in the agreements governing our indebtedness. To the extent new indebtedness is added to our debt levels, including as a result of satisfying interest payment obligations on certain of our indebtedness with payments-in-kind, the related risks that we now face could intensify. Our ability to access funding under our revolving credit facilities will depend upon, among other things, the absence of an event of default under such indebtedness, including any event of default arising from a failure to comply with the related covenants. If we are unable to comply with our covenants under our indebtedness, our liquidity may be further adversely affected.

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Our ability to meet our expenses, to remain in compliance with our covenants under our debt instruments and to make future principal and interest payments in respect of our debt depends on, among other factors, our operating performance, competitive developments and financial market conditions, all of which are significantly affected by financial, business, economic and other factors. We are not able to control many of these factors. Given current industry and economic conditions, our cash flow may not be sufficient to allow us to pay principal and interest on our debt and meet our other obligations.

To the extent our relationship with lenders is negatively affected by disputes that may arise from time to time, it may be more difficult to seek covenant relief, if needed, or to raise additional funds in the future.

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

We have a significant amount of goodwill on our balance sheet as a result of acquisitions. As of December 31, 2021, goodwill recorded on our consolidated balance sheet totaled $2,429.8 million. If the market price of our Common Stock declines, if the fair value of our debt declines, or if other events or circumstances change that would more likely than not reduce the fair value of our reporting units below their respective carrying value, all or a portion of our goodwill may be impaired in future periods.

We review long-lived assets, including goodwill, indefinite-lived intangible assets and other intangible assets and theatre assets (including operating lease right-of-use lease assets) whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. The review for goodwill compares the fair value for each of our reporting units to their associated carrying value. Factors that could lead to impairment of goodwill and intangible assets include adverse industry or economic trends, reduced estimates of future cash flows, and declines in the market price of our Common Stock or declines in the fair value of our debt. Our valuation methodology for assessing impairment requires management to make judgments and assumptions based on historical experience and projections of future operating performance, including estimating the fair value of our corporate borrowings and finance lease obligations. We may be required to record future charges to earnings during the period in which an impairment of goodwill or intangible assets is determined to exist. During the years ended December 31, 2021, December 31, 2020, and December 31, 2019, we recorded impairment of long-lived asset charges of $77.2 million, $177.9 million, $84.3 million (including $60.0 million related to the write-down of operating lease right-of-use assets, which were recorded in connection with the adoption of ASC 842, Leases), respectively. The assets impaired during year 2021 included 77 theatres in the U.S. markets with 805 screens (in Alabama, Arkansas, California, Colorado, Connecticut, District of Columbia, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Minnesota, Mississippi, Missouri, Montana, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Utah, West Virginia, and Wisconsin) and 14 theatres in the International markets with 18 screens (in Italy, Norway, Spain, and the UK). During the year ended December 31, 2020, we recorded goodwill non-cash impairment charges 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. We recorded non-cash 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 Theatres reporting unit during the year ended December 31, 2020. We recorded non-cash impairment charges of $14.4 million related to our definite-lived intangible assets in the Domestic Theatres reporting unit during the year ended December 31, 2020. We also recorded impairment of other assets recorded in investment expense (income) of $15.9 million and $3.6 million, during the years ended December 31, 2020 and December 31, 2019, respectively, and impairment of equity method investments recorded in equity in (earnings) loss of non-consolidated entities of $8.6 million during the year ended December 31, 2020.

Limitations on the availability of capital and reductions to capital expenditures may delay or prevent deployment of strategic initiatives.

Implementation of our key strategic initiatives, including recliner seating, enhanced food and beverage and premium sight and sound, require significant capital expenditures. Our gross capital expenditures were approximately $92.4 million, $173.8 million, and $518.1 million for the years ended December 31, 2021, December 31, 2020 and, December 31, 2019, respectively. We estimate that our cash outflows for capital expenditures, net of landlord contributions, will be approximately $150 million to $200 million for the year ending December 31, 2022 to maintain and enhance operations. A lack of available capital resources due to business performance or other financial commitments could prevent or delay the deployment of innovations in our theatres. We may reduce capital expenditures significantly or seek additional financing or issue additional securities, which may affect the timing and scope of growth

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strategy. We cannot be certain that we will be able to obtain new financing on favorable terms, or at all. In addition, covenants under our existing indebtedness limit our ability to incur additional indebtedness, and the performance of any additional or improved theatres may not be sufficient to service the related indebtedness that we are permitted to incur.

We are currently not paying dividends and in the future may not generate sufficient cash flows or have sufficient restricted payment capacity under our Senior Secured Credit Facilities or the indentures governing our debt securities to pay dividends on our Common Stock.

We currently are not paying a cash dividend. We are only able to pay dividends from our available cash on hand and funds received from our subsidiaries. Our subsidiaries' ability to make distributions to us will depend on their ability to generate substantial operating cash flow. Our ability to pay dividends to our stockholders in the future is subject to the terms of our Senior Secured Credit Facilities and the indentures governing our outstanding notes. Our operating cash flow and ability to comply with restricted payment covenants in our debt instruments will depend on our future performance, which will be subject to prevailing economic conditions and to financial, business and other factors beyond our control. In addition, dividend payments are not mandatory or guaranteed, and our board of directors may determine not to resume the payment of dividends. We may not pay dividends as a result of the following additional factors, among others:

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we are not legally or contractually required to pay dividends;

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even if we determine to resume paying cash dividends, the actual amount of dividends distributed and the decision to make any distribution is entirely at the discretion of our board of directors and future dividends, if any, will depend on, among other things, our results of operations, cash requirements, financial condition, business opportunities, provisions of applicable law and other factors that our board of directors may deem relevant;

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the amount of dividends distributed is and will be subject to contractual restrictions under the restrictive payment covenants contained in the indentures governing our debt securities, the terms of our Senior Secured Credit Facilities, and the terms of any other outstanding or future indebtedness incurred by us or any of our subsidiaries; and

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the amount of dividends distributed is subject to state law restrictions.

A significant portion of our net operating loss carryforwards have been reduced, which limits our ability to reduce our future tax liability, which may adversely affect our cash flows and therefore our ability to service our indebtedness.

In connection with the exchange offers and related financing transactions that closed on July 31, 2020, we realized approximately $1.2 billion of CODI. As a result of such CODI, we eliminated $1.2 billion of our net operating loss carryforwards through tax attribute reduction. The Tax Cuts and Jobs Act legislation (the “2017 Tax Act”) together with the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) included a number of significant tax provisions including (1) limiting business interest deductions to 30%, 50%, 50% and 30% of taxable EBITDA for years 2018, 2019, 2020 and 2021, respectively, (2) limiting interest deductions for 2022 and thereafter to 30% of taxable EBIT, (3) limiting the utilization of net operating losses generated in calendar year 2018 and thereafter to 80% of taxable income for years after 2020, (4) providing an indefinite carryover period for interest expense carryforwards and net operating losses generated in calendar year 2018 and thereafter, and (5) adding disallowed business interest carryforwards to the list of items subject to the annual limitation rules for corporations that undergo an “ownership change” within the meaning of Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”).

Utilization of our net operating loss carryforwards, disallowed business interest carryforward and other tax attributes became subject to the Section 382 ownership change limitation due to changes in our stock ownership on January 29, 2021. We do not believe, however, that our remaining tax attributes generated prior to this event are significantly limited by Section 382.

The loss of tax attributes as a result of CODI and related attribute reduction may adversely affect our cash flows and therefore our ability to service our indebtedness. For information regarding the remaining significant amount of net operating loss carryforwards, see Note 10—Income Taxes in the Notes to the Consolidated Financial Statements under Part II, Item 8 thereof.

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Our U.S. cumulative pretax losses have raised uncertainty about the likelihood of realizing our deferred tax assets, and as a result, we maintain a valuation allowance against all of the U.S. deferred tax assets and liabilities, except those deemed indefinite-lived. For the year ended December 31, 2021, our domestic cumulative pre-tax losses continue to raise uncertainty about the likelihood of realizing our deferred tax assets. For our U.S. jurisdiction, we recorded a net increase in valuation allowance of $279.0 million and total tax benefit of $9.4 million for 2021. During the first quarter of 2020, the severe impact of the COVID-19 pandemic on operations in Germany and Spain caused us to conclude the realizability of deferred tax assets held in those jurisdictions does not meet the more likely than not standard. As such, a charge of $33.1 million and $40.1 million was recorded for Germany and Spain, respectively. At December 31, 2020 year-end, we determined that it was appropriate to record a valuation allowance on the disallowed interest carryforward in Sweden as the realizability of this deferred tax asset in this jurisdiction does not meet the more likely than not standard. As such, the overall net tax benefit recorded on Sweden was reduced by a charge of $3.7 million. During 2021, we recorded a valuation allowance on all other deferred tax assets in Sweden, resulting in a charge of less than $1 million. With the exception of Finland and Norway, all other international jurisdictions carried valuation allowances against their deferred tax assets at the end of 2021.

There are no assurances that we will not increase the valuation allowances in future periods against deferred tax expense; likewise, any decrease would result in additional deferred tax benefit.

The elimination of the calculation of USD LIBOR rates may impact our contracts that are indexed to USD LIBOR.

In July 2017, the Financial Conduct Authority (the authority that regulates LIBOR) announced it intends to stop compelling banks to submit rates for the calculation of LIBOR after 2021 and the transition period has been subsequently extended through June 2023. The Alternative Reference Rates Committee ("ARRC") has proposed that the Secured Overnight Financing Rate ("SOFR") is the rate that represents best practice as the alternative to USD-LIBOR for use in derivatives and other financial contracts that are currently indexed to USD-LIBOR. ARRC has proposed a paced market transition plan to SOFR from USD-LIBOR and organizations are currently working on industry wide and company specific transition plans as it relates to derivatives and cash markets exposed to USD-LIBOR. We have material contracts that are indexed to USD-LIBOR and we are monitoring this activity and evaluating the related risks.

Operational Risks

Our business depends on motion picture production and performance and is subject to intense competition, including increases in alternative film delivery methods or other forms of entertainment.

Our ability to operate successfully depends upon the availability, diversity and appeal of motion pictures, our ability to license motion pictures and the performance of such motion pictures in our markets. The most attended films are usually released during the summer and the calendar year-end holidays, making our business seasonal. We license first-run motion pictures, the success of which has increasingly depended on the marketing efforts of the major motion picture studios and the duration of the exclusive theatrical release windows. Poor performance of, or any disruption in the production of these motion pictures (including by reason of a strike or lack of adequate financing), a reduction in the marketing efforts of the major motion picture studios, the choice by distributors to release fewer feature-length movies theatrically, or the choice to release feature-length movies directly to video streaming or PVOD platforms could hurt our business and results of operations. Conversely, the successful performance of these motion pictures, particularly the

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sustained success of any one motion picture, or an increase in effective marketing efforts of the major motion picture studios and extension of the exclusive theatrical release windows, may generate positive results for our business and operations in a specific fiscal quarter or year that may not necessarily be indicative of, or comparable to, future results of operations. As movie studios rely on a smaller number of higher grossing “tent pole” films there may be increased pressure for higher film licensing fees. Our loyalty program and certain promotional pricing also may affect performance and increase the cost to license motion pictures relative to revenue for admission. In addition, a change in the type and breadth of movies offered by motion picture studios and the theatrical exclusive release window may adversely affect the demographic base of movie-goers.

Our theatres are subject to varying degrees of competition in the geographic areas in which we operate. Competitors may be multi-national circuits, national circuits, regional circuits or smaller independent exhibitors. Competition among theatre exhibition companies is often intense with respect to attracting patrons, terms for licensing of motion pictures and availability and securing and maintaining desirable locations.

We also compete with other film delivery methods, including video streaming, network, syndicated cable and satellite television, as well as video-on-demand, pay-per-view services, and subscription streaming services. We also compete for the public’s leisure time and disposable income with other forms of entertainment, including sporting events, amusement parks, live music concerts, live theatre, and restaurants. An increase in the popularity of these alternative film delivery methods and other forms of entertainment could reduce attendance at our theatres, limit the prices we can charge for admission and materially adversely affect our business and results of operations.

We rely on distributors of motion pictures, over whom we have no control, for the films that we exhibit, and our business may be adversely affected if our access to motion pictures is limited or delayed.

Historically, major motion picture distributors have been required by law pursuant to certain long-standing consent decrees to offer and license film to exhibitors, including us, on a film-by-film and theatre-by-theatre basis. Consequently, we cannot assure ourselves of a supply of motion pictures by entering into long-term arrangements with major distributors but must compete for our licenses on a film-by-film and theatre-by-theatre basis. However, given the termination of the consent decrees in 2020, which will become fully effective in 2022 (see the Regulatory Environment section in Part I, Item 1 “Business” of this Annual Report on Form 10-K), these practices may change in ways that cannot be predicted. Our business depends on maintaining good relations with these distributors, as this affects our ability to negotiate commercially favorable licensing terms for first-run films or to obtain licenses at all. With only 6 movie studio distributors representing approximately 87% of our U.S. markets’ box office revenues in 2021 and 4 movie studio distributors representing approximately 77% of our International markets’ box office revenues in 2021, there is a high level of concentration and continued consolidation in the industry. Our business may be adversely affected if our access to motion pictures is limited or delayed because of deterioration in our relationships with one or more distributors or for some other reason. To the extent that we are unable to license a popular film for exhibition in our theatres, our operating results may be adversely affected.

Our results of operations will be impacted by shrinking theatrical exclusive release windows and other practices adopted by movie studies.

Over the last decade, the average theatrical exclusive release window, which represents the time that elapses from the date of a film’s theatrical release to the date a film is available to consumers in-home, has decreased from approximately four months to approximately one and a half months. Additionally, during the COVID-19 pandemic, certain movie studios have adopted strategies that have eliminated the theatrical exclusive release window. Notably, Warner Bros. released its entire slate of films for 2021 simultaneously in theatres and on its home streaming service. Other studios such as Disney have released (and have indicated an intention in certain cases to continue to release) movie titles directly to the in-home and streaming channels, avoiding a theatrical release. Other studios may adopt similar strategies, and these adjustments due to the COVID-19 pandemic may lead to permanent changes that shorten or eliminate the theatrical exclusive release window. These practices have significantly impacted our revenues and are expected to continue to have an adverse impact on our business and results of operations going forward.

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We rely on our information systems to conduct our business, and any failure to protect these systems against security breaches or failure of these systems themselves could adversely affect our business, results of operations and liquidity and could result in litigation and penalties. Additionally, if these systems fail or become unavailable for any significant period of time, our business could be harmed.

Potential cyber security incidents could interfere with our business and operations. Computer hacking, installation of malware, installation of ransomware, phishing, and spamming attacks against online networking platforms have become more prevalent and more sophisticated. Though it is difficult to determine what, if any, harm may directly result from any specific attack or interruption, such events could also be expensive to remedy, harm our reputation or brands, lead users to lose trust and confidence in our business, and/or result in costly fines, penalties, and costly remediation requirements. We, and others on our behalf, also store “personally identifiable information” (“PII”) with respect to employees, vendors, customers, and others. While we have implemented safeguards to protect the privacy of this information, there is still a risk that hackers or others might obtain this information, which would result in potentially costly remedial action, as well as potential fines, penalties, lawsuits, and reputational damage.

Furthermore, we rely on our information systems and those of third parties for storing proprietary company information about our products and intellectual property, as well as for processing patron purchases, loyalty program activity, supporting accounting functions and financial statement preparation, paying our employees, and otherwise running our business. In addition, we may need to enhance our information systems to provide additional capabilities and functionality. The implementation of new information systems and enhancements is frequently disruptive to the underlying business of an enterprise. Any disruptions affecting our ability to accurately report our financial performance on a timely basis could adversely affect our business in a number of respects. If we are unable to successfully implement potential future system enhancements, our financial position, results of operations, and cash flows could be negatively impacted.

We depend on key personnel for our current and future performance.

Supply chain disruptions and labor shortages may negatively impact our operations and operating results.

We rely on a limited number of suppliers for certain products, supplies and services, including a single vendor for the warehousing and distribution of most of the products and supplies for our food and beverage operations. Shortages, delays, or interruptions in the availability of food and beverage items and other supplies to our theatres may be caused by adverse weather conditions; natural disasters; governmental regulation; recalls; commodity availability; seasonality; public health crises or pandemics; labor issues or other operational disruptions; the inability of our suppliers to manage adverse business conditions, obtain credit or remain solvent; or other conditions beyond our control. Such shortages, delays or interruptions could adversely affect the availability, quality, and cost of the items we buy and the operations of our business. Supply chain risk could increase our costs and limit the availability of products that are critical to our operations. If we raise prices in response to increased costs or shortages, it may negatively impact our sales. If we temporarily remove popular food and beverage options without comparable alternatives, we may experience a reduction in sales during the time affected by the shortage or thereafter if our guests change their purchasing habits.

During the recovery from the impacts of the COVID-19 pandemic, we have, with regard to certain items, experienced difficulties in maintaining a consistent supply, seen delays in production and deliveries, been required to identify alternative suppliers, and suspended sales regionally or entirely. We expect these issues to continue for the foreseeable future and plan to minimize the impact by focusing on the supply of those items with the greatest impact on our sales and operations.

One of the impacts of COVID-19 has been extended labor shortages, resulting in our demand for staff outweighing the available supply. The success of our business depends on our ability to recruit and retain staff members for our theatres. Without proper staffing, wait times to buy tickets and concessions are extended, operating hours may be reduced, and, even in some cases, theatres cannot open at all. As patrons begin to return to our theatres in greater numbers, these conditions may result in a poor guest experience, perhaps causing them to not return in the future. These

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labor shortages have also resulted in wages rising to be competitive in the small available workforce. Increased labor costs cut into profits already extremely affected by COVID-19.

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

The availability of attractive site locations for new construction is subject to various factors that are beyond our control. These factors include:

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local conditions, such as scarcity of space or increase in demand for real estate, demographic changes and changes in zoning and tax laws; and

●

competition for site locations from both theatre companies and other businesses.

In addition, the improvement of our existing theatres through our enhanced food and beverage and recliner seating and premium sight and sound initiatives is subject to substantial risks, such as difficulty in obtaining permits, landlord approvals and operating licenses (e.g. liquor licenses). We may also experience cost overruns from delays or other unanticipated costs in both new construction and facility improvements. Furthermore, our new sites and transformed locations may not perform to our expectations.

Climate change, adverse weather conditions and natural disasters could adversely affect our theatre operations, sales or financial results.

Climate change and natural disasters may adversely affect our ability to keep movie theatres open and operational in affected regions and consumer ability to travel to our theatres if they are open. Relative to normal weather conditions, extended severe weather as a result of climate change can close theatres for days due to pervasive power outages, flooding, or wildfires. These severe weather events can also result in delays in the construction of new theatres, interruptions to the availability or increases in the cost of utilities, and shortages in the supply, or increases in the costs of concessions and other supplies required for operations. Additionally, the seasonal timing of severe weather patterns tends to mimic the fluctuation of our sales. With our busy season being around the winter holidays and in the summer, the risk is even greater for extended severe winter storms and increased hurricanes and tornadoes in the summer months.

Regulatory Risks

General political, social and economic conditions can reduce our attendance.

Our success depends on general political, social, and economic conditions and the willingness of consumers to spend money at movie theatres. If going to motion pictures becomes less popular or consumers spend less on food and beverage, our operations could be adversely affected. In addition, our operations could be adversely affected if consumers’ discretionary income falls as a result of an economic downturn. Geopolitical events, including the threat of terrorism or cyber-attacks, or widespread health emergencies, such as COVID-19 or other pandemics or epidemics, could cause people to avoid our theatres or other public places where large crowds are in attendance. In addition, due to our concentration in certain markets, natural disasters such as hurricanes or earthquakes in those markets could adversely affect our overall results of operations.

We are subject to substantial government regulation, which could entail significant cost.

We are subject to various federal, state and local laws, regulations and administrative practices both domestically and internationally affecting our business, and we must comply with provisions regulating antitrust, customary health and sanitation standards and those imposed as a result of the COVID-19 pandemic, equal employment, environmental, licensing for the sale of food and, in some theatres, alcoholic beverages, and data protection and privacy laws, including GDPR, CCPA, and other pending future domestic privacy laws and regulations. Our new theatre openings could be delayed or prevented or our existing theatres could be impacted by difficulties or failures in our ability to obtain or maintain required approvals or licenses. Changes in existing laws or implementation of new laws, regulations and practices could have a significant impact on our business. A significant portion of our theatre level employees are part-time workers who are paid at or near the applicable minimum wage in the theatre’s jurisdiction.

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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. During the year ended December 31, 2017, merger, acquisition and other costs includes $22.6 million of expense for NCM common units surrendered as a part of the exclusivity waiver with NCM in connection with the Department of Justice (“DOJ”) Final Judgment (“Final Judgment”). During the year ended December 31, 2016, merger, acquisition and other costs includes a $10.0 million management transaction bonus financed by a capital contribution from Wanda and related to the successful completion of the Odeon and Carmike acquisitions during 2016.

~~(2)~~

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 recognized 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. During calendar 2017, we recorded an impairment of long-lived assets loss of $43.6 million on 12 theatres in the U.S. markets with 179 screens which was related to property held and used.

~~(3)~~

Other expense of $13.4 million during the year ended December 31, 2019 was primarily due to $16.6 million of expense related to the repayment of indebtedness, foreign currency transaction losses of $1.5 million, and non-operating net periodic benefit cost of $1.2 million, and 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 $17.7 million, partially offset by decrease in fair value of our derivative liability for the embedded conversion feature in our Convertible Notes due 2024 of $23.5 million. During the year ended December 31, 2018, other income of $108.1 million is primarily due to $66.4 million of income for the decrease in the fair value of the derivative liability related to the embedded conversion feature for the Convertible Notes due 2024 and $45.0 million of income for the increase in fair value of the derivative asset related to the contingent call option for the cancellation of additional shares of Class B common stock in the Stock Purchase and Cancellation Agreement with Wanda. During the year ended December 31, 2015, we recorded a loss on extinguishment related to the redemption of the Notes due 2020 of approximately $9.3 million and a loss on the modification of the Senior Secured Credit Facility of $1.4 million. See Note 8—Corporate Borrowings and Finance Lease Obligations in the Notes to Consolidated Financial Statements under Part II, Item 8, hereof for further information regarding the derivative liability related to the embedded conversion feature, the call option for the cancellation of additional shares of Class B common stock.

~~(4)~~

Non-cash NCM exhibitor services agreement includes a significant financing component due to the significant length of time between receiving the non-cash consideration and fulfilling the performance obligation. We received the non-cash consideration in the form of common membership units from NCM, in exchange for rights to exclusive access to our theatre screens and attendees through February 2037. Upon adoption of ASC 606, our advertising revenues have significantly increased with a similar offsetting increase in non-cash interest expense.

~~(5)~~

Equity in earnings for the year ended December 31, 2018 includes a $28.9 million gain on the sale of all of our remaining interest in NCM and a $30.1 million gain related to the Screenvision merger. During the year ended December 31, 2017, we recorded non-consolidated entity impairment losses and losses on dispositions of our NCM ownership interests of approximately $230.7 million.

~~(6)~~

Investment expense (income) during the year ended December 31, 2019 includes a gain on the sale of our Austria theatres of $12.9 million and a loss on impairment of an investment of $3.6 million. During the year ended December 31, 2017, investment expense (income) includes a gain on sale of Open Road of $17.2 million. Investment expense (income) includes a gain on sale of our shares in RealD, Inc. of $3.0 million during the year ended December 31, 2016.

~~(7)~~

An international valuation allowance previously established against deferred tax assets held in Spain was released in the fourth quarter of 2019 resulting in a $41.5 million benefit to income tax expense. During the year ended December 31, 2017, we recorded the impact of the change in enacted Federal tax rates in our U.S. jurisdictions of $88.6 million and the impact of a full valuation allowance on our deferred income

Increases in the minimum wage and implementation of reforms requiring the provision of additional benefits will increase our labor costs.

We own and operate facilities throughout the United States and various international markets throughout Europe and are subject to the environmental laws and regulations of those jurisdictions, particularly laws governing the cleanup of hazardous materials and the management of properties. We might in the future be required to participate in the cleanup of a property that we own or lease, or at which we have been alleged to have disposed of hazardous materials from one of our facilities. In certain circumstances, we might be solely responsible for any such liability under environmental laws, and such claims could be material.

In the U.S., our theatres must comply with Title III of the Americans with Disabilities Act of 1990 (“ADA”). Compliance with the ADA requires that public accommodations, including websites and mobile apps for such public accommodations, “reasonably accommodate” individuals with disabilities and that new construction or alterations made to “commercial facilities” conform to accessibility guidelines unless “structurally impracticable” for new construction or technically infeasible for alterations. Non-compliance with the ADA could result in the imposition of injunctive relief, fines, and an award of damages to private litigants or additional capital expenditures to remedy such non-compliance, any of which could have a material adverse effect on our operations and financial condition. In Europe, all territories have similar national regulations relating to disabilities that our theatres operate in accordance with. Noncompliance with these regulations could carry financial, operational and reputation risks.

We are subject to many different forms of taxation in both the U.S. and in foreign jurisdictions where we operate. Current economic and political conditions, including Brexit and Organization for Economic Co-operation and Development’s (“OECD”), proposed recommendations around taxation in the Digital Economy, make tax rates, transfer pricing compliance and tax regulations, including in the U.S., U.K, and European Union subject to significant change. Recent examples include the Court of Justice of the European Union narrowing the EU Interest & Royalty withholding directive, OECD recommendations on Base Erosion and Profit Shifting (“BEPS”) including new rules for the allocation of multinational organization profits between countries and a global minimum tax rate, the European Commission’s Anti-Tax Avoidance Package, the U.S. Tax Cuts and Jobs Act signed into law in December 2017, and the CARES Act.

The cost of compliance with these laws and regulations is high and is likely to increase in the future. Any failure on our part to comply with these laws and regulations can result in negative publicity and diversion of management time and effort and may subject us to significant liabilities and other penalties.

The legal regimes governing our international business operations could require our international subsidiaries or their directors to pursue insolvency proceedings.

The legal regimes governing certain of our international subsidiaries (including Germany, Spain, Portugal, Norway and Sweden) impose on directors an obligation to pursue insolvency proceedings in certain circumstances. There are various potential triggers including illiquidity, over-indebtedness and inadequate capitalization. If our international subsidiaries were required to (and did) pursue insolvency proceedings, that could in turn trigger events of default under our international credit facility and/or have other material adverse effects on our business and financial position, including additional insolvency proceedings.

We may be reviewed by antitrust authorities.

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taxes in U.S. jurisdictions of $221.6 million, for an aggregate charge of approximately $310.0 million in the fourth quarter of 2017. We estimate that we will have no liability for deemed repatriation of foreign earnings. During the year ended December 31, 2016, we recorded a $19.2 million income tax benefit related to favorable resolutions of uncertain tax positions with authorities.

Our business is subject to international economic, political and other risks that could negatively affect our business, results of operations and financial condition.

As a result of our international operations, 25.8% of our revenues were derived from countries outside the United States for the year ended December 31, 2021. The success of our international operations is subject to risks that are beyond our control. Accordingly, our business is subject to risks associated with doing business internationally, including:

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difficulties and costs of staffing and managing international operations among diverse geographies, languages and cultures;

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the impact of regional or country-specific business cycles and economic instability;

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the potential for political, social, or economic unrest, terrorism, hostilities, cyber-attacks or war, including the conflict between Russia and Ukraine and the potential impact of financial and economic sanctions on the regional and global economy;

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increased foreign interest rates, foreign exchange fees and other bank charges as a result of financing our foreign operations;

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exposure to local economic conditions and local laws and regulations;

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exposure to local labor and employment laws;

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relationships with local labor unions and works councils;

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limited borrowing capabilities relating to activities in non-U.S. countries;

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economic and/or credit conditions abroad;

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potential adverse changes in the political and/or economic stability of foreign countries or in their diplomatic relations with the United States;

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restrictions on the withdrawal of foreign investment and earnings;

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government policies against businesses owned by foreigners;

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investment restrictions or requirements;

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diminished ability to legally enforce our contractual rights in foreign countries;

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difficulty in protecting our brand, reputation and intellectual property;

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restrictions on the ability to obtain or retain licenses required for operation;

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foreign exchange restrictions;

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adverse changes in regulatory or tax requirements;

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restrictions on foreign ownership of subsidiaries;

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data protection and privacy laws, including GDPR, and similar domestic laws such as the California Privacy Act, and other restrictions on transferring personally identifiable information outside of a jurisdiction; and

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tariffs and other trade barriers.

~~(8)~~

Other long-term liabilities exclude operating lease liabilities, which were recorded to operating lease liabilities in the consolidated balance sheets during the year ended December 2019 upon adoption of ASC 842, Leases.

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If we are unable to manage the complexity of our global operations successfully, it could have a material adverse effect on our business, financial condition and results of operations.

Risk Related to our Common Stock

There has been significant recent dilution and there may continue to be additional future dilution of our Common Stock, which could adversely affect the market price of shares of our Common Stock. The risks of future dilution must also be weighed against the risks of failing to increase our authorized shares, each of which could adversely affect the market price of shares of our Common Stock.

From January 1, 2020 through February 24, 2022, we have issued 464,698,868 shares of our Common Stock in a combination of at-the-market sales, conversion of Class B common stock, conversion of notes, exchanges of notes, transaction fee payments, and equity grant vesting. As of February 24, 2022, there were 516,778,945 shares of Common Stock issued and outstanding. The dilutive effect of these issuances was partially offset by the cancellation of 51,769,784 shares of our Class B common stock. If, in the future, we obtain shareholder approval to increase our authorized shares, we may issue additional shares of Common Stock to raise cash to bolster our liquidity, to refinance indebtedness, for working capital, to finance strategic initiatives and future acquisitions or for other purposes. We may also issue preferred equity securities or securities convertible into, or exchangeable for, or that represent the right to receive, shares of Common Stock. We may also acquire interests in other companies, or other assets by using a combination of cash and shares of Common Stock or just shares of Common Stock. Additionally, vesting under our equity compensation programs results in the issuance of new shares and shares withheld to cover tax withholding obligations upon vesting remain available for future grants. Any of these events may dilute the ownership interests of current stockholders, reduce our earnings per share or have an adverse effect on the price of our shares of Common Stock.

If we are unable to obtain shareholder approval to increase our authorized shares, this will create substantial risks, which could have an adverse effect on the price of our shares of Common Stock, including:

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we will be unable to issue equity to bolster our liquidity and respond to future challenges, including if attendance levels do not return to the levels assumed;

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for future financing, we may be required to issue additional debt, which may be unavailable on favorable terms or at all, which would exacerbate the challenges created by our high leverage;

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we will be unable to issue equity in deleveraging transactions, including exchanges, redemptions or buy-backs of debt, which will limit our flexibility to deliver; and

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we will be unable to issue equity as currency in strategic transactions, including acquisitions, joint ventures or in connection with landlord negotiations, which may prevent us from entering into transactions that could increase shareholder value.

~~(9)~~

~~Includes consolidated theatres only.~~

The market prices and trading volume that our shares of Common Stock have recently experienced, and may continue to experience, extreme volatility, which could cause purchasers of our Common Stock to incur substantial losses. For example, during 2021, the market price of our Common Stock has fluctuated from an intra-day low of $1.91 per share on January 5, 2021 to an intra-day high on the NYSE of $72.62 on June 2, 2021. Since June 2, 2021, the trading price of our Common Stock has reached an intra-day low on the NYSE of $13.40 per share on January 28, 2022, and the reported sale price of our Common Stock on the NYSE on February 24, 2022, was $17.68 per share. During 2021, daily trading volume ranged from approximately 18,270,800 to 1,222,342,500 shares.

We believe that the recent volatility and our current market prices reflect market and trading dynamics unrelated to our underlying business, or macro or industry fundamentals, and we do not know how long these dynamics will last. Under the circumstances, we caution you against investing in our Common Stock, unless you are prepared to incur the risk of losing all or a substantial portion of your investment.

Extreme fluctuations in the market price of our Common Stock have been accompanied by reports of strong and atypical retail investor interest, including on social media and online forums. The market volatility and trading patterns we have experienced create several risks for investors, including the following:

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the market price of our Common Stock has experienced and may continue to experience rapid and substantial increases or decreases unrelated to our operating performance or prospects, or macro or industry fundamentals, and substantial increases may be significantly inconsistent with the risks and uncertainties that we continue to face;

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~~Item~~ ~~7. Management’s Discussion~~factors in the public trading market for our Common Stock may include the sentiment of retail investors (including as may be expressed on financial trading and ~~Analysis~~other social media sites and online forums), the direct access by retail investors to broadly available trading platforms, the amount and status of ~~Financial Condition~~short interest in our securities, access to margin debt, trading in options and ~~Results of Operations.~~
other derivatives on our Common Stock and any related hedging and other trading factors;
●
~~The following discussion relates~~our market capitalization, as implied by various trading prices, currently reflects valuations that diverge significantly from those seen prior to recent volatility and that are significantly higher than our market capitalization immediately prior to the ~~consolidated audited~~COVID-19 pandemic, and to the extent, these valuations reflect trading dynamics unrelated to our financial ~~statements~~performance or prospects, purchasers of ~~AMC Entertainment Holdings, Inc.~~our Common Stock could incur substantial losses if there are declines in market prices driven by a return to earlier valuations;
● to the extent volatility in our Common Stock is caused, as has widely been reported, by a “short squeeze” in which coordinated trading activity causes a spike in the market price of our Common Stock as traders with a short position make market purchases to avoid or to mitigate potential losses, investors purchase at inflated prices unrelated to our financial performance or prospects, and may thereafter suffer substantial losses as prices decline once the level of short-covering purchases has abated;
● if the market price of our Common Stock declines, you may be unable to resell your shares at or above the price at which you acquired them. We cannot assure you that the equity issuance of our Common Stock will not fluctuate or decline significantly in the future, in which case you could incur substantial losses; and
● the Company will pay cash tax liabilities of $52.2 million to cover withholding obligations upon vesting of awards under our Equity Incentive Plan in January and February of 2022. The Company will withhold shares based on historical elections by participants under the terms of the plan, equivalent to the cash tax requirements for federal, state and local withholdings, pay the required tax obligation and return the withheld shares to the Equity Incentive Plan.

We may continue to incur rapid and substantial increases or decreases in our stock price in the foreseeable future that may not coincide in timing with the disclosure of news or developments by or affecting us. Accordingly, the market price of our shares of Common Stock may fluctuate dramatically and may decline rapidly, regardless of any developments in our business. Overall, there are various factors, many of which are beyond our control, that could negatively affect the market price of our Common Stock or result in fluctuations in the price or trading volume of our Common Stock, including:

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the ongoing impacts and developments relating to the COVID-19 pandemic;

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actual or anticipated variations in our annual or quarterly results of operations, including our earnings estimates and whether we meet market expectations with regard to our earnings;

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our current inability to pay dividends or other distributions;

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publication of research reports by analysts or others about us or the motion picture exhibition industry, which may be unfavorable, inaccurate, inconsistent or not disseminated on a regular basis;

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changes in market interest rates that may cause purchasers of our shares to demand a different yield;

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changes in market valuations of similar companies;

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market reaction to any additional equity, debt or other securities that we may issue in the future, and which may or may not dilute the holdings of our existing stockholders;

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additions or departures of key personnel;

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actions by institutional or significant stockholders;

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short interest in our stock and the market response to such short interest;

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the dramatic increase in the number of individual holders of our stock and their participation in social media platforms targeted at speculative investing;

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speculation in the press or investment community about our company or industry;

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strategic actions by us or our competitors, such as acquisitions or other investments;

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legislative, administrative, regulatory or other actions affecting our business, our industry, including positions taken by the Internal Revenue Service (“~~AMC”~~IRS”);

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investigations, proceedings, or litigation that involve or affect us;

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the occurrence of any of the other risk factors included ~~elsewhere~~or incorporated by reference in this Annual Report on Form ~~10-K. This discussion contains forward-looking statements. Please see “Forward-Looking Statements”~~10-K; and ~~“Risk Factors”~~

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general market and economic conditions.

Future offerings of debt, which would be senior to our Common Stock upon liquidation, and/or preferred equity securities, which may be senior to our Common Stock for purposes of distributions or upon liquidation, could adversely affect the market price of our Common Stock.

In the future, we may attempt to increase our capital resources by making additional offerings of debt or preferred equity securities, including convertible or non-convertible senior or subordinated notes, convertible or non-convertible preferred stock, medium-term notes and trust preferred securities, to raise cash or bolster our liquidity, to refinance indebtedness, for working capital, to finance strategic initiatives and future acquisitions or for other purposes. Upon liquidation, holders of our debt securities and shares of preferred stock and lenders with respect to other borrowings will receive distributions of our available assets prior to the holders of our Common Stock. In addition, any preferred stock we may issue could have a preference on liquidating distributions or a preference on distribution payments that could limit our ability to make a distribution to the holders of our Common Stock. Since our decision to issue securities in any future offering will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of our future offerings. Thus, our stockholders bear the risk of our future offerings reducing the market price of our Common Stock.

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

Provisions contained in our amended and restated certificate of incorporation and amended and restated bylaws, as amended, as well as provisions of the Delaware General Corporation Law delay or make it more difficult to remove incumbent directors or for a third-party to acquire us, even if a takeover would benefit our stockholders. These provisions include:

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a ~~discussion~~classified board of directors;

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the sole power of a majority of the ~~risks, uncertainties and assumptions relating~~board of directors to ~~these statements.~~

~~Overview~~

AMC is the world’s largest theatrical exhibition company and an industry leader in innovation and operational excellence. We operate theatres in 15 countries and are the market leader in nine of those. In the United States, AMC has the #1 market share in the top two markets, New York and Los Angeles.

Our theatrical exhibition revenues are generated primarily from box office admissions and theatre food and beverage sales. The balance of our revenues are generated from ancillary sources, including on-screen advertising, fees earned from our AMC Stubs^® customer loyalty program, rental of theatre auditoriums, income from gift card and exchange ticket sales, and online ticketing fees. As of December 31, 2019, we owned, operated or had interests in 1,004 theatres and 11,041 screens.

~~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 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 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 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 onfix the number of ~~weeks since release. The settlement process allows for negotiation based upon how~~directors;

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limitations on the removal of directors;

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the sole power of the board of directors to fill any vacancy on the board of directors, whether such vacancy occurs as a ~~film actually performs.~~

~~During~~result of an increase in the ~~2019 calendar year, films licensed from our six largest distributors based on revenues accounted for approximately 80%~~number of directors or otherwise;

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the ability of our ~~U.S. admissions revenues, which consisted~~board of directors to designate one or more series of preferred stock and issue shares of preferred stock without stockholder approval; and

●

the inability of stockholders to call special meetings.

Our issuance of shares of preferred stock could delay or prevent a change of control of our company. Our board of directors has the authority to cause us to issue, without any further vote or action by the stockholders, up to 50,000,000 shares of preferred stock, par value $0.01 per share, in one or more series, to designate the number of shares constituting any series, and to fix the rights, preferences, privileges and restrictions thereof, including dividend rights, voting rights, rights and terms of redemption, redemption price or prices and liquidation preferences of such series. The

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issuance of shares of preferred stock may have the effect of delaying, deferring or preventing a change in control of our company without further action by the stockholders, even where stockholders are offered a premium for their shares.

Our incorporation under Delaware law, the ability of our board of directors to create and issue a new series of preferred stock or a stockholder rights plan and certain other provisions of our amended and restated certificate of incorporation and amended and restated bylaws, as amended, could impede a merger, takeover or other business combination involving our company or the replacement of our management or discourage a potential investor from making a tender offer for our Common Stock, which, under certain circumstances, could reduce the market value of our Common Stock.

An issuance of preferred stock could dilute the voting power of the Common Stockholders and adversely affect the market value of our Common Stock.

The issuance of shares of preferred stock with voting rights may adversely affect the voting power of the holders of our other classes of voting stock either by diluting the voting power of our other classes of voting stock if they vote together as a single class, or by giving the holders of any such preferred stock the right to block an action on which they have a separate class vote even if the action were approved by the holders of our other classes of voting stock.

In addition, the issuance of shares of preferred stock with dividend or conversion rights, liquidation preferences or other economic terms favorable to the holders of preferred stock could adversely affect the market price for our Common Stock by making an investment in the Common Stock less attractive. For example, investors may not wish to purchase Common Stock at a price above the conversion price of a series of convertible preferred stock because the holders of the preferred stock would effectively be entitled to purchase Common Stock at the lower conversion price causing economic dilution to the holders of Common Stock.

Item 1B. Unresolved Staff Comments.

None.

Item 2. Properties.

The following table sets forth the general character and ownership classification of our theatre circuit, excluding non-consolidated joint ventures and managed theatres, as of December 31, 2021:


Property Holding Classification	Theatres	Screens
Owned	43	414
Leased	829	9,756
Total	872	10,170

We lease our corporate headquarters in Leawood, Kansas. We believe our facilities are currently adequate for our operations.

Please refer to Narrative Description of Business under Part I, Item 1 of this Annual Report on Form 10-K for the geographic locations of our Theatrical Exhibition circuit as of December 31, 2021. See Note 3—Leases in the Notes to the Consolidated Financial Statements under Part II, Item 8 thereof.

Item 3. Legal Proceedings.

The information required to be furnished by us under this Part I, Item 3 (Legal Proceedings) is incorporated by reference to the information contained in Note 11—Commitments and Contingencies to the Consolidated Financial Statements included in Part II, Item 8 on this Annual Report on Form 10-K.

Item 4. Mine Safety Disclosures.

Not applicable

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PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Market Information

Our common equity consists of Class A common stock. Our Class A common stock has traded on the New York Stock Exchange since December 18, 2013 under the symbol “AMC.” There was no established public trading market for our Class B common stock and on February 1, 2021, all outstanding Class B common stock was converted to Class A common stock, which resulted in the retirement of Class B common stock.

Holders of Common Stock

On February 24, 2022, there were 8,963 stockholders of record of our Class A common stock, who hold their shares directly with our transfer agent.

Dividend Policy

In the first quarter of 2020, we elected to decrease the dividend paid in the first quarter of 2020 by $0.17 per share (or a quarterly rate equal to approximately $0.03 per share) when compared to quarterly cash dividends paid of $0.20 per share for each quarter in 2019 on Holdings’ Class A and Class B common stock. Since April 24, 2020, we have been prohibited from making dividend payments in accordance with the covenant suspension conditions in our Credit Agreement (as defined in Note 8—Corporate Borrowings and Finance Lease Obligations to the Consolidated Financial Statements included in Part II, Item 8 thereof). The payment of future dividends after expiration of our covenant suspension conditions (for further information see Notes 8—Corporate Borrowings and Finance Lease Obligations to the Consolidated Financial Statements included in Part II, Item 8 on this Annual Report on Form 10-K) is subject to our Board of Directors’ discretion and dependent on many considerations, including limitations imposed by covenants in the agreements governing our indebtedness, operating results, capital requirements, strategic considerations and other factors.

We will only be able to pay dividends from our available cash on hand and funds received from our subsidiaries. Their ability to make any payments to us will depend upon many factors, including our operating results, cash flows and the terms of the Senior Secured Credit Facilities and the indentures governing our debt securities. The declaration and payment of any future dividends will be at the sole discretion of our Board of Directors after taking into account various factors, including legal requirements, our subsidiaries’ ability to make payments to us, our financial condition, operating results, cash flow from operating activities, available cash and current and anticipated cash needs. See the Liquidity and Capital Resources section of Item 7 of Part II thereof for further information regarding the dividend restrictions.

Securities Authorized for Issuance Under Equity Compensation Plans

See Item 12. of Part III of this Annual Report on Form 10-K.

Unregistered Sales of Equity Securities and Use of Proceeds

Sale of Unregistered Securities

On June 1, 2021, we issued 8,500,000 shares of Common Stock to Mudrick Capital Management, LP, for $230.5 million in a private placement pursuant to an exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933. The Company intends 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 its theatres. In addition, with these funds, the Company intends to continue exploring deleveraging opportunities.

Issuer Purchase of Equity Securities

None.

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Performance Graph

The following stock performance graph compares, for the period December 31, 2016 through December 31, 2021, the cumulative total stockholder returns for AMC’s Common Stock, the Standard & Poor’s Corporation Composite 500 Index and a self-determined peer group consisting of Cinemark Holdings, Inc. (CNK) and IMAX Corporation (IMAX). Measurement points are the last trading day for each month ended December 31, 2016 through December 31, 2021. The graph assumes that $100.00 was invested on December 31, 2016 in our Common Stock and in our peer group and in the Standard & Poor’s Corporation Composite 500 Index and assumes reinvestment of any dividends.

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The stock price performance below is not necessarily indicative of future stock price performance.

COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*

Among AMC Entertainment Holdings, Inc., the S&P 500 Index, and a Peer Group

*$100 invested on December 31, 2016 in stock or in index, including reinvestment of dividends.

Fiscal year ended December 31.


	12/16	3/17	6/17	9/17	12/17
AMC Entertainment Holdings, Inc.	100.00	94.09	68.65	45.02	46.91
S&P 500	100.00	106.07	109.34	114.24	121.83
Peer Group	100.00	113.79	92.26	88.73	87.22

		3/18	6/18	9/18	12/18
AMC Entertainment Holdings, Inc.		44.20	50.71	71.06	43.16
S&P 500		120.91	125.06	134.70	116.49
Peer Group		88.94	87.80	101.68	86.92

		3/19	6/19	9/19	12/19
AMC Entertainment Holdings, Inc.		52.91	33.86	39.50	27.38
S&P 500		132.39	138.09	140.43	153.17
Peer Group		99.46	90.14	97.48	87.28

		3/20	6/20	9/20	12/20
AMC Entertainment Holdings, Inc.		12.03	16.33	17.93	8.07
S&P 500		123.15	148.45	161.71	181.35
Peer Group		29.55	34.48	32.12	53.11

		3/21	6/21	9/21	12/21
AMC Entertainment Holdings, Inc.		38.87	215.79	144.90	103.56
S&P 500		192.55	209.01	210.23	233.41
Peer Group		61.23	65.73	57.69	50.32

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Item 6. [Reserved].

Not applicable

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. We operate theatres in 12 countries, including the U.S., Europe and 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 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, 2021, we owned, operated or had interests in 946 theatres and 10,562 screens.

Temporarily Suspended or Limited Operations

Throughout 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 U.S. 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.

As of March 31, 2021, we operated at 585 domestic theatres with limited seating capacities, representing approximately 99% of our domestic theatres. As of June 30, 2021, the Company operated 593 domestic theatres, representing approximately 100% of our domestic theatres with remaining seating capacity restrictions winding down throughout the quarter. As of September 30, 2021 and December 31, 2021, the Company operated 596 and 593 domestic theatres, respectively, representing essentially 100% of its domestic theatres. Total revenues for the U.S. markets increased $1,049.1 million for the year ended December 31, 2021, compared to the year ended December 31, 2020.

As of March 31, 2021, we operated at 97 international theatres, with limited seating capacities, representing approximately 27% of its international theatres. As of June 30, 2021, we operated 335 international theatres with limited seating capacities, representing approximately 95% of our international theatres. The majority of international theatre operations were suspended for the first two months of the second quarter of 2021 due to a COVID-19 resurgence and did not reopen until early June 2021. At September 30, 2021 and December 31, 2021, the Company operated 351 and 337 international theatres, respectively, representing approximately 99% and 95%, respectively, of its international theatres. Total revenues for the International markets increased $236.4 million for the year ended December 31. 2021, compared to the year ended December 31, 2020.

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”). 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, 2021, films licensed from our six largest movie studio distributors based on revenues accounted for approximately 87% of our U.S. admissions revenues, which consisted of Sony, Disney, Universal, Warner Bros., Paramount, and Lionsgate. In Europe, approximately 77% of our box office revenue came from films attributed to our four largest distributor groups; which consisted of Universal, Disney, Sony, and Warner Bros., Universal, Sony, Lionsgate, and Paramount. In Europe, approximately 80% of our box office revenue came from films attributed to our five largest distributors, which consisted of Disney, Warner Bros., Universal, Sony, 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.

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

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Movie Screens

~~During the year ended December 31, 2019, we opened 10 new theatres~~The following table provides detail with ~~a total of 85 screens, acquired 7 theatres with 70 screens, permanently closed 210 screens, temporarily closed 429 screens and reopened 434 screens~~respect to ~~implement our strategy to install consumer experience upgrades.~~

~~As of December 31, 2019, we had 3,116~~digital delivery, 3D enabled ~~screens, including 223~~projection, large screen formats, such as IMAX^®, and ~~120~~our proprietary Dolby Cinema™, other Premium Large Format (“PLF”) ~~screens; approximately 39% of~~screens, enhanced food and beverage offerings and our ~~screens were 3D enabled screens, including IMAX~~^® ~~3D enabled screens, and approximately 2% of~~premium seating as deployed throughout our ~~screens were IMAX~~^® ~~3D enabled screens. The following table identifies the upgrades to our theatre circuit during the periods indicated:~~circuit:


	U.S. Markets		International Markets
	Number of	Number of	Number of	Number of	U.S. Markets		International Markets
	Screens As of	Screens As of	Screens As of	Screens As of	Number of	Number of	Number of	Number of
	December 31,	December 31,	December 31,	December 31,	Screens As of	Screens As of	Screens As of	Screens As of
Format	2019	2018	2019	2018	December 31, 2021	December 31, 2020	December 31, 2021	December 31, 2020
Digital	8,091	8,114	2,947	2,977
3D enabled (includes IMAX® & in-house PLF brands)	3,116	3,564	1,424	1,847
IMAX® (3D enabled)	188	187	35	29
IMAX®					186	185	38	36
Dolby CinemaTM	148	127	5	2	154	149	8	6
Other PLF (3D enabled)	50	53	70	59
Other Premium Large Format ("PLF")					56	54	77	75
Dine-in theatres	725	619	8	2	729	723	13	8
Premium seating	3,256	2,894	451	385	3,395	3,342	572	533

As of December 31, ~~2019,~~2021, AMC iswas the largest IMAX^® exhibitor in the U.S. with a ~~56%~~57% market ~~share, and each~~share. Each one of our IMAX^® local installations is protected by geographic ~~exclusivity. As~~exclusivity, and as of December 31, ~~2019,~~2021, our IMAX^® screen count was ~~98%~~96% greater than our closest competitor. We ~~believe that~~also operate 35 IMAX® screens in Europe. As part of our long-term growth strategy, we ~~have had considerable success with~~expect to continue to expand our IMAX^® ~~partnership. With 35~~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, 2021, we opened two new IMAX screens in the ~~International markets, Odeon is the largest commercial~~U.S. theatres, closed one IMAX^®~~exhibitor~~ screen related to U.S. theatres that was permanently closed and opened two new IMAX screens related to theatres in ~~Western Europe. Four of our top 10 Odeon screens are IMAX~~^®~~, including our partnership with the largest screen in the UK. Since our acquisition of Odeon in November 2016, we have almost doubled our European IMAX~~^® ~~footprint with the opening of six additional screens in 2019 and eight in 2018. We converted about 20% of our IMAX~~^®~~screens in Western Europe to IMAX Laser~~^® ~~screens, which is about 5% more than our U.S. conversion percentage.~~Saudi Arabia.

As of December 31, ~~2019,~~2021, we ~~have 148 fully operational~~operated 154 Dolby Cinema™ at AMC ~~screens~~auditoriums in the U.S. In December 2018, we introduced the first United Kingdom Dolby Cinema Auditorium in our iconic Leicester Square theatre in the heart of London, ending 2021 with eight 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. We operate five Dolby Cinema™ screens in Europe, including the first non-U.S. Dolby Cinema™ screen at~~markets as part of our ~~Spanish La Maquinista location.~~ ~~In December 2018, we reopened the iconic screen of Odeon Leicester square as Luxe Dolby Cinema™ screen.~~long-term growth strategy.

We ~~believe there is considerable opportunity to add~~also offer our private label PLF ~~format in~~experience at many of our locations, with superior sight and sound technology and enhanced seating as contrasted with our traditional auditoriums. ~~This~~These proprietary PLF ~~auditorium is branded Prime at AMC and BigD in the U.S. markets and ISENSE in the International markets and offers~~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

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of December 31, ~~2019,~~2021, we operated ~~24 Prime at AMC~~56 screens ~~and 31 BigD screens~~under proprietary PLF brand names in the U.S. markets and ~~70 ISENSE screens~~77 in the International markets.

Guest Amenities

WeAs 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. 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 12 or more screens and offer amenities to

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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 ~~capita~~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. ~~The renovation process typically involves losing up~~As of December 31, 2019, prior to ~~two-thirds of a given auditorium’s seating capacity. However,~~the COVID-19 pandemic, the quality improvement in the customer experience ~~can~~could drive a 33% increase in attendance, on average, at these locations in their ~~first-year~~first year post renovation. ~~Further, upon~~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 ~~that~~the enhanced consumer experience. ~~Additionally, remodeled theatres tend to draw more adults who pay higher ticket prices than teens or young children, as well as most customers who upgrade their tickets to premium format.~~

As of December 31, ~~2019,~~2021, in our U.S. markets we ~~now feature~~featured recliner seating in approximately ~~342~~351 U.S. theatres, including Dine-in-Theatres, totaling approximately ~~3,256~~3,395 screens and representing ~~40.2%~~43.8% of total U.S. ~~screens, and representing 55% of total U.S. screens currently identified for recliner renovations.~~screens. In our International markets, as of December 31, 2021, we ~~have~~had recliner seating in approximately 7189 International theatres, totaling approximately ~~451~~572 screens and representing ~~15.3%~~20.4% of total International screens. ~~By the end of 2020, we expect to convert an additional 390 screens to recliner seating; 223 in the our U.S. markets and 167 in our International markets.~~

Open-source internet ticketing makes our AMC seats ~~(over~~(approximately 1.1 ~~million)~~million as of December 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 currently on sale ~~over the internet,~~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, ~~2019,~~2021, approximately ~~51.9%~~67% of our tickets were purchased online in the U.S., with approximately ~~72.3%~~80% of total online tickets being purchased through the AMC ticket engine. We believe increased online access is important because it captures customers’ purchase intent more immediately and directly than if we wait for their arrival at the theatre box office to make a purchase. Carefully monitoring internet pre-sales also lets us adjust capacity in real time, moving movies that are poised to over perform to larger capacity auditoriumsAMC’s website or ~~adding additional auditoriums, thereby maximizing yield.~~mobile app.

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~~We offer enhanced food and beverage ~~items are offered at our theatres based on preferences in the particular geographic region.~~products that include meals, healthy snacks, premium liquor, beer and wine options, and other gourmet products. Our ~~traditional food and beverage~~long-term growth strategy ~~emphasizes prominent and appealing food and beverage offerings designed~~calls for ~~rapid service and efficiency, including~~investment across a customer friendly self-serve experience. We design our theatres to have more food and beverage capacity to make it easier to serve larger numbers of customers. Strategic placement of large food and beverage operations within theatres increases their visibility, aids in reducing the length of lines, allows flexibility to introduce new concepts, and improves traffic flow around the food and beverage stands.

~~To address recent consumer trends, we have expanded our menu~~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. As a result of the COVID-19 pandemic, we have streamlined our concession menus to focus on our best-selling products and expanded cashless transactions technology through the deployment of mobile ordering across all brands, all in an effort to ~~include made-to-order~~reduce the number of touchpoints between guests and employees. We have also upgraded our Coca-Cola Freestyle beverage software to allow guests to dispense 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. The costs of these conversions in some cases are partially covered by investments fromwithout the ~~theatre landlord.~~ need to utilize the machine’s touch screen using the Coca-Cola Freestyle app.

We currently operate 2651 Dine-In Theatres in the U.S. and ~~two~~three Dine-In Theatres in ~~the~~ 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.

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

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services. It features a ~~traditional~~ paid tier called AMC Stubs Premiere™ for a ~~$15~~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.

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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 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.

~~On June 26, 2018, we launched~~ AMC Stubs^® A-List ~~a new~~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 visits to already seen movies ~~for~~from $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~~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, ~~2019,~~2021, we had more than ~~22,500,000~~25,300,000 member households enrolled in AMC Stubs® A-List, AMC Stubs Premiere™ and AMC Stubs Insider™ programs, combined. Our AMC Stubs® members represented approximately ~~45%~~40% of AMC U.S. markets attendance during the year ended December 31, ~~2019, with members generating 2.2x the revenue of non-members.~~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.

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 ~~4,200,000 active~~12,800,000 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.

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. ~~In select markets during 2019, we~~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. ~~Also, in 2019, we launched~~Our mobile applications also include AMC Theatres On Demand, a ~~new~~ service ~~where~~for members of the AMC 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 of both entertainment dollars~~AMC employees and ~~time.~~other guests. Online and mobile platforms are also available in our International markets.

Significant Transactions

~~Screenvision Merger.~~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 acquired our interest in Screenvision in December of 2016 in connection with our acquisition of Carmike. On May 30, 2018, Screenvision entered into an Agreement and Plan of Merger which resulted in a change of control in Screenvision. We received distributions and merger consideration of $45.8 million on July 2, 2018 upon consummationused the net proceeds from the sale of the ~~merger. AMC retained~~notes, and ~~currently holds an 18.2% common membership interest in Screenvision~~cash on ~~a fully diluted basis. Upon consummation~~hand, to fund the full redemption of the ~~merger,~~$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 estimate we ~~reduced the carrying value~~will record a loss on debt extinguishment related to this transaction of ~~our investment~~approximately $135 million in ~~Screenvision to $0 and recorded equity~~other expense in ~~earnings for the excess distribution of $30.1 million during the year ended December 31, 2018.~~2022. See Note 6—~~Investments of~~16—Subsequent Events in the Notes to the Consolidated Financial Statements under Part II, Item 8 thereof for ~~additional~~further information.

~~Sale of NCM.~~ Common Stock issuance.We formed National CineMedia, LLC (“NCM,LLC”, together with National CineMedia, Inc. (“NCM, Inc.”), “NCM”) in 2005 as a joint venture with Regal Entertainment Group and Cinemark Holdings, Inc. ~~On June 18, 2018, we~~ entered into ~~two Unit Purchase Agreements (the “Agreements”)~~equity distribution agreements with ~~each of Regal~~sales agents to sell approximately 241.6 million and ~~Cinemark pursuant to which Regal and Cinemark each separately agreed to purchase 10,738,740 common units of NCM at a sales price of $7.30 per unit and aggregate consideration of approximately $156.8~~90.9 million ~~(the “Sales”). The Sales closed on July 5, 2018. Following the closing of the Sales, we no longer own any~~ shares of our Class A common stock in NCM, Inc. or common units in NCM, LLC. NCM consented to the Sales and waived its rights under the memorandum of understanding that provided we would not reduce our combined ownership of NCM, LLC and NCM, Inc. below 4.5%.(“Common Stock”), par value $0.01

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~~We recorded a gain on~~per share, through “at-the-market” offering programs during the years ended December 31, 2021 and December 31, 2020, respectively. During the year ended December 31, 2021, the Company raised gross proceeds of approximately $1,611.8 million related to the “at-the-market” offering programs and paid fees to the sales agents of approximately $40.3 million and other fees of $0.8 million. During the year ended December 31, 2020, the Company raised gross proceeds of approximately $272.8 million related to the “at-the-market” offering programs and paid fees to the sales agents of approximately $8.1 million. The Company intends to use the net proceeds from the sale of ~~$28.9~~the 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.

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


"At-the-market" Equity Distribution Agreement Dates	Sales Agents	Number of Class A common stock shares sold (in millions)	Gross Proceeds (in millions)
September 24, 2020	Citigroup Global Markets Inc. and Goldman Sachs & Co. LLC	15.0	$	56.1
October 20, 2020	Citigroup Global Markets Inc. and Goldman Sachs & Co. LLC	15.0		41.6
November 10, 2020	Goldman Sachs & Co. LLC and B. Riley Securities, Inc.	20.0		61.4
December 11, 2020	Goldman Sachs & Co. LLC and B. Riley Securities, Inc. (1)	40.93		113.7
	Total year ended December 31, 2020	90.93	$	272.8
December 11, 2020	Goldman Sachs & Co. LLC and B. Riley Securities, Inc. (1)	137.07		352.6
January 25, 2021	Goldman Sachs & Co. LLC and B. Riley Securities, Inc.	50.0		244.3
April 27, 2021	Goldman Sachs & Co. LLC, B. Riley Securities, Inc. and Citigroup Global Markets Inc. (2)	43.0		427.5
June 3, 2021	B. Riley Securities, Inc. and Citigroup Global Markets Inc.	11.55		587.4
	Total year ended December 31, 2021	241.62	$	1,611.8

(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’s Common Stock, of which approximately 40.93 million shares of Common Stock were sold and settled during December 2020 and approximately 137.07 million shares of Common Stock were sold and settled during the year ended December 31, 2021.

(2)

Included in the Common Stock shares sold of 43.0 million 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.

Common Stock issuance to Mudrick. On June 1, 2021, we issued to Mudrick 8.5 million shares of our Common Stock 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 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, ~~2018.~~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

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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. 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 6—~~Investments of~~8—Corporate Borrowings and Finance Lease Obligations in the Notes to the Consolidated Financial Statements under Part II, Item 8 thereof for ~~additional~~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.

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Selected Financial Data


	Year Ended
	December 31,
(In millions, except operating data)	2021		2020		2019		2018		2017
Statement of Operations Data:
Revenues:
Admissions	$	1,394.2	$	712.1	$	3,301.3	$	3,385.0	$	3,229.5
Food and beverage		857.3		362.4		1,719.6		1,671.5		1,548.4
Other revenue		276.4		167.9		450.1		404.3		301.3
Total revenues		2,527.9		1,242.4		5,471.0		5,460.8		5,079.2
Operating Costs and Expenses:
Film exhibition costs		607.7		322.7		1,699.1		1,710.2		1,604.3
Food and beverage costs		137.9		88.8		278.7		270.9		252.1
Operating expense, excluding depreciation and amortization below		1,141.8		856.0		1,686.6		1,654.7		1,548.0
Rent		828.0		884.1		967.8		797.8		794.4
General and administrative:
Merger, acquisition and other costs(1)		13.7		24.6		15.5		31.3		63.0
Other, excluding depreciation and amortization below		226.6		156.7		153.0		179.3		133.2
Depreciation and amortization		425.0		498.3		450.0		537.8		538.6
Impairment of long-lived assets, definite and indefinite-lived intangible assets and goodwill(2)		77.2		2,513.9		84.3		13.8		43.6
Operating costs and expenses		3,457.9		5,345.1		5,335.0		5,195.8		4,977.2
Operating income (loss)		(930.0)		(4,102.7)		136.0		265.0		102.0
Other expense (income)(3)		(87.9)		28.9		13.4		(108.1)		(1.5)
Interest expense:
Corporate borrowings		414.9		311.0		292.8		262.3		231.6
Capital and financing lease obligations		5.2		5.9		7.6		38.5		42.4
Non-cash NCM exhibitor services agreement(4)		38.0		40.0		40.4		41.5		—
Equity in (earnings) losses of non-consolidated entities(5)		(11.0)		30.9		(30.6)		(86.7)		185.2
Investment expense (income)(6)		(9.2)		10.1		(16.0)		(6.2)		(22.6)
Earnings (loss) before income taxes		(1,280.0)		(4,529.5)		(171.6)		123.7		(333.1)
Income tax provision (benefit)(7)		(10.2)		59.9		(22.5)		13.6		154.1
Net earnings (loss)		(1,269.8)		(4,589.4)		(149.1)		110.1		(487.2)
Less: Net loss attributable to noncontrolling interests		(0.7)		(0.3)		—		—		—
Net earnings (loss) attributable to AMC Entertainment Holdings, Inc.	$	(1,269.1)	$	(4,589.1)	$	(149.1)	$	110.1	$	(487.2)
Earnings (loss) per share attributable to AMC Entertainment Holdings, Inc.'s common stockholders:
Basic	$	(2.66)	$	(39.15)	$	(1.44)	$	0.91	$	(3.80)
Diluted	$	(2.66)	$	(39.15)	$	(1.44)	$	0.41	$	(3.80)
Average shares outstanding
Basic (in thousands)		477,410		117,212		103,832		120,621		128,246
Diluted (in thousands)		477,410		117,212		103,832		130,105		128,246
Dividends declared per basic and diluted common share	$	0.00	$	0.03	$	0.80	$	2.35	$	0.80

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	Year Ended
	December 31,
(In millions, except operating data)	2021		2020		2019		2018		2017
Balance Sheet Data (at period end):
Cash and cash equivalents	$	1,592.5	$	308.3	$	265.0	$	313.3	$	310.0
Corporate borrowings		5,428.0		5,715.8		4,753.4		4,723.0		4,235.3
Other long-term liabilities(8)		165.0		241.3		195.9		963.1		903.8
Capital and financing lease obligations		72.7		96.0		99.9		560.2		651.4
AMC Entertainment Holdings, Inc.'s stockholder’s equity (deficit)		(1,789.5)		(2,885.1)		1,214.2		1,397.6		2,112.4
Total assets		10,821.5		10,276.4		13,675.8		9,495.8		9,805.9
Other Data:
Net cash provided by (used in) operating activities	$	(614.1)	$	(1,129.5)	$	579.0	$	523.2	$	537.4
Capital expenditures		(92.4)		(173.8)		(518.1)		(576.3)		(626.8)
Screen additions		82		63		85		89		96
Screen acquisitions		140		14		70		39		736
Screen dispositions		166		593		210		211		258
Construction openings (closures), net		(37)		18		5		5		37
Average screens—continuing operations(9)		8,998		5,049		10,669		10,696		10,675
Number of screens operated		10,448		6,048		11,041		11,091		11,169
Number of theatres operated		930		503		1,004		1,006		1,014
Total number of circuit screens		10,562		10,543		11,041		11,091		11,169
Total number of circuit theatres		946		950		1,004		1,006		1,014
Screens per theatre		11.2		11.1		11.0		11.0		11.0
Attendance (in thousands)—continuing operations(9)		128,547		75,190		356,443		358,901		346,763

(1)

During the year ended December 31, 2021, expenses were primarily related 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. During the year ended December 31, 2017, merger, acquisition and other costs includes $22.6 million of expense for NCM common units surrendered as a part of the exclusivity waiver with NCM in connection with the Department of Justice (“DOJ”) Final Judgment (“Final Judgment”) and merger, acquisition and other costs related to expenses incurred in connection with the Carmike (acquired December 2016), Odeon (acquired November 2016) and Nordic (acquired March 2017) acquisitions.

(2)

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. During calendar 2017, we recorded an impairment of long-lived assets loss of $43.6 million on 12 theatres in the U.S. markets with 179 screens which was related to property held and used.

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(3)

Other income for the year ended December 31, 2021 was primarily due to $87.1 million in government assistance related to COVID-19. Other expense (income) for the year ended December 31, 2020 included a loss of $109.0 million related to the fair value adjustments of the derivative liability and derivative asset for our Convertible Notes, financing fees related to the Exchange Offer of $39.3 million, and credit losses related to contingent lease guarantees of $15.0 million, partially offset by a gain on extinguishment of the Second Lien Notes due 2026 of $93.6 million and financing related foreign currency transaction losses. Other expense of $13.4 million during the year ended December 31, 2019 was primarily due to $16.6 million of expense related to the repayment of indebtedness, foreign currency transaction losses of $1.5 million, non-operating net periodic benefit cost of $1.2 million, and 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 $17.7 million, partially offset by decrease in fair value of our derivative liability for the embedded conversion feature in our Convertible Notes of $23.5 million. During the year ended December 31, 2018, other income of $108.1 million is primarily due to $66.4 million of income for the decrease in the fair value of the derivative liability related to the embedded conversion feature for the Convertible Notes and $45.0 million of income for the increase in fair value of the derivative asset related to the contingent call option for the cancellation of additional shares of Class B common stock in the Stock Purchase and Cancellation Agreement with Wanda. See Note 8—Corporate Borrowings and Finance Lease Obligations in the Notes to Consolidated Financial Statements under Part II, Item 8 thereof, for further information regarding the derivative liability related to the embedded conversion feature, the call option for the cancellation of additional shares of Class B common stock.

(4)

Non-cash NCM exhibitor services agreement includes a significant financing component due to the significant length of time between receiving the non-cash consideration and fulfilling the performance obligation. We received the non-cash consideration in the form of common membership units from NCM, in exchange for rights to exclusive access to our theatre screens and attendees through February 2037. Upon adoption of ASC 606 in year 2018, our advertising revenues have significantly increased with a similar offsetting increase in non-cash interest expense.

(5)

Equity in (earnings) loss of non-consolidated entities was primarily due to equity in earnings from DCIP for the year ended December 31, 2021. Equity in (earnings) loss of non-consolidated entities includes impairment losses in the International markets related to equity method investments of $8.6 million during the year ended December 31, 2020. Equity in earnings for the year ended December 31, 2018 includes a $28.9 million gain on the sale of all of our remaining interest in NCM and a $30.1 million gain related to the Screenvision merger. During the year ended December 31, 2017, we recorded non-consolidated entity impairment losses and losses on dispositions of our NCM ownership interests of approximately $230.7 million.

(6)

Investment income during the year ended December 31, 2021 includes a gain on sale of the Baltics theatres of $5.5 million. Investment expense (income) during the year ended December 31, 2020 includes impairment losses of $15.9 million related to equity interest investments without a readily determinable fair value accounted for under the cost method in the U.S. markets. Investment expense (income) during the year ended December 31, 2019 includes a gain on the sale of our Austria theatres of $12.9 million and a loss on impairment of an investment of $3.6 million. During the year ended December 31, 2017, investment expense (income) includes a gain on sale of Open Road of $17.2 million.

(7)

During the year ended December 31, 2020, income tax expense was primarily due to the recording of international valuation allowances against deferred tax assets held in Spain of $40.1 million and Germany of $33.1 million, partially offset by income tax benefit from net losses incurred in International markets. During the year ended December 31, 2019, an international valuation allowance previously established against deferred tax assets held in Spain was released in the fourth quarter of 2019 resulted in a $41.5 million benefit to income tax expense. During the year ended December 31, 2017, we recorded the impact of the change in enacted Federal tax rates in our U.S. jurisdictions of $88.6 million and the impact of a full valuation allowance on our deferred income taxes in U.S. jurisdictions of $221.6 million, for an aggregate charge of approximately $310.0 million in the fourth quarter of 2017. We estimate that we will have no liability for deemed repatriation of foreign earnings.

(8)

Other long-term liabilities exclude operating lease liabilities, which were recorded to operating lease liabilities in the consolidated balance sheets effective in year 2019 upon adoption of ASC 842, Leases.

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(9)

Includes consolidated theatres only.

Critical Accounting ~~Policies and~~ Estimates

Our Consolidated Financial Statements are prepared in accordance with U.S. GAAP. In connection with the preparation of our financial statements, we are required to make assumptions and estimates about future events and apply judgments that affect the reported amounts of assets, liabilities, revenue, expenses and the related disclosures. We base our assumptions, estimates, and judgments on historical experience, current trends and other factors that management believes to be relevant at the time our consolidated financial statements are prepared. On a regular basis, we review the accounting policies, assumptions, estimates, and judgments to ensure that our financial statements are presented fairly and in accordance with U.S. GAAP. However, because future events and their effects cannot be determined with certainty, actual results could differ from our assumptions and estimates, and such differences could be material. We have identified several policies as being critical because they require management to make particularly difficult, subjective and complex judgments about matters that are inherently uncertain, and there is a likelihood that materially different amounts would be reported under different conditions or using different assumptions.

All of our significant accounting policies are discussed in Note 1—The Company and Significant Accounting Policies ~~to our Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K.~~

~~Derivative Asset and Liability.~~ We remeasure the derivative asset related to our contingent call option to acquire shares of our Class B common stock at no additional cost and the derivative liability related to the conversion feature in our Convertible Notes due 2024 at fair value each reporting period with changes in fair value recorded in the consolidated statements of operations. We have obtained independent third-party valuation studies to assist us in determining fair value. Our valuation studies use a Monte Carlo simulation approach and are based on significant inputs not observable in the market and thus represent level 3 measurements within the fair value measurement hierarchy. Our common stock price at the end of each reporting period as well as the remaining amount of time until expiration for the contingent call option and conversion feature are key inputs for the estimation of fair value that are expected to change each reporting period. During the years ended December 31, 2019 and December 31, 2018, we recorded other expense (income) related to our derivative asset fair value of $17.7 million and $(45.0) million, respectively, and other expense (income) related to our derivative liability fair value of $(23.5) million and $(66.4) million, respectively. We expect there will be future changes in fair value for our derivative asset and liability and that the related amounts recorded as income or expense may be material. See Note 8—~~Corporate Borrowings and Finance Lease Obligations, Note 9 – Stockholders’ Equity, and Note 12~~—~~Fair Value Measurements~~ in the Notes to the Consolidated Financial Statements under Part II, Item 8 ~~hereof.~~thereof.

Long-lived Assets Impairments. We ~~evaluate~~review long-lived assets, 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~~other intangible assets ~~including definite-lived intangibles~~ and theatre assets (including operating lease right-of-use lease 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 of $84.3 million, $13.8 million, and $43.6 million during the years ended December 31, 2019, December 31, 2018, and December 31, 2017, respectively.Critical estimates. There are a number of estimates and significant judgments that are made by management in performing ~~these~~

~~Table~~impairment evaluations of ~~Contents~~

~~impairment evaluations.~~long-lived assets. 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. We believe we have used reasonable and appropriate business judgments. There is considerable management judgment with respect to cash flow estimates and appropriate multiples and 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.

Assumptions and judgment. Our valuation methodology for assessing impairment requires management to make judgments and assumptions based on historical experience and projections of future operating performance. Our projections assume that attendance will continue to gradually improve from 2021 levels to the point of approaching historical levels. Our projections have considered the risks of a shortened theatrical window and direct to consumer releases although on a more limited basis. These assumptions, among others, inform the considerable amount of management judgment with respect to cash flow estimates and appropriate discount rates to be used in determining the fair value of long-lived assets.

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.

Impact if actual results differ from assumptions. Although we believe that our estimates and judgments are reasonable, actual results may differ from these estimates, many of which fall under Level 3 within the fair value measurement hierarchy. Factors that could lead to impairment of long-lived assets include adverse industry or economic trends that would result in declines in the operating performance of our Domestic and International Theatres. 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 certain of our theatre operations as well as the behavior of the movie-going public as 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 and higher interest rates; and (iv) negative or overall declining financial performance compared with our actual and projected results of relevant prior periods.

If we are required to record an impairment charge it may substantially reduce the carrying value of our assets and reduce our income in the year in which it is recorded. 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.

Our Current Long-lived Asset Impairment related Estimates and Changes in those Estimates. During the ~~fourth quarter of~~year ended December 31, ~~2019,~~2021, we recorded non-cash impairment ofcharges related to our long-lived assets of ~~$84.3~~$61.3 million on 4077 theatres in the U.S. markets with ~~512~~805 screens (in Alabama, Arizona, California, Florida, Iowa, Illinois, Indiana, Kentucky, Louisiana, Michigan, Minnesota, Missouri, Montana, Nebraska, New York, North Carolina, North Dakota, Oklahoma, Pennsylvania, Tennessee, Texas, Virginia, Wisconsin, and Wyoming), 14 theatres in the International markets with 148 screens (in Germany, Italy, Spain, and United Kingdom), and a U.S. property held and not used. In addition, we recorded an impairment loss of $3.6 million within investment expense (income),which were related to ~~an equity interest investment without a readily determinable fair value accounted for under the cost method.~~property, net, operating lease right-of-use assets,

~~During the fourth quarter~~Table of ~~2018, we recorded non-cash impairment losses of $13.8~~Contents

net and other long-term assets and $15.9 million on ~~13 theatres in the U.S. markets with 150 screens (in Alabama, Arkansas, California, Colorado, Georgia, Iowa, Kentucky, Michigan, North Dakota, Ohio, Pennsylvania, Tennessee, and Wyoming) and on 15~~14 theatres in the International markets with 118 screens ~~(in Italy, Spain,~~which were related to property, net and ~~United Kingdom).~~operating lease right-of-use assets, net. 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 which were related to property, net, operating lease right-of-use assets, net and other long-term assets and $25.4 million on 37 theatres in the International markets with 340 screens which were related to property, net and operating lease right-of-use assets, net. At December 31, 2021, related cash flows were discounted at 10.0% for the Domestic Theatres and 11.5% for the International Theatres, at December 31, 2020, related cash flows were discounted at 11.0% for Domestic Theatres and 12.5% for International Theatres, at September 30, 2020, related cash flows were discounted at 12.0% for Domestic Theatres and 13.0% for International Theatres, and at March 31, 2020, related cash flows were discounted at 11.5% for Domestic Theatres and 13.0% for International Theatres.

There were no intangible asset impairment charges incurred during the year ended December 31, 2021. During the year ended December 31, 2020, we recorded impairment charges related to definite-lived intangible assets of $14.4 million in U.S. markets and indefinite-lived intangible assets of $15.2 million in International markets.

At December 31, 2020, September 30, 2020 and March 31, 2020, we performed quantitative impairment evaluations of our indefinite-lived intangible assets related to the AMC, Odeon and Nordic trade names and recorded impairment charges of $12.5 million related to Odeon trade name and $2.7 million related to Nordic for the year ended December 31, 2020. No impairment charges were recorded related to the AMC trade name for the year ended December 31, 2020. At December 31, 2020, September 30, 2020 and March 31, 2020, we applied royalty rates of 0.5% for AMC and Odeon trade names and 1.0% for Nordic trade names to the related theatre revenues on an after-tax basis using effective tax rates. At December 31, 2020, related cash flows were discounted at 12.0% for AMC and 13.5% for Odeon and Nordic, at September 30, 2020, related cash flows were discounted at 13.0% for AMC and 14.0% for Odeon and Nordic, and at March 31, 2020, related cash flows were discounted at 12.5% for AMC and 14.0% for Odeon and Nordic.

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. Prior to calendar 2019, we evaluated our recorded goodwill for impairment at three reporting units (Domestic Theatres, Odeon Theatres, and Nordic Theatres). 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
February 21, 2020

7.46

~~Based on sustained declines during 2019 in our market capitalization, we performed a quantitative goodwill impairment test as of September 30, 2019.~~ The impairment test for goodwill involves estimating the fair value of the reporting unit and comparing that value to ~~its~~our carrying value. If the estimated fair value of the reporting unit is less than its carrying value, the difference is recorded as a goodwill impairment charge, not to exceed the total amount of goodwill allocated to that reporting unit.

~~Table of Contents~~

The following tables reconcile enterprise carrying value to carrying value of our stockholders’ equity as of September 30, 2019 (the date of our quantitative goodwill impairment test) by reporting unit and reconciles estimated enterprise fair value to estimated fair value of our stockholders’ equity as of September 30, 2019:

Carrying Value

Corporate Borrowings

Carrying Value

Enterprise

and Finance

Stockholders'
(In millions)

Carrying Value

Lease Obligations

Equity
Domestic Theatres

$
3,820.3

$
(4,372.3)

$
(552.0)
International Theatres

2,194.0

(458.7)

1,735.3
Total

$
6,014.3

$
(4,831.0)

$
1,183.3

Estimated

Fair Value

Estimated

Estimated

Corporate Borrowings

Fair Value

Enterprise

and Finance

Stockholders'
(In millions)

Fair Value

Lease Obligations

Equity
Domestic Theatres

$
4,199.6

$
(4,316.9)

$
(117.3)
International Theatres

2,451.9

(453.0)

1,998.9
Total

$
6,651.5

$
(4,769.9)

$
1,881.6

Estimated

Estimated Enterprise Fair Value

Enterprise

Enterprise

exceeds Enterprise Carrying Value
(In millions)

Carrying Value

Fair Value

Amount

Percentage
Domestic Theatres

$
3,820.3

$
4,199.6

$
379.3

9.9%
International Theatres

2,194.0

2,451.9

257.9

11.8%
Total

$
6,014.3

$
6,651.5

$
637.2

10.6%

~~We determined~~Critical estimates. Calculating the fair value of our Domestic Theatres and International Theatres reporting units by ~~using an enterprise valuation methodology and an equally weighted combination~~use of the income approach for enterprise valuation methodology which utilizes estimated future discounted cash ~~flows, and the market approach which utilizes market comparable multiples of cash~~ flows. We believe that a market participant acquisition premium for a highly leveraged company is more reasonably measured on an enterprise value basis. There was considerable management judgment with respect to cash flow estimates and appropriate multiples and discount rates to be used in estimating fair value, which are classified as Level 3 in the fair value hierarchy. The income approach provides an estimate of fair value by measuring estimated annual cash flows over a discrete projection period and applying a present value discount rate to the cash flows. The present value of the cash flows is then added to the present value equivalent of the residual value of the business to arrive at an estimated fair value of the reporting unit. The residual value represents the present value of the projected cash flows beyond the discrete projection period. The discount rates ~~were~~are determined using ~~a rate~~weighted average cost of ~~return deemed appropriate~~capital for the risk of achieving the projected cash flows. ~~The~~

We did not weigh any of the enterprise valuation methodology on the market approach ~~used~~in 2020. We believe that using 100% income approach provided a more reasonable measurement of the enterprise value basis at December 31, 2020. Due to the volatility and unreliability in the market multiples, the lack of standalone Domestic and International public theatre companies, and the temporary suspension of operations due to the COVID-19 pandemic and the current impact on Adjusted EBITDA, we did not believe that placing any weight on the market approach was appropriate for this valuation.

Assumptions and judgment. Our projections assume that attendance will continue to gradually improve from 2021 levels to the point of approaching historical levels. Our projections have considered the risks of a shortened theatrical window and direct to consumer releases, although on a more limited basis. These assumptions, among others, inform the considerable amount of management judgment with respect to cash flow ~~multiples based on a comparison of growth~~estimates and ~~profitability of~~appropriate discount rates to be used in determining the ~~reporting units and publicly traded peer companies and a 20% enterprise control premium based on analysis of comparable transactions.~~

~~The following is a calculation~~fair value of our reporting units. Other factors that could lead to impairment of our goodwill include adverse industry or economic trends, declines in the market ~~equity capitalization~~price of our Common Stock and our debt instruments, all of which we utilize in establishing the estimates underlying these values. There is considerable management judgment with respect to cash flow estimates and discount rates to be used in estimating fair value, many of which are classified as ~~of September 30, 2019:~~Level 3 in fair value hierarchy.

(In millions, except share data)

As of September 30, 2019
Total outstanding shares

103,849,861
Share price

$
10.70
Market equity capitalization

$
1,111.2

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~~The following is a comparison~~Declines in the operating performance of our ~~estimated enterprise~~Domestic and International Theatres, the fair value of our debt, and the trading price of our Common Stock, together with small changes in other key input assumptions, and/or other events or circumstances could occur and could have a significant impact on the estimated fair values of our reporting units. 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 certain of our theatre operations as well as the behavior of the movie-going public as 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 and higher interest rates; (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.

Impact if actual results differ from assumptions. Although we believe that our estimates and judgments are reasonable, actual results may differ from these estimates many of which fall under Level 3 within the fair value measurement hierarchy. If we are required to record an impairment charge to our ~~market enterprise~~goodwill it may substantially reduce the carrying value ~~indicating an implied premium~~of goodwill on our balance sheet and reduce our income in the year in which it is recorded. 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.

Our Current Goodwill Estimates and Changes in those Estimates. As further described below, we recorded impairment charges as of March 31, 2020, September 30, 2020, and December 31, 2020 due to ~~market of 13.1%:~~

(In millions)

As of September 30, 2019
Estimated enterprise fair value

$
6,651.5

Market equity capitalization

$
1,111.2
Estimated fair value corporate borrowings and finance lease obligations

4,769.9
Market enterprise value

$
5,881.1

Implied premium to market

13.1%

~~We believe a~~ significant ~~reason for the difference~~decreases in our market enterprise ~~value as compared~~value. Our enterprise market capitalization increased and there were no other triggering events during 2021. At our goodwill impairment annual assessment date, October 1, 2021, we performed a qualitative impairment test to ~~our estimated enterprise fair value~~evaluate whether it 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~~more likely than not that the event of an acquisition of control of our enterprise by another market participant, this premium for control would likely be realized in the form of increased revenue opportunities, lower costs, better working capital terms and lower cost of capital. In addition, following our adoption of ASC 842, there are certain data providers in the analyst community that have characterized our operating lease liabilities as indebtedness, which has the impact of increasing our leverage as reported by these data providers. We believe inconsistencies in the reported data concerning operating leases from these data providers has caused market confusion which has negatively impacted our stock price.

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

September 30, 2019


Domestic


International

Description

Theatres

Theatres

Income approach:

Weighted average cost of capital/discount rate

9.0%

11.0%

Long-term growth rate

2.0%

2.0%

Market approach:

Control premium

20%

20%

Selected cash flow multiple

6.5x

9.75x

~~The enterprise~~ fair value of ~~the Domestic Theatres and International Theatres~~its two reporting units ~~exceeded~~was less than their ~~enterprise~~respective carrying ~~values by approximately 9.9% and 11.8%, respectively. Accordingly, there was no goodwill impairment recorded~~amounts as of ~~September 30, 2019. Our Domestic Theatres~~its annual assessment date. We concluded that it was not more likely than not that the fair value of either of our two reporting ~~unit has a negative equity value~~units had been reduced below their respective carrying ~~amount.~~amounts.

InFor calendar year 2020, we performed an assessment 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 December 31, ~~2019. Given~~2020, September 30, 2020, June 30, 2020, and March 31, 2020.

Based on the ~~further decline in~~suspension of operations at all of our ~~stock price~~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 ~~2019,~~2020 again after operations had previously been resumed, and the further delay or cancellation of film releases than originally estimated, we performed ~~a qualitative~~the Step 1 quantitative goodwill impairment test as of March 31, 2020, September 30, 2020, and December 31, 2020. In performing those Step 1 quantitative goodwill impairment tests, we used an enterprise value approach to ~~evaluate whether it is more likely~~measure fair value of the reporting units. The enterprise fair value of the Domestic Theatres and International Theatres reporting units was less than ~~not that~~their carrying values as of March 31, 2020 and September 30, 2020, and the fair value of ~~our two~~the International Theatres reporting ~~units is~~unit was less than ~~their respective carrying amounts~~its fair value as of December 31, ~~2019. We compared our projected financial information~~2020 and ~~assumptions utilized in our quantitative analysis as~~goodwill impairment charges of ~~September 30, 2019 to our fourth quarter results noting our operating performance is consistent with our projections~~$1,276.1 million and ~~there have been no other changes which would impact our conclusion that~~$1,030.3 million, were recorded during the fair value of our reporting units exceed their carrying values. We also observed that our estimated fair value of our corporate borrowings and finance lease obligations remained relatively consistent from September 30, 2019 toyear ended December 31, ~~2019, which represents approximately 80% of~~2020 for our market enterprise value. We have observed higher enterprise value control premiums for recent acquisitions in our industry than those utilized for the market approach. In considering the totality of the aforementioned factors together with the excess of fair value over carrying value calculated in both our reporting units in the previous quantitative impairment test, we have concluded that it is not more likely than not that the fair value of our two reporting units has been reduced below their respective carrying amounts. As a result, we concluded that an interim quantitative impairment test as of December 31, 2019 was not required.

~~Table of Contents~~

While the fair values of our reporting units exceed their respective carrying values at the present time, the performance of the reporting units may require improvement in future periods to maintain the excess. Declines in the operating performance of our Domestic Theatres and International Theatres ~~declines~~reporting units, respectively.

Key rates used 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) an adverse change in macroeconomic conditions; (ii) increased cost factors that have a negative effect on our earnings and cash flows; (iii) negative or overall declining financial performance compared with our actual and projected results of relevant prior periods; (iv) a decline in the fair value of our debt, and (v) a further sustained decrease in our share price. A future impairment could result for a portion of the goodwill, long-lived assets or intangible assets. Any impairment charges that we may take in the future could be material to our results of operations and financial condition.income approach were as follows:


	Measurement	Domestic	International
Description	Date	Theatres	Theatres
Income approach:
Weighted average cost of capital/discount rate	December 31, 2020	11.0%	12.5%
Long-term growth rate	December 31, 2020	1.0%	1.0%
Weighted average cost of capital/discount rate	September 30, 2020	12.0%	13.0%
Long-term growth rate	September 30, 2020	1.0%	1.0%
Weighted average cost of capital/discount rate	March 31, 2020	11.5%	13.0%
Long-term growth rate	March 31, 2020	2.0%	2.0%

Income and operating taxes. Income and operating taxes are inherently difficult to estimate and record. This is due to the complex nature of the U.S. and International tax codes and also because our returns are routinely subject to examination by government tax authorities, including federal, state and local officials. Most of these examinations take place a few years after we have filed our tax returns. Our tax audits in many instances raise questions regarding our tax

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filing positions, the timing and amount of deductions claimed and the allocation of income among various tax jurisdictions.

Critical estimates. In calculating our effective income tax rate and other taxes applicable to our operations, we make judgments regarding certain tax positions, including the timing and amount of deductions and allocations of income among various tax jurisdictions with disparate tax laws.

Assumptions and judgment. We have various tax filing positions with regard to the timing and amount of deductions and credits and the allocation of income among various tax jurisdictions, based on our interpretation of local tax laws. We also inventory, evaluate and measure all uncertain tax positions taken or expected to be taken on tax returns and to record liabilities for the amount of such positions that may not be sustained, or may only be partially sustained, upon examination by the relevant taxing authorities.

Impact if actual results differ from assumptions. Although we believe that our estimates and judgments are reasonable, actual results may differ from these estimates. Some or all of these judgments are subject to review by the taxing authorities. If one or more of the taxing authorities were to successfully challenge our right to realize some or all of the tax benefit we have recorded, and we were unable to realize this benefit, it could have a material adverse effect on our financial results and cash flows.

Our Current Tax Estimates and Changes in those Estimates. At December 31, ~~2019,~~2021, our federal income tax loss carryforwards were approximately ~~$380.9~~$1,185.5 million, our state income tax loss carryforwards were approximately ~~$380.4~~$1,678.6 million, and our foreign income tax loss carryforwards were approximately ~~$487.2~~$898.4 million. Since these losses have varying degrees of carryforward periods, it requires us to estimate the amount of carryforward losses that we can reasonably be expected to realize. Future changes in conditions and in the tax code may change these strategies and thus change the amount of carry forward losses that we expect to realize and the amount of valuation allowances we have recorded. As of December 31, 2021, we had a total valuation allowance of $1,114.1 million related to the above loss carryforward and other future tax benefits for which realization is not likely to occur. Accordingly, future reported results could be materially impacted by changes in tax matters, positions, rules and estimates and these changes could be material. See Note 10—Income Taxes in the Notes to Consolidated Financial Statements under Part II, Item 8 ~~hereof~~thereof, for further information.

~~An international valuation allowance previously established against~~During the first quarter of 2020, the severe impact of the COVID-19 pandemic on operations in Germany and Spain caused us to conclude the realizability of deferred tax assets held in those jurisdictions does not meet the more likely than not standard. As such, a charge of $33.1 million and $40.1 million was recorded for Germany and Spain, respectively. At December 31, 2020, we determined that it was ~~released~~appropriate to record a valuation allowance on the disallowed interest carryforward in Sweden as the ~~fourth quarter~~realizability of ~~2019~~this deferred tax asset in this jurisdiction does not meet the more likely than not standard. As such, the overall net tax benefit recorded on Sweden was reduced by a charge of $3.7 million. During 2021, we recorded a valuation allowance on all other deferred tax assets in Sweden, resulting in a ~~$41.5 million benefit to income tax expense. A significant piece~~charge of ~~objective positive evidence evaluated was a cumulative income position over a three-year period. Statutory taxable earnings that permit~~less than $1 million. With the ~~use~~exception of ~~these~~Finland and Norway, all other international jurisdictions carried valuation allowances against their deferred tax assets ~~primarily~~at the end of 2021.

On July 31, 2020, we completed our private offers to exchange our Existing Subordinated Notes for newly issued Second Lien Notes due 2026. Due to the terms of that exchange, we were required to recognize CODI for US tax purposes on the difference between the face value of debt exchanged and the fair market value of the new debt issued. We determined that we should recognize $1.2 billion of CODI for tax purposes. Further, we concluded that the level of our insolvency at July 31, 2020 exceeded the indicated amount of CODI resulting from the debt exchange, which allowed us to reduce our tax attributes rather than recognize current taxable income. As a result, $1.2 billion of our net operating ~~loss carryforwards, has stabilized~~losses have been eliminated due to ~~a profit position~~tax attribute reduction. See Note 8—Corporate Borrowings and Finance Lease Obligations and Note 10—Income Taxes in ~~recent years with significant improvement in 2019. Strategic initiatives have provided sufficient positive evidence that has resulted in Management concluding~~ the ~~realization of these deferred tax assets is more likely than not.~~Notes to Consolidated Financial Statements under Part II, Item 8 thereof, for further information.

Leases. We adopted ASC Topic 842 effective January 1, ~~2019 and as a result our lease accounting policy has been modified as discussed in Note 3~~—~~Leases in the Notes to the Condensed Consolidated Financial Statements under Item 1. Lessees~~2019. Under ASC Topic 842, lessees are required to recognize a right-of-use asset and a lease liability for virtually all of their leases (other than leases that meet the definition of a short-term lease). The liability is equal to the present value of lease payments. The asset is based on the liability, subject to certain adjustments, such as for lease incentives. For financial presentation purposes, a dual model was retained, requiring leases to be classified as either operating or finance leases. Operating leases result in straight-line expense (similar to operating leases under the prior accounting standard) while finance leases result in a front-loaded expense pattern (similar to capital leases under the prior accounting standard).

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Critical estimates. We used our incremental borrowing rate to calculate the present value of our future operating lease payments, which was determined using a portfolio approach based on the rate of interest that we would have to pay to borrow an amount equal to the lease payments on a collateralized basis over a similar ~~term.~~term since the leases do not provide a determinable implicit rate.

Assumptions and judgment. Estimating the incremental borrowing rate for operating leases is subjective when reviewing the reasonableness of the inputs and rates applied to each lease.

Impact if actual results differ from assumptions. A 100-basis point increase in the incremental borrowing rate would have decreased total operating lease liabilities by approximately $208.7 million and a 100-basis point decrease in weighted average discount rate would have increased total operating lease liabilities by approximately $223.2 million.

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Operating Results

The following table sets forth our consolidated revenues, operating costs and expenses attributable to our theatrical exhibition operations and segment operating results. Reference is made to Note 13—Operating Segments in the Notes to the Consolidated Financial Statements ~~included elsewhere in this Annual Report on Form 10-K~~under Part II, Item 8 thereof, for additional information therein:


	U.S. Markets							International Markets						Consolidated						U.S. Markets						International Markets						Consolidated
	Year Ended							Year Ended						Year Ended						Year Ended						Year Ended						Year Ended
	December 31,							December 31,						December 31,						December 31,						December 31,						December 31,
(In millions)	2019		2018			% Change		2019		2018		% Change		2019		2018		% Change		2021		2020		% Change		2021		2020		% Change		2021		2020		% Change
Revenues
Admissions	$	2,388.2	$	2,441.5		(2.2)	%	$	913.1	$	943.5	(3.2)	%	$	3,301.3	$	3,385.0	(2.5)	%	$	1,016.5	$	455.5	*	%	$	377.7	$	256.6	47.2	%	$	1,394.2	$	712.1	95.8	%
Food and beverage		1,348.0		1,321.2		2.0	%		371.6		350.3	6.1	%		1,719.6		1,671.5	2.9	%		677.1		258.5	*	%		180.2		103.9	73.4	%		857.3		362.4	*	%
Other theatre		287.0		250.5		14.6	%		163.1		153.8	6.0	%		450.1		404.3	11.3	%		182.2		112.7	61.7	%		94.2		55.2	70.7	%		276.4		167.9	64.6	%
Total revenues		4,023.2		4,013.2		0.2	%		1,447.8		1,447.6	—	%		5,471.0		5,460.8	0.2	%		1,875.8		826.7	*	%		652.1		415.7	56.9	%		2,527.9		1,242.4	*	%
Operating Costs and Expenses
Film exhibition costs		1,311.5		1,323.1		(0.9)	%		387.6		387.1	0.1	%		1,699.1		1,710.2	(0.6)	%		460.6		223.0	*	%		147.1		99.7	47.5	%		607.7		322.7	88.3	%
Food and beverage costs		193.8		190.2		1.9	%		84.9		80.7	5.2	%		278.7		270.9	2.9	%		95.9		59.1	62.3	%		42.0		29.7	41.4	%		137.9		88.8	55.3	%
Operating expense, excluding depreciation and amortization below		1,215.5		1,162.2		4.6	%		471.1		492.5	(4.3)	%		1,686.6		1,654.7	1.9	%		833.9		588.9	41.6	%		307.9		267.1	15.3	%		1,141.8		856.0	33.4	%
Rent		708.2		584.4		21.2	%		259.6		213.4	21.6	%		967.8		797.8	21.3	%		614.2		650.7	(5.6)	%		213.8		233.4	(8.4)	%		828.0		884.1	(6.3)	%
General and administrative expense:
Merger, acquisition and other costs		6.5		16.8		(61.3)	%		9.0		14.5	(37.9)	%		15.5		31.3	(50.5)	%		9.0		10.2	(11.8)	%		4.7		14.4	(67.4)	%		13.7		24.6	(44.3)	%
Other, excluding depreciation and amortization below		86.4		112.6		(23.3)	%		66.6		66.7	(0.1)	%		153.0		179.3	(14.7)	%		158.4		97.8	62.0	%		68.2		58.9	15.8	%		226.6		156.7	44.6	%
Depreciation and amortization		340.4		384.0		(11.4)	%		109.6		153.8	(28.7)	%		450.0		537.8	(16.3)	%		321.2		374.5	(14.2)	%		103.8		123.8	(16.2)	%		425.0		498.3	(14.7)	%
Impairment of long-lived assets		76.6		8.1		*	%		7.7		5.7	35.1	%		84.3		13.8	*	%		61.3		1,443.0	(95.8)	%		15.9		1,070.9	(98.5)	%		77.2		2,513.9	(96.9)	%
Operating costs and expenses		3,938.9		3,781.4		4.2	%		1,396.1		1,414.4	(1.3)	%		5,335.0		5,195.8	2.7	%		2,554.5		3,447.2	(25.9)	%		903.4		1,897.9	(52.4)	%		3,457.9		5,345.1	(35.3)	%
Operating income		84.3		231.8		(63.6)	%		51.7		33.2	55.7	%		136.0		265.0	(48.7)	%
Operating loss																					(678.7)		(2,620.5)	(74.1)	%		(251.3)		(1,482.2)	(83.0)	%		(930.0)		(4,102.7)	(77.3)	%
Other expense (income):
Other expense (income)		13.3		(108.7)		*	%		0.1		0.6	(83.3)	%		13.4		(108.1)	*	%		9.2		61.3	(85.0)	%		(97.1)		(32.4)	*	%		(87.9)		28.9	*	%
Interest expense:
Corporate borrowings		289.9		256.4		13.1	%		2.9		5.9	(50.8)	%		292.8		262.3	11.6	%		349.2		306.0	14.1	%		65.7		5.0	*	%		414.9		311.0	33.4	%
Capital and financing lease obligations		2.3		17.2		(86.6)	%		5.3		21.3	(75.1)	%		7.6		38.5	(80.3)	%
Finance lease obligations																					0.7		1.2	(41.7)	%		4.5		4.7	(4.3)	%		5.2		5.9	(11.9)	%
Non-cash NCM exhibitor service agreement		40.4		41.5		(2.7)	%		—		—	—	%		40.4		41.5	(2.7)	%		38.0		40.0	(5.0)	%		—		—	—	%		38.0		40.0	(5.0)	%
Equity in earnings of non-consolidated entities		(29.1)		(81.5)		(64.3)	%		(1.5)		(5.2)	(71.2)	%		(30.6)		(86.7)	(64.7)	%
Investment income		(3.0)		(6.2)		(51.6)	%		(13.0)		—	*	%		(16.0)		(6.2)	*	%
Equity in (earnings) loss of non-consolidated entities																					(13.7)		17.6	*	%		2.7		13.3	(79.7)	%		(11.0)		30.9	*	%
Investment expense (income)																					(3.7)		10.2	*	%		(5.5)		(0.1)	*	%		(9.2)		10.1	*	%
Total other expense (income), net		313.8		118.7		*	%		(6.2)		22.6	*	%		307.6		141.3	*	%		379.7		436.3	(13.0)	%		(29.7)		(9.5)	*	%		350.0		426.8	(18.0)	%
Earnings (loss) before income taxes		(229.5)		113.1		*	%		57.9		10.6	*	%		(171.6)		123.7	*	%
Net loss before income taxes																					(1,058.4)		(3,056.8)	(65.4)	%		(221.6)		(1,472.7)	(85.0)	%		(1,280.0)		(4,529.5)	(71.7)	%
Income tax provision (benefit)		11.9		16.1	��	(26.1)	%		(34.4)		(2.5)	*	%		(22.5)		13.6	*	%		(9.4)		2.4	*	%		(0.8)		57.5	*	%		(10.2)		59.9	*	%
Net earnings (loss)	$	(241.4)	$	97.0		*	%	$	92.3	$	13.1	*	%	$	(149.1)	$	110.1	*	%
Net loss																					(1,049.0)		(3,059.2)	(65.7)	%		(220.8)		(1,530.2)	(85.6)	%		(1,269.8)		(4,589.4)	(72.3)	%
Less: Net loss attributable to noncontrolling interests																					—		—	—	%		(0.7)		(0.3)	*	%		(0.7)		(0.3)	*	%
Net loss attributable to AMC Entertainment Holdings, Inc.																				$	(1,049.0)	$	(3,059.2)	(65.7)	%	$	(220.1)	$	(1,529.9)	(85.6)	%	$	(1,269.1)	$	(4,589.1)	(72.3)	%

*Percentage change in excess of 100%.

U.S. Markets

International Markets

Consolidated

Year Ended

Year Ended

Year Ended

December 31,

December 31,

December 31,


2019

2018



2019

2018



2019

2018


Operating Data:

Screen additions

54

26

31

63

85

89

Screen acquisitions

70

31

—

8

70

39

Screen dispositions

150

172

60

39

210

211

Construction openings (closures), net

6

5

(1)

—

5

5

Average screens(1)

8,000

8,028

2,669

2,668

10,669

10,696

Number of screens operated

8,094

8,114

2,947

2,977

11,041

11,091

Number of theatres operated

636

637

368

369

1,004

1,006

Screens per theatre

12.7

12.7

8.0

8.1

11.0

11.0

Attendance (in thousands)(1)

250,370

255,736

106,073

103,165

356,443

358,901

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	U.S. Markets		International Markets		Consolidated
	Year Ended		Year Ended		Year Ended
	December 31,		December 31,		December 31,
	2021	2020	2021	2020	2021	2020
Operating Data:
Screen additions	34	23	48	40	82	63
Screen acquisitions	134	14	6	—	140	14
Screen dispositions	66	478	100	115	166	593
Construction openings (closures), net	(15)	15	(22)	3	(37)	18
Average screens(1)	7,341	3,715	1,657	1,334	8,998	5,049
Number of screens operated	7,755	5,228	2,693	820	10,448	6,048
Number of theatres operated	593	394	337	109	930	503
Total number of circuit screens	7,755	7,668	2,807	2,875	10,562	10,543
Total number of circuit theatres	593	590	353	360	946	950
Screens per theatre	13.1	13.0	8.0	8.0	11.2	11.1
Attendance (in thousands)(1)	91,102	46,453	37,445	28,737	128,547	75,190

(1)

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

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 our 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.

During the year ended December 31, 2021, Adjusted EBITDA ~~decreased by $157.8~~in the U.S. markets was $(250.6) million ~~or 17.0%~~compared to $(768.2) million during the year ended December 31, ~~2019 compared~~2020. The year-over-year improvement was primarily due to the decreased net loss driven by an increase in attendance as a result of the reopening of theatres that had been temporarily closed due to the COVID-19 pandemic, lifting of seating restrictions, increases in governmental assistance for COVID-19, and decreases in rent expense, partially offset by increases in operating expenses due to the increase in attendance, increases in general and administrative expense, and decreases in cash distributions from equity method investees. During the year ended December 31, ~~2018.~~2021, Adjusted EBITDA in ~~U.S.~~the International markets ~~decreased by $124.9~~was $(41.1) million ~~or 17.8%, primarily due~~compared to ~~(1) modification of a lease in the prior year that reduced rent expense in 2018 by $35.0~~$(231.0) million ~~(2) increased rent due to the new lease standard that reduced Adjusted EBITDA by approximately $44.0 million for principal and interest payments recorded as rent expense~~ during the year ended December 31, ~~2019 related~~2020. The year-over-year improvement was primarily due to ~~previously classified build-to-suit financing lease obligations, (3)~~decreases in net losses due to the ~~elimination of $7.2 million of deferred gain amortization~~increase in attendance, increases in governmental assistance for ~~sale leaseback transactions that previously reduced~~COVID-19, and decreases in rent expense~~(4) higher operating expenses,~~ and ~~(5) a decrease~~increases in ~~attendance,~~attributable EBITDA from equity method investees, partially offset by the increases in ~~other revenues, food and beverage per patron and declines~~operating expenses due to the increase in attendance, increases in general and ~~administrative: other expenses.~~administrative expense and an increase in foreign currency translation rates. During the year ended December 31, 2021, Adjusted EBITDA in the U.S. markets and International markets ~~decreased $32.9~~was $(291.7) million ~~or 14.4%, primarily due~~compared to ~~the increased rent due to the new lease standard that reduced Adjusted EBITDA by approximately $39.6~~$(999.2) million ~~for prior year principal and interest payments recorded as rent expense~~ during the year ended December 31, ~~2019 related to build-to-suit financing lease obligations and a decline in foreign currency translation rates, partially offset~~2020, driven by ~~an increase in attendance, other revenues and food and beverage per patron.~~the aforementioned factors impacting Adjusted EBITDA.

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

Year Ended
Adjusted EBITDA (1) (In millions)

December 31, 2019

December 31, 2018
U.S. markets (1)

$
575.6

$
700.5
International markets

195.8

228.7
Total Adjusted EBITDA

$
771.4

$
929.2

~~(1)~~

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


	Year Ended
Adjusted EBITDA (In millions)	December 31, 2021		December 31, 2020
U.S. markets	$	(250.6)	$	(768.2)
International markets		(41.1)		(231.0)
Total Adjusted EBITDA (1)	$	(291.7)	$	(999.2)

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	Year Ended				Year Ended
(In millions)	December 31, 2019		December 31, 2018		December 31, 2021		December 31, 2020
Net earnings (loss)	$	(149.1)	$	110.1
Net loss					$	(1,269.8)	$	(4,589.4)
Plus:
Income tax provision (benefit)(1)		(22.5)		13.6		(10.2)		59.9
Interest expense		340.8		342.3		458.1		356.9
Depreciation and amortization		450.0		537.8		425.0		498.3
Impairment of long-lived assets		84.3		13.8
Certain operating expenses (1)		14.8		24.0
Equity in earnings of non-consolidated entities (2)		(30.6)		(86.7)
Impairment of long-lived assets, definite and indefinite-lived intangible assets and goodwill (2)						77.2		2,513.9
Certain operating expense (income) (3)						0.2		(9.4)
Equity in (earnings) loss of non-consolidated entities (4)						(11.0)		30.9
Cash distributions from non-consolidated entities ~~(3)~~(5)		35.8		35.2		12.5		17.4
Attributable EBITDA ~~(4)~~(6)		5.0		7.3		3.7		0.2
Investment income		(16.0)		(6.2)
Investment expense (income)						(9.2)		10.1
Other expense (income) ~~(5)~~(7)		13.3		(108.2)		(0.1)		66.9
Non-cash rent - purchase accounting (6)		25.7		—
Other non-cash rent benefit (8)						(24.9)		(4.9)
General and administrative — unallocated:
Merger, acquisition and other costs ~~(7)~~(9)		15.5		31.3		13.7		24.6
Stock-based compensation expense (8)		4.4		14.9
Stock-based compensation expense (10)						43.1		25.4
Adjusted EBITDA	$	771.4	$	929.2	$	(291.7)	$	(999.2)

(1)

For information regarding the income tax provision (benefit), see Note 10—Income Taxes to the Consolidated Financial Statements under Part II, Item 8 thereof.

(2)

During the year ended December 31, 2020, we recorded goodwill non-cash impairment charges 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 which were related to property, net, operating lease right-of-use assets, net and other long-term assets and $25.4 million on 37 theatres in the International markets with 340 screens which were related to property, net and operating lease right-of-use assets, net. We recorded non-cash 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 Theatres reporting unit during the year ended December 31, 2020. We also recorded non-cash impairment charges of $14.4 million related to our definite-lived intangible assets in the Domestic Theatres reporting unit during the year ended December 31, 2020.

(3)

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

~~(2)~~(4)

During the years ended December 31, 2019 and December 31, 2018, we recorded $25.4 million and $29.1 million, respectively, in earnings from Digital Cinema Implementation Partners, LLC (“DCIP”). During the year ended December 31, 2018, we recorded equity in earnings related to our sale of all remaining NCM units of $28.9 million and a gain of $30.1 million related to the Screenvision merger. Equity in (earnings) loss of non-consolidated entities ~~also includes loss on the surrender (disposition)~~primarily consisted of ~~a portion~~equity in earnings (loss) from DCIP of ~~our investment in NCM of $1.1~~$12.2 million and ~~a lower of carrying value or fair value impairment loss of the held-for sale portion of our investment in NCM of $16.0~~$(14.5) million, ~~for~~during the year ended December 31, ~~2018.~~ 2021 and December 31, 2020 respectively. In addition, we recorded impairment losses in the International markets during the year ended December 31, 2020 related to equity method investments of $8.6 million in equity in (earnings) loss of non-consolidated entities.

~~(3)~~(5)

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.

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~~(4)~~(6)

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.


	Year Ended				Year Ended
(In millions)	December 31, 2019		December 31, 2018		December 31, 2021		December 31, 2020
Equity in earnings of non-consolidated entities	$	(30.6)	$	(86.7)
Equity in (earnings) loss of non-consolidated entities					$	(11.0)	$	30.9
Less:
Equity in earnings of non-consolidated entities excluding International theatre joint ventures		(29.2)		(81.9)
Equity in earnings of International theatre joint ventures		1.4		4.8
Income tax provision		0.4		0.4
Equity in (earnings) loss of non-consolidated entities excluding International theatre joint ventures						(13.5)		27.4
Equity in earnings (loss) of International theatre joint ventures						(2.5)		(3.5)
Income tax expense						0.3		0.1
Investment income		(0.7)		(0.5)		(0.1)		(0.4)
Interest expense						0.2		0.1
Depreciation and amortization		3.4		2.6		5.6		3.2
Other expense		0.5		—		0.2		0.7
Attributable EBITDA	$	5.0	$	7.3	$	3.7	$	0.2

~~Table of Contents~~

~~(5)~~(7)

Other expense ~~for~~(income) during the year ended December 31, ~~2019 was~~2021, primarily ~~due to expense related to the repayment~~consisted of ~~indebtedness~~a loss on debt extinguishment of ~~$16.6 million, foreign currency transaction losses of $1.5 million, non-operating net periodic benefit cost of $1.2~~$14.4 million and ~~the decrease in fair value~~financing fees of ~~our derivative asset for the contingent call option related to the Class B common stock purchase and cancellation agreement of $17.7~~$1.0 million, partially offset by ~~a decrease in fair value of our derivative liability for~~income related to the embedded conversion feature in our Convertible Notes due 2024 of $23.5 million. During the year ended December 31, 2018, we recorded gain of $111.4 million as a result of a decrease in fair value of our derivative liability and an increase in fair value of our derivative asset for the Convertible Notes due 2024, partially offset by financing losses and financing related foreign currency transaction ~~losses.~~gains of $(9.8) million and contingent lease guarantees of $(5.7) million.

Other expense (income) for the year ended December 31, 2020 included a loss of $109.0 million related to the fair value adjustments of the derivative liability and derivative asset for our Convertible Notes, financing fees related to the Exchange Offer of $39.3 million, and credit losses related to contingent lease guarantees of $15.0 million, partially offset due to a gain on extinguishment of the Second Lien Notes due 2026 of $(93.6) million.

~~(6)~~(8)

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

~~(7)~~(9)

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

~~(8)~~(10)

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

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

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

●

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

●

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

●

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

●

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

●

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

●

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

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Segment Information

Our historical results of operations for the years ended December 31, ~~2019~~2021 and December 31, ~~2018~~2020 reflect the results of operations for our two Theatrical Exhibition reportable segments, U.S. markets and International markets.

Results of Operations—For the Year Ended December 31, ~~2019,~~2021, Compared to the Year Ended December 31, ~~2018~~2020

Consolidated Results of Operations

Revenues. Total revenues increased ~~0.2%~~103.5%, or ~~$10.2~~$1,285.5 million, during the year ended December 31, ~~2019~~2021, compared to the year ended December 31, ~~2018.~~2020. Admissions revenues ~~decreased 2.5%~~increased 95.8%, or ~~$83.7~~$682.1 million, during the year ended December 31, ~~2019~~2021, compared to the year ended December 31, ~~2018,~~2020, primarily due to a ~~1.8% decrease~~71.0% increase in attendance and a 14.5% increase in average ticket ~~price~~price. The increase in attendance was primarily due to the COVID-19 pandemic impact on the prior year which resulted in the temporary suspension of operations at our theatres in U.S. markets and ~~a 0.7% decrease in attendance.~~International markets, deterred customers from attending our theatres when we resumed operations, and prompted film distributors to delay or alternatively distribute films. The ~~decrease~~increase in average ticket price was primarily due to ~~declines~~strategic pricing initiatives put in place over the prior year, increases in IMAX and Premium content and lower frequency on our A-List subscription program and an increase in foreign currency translation rates, ~~and decreases in the popularity of 3D premium content,~~ partially offset by ~~increases in attendance for PLF and IMAX~~^® ~~premium content. The decrease in attendance was primarily due to the popularity of films in U.S. markets as compared to the same period a year ago.~~loyalty program discounts.

Food and beverage revenues increased ~~2.9%~~136.6%, or ~~$48.1~~$494.9 million, during the year ended December 31, ~~2019~~2021, compared to the year ended December 31, ~~2018,~~2020, primarily due ~~to a 3.6%~~the increase in attendance and the increase in food and beverage ~~revenues~~ per

~~Table~~ patron. Food and beverage per patron increased 38.4% from $4.82 to $6.67 due to several contributing factors including increases in units sold per transaction and increases in the percentage of ~~Contents~~

~~patron,~~patrons making purchases due to higher child percentages, private theatre rentals, an increase in dine-in percentages, mobile orders along with price increases and reduced loyalty program penetration, partially offset by the decrease in attendance. Food and beverage revenues per patron increased as a result of strategic price increases, our food and beverage initiatives including theatre renovations, and our Feature Fare menu, partially offset by declinesan increase in foreign currency translation rates.

Total other theatre revenues increased ~~11.3%~~64.6%, or ~~$45.8~~$108.5 million, during the year ended December 31, ~~2019~~2021, compared to the year ended December 31, ~~2018,~~2020, primarily due to increases in ticket fees, ~~theatre rentals and~~ income from gift cards and package tickets ~~partially offset by declines~~and screen advertising due to the increase in attendance and the increase in foreign currency translation rates.

Operating costs and expenses. Operating costs and expenses ~~increased 2.7%, or $139.2~~decreased $1,887.2 million, during the year ended December 31, ~~2019~~2021, compared to the year ended December 31, ~~2018.~~2020, primarily due to the $2,513.9 million impairment of long-lived assets charge recorded during the year ended December 31, 2020, and the increase in foreign currency translation rates. Film exhibition costs ~~decreased 0.6%~~increased 88.3%, or ~~$11.1~~$285.0 million, during the year ended December 31, ~~2019~~2021, compared to the year ended December 31, ~~2018, primarily~~2020, due to the ~~decrease~~increase in ~~admissions revenues.~~attendance. As a percentage of admissions revenues, film exhibition costs were ~~51.5%~~43.6% for the year ended December 31, ~~2019~~2021, and ~~50.5%~~45.3% for the year ended December 31, ~~2018.~~2020. The decrease in film exhibition cost percentage is primarily due to the concentration of box office revenues in lower grossing films and library content in the current year, which typically results in lower film exhibition costs. Additionally, lower film exhibition costs were paid on films with shorter exclusive theatrical windows.

Food and beverage costs increased ~~2.9%~~55.3%, or ~~$7.8~~$49.1 million, during the year ended December 31, ~~2019~~2021, compared to the year ended December 31, ~~2018.~~2020. The increase in food and beverage costs was primarily due to the increase in food and beverage revenues. As a percentage of food and beverage revenues, food and beverage costs were ~~16.2%~~16.1% for ~~both~~ the year ended December 31, ~~2019~~2021, and 24.5% for the year ended December 31, ~~2018.~~2020. Food and beverage ~~gross profit per patron increased 3.6% and is calculated as food and beverage revenues less food and beverage~~ costs ~~divided by attendance.~~included $22.6 million of charges for obsolete inventory during the year ended December 31, 2020, due to the suspension of theatre operations.

As a percentage of revenues, operating expense was ~~30.8%~~45.2% for the year ended December 31, ~~2019~~2021, and ~~30.3%~~68.9% for the year ended December 31, ~~2018.~~2020. Rent expense ~~increased 21.3%~~decreased 6.3%, or ~~$170.0~~$56.1 million, during the year ended December 31, ~~2019~~2021, compared to the year ended December 31, ~~2018,~~2020, due primarily to cash rent abatements from landlords, declines in rent expense due to the ~~adoption~~impairment of ~~ASC 842 for lease accounting where approximately $83.6 million of principal and interest payments were recorded as rent expense~~right-of-use assets during the ~~year~~years ended December 31, 2019 ~~related to previously classified build-to-suit financing lease obligations, $25.7 million~~and December 31, 2020 that reduce the amounts of ~~amortization of certain intangible~~right-of-use assets ~~was reclassified from depreciation and amortization~~that are amortized to rent expense, and ~~$7.2 million of deferred gain amortization for sale leaseback transactions that previously reduced rent expense~~theatre closures, partially offset by the increase in ~~2018 was eliminated. Additionally, a prior year modification of a theatre lease reduced rent expense by $35.0 million in 2018.~~foreign currency translation rates. See Note 3—3—Leases in the Notes to the Consolidated Financial Statements under Part II Item 8 ~~hereof~~thereof for further information on the impact of ~~ASC 842.~~COVID-19 on

~~General~~60

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leases and ~~Administrative Expense:~~rent obligations of approximately $315.1 million that have been deferred to future years as of December 31, 2021.

Merger, acquisition, and other costs. Merger, acquisition, and other costs were ~~$15.5~~$13.7 million during the year ended December 31, ~~2019~~2021, compared to ~~$31.3~~$24.6 million during the year ended December 31, ~~2018,~~2020, primarily due to ~~expenses incurred in connection with the Nordic acquisition~~higher legal and professional costs related to strategic contingent planning in the prior year.

Other. Other general and administrative expense ~~decreased $26.3~~increased 44.6% or $69.9 million during the year ended December 31, ~~2019~~2021, compared to the year ended December 31, ~~2018,~~2020, primarily due to a $10.5 million decrease in stock based compensation expense where we determined that achieving the net profit performance thresholds was improbable and reversed previously recorded expense for certain stock awards granted in 2018 and 2019, a reduction in legal expenses of $4.5 million and a $6.3 million decreaseincreases in bonus expense ~~due~~and stock-based compensation expense as a result of improvements in expected annual performance compared to ~~declines in number~~annual targets and the modification and acceleration of ~~participants and expected performance.~~

~~Depreciation and amortization.~~ ~~Depreciation and amortization decreased $87.8 million~~vesting of awards during the current and prior year ~~ended December 31, 2019 compared to the year ended December 31, 2018, primarily due to the adoption of ASC 842 for lease accounting where the financing lease building~~ and ~~related depreciation were eliminated.~~increases in insurance costs and professional expenses. See Note 3—~~Leases~~9—Stockholders’ Equity in the Notes to the Consolidated Financial Statements under Part II Item 8 ~~hereof~~thereof for ~~the impact of ASC 842.~~additional information about stock-based compensation expense.

Depreciation and amortization. Depreciation and amortization decreased 14.7% or $73.3 million during the year ended December 31, 2021, compared to the year ended December 31, 2020, primarily due to lower depreciation expense on theatres impaired during years ended December 31, 2019 and December 31, 2020, partially offset by the increase in foreign currency translation rates.

During the year ended December 31, 2020, we recognized non-cash impairment losses of $152.5 million on 101 theatres in the U.S. markets with 1,139 screens (in Alabama, Arizona, Arkansas, California, Colorado, District of Columbia, Florida, ~~Iowa,~~Georgia, Illinois, Indiana, Iowa, Kentucky, ~~Louisiana,~~Massachusetts, Michigan, Minnesota, Missouri, Montana, Nebraska, New Hampshire, New Jersey, New York, North Carolina, North Dakota, ~~Nebraska, New York,~~Ohio, Oklahoma, Pennsylvania, South Dakota, Tennessee, Texas, ~~Virginia,~~Washington, Wisconsin and Wyoming) which were related to property, net, operating lease right-of-use assets, net and other long-term assets and ~~$7.7~~$25.4 million on 1437 theatres in the International markets with ~~148~~340 screens (in Finland, Germany, Ireland, Italy, Norway, Portugal, Spain, Sweden, and ~~United Kingdom)~~UK), which were related to property, net and operating lease right-of-use assets, net. ~~During~~

We performed quantitative impairment evaluations of our indefinite-lived intangible assets as of March 31, 2020, September 30, 2020 and December 31, 2020 related to the AMC, Odeon and Nordic trade names and recorded impairment charges of $15.2 million related to the Odeon and Nordic trade names during the year ended December 31, ~~2018,~~2020. In addition, we ~~recognized non-cash~~performed quantitative impairment ~~losses~~evaluations of ~~$8.1~~our definite-lived intangible assets as of March 31, 2020, September 30, 2020 and December 31, 2020 and recorded impairment charges of $14.4 million ~~on 13 theatres~~ in ~~the~~ U.S. ~~markets with 150 screens (in Alabama, Arkansas, California, Colorado, Georgia, Iowa, Kentucky, Michigan, North Dakota, Ohio, Pennsylvania, Tennessee,~~markets.

We performed quantitative impairment evaluations of our goodwill as of March 31, 2020, September 20, 2020 and

~~Table~~ December 31, 2020 and recorded impairment charges of ~~Contents~~

~~Wyoming) which were related to property, net~~$1,276.1 million and ~~$5.7 million on 15 theatres in the International markets with 118 screens (in Italy, Spain, and United Kingdom) which were related to property, net.~~

~~Other Expense (Income):~~

~~Other expense (income).~~ ~~Other expense of $13.4~~$1,030.3 million during the year ended December 31, ~~2019 is~~2020 for our Domestic Theatres and International Theatres reporting units, respectively.

Other expense (income). Otherincome of $87.9 million during the year ended December 31, 2021 was primarily due to ~~$16.6~~$87.1 million in government assistance related to COVID-19, foreign currency transaction gains of ~~expense~~$9.8 million and estimated credit income of $5.7 million related to contingent lease guarantees, partially offset by a loss on extinguishment of $14.4 million related to the ~~repayment~~redemption of ~~indebtedness (See Note 8~~—~~Corporate Borrowings~~$35.0 million principal amount of 15%/17% Cash/PIK Toggle First Lien Secured Notes due 2026 and ~~Finance Lease Obligations in the Notes~~$1.0 million of financing fees related to the ~~Consolidated Financial Statements under Part II, Item 8 hereof~~write-off of unamortized deferred charges on the Odeon Revolving Credit Facility. Other expense of $28.9 million during the year ended December 31, 2020 was primarily due to third party expenses of $39.3 million related to the restructuring of our debt, the increase in fair value of our derivative liability for ~~additional information), $1.5~~the embedded conversion feature in our Convertible Notes due 2026 of $89.4 million, ~~of foreign currency transaction losses, $1.2 million of non-operating net periodic benefit cost,~~ 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 ~~$17.7~~$19.6 million, estimated credit losses related to contingent

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lease guarantees of $15.0 million, partially offset by government assistance related to COVID-19 of $38.6 million and a ~~decrease in fair value~~gain on the extinguishment of our ~~derivative liability for the embedded conversion feature in our Convertible Notes due 2024~~second lien secured debt of ~~$23.5~~$93.6 million. During the year ended December 31, 2018, other expense (income) included $66.4 million of income related to the decrease in the fair value of our derivative liability for the embedded conversion feature in our Convertible Notes due 2024 and $45.0 million of income related to the increase 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 in the Notes to the Consolidated Financial Statements under Part II Item 8 ~~hereof~~thereof for additional information about the components of other expense (income).

Interest expense. Interest expense ~~decreased $1.5~~increased $101.2 million to ~~$340.8~~$458.1 million for the year ended December 31, ~~2019~~2021 compared to ~~$342.3~~$356.9 million during the year ended December 31, ~~2018. The decrease is~~2020 primarily due ~~to the reduction of interest expense of $27.6 million for financing lease obligations as a result of the adoption of ASC 842,~~ to:

●

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

●

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;

●

unamortized discount and deferred charges at the date of conversion of $600 million 2.95% Convertible Notes due 2026 to 44,422,860 common shares on January 27, 2021 following the guidance in ASC 815-15-40-1; and

●

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

partially offset ~~by the issuance of our 2.95% $600.0~~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;

●

borrowings under revolving credit facilities of approximately $325.1 million during the year ended December 31, 2020;

●

the repayment of £89.7 million ~~Convertible Notes due 2024 on September 14, 2018 and our Senior Secured Credit Facility Term Loan due 2026. See Note 3~~—~~Leases in the Notes to the Consolidated Financial Statements under Part II, Item 8 hereof for the impact of ASC 842~~ and €12.8 million outstanding amounts under the Odeon Revolving Credit Facility on February 19, 2021;

●

the conversion of $600 million 2.95% Convertible Notes due 2026 to 44,422,860 common shares on January 27, 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 8—Corporate Borrowings and Finance Lease Obligations in the Notes to the Consolidated Financial Statements under Part II Item 8 ~~hereof~~thereof for additional information about our ~~corporate borrowings.~~indebtedness.

Equity in ~~earnings~~(earnings) loss of non-consolidated entities. Equity in ~~earnings~~(earnings) loss of non-consolidated entities ~~were $30.6~~was $(11.0) million for the year ended December 31, ~~2019~~2021, compared to ~~$86.7~~$30.9 million for the year ended December 31, ~~2018.~~2020. The ~~earnings for the year ended December 31, 2018 includes~~decrease in equity in ~~earnings~~loss of ~~$28.9~~$41.9 million ~~related~~was primarily due to ~~the sale~~decreases in equity in losses from DCIP of ~~our then remaining interest~~$26.8 million, decreases in ~~NCM, $30.1~~impairment charges for equity method investments of $8.6 million ~~related to the Screenvision merger,~~ and ~~a $2.3 million gain~~decreases in equity losses on ~~the sale~~other investments of NCM, Inc. common shares, partially offset by a $16.0 million of impairment loss on 9,492,820 NCM units and 1,000,000 NCM, Inc. common shares held-for-sale and a $1.1 million loss on the return of 915,150 NCM units as a part of the annual common unit adjustment under the NCM exhibitor service agreement in 2018.$6.5 million.

Investment ~~income.~~(income) expense. Investment income was ~~$16.0~~$(9.2) million for the year ended December 31, ~~2019~~2021, compared to ~~$6.2~~investment expense of $10.1 million for the year ended December 31, ~~2018.~~2020. Investment income includes a gain on ~~the~~ sale of ~~our Austria theatres~~the Baltics of ~~$12.9~~$5.5 million ~~for~~during the year ended December 31, ~~2019,~~2021. Investment expense includes an impairment charge of $15.9 million related to investments, partially offset by ~~an impairment loss~~a payment of ~~an investment of $3.6~~$3.7 million ~~and by a reduction of payments received related to~~under the NCM tax receivable agreement ~~of $1.1 million. Investment income for~~during the year ended December 31, ~~2018 also includes a $1.5 million gain on the sale of a joint venture managed theatre.~~2020.

Income tax provision (benefit). The income tax provision (benefit) was ~~$(22.5)~~$(10.2) million and ~~$13.6~~$59.9 million for the ~~years~~year ended December 31, ~~2019~~2021, and December 31, ~~2018, respectively,~~2020, respectively. The decrease in income tax expense is primarily due to the ~~release~~recording of ~~$41.5 million of international~~International valuation ~~allowance previously established~~allowances against deferred tax assets held in Spain of $40.1 million and Germany of $33.1 million during the ~~current year.~~year ended December 31, 2020. See Note 10—Income Taxes in the Notes to the Consolidated Financial Statements under Part II Item 8 ~~hereof~~thereof for further information.

Net ~~earnings (loss).~~loss. Net ~~earnings (loss)~~loss was ~~($149.1)~~$1,269.8 million and ~~$110.1~~$4,589.4 million during the ~~years~~year ended December 31, ~~2019~~2021, and December 31, ~~2018,~~2020, respectively. Net loss during the year ended December 31, ~~2019~~2021 compared to net ~~earnings~~loss for the year ended December 31, 2018 was negatively impacted by higher rent expense, a reduction in income on our derivative asset and liability of $105.6 million, an increase in impairment charges of $70.5 million, lower attendance and average ticket prices which negatively impacted admissions revenue, higher operating expense, and decreased equity in earnings from non-consolidated entities, offset by increases in food and beverage per patron which positively impacted food and beverage revenues, lower income tax provision due to the release of $41.5 million of valuation allowance in the Spain tax jurisdiction in the current year, other revenues, decreases in depreciation and

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ended December 31, 2020 was positively impacted by the increase in attendance as a result of an increase in new film releases in connection with the reopening of theatres in the current year that had been temporarily closed due to the COVID-19 pandemic and lifting of seating restrictions, decreases in impairment of long-lived assets, decreases in depreciation and amortization expense, decreases in rent expense, increases in other income, decreases in equity losses in non-consolidated entities, increases in investment income and decreases in income tax provision, partially offset by higher interest expense, higher general and administrative ~~expenses, increased investment income~~costs and ~~a decline~~an increase in foreign currency translation rates.

Theatrical Exhibition–U.S. Markets

Revenues.Total revenues increased ~~0.2%~~126.9%, or ~~$10.0~~$1,049.1 million, during the year ended December 31, ~~2019~~2021, compared to the year ended December 31, ~~2018.~~2020. Admissions revenues ~~decreased 2.2%~~increased 123.2%, or ~~$53.3~~$561.0 million, during the year ended December 31, ~~2019~~2021, compared to the year ended December 31, ~~2018,~~2020, primarily due to a ~~2.1% decrease~~96.1% increase in ~~attendance.~~attendance and a 13.8% increase in average ticket price. The ~~decrease~~increase in attendance was primarily due to the ~~popularity~~COVID-19 pandemic impact on the prior year, which resulted in the temporary suspension of ~~films released~~operations at our theatres in U.S. markets, ~~as compared~~deterred customers from attending our theatres when we resumed operations, and prompted film distributors to delay or alternatively distribute films. The increase in average ticket price was primarily due to strategic pricing initiatives put in place over the ~~same period a~~prior year ~~ago.~~and increases in IMAX and Premium content and lower frequency on our A-List subscription program.

Food and beverage revenues increased ~~2.0%~~161.9%, or ~~$26.8~~$418.6 million, during the year ended December 31, ~~2019~~2021, compared to the year ended December 31, ~~2018,~~2020, primarily due to the increase in attendance and food and beverage ~~revenues~~ per ~~patron of 4.2%, partially offset by the decrease in attendance.~~patron. Food and beverage ~~revenues~~ per patron increased ~~as a result~~33.6% from $5.56 to $7.43 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 and ~~our food and beverage initiatives including our Feature Fare menu and theatre renovations.~~reduced loyalty program penetration.

Total other theatre revenues increased ~~14.6%~~61.7%, or ~~$36.5~~$69.5 million, during the year ended December 31, ~~2019~~2021, compared to the year ended December 31, ~~2018,~~2020, primarily due to ~~increased~~increases in ticket ~~fee revenues of $28.7 million or 29.2%, increases in~~fees, income from gift cards and package tickets ~~theatre rentals~~ and ~~merchandise sales.~~screen advertising due to the increase in attendance.

Operating costs and expenses. Operating costs and expenses ~~increased 4.2%, or $157.5~~decreased $892.7 million, during the year ended December 31, ~~2019~~2021, compared to the year ended December 31, ~~2018.~~2020, primarily due to the $1,443.0 million impairment of long-lived assets, definite-lived intangible assets and goodwill charge recorded during the year ended December 31, 2020. Film exhibition costs ~~decreased 0.9%~~increased 106.5%, or ~~$11.6~~$237.6 million, during the year ended December 31, ~~2019~~2021, compared to the year ended December 31, ~~2018, primarily~~2020, due to the increase in admissions revenues, partially offset by a decrease in film exhibition costs as a percentage of admissions revenues. As a percentage of admissions revenues, film exhibition costs were ~~54.9% and 54.2%~~45.3% for the ~~years~~year ended December 31, ~~2019~~2021, and 49.0% for the year ended December 31, ~~2018, respectively.~~2020. The decrease in film exhibition cost percentage is primarily due to the concentration of box office revenues in lower grossing films and library content in the current year, which typically results in lower film exhibition costs. Additionally, lower film exhibition costs were paid on films with shorter exclusive theatrical windows.

Food and beverage costs increased ~~1.9%~~62.3%, or ~~$3.6~~$36.8 million, during the year ended December 31, ~~2019~~2021, compared to the year ended December 31, ~~2018,~~2020. The increase in food and beverage costs was primarily asdue to the ~~result of increases~~increase in food and beverage revenues. As a percentage of food and beverage revenues, food and beverage costs were ~~14.4% for both the year ended December 31, 2019 and~~14.2% for the year ended December 31, ~~2018.~~2021, and 22.9% for the year ended December 31, 2020. Food and beverage ~~gross profit per patron increased 4.2% and is calculated as food and beverage revenues less food and beverage~~ costs ~~divided by attendance.~~included $17.5 million of charges for obsolete inventory during the year ended December 31, 2020, due to the suspension of theatre operations.

As a percentage of revenues, operating expense was ~~30.2%~~44.5% for the year ended December 31, ~~2019~~2021, and ~~29.0% during~~71.2% for the year ended December 31, ~~2018.~~2020. Rent expense ~~increased 21.2%~~decreased 5.6%, or ~~$123.8~~$36.5 million, during the year ended December 31, ~~2019~~2021, compared to the year ended December 31, ~~2018,~~2020, due primarily to theatre closures, declines in rent expense due to the ~~prior year modification~~impairment of a theatre lease which reduced rent by $35.0 million in 2018 and by the adoption of ASC 842 for lease accounting where approximately $44.0 million of principal and interest payments were recorded as rent expenseright-of-use assets during ~~the year~~years ended December 31, 2019 ~~related~~and December 31, 2020 that reduce the amounts of right-of-use assets that are amortized to ~~previously classified build-to-suit financing lease obligations, $7.2 million of deferred gain amortization for sale leaseback transactions that previously reduced~~ rent expense, ~~in 2018 was eliminated~~ and ~~$18.3 million of amortization of certain intangible assets was reclassified~~cash rent abatements from ~~depreciation and amortization to rent expense.~~landlords. See Note 3—3—Leases in the Notes to the Consolidated Financial Statements under Part II Item 8 ~~hereof~~thereof for further information on the impact of ~~ASC 842.~~

~~General~~COVID-19 on leases and ~~Administrative Expense:~~rent obligations of approximately $252.4 million that have been deferred to future years as of December 31, 2021.

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Merger, acquisition, and other costs. Merger, acquisition, and other costs were ~~$6.5~~$9.0 million during the year ended December 31, ~~2019~~2021, compared to ~~$16.8~~$10.2 million during the year ended December 31, ~~2018, primarily due to expenses incurred in connection with the Nordic acquisition in the prior year.~~2020.

Other. Other general and administrative expense ~~decreased $26.2~~increased 62.0% or $60.6 million during the year ended December 31, ~~2019~~2021, compared to the year ended December 31, ~~2018,~~2020, primarily due to a $9.5 million decrease in stock based compensation expense where we determined that achieving the net profit performance thresholds was improbable and reversed previously recorded expense for certain stock awards granted in 2018 and 2019, a reduction in legal expenses of $4.5 million and a $6.3 million decreaseincreases in bonus expense ~~due~~and stock-based compensation expense as a result of improvements in expected annual performance compared to ~~declines in number~~annual targets and the modification and acceleration of ~~participants and expected performance.~~

~~Depreciation and amortization.~~ ~~Depreciation and amortization decreased $43.6 million~~vesting of awards during the current and prior year ~~ended December 31, 2019 compared to the year ended December 31, 2018, primarily due to the adoption of ASC 842 for lease~~

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~~accounting where the financing lease buildings~~ and ~~related depreciation were eliminated.~~increases in insurance costs and professional expenses. See Note 3—~~Leases~~9—Stockholders’ Equity in the Notes to the Consolidated Financial Statements under Part II Item 8 ~~hereof~~thereof for additional information about stock-based compensation expense.

Depreciation and amortization. Depreciation and amortization decreased 14.2% or $53.3 million during the ~~impact of ASC 842.~~year ended December 31, 2021, compared to the year ended December 31, 2020, primarily due to lower depreciation expense on theatres impaired during years ended December 31, 2019 and December 31, 2020.

Impairment of long-lived ~~assets.~~assets, definite and indefinite-lived intangible assets, and goodwill. During the year ended December 31, ~~2019,~~2021, we recognized non-cash impairment losses of ~~$76.6~~$61.3 million on 4077 theatres in the U.S. markets with ~~512~~805 screens (in Alabama, Arkansas, California, Colorado, Connecticut, District of Columbia, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Minnesota, Mississippi, Missouri, Montana, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Utah, West Virginia, and Wisconsin) which were related to property, net, operating lease right-of-use assets, net and other long-term assets.
During the year ended December 31, 2020, we recognized non-cash impairment losses of $152.5 million on 101 theatres in the U.S. markets with 1,139 screens (in Alabama, Arizona, Arkansas, California, Colorado, District of Columbia, Florida, ~~Iowa,~~Georgia, Illinois, Indiana, Iowa, Kentucky, ~~Louisiana,~~Massachusetts, Michigan, Minnesota, Missouri, Montana, Nebraska, New Hampshire, New Jersey, New York, North Carolina, North Dakota, ~~Nebraska, New York,~~Ohio, Oklahoma, Pennsylvania, South Dakota, Tennessee, Texas, ~~Virginia,~~Washington, Wisconsin and Wyoming) which were related to property, net, operating lease right-of-use assets, net and other long-term assets. ~~During the year ended~~
We performed quantitative impairment evaluations of our definite-lived intangible assets as of March 31, 2020, September 30, 2020 and December 31, ~~2018, we recognized non-cash~~2020 and recorded impairment ~~losses~~charges of $8.1 million on 13 theatres in the U.S. markets with 150 screens (in Alabama, Arkansas, California, Colorado, Georgia, Iowa, Kentucky, Michigan, North Dakota, Ohio, Pennsylvania, Tennessee, and Wyoming) which were related to property, net.
~~Other Expense (Income):~~
~~Other expense (income).~~ ~~Other expense of $13.3~~$14.4 million during the year ended December 31, ~~2019 is~~2020.
We performed quantitative impairment evaluations of our goodwill as of March 31, 2020, September 30, 2020 and December 31, 2020 and recorded impairment charges of $1,276.1 million for our Domestic Theatres reporting unit.
Other expense. Otherexpense of $9.2 million during the year ended December 31, 2021, was primarily due to ~~$16.6~~a loss on extinguishment of $14.4 million ~~of expense~~ related to the ~~repayment~~redemption of ~~indebtedness (See Note 8~~—~~Corporate Borrowings and Finance Lease Obligations~~$35.0 million principal amount of 15%/17% Cash/PIK Toggle First Lien Secured Notes due 2026, partially offset by $5.6 million in government assistance related to COVID-19. Other expense of $61.3 million during the ~~Notes~~year ended December 31, 2020 was primarily due to third party expenses of $39.3 million related to the ~~Consolidated Financial Statements under Part II, Item 8 hereof~~restructuring of our debt, the increase in fair value of our derivative liability for ~~additional information), $0.9~~the embedded conversion feature in our Convertible Notes due 2026 of $89.4 million, ~~of foreign currency transaction losses and $1.2 million of non-operating net periodic benefit cost,~~ 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 ~~$17.7~~$19.6 million, and estimated credit losses related to contingent lease guarantees of $9.2 million, partially offset by government assistance related to COVID-19 of $1.8 million and a ~~decrease in fair value~~gain on the extinguishment of our ~~derivative liability for the embedded conversion feature in our Convertible Notes due 2024~~second lien secured debt of ~~$23.5~~$93.6 million. During the year ended December 31, 2018, other expense (income) included $66.4 million of income related to the decrease in fair value of our derivative liability for the embedded conversion feature in our Convertible Notes due 2024 and $45.0 million of income related to increase in fair value of 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 in the Notes to the Consolidated Financial Statements under Part II Item 8 ~~hereof~~thereof for additional information about the components of other ~~expense (income).~~expense.
Interest expense. Interest expense increased ~~$17.5~~$40.7 million to ~~$332.6~~$387.9 million for the year ended December 31, ~~2019~~2021, compared to ~~$315.1~~$347.2 million ~~for~~during the year ended December 31, ~~2018~~2020, primarily due ~~to the interest expense related to our 2.95% $600.0 million Convertible Notes due 2024 issued on September 14, 2018 and our Senior Secured Credit Facility Term Loan due 2026 (see~~to:
● the issuance of $500 million of 10.5% First Lien Notes due 2025 on April 24, 2020;
● 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
● the conversion of $600 million 2.95% Convertible Notes due 2026 to 44,422,860 common shares on January 27, 2021, that resulted in the write-off to interest expense of $70.0 million of unamortized discount and deferred charges at the date of conversion following the guidance in ASC 815-15-40-1,

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partially offset by:

●

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

●

borrowings under revolving credit facilities of approximately $212.2 million during the year ended March 31, 2020;

●

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 8—Corporate Borrowings and Finance Lease Obligations in the Notes to the Consolidated Financial Statements under Part II Item 8 ~~hereof~~thereof for additional ~~information), partially offset by the reduction of interest expense of $13.2 million for financing lease obligations as a result of the adoption of ASC 842. See Note 3~~—~~Leases in the Notes to the Consolidated Financial Statements under Part II, Item 8 hereof for the impact of ASC 842.~~information about our indebtedness.

Equity in ~~earnings~~(earnings) loss of non-consolidated entities. Equity in ~~earnings~~(earnings) loss of non-consolidated entities ~~were $29.1~~was $(13.7) million for the year ended December 31, ~~2019~~2021, compared to ~~$81.5~~$17.6 million for the year ended December 31, ~~2018. Equity~~2020. The decrease in ~~earnings for the year ended December 31, 2018 includes~~ equity in ~~earnings~~loss of ~~$28.9~~$31.3 million ~~related~~was primarily due to ~~the sale~~decreases in equity in losses from DCIP of ~~our then-remaining interest~~$26.8 million and decreases in ~~NCM, $30.1 million related to the Screenvision merger and a $2.3 million gain~~equity losses on ~~the sale~~other investments of NCM, Inc. common shares, partially offset by a $16.0 million impairment loss on 9,492,820 NCM units and 1,000,000 NCM, Inc. common shares held-for-sale and a $1.1 million loss on the return of 915,150 NCM units as a part of the annual common unit adjustment under the NCM exhibitor service agreement in 2018.$4.5 million.

Investment ~~income.~~(income) expense. Investment income was ~~$3.0~~$(3.7) million for the year ended December 31, ~~2019,~~2021, compared to ~~$6.2~~investment expense of $10.2 million for the year ended December 31, ~~2018.~~2020. Investment ~~income~~expense includes ~~a loss on~~ impairment charges of ~~an investment of $3.6~~$15.9 million related to investments, partially offset by ~~payments received related to~~a payment of $3.7 million under the NCM tax receivable agreement ~~of $4.3 million and $5.4 million for~~during the ~~years~~year ended December 31, ~~2019~~2020.

Income tax provision (benefit). The income tax provision (benefit) was $(9.4) million and ~~December 31, 2018, respectively. Investment income~~$2.4 million for the year ended December 31, ~~2018 also includes a $1.5 million gain on the sale of a joint venture managed theatre.~~

~~Income tax provision.~~ ~~The income tax provision was $11.9 million and $16.1 million for the years ended December 31, 2019~~2021, and December 31, ~~2018,~~2020, respectively. See Note 10—Income Taxes in the Notes to the Consolidated Financial Statements under Part II Item 8 ~~hereof~~thereof for further information.

Net ~~earnings (loss).~~loss. Net ~~earnings (loss)~~loss was ~~($241.4)~~$1,049.0 million and ~~$97.0~~$3,059.2 million during the ~~years~~year ended December 31, ~~2019~~2021, and December 31, ~~2018,~~2020, respectively. Net loss during the year ended December 31, ~~2019~~2021 compared to net loss for the year ended December 31, ~~2018~~2020 was ~~negatively~~positively impacted by ~~higher rent expense,~~the increase in attendance as a ~~reduction in income on our~~

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~~derivative asset and liability of $105.6 million,~~ an increase in new film releases in connection with the reopening of theatres in the current year that had been temporarily closed due to the COVID-19 pandemic and lifting of seating restrictions, decreases in impairment ~~charges~~ of $68.5 million, lower attendance which negatively impacted admissions revenue, higher operating expense, decreased equity in earnings from non-consolidated entities, offset by increases in food and beverage per patron which positively impacted food and beverage revenues, other revenues,long-lived assets, decreases in depreciation and amortization expense, decreases in rent expense decreases in other expense, decreases in equity losses in non-consolidated entities, increases in investment income, decreases in income tax provision, partially offset by higher interest expense and higher general and administrative ~~expenses, increased investment income and lower income tax provision.~~costs.

Theatrical Exhibition - International Markets

Revenues.Total revenues increased ~~$0.2~~56.9%, or $236.4 million, during the year ended December 31, ~~2019~~2021, compared to the year ended December 31, ~~2018.~~2020. Admissions revenues ~~decreased 3.2%~~increased 47.2%, or ~~$30.4~~$121.1 million, during the year ended December 31, ~~2019~~2021, compared to the year ended December 31, ~~2018,~~2020, primarily due to a ~~decline~~30.3% increase in attendance and a 13.0% increase in average ticket ~~price of 5.9%, partially offset by an increase in attendance of 2.8%. The decrease in average ticket price was primarily due to decreases in foreign currency translation rates.~~price. The increase in attendance was primarily the result of an increase in new film releases in connection with the reopening of theatres in the current year that had been temporarily closed due to the ~~popularity~~COVID-19 pandemic and lifting of ~~films released~~seating restrictions. The increase in average ticket price includes the impact of the increase in foreign currency translation rates and reflects minimal volumes of attendance in the ~~period as compared to the same period a year ago.~~prior year.

Food and beverage revenues increased ~~6.1%,~~73.4% or ~~$21.3~~$76.3 million, during the year ended December 31, ~~2019~~2021, compared to the year ended December 31, ~~2018,~~2020, primarily due to the ~~overall~~ increase in attendance and food and beverage per patron. Food and beverage per patron increased 32.9% from $3.62 to $4.81 and includes the impact of ~~3.5%, including declines~~the increase in foreign currency translation ~~rates, and the increase in attendance.~~rates.

Total other theatre revenues increased ~~$9.3~~70.7%, or $39.0 million, during the year ended December 31, ~~2019~~2021, compared to the year ended December 31, ~~2018,~~2020, primarily due to increases in ticket fees, ~~screen advertising, theatre rentals and~~ income from gift cards and package tickets, ~~partially offset by a decline~~screen advertising and theatre rentals due to the increase in attendance and the increase in foreign currency translation rates.

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Operating costs and expenses. Operating costs and expenses decreased ~~1.3%, or $18.3~~$994.5 million, during the year ended December 31, ~~2019~~2021, compared to the year ended December 31, ~~2018.~~2020, primarily due to a $1,070.9 million impairment of long-lived assets, indefinite-lived intangible assets and goodwill charge, recorded during the year ended December 31, 2020, and an increase in foreign currency translation rates. Film exhibition costs increased ~~$0.5~~47.5%, or $47.4 million, during the year ended December 31, ~~2019~~2021, compared to the year ended December 31, ~~2018, primarily~~2020, due to anthe increase in ~~film terms.~~admissions revenues. As a percentage of admissions revenues, film exhibition costs were ~~42.4%~~38.9% for the ~~year~~years ended December 31, ~~2019~~2021 and ~~41.0% for the year ended December 31, 2018.~~2020.

Food and beverage costs increased ~~$4.2~~41.4%, or $12.3 million, during the year ended December 31, ~~2019~~2021, compared to the year ended December 31, ~~2018.~~2020. The increase in food and beverage costs was primarily due to the increase in food and beverage revenues. As a percentage of food and beverage revenues, food and beverage costs were ~~22.8%~~23.3% for the year ended December 31, ~~2019~~2021, and ~~23.0%~~28.6% for the year ended December 31, ~~2018.~~2020. Food and beverage ~~gross profit per patron increased 3.5% and is calculated as food and beverage revenues less food and beverage~~ costs ~~divided by attendance.~~included $5.1 million of charges for obsolete inventory during the year ended December 31, 2020, due to the suspension of theatre operations.

As a percentage of revenues, operating expense was ~~32.5%~~47.2% for the year ended December 31, ~~2019~~2021, and ~~34.0% during~~64.3% for the year ended December 31, ~~2018.~~2020. Rent expense ~~increased $46.2~~decreased 8.4%, or $19.6 million, during the year ended December 31, ~~2019~~2021, compared to the year ended December 31, ~~2018~~2020, due primarily to cash rent abatements from landlords, declines in rent expense due to the ~~adoption~~impairment of ~~ASC 842 for lease accounting where approximately $39.6 million of prior year principal and interest payments were recorded as rent expense~~right-of-use assets during the ~~year~~years ended December 31, 2019 ~~related to build-to-suit financing lease obligations~~ and ~~$7.4 million~~December 31, 2020 that reduce the amounts of ~~amortization of certain intangible~~right-of-use assets ~~was reclassified from depreciation and amortization~~that are amortized to rent expense, and theatre closures, partially offset by ~~a decline~~the increase in foreign currency translation rates. See Note 3—3—Leases in the Notes to the Consolidated Financial Statements under Part II Item 8 ~~hereof~~thereof for further information on the impact of ~~ASC 842.~~COVID-19 on leases and rent obligations of approximately $62.7 million that have been deferred to future years as of December 31, 2021.
~~General and Administrative Expense:~~
Merger, acquisition, and other costs. Merger, acquisition, and other costs ~~decreased $5.5~~were $4.7 million during the year ended December 31, ~~2019~~2021, compared to $14.4 million during the year ended December 31, 2020, primarily due to legal and professional costs related to strategic planning in the prior year.
Other. Other general and administrative expense increased 15.8% or $9.3 million during the year ended December 31, 2021, compared to the year ended December 31, ~~2018,~~2020, primarily due to ~~expenses incurred~~increases in ~~connection with~~bonus expense and stock-based compensation expense as a result of improvements in expected annual performance compared to annual targets and the ~~Nordic acquisition in the prior year.~~
~~Other.~~ ~~Other general~~modification and ~~administrative expense decreased $0.1 million~~acceleration of vesting of awards during the current and prior year ~~ended December 31, 2019, compared to the year ended December 31, 2018.~~
~~Depreciation~~ and ~~amortization.~~ Depreciation and amortization decreased $44.2 million during the year ended December 31, 2019 compared to the year ended December 31, 2018, primarily due to the adoption of ASC 842 for lease accounting where the financing lease buildings and depreciation were eliminated and a declineincreases in foreign currency translation rates. See Note 3—~~Leases~~9—Stockholders’ Equity in the Notes to the Consolidated Financial Statements under Part II Item 8 ~~hereof~~thereof for additional information about stock-based compensation expense.
Depreciation and amortization. Depreciation and amortization decreased 16.2% or $20.0 million during the ~~impact of ASC 842.~~year ended December 31, 2021, compared to the year ended December 31, 2020, primarily due to lower depreciation expense on theatres impaired in years ended December 31, 2019 and December 31, 2020, partially offset by the increase in foreign currency translation rates.

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During the year ended December 31, ~~2018,~~2020, we recognized non-cash impairment losses of ~~$5.7~~$25.4 million on 1537 theatres in the International markets with ~~118~~340 screens (in Finland, Germany, Ireland, Italy, Norway, Portugal, Spain, Sweden, and ~~United Kingdom)~~UK), which were related to property, net, and operating lease right-of-use assets, net.

We performed quantitative impairment evaluations of our indefinite-lived intangible assets related to the Odeon and Nordic trade names as of March 31, 2020, September 30, 2020 and December 31, 2020 and recorded impairment charges of $15.2 million related to these assets during the year ended December 31, 2020.

We performed a quantitative impairment evaluation of our goodwill as of March 31, 2020, September 30, 2020 and December 31, 2020 and recorded impairment charges of $1,030.3 million for our International Theatres reporting unit during the year ended December 31, 2020.

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Other ~~Expense (Income):~~

~~Other expense (income).~~income. Other ~~expense was $0.1~~income of $97.1 million during the year ended December 31, ~~2019 compared~~2021, was primarily due to ~~$0.6~~$81.5 million ~~for~~in government assistance related to COVID-19, $9.8 million of foreign currency transaction gains and estimated credit income of $6.0 million related to contingent lease guarantees. Other income of $32.4 million during the year ended December 31, ~~2019.~~ 2020, was primarily due to the international government assistance related to COVID-19 of $36.8 million, partially offset by estimated credit losses related to contingent lease guarantees of $5.8 million. See Note 1—The Company and Significant Accounting Policies in the Notes to the Consolidated Financial Statements under Part II Item 8 ~~hereof~~thereof for additional information about the components of other expense (income).

Interest expense. Interest expense ~~decreased $19.0~~increased $60.5 million to $70.2 million for the year ended December 31, ~~2019~~2021 compared to $9.7 million during the year ended December 31, ~~2018,~~2020, primarily due ~~to the reduction of interest expense of $14.4 million for financing lease obligations as a result of the adoption of ASC 842 for lease accounting and a decline in foreign currency translation rates.~~ to:

●

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

partially offset by:

●

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

See Note 3—~~Leases~~8—Corporate Borrowings and Finance Lease Obligations in the Notes to the Consolidated Financial Statements under Part II Item 8 ~~hereof~~thereof for ~~the impact of ASC 842.~~additional information about our indebtedness.

Equity in ~~earnings~~loss of non-consolidated entities. Equity in ~~earnings~~loss of non-consolidated entities ~~were $1.5~~was $2.7 million for the year ended December 31, ~~2019~~2021, compared to ~~$5.2~~$13.3 million for the year ended December 31, ~~2018.~~2020.

Investment ~~income.~~(income) expense. Investment income ~~increased $13.0~~was $(5.5) million ~~primarily due~~for the year ended December 31, 2021, compared to investment income of $(0.1) million for the year ended December 31, 2020. Investment income includes a gain on ~~the~~ sale of ~~our Austria theatres.~~the Baltics of $5.5 million during the year ended December 31, 2021.

Income tax ~~benefit.~~provision (benefit). The income tax ~~benefit~~provision (benefit) was ~~$34.4~~$(0.8) million and ~~$2.5~~$57.5 million for the ~~years~~year ended December 31, ~~2019~~2021, and December 31, ~~2018, respectively,~~2020, respectively. The decrease in income tax expense is primarily due to the ~~release~~recording of ~~$41.5 million of international~~International valuation ~~allowance previously established~~allowances against deferred tax ~~asset~~assets held in Spain of $40.1 million and Germany of $33.1 million during the ~~current year.~~ year ended December 31, 2020. See Note 10—Income Taxes in the Notes to the Consolidated Financial Statements inunder Part II Item 8 ~~hereof~~thereof for further information.

Net ~~earnings.~~loss. Net ~~earnings increased $79.2~~loss was $220.8 million and $1,530.2 million during the year ended December 31, ~~2019~~2021, and December 31, 2020, respectively. Net loss during the year ended December 31, 2021 declined compared to net loss for the year ended December 31, 2020 due to increases in attendance as a result of ~~increased income tax benefit~~an increase in new film releases in connection with the reopening of theatres in the current year that had been temporarily closed due to the ~~release~~COVID-19 pandemic and lifting of ~~valuation allowance~~seating restrictions, decreases in ~~the Spanish tax jurisdiction, higher attendance and food and beverage per patron, increased investment income, lower~~impairment of long-lived assets, decreases in depreciation and amortization ~~reduced operating expenses, lower merger, acquisition~~expense, increases in other income, increases in investment income, decreases in equity losses in non-consolidated entities, decreases in income tax provision, decreases in rent expense, partially offset by higher interest expense, higher general and ~~other~~administrative costs and ~~lower interest expense, offset by a decline~~an increase in foreign currency translation ~~rates and higher rent expense.~~rates.

Results of Operations—For the Year Ended December 31, ~~2018,~~2020, Compared to the Year Ended December 31, ~~2017~~2019

For a comparison of our results of operations for the year ended December 31, ~~2018,~~2020, compared to the year ended December 31, ~~2017,~~2019, see ““Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our annual report on Form 10-K for the year ended December 31, ~~2018,~~2020, filed with the Securities and Exchange Commission on March ~~1, 2019~~,12, 2021, which is incorporated herein by reference.

Liquidity and Capital Resources—For the Year Ended December 31, ~~2019,~~2021, Compared to the Year Ended December 31, ~~2018~~2020

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. As operations are beginning to resume, we are starting to see this float resume. Film distributors generally release the films which they

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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~~surplus (deficits) (excluding restricted cash) as of December 31, ~~2019~~2021 and December 31, ~~2018~~2020 of ~~$1,270.6~~$54.6 million and ~~$557.5~~$(1,104.6) million, respectively. As of December 31, ~~2019~~2021 and December 31, ~~2018,~~2020, working capital included ~~$585.8~~$605.2 million and ~~$0,~~$583.6 million, respectively, of operating lease liabilities and ~~$449.2~~$408.6 million and ~~$414.8~~$405.4 million, respectively, of deferred revenues. ~~We have the ability to borrow under our Senior Secured Credit Facility to meet~~

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~~obligations as they come due (subject to limitations on the incurrence of indebtedness in our various debt instruments). As of~~At December 31, ~~2019,~~2021, we had ~~$215.0~~$209.1 million ~~available for~~unused borrowing capacity, net of letters of credit, under our $225.0 million Senior Secured Revolving Credit Facility. As of December 31, 2020, we had borrowed $212.2 million (the full availability net of standby letters of credit) under our $225.0 million Senior Secured Revolving Credit Facility. We also ~~maintain~~maintained a revolving credit facility due February 14, 2022 at our Odeon subsidiary (the “Odeon Revolving Credit Facility”). This facility was replaced on February 15, 2021 by the Odeon Term Loan Facility. Reference is made to Note 8—Corporate Borrowings and Finance Lease Obligations in the Notes to the Consolidated Statements under Part II, Item 8 thereof, for further information about the Odeon Term Loan Facility. As of December 31, 2020, we had borrowed $120.8 million (the full availability net of standby letters of credit) under our £100.0 million Odeon Revolving Credit Facility ($~~131.2~~136.3 million based on the foreign currency translation rate of ~~1.312~~1.3628 on December 31, 2019) revolving credit facility at our Odeon subsidiary. As of December 31, 2019, we had issued £10.8 million ($14.2 million) standby letters of credit in the ordinary course of business, leaving £89.2 million ($117.0 million) available for borrowing (subject to limitations on the incurrence of indebtedness in our various debt instruments)2020). Reference is made to Note 8—Corporate Borrowings and Finance Lease Obligations in the Notes to Consolidated Financial Statements under Part II, Item 8 ~~hereof~~thereof, for further information about our outstanding indebtedness.
~~We believe that cash generated from operations, existing~~As of December 31, 2021, we had cash and cash equivalents ~~availability under our Revolving Credit Facility and Odeon’s revolving credit facility agreement will be sufficient~~of approximately $1.6 billion. In response to ~~fund operations, planned capital expenditures, and dividends and repurchases~~the COVID-19 pandemic, we adjusted certain elements of our ~~common stock~~business strategy and ~~outstanding debt currently~~took significant steps to preserve cash. We are continuing to take significant measures to further strengthen our financial position and ~~for at least the next 12 months and enable us to maintain compliance with all financial debt covenants.~~
~~Each indenture relating~~enhance our operations, by eliminating non-essential costs, including reductions to our ~~notes (Convertible Notes due 2024, Sterling Notes due 2024, Notes due 2025, Notes due 2026,~~variable costs and ~~Notes due 2027) allows us to incur specified permitted indebtedness (as defined therein) without restriction. Each indenture also allows us to incur any amount~~elements of ~~additional~~our fixed cost structure, introducing new initiatives, and optimizing our theatrical footprint.
Additionally, we enhanced liquidity through debt as long as we can satisfy the coverage ratio of each indenture, after giving effect to the indebtedness on a pro forma basis. Under the indentures for the Convertible Notes due 2024, Sterling Notes due 2024, Notes due 2025, Notes due 2026issuances, debt exchanges and Notes due 2027, at December 31, 2019, AMC could borrow approximately $332.0 million discussed above, available under our Revolving Credit Facility and Odeon’s revolving credit facility. If we cannot satisfy the coverage ratios of the indentures, generally we can borrow an additional amount under our Senior Secured Credit Facility.
~~As of December~~ ~~31, 2019, we were in compliance with all financial debt covenants.~~
equity sales. See Note 8—Corporate Borrowings and Finance Lease Obligations, Note 9—Stockholders’ Equity, and Note 16—Subsequent Events in the Notes to ~~our~~the Consolidated Financial Statements inunder Part II, Item 8 ~~of hereof~~thereof, for further ~~information~~information.
The table below summarizes net increase (decrease) in cash equivalents and restricted cash by quarter for the year ended December 31, 2021:

Three Months Ended

Year Ended

March 31,

June 30,

September 30,

December 31,

December 31,
(In millions)

2021

2021

2021

2021

2021
Cash flows from operating activities:

Net cash provided by (used in) operating activities

$
(312.9)

$
(233.8)

$
(113.9)

$
46.5

$
(614.1)
Cash flows from investing activities:

Net cash provided by (used in) investing activities

(16.0)

13.5

(28.8)

(36.9)

(68.2)
Cash flows from financing activities:

Net cash provided by (used in) financing activities

854.7

1,212.2

(48.3)

(27.9)

1,990.7
Effect of exchange rate changes on cash and cash equivalents and restricted cash

(5.1)

5.6

(8.4)

(1.6)

(9.5)
Net increase (decrease) in cash and cash equivalents and restricted cash

520.7

997.5

(199.4)

(19.9)

1,298.9
Cash and cash equivalents and restricted cash at beginning of period

321.4

842.1

1,839.6

1,640.2

321.4
Cash and cash equivalents and restricted cash at end of period

$
842.1

$
1,839.6

$
1,640.2

$
1,620.3

$
1,620.3

Our net cash used in operating activities improved by $79.1 million during the three months ended June 30, 2021 compared to the three months ended March 31, 2021, $119.9 million during the three months ended September 30, 2021 compared to the three months ended June 30, 2021, and $160.4 million during the three months ended December 31, 2021 compared to the three months ended September 30, 2021. This is primarily attributable to continued increases in attendance and industry box office revenues during the year ended December 31, 2021. We will continue to repay rent amounts that were deferred during the pandemic, which will increase our cash outflows from operating activities. See

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Note 3—Leases in the Notes to the Consolidated Financial Statements under Part II, Item 8 thereof, for a summary of the estimated future repayment terms for the remaining $315.1 million of rentals that were deferred during the COVID-19 pandemic.

Our net cash provided by (used in) investing activities included:

●

$(11.9) million of capital expenditures and $(9.3) million of investments in non-consolidated entities, partially offset by proceeds from the disposition of the Baltic theatres of $3.8 million and proceeds from the disposition of long-term assets of $1.4 million during the three months ended March 31, 2021;

●

$31.4 million of proceeds from the disposition of the Baltic theatres, partially offset by $(17.9) million of capital expenditures during the three months ended June 30, 2021;

●

$(24.1) million of capital expenditures, $(5.8) million related to the acquisition of assets at two theatres and $(1.0) million of transaction costs related to the Baltic theatres sale, partially offset by $2.0 million of proceeds from disposition of long-term assets during the three months ended September 30, 2021; and

●

$(38.5) million of capital expenditures and $(2.4) million related to the acquisition of assets at two theatres, partially offset by $4.5 million of proceeds from disposition of long-term assets during the three months ended December 31, 2021.

Our net cash provided by (used in) financing activities included:

●

Net proceeds from our debt and equity issuances of $861.9 million during the three months ended March 31, 2021;

●

Net proceeds from our equity issuances of $1,219.6 million during the three months ended June 30, 2021;

●

Principal and premium payments of $(40.3) million related to an optional redemption of our First Lien Toggle Notes due 2026 during the three months ended September 30, 2021; and

●

Taxes paid for restricted stock withholdings of $(19.1) million during the three months ended December 31, 2021.

We believe our existing cash and cash equivalents, together with cash generated from operations, will be sufficient to fund our operations, satisfy our obligations, including cash outflows for increased rent and planned capital expenditures, and comply with minimum liquidity and financial covenant requirements under our debt covenants related to borrowings pursuant to the Senior Secured Revolving Credit Facility and Odeon Term Loan Facility for at least the next twelve months. In order to achieve net positive operating cash flows and long-term profitability, we believe we will need to continue to increase attendance levels significantly compared to 2021 and achieve levels in line with pre COVID-19 attendance. We believe the global re-opening of our theatres, the anticipated volume of titles available for theatrical release, and the anticipated broad appeal of many of those titles will support increased attendance levels. We believe that the sequential increases in attendance experienced each quarter as 2021 progressed are positive signs of continued demand for the moviegoing experience. However, there remain significant risks that may negatively impact attendance, including a resurgence of COVID-19 related restrictions, potential movie-goer reluctance to attend theatres due to concerns about COVID-19 variant strains, movie studios release schedules and direct to streaming or other changing movie studio practices.

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Suspension Period ending March 31, 2023, as amended, under the Senior Secured Revolving Credit Facility, and £32.5 million (approximately $44 million) of which is required under the Odeon Term Loan Facility. Following the expiration of the Extended Covenant Suspension Period ending March 31, 2023, we will be subject to the financial covenant under the Senior Secured Revolving Credit Facility as of the last day of each quarter on which the aggregate principal amount of revolving loans, and letters of credit (excluding letters of credit that are cash collateralized) in excess of $25 million, outstanding under the Senior Secured Revolving Credit Facility exceeds 35% of the principal amount of commitments under the Senior Secured Revolving Credit Facility then in effect, beginning with the quarter ending June 30, 2023. We currently expect we will be able to comply with this financial covenant, however, we do not anticipate the need to borrow under the Senior Secured Revolving Credit Facility during the next twelve months. See Note 8—Corporate Borrowings and Finance Lease Obligations for further information. Our liquidity needs thereafter will depend, among other things, on the timing of movie releases and our ability to generate cash from operations.

We realized $1.2 billion of 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.

Cash Flows from Operating Activities

~~Cash flows provided by~~Net cash used in operating activities, as reflected in the consolidated statements of cash flows, were ~~$579.0~~$614.1 million and ~~$523.2~~$1,129.5 million during the years ended December 31, ~~2019~~2021 and December 31, ~~2018,~~2020, respectively. The ~~increase~~decrease in cash flows ~~provided by~~used in operating activities was primarily due to ~~increases in accounts payable, partially offset by decreased~~increased attendance levels, ~~and average ticket prices~~ which ~~drove lower~~resulted in improved operating results ~~and~~during the adoption of ASC 842, which reclassified approximately $56.0 million of principal payments under build-to-suit finance lease obligations from net cash used in financing activities to net cash used in operating activities during calendar 2019.year ended December 31, 2021.

Cash Flows from Investing Activities

~~Cash~~Net cash used in investing activities, as reflected in the consolidated statements of cash flows, were ~~$516.1~~$68.2 million and ~~$317.2~~$154.6 million during the years ended December 31, ~~2019~~2021 and December 31, ~~2018,~~2020, respectively. Cash outflows from investing activities for capital expenditures during the years ended December 31, ~~2019~~2021 and December 31, ~~2018~~2020 were ~~$518.1~~$92.4 million and ~~$576.3~~$173.8 million, respectively. ~~Our capital expenditures primarily consisted of strategic growth initiatives and remodels, maintaining our theatre circuit, and technology upgrades.~~

During the year ended December 31, ~~2019,~~2021, cash flows used in investing activities included ~~cash outflows~~proceeds from the disposition of ~~$11.8~~Baltics of $34.2 million, ~~for~~primarily from the ~~acquisition~~sale of ~~assets related to 4 theatres~~our remaining equity interest in ~~the U.S. markets, partially offset by~~Estonia of $3.7 million and Lithuania of $30.5 million and proceeds received from the disposition of long-term assets of ~~$23.2~~$7.9 million primarily ~~from the sale of theatres located in Austria of $15.3 million.~~related to four properties. During the year ended December 31, ~~2018,~~2021, we made an additional investment of $9.3 million in Saudi Cinema Company LLC and acquired theatre assets of $8.2 million related to two theatres.

During the year ended December 31, 2020, cash ~~inflows from~~flows used in investing activities included ~~the~~ proceeds from the disposition of ~~NCM units~~assets of ~~$162.5~~$28.5 million, ~~proceeds from sale leaseback transactions~~primarily related to 10 properties and other asset sales of ~~$50.1~~$19.8 million and ~~proceeds from~~ the ~~Screenvision merger~~

Table of ~~$45.8 million. In addition, we received proceeds from the disposition of long-term assets of $14.2 million during the year ended December 31, 2018, primarily from the~~ Contents

sale of ~~a theatre partnership~~our remaining interest in one of ~~$4.1~~the Baltic theatres located in Latvia of $6.2 million, and ~~proceeds from~~ the ~~disposition~~cash outflow for an additional investment in Saudi Cinema Company LLC (“SCC”) of ~~two theatres of $7.9~~$9.3 million. ~~We expect that our cash outflows for capital expenditures, net of landlord contributions, will be approximately $275.0 million to $300.0 million for calendar 2020.~~

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

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reimburse us for the construction costs. We may decide to own the real estate assets of new theatres and following construction, sell and leaseback the real estate assets pursuant to long-term non-cancelable operating leases. In addition, we estimate that our cash outflows for capital expenditures, net of landlord contributions, will be approximately $150 million to $200 million for the year ending December 31, 2022 to maintain and enhance operations.

Cash Flows from Financing Activities

~~Cash flows used in~~Net cash provided by financing activities, as reflected in the consolidated statements of cash flows, were ~~$112.9~~$1,990.7 million and ~~$194.8~~$1,330.3 million, during the years ended December 31, ~~2019~~2021 and December 31, ~~2018,~~2020, respectively. The increase in cash flows from financing activities during the year ended December 31, 2021 compared to December 31, 2020 was primarily due to borrowings under the Odeon Term Loan Facility of $534.3 million, borrowings under the issuance of First Lien Toggle Notes due 2026 of $100.0 million, net proceeds from the sale of Common Stock of $1,570.7 million, and net proceeds from Common Stock issuance to Mudrick of $230.4 million, partially offset by the repayments under the revolving credit facilities of $335.0 million, principal and redemption premium under the First Lien Toggle Notes due 2026 of $40.3 million, payment for deferred financing costs of $19.9 million, payment of $19.1 million of taxes for restricted unit withholdings, and principal payments under the Term Loan due 2026 of $20.0 million.

During the year ended December 31, 2020, borrowings, net of discounts, under our First Lien Notes due 2025, First Lien Notes due 2026, and revolving credit facilities were $490.0 million, $270.0 million, and $321.8 million, respectively. Proceeds from the sale of Common Stock were $264.7 million during the year ended December 31, 2020.

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 Baltic region (Latvia, Lithuania and Estonia) in several steps. For further information, see Note 1—The Company and Significant Accounting Policies in the Notes to the Consolidated Financial Statements under Part II, Item 8 thereof. We received $37.0 million cash consideration, net of transaction costs, and transferred an equity interest of 49% in Forum Cinemas OU to the purchaser during the year ended December 31, 2020.

We and our subsidiaries may from time to time seek to retire or repurchase our outstanding debt through cash purchases, in open market purchases, privately negotiated transactions, by tender offer or otherwise. Such repurchases, if any, will depend on prevailing market conditions, liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.

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

Amount per

Total Amount






Share of

Declared
Declaration Date

Record Date

Date Paid

Common Stock

(In millions)
February 26, 2020

March 9, 2020

March 23, 2020

$
0.03

$
3.2

During the year ended December 31, 2020, we paid dividends and dividend equivalents of $6.5 million. As of December 31, 2021 and December 31, 2020, we accrued $0.7 million and $0.4 million, respectively, for the remaining unpaid dividends.
Future Contractual Obligations
Our estimated future obligations as of December 31, 2021 include both current and long term obligations. Our expected material contractual cash requirements over the next twelve months, primarily consist of capital related betterments of $16.3 million, obligation for unrecognized tax benefits of $0.2 million, minimum operating lease obligations of $1,039.5 million, finance lease obligations of $13.9 million, contractual cash rent amounts that were due and not paid of $41.8 million recorded in accounts payable, and corporate borrowings principal and interest payments of $20.0 million and $385.0 million, respectively.

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Capital related betterments. At December 31, 2021, we have short-term committed capital expenditures, investments, and betterments to our circuit, which do not include planned, but non-committed capital expenditures of $16.3 million.
Pension funding. Our U.S., U.K., and Sweden defined benefit plans are frozen. We fund our U.S. pension plans such that the plans are in compliance with Employee retirement Income security Act (“ERISA”) and the plans are not considered “at risk” as defined by ERISA guidelines. We do not expect to make a material contribution to the defined pension plans during the year ended December 31, 2022.
Obligation for unrecognized tax benefits. As of December 31, 2021, our recorded obligation for unrecognized tax benefits is $8.3 million. There are currently unrecognized tax benefits of $0.2 million, which we anticipate will be resolved in the next twelve months. See Note 10—Income Taxes in the Notes to Consolidated Financial Statements under Part II, Item 8 thereof for further information.
Minimum operating lease and finance lease payments. We have current and long-term minimum cash requirements for operating lease payments of $1,039.5 million and $7,139.9 million, respectively. We have current and long-term minimum cash requirements for finance lease payments of $13.9 million and $97.9 million, respectively. The total amounts do not equal the carrying amount due to imputed interest. We received rent concessions provided by the lessors that aided in mitigating the economic effects of COVID-19 during the pandemic. These concessions primarily consisted of rent abatements and the deferral of rent payments and were included in the amounts above, except for contractual cash rent amounts recorded in accounts payable that were due and not paid of $41.8 million. Our cash expenditures for rent increased significantly in the second, third, and fourth quarters of 2021 as previously deferred rent payments and landlord concessions started to become current obligations. See Note 3—Leases in the Notes to the Consolidated Financial Statements under Part II, Item 8 thereof, for a summary of the estimated future repayment terms for the minimum operating lease and finance lease amounts, including the deferred lease amounts due to COVID-19.
Corporate borrowings principal and interest payments. We have current and long-term cash requirements for the payment of principal related to corporate borrowings of $20.0 million and $5,149.1 million, respectively. The total amount does not equal the carrying amount due to unamortized discounts, premiums and deferred charges. See Note 16—Subsequent Events in the Notes to the Consolidated Financial Statements under Part II, Item 8 thereof, for information regarding the new 7.5% First Lien Senior Secured Notes due 2029 and redemptions of First Lien Toggle Notes due 2026, First Lien Notes due 2025 and First Lien Notes due 2026. We have current and long-term cash interest payment requirements related to our corporate borrowings of $385.0 million and $1,078.3 million, respectively. The cash interest payment requirements for our Senior Secured Term Loans due 2026 was estimated at 3.1% based on the interest rate in effect as of December 31, 2021. See Note 8—Corporate Borrowings and Finance Lease Obligations in the Notes to the Consolidated Financial Statements under Part II, Item 8 thereof, for further information, including a summary of principal payments required and maturities of corporate borrowings as of December 31, 2021.
Senior Secured Credit Facilities (Senior Secured Revolving Credit Facility and Senior Secured Term Loan due ~~2026.~~2026). On ~~April 22, 2019,~~March 8, 2021,we entered the Ninth Amendment (as defined in Note 8—Corporate Borrowings and Finance Lease Obligations in the Notes to the Consolidated Financial Statements under Part II, Item 8 thereof), pursuant to which the requisite revolving lenders party thereto agreed to extend the suspension period for the financial covenant under our Credit Agreement (as defined in Note 8—Corporate Borrowings and Finance Lease Obligations in the Notes to the Consolidated Financial Statements under Part II, Item 8 thereof) from a period ending on March 31, 2021 to a period ending on March 31, 2022, which was further extended by the Eleventh Amendment (as defined in Note 8—Corporate Borrowings and Finance Lease Obligations in the Notes to the Consolidated Financial Statements under Part II, Item 8 thereof) from March 31, 2022 to March 31, 2023, as described, and on the terms and conditions specified, therein. 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 (iii) additional reporting obligations. On March 8, 2021, we entered into the ~~Sixth~~Tenth Amendment (as defined in Note 8—Corporate Borrowings and Finance Lease Obligations in the Notes to ~~Credit Agreement amending~~the Consolidated Financial Statements under Part II, Item 8 thereof), pursuant to which we agreed that certain modifications to the Credit Agreement ~~dated April 30, 2013. After giving effect~~described in the Tenth Amendment require the consent of the majority of the revolving lenders party to the Sixth Amendment, the Credit Agreement provides for senior secured financing of $2,225.0 million in aggregate, consisting of (1) $2,000.0 million in aggregate principal amount of senior secured tranche B loans maturing April 22, 2026 (the “Term Loan Facility”) and (2) a $225.0 million senior secured revolving credit facility (which includes borrowing capacity available for letters of credit) maturing April 22, 2024 (the “Revolving Credit Facility” and, together with the Term Loan Facility, the “Credit Facilities”). The loans were used for the repayment of the Term Loan due 2022 of $849.8 million, repayment of the Term Loan due 2023 of $488.7 million, the redemption of the 5.875% Senior Subordinated Notes due 2022 of $375.0 million, and the redemption of the 6.0% Tenth Amendment.
Senior Secured Notes due 2023 of $230.0 million. Call premiums paid related to the repayment of the 6.0% Senior Secured Notes due 2023 and the 5.875% Senior Subordinated Notes due 2022 were $15.9 million and debt financing costs paid were $11.7 million.
~~Borrowings under the~~ Term ~~Loan Facility~~Loans bear interest at a rate per annum equal to, at our option, either (1) an applicable margin plus a base rate determined by reference to the highest of (a) 0.50% per annum plus the Federal Funds Effective Rate, (b) the prime rate ~~of Citi~~announced by the Administrative Agent and (c) LIBOR determined by reference to the cost of funds for U.S. dollar deposits for an interest period of one month adjusted for certain additional costs, plus 1.00% or (2) an

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applicable margin plus LIBOR determined by reference to the costs of funds for U.S. dollar deposits for the interest period relevant to such borrowing adjusted for certain additional costs.

As of December 31, ~~2019,~~2021, we had ~~$215.0~~$209.1 million ~~available for~~unused borrowing capacity, net of letters of credit, under our ~~Revolving Credit Facility and £89.2~~$225.0 million ~~($117.0 million) available for borrowing under our Odeon~~Senior Secured Revolving Credit Facility.
~~Finance Lease Obligations.~~Odeon Term Loan Facility. ~~Principal payments~~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 ~~finance lease~~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 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 is 3 months, or such other period agreed between us 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. All obligations ~~declined~~under the Odeon Term Loan Facility are guaranteed by certain subsidiaries of Odeon. We are subject to ~~$10.9~~minimum liquidity requirements of £32.5 million ~~for~~(approximately $44 million) required under the Odeon Term Loan Facility, measured at each quarter end date.
First Lien Toggle Notes due 2026. On January 15, 2021, we issued $100.0 million aggregate principal amount of our First Lien Toggle Notes due 2026 as contemplated by the previously disclosed commitment letter with Mudrick Capital Management, LP (“Mudrick”), 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 us, the guarantors named therein and the U.S. Bank National Association, as trustee and collateral agent. On September 30, 2021, we exercised an option to repurchase $35.0 million of our First Lien Toggle Notes due 2026. The total cost to exercise this repurchase option was $40.3 million, including principal, redemption premium and accrued and unpaid interest. During the year ended December 31, ~~2019~~2021, we recorded loss on debt extinguishment of $14.4 million in other expense. As a result of this debt reduction, our annual interest cost has been reduced by $5.25 million. The First Lien Toggle Notes due ~~primarily to~~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 ~~adoption~~first three interest periods after the issue date may, at our option, be paid in PIK interest at a rate of ~~ASC 842 where principal payments~~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 ~~$56.0 million for build-to-suit finance lease obligations were reclassified as operating leases~~the Company and are secured on a pari passu basis with the Senior Credit Facilities, the First Lien Notes due 2026, the First Lien Notes due 2025, and the ~~related cash flows~~Convertible Notes due 2026.
On December 14, 2020, Mudrick received a total of 21,978,022 shares of our 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 exchange $100 million aggregate principal amount of the Second Lien Notes due 2026 that were ~~also classified~~held by Mudrick for the Exchange Shares (the “Second Lien Exchange”) and waived its claim to PIK interest of $4.5 million principal amount. During the year ended December 31, 2021, we 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 was recorded as ~~operating activities.~~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. During the year ended December 31, 2020, we recorded a gain on extinguishment of the Second Lien Notes due 2026 of $93.6 million based on the fair value of the Exchange Shares of $43.8 million and the carrying value of the $104.5 million principal amount of the Second Lien Notes exchanged of $137.4 million. See Note 316—~~Leases~~Subsequent Events in the Notes to the Consolidated Financial Statements under Part II, Item 8 thereof, for ~~the impact of ASC 842.~~further information.
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 Common Stock ~~Repurchase.~~ ~~During~~at a conversion price of $13.51 per share. The Conversion settled on January 29, 2021 and resulted in the ~~year ended December 31,~~issuance of 44,422,860 shares of our 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”) dated as of September 14, 2018, ~~we repurchased 500,000~~5,666,000 shares of our Class A common stock under our share repurchase program for a total consideration of $8.3 million. We paid $13.5 million for treasury stock purchased at the end of 2017 and settled during January 2018. During the year ended December 31, 2017, we repurchased 3,232,625 shares of our Class A common stock under our share repurchase program for a total consideration of $47.5 million. This program expired on August 2, 2019.
~~Tax Payments.~~ ~~We made tax payments for restricted stock units withholdings of $1.3 million and $1.7 million during the years ended December 31, 2019 and December 31, 2018, respectively.~~
~~Convertible Notes due 2024.~~ On September 14, 2018, we issued $600.0 million aggregate principal amount of our 2.95% Senior Unsecured Convertible Notes due 2024. We capitalized deferred financing costs of approximately $13.6 million, related to the issuance of the Convertible Notes due 2024. The Convertible Notes due 2024 mature on September 15, 2024, unless earlier converted, repurchased or redeemed. We pay interest on the Convertible Notes due 2024 at 2.95% per annum, semi-annually in arrears on March 15th and September 15th. We used the net proceeds from the Notes due 2024 to repurchase and retire 24,057,143 shares of Class B common stock ~~from~~held by Wanda were forfeited and ~~to pay a special dividend.~~cancelled in connection with the Conversion.

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~~Wanda Class B Common Shares Repurchase.~~ ~~On September 14, 2018, we used the net proceeds from the Convertible~~First Lien Notes due ~~2024 private offering to repurchase~~2025. On April 24, 2020, we issued $500.0 million aggregate principal amount of our 10.5% First Lien Notes due 2025, 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-annually on April 15 and ~~retire 24,057,143 shares of Class B common stock held by Wanda for $423.6 million~~October 15 each year, commencing October 15, 2020 and ~~to pay~~are secured on a ~~special dividend~~pari passu basis with the Senior Secured Credit Facilities. The First Lien Notes due 2025 will mature on ~~September 28, 2018 to shareholders of record on September 25, 2018 of $1.55 per share, or approximately $160.5 million.~~

April 15, 2025. See Note 816—~~Corporate Borrowings and Finance Lease Obligations~~Subsequent Events in the Notes to the Consolidated Financial Statements under Part II, Item 8 ~~hereof~~thereof, for further information.

Senior Subordinated Debt Exchange Offers~~Dividends~~. On July 31, 2020, we closed our previously announced private offers to exchange (the “Exchange Offers”) any and all of our 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 (together the “Existing Subordinated Notes”) for approximately $1.46 billion in aggregate principal amount of newly issued 10%/12% Cash/PIK Toggle Second Lien Subordinated Secured Notes due 2026.

~~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)
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
November 1, 2018

December 10, 2018

December 26, 2018

0.20

21.2
September 14, 2018

September 25, 2018

September 28, 2018

1.55

162.9
July 24, 2018

September 10, 2018

September 24, 2018

0.20

25.8
May 3, 2018

June 11, 2018

June 25, 2018

0.20

26.0
February 28, 2018

March 12, 2018

March 26, 2018

0.20

26.0


(In thousands)	Total Aggregate Principal Amount Validly Tendered		Percentage of Outstanding Existing Subordinated Notes Validly Tendered
6.375% Senior Subordinated Notes due 2024 (£496,014 par value)	$	632,145	99.20	%
5.75% Senior Subordinated Notes due 2025	$	501,679	83.61	%
5.875% Senior Subordinated Notes due 2026	$	539,393	90.65	%
6.125% Senior Subordinated Notes due 2027	$	344,279	72.48	%

~~On February 26, 2020,~~The Exchange Offers reduced the principal amounts of our debt by approximately $555 million, which represented approximately 23.9% of the principal amount of the Existing Subordinated Notes. We raised $300 million in additional cash from the issuance of the incremental First Lien Notes due 2026, prior to deducting $36 million related to discounts and deferred financing costs paid to the lenders. Additionally, certain holders of the Existing Subordinated Notes that agreed to backstop the rights offering for $200 million of the First Lien Notes due 2026 received five million common shares. The closing of the Exchange Offers 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 12 to 18 months after issuance 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.

In connection with the Exchange Offers, we ~~declared a cash dividend~~also received consents from eligible holders of the Existing Subordinated Notes to amend the indentures governing the Existing Subordinated Notes to among other things, (i) release the existing subsidiary guarantees of the Existing Subordinated Notes, (ii) eliminate substantially all of the restrictive covenants, certain affirmative covenants and certain events of default contained in the indentures governing the Existing Subordinated Notes, and (iii) make other conforming changes to internally conform to certain proposed amendments.

We performed an assessment on a lender by lender basis to identify certain lenders that met the criteria for a 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 ~~$0.03 per share on Class A and Class B common stock, payable on March 23, 2020 to stockholders~~our Existing Senior Subordinated Notes for approximately $1,289.1 million principal amount of ~~record on March 9, 2020. The dividend decrease of $0.17 per share compared to our previous historical declarations of $0.20 per share reduces~~ the ~~total dividend payout~~Second Lien Notes due 2026 as TDR. We accounted for the ~~quarter by approximately $18.0 million, providing capital that can be deployed towards share buybacks and deleveraging.~~

~~During the years ended December 31, 2019 and December 31, 2018, we paid dividends and dividend equivalents~~exchange of ~~$84.1 million and $258.1 million, respectively. As of December 31, 2019, we accrued $2.3 million for~~ the remaining ~~unpaid dividends.~~

~~On September 14, 2018, we declared a special dividend which was paid on September 28, 2018 to shareholders of record on September 25, 2018 of $1.55 per share, or~~ approximately ~~$160.5 million.~~

~~Liquidity and Capital Resources—For the Year Ended December 31, 2018, Compared to the Year Ended December 31, 2017~~

~~For a comparison~~$235.0 million principal amount of our ~~liquidity~~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 ~~capital resources for~~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 both the year ended December 31, ~~2018, compared~~2020.

Convertible Notes. On April 24, 2020, we entered into a supplemental indenture (the “Supplemental Indenture”) to the ~~year ended December 31, 2017, see “Part II, Item 7. Management’s Discussion and Analysis~~Convertible Notes due 2024 indenture, dated as of ~~Financial Condition and Results of Operations” of our annual report on Form 10-K for the year ended December 31, 2018, filed with the Securities and Exchange Commission on March 1, 2019, which is incorporated herein by reference.~~

September 14, 2018. The Supplemental Indenture

~~Table of Contents~~

~~Commitments and Contingencies~~

Minimum annual cash payments required under existing financing lease obligations, maturities of corporate borrowings, future minimum rental payments under existing operating leases, committed capital expenditures, investments and betterments, including furniture, fixtures, equipment and leasehold betterments and ADA related betterments and pension funding that have initial or remaining non-cancelable terms in excess of one year as of December 31, 2019 are as follows:

Minimum

Principal

Interest

Minimum

Financing

Amount of

Payments on

Operating

Capital

(In millions)

Lease

Corporate

Corporate

  Lease

Related

Pension

Total

Calendar Year

Payments(1)

Borrowings(2)

Borrowings(3)

Payments(1)

Betterments(4)

Funding(5)

Commitments

2020

$
16.4

$
20.0

$
261.5

$
952.5

$
114.4

$
5.1

$
1,369.9

2021

15.4

20.0

260.4

899.1

—

—

1,194.9

2022

14.9

20.0

259.4

836.1

—

—

1,130.4

2023

11.8

20.0

258.3

743.6

—

—

1,033.7

2024

10.6

1,275.8

246.9

667.2

—

—

2,200.5

Thereafter

80.5

3,555.0

279.0

3,738.4

—

—

7,652.9

Total

$
149.6

$
4,910.8

$
1,565.5

$
7,836.9

$
114.4

$
5.1

$
14,582.3

~~(1)~~

~~Represents cash requirements for lease payments. Total amount does not equal carrying amount due to imputed interest.~~

~~(2)~~

~~Represents cash requirements for the payment of principal on corporate borrowings. Total amount does not equal carrying amount due to unamortized discounts, premiums and deferred charges.~~

~~(3)~~

~~Interest expense on our Senior Secured Credit Facility Term Loans due 2026 was estimated at 5.23% based on the interest rate in effect as of December 31, 2019.~~

~~(4)~~

~~Includes committed capital expenditures, investments, and betterments to our circuit. Does not include planned, but non-committed capital expenditures.~~

~~(5)~~

We fund our U.S. pension plans such that the plans are in compliance with Employee Retirement Income Security Act (“ERISA”) and the plans are not considered “at risk” as defined by ERISA guidelines. The U.S. plans have been frozen effective December 31, 2006.

As of December 31, 2019, our recorded obligation for unrecognized tax benefits is $31.0 million. There are currently unrecognized tax benefits which we anticipate will be resolved in the next 12 months; however, we are unable at this time to estimate what the impact on our effective tax rate will be. See Note 10—~~Income Taxes in the Notes to Consolidated Financial Statements under Part II, Item 8 hereof for further information.~~

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

~~Impact of Inflation~~

Historically, the principal impact of inflation and changing prices upon us has been to increase the costs of the construction of new theatres, the purchase of theatre equipment, rent and the utility and labor costs incurred in connection with continuing theatre operations. Film exhibition costs, our largest cost of operations, are customarily paid as a percentage of admissions revenues and hence, while the film exhibition costs may increase on an absolute basis, the percentage of admissions revenues represented by such expense is not directly affected by inflation. Except as set forth above, inflation and changing prices have not had a significant impact on our total revenues and results of operations during the last three years.

~~Off-Balance Sheet Arrangements~~

~~We have no off-balance sheet arrangements.~~

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amended the debt covenant under the Convertible Notes due 2024 Indenture to permit us to issue the First Lien Notes due 2025, among other changes.

Concurrently with the Exchange Offers, to obtain the consent of the holders of the Convertible Notes due 2024, we restructured $600 million of Convertible Notes due 2024 issued in 2018 to Silver Lake and others pursuant to which the maturity of the Convertible Notes due 2024 were extended to May 1, 2026 (the “Convertible Notes due 2026”) and a first-priority lien on the collateral securing our Credit Facilities was granted to secure indebtedness thereunder. We accounted for this transaction 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 modification did not result in the recognition of any gain or loss and we established new effective interest rates based on the carrying value of the Convertible Notes due 2024. Third party costs related to the transaction were expensed as incurred and amounts paid to lenders were capitalized and amortized through maturity of the debt.

As noted above, on January 27, 2021, affiliates of Silver Lake and certain co-investors elected to convert all $600.0 million principal amount of our Convertible Notes due 2026 into shares of our Common Stock at a conversion price of $13.51 per share.

Second Lien Notes due 2026. In connection with the Exchange Offers on July 31, 2020, we issued $1,462.3 million aggregate principal amount of the new Second Lien Notes due 2026 in exchange for the Existing Subordinated Notes. We have reflected a premium of $535.1 million on the Second Lien Notes due 2026 as the difference between the principal balance of the Second Lien Notes due 2026 and the $1,997.4 million carrying value of the Existing Subordinated Notes exchanged. The premium will be amortized to interest expense over the term of the Second Lien Notes due 2026 using the effective interest method.

In connection with the Exchange Offers and the First Lien Notes due 2026, we issued five million shares of Common Stock to certain holders of subordinated notes as consideration for their commitment to backstop the issuance of $200 million of the First Lien Notes due 2026. Pursuant to the Backstop Commitment Agreement dated July 10, 2020, certain of the actual or beneficial holders of Existing Subordinated Notes agreed to purchase 100% of the First Lien Notes due 2026 that were not subscribed for in connection with the $200 million rights offering to holders of the existing Subordinated Notes participating in the Exchange Offers. Those providing a backstop commitment pursuant to the Backstop Commitment Agreement received their pro-rata share of five million shares of the Common Stock, or 4.6% of AMC’s outstanding shares as of July 31, 2020, worth $20.2 million at the market closing price on July 31, 2020. The equity issuance was recorded by us in stockholders’ deficit with an offset in corporate borrowings as a discount. The discount will be amortized to interest expense over the term of the Second Lien Notes due 2026 using the effective interest method. As part of the registration rights agreement related to the issuance of the Common Stock, we filed a shelf registration statement in August 2020 providing for the resale of the shares of Common Stock issued as consideration for the backstop commitment described above.

First Lien Notes due 2026. In connection with the Exchange Offers, certain holders of the Existing Subordinated Notes purchased 10.5% First Lien Notes due 2026 in an aggregate principal amount of $200 million. The 10.5% First Lien Notes due 2026 issued to certain holders of the Existing Subordinated Notes were issued pursuant to an indenture, dated as of July 31, 2020, among the Company, the guarantors named therein and GLAS Trust Company LLC, as trustee and collateral agent.

Separately, upon the closing of its private debt exchange, Silver Lake Alpine, L.P. and Silver Lake Alpine (Offshore Master), L.P., each affiliates of Silver Lake Group, L.L.C. (“Silver Lake”), purchased from us $100 million principal amount of First Lien Notes due 2026. The 10.5% First Lien Notes due 2026 issued to affiliates of Silver Lake were issued pursuant to an indenture, dated as of July 31, 2020, among the Company, the guarantors named therein and U.S. Bank National Association, as trustee and collateral agent. The terms of the 10.5% First Lien Notes due 2026 issued to the holders of the Existing Subordinated Notes and the 10.5% First Lien Notes due 2026 issued to Silver Lake are substantially identical. The $300 million principal amount of new funding is prior to deducting discounts of $30.0 million and deferred financing costs paid to lenders of $6.0 million related to the First Lien Notes due 2026. The discount and deferred financing costs will be amortized to interest expense over the term using the effective interest method. See Note 16—Subsequent Events in the Notes to the Consolidated Financial Statements under Part II, Item 8 thereof, for further information.

See Note 8—Corporate Borrowings and Finance Lease Obligations and Note 16—Subsequent Events in the Notes to the Consolidated Financial Statements under Part II, Item 8 thereof, for further information regarding the above.

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New Accounting Pronouncements

See Note 1—The Company and Significant Accounting Policies in Notes to the Consolidated Financial Statements under Part II, Item 8 ~~hereof~~thereof for information regarding recently issued accounting standards.

Liquidity and Capital Resources—For the Year Ended December 31, 2020, Compared to the Year Ended December 31, 2019

For a comparison of our liquidity and capital resources for the year ended December 31, 2020, compared to the year ended December 31, 2019, see “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our annual report on Form 10-K for the year ended December 31, 2020, filed with the Securities and Exchange Commission on March 12, 2021, which is incorporated herein by reference.

Item 7A. 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 ~~year~~years ended December 31, ~~2019,~~2021 and December 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 ~~year~~years ended December 31, ~~2019,~~2021 and December 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 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~~as presented below.

Market risk on variable-rate financial instruments. At December 31, ~~2019,~~2021 and December 31, 2020, we maintained a Senior Secured Credit ~~Facility~~Facilities comprised of a $225.0 million revolving credit facility and $2,000.0 million of Term Loans 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 for the outstanding Senior Secured Term Loan due 2026 was 3.103% per annum at December 31, ~~2019 for the outstanding Term Loans due 2026 was 5.23%~~2021 and 3.23% per ~~annum.~~ annum at December 31, 2020. At December 31, 2020, we also maintained a revolving credit facility 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 December 31, ~~2019,~~2021, we had no variable-rate borrowings outstanding under our ~~revolving credit facility~~Senior Secured Revolving Credit Facilities and had an aggregate principal balance of ~~$1,985.0~~$1,945.0 million outstanding under the Term Loans due 2026. A 100-basis point change in market interest rates would have increased or decreased interest expense on the Senior Secured Credit ~~Facility~~Facilities by ~~$19.8~~$19.5 million during the year ended December 31, ~~2019.~~2021. At December 31, 2020, we had aggregate principal balance of $212.2 million under our revolving credit facility, $120.8 million under the Odeon Revolving Credit Facility, and had an aggregate principal balance of $1,965.0 million outstanding under the Term Loans due 2026. A 100-basis point change in market interest rates would have increased or decreased interest expense on the Senior Secured Credit Facilities and the Odeon Revolving Credit Facility by $23.0 million during the year ended December 31, 2020.

Market risk on fixed-rate financial instruments. Included in long-term corporate borrowings at December 31, ~~2019~~2021 were principal amounts of $500.0 million of our First Lien Notes due 2025, $1,508.0 million of our Second Lien Notes due 2026, $300.0 million of our First Lien Notes due 2026, $73.5 million of our First Lien Toggle Notes due 2026, $552.6 million of our Odeon Term Loan Facility due 2023, $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 ($5.4 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

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value of our fixed rate financial instruments of approximately $99.1 million and $(95.2) million, respectively, during the year ended December 31, 2021.

Included in long-term corporate borrowings at December 31, 2020 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, $600.0 million of our Convertible Notes due ~~2024, $600.0~~2026, $300.0 million of our First Lien Notes due 2026, $98.3 million of our Notes due 2025, ~~$595.0~~$55.6 million of our Notes due 2026, ~~$475.0~~$130.7 million of our Notes due 2027, and ~~£500.0~~£4.0 million ($~~655.8~~5.4 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 ~~$131.1~~$39.7 million and ~~$(123.7)~~$(37.9) million, ~~respectively.~~respectively, during the year ended December 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 December 31, ~~2019,~~2021, 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 income (loss) of changes in foreign exchange rates would increase the aggregate net loss of our International theatres for the year ended December 31, 2021 by approximately $22.0 million. Based upon our ownership in Odeon and Nordic as of December 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 income (loss) of changes in foreign exchange rates would decrease the aggregate net ~~earnings~~loss of our ~~international~~International theatres for the year ended December 31, ~~2019~~2020 by approximately ~~$9.2~~$153.0 million.

Our foreign currency translation rates ~~decreased~~increased by approximately ~~5.2%~~1.9% for the year ended December 31, ~~2019~~2021 compared to the year ended December 31, ~~2018, which did not significantly impact our consolidated net loss for the year ended December 31, 2019.~~2020.

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Item 8. Financial Statements and Supplementary Data.

MANAGEMENT’S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

AMC Entertainment Holdings, Inc.

TO THE STOCKHOLDERS OF AMC ENTERTAINMENT HOLDINGS, INC.

Management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company as defined in Rule 13a-15(f) of the Exchange Act. With management’s participation, an evaluation of the effectiveness of internal control over financial reporting was conducted as of December 31, ~~2019,~~2021, based on the framework and criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management has concluded that the Company’s internal control over financial reporting was effective as of December 31, ~~2019.~~2021. The effectiveness of our internal control over financial reporting has been audited by ~~KPMG~~Ernst & Young LLP, an independent registered public accounting firm, as stated in their attestation report that follows this report.


/s/ Adam M. Aron
Chairman of the Board, Chief Executive Officer ~~Director~~ and President


/s/ S~~Craig R. Ramsey~~EAN D. GOODMAN
Executive Vice President, ~~and~~ Chief Financial Officer and Treasurer

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Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors
of AMC Entertainment Holdings, Inc.:

Opinion on ~~Internal Control Over~~the Financial ~~Reporting~~Statements

We have audited the accompanying consolidated balance sheets of AMC Entertainment Holdings, Inc. and ~~subsidiaries’~~subsidiaries (the Company) ~~internal control over financial reporting~~ as of December 31, ~~2019, based on criteria established in~~ ~~Internal Control – Integrated Framework (2013)~~ ~~issued by~~2021 and 2020, the ~~Committee~~related consolidated statements of ~~Sponsoring Organizations~~operations, comprehensive loss, shareholders’ equity (deficit), and cash flows for each of the ~~Treadway Commission.~~two years in the period ended December 31, 2021, and the related notes(collectively referred to as the “consolidated financial statements”). In our opinion, the ~~Company maintained,~~consolidated financial statements present fairly, in all material respects, ~~effective internal control over~~the financial ~~reporting as~~position of the Company at December 31, ~~2019, based on criteria established in~~ ~~Internal Control – Integrated Framework (2013)~~ ~~issued by~~2021 and 2020, and the ~~Committee~~results of ~~Sponsoring Organizations~~its operations and its cash flows for each of the ~~Treadway Commission.~~two years in the period ended December 31, 2021, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2019 and 2018, the related consolidated statements of operations, comprehensive loss, cash flows, and stockholders’ equity for each of the years in the three-year period ended December 31, 2019, and the related notes (collectively, the consolidated financial statements), and our report dated February 27, 2020 expressed an unqualified opinion on those consolidated financial statements.

~~Basis for Opinion~~

~~The Company’s management is responsible for maintaining effective~~Company's internal control over financial reporting ~~and for its assessment~~as of December 31, 2021, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the ~~effectiveness~~Treadway Commission (2013 framework)and our report dated March 1, 2022 expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of ~~internal control over financial reporting, included in~~ the ~~accompanying “Management’s Annual Report on Internal Control over Financial Reporting”.~~Company's management. Our responsibility is to express an opinion on the Company’s ~~internal control over~~ financial ~~reporting~~statements based on our ~~audit.~~audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our ~~audit~~audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether ~~effective internal control over~~the financial ~~reporting was maintained~~statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in ~~all material respects.~~the financial statements. Our ~~audit of internal control over financial reporting~~audits also included ~~obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and~~ evaluating the ~~design~~accounting principles used and ~~operating effectiveness~~significant estimates made by management, as well as evaluating the overall presentation of ~~internal control based on~~ the ~~assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances.~~financial statements. We believe that our ~~audit provides~~audits provide a reasonable basis for our opinion.

~~Definition and Limitations of Internal Control Over Financial Reporting~~Critical Audit Matter

~~A company’s internal control over financial reporting~~The critical audit matter communicated below is a ~~process designed to provide reasonable assurance regarding~~matter arising from the ~~reliability~~current period audit of ~~financial reporting and~~ the ~~preparation of~~ financial statements ~~for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures~~ that ~~(1) pertain~~was communicated or required to be communicated to the ~~maintenance of records~~audit committee and that: (1) relates to accounts or disclosures that ~~in reasonable detail, accurately~~are material to the financial statements and ~~fairly reflect the transactions and dispositions~~(2) involved our especially challenging, subjective or complex judgments. The communication of the ~~assets of~~critical audit matter does not alter in any way our opinion on the ~~company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of~~consolidated financial statements, ~~in accordance with generally accepted accounting principles,~~taken as a whole, and ~~that receipts and expenditures of~~we are not, by communicating the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could havecritical audit matter below, providing a ~~material effect~~separate opinion on the ~~financial statements.~~critical audit matter or on the accounts or disclosures to which it relates.

~~Because~~

Valuation of operating leases

Description of the Matter

At December 31, 2021, the Company’s operating lease right of use assets and operating lease liabilities were $4.2 billion and $5.3 billion, respectively. As discussed in Note 3 of the consolidated financial statements, the present value of the lease payments is calculated using the incremental borrowing rate (IBR) for operating leases. Since most of the leases do not provide a determinable implicit rate, the Company estimated its IBR used to calculate its right of use assets and lease liabilities.

Auditing the Company’s estimate of the IBR was especially challenging as it involved a high degree of subjective judgment when testing the reasonableness of the inputs and appropriateness

Table of ~~its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject~~Contents

of the rates applied to each lease. In particular, the estimate of the IBR is sensitive to significant assumptions such as the determination of the current credit rating and selection of the associated yield curve.

How We Addressed the Matter in Our Audit

We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the Company’s determination of the IBR. For example, we tested management’s review controls over this process.

To test the Company’s determination of the IBR, our audit procedures included, among others, an evaluation of management’s methodology for developing the IBR and a comparison of certain assumptions used by management to our independent estimates which were developed with the assistance of our specialists.

/s/ Ernst & Young LLP
We have served as the ~~risk that controls may become~~Company’s auditor since 2020
Kansas City, Missouri
March 1, 2022

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~~inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.~~

~~/s/ KPMG LLP~~

Kansas City, Missouri
February 27, 2020

~~Table of Contents~~

Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors
of AMC Entertainment Holdings, Inc.:

Opinion on ~~the Consolidated~~Internal Control Over Financial ~~Statements~~Reporting

We have audited AMC Entertainment Holdings, Inc. and subsidiaries’ internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control—Integrated Framework issued by the ~~accompanying consolidated balance sheets~~Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, AMC Entertainment Holdings, Inc. and subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, ~~2019 and 2018,~~2021, based on the related consolidated statements of operations, comprehensive loss, cash flows, and stockholders’ equity for each of the years in the three-year period ended December 31, 2019, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2019 and 2018, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2019, in conformity with U.S. generally accepted accounting principles.COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2021 and 2020, the related consolidated statements of operations, comprehensive loss, shareholders’ equity (deficit), and cash flows for each of the two years in the period ended December 31, 2021 and our report dated March 1, 2022 expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting ~~as of December 31, 2019, based on criteria established in~~ ~~Internal Control – Integrated Framework (2013)~~ ~~issued by the Committee of Sponsoring Organizations~~and for its assessment of the ~~Treadway Commission, and our report dated February 27, 2020 expressed an unqualified opinion on the~~ effectiveness of ~~the Company’s~~ internal control over financial ~~reporting.~~

~~Changes~~reporting included in ~~Accounting Principles~~

~~As discussed in Notes 1 and 3 to~~ the ~~consolidated financial statements, the Company has changed its method of accounting for leases as of January 1, 2019 due to the adoption of Accounting Standards Codification Topic 842,~~ ~~Leases~~.

As discussed in Notes 1 and 2 to the consolidated financial statements, the Company has changed its method of accounting for the recognition of revenue and certain costs as of January 1, 2018 due to the adoption of Accounting Standards Codification Topic 606, ~~Revenue from Contracts with Customers~~.

~~Basis for Opinion~~

~~These consolidated financial statements are the responsibility of the Company’s management.~~accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on ~~these consolidated~~the Company’s internal control over financial ~~statements~~reporting based on our ~~audits.~~audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our ~~audits~~audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Ernst & Young LLP
Kansas City, Missouri
March 1, 2022

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Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors AMC Entertainment Holdings, Inc.:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated statements of operations, comprehensive loss, cash flows, and stockholders’ equity (deficit) of AMC Entertainment Holdings, Inc. and subsidiaries (the Company) for the year ended December 31, 2019, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the results of the Company’s operations and its cash flows for the year ended December 31, 2019, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financialstatements are free of material misstatement, whether due to error or fraud. Our ~~audits~~audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our ~~audits~~audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our ~~audits provide~~audit provides a reasonable basis for our opinion.

/s/ KPMG LLP

We ~~have~~ served as the Company’s auditor ~~since 2009.~~from 2009 to 2020.

Kansas City, Missouri

February 27, 2020

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AMC ENTERTAINMENT HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

Year Ended
(In millions, except share and per share amounts)

December 31, 2019

December 31, 2018

December 31, 2017

Revenues

Admissions

$
3,301.3

$
3,385.0

$
3,229.5
Food and beverage

1,719.6

1,671.5

1,548.4
Other theatre

450.1

404.3

301.3
Total revenues

5,471.0

5,460.8

5,079.2
Operating costs and expenses

Film exhibition costs

1,699.1

1,710.2

1,604.3
Food and beverage costs

278.7

270.9

252.1
Operating expense, excluding depreciation and amortization below

1,686.6

1,654.7

1,548.0
Rent

967.8

797.8

794.4
General and administrative:

Merger, acquisition and other costs

15.5

31.3

63.0
Other, excluding depreciation and amortization below

153.0

179.3

133.2
Depreciation and amortization

450.0

537.8

538.6
Impairment of long-lived assets

84.3

13.8

43.6
Operating costs and expenses

5,335.0

5,195.8

4,977.2
Operating income

136.0

265.0

102.0
Other expense (income):

Other expense (income)

13.4

(108.1)

(1.5)
Interest expense:

Corporate borrowings

292.8

262.3

231.6
Capital and financing lease obligations

7.6

38.5

42.4
Non-cash NCM exhibitor services agreement

40.4

41.5

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

(30.6)

(86.7)

185.2
Investment income

(16.0)

(6.2)

(22.6)
Total other expense, net

307.6

141.3

435.1
Earnings (loss) before income taxes

(171.6)

123.7

(333.1)
Income tax provision (benefit)

(22.5)

13.6

154.1
Net earnings (loss)

$
(149.1)

$
110.1

$
(487.2)
Earnings (loss) per share:

Basic

$
(1.44)

$
0.91

$
(3.80)
Diluted

$
(1.44)

$
0.41

$
(3.80)
Average shares outstanding:

Basic (in thousands)

103,832

120,621

128,246
Diluted (in thousands)

103,832

130,105

128,246


	Year Ended
(In millions, except share and per share amounts)	December 31, 2021		December 31, 2020		December 31, 2019

Revenues
Admissions	$	1,394.2	$	712.1	$	3,301.3
Food and beverage		857.3		362.4		1,719.6
Other theatre		276.4		167.9		450.1
Total revenues		2,527.9		1,242.4		5,471.0
Operating costs and expenses
Film exhibition costs		607.7		322.7		1,699.1
Food and beverage costs		137.9		88.8		278.7
Operating expense, excluding depreciation and amortization below		1,141.8		856.0		1,686.6
Rent		828.0		884.1		967.8
General and administrative:
Merger, acquisition and other costs		13.7		24.6		15.5
Other, excluding depreciation and amortization below		226.6		156.7		153.0
Depreciation and amortization		425.0		498.3		450.0
Impairment of long-lived assets, definite and indefinite-lived intangible assets and goodwill		77.2		2,513.9		84.3
Operating costs and expenses		3,457.9		5,345.1		5,335.0
Operating income (loss)		(930.0)		(4,102.7)		136.0
Other expense (income):
Other expense (income)		(87.9)		28.9		13.4
Interest expense:
Corporate borrowings		414.9		311.0		292.8
Finance lease obligations		5.2		5.9		7.6
Non-cash NCM exhibitor services agreement		38.0		40.0		40.4
Equity in (earnings) loss of non-consolidated entities		(11.0)		30.9		(30.6)
Investment expense (income)		(9.2)		10.1		(16.0)
Total other expense, net		350.0		426.8		307.6
Net loss before income taxes		(1,280.0)		(4,529.5)		(171.6)
Income tax provision (benefit)		(10.2)		59.9		(22.5)
Net loss		(1,269.8)		(4,589.4)		(149.1)
Less: Net loss attributable to noncontrolling interests		(0.7)		(0.3)		—
Net loss attributable to AMC Entertainment Holdings, Inc.	$	(1,269.1)	$	(4,589.1)	$	(149.1)
Net loss per share attributable to AMC Entertainment Holdings, Inc.'s common stockholders:
Basic	$	(2.66)	$	(39.15)	$	(1.44)
Diluted	$	(2.66)	$	(39.15)	$	(1.44)
Average shares outstanding:
Basic (in thousands)		477,410		117,212		103,832
Diluted (in thousands)		477,410		117,212		103,832

See Notes to Consolidated Financial Statements.

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AMC ENTERTAINMENT HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

Year Ended
(In millions)

December 31, 2019

December 31, 2018

December 31, 2017
Net earnings (loss)

$
(149.1)

$
110.1

$
(487.2)
Other comprehensive income (loss):

Unrealized foreign currency translation adjustment, net of tax

(16.5)

(127.7)

131.7
Realized loss on foreign currency transactions reclassified into other expense, net of tax

0.5

1.0

—
Pension and other benefit adjustments:

Net gain (loss) arising during the period, net of tax

(15.5)

4.2

(3.0)
Marketable securities:

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

—

—

0.7
Realized net gain reclassified into investment income, net of tax

—

—

(0.4)
Equity method investee's cash flow hedge:

Unrealized net holding gain (loss) arising during the period, net of tax

(0.1)

0.2

—
Realized net gain reclassified into equity in earnings of non-consolidated entities, net of tax

—

(2.2)

(0.9)
Other comprehensive income (loss):

(31.6)

(124.5)

128.1
Total comprehensive loss

$
(180.7)

$
(14.4)

$
(359.1)


	Year Ended
(In millions)	December 31, 2021		December 31, 2020		December 31, 2019

Net loss	$	(1,269.8)	$	(4,589.4)	$	(149.1)
Other comprehensive income (loss):
Unrealized foreign currency translation adjustments		(78.9)		67.0		(16.5)
Realized gain (loss) on foreign currency transactions reclassified into investment expense (income), net of tax		(0.4)		1.9		0.5
Pension adjustments:
Net gain (loss) arising during the period, net of tax		12.3		(4.1)		(15.5)
Equity method investee's cash flow hedge:
Unrealized net holding loss arising during the period		—		—		(0.1)
Other comprehensive income (loss)		(67.0)		64.8		(31.6)
Total comprehensive loss		(1,336.8)		(4,524.6)		(180.7)
Comprehensive loss attributable to noncontrolling interests		(0.9)		(0.1)		—
Comprehensive loss attributable to AMC Entertainment Holdings, Inc.	$	(1,335.9)	$	(4,524.5)	$	(180.7)

See Notes to Consolidated Financial Statements.

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AMC ENTERTAINMENT HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS


(In millions, except share data)	December 31, 2019		December 31, 2018		December 31, 2021		December 31, 2020
ASSETS
Current assets:
Cash and cash equivalents	$	265.0	$	313.3	$	1,592.5	$	308.3
Restricted cash		10.5		10.7		27.8		13.1
Receivables, net		254.2		259.5		168.5		91.0
Other current assets		143.4		197.8		81.5		74.6
Total current assets		673.1		781.3		1,870.3		487.0
Property, net		2,649.2		3,039.6		1,962.5		2,322.5
Operating lease right-of-use assets, net		4,796.0		—		4,155.9		4,451.5
Intangible assets, net		195.3		352.1		153.4		163.2
Goodwill		4,789.1		4,788.7		2,429.8		2,547.3
Deferred tax asset, net		70.1		28.6		0.6		0.3
Other long-term assets		503.0		505.5		249.0		304.6
Total assets	$	13,675.8	$	9,495.8	$	10,821.5	$	10,276.4
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	543.3	$	452.6	$	377.1	$	298.8
Accrued expenses and other liabilities		324.6		378.5		367.5		257.8
Deferred revenues and income		449.2		414.8		408.6		405.4
Current maturities of corporate borrowings		20.0		15.2		20.0		20.0
Current maturities of finance lease liabilities		10.3		—		9.5		12.9
Current maturities of operating lease liabilities		585.8		—		605.2		583.6
Current maturities of capital and financing lease obligations		—		67.0
Total current liabilities		1,933.2		1,328.1		1,787.9		1,578.5
Corporate borrowings		4,733.4		4,707.8		5,408.0		5,695.8
Finance lease liabilities		89.6		493.2		63.2		83.1
Operating lease liabilities		4,913.8		—		4,645.2		4,957.8
Exhibitor services agreement		549.7		564.0		510.4		537.6
Deferred tax liability, net		46.0		41.6		31.3		40.5
Other long-term liabilities		195.9		963.1		165.0		241.3
Total liabilities		12,461.6		8,097.8		12,611.0		13,134.6
Commitments and contingencies
Class A common stock (temporary equity) ($.01 par value, 0 shares issued; 0 shares outstanding as of December 31, 2019 and 75,712 shares issued; 38,943 shares outstanding as of December 31, 2018)		—		0.4
Stockholders’ equity:
Class A common stock ($.01 par value, 524,173,073 shares authorized; 55,812,702 shares issued and 52,080,077 outstanding as of December 31, 2019; 55,401,325 shares issued and 51,705,469 outstanding as of December 31, 2018)		0.5		0.5
Class B common stock ($.01 par value, 51,769,784 shares authorized, issued and outstanding as of December 31, 2019 and December 31, 2018)		0.5		0.5
Stockholders’ deficit:
AMC Entertainment Holdings, Inc.'s stockholders' deficit:
Class A common stock ($.01 par value, 524,173,073 shares authorized; 513,979,100 shares issued and outstanding as of December 31, 2021; 176,295,874 shares issued and 172,563,249 outstanding as of December 31, 2020)						5.1		1.8
Class B common stock ($.01 par value, 0 shares authorized, issued and outstanding as of December 31, 2021 and 51,769,784 shares authorized, issued and outstanding as of December 31, 2020)						—		0.5
Additional paid-in capital		2,001.9		1,998.4		4,857.5		2,465.6
Treasury stock (3,732,625 shares as of December 31, 2019 and December 31, 2018, at cost)		(56.4)		(56.4)
Treasury stock (0 shares as of December 31, 2021 and 3,732,625 shares as of December 31, 2020, at cost)						—		(56.4)
Accumulated other comprehensive income (loss)		(26.1)		5.5		(28.1)		38.7
Accumulated deficit		(706.2)		(550.9)		(6,624.0)		(5,335.3)
Total stockholders’ equity		1,214.2		1,397.6
Total liabilities and stockholders’ equity	$	13,675.8	$	9,495.8
Total AMC Entertainment Holdings, Inc.'s stockholders’ deficit						(1,789.5)		(2,885.1)
Noncontrolling interests						—		26.9
Total deficit						(1,789.5)		(2,858.2)
Total liabilities and stockholders’ deficit					$	10,821.5	$	10,276.4

See Notes to Consolidated Financial Statements.

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AMC ENTERTAINMENT HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS


	Year Ended						Year Ended
	December 31,		December 31,		December 31,		December 31,		December 31,		December 31,
(In millions)	2019		2018		2017		2021		2020		2019
Cash flows from operating activities:
Net earnings (loss)	$	(149.1)	$	110.1	$	(487.2)
Adjustments to reconcile net earnings (loss) to net cash provided by operating activities:
Net loss							$	(1,269.8)	$	(4,589.4)	$	(149.1)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization		450.0		537.8		538.6		425.0		498.3		450.0
Loss on NCM charged to merger, acquisition and transaction costs		—		—		22.6
Loss on extinguishment of debt		16.6		—		0.5
(Gain) loss on extinguishment of debt								14.1		(93.6)		16.6
Deferred income taxes		(33.7)		(6.4)		157.8		(7.6)		64.0		(33.7)
Impairment of long-lived assets		84.3		13.8		43.6
Amortization of net discount (premium) on corporate borrowings		11.3		0.2		(2.7)
Amortization of deferred charges to interest expense		15.8		16.0		12.7
Impairment of long-lived assets, definite and indefinite-lived intangible assets and goodwill								77.2		2,513.9		84.3
Gain on dispositions of Baltics								(5.5)		—		—
Amortization of net discount (premium) on corporate borrowings to interest expense								(3.9)		(22.0)		11.3
Amortization of deferred financing costs to interest expense								23.3		14.2		15.8
PIK interest expense								116.2		73.4		—
Non-cash portion of stock-based compensation		4.4		14.9		5.7		43.1		25.4		4.4
Gain on dispositions		(17.4)		(3.2)		(2.5)
Gain on disposition of NCM		—		(30.6)		22.6
Gain on sale of Open Road		—		—		(17.2)
Gain on derivative asset and derivative liability		(5.8)		(111.4)		—
Repayment of Nordic interest rate swaps		—		—		(2.6)
Equity in (earnings) loss from non-consolidated entities, net of distributions		2.7		(40.0)		(3.9)
NCM held-for-sale impairment loss		—		16.0		208.0
Loss (gain) on disposition of assets								0.3		(17.4)		(17.4)
Loss (gain) on derivative asset and derivative liability								—		109.0		(5.8)
Equity in loss from non-consolidated entities, net of distributions								1.3		45.4		2.7
Landlord contributions		106.5		127.6		133.3		22.0		43.6		106.5
Non-cash rent - purchase accounting		25.7		—		—
Other non-cash rent expense (benefit)								(24.9)		(4.9)		25.7
Deferred rent		(62.3)		(101.6)		(52.9)		(133.7)		3.4		(62.3)
Net periodic benefit cost		1.7		1.1		0.6
Change in assets and liabilities, excluding acquisitions:
Net periodic benefit cost (income)								(0.9)		1.8		1.7
Change in assets and liabilities:
Receivables		0.7		(0.2)		(36.6)		(82.7)		159.3		0.7
Other assets		30.9		(0.4)		(4.8)		(5.8)		76.8		30.9
Accounts payable		104.8		(85.6)		34.7		63.8		(176.4)		104.8
Accrued expenses and other liabilities		(0.6)		68.5		(21.4)		164.3		102.5		(0.6)
Other, net		(7.5)		(3.4)		(11.5)		(29.9)		43.2		(7.5)
Net cash provided by operating activities		579.0		523.2		537.4
Net cash provided by (used in) operating activities								(614.1)		(1,129.5)		579.0
Cash flows from investing activities:
Capital expenditures		(518.1)		(576.3)		(626.8)		(92.4)		(173.8)		(518.1)
Acquisition of Nordic Cinemas Group, net of cash and restricted cash acquired		—		—		(577.6)
Proceeds from sale leaseback transactions		—		50.1		136.2
Proceeds from disposition of NCM		—		162.5		89.0
Proceeds from Screenvision merger		—		45.8		—
Proceeds from disposition of Open Road		—		—		9.2
Proceeds from disposition of Baltics, net of cash and transaction costs								34.2		6.2		—
Acquisition of theatre assets		(11.8)		—		—		(8.2)		—		(11.8)
Proceeds from disposition of long-term assets		23.2		14.2		24.1		7.9		19.8		23.2
Investments in non-consolidated entities, net		(9.7)		(11.4)		(11.1)		(9.3)		(9.3)		(9.7)
Other, net		0.3		(2.1)		(2.3)		(0.4)		2.5		0.3
Net cash used in investing activities		(516.1)		(317.2)		(959.3)		(68.2)		(154.6)		(516.1)
Cash flows from financing activities:
Proceeds from issuance of Term Loan due 2026		1,990.0		—		—		—		—		1,990.0
Payment of principal Senior Secured Notes due 2023		(230.0)		—		—		—		—		(230.0)
Payment of principal Senior Subordinated Notes due 2022		(375.0)		—		—		—		—		(375.0)
Call premiums paid for Senior Secured Notes due 2023 and Senior Subordinated Notes due 2022		(15.9)		—		—		—		—		(15.9)
Principal payment of Term Loans due 2022 and 2023		(1,338.5)		—		—		—		—		(1,338.5)
Proceeds from issuance of Odeon Term Loan due 2023								534.3		—		—
Proceeds from First Lien Toggle Notes due 2026								100.0		—		—
Principal payments under First Lien Toggle Notes due 2026								(35.0)		—		—
Premium paid to extinguish First Lien Toggle Notes due 2026								(5.3)		—		—
Principal payments under Second Lien Notes due 2026								(1.0)		—		—
Proceeds from issuance of First Lien Notes due 2025								—		490.0		—
Proceeds from issuance of First Lien Notes due 2026								—		270.0		—

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Proceeds from issuance of Senior Unsecured Convertible Notes due 2024

—

600.0

—
Proceeds from issuance of Senior Subordinated Sterling Notes due 2024

—

—

327.8
Proceeds from issuance of Senior Subordinated Notes due 2027

—

—

475.0
Payment of Nordic SEK Term Loan

—

—

(144.4)
Payment of Nordic EUR Term Loan

—

—

(169.5)
Net proceeds from equity offering

—

—

616.8
Borrowings (repayments) under revolving credit facilities

(12.0)

12.1

—
Principal payment of Bridge Loan due 2017

—

—

(350.0)
Scheduled principal payments under Term Loans

(21.9)

(13.8)

(12.6)
Principal payments under capital and financing lease obligations

(10.9)

(71.0)

(70.7)
Principal payments under promissory note

(1.4)

(1.4)

(1.4)
Cash used to pay for deferred financing costs

(11.9)

(15.5)

(33.6)
Cash used to pay dividends

(84.1)

(258.1)

(104.6)
Taxes paid for restricted unit withholdings

(1.3)

(1.7)

(6.5)
Retirement of Class B common stock

—

(423.6)

—
Purchase of treasury stock

—

(21.8)

(34.0)
Net cash provided by (used in) financing activities

(112.9)

(194.8)

492.3
Effect of exchange rate changes on cash and cash equivalents and restricted cash

1.5

(5.5)

17.7
Net increase (decrease) in cash and cash equivalents and restricted cash

(48.5)

5.7

88.1
Cash and cash equivalents and restricted cash at beginning of period

324.0

318.3

230.2
Cash and cash equivalents and restricted cash at end of period

$
275.5

$
324.0

$
318.3
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

Cash paid during the period for:

Interest (including amounts capitalized of $1.0 million, $0.5 million and $0.3 million)

$
284.5

$
278.3

$
226.7
Income taxes (received) paid, net

$
(1.7)

$
19.5

10.9
Schedule of non-cash activities:

Investment in NCM (See Note 6—Investments)

$
—

$
(6.3)

$
235.2
Construction payables at period end

$
97.0

$
100.8

$
82.7
Accrued treasury stock payable at period end

$
—

$
—

$
13.5

Borrowings (repayments) under revolving credit facilities		(335.0)		321.8		(12.0)
Scheduled principal payments under Term Loan due 2026		(20.0)		(20.0)		(21.9)
Net proceeds from Class A common stock issuance		1,570.7		264.7		—
Net proceeds from Class A common stock issuance to Mudrick		230.4		—		—
(Payments) proceeds related to sale of noncontrolling interest		(0.4)		37.0		—
Principal payments under finance lease obligations		(9.0)		(6.2)		(10.9)
Principal payments under promissory note		—		—		(1.4)
Cash used to pay for deferred financing costs		(19.9)		(15.4)		(11.9)
Cash used to pay dividends		—		(6.5)		(84.1)
Taxes paid for restricted unit withholdings		(19.1)		(5.1)		(1.3)
Net cash provided by (used in) financing activities		1,990.7		1,330.3		(112.9)
Effect of exchange rate changes on cash and cash equivalents and restricted cash		(9.5)		(0.3)		1.5
Net increase (decrease) in cash and cash equivalents and restricted cash		1,298.9		45.9		(48.5)
Cash and cash equivalents and restricted cash at beginning of period		321.4		275.5		324.0
Cash and cash equivalents and restricted cash at end of period	$	1,620.3	$	321.4	$	275.5
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest (including amounts capitalized of $0.2 million, $1.1 million and $1.0 million, respectively)	$	274.7	$	237.5	$	284.5
Income taxes received, net	$	(7.4)	$	(10.5)		(1.7)
Schedule of non-cash activities:
Investment in NCM	$	—	$	5.2	$	—
Construction payables at period end	$	40.4	$	18.2	$	97.0
Convertible Notes due 2026 conversion, see Note 8-Corporate Borrowings and Finance Lease Obligations	$	600.0	$	—	$	—
Mudrick transaction, see Note 8-Corporate Borrowings and Finance Lease Obligations	$	—	$	70.2	$	—
DCIP digital projectors transaction, see Note 6-Investments	$	—	$	125.2	$	—

See Notes to Consolidated Financial Statements.

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AMC ENTERTAINMENT HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)


											Accumulated																	Accumulated
	Class A Voting			Class B Voting			Additional				Other		Accumulated		Total		Class A Voting			Class B Voting			Additional					Other		Accumulated		Total AMC				Total
	Common Stock			Common Stock			Paid-in		Treasury		Comprehensive		Earnings		Stockholders’		Common Stock			Common Stock			Paid-in		Treasury Stock			Comprehensive		Earnings		Stockholders’		Noncontrolling		Equity
(In millions, except share and per share data)	Shares	Amount		Shares	Amount		Capital		Stock		Income (Loss)		(Deficit)		Equity		Shares	Amount		Shares	Amount		Capital		Shares	Amount		Income (Loss)		(Deficit)		Equity (Deficit)		Interests		(Deficit)
Balance December 31, 2016	34,236,561	$	0.3	75,826,927	$	0.8	$	1,627.3	$	(0.7)	$	(2.5)	$	384.4	$	2,009.6
Balance December 31, 2018																	51,705,469	$	0.5	51,769,784	$	0.5	$	1,998.4	3,732,625	$	(56.4)	$	5.5	$	(550.9)	$	1,397.6	$	—	$	1,397.6
Cumulative effect adjustments for the adoption of new accounting principle (ASC 842)																	—		—	—		—		—	—		—		—		76.2		76.2		—		76.2
Net loss																	—		—	—		—		—	—		—		—		(149.1)		(149.1)		—		(149.1)
Other comprehensive loss																	—		—	—		—		—	—		—		(31.6)		—		(31.6)		—		(31.6)
Dividends declared:
Class A common stock, $0.20/share, net of forfeitures and reversal of dividend accrual for nonvested PSUs																	—		—	—		—		—	—		—		—		(40.8)		(40.8)		—		(40.8)
Class B common stock, $0.20/share																	—		—	—		—		—	—		—		—		(41.6)		(41.6)		—		(41.6)
RSUs surrendered to pay for payroll taxes																	—		—	—		—		(1.3)	—		—		—		—		(1.3)		—		(1.3)
Reclassification from temporary equity																	38,943		—	—		—		0.4	—		—		—		—		0.4		—		0.4
Stock-based compensation																	335,665		—	—		—		4.4	—		—		—		—		4.4		—		4.4
Balance 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	$	—	$	1,214.2
Cumulative effect adjustment for the adoption of new accounting principle (ASU 2016-13)																	—		—	—		—		—	—		—		—		(16.9)		(16.9)		—		(16.9)
Net loss	—		—	—		—		—		—		—		(487.2)		(487.2)	—		—	—		—		—	—		—		—		(4,589.1)		(4,589.1)		(0.3)		(4,589.4)
Other comprehensive income	—		—	—		—		—		—		128.1		—		128.1	—		—	—		—		—	—		—		64.6		—		64.6		0.2		64.8
Dividends declared
Class A common stock, $0.20/share	—		—	—		—		—		—		—		(44.4)		(44.4)
Class B common stock, $0.20/share	—		—	—		—		—		—		—		(60.7)		(60.7)
Additional offering	20,330,874		0.2	—		—		616.6		—		—		—		616.8
RSUs surrendered to pay for payroll taxes	—		—	—		—		(6.5)		—		—		—		(6.5)
Stock-based compensation	415,528		—	—		—		3.9		—		—		—		3.9
Share repurchases	—		—	—		—		—		(47.5)		—		—		(47.5)
Reclassification from temporary equity	27,197		—	—		—		0.3		—		—		—		0.3
Balance December 31, 2017	55,010,160	$	0.5	75,826,927	$	0.8	$	2,241.6	$	(48.2)	$	125.6	$	(207.9)	$	2,112.4
Cumulative effect adjustments for the adoption of new accounting principles (AS 606, ASU 2016-01 and ASU 2018-02)	—		—	—		—		—		—		4.4		(36.2)		(31.8)
Net earnings	—		—	—		—		—		—		—		110.1		110.1
Other comprehensive loss	—		—	—		—		—		—		(124.5)		—		(124.5)
Baltics noncontrolling capital contribution																	—		—	—		—		(0.2)	—		—		0.2		—		—		27.0		27.0
Dividends declared:
Class A common stock, $0.20/share	—		—	—		—		—		—		—		(42.9)		(42.9)
Class B common stock, $0.20/share	—		—	—		—		—		—		—		(55.9)		(55.9)
Reversed dividend accrual for nonvested PSU's	—		—	—		—		—		—		—		0.5		0.5
Special dividend declared:
Class A common stock, $1.55/share	—		—	—		—		—		—		—		(82.7)		(82.7)
Class B common stock, $1.55/share	—		—	—		—		—		—		—		(80.3)		(80.3)
RSUs surrendered to pay for payroll taxes	326,005		—	—		—		(1.8)		—		—		—		(1.8)
Stock-based compensation	28,055		—	—		—		14.9		—		—		—		14.9
Share repurchases	—		—	—		—		—		(8.2)		—		—		(8.2)
Reclassification from temporary equity	37,105		—	—		—		0.4		—		—		—		0.4
Class B common stock repurchase and cancellation	—		—	(24,057,143)		(0.3)		(256.7)		—		—		(155.6)		(412.6)
Balance December 31, 2018	55,401,325	$	0.5	51,769,784	$	0.5	$	1,998.4	$	(56.4)	$	5.5	$	(550.9)	$	1,397.6
Cumulative effect adjustments for the adoption of new accounting principles (AS 842)	—		—	—		—		—		—		—		76.2		76.2
Net loss	—		—	—		—		—		—		—		(149.1)		(149.1)
Other comprehensive loss	—		—	—		—		—		—		(31.6)		—		(31.6)
Class A common stock, $0.03/share, net of forfeitures and reversal of dividend accrual for nonvested RSUs/PSUs																	—		—	—		—		—	—		—		—		(3.2)		(3.2)		—		(3.2)
Class B common stock, $0.03/share																	—		—	—		—		—	—		—		—		(1.6)		(1.6)		—		(1.6)
Class A common stock issuance																	90,955,685		0.9	—		—		263.8	—		—		—		—		264.7		—		264.7
Exchange Offer Class A common stock issuance																	5,000,000		0.1	—		—		20.1	—		—		—		—		20.2		—		20.2
Class A common stock issuance commitment and exchange shares																	21,978,022		0.3	—		—		69.8	—		—		—		—		70.1		—		70.1
Derivative asset valuation allowance adjustment																	—		—	—		—		—	—		—		—		(2.4)		(2.4)		—		(2.4)

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Dividends declared:

Class A common stock, $0.20/share, net of forfeitures and reversal of dividend accrual for nonvested PSUs

—

—

—

—

—

—

—

(40.8)

(40.8)
Class B common stock, $0.20/share

—

—

—

—

—

—

—

(41.6)

(41.6)
RSUs surrendered to pay for payroll taxes

—

—

—

—

(1.3)

—

—

—

(1.3)
Reclassification from temporary equity

75,712

—

—

—

0.4

—

—

—

0.4
Stock-based compensation

335,665

—

—

—

4.4

—

—

—

4.4
Balance December 31, 2019

55,812,702

$
0.5

51,769,784

$
0.5

$
2,001.9

$
(56.4)

$
(26.1)

$
(706.2)

$
1,214.2

Reclassification of derivative liability and derivative asset for Conversion Price Reset of Convertible Notes due 2026	—		—	—		—		89.9	—		—		—		(15.9)		74.0		—		74.0
Taxes paid for restricted unit withholdings	—		—	—		—		(5.1)	—		—		—		—		(5.1)		—		(5.1)
Stock-based compensation	2,549,465		—	—		—		25.4	—		—		—		—		25.4		—		25.4
Balance 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	—		—	—		—		—	—		—		—		(1,269.1)		(1,269.1)		(0.7)		(1,269.8)
Other comprehensive loss	—		—	—		—		—	—		—		(65.9)		—		(65.9)		(0.2)		(66.1)
Baltics noncontrolling capital contribution	—		—	—		—		0.2	—		—		—		—		0.2		(4.0)		(3.8)
100% liquidation of Baltics	—		—	—		—		—	—		—		(0.9)		—		(0.9)		(22.0)		(22.9)
Class A common stock, accrued dividend equivalent adjustment	—		—	—		—		—	—		—		—		(0.3)		(0.3)		—		(0.3)
Class A common stock issuance	241,616,293		2.3	—		—		1,531.3	(3,732,625)		56.4		—		(19.3)		1,570.7		—		1,570.7
Class A common stock issuance to Mudrick	8,500,000		0.1	—		—		230.3	—		—		—		—		230.4		—		230.4
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	—		—	—		—		(19.1)	—		—		—		—		(19.1)		—		(19.1)
Stock-based compensation	772,914		—	—		—		43.1	—		—		—		—		43.1		—		43.1
Balance December 31, 2021	513,979,100	$	5.1	—	$	—	$	4,857.5	—	$	—	$	(28.1)	$	(6,624.0)	$	(1,789.5)	$	—	$	(1,789.5)

See Notes to Consolidated Financial Statements

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AMC ENTERTAINMENT HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, ~~2019, 2018,~~2021, 2020, 20179

NOTE 1—THE COMPANY AND SIGNIFICANT ACCOUNTING POLICIES

Temporarily Suspended or Limited Operations. Throughout the first quarter of ~~Dalian Wanda Group Co.~~2020, the Company temporarily suspended 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. As of March 17, 2020, all of the Company’s U.S. and International theatre operations were temporarily suspended. 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 of March 31, 2021, the Company operated at 585 domestic theatres with limited seating capacities, representing approximately 99% of its domestic theatres. As of June 30, 2021, the Company operated 593 domestic theatres, representing approximately 100% of its domestic theatres with remaining seating capacity restrictions winding down throughout the quarter. As of September 30, 2021 and December 31, 2021, the Company operated 596 and 593 domestic theatres, respectively, representing essentially 100% of its domestic theatres. Total revenues for the U.S. markets increased $1,049.1 million for the year ended December 31, 2021, compared to the year ended December 31, 2020.

As of March 31, 2021, the Company operated at 97 international theatres, with limited seating capacities, representing approximately 27% of its international theatres. As of June 30, 2021, the Company operated 335 international theatres with limited seating capacities, representing approximately 95% of its international theatres. The majority of international theatre operations were suspended for the first two months of the second quarter of 2021 due to a COVID-19 resurgence and did not reopen until early June 2021. At September 30, 2021 and December 31, 2021, the Company operated 351 and 337 international theatres, respectively, representing approximately 99% and 95%, ~~Ltd. (“Wanda”), a Chinese private conglomerate.~~respectively, of its international theatres. Total revenues for the International markets increased $236.4 million for the year ended December 31. 2021, compared to the year ended December 31, 2020.

Liquidity.As of December 31, ~~2019, Wanda owned~~2021, the Company has cash and cash equivalents of approximately ~~49.85%~~$1.6 billion. In response to the COVID-19 pandemic, the Company adjusted certain elements of ~~Holdings’ outstanding common stock~~its business strategy and ~~74.89%~~took significant steps to preserve cash. The Company is continuing to take significant measures to further strengthen its financial position and enhance its operations, by eliminating non-essential costs, including reductions to its variable costs and elements of its fixed cost structure, introducing new initiatives, and optimizing its theatrical footprint.

Additionally, the Company enhanced liquidity through debt issuances, debt exchanges and equity sales. See Note 8—Corporate Borrowings and Finance Lease Obligations, Note 9—Stockholders’ Equity, and Note 16—Subsequent Events for further information.

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The table below summarizes net increase (decrease) in cash equivalents and restricted cash by quarter for the year ended December 31, 2021:


	Three Months Ended								Year Ended
	March 31,		June 30,		September 30,		December 31,		December 31,
(In millions)	2021		2021		2021		2021		2021
Cash flows from operating activities:								��
Net cash provided by (used in) operating activities	$	(312.9)	$	(233.8)	$	(113.9)	$	46.5	$	(614.1)
Cash flows from investing activities:
Net cash provided by (used in) investing activities		(16.0)		13.5		(28.8)		(36.9)		(68.2)
Cash flows from financing activities:
Net cash provided by (used in) financing activities		854.7		1,212.2		(48.3)		(27.9)		1,990.7
Effect of exchange rate changes on cash and cash equivalents and restricted cash		(5.1)		5.6		(8.4)		(1.6)		(9.5)
Net increase (decrease) in cash and cash equivalents and restricted cash		520.7		997.5		(199.4)		(19.9)		1,298.9
Cash and cash equivalents and restricted cash at beginning of period		321.4		842.1		1,839.6		1,640.2		321.4
Cash and cash equivalents and restricted cash at end of period	$	842.1	$	1,839.6	$	1,640.2	$	1,620.3	$	1,620.3

The Company’s net cash used in operating activities improved by $79.1 million during the three months ended June 30, 2021 compared to the three months ended March 31, 2021, $119.9 million during the three months ended September 30, 2021 compared to the three months ended June 30, 2021, and $160.4 million during the three months ended December 31, 2021 compared to the three months ended September 30, 2021. This is primarily attributable to continued increases in attendance and industry box office revenues during the year ended December 31, 2021. The Company will continue to repay rent amounts that were deferred during the pandemic, which will increase its cash outflows from operating activities. See Note 3—Leases for a summary of the ~~combined voting power~~estimated future repayment terms for the remaining $315.1 million of ~~Holdings’ outstanding common~~rentals that were deferred during the COVID-19 pandemic.

The Company’s net cash provided by (used in) investing activities included:

●

$31.4 million of proceeds from the disposition of the Baltic theatres, partially offset by $(17.9) million of capital expenditures during the three months ended June 30, 2021;

●

$(24.1) million of capital expenditures, $(5.8) million related to the acquisition of assets at 2 theatres and $(1.0) million of transaction costs related to the Baltic theatres sale, partially offset by $2.0 million of proceeds from disposition of long-term assets during the three months ended September 30, 2021; and

●

$(38.5) million of capital expenditures and $(2.4) million related to the acquisition of assets at 2 theatres, partially offset by $4.5 million of proceeds from disposition of long-term assets during the three months ended December 31, 2021.

The Company’s net cash provided by (used in) financing activities included:

●

Net proceeds from the Company’s debt and equity issuances of $861.9 million during the three months ended March 31, 2021;

●

Net proceeds from the Company’s equity issuances of $1,219.6 million during the three months ended June 30, 2021;

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●

Principal and premium payments of $(40.3) million related to an optional redemption of the Company’s First Lien Toggle Notes due 2026 during the three months ended September 30, 2021; and

●

Taxes paid for restricted stock withholdings of $(19.1) million during the three months ended December 31, 2021.

The Company believes its existing cash and ~~has the power~~cash equivalents, together with cash generated from operations, will be sufficient to ~~control Holdings’ affairs~~fund its operations, satisfy its obligations, including cash outflows for increased rent and ~~policies, including~~planned capital expenditures, and comply with ~~respect~~minimum liquidity and financial covenant requirements under its debt covenants related to borrowings pursuant to the ~~election~~Senior Secured Revolving Credit Facility and Odeon Term Loan Facility for at least the next twelve months. In order to achieve net positive operating cash flows and long-term profitability, the Company believes it will need to continue to increase attendance levels significantly compared to 2021 and achieve levels in line with pre COVID-19 attendance. The Company believes the global re-opening of ~~directors (and, through~~its theatres, the ~~election~~anticipated volume of ~~directors,~~titles available for theatrical release, and the ~~appointment~~anticipated broad appeal of ~~management), entering into mergers, sales~~many of ~~substantially all~~those titles will support increased attendance levels. The Company believes that the sequential increases in attendance experienced each quarter as 2021 progressed are positive signs of continued demand for the moviegoing experience. However, there remain significant risks that may negatively impact attendance, including a resurgence of COVID-19 related restrictions, potential movie-goer reluctance to attend theatres due to concerns about COVID-19 variant strains, movie studios release schedules and direct to streaming or other changing movie studio practices.

The Company entered the Ninth Amendment (as defined in Note 8—Corporate Borrowings and Finance Lease Obligations) pursuant to which the requisite revolving lenders party thereto agreed to extend the fixed date for the termination of the suspension period for the financial covenant (the secured leverage ratio) applicable to the Senior Secured Revolving Credit Facility (as defined in Note 8—Corporate Borrowings and Finance Lease Obligations) from March 31, 2021 to March 31, 2022, which was further extended by the Eleventh Amendment (as defined in Note 8—Corporate Borrowings and Finance Lease Obligations) from March 31, 2022 to March 31, 2023, as described, and on the terms and conditions specified, therein. The Company is currently subject to minimum liquidity requirements of approximately $144 million, of which $100 million is required under the conditions for the Extended Covenant Suspension Period ending March 31, 2023, as amended, under the Senior Secured Revolving Credit Facility, and £32.5 million (approximately $44 million) of which is required under the Odeon Term Loan Facility. Following the expiration of the Extended Covenant Suspension Period ending March 31, 2023, the Company will be subject to the financial covenant under the Senior Secured Revolving Credit Facility as of the last day of each quarter on which the aggregate principal amount of revolving loans, and letters of credit (excluding letters of credit that are cash collateralized) in excess of $25 million, outstanding under the Senior Secured Revolving Credit Facility exceeds 35% of the principal amount of commitments under the Senior Secured Revolving Credit Facility then in effect, beginning with the quarter ending June 30, 2023. The Company currently expects it will be able to comply with this financial covenant, however, the Company does not anticipate the need to borrow under the Senior Secured Revolving Credit Facility during the next twelve months. See Note 8—Corporate Borrowings and Finance Lease Obligations for further information. The Company’s ~~assets~~liquidity needs thereafter will depend, among other things, on the timing of movie releases and ~~other extraordinary transactions.~~its ability to generate cash from operations.

The Company’s cash expenditures for rent increased significantly in the second, third, and fourth quarters of 2021 as previously deferred rent payments and landlord concessions started to become current obligations. The Company received rent concessions provided by the lessors that aided in mitigating the economic effects of COVID-19 during the pandemic. These concessions primarily consisted of rent abatements and the deferral of rent payments. As a result, deferred lease amounts were approximately $315.1 million as of December 31, 2021. See Note 3—Leases for a summary of the estimated future repayment terms for the deferred lease amounts due to COVID-19.

Use of Estimates. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Principles of Consolidation. The consolidated financial statements include the accounts of Holdings and all subsidiaries, as discussed above. All significant intercompany balances and transactions have been eliminated in consolidation. ~~There~~Majority-owned subsidiaries that the Company has control of are ~~no noncontrolling interests~~consolidated in the Company’s consolidated subsidiaries; consequently, ~~all~~a portion of its stockholders’ equity, net earnings (loss) and total comprehensive

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income (loss) for the periods presented are attributable to ~~controlling~~noncontrolling interests. The Company manages its business under 2 reportable segments for its theatrical exhibition operations, U.S. ~~Theatres~~markets and International ~~Theatres.~~markets.

Noncontrolling Interests and Baltic Theatre Sale. Majority-owned subsidiaries that the Company has control of are consolidated in the Company’s consolidated financial statements; consequently, a portion of its stockholders’ equity, net earnings (loss) and total comprehensive income (loss) for the periods presented are attributable to noncontrolling interests. 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 Baltic region (Latvia, Lithuania and Estonia) and is 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 took place in several steps, as noted below, and was 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 and paid $0.5 million in transaction costs during the year ended December 31, 2020. The Company 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, the Company 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, 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 $41.8 million, property, net, of $13.0 million, operating lease right-of-use assets, net of $15.7 million, and current and long-term operating lease liabilities of $2.4 million and $13.7 million, respectively. At December 31, 2020, the Company’s noncontrolling interest of 49% in Lithuania and Estonia was $26.9 million.

During the year ended December 31, 2021, the Company 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 the Company’s noncontrolling interest in Forum Cinemas OU. The Company recorded the net gain from the sale of its 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.

Revenues. The Company recognizes revenue, net of sales tax, when it satisfies a performance obligation by transferring control over a product or service to a customer. Admissions and food and beverage revenues are ~~recognized~~recorded at a point in time when a film is exhibited to a customer and when a customer takes possession of food and beverage offerings. The Company defers 100% of the revenue associated with the sales of gift cards and exchange tickets until such time as the items are redeemed or estimated income from non-redemption is recorded.

The Company recognizes income from non-redeemed or partially redeemed gift cards in proportion to the pattern of rights exercised by the customer (“proportional method”) where it applies an estimated non-redemption rate for its gift card sales channels, which range from ~~12%~~13% to ~~18%~~18.5% of the current month sales of gift cards, and the Company recognizes in other theatre revenues the total amount of expected income for non-redemption for that current month’s sales as income over the next 24 months in proportion to the pattern of actual redemptions. The Company has determined its non-redeemed rates and redemption patterns using ~~data~~more than 10 years of accumulated over ten years. Prior to January 1, 2018, income for non-redeemed exchange tickets were recognized 18 months after purchase when the redemption of these items was determined to be remote. At January 1, 2018, thedata. The Company ~~changed its method for recognizing~~also recognizes income from non-redeemed or partially redeemed exchange tickets tousing the proportional ~~method, where it applies a non-redemption rate of 10% to~~method. In the current month sales, and the Company recognizes the total amount of income for that current month’s sales as income over the next 24 months in proportion to the pattern of actual redemptions. Management believes the ~~24-month~~ estimate is supported by its continued development of redemption history and that it is reflective of management’s current best estimate. The adoption of the proportional method of recognizing income from non-redeemedInternational markets, certain exchange tickets ~~did not have a material impact on the Company’s consolidated financial statements.~~are subject to expiration dates, which triggers recognition of non-redemption in other revenues.

~~Prior to January 1, 2018, the~~The Company ~~recorded online~~recognizes ticket fee revenues ~~net of third-party commission or service fees. In accordance with ASC 606 guidance, the~~based on a gross transaction price. The Company ~~believes that it~~ is a principal (as opposed to agent) in the arrangement with third-party internet ticketing companies in regard to the sale of online tickets because the Company controls the online tickets before they are transferred to the customer. ~~Upon adoption of ASC 606 on January 1, 2018,~~

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~~the Company recognizes ticket fee revenues based on a gross transaction price.~~ The online ticket fee revenues and the third-party commission or service fees are recorded in the line items other theatre revenues and operating expense, respectively, in the consolidated statements of operations. ~~These changes did not~~

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The Company recognizes government grants once the grant requirements have ~~any impact on net income or cash flows from~~been met. Grants relating to specific costs are treated as a reduction of that cost in the consolidated statements of operations. General grants are recorded within other expense (income). Grants related to the construction of fixed assets are treated as reductions to the associated fixed asset cost. Certain grants contain stipulations around the use of funds which could trigger claw backs if the stipulations are violated.

Film Exhibition Costs. Film exhibition costs are accrued based on the applicable box office receipts and estimates of the final settlement to the film licensors. Film exhibition costs include certain advertising costs. As of December 31, ~~2019~~2021 and December 31, ~~2018,~~2020, the Company recorded film payables of ~~$166.5~~$150.3 million and ~~$168.6~~$16.4 million, respectively, which are included in accounts payable in the accompanying consolidated balance sheets.

Food and Beverage Costs. The Company records rebate payments from vendors as a reduction of food and beverage costs when earned.

Exhibitor Services Agreement. The Company recognizes advertising revenues, which are included in other theatre revenues in the consolidated statements of operations, when it satisfies a performance obligation by transferring a promised good or service to the customers. The advertising contracts with customers generally consist of a series of distinct periods of service, satisfied over time, to provide rights to advertising services. The Company’s Exhibitor Services Agreement (“ESA”) with ~~NCM~~National CineMedia, LLC (“NCM”) includes a significant financing component due to the significant length of time between receiving the non-cash consideration and fulfilling the performance obligation. The Company receives the non-cash consideration in the form of common membership units from NCM, in exchange for rights to exclusive access to the Company’s theatre screens and attendees through February 2037. Upon ~~adoption of ASC 606, Revenue from Contracts with Customers (“ASC 606”) on January 1, 2018,~~recognition, the ~~Company’s~~Company records an increase to advertising revenues ~~have significantly increased~~ with a similar offsetting increase in non-cash interest expense, which is recorded to non-cash NCM exhibitor service agreement in the consolidated statements of operations. ~~Upon adoption of ASC 606 and pursuant~~Pursuant to the calculation requirements for the time value of money, the amortization method reflects the front-end loading of the significant financing component where more interest expense is recognized earlier during the term of the agreement than the back-end recognition of the deferred revenue amortization where more revenue is recognized later in the term of the agreement. See Note 6—Investments for further information regarding the common unit adjustment (“CUA”) and the fair value measurement of the non-cash consideration. The interest expense was calculated using discount rates that ranged from 6.5% to ~~8.5%~~18.25%, which are the rates at which the Company believes it could borrow in separate financing transactions. The Company recognized a cumulative effect transition adjustment of initially applying ASC 606 by increasing accumulated deficit on January 1, 2018 by approximately $52.9 million, including income tax effect of $0, as a result of this change. These changes did not have any impact on the Company’s cash flows from operations.

Customer Engagement Programs. AMC Stubs^® is a customer loyalty program ~~for~~in the U.S. ~~market~~markets which allows members to earn rewards, receive discounts and participate in exclusive members-only offerings and services. It features both a ~~traditional~~ paid tier called AMC Stubs Premiere^TM~~, with~~ for a ~~$15.00~~flat annual membership fee and a non-paid tier called AMC Stubs^® Insider^TM. Both programs reward loyal guests for their patronage of AMC Theatres. Rewards earned are redeemable on future purchases at AMC locations. ~~Once an AMC Stubs Premiere~~^TM ~~or AMC Stubs Insider~~^TM ~~member accumulates 5,000 points they will earn a $5.00 virtual reward.~~

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 as revenues along with associated cost of goods. Converted rewards not redeemed within nine months are forfeited and recognized as admissions or food and beverage revenues. Prior to January 1, 2018, rewards for expired memberships were forfeited based upon specified periods of inactivity of the membership and recognized as admissions or food and beverage revenues. As of January 1, 2018, the Company changed its method for recognizing forfeited rewards from the remote method to the proportional method, where theThe Company estimates 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 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 as the rights are redeemed or expire.

~~On June 20, 2018, the Company announced the launch of~~ AMC Stubs^® A-List ~~a new~~is the Company’s monthly subscription-based tier of the AMC Stubs^® loyalty program. This program offers guests ~~a unique subscription pricing structure for~~ admission to movies at AMC up to three times per week including multiple movies per day and repeat visits to already seen movies ~~for the monthly price~~

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~~of between~~from $19.95 and $23.95 per month depending upon geographic market. Revenue is recognized ratably over the enrollment period.

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 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. Starting in July of 2021, all A-List monthly subscriptions were automatically reactivated and the Company has

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resumed a more normal recognition pattern for deferred revenues related to certain loyalty programs, gift cards and exchange tickets.

Advertising Costs. The Company expenses advertising costs as incurred and does not have any direct-response advertising recorded as assets. Advertising costs were ~~$42.6~~$28.4 million, ~~$45.4~~$10.7 million, and ~~$39.9~~$42.6 million for the years ended December 31, ~~2019,~~2021, December 31, ~~2018,~~2020, and December 31, ~~2017,~~2019, respectively, and are recorded in operating expense in the accompanying consolidated statements of operations.

Cash and Equivalents. All highly liquid debt instruments and investments purchased with an original maturity of three months or less are classified as cash equivalents. At December 31, 2021, cash and cash equivalents for the U.S. markets and International markets were $1,311.4 million and $281.1 million, respectively, and at December 31, 2020, cash and cash equivalents were $222.9 million and $85.4 million, respectively.

Restricted Cash. Restricted cash is cash held in the Company's bank accounts in International markets as a guarantee for certain landlords.

Derivative Asset and Liability. ~~The~~Prior to September 14, 2020, the Company ~~remeasures~~remeasured the derivative asset related to its contingent call option to acquire shares of its Class B common stock at no additional cost and the derivative liability related to the conversion feature in its ~~Senior Unsecured~~ Convertible Notes due ~~2024~~2026 at fair value each reporting period until the conversion price reset on September 14, 2020, with changes in fair value recorded in the consolidated ~~statement~~statements of ~~operations.~~operations in other expense (income). The Company ~~has~~ obtained independent third-party valuation studies to assist in determining fair value. The Company’s valuation studies ~~use~~used a Monte Carlo simulation approach and ~~are~~were based on significant inputs not observable in the market and thus represent ~~level~~Level 3 measurements within the fair value measurement hierarchy. The Company’s ~~common stock~~Common Stock price at the end of each reporting period as well as the remaining amount of time until expiration for the contingent call option and conversion feature ~~are~~were key inputs for the estimation of fair value that ~~are~~were expected to change each reporting period. The Company recorded other expense (income) related to ~~its~~ derivative asset fair value adjustments of ~~$17.7~~$0, $19.6 million and ~~$(45.0)~~$17.7 million, during the years ended December 31, ~~2019~~2021, December 31, 2020 and December 31, ~~2018,~~2019, respectively, and other expense (income) related to ~~its~~ derivative liability fair value adjustments of ~~$(23.5)~~$0, $89.4 million, and ~~$(66.4)~~$(23.5) million, during the years ended December 31, ~~2019~~2021, December 31, 2020 and December 31, ~~2018,~~2019, respectively. See Note 8—Corporate Borrowings and Finance Lease Obligations and Note 9—Stockholders’ Equity ~~and Note 12~~—~~Fair Value Measurements~~ for further discussions.

Intangible Assets. Intangible assets were recorded at fair value for intangible assets resulting from the acquisition of Holdings by Wanda on August 30, 2012 and other theatre acquisitions. Intangible assets are comprised of amounts assigned to ~~theatre leases acquired under favorable terms,~~ management contracts, ~~a contract with an equity method investee, and a non-compete agreement, each of~~ which are being amortized on a straight-line basis over the estimated remaining useful lives of the ~~assets. Favorable leases that were previously classified as~~assets, and trademark and trade names. The Company evaluates definite-lived intangible assets ~~were reclassified as an addition to~~whenever events or changes in circumstances indicate that the ~~opening right-of-use (“ROU”)~~carrying amount of the asset ~~balances, as a result of adopting~~ ~~ASC 842, Leases, (“ASC 842”) on January 1, 2019.~~group may not be fully recoverable. Trademark and trade names are considered either definite or indefinite-lived intangible assets. Indefinite-lived intangible assets are not amortized but rather evaluated for impairment ~~annually.~~annually or more frequently as specific events or circumstances dictate.

The Company first assesses the qualitative factors to determine whether the existence of events and circumstances indicate that it is more likely than not the fair value of an indefinite-lived intangible asset is less than its carrying amount as a basis for determining whether it is necessary to perform the quantitative impairment test. ~~As a result, there~~During the year ended December 31, 2020, the Company recorded impairment losses related to definite-lived intangible assets of $14.4 million in the U.S. markets and indefinite-lived intangible assets of $15.2 million in the International markets. There were no0 intangible asset impairment charges incurred during the years ended December 31, ~~2019, December 31, 2018,~~2021 and December 31, ~~2017.~~2019.

Investments. The Company accounts for its investments in non-consolidated entities using either the cost or equity methods of accounting as appropriate, and has recorded the investments within other long-term assets in its consolidated balance sheets. Equity earnings and losses are recorded when the Company’s ownership interest provides the Company with significant influence. The Company follows the guidance in ASC 323-30-35-3, investment in a limited liability company, which prescribes the use of the equity method for investments where the Company has significant influence. The Company classifies gains and losses on sales of investments or impairments accounted for using the cost method in investment ~~income.~~expense (income). Gains and losses on cash sales are recorded using the weighted average cost of all interests in the investments. Gains and losses related to non-cash negative common unit adjustments are recorded using the weighted average cost of those units in NCM. See Note 6—Investments for further discussion of

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the Company’s investments in NCM. As of December 31, ~~2019,~~2021, the Company holds equity method investments comprised of a ~~18.2%~~18.3% interest in SV Holdco LLC (“SV Holdco”), a joint venture that markets and sells cinema advertising and promotions through Screenvision; a 50.0% interest in Digital ~~CineMedia~~Cinema Media Ltd. (“DCM”), a joint venture that provides advertising services in International markets; a 32.0% interest in AC JV, LLC (“AC JV”), a joint venture that owns Fathom Events offering alternative content for motion picture screens; a 29.0% interest in Digital Cinema Implementation Partners, LLC (“DCIP”), a joint venture charged with implementing digital cinema in the Company’s theatres; a 14.6% interest in Digital Cinema Distribution Coalition, LLC (“DCDC”), a satellite distribution network for feature films and other digital cinema content; a 10.0% interest in Saudi Cinema Company LLC (“SCC”); a 50%

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ownership interest in 43 U.S. motion picture theatres and approximately 50% ownership interest in 5557 theatres in Europe. Indebtedness held by equity method investees is non-recourse to the Company. In 2020, the Company early adopted the amendments in S-X Rule 1-02(w) related to significant subsidiary tests of nonconsolidated entities.

Goodwill. The Company’s recorded goodwill was $2,429.8 million and $2,547.3 million as of December 31, 2021 and December 31, 2020, respectively. Goodwill represents the excess of purchase price over fair value of net tangible and identifiable intangible assets related to the acquisition of Holdings by Wanda on August 30, 2012 and subsequent theatre business acquisitions. ~~Prior to January 1, 2019,~~The Company evaluates goodwill recorded at the ~~Company had 3~~Company’s 2 reporting units ~~Domestic Theatres, Odeon~~(Domestic Theatres and ~~Nordic Theatres. Effective January 1, 2019,~~International Theatres). Also, the Company combined the Odeon Theatres and Nordic Theatres into a single reporting unit, International Theatres, to reflect how the international business is now managed. The Company tested goodwill for impairment both prior to and subsequent to the combining of these reporting units into the single reporting unit.

~~The Company’s recorded goodwill was $4,789.1 million and $4,788.7 million as of December 31, 2019 and December~~ ~~31, 2018, respectively. The~~ Company evaluates goodwill and its indefinite-lived trademark and trade names for impairment annually as of the beginning of the fourth 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. A decline in the common stock price and the resulting impact on market capitalization is one of several factors considered when making this evaluation. Based on recent sustained declines in the trading price of the Company’s Class A common stock, the Company performed a quantitative goodwill impairment test of the Domestic and International reporting units as of September 30, 2019.

In ~~performing the~~accordance with ASC 350-20-35-30, goodwill of a reporting unit shall be tested for impairment between annual ~~impairment test, the Company has an option to first assess~~tests by assessing the qualitative factors to determine ~~whether it~~if an event occurs or changes in circumstances that would warrant an interim ASC 350 impairment analysis. If an impairment analysis is ~~more likely than not that the fair value of its reporting units are less than the carrying values. Otherwise,~~needed, the Company ~~must perform~~performs a quantitative impairment ~~test. The impairment~~ test for goodwill, which 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. ~~In performing~~

Qualitative impairment tests performed during 2021. The Company performed a qualitative impairment test to evaluate whether it is more likely than not that the fair value of its two reporting units was less than their respective carrying amounts as of its annual assessment date. The Company concluded that it was not more likely than not that the fair value of either of the Company’s two reporting units had been reduced below their respective carrying amounts. As a result, the Company concluded that there were no triggering events as of the annual assessment date, December 31, 2021.

Step 1 quantitative goodwill impairment test as of September 30, 2019, the Company used an enterprise value approach to measure fair value of the reporting units, as compared to an equity value approach used previously. This change in estimate is preferable due to the impact of the change in the capital structure of the Domestic Theatres reporting unit late in the third quarter of 2018 as a result of the issuance of $600 million of the Company’s Senior Unsecured Notes due 2024, the negative equity value carrying amount for the Domestic Theatres reporting unit, and the decline in the market capitalization since May 2019, which has increased the Company’s leverage ratio. See additional discussion in Note 6—~~Corporate Borrowings.~~

The enterprise fair values of the Domestic Theatres and International Theatres reporting units exceeded their carrying values by approximately 9.9% and 11.8%, respectively. Accordingly, there was 0 goodwill impairment recorded as of September 30, 2019.tests performed during 2020. In accordance with ASC 350-20-35-30, ~~goodwill of a reporting unit shall be tested for impairment between annual tests if an event occurs or circumstances change that would more likely than not reduce~~ the ~~fair value of a reporting unit below its carrying amount. The~~ Company 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 December 31, 2019. Given the further~~analysis. A decline in the Common Stock price and prices of the Company’s ~~stock price~~corporate borrowings and the resulting impact on market capitalization are two of several factors considered when making this evaluation. In performing the Step 1 quantitative goodwill impairment test, the Company used an enterprise value approach to measure fair value of the reporting units.

Based on sustained declines during the ~~fourth~~first quarter of ~~2019,~~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 ~~qualitative~~Step 1 quantitative goodwill impairment test ~~to evaluate whether it is more likely than not that~~of the ~~fair value of its 2~~Domestic and International reporting units ~~are less than their respective carrying amounts~~ as of ~~December~~March 31, ~~2019.~~2020. The Company compared its projected financial information and assumptions utilized in the quantitative analysis as of September 30, 2019 to the fourth quarter results noting operating performance is consistent with the projections and there have been no other changes which would impact management’s conclusion that theenterprise fair values of ~~its~~the Domestic Theatres and International Theatres reporting units exceed their carrying values. The Company also observed that its estimated fair value of its corporate borrowings and finance lease obligations remained relatively consistent from September 30, 2019 to December 31, 2019, which represents approximately 80% of the Company’s market enterprise value. The Company observed higher enterprise value control premiums for a recent acquisition agreement in its industry than those utilized for the market approach. In considering the totality of the aforementioned factors together with the excess of fair value over carrying value calculated in both its reporting units in the previous impairment test, the Company has concluded that it is not more likely than not that the fair values of its two reporting units have been reduced below their respective carrying amounts. As a result, the Company concluded that an interim quantitative impairment test as of December 31, 2019 was not required. The Domestic Theatres reporting unit to which $3.1 billion of goodwill is allocated had a negative equity value carrying amount as of December 31, 2019.

As of December 31, 2018, the Company assessed qualitative factors for both of its reporting units and reached a determination that it is not more likely than not that the fair value of the Company’s reporting units arewere less than their carrying values and ~~therefore~~ 0goodwill impairment ~~charge was incurred. In addition,~~charges of $1,124.9 million and $619.4 million, respectively, were recorded as of March 31, 2020 for the Company’s Domestic Theatres and International Theatres reporting units.

Due to the suspension of operations during the second and third quarters of 2020 and the further delay or cancellation of film releases, the Company performed ~~its annual~~a Step 1 quantitative impairment test of the Domestic and International reporting units as of September 30, 2020. See Note 12—Fair Value Measurements for a discussion of the valuation methodology. The enterprise fair value of the Domestic Theatres and International Theatres reporting units was less than their carrying values and goodwill impairment charges of $151.2 million and $5.6 million, respectively, were recorded as of September 30, 2020 for the Company’s Domestic Theatres and International Theatres reporting units.

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~~impairment analysis during~~Due to the ~~fourth quarter~~further delay or cancellation of ~~calendar 2018~~film releases and the ~~third quarter and fourth quarter~~further suspension of ~~calendar~~ ~~2017. In all of these impairment tests,~~operations in the International markets, the Company ~~reached~~performed a ~~determination that there~~Step 1 quantitative impairment test of the Domestic and International reporting units as of December 31, 2020. See Note 12—Fair Value Measurements for a discussion of the valuation methodology. The enterprise fair value of the Domestic Theatres reporting unit was nogreater than its carrying value and the enterprise fair value of the International Theatre reporting unit was less than its carrying value. As a result, goodwill ~~impairment.~~impairment charge of $405.3 million was recorded as of December 31, 2020 for the Company’s International Theatres reporting unit. There is considerable management judgment with respect to cash flow estimates and discount rates to be used in determining fair value, which fall under Level 3 within the fair value measurement hierarchy. Given the nature of the Company’s business and its recent history, future impairments are possible based upon business conditions, movie release dates, and attendance levels.

Other Long-term Assets. Other long-term assets are comprised principally of investments in partnerships and joint ventures costs incurred in connection with the Company’s line-of-credit revolving credit arrangement, which is being amortized to interest expense using the effective interest rate method over the respective life of the issuance, and capitalized computer software, which is amortized over the estimated useful life of the software. See Note 7—Supplemental Balance Sheet Information.

Accounts Payable. Under the Company’s cash management system, checks issued but not presented to banks frequently result in book overdraft balances for accounting purposes and are classified within accounts payable in the balance sheet. The change in book overdrafts are reported as a component of operating cash flows for accounts payable as they do not represent bank overdrafts. The amount of these checks included in accounts payable as of December 31, ~~2019~~2021 and December 31, ~~2018~~2020 was ~~$40.9~~$3.6 million and ~~$42.6~~$1.8 million, respectively.

Leases. The Company adopted ASC 842 on January 1, 2019 using the modified retrospective transition ~~method; and therefore, the comparative information has not been adjusted for the years ended December 31, 2018 and December 31, 2017 or as of December 31, 2018.~~method. Upon transition to the new standard, the Company elected the package of practical expedients, which permitted the Company not to reassess under the new standard its prior conclusions about lease identification, lease classification and initial direct costs.

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

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

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

~~As a result of adopting ASC 842, the Company’s consolidated balance sheet includes additional operating lease ROU assets~~ and total operating lease liabilities of $4,796.0 million and $5,499.6 million, respectively, at December 31, 2019. The difference between the lease ROU assets and total lease liabilities upon initial measurement at January 1, 2019 was primarily due to the reclassification of: (i) deferred rent, landlord allowances, unfavorable lease balances, and theatre closure liabilities previously recorded in other long-term liabilities; (ii) current portions of theatre closure liabilities previously recorded in accrued expenses and other liabilities; (iii) favorable lease balances previously recorded in intangible assets; and, (iv) prepaid rents recorded in other current assets within the consolidated balance sheets as an offset or addition to the opening lease ROU asset balances, as required by ASC 842.

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~~Sale Leaseback Transactions.~~ Prior to adopting ASC 842 on January 1, 2019, the Company deferred gains on sale leaseback transactions and amortized the gains over the remaining lease term. Losses on sale leaseback transactions were recognized at the time of sale if the fair value of the property sold is less than the net book value of the property. On June 18, 2018, the Company completed the sale leaseback of the real estate assets associated with 1 theatre for proceeds, net of closing costs, of $50.1 million and the deferred gain on the sale was approximately $27.3 million. On September 14, 2017, the Company completed the sale leaseback of the real estate assets associated with 7 theatres for proceeds net of closing costs of $128.4 million and the deferred gain on sale was approximately $78.2 million. On December 18, 2017, the Company completed the sale leaseback of the real estate assets associated with 1 theatre for proceeds net of closing costs of $7.8 million. The loss on sale of $0.5 million was recognized immediately. Upon adoption ASC 842 on January 1, 2019, the unamortized deferred gains related to these transactions of $102.4 million were reclassified as a cumulative effect adjustment to accumulated deficit.digital equipment.

Impairment of Long-lived Assets. The Company reviews long-lived assets, including definite-lived intangibles 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. The Company identifies impairments related to internal use software when management determines that the remaining carrying value of the software will not be realized through future use. The Company evaluates events or circumstances, including competition in the markets

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where it operates, that would indicate the carrying value of theatre assets may not be fully recoverable. 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 the carrying value exceeds the future undiscounted cash flows, the carrying value of the asset is reduced to fair value, with the difference ~~recognized~~recorded as an impairment charge. 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 Company evaluates theatres using historical and projected data of theatre level cash flow as its primary indicator of potential impairment and considers the seasonality of its business when making these evaluations. 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.

There is considerable management judgment necessary to determine the estimated future cash flows and fair values of the Company’s theatres and other long-lived assets, and, accordingly, actual results could vary significantly from such estimates, which fall under Level 3 within the fair value measurement hierarchy, see Note 12—Fair Value Measurements.

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


	Year Ended						Year Ended
	December 31,		December 31,		December 31,		December 31,		December 31,		December 31,
(In millions)	2019		2018		2017		2021		2020		2019
Impairment of long-lived assets	$	84.3	$	13.8	$	43.6	$	77.2	$	177.9	$	84.3
Investment expense		3.6		—		—
Impairment of definite-lived intangible assets								—		14.4		—
Impairment of indefinite-lived intangible assets								—		15.2		—
Impairment of goodwill (1)								—		2,306.4		—
Impairment of long-lived assets, definite and indefinite-lived intangible assets and goodwill								77.2		2,513.9		84.3
Impairment of equity method investments recorded in equity in (earnings) loss of non-consolidated entities								—		8.6		—
Impairment of other assets recorded in investment expense (income)								—		15.9		3.6
Total impairment loss	$	87.9	$	13.8	$	43.6	$	77.2	$	2,538.4	$	87.9

(1)

See Note 5—Goodwill and Intangible Assets for information regarding goodwill impairment.

During the year ended December 31, 2021, the Company recorded non-cash impairment of long-lived assets of $61.3 million on 77 theatres in the U.S. markets with 805 screens (in Alabama, Arkansas, California, Colorado, Connecticut, District of Columbia, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Minnesota, Mississippi, Missouri, Montana, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Utah, West Virginia, and Wisconsin) and $15.9 million on 14 theatres in the International markets with 118 screens (in Italy, Norway, Spain, and the UK), which were related to property, net, operating lease right-of-use assets, net, and other long-term assets.

During ~~calendar~~the year ended December 31, 2020, the Company recorded non-cash impairment of long-lived assets of $152.5 million on 101 theatres in the U.S. markets with 1,139 screens (in Alabama, Arizona, Arkansas, California, Colorado, District of Columbia, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nebraska, New Hampshire, New Jersey, New York, North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, South Dakota, Tennessee, Texas, Washington, Wisconsin and Wyoming) and $25.4 million on 37 theatres in the International markets with 340 screens (in Finland, Germany, Ireland, Italy, Norway, Portugal, Spain, Sweden, and UK), which were related to property, net and operating lease right-of-use assets, net. During the year ended December 31, 2020, the Company recorded impairment losses related to definite-lived intangible assets of $14.4 million in the U.S. markets. For indefinite-lived intangible asset, the Company recorded impairment charges related to the Odeon trade name of $12.5 million and Nordic trade names of $2.7 million during the year ended December 31, 2020. During the year ended December 31, 2020, the Company recorded impairment losses in the International markets related to equity method investments of $8.6 million in equity in (earnings) loss of non-consolidated entities. In addition, during the year ended December 31, 2020, the Company recorded impairment losses of $15.9 million within investment expense (income), related to equity interest investments without a readily determinable fair value accounted for under the cost method in the U.S. markets.

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During the year ended December 31, 2019, the Company recorded an impairment of long-lived assets loss of ~~$84.3~~$76.6 million on 40 theatres in the U.S. markets with 512 screens and an impairment of long-lived assets loss of $7.7 million on 14 theatres with 148 screens in the International markets, which was related to property held and used, operating lease right-of-use assets, and a U.S. property held and not used in other long-term assets. In addition, the Company recorded an impairment loss of $3.6 million within investment expense (income), related to an equity interest investment without a readily determinable fair value accounted for under the cost method. During calendar 2018, the Company recorded an impairment of long-lived assets loss of $13.8 million on 13 theatres in the U.S. markets with 150 screens and 15 theatres with 118 screens in the International markets which was related to property held and used. During calendar 2017, the Company recorded an impairment of long-lived assets loss of $43.6 million on 12 theatres in the U.S. markets with 179 screens which was related to property held and used.

Foreign Currency Translation. Operations outside the United States are generally measured using the local currency as the functional currency. Assets and liabilities are translated at the rates of exchange at the balance sheet date. Income and expense items are translated at average rates of exchange. The resultant translation adjustments are included in foreign currency translation adjustment, a separate component of accumulated other comprehensive income (loss). Gains and losses from foreign currency transactions are included in net earnings (loss), except those intercompany transactions of a long-term investment nature, and also the Company’s ~~£500.0~~£4.0 million, 6.375% Senior Subordinated Notes due 2024, which have been designated as a non-derivative net investment hedge of the Company’s investment in Odeon and UCI Cinemas Holdings Limited (“Odeon”) ~~are not included in net earnings.~~. If the Company substantially liquidates its investment in a foreign entity, any gain or loss on currency translation or transaction balance recorded in accumulated other comprehensive loss is recorded as part of a gain or loss on disposition.

Employee Benefit Plans. The Company sponsors frozen non-contributory qualified and non-qualified defined benefit pension plans in the U.S. and frozen defined benefit pension plans in the U.K. and Sweden. The Company also sponsors a postretirement deferred compensation plan, which was terminated on May 3, 2021 and will be liquidated in 2022, and also a defined contribution plan.

The following table sets forth the plans’ benefit obligations and plan assets and the accrued liability for benefit costs included in the consolidated balance sheets:


	U.S. Pension Benefits				International Pension Benefits
	Year Ended				Year Ended
(In millions)	December 31, 2021		December 31, 2020		December 31, 2021		December 31, 2020
Aggregated projected benefit obligation at end of period (1)	$	(111.5)	$	(123.9)	$	(125.0)	$	(133.1)
Aggregated fair value of plan assets at end of period		84.3		84.2		126.0		128.7
Net (liability) asset for benefit cost - funded status	$	(27.2)	$	(39.7)	$	1.0	$	(4.4)

(1)

At December 31, 2021 and December 31, 2020, U.S. aggregated accumulated benefit obligations were $111.5 million and $123.9 million, respectively, and International aggregated accumulated benefit obligations were $125.0 million and $129.5 million, respectively.

The Company does not expect to make a material contribution to the U.S. pension plans during the year ended December 31, 2022. The Company intends to make future cash contributions to the plans in an amount necessary to meet minimum funding requirements according to applicable benefit plan regulations.

The weighted-average assumptions used to determine benefit obligations are as follows:


	U.S. Pension Benefits		International Pension Benefits
	December 31, 2021	December 31, 2020	December 31, 2021	December 31, 2020
Discount rate	2.66%	2.26%	1.79%	1.78%
Rate of compensation increase	N/A	N/A	2.28%	2.29%

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~~gain or loss on currency translation balance recorded in accumulated other comprehensive loss is recognized as part of a gain or loss on disposition.~~

~~Employee Benefit Plans.~~ The Company sponsors frozen non-contributory qualified and non-qualified defined benefit pension plans in the U.S., frozen defined benefit pension plans in the U.K., and a defined benefit pension plan in Sweden that is not frozen. The Company also sponsors a postretirement deferred compensation plan and a defined contribution plan.

~~The following table sets forth the plans’ benefit obligations and plan assets and the accrued liability for benefit costs included in the consolidated balance sheets:~~

U.S. Pension Benefits

International Pension Benefits

Year Ended

Year Ended
(In millions)

December 31, 2019

December 31, 2018

December 31, 2019

December 31, 2018
Aggregated projected benefit obligation at end of period (1)

$
(115.9)

$
(101.1)

$
(120.5)

$
(98.6)
Aggregated fair value of plan assets at end of period

76.3

63.2

119.4

107.2
Net (liability) asset for benefit cost - funded status

$
(39.6)

$
(37.9)

$
(1.1)

$
8.6

~~(1)~~At December 31, 2019 and December 31, 2018, U.S. aggregated accumulated benefit obligations were $115.9 million and $101.1 million, respectively, and international aggregated accumulated benefit obligations were $117.2 million and $95.8 million, respectively.

The Company expects to contribute $5.1 million and $0.0 million to the U.S. and International pension plans, respectively, during the calendar year 2020. The Company intends to make future cash contributions to the plans in an amount necessary to meet minimum funding requirements according to applicable benefit plan regulations.

~~The weighted-average assumptions used to determine benefit obligations are as follows:~~

U.S. Pension Benefits

International Pension Benefits

December 31, 2019

December 31, 2018

December 31, 2019

December 31, 2018
Discount rate

3.07%

4.12%

1.97%

2.86%
Rate of compensation increase

N/A

N/A

2.27%

2.19%

The weighted-average assumptions used to determine net periodic benefit cost are as follows:


	U.S. Pension Benefits			International Pension Benefits			U.S. Pension Benefits			International Pension Benefits
	Year Ended			Year Ended			Year Ended			Year Ended
	December 31,	December 31,	December 31,	December 31,	December 31,	December 31,	December 31,	December 31,	December 31,	December 31,	December 31,	December 31,
	2019	2018	2017	2019	2018	2017	2021	2020	2019	2021	2020	2019
Discount rate	4.12%	3.42%	3.92%	2.86%	2.58%	2.70%	2.26%	3.07%	4.12%	1.78%	1.97%	2.86%
Weighted average expected long-term return on plan assets	6.70%	7.00%	7.00%	2.99%	2.86%	2.85%	6.57%	6.70%	6.70%	1.28%	2.15%	2.99%
Rate of compensation increase	N/A	N/A	N/A	2.19%	2.19%	2.14%	N/A	N/A	N/A	2.29%	2.27%	2.19%

The offset to the pension liability is recorded in equity as a component of accumulated other comprehensive (income) loss. For further information, see Note 14—Accumulated Other Comprehensive Income (Loss) for pension amounts and activity recorded in accumulated other comprehensive income.

For the years ended December 31, ~~2019,~~2021, December 31, ~~2018,~~2020, and December 31, ~~2017,~~2019, net periodic benefit costs (credits) were ~~$1.7~~$(0.9) million, ~~$1.1~~$1.8 million, and ~~$0.6~~$1.7 million, respectively. The ~~service cost~~non-operating component of net periodic benefit costs ~~is recorded in general and administrative other and the non-operating component~~ is recorded in other expense (income) in the consolidated statements of operations. During the years ended December 31, 2020 and December 31, 2019, before the Sweden pension benefit plan was frozen, the service cost component of net periodic benefit cost was recorded in general and administrative other.

The following table provides the benefits expected to be paid in each of the next five years, and in the aggregate for the five years thereafter:


(In millions)	U.S. Pension Benefits		International Pension Benefits
2022	$	5.5	$	3.7
2023		4.6		3.7
2024		5.0		3.9
2025		5.2		4.0
2026		5.3		4.1
Years 2027 - 2031		28.5		22.1

The Company’s investment objectives for its U.S. defined benefit pension plan investments are: (1) to preserve the value of its principal; (2) to maximize a real long-term return with respect to the plan assets consistent with minimizing risk; (3) to achieve and maintain adequate asset coverage for accrued benefits under the plan; and (4) to

~~Table of Contents~~

maintain sufficient liquidity for payment of the plan obligations and expenses. The Company uses a diversified allocation of equity, debt, commodity and real estate exposures that are customized to the plan’s cash flow benefit needs. A weighted average targeted allocation percentage is assigned to each asset class as follows: ~~U.S.~~ equity securities of ~~43%~~49%, ~~fixed including U.S. treasury securities and bond market funds of 27%, international equity~~debt securities of ~~23%~~45%, and private real estate of 7%6%. The ~~international~~International pension benefit plans do not have an established asset target allocation.

Investments in the pension plan assets are measured at fair value on a recurring ~~basis, which is determined using quoted market prices or estimated fair values.~~basis. As of December 31, ~~2019,~~2021, for the U.S. investment portfolio, ~~7% was~~94% were valued using the net asset value per share (or its equivalent) as a practical expedient and 6% of the investment included pooled separate accounts valued using market prices for the underlying instruments that were observable in the market or could be derived by observable market data from independent external valuation information ~~and 93% were valued using~~(Level 2 of the ~~net asset~~fair value ~~per share (or its equivalent) as a practical expedient.~~hierarchy). As of December 31, ~~2019,~~2021, for the ~~international~~International investment portfolio ~~2% was valued using quoted market prices from actively traded markets,~~ 37% included ~~pooled separate accounts~~mutual funds and collective trust funds valued using market prices for the underlying instruments that were observable in the market or could be derived by observable market data from independent external valuation information (Level 2 of the fair value hierarchy) and ~~61%~~63% were valued using the net asset value per share (or its equivalent) as a practical expedient.

Under the defined contribution plan, the Company sponsors a voluntary 401(k) savings plan covering certain U.S. employees age 21 or older and who are not covered by a collective bargaining agreement. Under the Company’s 401(k) Savings Plan, except during the 2020 furlough period, the Company ~~matches~~matched 100% of each eligible employee’s elective contributions up to 3% and 50% of contributions up to 5% of the employee’s eligible compensation.

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Income and Operating Taxes. The Company accounts for income taxes in accordance with ASC 740-10. Under ASC 740-10, deferred income tax effects of transactions reported in different periods for financial reporting and income tax return purposes are recorded by the asset and liability method. This method gives consideration to the future tax consequences of deferred income or expense items and recognizes changes in income tax laws in the period of enactment.

Holdings and its domestic subsidiaries file a consolidated U.S. federal income tax return and combined income tax returns in certain state jurisdictions. Foreign subsidiaries file income tax returns in foreign jurisdictions. Income taxes are determined based on separate Company computations of income or loss. Tax sharing arrangements are in place and utilized when tax benefits from affiliates in the consolidated group are used to offset what would otherwise be taxable income generated by Holdings or another affiliate.

Casualty Insurance. The Company is self-insured for general liability up to $1.0 million per occurrence and carries a $0.5 million deductible limit per occurrence for workers’ compensation claims. The Company utilizes actuarial projections of its ultimate losses to calculate its reserves and expense. The actuarial method includes an allowance for adverse developments on known claims and an allowance for claims which have been incurred but which have not yet been reported. As of December 31, ~~2019~~2021 and December 31, ~~2018,~~2020, the Company recorded casualty insurance reserves of ~~$29.4~~$34.6 million and ~~$24.9 million.~~$32.7 million, respectively. The Company recorded expenses related to general liability and workers’ compensation claims of ~~$32.6~~$37.1 million, ~~$25.1~~$32.8 million, and ~~$22.1~~$32.6 million for the years ended December 31, ~~2019,~~2021, December 31, ~~2018,~~2020, and December 31, ~~2017,~~2019, respectively. Casualty insurance expense is recorded in operating expense.

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


	Year Ended						Year Ended
	December 31,						December 31,		December 31,		December 31,
(In millions)	2019		2018		2017		2021		2020		2019
Derivative liability fair value adjustment for embedded conversion feature in the Convertible Notes due 2024	$	(23.5)	$	(66.4)	$	—
Derivative liability fair value adjustment for embedded conversion feature in the Convertible Notes							$	—	$	89.4	$	(23.5)
Derivative asset fair value adjustment for contingent call option related to the Class B common stock purchase and cancellation agreement		17.7		(45.0)		—		—		19.6		17.7
Credit losses (income) related to contingent lease guarantees								(5.7)		15.0		—
Governmental assistance due to COVID-19 - International markets								(81.5)		(38.6)		—
Governmental assistance due to COVID-19 - U.S. markets								(5.6)		—		—
Foreign currency transaction (gains) losses								(9.8)		(2.8)		1.5
Non-operating components of net periodic benefit cost (income)								(0.7)		1.1		1.2
Loss on debt extinguishment								14.4		—		16.6
Gain on extinguishment Second Lien Notes due 2026								—		(93.6)		—
Financing fees related to modification of debt								1.0		39.3		—
Loss on Pound sterling forward contract								—		—		0.9
Business interruption insurance recoveries		(1.1)		(0.4)		(0.4)		—		(0.5)		(1.1)
Loss on Pound sterling forward contract		0.9		0.4		—
Foreign currency transactions losses		1.5		1.4		(3.0)
Non-operating components of net periodic benefit cost		1.2		0.8		0.2
Loss on extinguishment of Bridge Loan		—		—		0.4
Loss on repayment of indebtedness		16.6		—		—
Fees related to modification of term loans		—		0.4		—
Third party fees relating to Third Amendment to the Senior Secured Credit Agreement		—		—		1.0
Other		0.1		0.7		0.3		—		—		0.1
Other expense (income)	$	13.4	$	(108.1)	$	(1.5)	$	(87.9)	$	28.9	$	13.4

Accounting Pronouncements Recently Adopted

Income Taxes.~~Leases.~~ In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 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 ~~Company adopted~~new guidance also clarifies the ~~guidance of ASC 842 as of January 1, 2019 using the modified retrospective transition approach with the cumulative effect recognized at the date of initial application. The comparative information~~accounting for transactions that result in a step-up in the ~~prior year has not been adjusted and continues to be reported under ASC 840, Leases, which was the accounting standard in effect~~tax basis for that period. ASC 842 requires lessees to recognize leases on-balance sheet and disclose key information about leasing arrangements. The new standard establishes a right-of-use (“ROU”) model that requires a lessee to recognize a lease ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases are classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the consolidated statements of operations. See Note 3—~~Leases for the required disclosures of the nature, amount, timing, and uncertainty of cash flows arising from leases.~~

~~Revenue from Contracts with Customers.~~ The Company adopted the guidance of Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers, (“ASC 606”) as of January 1, 2018 using the modified retrospective method. ASC 606 requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The Company recognized the cumulative effect of initially applying the new revenue standard as an adjustment to the opening balance of accumulated deficit. ASC 606 was applied only to contracts that were not completed at January 1, 2018. The comparative information in 2017 has not been adjusted and continues to be reported under ASC 605, Revenue Recognition, which was the accounting standard in effect during 2017. See Note 2—~~Revenue Recognition for the required disclosures of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers per the guidance in ASC 606.~~

~~Reclassification of Certain Tax Effects.~~ ~~In February 2018, the FASB issued~~goodwill. ASU No. 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (“ASU 2018-02”), which allows a reclassification from accumulated other comprehensive income to accumulated deficit for stranded tax effects resulting from the U.S. Tax Cuts and Jobs Act signed into law in December 2017. ASU 2018-022019-12 was effective for the Company ~~on January 1, 2019 and early~~in the first quarter of 2021. The adoption of ASU 2019-12 did not have a material impact on the amendments was permitted, including adoption in any interim period. The Company early adopted ASU 2018-02, effective January 1, 2018, and recorded a reclassification related to the stranded tax effects that increased accumulated other comprehensive income and increased accumulated deficit by $5.0 million in theCompany’s consolidated ~~balance sheets as of January 1, 2018. See Note 14~~financial statements.—~~Accumulated Other Comprehensive Income (Loss) for further information.~~

~~Improving Presentation of Net Benefit Costs.~~ In March 2017, the FASB issued ASU No. 2017-07, Compensation – Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost (“ASU 2017-07”). The guidance requires the service cost component of defined benefit pension plans and other post-retirement benefit plans to be reported in the same line item as other compensation costs arising from the services rendered by the pertinent employees while the other components of net benefit cost are required to be presented in the income statement separately from the service cost component and reported outside a

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subtotal of operating income. The amendments in this guidance should be applied retrospectively for the presentation of the service cost component and the other components of net benefit cost in the consolidated statements of operations. The Company adopted ASU 2017-07 effective January 1, 2018 and recorded a prior period adjustment for the year ended December 31, 2017 in the consolidated statements of operations to decrease general and administrative: other by $0.2 million, related to the other components of net benefit cost, with a corresponding increase to other expense (income) and decrease to other income of $0.2 million, respectively. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.

~~Restricted Cash in Statement of Cash Flows.~~ In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (A Consensus of the FASB Emerging Issues Task Force) (“ASU 2016-18”). ASU 2016-18 requires that restricted cash be included with cash and cash equivalents when reconciling the beginning and end-of-period total amounts shown on the statement of cash flows. This guidance must be applied retrospectively to all periods presented. The Company adopted ASU 2016-18 effective January 1, 2018 and 2017 has been adjusted to conform to the current presentation. This guidance also requires a new disclosure to reconcile the cash balances within the consolidated statement of cash flows to the consolidated balance sheets. The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the amounts shown in the consolidated statements of cash flows:

(In millions)

December 31, 2019

December 31, 2018

December 31, 2017
Cash and cash equivalents

$
265.0

$
313.3

$
310.0
Restricted cash

10.5

10.7

8.3
Total cash and cash equivalents and restricted cash shown in the consolidated statements of cash flows

$
275.5

$
324.0

$
318.3

~~Classification and measurement of financial instruments.~~ In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”). ASU 2016-01 amends various aspects of the recognition, measurement, presentation, and disclosure of financial instruments. The amendments require that equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) are to be measured at fair value with changes in fair value recognized in net income. However, an entity may choose to measure equity investments that do not have readily determinable fair values at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. The Company adopted ASU 2016-01 on January 1, 2018 and recorded a decrease to accumulated other comprehensive income of $0.6 million, net of tax, related to the unrealized gains on available-for-sale securities that are equity instruments with a corresponding decrease to accumulated deficit in the consolidated balance sheets as of the beginning of the year. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.

Accounting Pronouncements Issued Not Yet Adopted

~~Financial Instruments.~~Government Assistance. In ~~June 2016,~~November 2021, the FASB issued ASU ~~2016-13, Financial Instruments – Credit Losses~~2021-10, Government Assistance (Topic ~~326): Measurement~~832) Disclosures by Business Entities about Government Assistance (“ASU 2021-10”). The amendments in ASU 2021-10 require annual disclosures about transactions with a government that are accounted for by applying a grant or contribution accounting model by analogy, including (1) information about the nature of ~~Credit Losses~~the transactions and the related accounting policy used to account for the transactions, (2) the line items on ~~Financial Instruments (“ASU 2016-13”), which provides new guidance regarding~~ the ~~measurement~~balance sheet and ~~recognition~~income statement that are affected by the transactions, and the amounts applicable to each financial statement line item, and (3) significant terms and conditions of ~~credit impairment for certain financial assets. Such guidance will impact how~~ the ~~Company determines its allowance for estimated uncollectible receivables~~transactions, including commitments and ~~evaluates its available-for-sale investments for impairment. ASU 2016-13 is~~contingencies. The annual government assistance disclosure requirements are effective for the Company induring the ~~first quarter of 2020. The Company is currently evaluating the effect that ASU 2016-13 will have on its consolidated financial statements and related disclosures.~~

~~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 will no longer be required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, but will be required to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. The fair value measurement disclosure requirements of ASU 2018-13 is effective for the Company in the first quarter of 2020.

~~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~~

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Computing Arrangement That Is a Service Contract (“ASU 2018-15”). The guidance 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 whether to capitalize certain implementation costs or expense them as incurred. ASU 2018-15 is effective for the Company in the first quarter of 2020. Early adoption is permitted. 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 expects to adopt ASU 2018-15 prospectively and is currently evaluating the effect that ASU 2016-15 will have on its consolidated financial statements and related disclosures.year ended December 31, 2022.

~~NOTE 2—REVENUE RECOGNITION~~

~~The Company adopted ASC 606 on January 1, 2018 using the modified retrospective method; and therefore, the comparative information has not been adjusted for the year ended December 31, 2017.~~

~~The cumulative effect of the changes made to the consolidated balance sheet at January 1, 2018 for the adoption of ASC 606, are included in the following table:~~

(In millions)

Balance at
December 31, 2017 Without Adoption of ASC 606

Adjustments Due to ASC 606

Balance at
January 1, 2018
Assets:

Other long-term assets

$
475.9

$
11.1

$
487.0
Current liabilities:

Deferred revenues and income

401.0

(10.0)

391.0
Long-term liabilities:

Exhibitor services agreement

530.9

52.9

583.8
Stockholders' equity:

Accumulated deficit

(207.9)

(31.8)

(239.7)

~~The disclosure of the impact of the adoption of ASC 606 on the Company’s consolidated statement of operations is as follows:~~

Year Ended December 31, 2018
(In millions)

Without Adoption of ASC 606

Adjustments

As Reported
Revenues:

Admissions

$
3,386.4

$
(1.4)

$
3,385.0
Food and beverage

1,671.9

(0.4)

1,671.5
Other theatre

356.8

47.5

404.3
Total revenues

5,415.1

45.7

5,460.8
Operating costs and expenses:

Operating expense, excluding depreciation and amortization

1,636.7

18.0

1,654.7
Non-cash interest expense related to NCM exhibitor service agreement

—

41.5

41.5
Net earnings

123.9

(13.8)

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~~Table of Contents~~

NOTE 2—REVENUE RECOGNITION

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


	Year Ended				Year Ended
(In millions)	December 31, 2019		December 31, 2018		December 31, 2021		December 31, 2020		December 31, 2019
Major revenue types
Admissions	$	3,301.3	$	3,385.0	$	1,394.2	$	712.1	$	3,301.3
Food and beverage		1,719.6		1,671.5		857.3		362.4		1,719.6
Other theatre:
Advertising		143.0		142.2		95.3		80.5		143.0
Other theatre		307.1		262.1		181.1		87.4		307.1
Other theatre		450.1		404.3		276.4		167.9		450.1
Total revenues	$	5,471.0	$	5,460.8	$	2,527.9	$	1,242.4	$	5,471.0


	Year Ended				Year Ended
(In millions)	December 31, 2019		December 31, 2018		December 31, 2021		December 31, 2020		December 31, 2019
Timing of revenue recognition
Products and services transferred at a point in time	$	5,071.0	$	5,218.7	$	2,325.5	$	1,086.0	$	5,071.0
Products and services transferred over time (1)		400.0		242.1		202.4		156.4		400.0
Total revenues	$	5,471.0	$	5,460.8	$	2,527.9	$	1,242.4	$	5,471.0

~~(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)	December 31, 2019		December 31, 2018		December 31, 2021		December 31, 2020
Current assets:
Current assets
Receivables related to contracts with customers	$	160.3	$	183.2	$	85.4	$	23.1
Miscellaneous receivables		93.9		76.3		83.1		67.9
Receivables, net	$	254.2	$	259.5	$	168.5	$	91.0


(In millions)	December 31, 2019		December 31, 2018		December 31, 2021		December 31, 2020
Current liabilities:	��
Current liabilities
Deferred revenue related to contracts with customers	$	447.1	$	412.8	$	405.1	$	400.6
Miscellaneous deferred income		2.1		2.0		3.5		4.8
Deferred revenue and income	$	449.2	$	414.8	$	408.6	$	405.4

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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
Ending balance at December 31, 2017

$
376.1
Cumulative effect of initially applying ASC 606

(10.0)
Balance December 31, 2019

$
447.1
Cash received in advance (1)

463.4

110.8
Customer loyalty rewards accumulated, net of expirations:

Admission revenues (2)

30.0

8.4
Food and beverage (2)

55.2
Other theatre (2)

8.9
Food and beverage revenues (2)

15.0
Other theatre revenues (2)

—
Reclassification to revenue as the result of performance obligations satisfied:

Admission revenues (3)

(329.9)

(118.5)
Food and beverage (3)

(82.3)
Other theatre (4)

(97.0)
Business combination - Nordic purchase price allocation

(2.3)
Food and beverage revenues (3)

(32.0)
Other theatre revenues (4)

(33.8)
Foreign currency translation adjustment

0.7

3.6
Ending balance at December 31, 2018

$
412.8
Balance December 31, 2020

$
400.6
Cash received in advance (1)

457.1

186.1
Customer loyalty rewards accumulated, net of expirations:

Admission revenues (2)

29.4

11.0
Food and beverage (2)

69.7
Other theatre (2)

2.8
Food and beverage revenues (2)

20.3
Other theatre revenues (2)

(0.2)
Reclassification to revenue as the result of performance obligations satisfied:

Admission revenues (3)

(307.8)

(127.4)
Food and beverage (3)

(116.7)
Other theatre (4)

(95.6)
Disposition of Austria theatres

(1.2)
Food and beverage revenues (3)

(39.3)
Other theatre revenues (4)

(42.1)
Foreign currency translation adjustment

(3.4)

(3.9)
Ending balance at December 31, 2019

$
447.1
Balance December 31, 2021

$
405.1
(1) Includes movie tickets, food and beverage, gift cards, exchange tickets, and AMC Stubs^® loyalty membership fees.
(2) Amount of rewards accumulated, net of expirations, that are attributed to AMC Stubs^® and other loyalty programs.
(3) Amount of rewards redeemed that are attributed to gift cards, exchange tickets, movie tickets, AMC Stubs^® loyalty programs and other loyalty programs.
(4) Amounts relate to income from non-redeemed or partially redeemed gift cards, non-redeemed exchange tickets, AMC Stubs^® loyalty membership fees and other loyalty programs.
~~(1)Includes movie tickets, food and beverage, gift cards, exchange tickets, and AMC Stubs~~^® ~~loyalty membership fees.~~
~~(2)Amount of rewards accumulated, net of expirations, that are attributed to AMC Stubs~~^® ~~and other loyalty programs.~~
~~(3)Amount of rewards redeemed that are attributed to gift cards, exchange tickets, movie tickets, AMC Stubs~~^® ~~loyalty programs and other loyalty programs.~~
~~(4)Amounts relate to income from non-redeemed or partially redeemed gift cards, non-redeemed exchange tickets, AMC Stubs~~^® ~~loyalty membership fees and other loyalty programs.~~

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

Exhibitor Services

Exhibitor Services
(In millions)

Agreement

Agreement (1)
Balance as of December 31, 2017

$
530.9
Cumulative effect of initially applying ASC 606

52.9
Common Unit Adjustment – surrender of common units (1)

(5.2)
Reclassification of the beginning balance to other theatre revenue, as the result of performance obligations satisfied

(14.6)
Beginning balance
$
564.0
Balance December 31, 2019

$
549.7
Common Unit Adjustment–additions of common units (1)

1.4

4.8
Reclassification of the beginning balance to other theatre revenue, as the result of performance obligations satisfied

(15.7)

(16.9)
Balance as of December 31, 2019
$
549.7
Balance December 31, 2020

$
537.6
Negative Common Unit Adjustment–reduction of common units

(9.2)
Reclassification of portion of the beginning balance to other theatre revenue, as the result of performance obligations satisfied

(18.0)
Balance December 31, 2021

$
510.4
(1) Represents the carrying amount of the NCM common units that were previously received under the annual Common Unit Adjustment. The deferred revenues are being amortized to other theatre revenues over the

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~~(1)~~Represents the fair value amount of the NCM common units that were surrendered due to the annual Common Unit Adjustment. 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 ESA ending in February 2037. See Note 6—~~Investments for further information.~~
remainder of the 30-year term of the ESA ending in February 2037.

Transaction Price Allocated to the Remaining Performance ~~Obligations:~~Obligations. The following table includes the amount of NCM ESA, included in exhibitor services agreement in the Company’s consolidated balance sheets, that is expected to be recognized as revenues in the future related to performance obligations that are unsatisfied as of December 31, ~~2019:~~2021:

(In millions)

Exhibitor services agreement
Year Ended 2020

$
16.9
Year Ended 2021

18.1
Year Ended 2022

19.5
Year Ended 2023

20.9
Year Ended 2024

22.5
Years Ended 2025 through February 2037

451.8
Total

$
549.7

(In millions)

Exhibitor Services Agreement
Year ended 2022

$
19.3
Year ended 2023

20.8
Year ended 2024

22.3
Year ended 2025

24.0
Year ended 2026

25.8
Years ended 2027 through February 2037

398.2
Total

$
510.4

Gift Cards and Exchange Tickets.The total amount of non-redeemed ~~gifts~~gift cards and exchange tickets included in deferred revenues and income as of December 31, ~~2019~~2021 was ~~$354.3~~$322.0 million. This will be recognized as revenues as the gift cards and exchange tickets are redeemed or as the non-redeemed gift card and exchange ticket revenues are recognized in proportion to the pattern of actual redemptions, which is estimated to occur over the next 24 months.

Loyalty Programs.As of December 31, ~~2019,~~2021, the amount of deferred ~~revenue~~revenues allocated to the ~~AMC Stubs~~^® loyalty programs included in deferred revenues and income was ~~$57.4~~$65.5 million. The earned points will be recognized as revenue as the points are redeemed, which is estimated to occur over the next 24 months. The AMC Stubs Premiere^TM annual membership fee is recognized ratably over the one-year membership period.

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

~~NOTE 3—LEASES~~
The Company adopted ASC 842 on January 1, 2019 using the modified retrospective transition method; and therefore, the comparative information has not been adjusted for the years ended December 31, 2018 and December 31, 2017 or as of December 31, 2018. Upon transition to the new standard, the Company elected the package of practical expedients which permitted the Company not to reassess under the new standard its prior conclusions about lease identification, lease classification and initial direct costs.

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NOTE 3—LEASES
The ~~following table provides~~Company received rent concessions provided by the ~~operating~~lessors that aided in mitigating the economic effects of COVID-19 during the pandemic. These concessions primarily consisted of rent abatements and ~~finance~~the deferral of rent payments. In instances where there were no substantive changes to the lease ~~ROU assets~~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 ~~liabilities:~~

(In millions)

Balance Sheet Classification

December 31, 2019
Assets

Operating lease right-of-use assets (1)

Operating lease right-of-use assets

$
4,796.0
Finance lease right-of-use assets (2)

Property, net

73.4
Total leased assets

$
4,869.4

Liabilities

Current

Operating lease liabilities (1)

Current maturities of operating lease liabilities

$
585.8
Finance lease liabilities (2)

Current maturities of finance lease liabilities

10.3
Noncurrent

Operating lease liabilities (1)

Operating lease liabilities

4,913.8
Finance lease liabilities (2)

Finance lease liabilities

89.6
Total lease liabilities

$
5,599.5

~~(1)Included~~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 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 consolidated balance sheets and in the 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 ~~and operating~~as a result of lease ~~liabilities are assets and liabilities for leases~~remeasurements.
A summary of deferred payment amounts related to ~~previous build-to-suit failed sale leaseback transactions, that~~rent obligations for which payments were ~~derecognized~~deferred to 2022 and recorded as a cumulative effect adjustment to accumulated deficit upon adoption of ASC 842. These leases were classified and remeasured at January 1, 2019 as operating right-of-use assets and operating lease liabilities.
future years are provided below:

As of

As of

December 31,

Decrease

December 31,
(In millions)

2020

in deferred amounts

2021
Fixed operating lease deferred amounts (1) (2)

$
383.9

$
(84.6)

$
299.3
Finance lease deferred amounts

12.8

(10.4)

2.4
Variable lease deferred amounts (2)

53.3

(39.9)

13.4
Total deferred lease amounts

$
450.0

$
(134.9)

$
315.1
~~(2)~~Corresponding with the adoption of ASC 842, the Company renamed previously classified capital lease assets and capital lease obligations under ASC 840 as finance lease right-of-use assets and finance lease liabilities, respectively. The Company recognized the finance lease right-of-use assets and finance lease liabilities on January 1, 2019 at the carrying amount of the capital lease asset and capital lease obligation as of December 31, 2018.
~~The cumulative effect adjustment to accumulated deficit at January 1, 2019 is as follows:~~

	(1)
		~~Accumulated~~
~~(In millions)~~		~~Deficit~~
~~Balance~~During the year ended December 31, 2021, the decrease in fixed operating lease deferred amounts includes $152.6 million of decreases in the deferred balances as of December 31, ~~2018~~		$	~~(550.9)~~
~~Derecognition of existing assets for certain sale leaseback transactions previously recorded in property, net~~			~~(405.9)~~
~~Derecognition of existing liabilities for certain sale leaseback transactions previously recorded in current maturities of capital~~2020 related to payments and ~~financing lease obligations and in finance lease liabilities~~	abatements.		~~427.5~~
~~Derecognition of deferred gains from the sale leaseback transactions previously recorded in other long-term liabilities~~			~~102.4~~
~~Difference in fair value compared to the basis of the right-of-use assets for previously impaired asset groups~~			~~(49.0)~~
~~Deferred taxes~~			~~1.2~~
~~Cumulative effect adjustment to accumulated deficit~~			~~76.2~~
~~Balance as of January 1, 2019~~		$	~~(474.7)~~

(2)

During the year ended December 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 is the impact of the adoption of ASC 842 on the Company’s consolidated statement of operations for the year ended December 31, 2019:~~

Year Ended December 31, 2019

Without Adoption of

U.S. Markets

International Markets

(In millions)

ASC 842

Adjustments

Adjustments

As Reported
Operating costs and expenses

Rent (1)(2)(4)

$
851.3

$
69.5

$
47.0

$
967.8
Depreciation and amortization (2)(3)

546.0

(53.6)

(42.4)

450.0
Operating costs and expenses

5,314.5

15.9

4.6

5,335.0
Operating income

156.5

(15.9)

(4.6)

136.0

Other expense (income)

Interest expense:

Capital and financing lease obligations (1)

35.2

(13.2)

(14.4)

7.6
Net loss

(156.2)

(2.7)

9.8

(149.1)

~~(1)~~Cash rent payments for build-to-suit failed sale leasebacks of $44.0 million and $39.6 million for U.S. Markets and International markets, respectively, are accounted for as operating leases under ASC 842 that were previously accounted for as financing leases under ASC 840.
~~(2)~~Non-cash amortization expense for favorable lease terms of $18.3 million and $7.4 million for U.S. Markets and International markets, respectively, reclassified to rent expense and amortized over the shorter base lease term under ASC 842.
~~(3)Depreciation on build-to-suit failed sale leaseback buildings that are eliminated upon adoption of ASC 842.~~
~~(4)Amortization of deferred gains on sale leaseback transactions of $7.2 million for U.S. markets is eliminated upon adoption of ASC 842.~~
The following table reflects the lease costs for the ~~year ended December 31, 2019:~~years indicated below:

Year Ended

Year Ended

December 31,

December 31,

December 31,
(In millions)

Consolidated Statement of Operations

December 31, 2019

Consolidated Statements of Operations

2021

2020

2019
Operating lease cost

Theatre properties

Rent

$
876.0

Rent

$
775.4

$
813.7

$
876.0
Theatre properties

Operating expense

9.1

Operating expense

1.1

2.8

9.1
Equipment

Operating expense

14.4

Operating expense

10.7

14.6

14.4
Office and other

General and administrative: other

5.5

General and administrative: other

5.4

5.4

5.5
Finance lease cost

Amortization of finance lease assets

Depreciation and amortization

9.2

Depreciation and amortization

4.6

6.7

9.2
Interest expense on lease liabilities

Finance lease obligations

7.6

Finance lease obligations

5.2

5.9

7.6
Variable lease cost

Theatre properties

Rent

91.8

Rent

52.6

70.4

91.8
Equipment

Operating expense

56.3

Operating expense

43.4

6.4

56.3
Total lease cost

$
1,069.9

$
898.4

$
925.9

$
1,069.9

The following table represents the weighted-average remaining lease term and discount rate as of December 31, ~~2019:~~2021:

As of December 31, 2019

As of December 31, 2021

Weighted Average

Weighted Average

Weighted Average

Weighted Average

Remaining

Discount

Remaining

Discount
Lease Term and Discount Rate

Lease Term (years)

Rate

Lease Term (years)

Rate
Operating leases

10.2

7.2%

10.0

9.9%
Finance leases

13.0

6.5%

13.8

6.5%

Cash flow and supplemental information is presented below:

Year Ended

December 31,

December 31,

December 31,
(In millions)

2021

2020

2019
Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows used in finance leases

$
(2.9)

$
(3.2)

$
(7.6)
Operating cash flows used in operating leases

(883.2)

(446.5)

(941.6)
Financing cash flows used in finance leases

(9.0)

(6.2)

(10.9)

Landlord contributions:

Operating cashflows provided by operating leases

22.0

43.6

106.5
Supplemental disclosure of noncash leasing activities:

Right-of-use assets obtained in exchange for new operating lease liabilities (1)

196.6

201.5

463.2

(1) Includes lease extensions and option exercises.

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~~Cash flow and supplemental information is presented below:~~

~~Year Ended~~
~~(In millions)~~

~~December 31, 2019~~
~~Cash paid for amounts included in the measurement of lease liabilities:~~

~~Operating cash flows used in finance leases~~

$
~~(7.6)~~
~~Operating cash flows used in operating leases~~

~~(941.6)~~
~~Financing cash flows used in finance leases~~

~~(10.9)~~

~~Landlord contributions:~~

~~Operating cashflows provided by operating leases~~

~~106.5~~
~~Supplemental disclosure of noncash leasing activities:~~

~~Right-of-use assets obtained in exchange for new operating lease liabilities (1)~~

~~463.2~~

~~(1)~~ ~~Includes lease extensions and an option exercise.~~
Minimum annual payments required under existing operating and finance ~~lease liabilities, (net~~leases and the net present value ~~thereof)~~thereof as of December 31, ~~2019~~2021 are as follows:

Operating Lease

Financing Lease

Operating Lease

Financing Lease
(In millions)

Payments (1)(2)

Payments

Payments (2)

Payments (2)
2020

$
952.5

$
16.4
2021

899.1

15.4
2022

836.1

14.9
2022 (1)

$
1,039.5

$
13.9
2023

743.6

11.8

947.8

9.8
2024

667.2

10.6

823.3

8.7
2025

775.6

8.0
2026

711.3

7.8
Thereafter

3,738.4

80.5

3,881.9

63.6
Total lease payments

7,836.9

149.6

8,179.4

111.8
Less imputed interest

(2,337.3)

(49.7)

(2,929.0)

(39.1)
Total

$
5,499.6

$
99.9
Total operating and finance lease liabilities, respectively

$
5,250.4

$
72.7
(1) The minimum annual payments table above does not include contractual cash rent amounts that were due and not paid, which are recorded in accounts payable as shown below, including estimated repayment dates:

Accounts Payable
(In millions)

Lease Payments
Three months ended March 31, 2022

$
33.6
Three months ended June 30, 2022

0.9
Three months ended September 30, 2022

0.8
Three months ended December 31, 2022

6.5
Total deferred lease amounts recorded in AP

$
41.8
~~(1)~~Included in this column upon adoption of ASC 842 are liabilities for leases that were previously classified as build-to-suit failed sale leaseback transactions that were included in the capital and finance lease obligations columns in the prior year.
~~(2)~~Included in this column upon adoption of ASC 842 are fixed executory costs that were previously excluded as part of the minimum lease payments. Fixed executory costs, which primarily consist of common area maintenance, insurance and taxes that meet the classification of fixed payments are included as part of the minimum lease payments.
(2) The minimum annual payments table above includes deferred undiscounted cash rent amounts that were due and not paid related to operating and finance leases, as shown below:

Operating Lease

Financing Lease
(In millions)

Payments

Payments
Three months ended March 31, 2022

$
40.0

$
0.6
Three months ended June 30, 2022

36.2

0.4
Three months ended September 30, 2022

32.3

0.2
Three months ended December 31, 2022

31.4

0.2
2023

82.3

0.5
2024

15.2

—
2025

5.6

—
2026

4.1

—
Thereafter

24.3

—
Total deferred lease amounts

$
271.4

$
1.9

As of December 31, ~~2019,~~2021, the Company had signed additional operating lease agreements for 117 theatres that have not yet commenced of approximately ~~$226.8~~$165.2 million, which are expected to commence between ~~2020~~2022 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.
During the year ended December 31, 2018, the Company modified the terms of an existing operating lease to reduce the lease term. The Company received a $35.0 million incentive from the landlord to enter into the new lease agreement. The Company has recorded amortization of the lease incentive as a reduction to rent expense on a straight-line basis over the remaining lease term which reduced rent expense by $35.0 million during the year ended December 31, 2018.

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NOTE 4—PROPERTY

A summary of property is as follows:

(In millions)

December 31, 2019

December 31, 2018

Property owned:

Land

$
106.3

$
104.6

Buildings and improvements (1)

230.4

878.2

Leasehold improvements

1,834.8

1,560.7

Furniture, fixtures and equipment

2,216.8

2,065.4

4,388.3

4,608.9

Less: accumulated depreciation (1)

1,812.5

1,668.3

2,575.8

2,940.6

Property leased under capital leases:

Building and improvements

81.0

127.8

Less: accumulated depreciation and amortization

7.6

28.8

73.4

99.0

$
2,649.2

$
3,039.6

~~(1)~~ ~~See Note 3~~—Leases for information about derecognition of existing assets for certain sale leaseback transactions previously recorded in property, net for the cumulative effect adjustment to accumulated deficit as of January 1, 2019, as required by ASC 842.

(In millions)

December 31, 2021

December 31, 2020

Property owned:

Land

$
83.2

$
92.6

Buildings and improvements

215.1

222.3

Leasehold improvements

1,852.4

1,833.8

Furniture, fixtures and equipment

2,334.8

2,343.7

4,485.5

4,492.4

Less: accumulated depreciation

2,572.0

2,232.1

1,913.5

2,260.3

Property leased under finance leases:

Building and improvements

60.4

73.2

Less: accumulated depreciation and amortization

11.4

11.0

49.0

62.2

$
1,962.5

$
2,322.5

Property is recorded at cost or fair value, in the case of property resulting from acquisitions. The Company uses the straight-line method in computing depreciation and amortization for financial reporting purposes. The estimated useful lives for leasehold improvements and buildings subject to a ground lease reflect the shorter of the expected useful lives of the assets or the base terms of the corresponding lease agreements plus renewal options expected to be exercised for these leases for assets placed in service subsequent to the lease inception. The estimated useful lives are as follows:

Buildings and improvements

51 to 4540 years

Leasehold improvements

1 to 20 years

Furniture, fixtures and equipment

1 to 1115 years

Expenditures for additions (including interest during construction) and betterments are capitalized, and expenditures for maintenance and repairs are charged to expense as incurred. The cost of assets retired or otherwise disposed of and the related accumulated depreciation and amortization are eliminated from the accounts in the year of disposal. Gains or losses resulting from property disposals are included in operating expense in the accompanying consolidated statements of operations.
Depreciation expense was ~~$413.6~~$382.0 million, ~~$498.2~~$453.2 million, and ~~$495.2~~$413.6 million for the years ended December 31, ~~2019,~~2021, December 31, ~~2018~~2020 and December 31, ~~2017,~~2019, respectively.

NOTE 5—GOODWILL AND INTANGIBLE ASSETS

~~Activity of~~The following table summarizes the changes in goodwill ~~is presented below:~~by reporting unit:

(In millions)

U.S.
Markets

International
Markets

Total
Balance as of December 31, 2017

$
3,072.6

$
1,859.1

$
4,931.7
Adjustments to the acquisition of Nordic

—

(6.4)

(6.4)
Currency translation adjustment

—

(136.6)

(136.6)
Balance as of December 31, 2018

$
3,072.6

$
1,716.1

$
4,788.7
Currency translation adjustment

—

0.4

0.4
Balance as of December 31, 2019

$
3,072.6

$
1,716.5

$
4,789.1

(In millions)

U.S.
Markets

International
Markets

Total
Balance December 31, 2019

$
3,072.6

$
1,716.5

$
4,789.1
Impairment adjustment March 31, 2020

(1,124.9)

(619.4)

(1,744.3)
Impairment adjustment September 30, 2020

(151.2)

(5.6)

(156.8)
Impairment adjustment December 31, 2020

—

(405.3)

(405.3)
Baltics disposition-Latvia (1)

—

(7.9)

(7.9)
Currency translation adjustment

—

72.5

72.5
Balance December 31, 2020

1,796.5

750.8

2,547.3
Currency translation adjustment

—

(76.2)

(76.2)
Baltics disposition-Estonia (1)

—

(3.7)

(3.7)
Baltics disposition-Lithuania (1)

—

(37.6)

(37.6)
Balance December 31, 2021

$
1,796.5

$
633.3

$
2,429.8

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~~Detail of other intangible assets is presented below:~~

December 31, 2019

December 31, 2018




Gross



Gross


Remaining

Carrying

Accumulated

Carrying

Accumulated

(In millions)

Useful Life

Amount

Amortization

Amount

Amortization

Amortizable Intangible Assets:

Favorable leases (1)

$
—

$
—

$
206.0

$
(55.4)

Management contracts and franchise rights

1 to 7 years

11.8

(7.9)

11.8

(6.2)

Non-compete agreement

2 years

2.6

(2.1)

2.6

(1.5)

Starplex trade name

7 years

7.9

(2.6)

7.9

(1.8)

Carmike trade name

4 years

9.3

(4.0)

9.3

(2.7)

NCM tax receivable agreement

17 years

20.9

(6.2)

20.9

(5.3)

Total, amortizable

$
52.5

$
(22.8)

$
258.5

$
(72.9)

Unamortized Intangible Assets:

AMC trademark

$
104.4

$
104.4

Odeon trade names

50.7

51.4

Nordic trade names

10.5

10.7

Total, unamortizable

$
165.6

$
166.5

(1) See Note 1—The Company and Significant Accounting Policies for further information regarding the ~~reclassification of favorable leases as an addition to the opening lease ROU asset balances, as required by ASC 842.~~Baltic theatre sale.
Detail of other intangible assets is presented below:

December 31, 2021

December 31, 2020




Gross



Gross


Remaining

Carrying

Accumulated

Carrying

Accumulated

(In millions)

Useful Life

Amount

Amortization

Amount

Amortization

Amortizable Intangible Assets:

Management contracts and franchise rights

1 to 5 years

$
10.4

$
(9.8)

$
12.0

$
(9.8)

Starplex trade name

5 years

7.9

(4.1)

7.9

(3.4)

Carmike trade name

2 years

9.3

(6.7)

9.3

(5.3)

Total, amortizable

$
27.6

$
(20.6)

$
29.2

$
(18.5)

Non-amortizing Intangible Assets:

AMC trademark

$
104.4

$
104.4

Odeon trade names

38.9

40.7

Nordic trade names

3.1

7.4

Total, unamortizable

$
146.4

$
152.5

See the impairment table in Note 1—The Company and Significant Accounting Policies for information regarding indefinite and definite-lived intangible assets impairment amounts.
Amortization expense associated with the intangible assets noted above is as follows:

Year Ended

Year Ended

(In millions)

December 31, 2019

December 31, 2018

December 31, 2017


December 31, 2021

December 31, 2020

December 31, 2019

Recorded amortization

$
5.1

$
19.2

$
20.0

$
3.5

$
4.5

$
5.1

Estimated annual amortization for the next five calendar years for intangible assets is projected below:

(In millions)

2020

2021

2022

2023

2024


2022

2023

2024

2025

2026
Projected annual amortization

$
5.0

$
4.5

$
3.5

$
3.1

$
1.7

$
2.5

$
2.2

$
1.0

$
1.0

$
1.0

NOTE 6—INVESTMENTS

Investments in non-consolidated affiliates and certain other investments accounted for under the equity method generally include all entities in which the Company or its subsidiaries have significant influence, but not more than 50% voting control, and are recorded in the consolidated balance sheets in other long-term assets. Investments in non-consolidated affiliates as of December 31, ~~2019,~~2021, include interests in DCIP of 29.0%, DCDC of 14.6%, AC JV, owner of Fathom Events, of 32.0%, SV Holdco, owner of Screenvision, ~~18.2%~~of 18.3%, DCM of 50.0%, and SCC of 10.0%. The Company also has partnership interests in 43 U.S. motion picture theatres and approximately 50.0% interest in 5557 theatres in Europe. Indebtedness held by equity method investees is non-recourse to the Company.
~~At December 31, 2019, the Company’s recorded investments are greater than its proportional ownership of the underlying equity in its non-consolidated affiliates by approximately $36.6 million.~~
NCM Transactions
Pursuant to the Company’s Common Unit Adjustment Agreement, from time to time common units of NCM held by the Founding Members will be adjusted up or down through a formula (“Common Unit Adjustment” or “CUA”), primarily based on increases or decreases in the number of theatre screens operated and theatre attendance generated by each Founding Member. The ~~common unit adjustment~~CUA is computed annually, except that an earlier ~~common unit adjustment~~CUA will occur for a Founding Member if its acquisition or disposition of theatres, in a single transaction or cumulatively since the most recent ~~common unit adjustment,~~CUA, will cause a change of 2% or more in the total annual attendance of all of the Founding Members. In the event that a ~~common unit adjustment~~CUA is determined to be a negative number, the Founding

~~Table of Contents~~

Member shall cause, at its election, either (a) the transfer and surrender to NCM of a number of common units equal to all or part of such Founding Member’s ~~common unit adjustment~~CUA or (b) pay to NCM an amount equal to such Founding Member’s ~~common unit adjustment~~CUA calculated in accordance with the ~~Common Unit Adjustment~~CUA Agreement.

~~In March 2018, the NCM Common Unit Adjustment ("CUA") resulted in a negative adjustment~~109

Table of 915,150 common units for the Company. The Company elected to return the units and recorded the surrendered common units as a reduction to deferred revenues for the ESA at fair value of $5.2 million, based upon a price per share of NCM, Inc. of $5.64 on March 15, 2018. The Company’s investment in NCM was reduced by the carrying value of the common units of $6.3 million resulting in a loss from the surrender of the NCM common units of $1.1 million, which was recorded to equity in earnings (loss) of Non-Consolidated Entities in March 2018.Contents

In June 18, 2018, the Company entered into 2 Unit Purchase Agreements (the “Agreements”) with each of Regal Cinemas, Inc. (“Regal”) and Cinemark USA, Inc. (“Cinemark”) pursuant to which Regal and Cinemark each separately agreed to purchase 10,738,740 common units of NCM at a sales price of $7.30 per unit and aggregate consideration of approximately $156.8 million (the “Sales”). The Sales closed on July 5, 2018. Following the closing of the Sales, it reduced the Company’s then ownership of common stock shares in NCM, Inc. or common units in NCM to zero. NCM consented to the Sales and waived its rights under the memorandum of understanding that provided the Company would not reduce its combined ownership of NCM and NCM, Inc. below 4.5%. The Company recorded a $28.9 million gain on the sale of its NCM investment during the year ended December 31, 2018.

In March 2019, the NCM CUA resulted in a positive adjustment of 197,118 common units for the Company. The Company received the units and recorded the common units as an addition to deferred revenues for the ESA at fair value of $1.4 million, based upon a price per share of National CineMedia, Inc. (“NCM, Inc.”) of $7.24 on March 14, 2019. In March 2020, the NCM CUA resulted in a positive adjustment of 1,390,566 common units for the Company. The Company ~~does not have significant influence over this entity~~received the units and recorded the ~~investment is recorded~~common units as an addition to deferred revenues for the ESA at fair value ~~each period.~~
~~SV Holdco.~~of $4.8 million, based upon a price per share of National CineMedia, Inc. (“~~Screenvision”~~NCM, Inc.”)
~~The Company acquired its investment in SV Holdco~~ of $3.46 on ~~December 21, 2016, in connection with~~March 12, 2020. In March 2021, the acquisition of Carmike. SV Holdco is a holding company that owns and operates the Screenvision advertising business through a subsidiary entity. SV Holdco has elected to be taxed as a partnership for U.S. federal income tax purposes.
~~On May 30, 2018, Screenvision entered into an Agreement and Plan of Merger which~~NCM CUA resulted in a ~~change~~negative adjustment of ~~control in Screenvision. The~~3,012,738 common units for the Company, ~~received distributions~~ and ~~merger consideration~~therefore, the Company paid NCM cash of ~~$45.8~~$9.2 million ~~on July 2, 2018 upon consummation of the Screenvision merger and retains a 18.2% common membership interest. The Company reduced the carrying value of its investment in Screenvision to $0~~ and recorded ~~equity in earnings~~the amount as a reduction to deferred revenues for the ~~excess distribution of $30.1 million during~~ESA. During the year ended December 31, ~~2018.~~2021, the Company sold its remaining approximately 1.4 million NCM shares and received net proceeds of $5.7 million, which were recorded in investment expense (income). See Note 1—The Company and Significant Accounting Policies and Note 2—Revenue Recognition for further information regarding CUA and ESA.
DCIP ~~Transactions~~
The Company will make capital contributions to DCIP for projector and installation costs in excess of an agreed upon cap. The Company pays equipment rent monthly and records the equipment rental expense on a straight-line basis over 12 years, or until DCIP contributes the projectors back to the Company reducing the Company’s investment in DCIP.
~~Open Road Films~~ Transactions
During the year ended December 31, ~~2017,~~2021, the Company received cash distribution of $12.2 million from DCIP, which the Company recorded ~~additional~~as a reduction to its investment in DCIP. The distribution reduced the Company’s recorded investment below $0 and therefore the Company recorded equity in earnings ~~(loss) in Open Road Releasing, LLC (“Open Road”)~~ of ~~$(8.0)~~$4.0 million ~~related~~ to ~~certain advances~~increase its investment to ~~and on behalf of Open Road.~~
~~On August 4, 2017,~~$0 as the Company ~~and Regal Entertainment Group consummated a transaction for~~has not guaranteed any of the ~~sale~~liabilities of ~~all~~DCIP. During the ~~issued and outstanding ownership interests in Open Road for total proceeds~~year ended December 31, 2020, the Company received distributions from DCIP of ~~$28.8~~digital projectors it had been leasing with an estimated fair value of $125.2 million, of which the Company ~~received $14.0~~recorded as a reduction to its investment in DCIP. The distribution reduced the Company’s recorded investment below $0 and therefore the Company recorded equity in earnings of $5.1 million to increase its investment to $0 as the Company has not guaranteed any of the liabilities of DCIP. The Company will not record its share of any equity in ~~net proceeds after transaction expenses for its 50% investment including collection~~earnings of ~~amounts due~~DCIP until such time as the excess distribution amount recorded to earnings has been satisfied with prospective earnings from ~~Open Road of $4.8 million and recognized a gain on sale of $17.2 million.~~DCIP.
AC JV Transactions
On December 26, 2013, the Company amended and restated its existing ESA with NCM in connection with the spin-off by NCM of its Fathom Events business to AC JV, a newly-formed company owned 32% by each of the

~~Table of Contents~~

Founding Members and 4% by NCM. In consideration for the spin-off, NCM received a total of $25.0 million in promissory notes from its Founding Members (approximately $8.3 million from each Founding Member). Interest on the promissory note is at a fixed rate of 5% per annum, compounded annually. Interest and principal payments ~~are~~were due annually in 6 equal installments commencing on the first anniversary of the closing. The Company paid the sixth and final annual installment related to the promissory note in December 2019. As of December 31, 2019, Cinemark and Regal also amended and restated their respective ESAs with NCM in connection with the spin-off. The ESAs were modified to remove those provisions addressing the rights and obligations related to digital programing services of the Fathom Events business. Those provisions are now contained in the Amended and Restated Digital Programming Exhibitor Services Agreements (the “Digital ESAs”) that were entered into on December 26, 2013 by NCM and each of the Founding Members. These Digital ESAs were then assigned by NCM to AC JV as part of the Fathom spin-off.
SV Holdco (“Screenvision”)
The Company acquired its investment in SV Holdco on December 21, 2016, in connection with the acquisition of Carmike. SV Holdco is a holding company that owns and operates the Screenvision advertising business through a subsidiary entity. SV Holdco has elected to be taxed as a partnership for U.S. federal income tax purposes.
Summary Financial Information
Investments in non-consolidated affiliates accounted for under the equity method as of December 31, ~~2019,~~2021, include interests in SV Holdco, DCM, DCIP, AC JV, DCDC, SCC, 5557 theatres in Europe, 43 U.S. motion picture theatres, and other immaterial investments.
~~Condensed financial information of the Company’s significant non-consolidated equity method investments is shown below with amounts presented under U.S. GAAP:~~

December 31, 2019
(In millions)

DCIP

Other

Total
Current assets

$
51.4

$
287.9

$
339.3
Noncurrent assets

568.0

275.3

843.3
Total assets

619.4

563.2

1,182.6
Current liabilities

64.6

157.8

222.4
Noncurrent liabilities

10.4

250.1

260.5
Total liabilities

75.0

407.9

482.9
Stockholders’ equity

544.4

155.3

699.7
Liabilities and stockholders’ equity

619.4

563.2

1,182.6
The Company’s recorded investment (1)

$
151.0

$
88.1

$
239.1

December 31, 2018
(In millions)

DCIP

Other

Total
Current assets

$
57.9

$
170.4

$
228.3
Noncurrent assets

684.3

201.0

885.3
Total assets

742.2

371.4

1,113.6
Current liabilities

60.7

99.4

160.1
Noncurrent liabilities

132.1

207.7

339.8
Total liabilities

192.8

307.1

499.9
Stockholders’ equity

549.5

64.3

613.8
Liabilities and stockholders’ equity

742.2

371.4

1,113.6
The Company’s recorded investment (1)

$
152.5

$
79.9

$
232.4
~~(1)~~ Certain differences in the Company’s recorded investments, and its proportional ownership share resulting from the acquisition of Holdings by Wanda on August 30, 2012, where the investments were recorded at fair value, are amortized to equity in (earnings) losses of non-consolidated entities over the estimated useful lives of the underlying assets and liabilities. Other non-amortizing differences are considered to represent goodwill and are evaluated for impairment annually.

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Condensed financial information of the Company’s ~~significant~~non-consolidated equity method investments is shown below with amounts presented under U.S. GAAP:

(In millions)

December 31, 2021

December 31, 2020
Current assets

$
265.6

$
267.6
Noncurrent assets

348.5

347.4
Total assets

614.1

615.0
Current liabilities

218.4

181.0
Noncurrent liabilities

208.7

213.5
Total liabilities

427.1

394.5
Stockholders’ equity

187.0

220.5
Liabilities and stockholders’ equity

614.1

615.0
The Company’s recorded investment

85.6

80.9

Condensed financial information of the Company’s non-consolidated equity method investments is shown below and amounts are presented under U.S. GAAP for the periods of ownership by the Company:

Year Ended

Year Ended December 31, 2019

December 31,

December 31,

December 31,
(In millions)

DCIP

Other

Total

2021

2020

2019
Revenues

$
172.2

$
522.3

$
694.5

$
285.1

$
162.7

$
694.5
Operating costs and expenses

94.3

489.4

583.7

287.6

347.9

583.7
Net earnings

$
77.9

$
32.9

$
110.8
Net earnings (loss)

$
(2.5)

$
(185.2)

$
110.8

Year Ended December 31, 2018
(In millions)

NCM (1)

DCIP

Other

Total
Revenues

$
193.9

$
176.7

$
532.2

$
902.8
Operating costs and expenses

171.9

81.9

489.2

743.0
Net earnings

$
22.0

$
94.8

$
43.0

$
159.8
~~(1)~~ ~~The NCM condensed financial information represents the period January 1, 2018 through the date the sale closed July 5, 2018.~~

Year Ended December 31, 2017
(In millions)

NCM

DCIP

Other

Total
Revenues

$
426.1

$
177.4

$
581.9

$
1,185.4
Operating costs and expenses

324.2

84.3

550.9

959.4
Net earnings

$
101.9

$
93.1

$
31.0

$
226.0

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

Year Ended

Year Ended

Year Ended
(In millions)

December 31, 2019

December 31, 2018

December 31, 2017
National CineMedia(1)

$
—

$
17.9

$
(216.3)
Digital Cinema Implementation Partners, LLC

25.4

29.1

28.6
Other

5.2

39.7

2.5
The Company’s recorded equity in earnings (losses)

$
30.6

$
86.7

$
(185.2)
~~(1)~~ ~~Includes both NCM, LLC and NCM, Inc.~~

Year Ended
(In millions)

December 31, 2021

December 31, 2020

December 31, 2019
The Company’s recorded equity in earnings (loss)

$
11.0

$
(30.9)

$
30.6

Related Party Transactions
The Company recorded the following related party transactions with equity method investees:

As of

As of
(In millions)

December 31, 2021

December 31, 2020
Due from DCM for on-screen advertising revenue

$
2.2

$
—
Loan receivable from DCM

0.7

0.7
Due from DCIP for warranty expenditures

—

5.7
Due to AC JV for Fathom Events programming

(3.7)

(0.9)
Due from Screenvision for on-screen advertising revenue

2.3

0.4
Due from Nordic JVs

0.9

1.2
Due to Nordic JVs for management services

(1.1)

(0.5)
Due from SCC related to the joint venture

1.3

0.7
Due to U.S. theatre partnerships

—

(0.4)

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The Company recorded the following changes in the carrying amount of its investment in NCM LLC and equity in earnings of NCM LLC during the years ended December 31, 2019, December 31, 2018, and December 31, 2017:

Accumulated

G&A:




Exhibitor

Other



Equity in

Mergers and


Investment

Services

Comprehensive

Cash

(Earnings)

Acquisitions

Advertising
(In millions)

in NCM

Agreement(1)

(Income)/Loss

Received

Losses

Expense

(Revenue)
Ending balance at December 31, 2016

$
323.9

$
(359.2)

$
(4.0)

Receipt of common units

235.2

(235.2)

—

$
—

$
—

$
—

$
—
Receipt of excess cash distributions

(28.6)

—

—

28.6

—

—

—
Surrender of common units for transferred theatres

(36.4)

35.7

—

—

0.7

—

—
Surrender of common units for make whole agreement

(23.1)

—

—

—

0.5

22.6

—
Other-than-temporary impairment loss - held for sale

(206.3)

—

—

—

206.3

—

—
Units exchanged for NCM, Inc. common shares

(116.5)

—

—

—

—

—

—
Equity in earnings

15.3

—

1.5

—

(16.8)

—

—
Equity in loss from amortization of basis difference

(2.4)

—

—

—

2.4

—

—
Amortization of ESA

—

27.8

—

—

—

—

(27.8)
Ending balance at December 31, 2017

$
161.1

$
(530.9)

$
(2.5)

$
28.6

$
193.1

$
22.6

$
(27.8)
ASC 606 revenue recognition change in amortization method

—

(52.9)

—

—

—

—

—
Surrender of common units for common unit adjustment

(6.3)

5.2

—

—

1.1

—

—
Receipt of excess cash distributions

(15.3)

—

—

15.3

—

—

—
Impairment loss - held for sale

(14.4)

—

—

—

14.4

—

—
Expenses on sale of NCM common units

—

—

—

(1.4)

1.4

—

—
Sale of NCM common units

(128.3)

—

2.4

156.8

(30.9)

—

—
Equity in earnings

3.2

—

0.1

—

(3.3)

—

—
Amortization of ESA

—

14.6

—

—

—

—

(14.6)
Ending balance at December 31, 2018

$
—

$
(564.0)

$
—

$
170.7

$
(17.3)

$
—

$
(14.6)
Receipt of NCM shares

—

(1.4)

—

—

—

—

—
Amortization of ESA

—

15.7

—

—

—

—

(15.7)
Ending balance at December 31, 2019

$
—

$
(549.7)

$
—

$
—

$
—

$
—

$
(15.7)
~~(1)~~ ~~Represents the unamortized portion of the ESA with NCM. Such amounts are being amortized to other theatre revenues over the remainder of the 30-year term of the ESA ending in 2037. See Note 1~~—~~The Company and Significant Accounting Policies and Note 2~~—~~Revenue Recognition for information on the effects of adopting ASC 606.~~

~~Table of Contents~~

~~Related Party Transactions~~
~~The Company recorded the following related party transactions with equity method investees:~~

As of

As of
(In millions)

December 31, 2019

December 31, 2018
Due from DCM for on-screen advertising revenue

$
4.2

$
2.8
Loan receivable from DCM

0.7

0.6
Due from DCIP for warranty expenditures

3.5

3.4
Deferred rent liability for digital projectors related to DCIP

—

(7.8)
Due to AC JV for Fathom Events programming

(0.8)

(2.5)
Due from Screenvision for on-screen advertising revenue

3.4

2.7
Due from Nordic JVs

2.5

2.6
Due to Nordic JVs for management services

(1.6)

(1.7)
Due from SCC related to the joint venture

8.3

—
Due to U.S. theatre partnerships

(1.0)

(0.9)

Year Ended

Year Ended
(In millions)

Condensed Consolidated Statement of Operations

December 31, 2019

December 31, 2018

December 31, 2017

Consolidated Statements of Operations

December 31, 2021

December 31, 2020

December 31, 2019
DCM screen advertising revenues

Other revenues

$
22.4

$
20.1

$
23.3

Other revenues

$
7.8

$
3.8

$
22.4
DCIP equipment rental expense

Operating expense

3.6

6.5

5.7

Operating expense

0.2

1.0

3.6
Gross exhibition cost on AC JV Fathom Events programming

Film exhibition costs

13.6

12.9

12.5

Film exhibition costs

10.4

3.9

13.6
Screenvision screen advertising revenues

Other revenues

15.6

15.1

14.0

Other revenues

4.6

2.6

15.6

~~Table of Contents~~

NOTE 7—SUPPLEMENTAL BALANCE SHEET INFORMATION

~~Assets held for sale, other~~Other assets and liabilities consist of the following:

(In millions)

December 31, 2019

December 31, 2018


December 31, 2021

December 31, 2020

Other current assets:

Income taxes receivable

$
11.7

$
24.7

$
1.9

$
8.0

Prepaids ~~(1)~~

63.4

99.8

35.4

33.8

Merchandise inventory

37.5

35.2

31.3

21.3

Other

30.8

38.1

12.9

11.5

$
143.4

$
197.8

$
81.5

$
74.6

Other long-term assets:

Investments in real estate

$
16.8

$
16.2

$
9.7

$
16.0

Deferred financing costs revolving credit facility

11.3

6.7

5.5

8.3

Investments in equity method investees

239.1

232.4

85.6

80.9

Computer software

115.8

104.3

83.7

101.6

Investment in common stock

28.0

30.9

11.4

16.6

Pension asset

19.6

25.7

21.1

20.8

Derivative asset

38.0

55.7

Prepaid commitment fee and deferred charges (1)

—

28.6

Other

34.4

33.6

32.0

31.8

$
503.0

$
505.5

$
249.0

$
304.6

Accrued expenses and other liabilities:

Taxes other than income

$
75.2

$
73.4

$
105.8

$
86.6

Interest

21.2

32.6

37.4

31.4

Payroll and vacation

43.8

39.6

44.4

28.3

Current portion of casualty claims and premiums

12.6

11.2

12.0

6.7

Accrued bonus

32.5

39.6

54.5

0.6

Theatre and other closure (1)

—

5.6

Accrued licensing and percentage rent

24.7

18.9

Accrued licensing and variable rent

23.5

16.5

Current portion of pension

0.5

0.3

0.8

0.6

Group insurance reserve

3.0

3.0

Accrued tax payable

4.7

3.6

Other

114.1

157.3

81.4

80.5

$
324.6

$
378.5

$
367.5

$
257.8

Other long-term liabilities:

Unfavorable lease obligations (1)

$
—

$
176.6

Deferred rent (1)

—

518.5

Pension

59.9

54.6

$
46.5

$
64.3

Deferred gain (2)

—

102.4

Casualty claims and premiums

17.9

15.2

24.4

28.2

Theatre and other closure (1)

—

12.5

Contingent lease liabilities

0.3

30.2

Other

118.1

83.3

93.8

118.6

$
195.9

$
963.1

$
165.0

$
241.3

(1) During the year ended December 31, 2021, the Company reclassified the prepaid commitment fee and deferred charges of $28.6 million to corporate borrowings from other long-term assets. See Note 18—~~The Company~~Corporate Borrowings and ~~Significant Accounting Policies~~ Finance Lease Obligationsfor information regarding the reclassification of prepaid rent, unfavorable lease obligations, deferred rent including landlord allowances and theatre closure liabilities as a reduction to the opening lease ROU asset balances, as required by ASC 842.further information.
~~(2)~~ ~~See Note 3~~—Leases for information regarding the derecognition of deferred gains from sale leaseback transactions for the cumulative effect adjustment to accumulated deficit as of January 1, 2019, as required by ASC 842.

93112

Table of Contents

NOTE 8—CORPORATE BORROWINGS AND FINANCE LEASE OBLIGATIONS
A summary of the carrying value of corporate borrowings and ~~capital and financing~~finance lease obligations is as follows:

(In millions)

December 31, 2019

December 31, 2018
Senior Secured Credit Facility-Term Loan due 2022

$
—

$
854.2
Senior Secured Credit Facility-Term Loan due 2023

—

491.2
Senior Secured Credit Facility-Term Loan due 2026 (5.23% as of December 31, 2019)

1,985.0

—
Odeon Revolving Credit Facility Due 2022

—

$
11.9
6.0% Senior Secured Notes due 2023

—

230.0
2.95% Senior Unsecured Convertible Notes due 2024

600.0

600.0
5.875% Senior Subordinated Notes due 2022

—

375.0
6.375% Senior Subordinated Notes due 2024 (£500 million par value)

655.8

634.1
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
5.0% Promissory Note payable to NCM due 2019

—

1.3

$
4,910.8

$
4,867.7
Finance lease obligations(1)

99.9

560.2
Debt issuance costs

(88.8)

(104.3)
Net discounts

(69.1)

(64.4)
Derivative liability

0.5

24.0

$
4,853.3

$
5,283.2
Less:

Current maturities corporate borrowings

(20.0)

(15.2)
Current maturities finance lease obligations

(10.3)

—
Current maturities capital and financing lease obligations

—

(67.0)

$
4,823.0

$
5,201.0

(In millions)

December 31, 2021

December 31, 2020
First Lien Secured Debt:

Senior Secured Credit Facility-Term Loan due 2026 (3.103% as of December 31, 2021)

$
1,945.0

$
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 (£147.6 million and €312.2 million par value as of December 31, 2021)

552.6

—
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

73.5

—
Second Lien Secured Debt:

10%/12% Cash/PIK/Toggle Second Lien Subordinated Notes due 2026

1,508.0

1,423.6
Subordinated Debt:

6.375% Senior Subordinated Notes due 2024 (£4.0 million par value as of December 31, 2021)

5.4

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

$
5,169.1

$
5,411.6
Finance lease obligations

72.7

96.0
Paid-in-kind interest

—

7.6
Deferred financing costs

(39.1)

(42.1)
Net premium (1)

298.0

338.7

$
5,500.7

$
5,811.8
Less:

Current maturities corporate borrowings

(20.0)

(20.0)
Current maturities finance lease obligations

(9.5)

(12.9)

$
5,471.2

$
5,778.9
(1) ~~See Note 3~~—~~Leases for information about~~The following table provides the ~~derecognition~~net premium (discount) amounts of ~~existing liabilities for certain sale leaseback transactions for the cumulative effect adjustment to accumulated deficit as of January 1, 2019, as required by ASC 842.~~corporate borrowings:

December 31,

December 31,
(In millions)

2021

2020
10%/12% Cash/PIK/Toggle Second Lien Subordinated Notes due 2026

$
364.6

$
445.1
2.95% Senior Secured Convertible Notes due 2026

—

(61.5)
15%/17% Cash/PIK Toggle First Lien Secured Notes due 2026

(16.8)

—
10.5% First Lien Notes due 2026

(24.5)

(28.5)
10.5% First Lien Notes due 2025

(7.2)

(8.9)
Senior Secured Credit Facility-Term Loan due 2026

(6.1)

(7.5)
10.75% in Year 1, 11.25% thereafter Cash/PIK Odeon Term Loan Facility due 2023

(12.1)

—
6.375% Senior Subordinated Notes due 2024

0.1

—

$
298.0

$
338.7

113

Table of Contents

The following table provides the principal payments required and maturities of corporate borrowings as of December 31, ~~2019:~~2021:

Principal

Principal

Amount of

Amount of

Corporate

Corporate
(In millions)

Borrowings

Borrowings
2020

$
20.0
2021

20.0
2022

20.0

$
20.0
2023

20.0

572.6
2024

1,275.8

25.4
2025

618.3
2026

3,802.1
Thereafter

3,555.0

130.7
Total

$
4,910.8

$
5,169.1

Odeon Secured Debt
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 then-existing revolving credit facility and the remaining net proceeds will be used for general corporate purposes. The Company recorded deferred financing costs of $1.0 million in other expense during the year ended December 31, 2021. The Odeon Term Loan Facility has a maturity of August 19, 2023 (2.5 years from the date on which it was 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 is 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. For the first interest period ending May 2021 and the second interest period ending August 2021, Odeon elected to pay in PIK interest. Odeon paid cash interest with respect to the third interest period ending November 2021. The principal amount of new funding is prior to deducting discounts of $19.4 million and deferred financing costs of $16.5 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 $44 million) required under the Odeon Term Loan Facility, measured at each quarter end date.
Odeon Revolving Credit Facility. On December 7, 2017, the Company entered into a Revolving Credit Facility Agreement (“Odeon Revolving Credit Facility”) with Citigroup Global Markets Limited, Lloyds Bank PLC, Barclays Bank PLC and Bank of America Merrill Lynch International Limited as arrangers. The lenders made available a multicurrency revolving credit facility in an aggregate amount of £100.0 million. The interest rate on each loan when drawn down under the Odeon Revolving Credit Facility was 2.5% plus IBOR (meaning LIBOR, EURIBOR, CIBOR or STIBOR as applicable) per annum. The undrawn commitment fee was 0.5% of the undrawn amount per annum. All assets located in England and Wales were pledged as collateral.
On April 24, 2020, Odeon Cinemas Group Limited entered into an amendment to the Odeon Revolving Credit Facility with Lloyds Bank PLC as agent (the “Odeon Amendment”), 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) during which Odeon Cinemas Group Limited has delivered a Financial Covenant Election (as defined in the Odeon Amendment) to the agent (the “Odeon Covenant Suspension Period”). During the Odeon Covenant Suspension Period, Odeon Cinemas Group Limited will not, and will not permit any of its subsidiaries to, make certain restricted payments including payment on shareholder loans, provided that cash payments of interest with respect to shareholder loans will be permitted. Additionally, lenders granted a waiver such that certain events or circumstances resulting from COVID-19 virus occurring prior to the Odeon Amendment and continuing will be deemed not to constitute an event of default under the Odeon Revolving Credit Facility.

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On February 15, 2021, Odeon used the net proceeds from the Odeon Term Loan Facility to repay in full its then-existing Odeon Revolving Credit Facility.

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 (the “First Lien Toggle Notes due 2026”) as contemplated by the previously disclosed commitment letter with Mudrick Capital Management, LP (“Mudrick”), 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. On September 30, 2021, the Company exercised an option to repurchase $35.0 million of its First Lien Toggle Notes due 2026. The total cost to exercise this repurchase option was $40.3 million, including principal, redemption price and accrued and unpaid interest. As a result of this debt reduction, the Company’s annual cash interest cost will be reduced by $5.25 million. During the year ended December 31, 2021, the Company recorded loss on debt extinguishment of $14.4 million in other expense. See Note 16—Subsequent Events for additional information.

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. For the first interest period ended July 15, 2021, the Company elected to pay in PIK interest. 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 Secured 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 common stock (“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 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 common shares issued were recorded by the Company in stockholders’ deficit. During the year ended December 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 was 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. During the year ended December 31, 2020, the Company recorded a gain on extinguishment of the Second Lien Notes due 2026 of $93.6 million based on the fair value of the Exchange Shares of $43.8 million and the carrying value of the $104.5 million principal amount of the Second Lien Notes exchanged of $137.4 million. The Company filed a shelf registration statement in December 2020, which was declared effective providing for the resale of the Exchange Shares.

Senior Subordinated Debt Exchange Offers

On July 31, 2020, the Company consummated its previously announced private offers to exchange (the “Exchange Offers”) any and all of 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 (together the “Existing Subordinated Notes”) for newly issued Second Lien Notes due 2026.

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The aggregate principal amounts of the Existing Subordinated Notes set forth in the table below were validly tendered and subsequently accepted. Such accepted Existing Subordinated Notes were retired and cancelled.

(In thousands)

Total Aggregate Principal Amount Validly Tendered

Percentage of Outstanding Existing Subordinated Notes Validly Tendered
6.375% Senior Subordinated Notes due 2024 (£496,014 par value)

$
632,145

99.20
%
5.75% Senior Subordinated Notes due 2025

$
501,679

83.61
%
5.875% Senior Subordinated Notes due 2026

$
539,393

90.65
%
6.125% Senior Subordinated Notes due 2027

$
344,279

72.48
%

The Exchange Offers reduced the principal amounts of the Company’s debt by approximately $555 million, which represented approximately 23.9% of the principal amount of the Existing Subordinated Notes. The Company raised $300 million in additional cash from the issuance of the new First Lien Notes due 2026, prior to deducting $36 million related to discounts and deferred financing costs paid to the lenders. Additionally, certain holders of the Existing Subordinated Notes that agreed to backstop the rights offering for $200 million of the First Lien Notes due 2026 received 5 million common shares, or 4.6% of AMC’s outstanding shares as of July 31, 2020, worth $20.2 million at the market closing price on July 31, 2020. The closing of the Exchange Offers also allowed the Company 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 12 to 18 months after issuance 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 the Company of between approximately $120 million and $180 million. The Company realized $1.2 billion of cancellation of debt income (“CODI”) for tax purposes in connection with its debt restructuring. As a result of such CODI, $1.2 billion of its net operating losses were eliminated as a result of tax attribute reductions, see Note 10—Income Taxes for further information.
In connection with the Exchange Offers, the Company also received consents from eligible holders of the Existing Subordinated Notes to amend the indentures governing the Existing Subordinated Notes to among other things, (i) release the existing subsidiary guarantees of the Existing Subordinated Notes, (ii) eliminate substantially all of the restrictive covenants, certain affirmative covenants and certain events of default contained in the indentures governing the Existing Subordinated Notes, and (iii) make other conforming changes to internally conform to certain proposed amendments.
The Company performed an assessment on a lender-by-lender basis to identify certain lenders that met the criteria for a troubled debt restructuring (“TDR”) under ASC 470-60, Troubled Debt Restructurings by Debtors (“ASC 470-60”) as the Company was experiencing financial difficulties and the lenders granted a concession. The portion of the loans that did not meet the assessment of TDR under ASC 470-60 were treated as modifications. The Company accounted for the exchange of approximately $1,782.5 million principal amount of its Existing Senior Subordinated Notes for approximately $1,289.1 million principal amount of the Second Lien Notes due 2026 as TDR. The Company accounted for the exchange of the remaining approximately $235.0 million principal amount of its 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 the Company 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.
Second Lien Notes due 2026. In connection with the Second Lien Exchange on December 14, 2020, Mudrick exchanged $104.5 million aggregate principal amount of the Company’s Second Lien Notes due 2026 held by Mudrick for 13,736,264 shares of the Company’s Common Stock, see “First Lien Toggle Notes Due 2026” above for further information.
In connection with the Exchange Offers on July 31, 2020, the Company issued $1,462.3 million aggregate principal amount of the new Second Lien Notes due 2026 in exchange for the Existing Subordinated Notes. The Second Lien Notes due 2026 were issued pursuant to an indenture, dated as of July 31, 2020, among the Company, the guarantors named therein and GLAS Trust Company LLC, as trustee and collateral agent. The Company has reflected a premium of $535.1 million on the Second Lien Notes due 2026 as the difference between the principal balance of the

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Second Lien Notes due 2026 and the $1,997.4 million carrying value of the Existing Subordinated Notes exchanged. The premium will be amortized to interest expense over the term of the Second Lien Notes due 2026 using the effective interest method.

In connection with the Exchange Offers and the First Lien Notes due 2026, the Company issued 5 million shares of Common Stock to certain holders of subordinated notes as consideration for their commitment to backstop the issuance of $200 million of the First Lien Notes due 2026. Pursuant to the Backstop Commitment Agreement dated July 10, 2020, certain of the actual or beneficial holders of Existing Subordinated Notes agreed to purchase 100% of the First Lien Notes due 2026 that were not subscribed for in connection with the $200 million rights offering to holders of the Existing Subordinated Notes participating in the Exchange Offers. Those providing a backstop commitment pursuant to the Backstop Commitment Agreement received their pro-rata share of 5 million shares of the Common Stock, or 4.6% of AMC’s outstanding shares as of July 31, 2020, worth $20.2 million at the market closing price on July 31, 2020. The equity issuance was recorded by the Company in stockholders’ deficit with an offset in corporate borrowings as a discount. The discount will be amortized to interest expense over the term of the Second Lien Notes due 2026 using the effective interest method. As part of the registration rights agreement related to the issuance of the Common Stock, the Company filed a shelf registration statement in August 2020 providing for the resale of the shares of Common Stock issued as consideration for the backstop commitment described above.

The Second Lien Notes due 2026 bear cash interest at a rate of 10% per annum payable semi-annually in arrears on June 15 and December 15, beginning on December 15, 2020. Subject to the limitation in the next succeeding sentence, 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 12% per annum. For the first interest period ending December 15, 2020 and the second interest period ending June 15, 2021, the Company elected to pay in PIK interest. For the third interest period ending December 15, 2021, the Company paid cash interest with respect to the third interest period. For all interest periods after the first 3 interest periods, interest will be payable solely in cash at a rate of 10% per annum.

The Second Lien Notes due 2026 are redeemable at the Company’s option prior to June 15, 2023, at a redemption price equal to 100% of their aggregate principal amount and accrued and unpaid interest, plus an applicable make-whole premium. On or after June 15, 2023, the Second Lien Notes due 2026 will be redeemable, in whole or in part, at a redemption price equal to (i) 106.0% for the twelve-month period beginning on June 15, 2023; (ii) 103.0% for the twelve-month period beginning on June 15, 2024 and (iii) 100.0% at any time thereafter, plus accrued and unpaid interest. If the Company or its restricted subsidiaries sell assets, under certain circumstances, the Company will be required to apply the net proceeds to redeem the Second Lien Notes due 2026 at a price equal to 100% of the issue price of the Second Lien Notes due 2026, plus accrued and unpaid interest to, but excluding the redemption date. Upon a Change of Control (as defined in the indenture governing the Second Lien Notes due 2026), the Company must offer to purchase the Second Lien Notes due 2026 at a purchase price equal to 101% of the principal amount, plus accrued and unpaid interest. The Second Lien Notes due 2026 have not been registered under the Securities Act of 1933, as amended (the “Securities Act”) and will mature on June 15, 2026.

The Second Lien Notes due 2026 are fully and unconditionally guaranteed on a joint and several basis by each of the Company’s subsidiaries that currently guarantee its obligations under the Company’s Senior Secured Credit Facilities. The Second Lien Notes due 2026 are secured on a second-priority basis by substantially all of the tangible and intangible assets owned by the Company and the guarantor subsidiaries that secure obligations under the Senior Secured Credit Facilities (“Collateral”). The Second Lien Notes due 2026 are subordinated in right of payment to all indebtedness of the Company that is secured by a first-priority lien on the Collateral.

The indenture governing the Second Lien Notes due 2026 contains covenants that restrict the ability of the Company to: incur additional debt or issue certain preferred shares; pay dividends on or make other distributions in respect of its capital stock or make other restricted payments; make certain investments; or transfer certain assets; create liens on certain assets to secure debt; consolidate, merge, sell or otherwise dispose of all or substantially all of its assets; enter into certain transactions with its affiliates; and allow to exist certain restrictions on the ability of its subsidiaries to pay dividends or make other payments to the Company. The Second Lien Notes due 2026 Indenture also contains certain affirmative covenants and events of default.

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indenture, dated as of July 31, 2020, among the Company, the guarantors named therein and GLAS Trust Company LLC, as trustee and collateral agent. See Note 16—Subsequent Events for additional information.

Separately, upon the closing of its private debt exchange, Silver Lake Alpine, L.P. and Silver Lake Alpine (Offshore Master), L.P., each affiliates of Silver Lake Group, L.L.C. (“Silver Lake”), purchased from the Company $100 million principal amount of First Lien Notes due 2026. The 10.5% First Lien Notes due 2026 issued to affiliates of Silver Lake were issued pursuant to an indenture, dated as of July 31, 2020, among the Company, the guarantors named therein and U.S. Bank National Association, as trustee and collateral agent. The terms of the 10.5% First Lien Notes due 2026 issued to the holders of the Existing Subordinated Notes and the 10.5% First Lien Notes due 2026 issued to Silver Lake are substantially identical. The $300 million principal amount of new funding is prior to deducting discounts of $30.0 million and deferred financing costs paid to lenders of $6.0 million related to the First Lien Notes due 2026. The discount and deferred financing costs will be amortized to interest expense over the term using the effective interest method. Silver Lake has sold the previously held $100 million aggregate principal amount of the First Lien Notes due 2026 previously held.

The First Lien Notes due 2026 bear interest at a rate of 10.5% per annum, payable semi-annually on June 15 and December 15, beginning on December 15, 2020. The First Lien Notes due 2026 are redeemable at the Company’s option prior to June 15, 2022, at a redemption price equal to 100% of their aggregate principal amount and accrued and unpaid interest, plus an applicable make-whole premium. On or after June 15, 2022, the First Lien Notes due 2026 will be redeemable, in whole or in part, at redemption prices equal to (i) 105.250% for the twelve-month period beginning on June 15, 2022; (ii) 102.625% for the twelve-month period beginning on June 15, 2023 and (iii) 100.000% at any time thereafter, plus accrued and unpaid interest, if any. In addition, at any time on or prior to June 15, 2022, the Company may, subject to certain limitations specified in the First Lien Notes due 2026 Indenture, on one or more occasions, redeem up to 35% of the aggregate principal amount of the First Lien Notes due 2026 at a redemption price equal to 110.500% of the aggregate principal amount thereof, plus accrued and unpaid interest, if any, with the net cash proceeds of certain equity offerings. If the Company or its restricted subsidiaries sell assets, under certain circumstances, the Company will be required to use the net proceeds to redeem the First Lien Notes due 2026 at a price equal to 100% of the issue price of the First Lien Notes due 2026, plus accrued and unpaid interest, if any. Upon a Change of Control (as defined in the indentures governing the First Lien Notes due 2026), the Company must offer to purchase the First Lien Notes due 2026 at a purchase price equal to 101% of the principal amount, plus accrued and unpaid interest, if any. The First Lien Notes due 2026 have not been registered under the Securities Act and will mature on April 24, 2026.

The First Lien Notes due 2026 are fully and unconditionally guaranteed on a joint and several basis by each of the Company’s subsidiaries that currently guarantee its obligations under the Company’s Senior Secured Credit Facilities. The First Lien Notes due 2026 are secured by a first-priority lien on the Collateral.

The indentures governing the First Lien Notes due 2026 contain covenants that restrict the ability of the Company to: incur additional debt or issue certain preferred shares; pay dividends on or make other distributions in respect of its capital stock or make other restricted payments; make certain investments; or transfer certain assets; create liens on certain assets to secure debt; consolidate, merge, sell or otherwise dispose of all or substantially all of its assets; enter into certain transactions with its affiliates; and allow to exist certain restrictions on the ability of its subsidiaries to pay dividends or make other payments to the Company. The indentures governing the First Lien Notes due 2026 also contain certain affirmative covenants and events of default.

Senior Secured Credit Facilities. The Company is party to that certain Credit Agreement, dated as of April 30, 2013 (as amended by that certain 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, that certain Sixth Amendment to Credit Agreement, dated as of April 22, 2019, that certain Seventh Amendment to Credit Agreement, dated as of April 23, 2020, that certain Eighth Amendment to Credit Agreement, dated as of July 31, 2020, that certain Ninth Amendment to Credit Agreement, dated as of March 8, 2021, that certain Tenth Amendment to Credit Agreement, also dated as of March 8, 2021, and that certain Eleventh Amendment to Credit Agreement, dated as of December 20, 2021, (the “Eleventh Amendment”), the “Credit Agreement”) 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 the Senior Secured Term Loan (as

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defined below) and the Senior Secured Revolving Credit Facility

(as defined below). The Senior Secured Credit ~~Facility is with~~Facilities (as defined below) 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 March 31, 2021, to a period ending on March 31, 2022 (the “Extended Covenant Suspension Period ending March 31, 2022”), which was further extended by the Eleventh Amendment from a period ending March 31, 2021, to a period ending on March 31, 2023 (the “Extended Covenant Suspension Period ending March 31, 2023”). During the Extended Covenant Suspension Period ending March 31, 2022 and the Extended Covenant Suspension Period ending March 31, 2023, 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. In addition, on March 8, 2021 the Company entered into the Tenth Amendment to the Credit Agreement (the “Tenth Amendment”), 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.

On July 31, 2020, the Company entered into the Eighth Amendment to Credit Agreement (the “Eighth Amendment”) with Citicorp North America, Inc., as the administrative agent, pursuant to which certain restrictive provisions, including modifications to the covenants limiting indebtedness, liens, investments, asset sales and restricted payments, were added to the Credit Agreement to ensure that the terms and conditions of the First Lien Notes due 2026, the Convertible Notes due 2026 and the Second Lien Notes due 2026 (subject to certain exceptions) are not materially more favorable (when taken as a whole) to the noteholders than the terms and conditions of the Credit Agreement (when taken as a whole) are to the lenders thereunder. The Company accounted for this transaction as a modification of debt.

On April 23, 2020, the Company entered into the Seventh Amendment to Credit Agreement (the “Seventh Amendment”) with the requisite revolving lenders party thereto and Citicorp North America, Inc., as administrative agent, pursuant to which the requisite revolving lenders party thereto agreed to suspend the financial covenant applicable to the Senior Secured ~~Credit Facility also provides for a~~ Revolving Credit Facility for the period from and after the effective date of the Seventh Amendment to 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 Credit Agreement) during which the Company has delivered a ~~borrowing capacity~~Financial Covenant Election (as defined in the Credit Agreement) to the Administrative Agent (such period, the “Initial Covenant Suspension Period”). During the Initial Covenant Suspension Period, the Company will not, and will not permit any of its restricted subsidiaries to, make certain restricted payments, and such conditions were further amended by the Ninth Amendment. As an ongoing condition to the suspension of the financial covenant, the Company agreed to a minimum Liquidity (as defined in the Seventh Amendment) test, which ~~is available~~was amended by the Ninth Amendment. In addition, the Seventh Amendment provides for ~~letters~~certain changes to the covenants limiting indebtedness, liens and restricted payments that are intended to match corresponding restrictions under the 10.5% first lien notes due 2025 (the “First Lien Notes due 2025”) and to ensure that the terms and conditions of ~~credit~~the First Lien Notes due 2025 (subject to certain exceptions) are not materially more favorable (when taken as a whole) to the noteholders than the terms and ~~for swingline borrowings on same-day notice.~~conditions of the Credit Agreement (when taken as a whole) are to the lenders thereunder. Pursuant to the terms of the Seventh Amendment, these more restrictive terms will be operative until the repayment, satisfaction, defeasance or other discharge of the obligations under the First Lien Notes due 2025 or an effective amendment of, other consent or waiver with respect to, or covenant defeasance pursuant to the Indenture as result of which the covenants limiting indebtedness, liens and restricted payments thereunder are of no further force or effect. Certain provisions of the Seventh Amendment are amended by the Ninth Amendment.

~~Sixth Amendment to Credit Agreement.~~ On April 22, 2019, the Company entered into the Sixth Amendment to Credit Agreement (the “Sixth Amendment”) ~~amending the Credit Agreement dated April 30, 2013, by and among the~~

~~Table of Contents~~

~~Company,~~with each lender party thereto and Citicorp North America, Inc. ~~(“Citi”)~~, as administrative agent. ~~After giving effect~~Pursuant to the Sixth Amendment, the ~~Credit Agreement provides for~~lenders agreed to provide senior secured financing of $2,225.0 million in aggregate, consisting of (1) $2,000.0 million in aggregate principal amount of senior secured tranche B loans maturing April 22, 2026 (the ~~“Term Loan Facility”)~~“Senior Secured Term Loans)” and (2) a $225.0 million senior secured revolving credit facility (which ~~includes borrowing capacity~~is also available

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for letters of ~~credit)~~credit and for swingline borrowings on same-day notice) maturing April 22, 2024 (the ~~“Revolving~~“Senior Secured Revolving Credit Facility” and, together with the Senior Secured Term ~~Loan Facility,~~Loans, the ~~“Credit~~“Senior Secured Credit Facilities”). The ~~loans~~proceeds of the Senior Secured Term Loans were used to repay all of the Company’s existing term loans in an aggregate principal amount of approximately $1,338.5 million and to fund the redemptions of the 5.875% Senior Subordinated Notes due 2022 and the 6.0% Senior Secured Notes due 2023. The Company recorded a loss of $16.6 million during the year ended December 31, 2019 related to these transactions, comprised of $14.1 million of extinguishment losses and $2.5 million of third party costs related to the modification of the Term ~~Loans under the Senior Secured Credit Facility.~~Loans.

All obligations under the Credit Agreement are guaranteed by, subject to certain exceptions, each of the Company’s current and future wholly-owned material ~~domestic~~U.S. restricted subsidiaries. All obligations under the Credit Agreement, and the guarantees of those obligations, are secured by substantially all of the assets of the Company and each guarantor, subject to customary exceptions, including:

●

a pledge of 100% of the equity interests directly held by the Company and each guarantor in any wholly-owned material subsidiary of the Company or any guarantor (which pledge, in the case of any non-U.S. subsidiary of a U.S. subsidiary, will not include more than 65% of the voting stock of such non-U.S. subsidiary), subject to certain exceptions; and

●

a security interest in substantially all other tangible and intangible assets of the Company and each guarantor, subject to certain exceptions.

The Credit ~~Facilities~~Agreement will require the Company to prepay outstanding term loans, subject to certain exceptions, with:

●

50% (which percentage will be reduced to 0% if the Company attains a certain secured net leverage ratio) of the Company’s annual excess cash flow;

●

100% of the net cash proceeds of certain non-ordinary course asset sales by the Company and its restricted subsidiaries (including casualty and condemnation events, subject to de minimis thresholds), and subject to the right to reinvest 100% of such proceeds, subject to certain qualifications; and

●

100% of the net proceeds of any issuance or incurrence of debt by the Company or any of its restricted subsidiaries, other than certain debt permitted under the Credit Agreement.

The foregoing mandatory prepayments will be used to reduce the installments of principal payments on the Senior Secured Term ~~Loan Facility.~~Loans. The Company may voluntarily repay outstanding loans under the Senior Secured Credit Facilities at any time without premium or penalty, except ~~(1)~~ for customary “breakage” costs with respect to LIBOR loans under the Senior Secured Credit ~~Facilities and (2) during the six months following the Amendment Closing Date, with respect to certain voluntary prepayments or refinancings of the~~Facilities.

The Senior Secured Term ~~Loan Facility that reduce the effective yield of the Term Loan Facility, which will be subject to a 1.00% prepayment premium.~~

~~Borrowings under the Term Loan Facility will~~Loans bear interest at a rate per annum equal to, at the Company’s option, either (1) an applicable margin plus a base rate determined by reference to the highest of (a) 0.50% per annum plus the Federal Funds Effective Rate, (b) the prime rate ~~of Citi~~announced by the Administrative Agent from time to time and (c) LIBOR determined by reference to the cost of funds for U.S. dollar deposits for an interest period of one month adjusted for certain additional costs, plus 1.00% or (2) an applicable margin plus LIBOR determined by reference to the costs of funds for U.S. dollar deposits for the interest period relevant to such borrowing adjusted for certain additional costs. Borrowings under the Senior Secured Revolving Credit Facility ~~will~~ bear interest at a rate per annum equal to an applicable margin based upon a leverage-based pricing grid, plus, at the Company’s option, either (1) a base rate determined by reference to the highest of (a) 0.50% per annum plus the Federal Funds Effective Rate, (b) the prime rate ~~of Citi~~announced by the Administrative Agent from time to time and (c) LIBOR determined by reference to the cost of funds for U.S. dollar deposits for an interest period of one month adjusted for certain additional costs, plus 1.00% or (2) LIBOR determined by reference to the costs of funds for U.S. dollar deposits for the interest period relevant to such borrowing adjusted for certain additional costs. As of December 31, ~~2019,~~2021, the applicable margins for ~~LIBOR~~ borrowings under the Senior Secured Term Loan ~~Facility~~ and the Senior Secured Revolving Credit Facility ~~are~~were 3.00% and 2.50%, respectively.

The Credit Agreement contains other customary terms, including (1) representations, warranties and affirmative covenants, (2) negative covenants, including limitations on indebtedness, liens, mergers and acquisitions, asset sales, investments, distributions, prepayments of subordinated debt and transactions with affiliates, in each case subject to baskets, thresholds and other exceptions, and (3) customary events of default.

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The availability of certain baskets and the ability to enter into certain transactions will also be subject to compliance with certain financial ratios. In addition, the Senior Secured Revolving Credit Facility includes a ~~maintenance~~financial covenant that requires, in certain circumstances, compliance with a certain secured leverage ratio.

~~Odeon Revolving Credit Facility~~

On December 7, 2017, the Company entered into a Revolving Credit Facility Agreement (“Odeon Revolving Credit Facility”) with Citigroup Global Markets Limited, Lloyds Bank PLC, Barclays Bank PLC and Bank of America Merrill Lynch International Limited as arrangers. The lenders make available a multicurrency revolving credit facility in an aggregate amount of £100.0 million ($131.2 million as of December 31, 2019). As of December 31, 2019, there were 0 borrowings outstanding and Odeon had £89.2 million ($117.0 million) available for borrowing, net of £10.8 million ($14.2 million) outstanding letters of credit (subject to limitations on2021, the ~~incurrence of indebtedness~~Company was in ~~the Company’s various debt instruments). The interest rate on each loan when drawn down~~a covenant suspension period under the ~~Odeon~~Senior Secured Revolving Credit Facility ~~is 2.5% plus~~as described above.

Convertible Notes due 2026. ~~IBOR (meaning LIBOR, EURIBOR, CIBOR or STIBOR as applicable) per annum. The undrawn commitment fee is 0.5%~~Concurrently with the Exchange Offers, to obtain the consent of the ~~undrawn amount per annum. All assets located in England and Wales have been pledged as collateral.~~

~~Senior Unsecured~~holders of the 2.95% Convertible Notes due 2024 (the “Convertible Notes due 2024”) to the transactions contemplated by the Exchange Offers, the Company restructured $600 million of Convertible Notes due 2024 issued in 2018 to Silver Lake and others pursuant to which the maturity of the Convertible Notes due 2024 was extended to May 1, 2026 (the “Convertible Notes due 2026”) (the “Convertible Notes” means the Convertible Notes due 2024 before July 31, 2020 and the Convertible Notes due 2026 after July 31, 2020), a first-priority lien on the Collateral was granted to secure indebtedness thereunder and certain covenants were modified. The Convertible Notes due 2026 were issued pursuant to an amended and restated indenture, dated as of July 31, 2020, among the Company, the guarantors named therein and U.S. Bank National Association, as trustee and collateral agent. The Company accounted for this transaction 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 modification did not result in the recognition of any gain or loss and the Company established new effective interest rates based on the carrying value of the Convertible Notes due 2024. Third party costs related to the transaction were expensed as incurred and amounts paid to lenders were capitalized and amortized through maturity of the debt. The Convertible Notes due 2026 are convertible at the option of the holders thereof on the same terms as the Convertible Notes due 2024. Upon maturity, the $600.0 million principal amount of the Convertible Notes due 2026 will be payable in cash. The Company will pay interest in cash on the Convertible Notes due 2026 at 2.95% per annum, semi-annually in arrears on September 15^th and March 15^th, commencing on September 15, 2020.

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 into shares of the Company’s 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 Common Stock to the Noteholders. The Company recorded approximately $71.0 million of non-cash interest expense during the year ended December 31, 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.

The carrying value of the ~~Senior Unsecured~~Convertible Notes is as follows:


	Carrying Value				Reclassification		Carrying Value		Conversion		Carrying Value
	as of		Increase		to Additional		as of		on		as of
(In millions)	December 31, 2019		to Expense		Paid-in Capital		December 31, 2020		January 29, 2021		January 29, 2021
Principal balance	$	600.0	$	—	$	—	$	600.0	$	(600.0)	$	—
Discount		(73.7)		12.2		—		(61.5)		61.5		—
Deferred financing costs		(11.2)		1.7		—		(9.5)		9.5		—
Derivative liability		0.5		89.4		(89.9)		—		—		—
Carrying value	$	515.6	$	103.3	$	(89.9)	$	529.0	$	(529.0)	$	—

On April 24, 2020, the Company entered into a supplemental indenture (the “Supplemental Indenture”) to the Convertible Notes due 2024 isindenture, dated as ~~follows:~~

Carrying Value

Additional

Increase

Carrying Value

Increase

Carrying Value

at Issuance on

Deferred

to Expense

as of

to Expense

as of
(In millions)

September 14, 2018

Charges

(Income)

December 31, 2018

(Income)

December 31, 2019
Principal balance

$
600.0

$
—

$
—

$
600.0

$
—

$
600.0
Discount

(90.4)

—

3.7

(86.7)

13.0

(73.7)
Debt issuance costs

(12.5)

(1.1)

0.6

(13.0)

1.8

(11.2)
Derivative liability

90.4

—

(66.4)

24.0

(23.5)

0.5
Carrying Value

$
587.5

$
(1.1)

$
(62.1)

$
524.3

$
(8.7)

$
515.6

of September 14, 2018. The Supplemental Indenture amended the debt covenant under the Convertible Notes due 2024 Indenture to permit the Company to issue the First Lien Notes due 2025, among other changes.

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").~~to Silver Lake and others. The Convertible Notes due 2024 ~~mature~~would have matured 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,~~

On September 14, 2018, the $600.0 million principal amount of the Convertible Notes due 2024 will be payable in cash. The Company will pay interest in cash on the Convertible Notes due 2024 at 2.95% per annum, semi-annually in arrears on September 15th and March 15th, commencing on March 15, 2019. The Company used the net proceeds from the sale of the Convertible Notes due 2024 to repurchase and retire 24,057,143 shares of Class B common stock held by Wanda for $17.50 per share or approximately $421.0 million, associated legal fees of $2.6 million, and to pay a special dividend of $1.55 per share of Class A common stock and Class B common stock, or approximately $160.5 million on September 28, 2018 to shareholders of record on September 25, 2018.

~~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 iswas not clearly and closely related

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to the debt instrument and the reset of the conversion price ~~discussed in the following paragraph causes~~caused the conversion feature to not be considered indexed to the Company’s equity, (2) the conversion feature standing alone ~~meets~~met the definition of a derivative, and (3) the Convertible Notes due 2024 ~~are~~were not remeasured at fair value each reporting period with changes in fair value recorded in the consolidated ~~statement~~statements of operations. The initial derivative liability of $90.4 million is offset by a discount to the principal balance and iswas amortized to interest expense resulting in an effective rate of 5.98% over the extended term of the Convertible Notes due 2024. The Company also recorded ~~debt issuance~~deferred financing 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 extended term of the Convertible Notes due 2024. The Company recorded interest expense for the ~~year~~years ended December 31, 2021, December 31, 2020 and December 31, 2019 of $0 million, $31.8 million, and $32.6 million, ~~and for the period from September 14, 2018 to December 31, 2018 of $9.7 million.~~ respectively.

The derivative liability iswas remeasured at fair value each reporting period, a Level 3 fair value estimate, until the conversion price reset on September 14, 2020, with changes in fair value recorded in the consolidated ~~statement~~statements of operations as other expense or income. ~~See Note 12~~—~~Fair Value~~

~~Table of Contents~~

~~Measurements for a discussion~~On September 14, 2020, the conversion price reset from $18.95 per share to $13.51 per share pursuant to the terms of the ~~valuation methodology.~~Indenture for the Convertible Notes due 2024 and the derivative liability as of September 14, 2020 was reclassified to permanent equity as the conversion feature is indexed to the Company’s equity. For the years ended December 31, ~~2019~~2020 and December 31, ~~2018, this resulted~~2019, the Company recorded in other expense (income) of $89.4 million and $(23.5) million, ~~and $(66.4) million, respectively. The principal balance exceeded~~respectively, related to the ~~if-converted~~derivative liability fair value ofadjustments for embedded conversion feature in the Convertible Notes due ~~2024 by approximately $370.8 million as of December 31, 2019 based on~~2024.

Pursuant to the ~~closing price per share of the Company’s common stock of $7.24 per share.~~

~~Upon conversion by a holder thereof,~~Stock Repurchase and Cancellation Agreement between the Company ~~shall deliver, at its election, either cash, shares of~~and Wanda, 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 December 31, 2019, the $600.0 million principal balancefeature 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 10 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~~being 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 9~~—~~Stockholders’ Equity.~~cost. This cancellation agreement iswas a contingent call option for the forfeiture shares, which iswas a freestanding derivative measured at fair value on a recurring ~~basis. The feature is contingent on the same reset~~basis, which was a Level 3 estimate of ~~the conversion price which is part of the conversion feature.~~fair value. The initial derivative asset of $10.7 million iswas offset by a credit to stockholders’ equity related to the Class B common stock purchase and cancellation. The forfeiture shares feature iswas not clearly and closely related to the Convertible Notes due 2024 host and it iswas 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 consolidated ~~statement~~statements of operations as other expense or income. ~~See Note 12~~—~~Fair Value Measurements for a discussion of the valuation methodology.~~ For the years ended December 31, ~~2019~~2020 and December 31, ~~2018,~~2019, this resulted in other expense (income) of $19.6 million and $17.7 million, respectively, related to the derivative asset fair value adjustment for contingent call option related to the Class B common stock purchase and ~~$(45.0) million, respectively. Additionally,~~cancellation agreement. On September 14, 2020, the conversion ~~rate will be adjusted if any cash dividend or distribution is made~~price reset from $18.95 per share to ~~all or substantially all holders~~$13.51 per share pursuant to the terms 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~~for the Convertible Notes due 2024 ~~for cash~~and the derivative asset as of September 14, 2020 was reclassified to permanent equity as the number of shares that will be cancelled 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. The Company also bifurcated this redemption feature from the principal balance of the Convertible Notes due 2024 ~~and considered it as a part~~were known. The Company recorded an immaterial non-cash correction of $26.2 million recorded in other expense during the ~~overall fair value of the derivative liability. For the years~~year ended December 31, ~~2019 and December 31, 2018, the Company recorded other income of $23.5 million and $66.4 million, respectively,~~2020. The adjustment related to the ~~decrease in~~Company correcting the valuation methodology applied to the derivative asset related to the cancellation agreement entered into on September 14, 2018, a Level 3 estimate of fair value ~~of its derivative liability~~ for ~~the Convertible~~a complex instrument developed in consultation with a third party specialist.

First Lien Notes ~~due 2024.~~Due 2025

~~With certain exceptions, upon a change of control of~~On April 24, 2020, 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 theissued $500.0 million aggregate principal amount of ~~the Convertible~~its 10.5% First Lien Notes due ~~2024~~2025, in a private offering, pursuant to an indenture, dated as of April 24, 2020 (the “First Lien Notes Indenture”), among the Company, the guarantors named therein and U.S. Bank National Association, as trustee and collateral agent. The Company used the net proceeds from the First Lien Notes due 2025 private offering for general corporate purposes, including further increasing the Company’s liquidity. The First Lien Notes due 2025 were issued with a discount of $10.0 million and bear interest at a ~~purchase price equal~~rate of 10.5% per annum, payable semi-annually on April 15 and October 15 each year, commencing October 15, 2020. The First Lien Notes due 2025 will mature on April 15, 2025. The Company recorded deferred financing costs of approximately $8.9 million related 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 abilityissuance of the ~~Company~~First Lien Notes due 2025 and will amortize those costs to ~~incur additional debt and limit~~interest expense under the ~~ability~~effective interest method over the term 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 ConvertibleFirst Lien Notes due ~~2024 under the Indenture.~~2025. See Note 16—Subsequent Events for additional information.

~~Table of Contents~~

The ~~Convertible~~First Lien Notes due ~~2024~~2025 are general ~~unsecured~~ senior secured obligations of the Company and are fully and unconditionally guaranteed on a joint and several senior ~~unsecured~~secured basis by all of the Company’s existing and future ~~domestic restricted~~ subsidiaries that guarantee ~~its~~the Company’s other ~~indebtedness.~~

~~On September 14, 2018, in connection~~indebtedness, including the Company’s Senior Secured Credit Facilities. The First Lien Notes due 2025 are secured, on a pari passu basis with the ~~issuance~~Senior Secured Credit Facilities, on a first-

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priority basis by substantially all of the ~~Convertible~~tangible and intangible assets owned by the Company and guarantors that secure obligations under the Senior Secured Credit Facilities including pledges of capital stock of certain of the Company’s and the guarantor’s wholly-owned material subsidiaries (but limited to 65% of the voting stock of any foreign subsidiary), subject to certain thresholds, exceptions and permitted liens.

The Company may redeem some or all of the First Lien Notes due ~~2024,~~2025 at any time on or after April 15, 2022, at the redemption prices set forth in the First Lien Notes Indenture. In addition, the Company ~~entered into~~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 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 ~~investment agreement (the “Investment Agreement”) providing for,~~applicable make-whole premium.

The First Lien Notes Indenture contains covenants that limit the Company’s ability to, among other ~~things, registration rights~~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 ~~respect~~or subordinated in right of payment to ~~the Convertible~~First Lien Notes due ~~2024~~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 First Lien Notes Indenture also provides for events of default, which, if any of them occurs, would permit or require the ~~shares of Class A common stock underlying~~principal, premium, if any, interest and any other monetary obligations on all the ~~Convertible~~then outstanding First Lien Notes due 2024. Subject to the terms of the Investment Agreement, the Company was required to file a registration statement with the SEC not later than three months from the issuance date of the Convertible Notes in order to provide for resales of the Convertible Notes due 2024 and the shares of Class A common stock underlying the Convertible Notes2025 to be ~~made on a delayed or continuous basis pursuant to Rule 415 under the Securities Act. The Company filed a registration statement with the SEC on December 14, 2018 to fulfill this requirement.~~due and payable immediately.

Sterling Notes Due 2024

On November 8, 2016, the Company issued £250.0 million aggregate principal amount of its 6.375% Senior Subordinated Notes due 2024 (the "Sterling Notes due 2024") in a private offering. The Company recorded deferred financing costs of approximately $14.1 million related to the issuance of the Sterling Notes due 2024. The Sterling Notes due 2024 mature on November 15, 2024. The Company will pay interest on the Sterling Notes due 2024 at 6.375% per annum, semi-annually in arrears on May 15th and November 15th, commencing on May 15, 2017. The Company may redeem some or all of the Sterling Notes due 2024 at any time on or after November 15, 2019 at 104.781% of the principal amount thereof, declining ratably to 100% of the principal amount thereof on or after November 15, 2022, plus accrued and unpaid interest to the redemption date. On or prior to November 15, 2019, the Company may redeem the Sterling Notes due 2024 at par, including accrued and unpaid interest plus a make-whole premium. The Company used the net proceeds from the Sterling Notes due 2024 private offering to pay the consideration for the Odeon acquisition and the related refinancing of Odeon debt assumed in the acquisition.

The Sterling Notes due 2024 are general unsecured senior subordinated obligations of the Company and are fully and unconditionally guaranteed on a joint and several senior subordinated unsecured basis by all of its existing and future domestic restricted subsidiaries that guarantee its other indebtedness. Following the closing of the Odeon acquisition on November 30, 2016 and the Carmike acquisition on December 21, 2016, neither Odeon or Carmike or any of its subsidiaries will guarantee the Sterling Notes due 2024.

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

On November 8, 2016, in connection with the issuance of the Sterling Notes due 2024, the Company entered into a registration rights agreement. Subject to the terms of the registration rights agreement, the Company is required to (1) file a registration statement with the Securities and Exchange Commission (“SEC”) not later than 270 days from the issuance date with respect to the registered offer to exchange the notes for new notes of the Company having terms identical in all material respects to the notes and (2) use its commercially reasonable efforts to cause the exchange offer registration statement to be declared effective under the Securities Act of 1933 within 365 days of the issuance date.

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

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proceeds from the additional Sterling Notes to pay a portion of the consideration for the acquisition of Nordic plus related refinancing of Nordic debt assumed in the acquisition.

On March 17, 2017, in connection with the issuance of the additional Sterling Notes due 2024, the Company entered into a registration rights agreement. Subject to the terms of the registration rights agreement, the Company is

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required to (1) file one or more registration statements with the SEC not later than 270 days from November 8, 2016 with respect to the registered offer to exchange the notes for new notes of the Company having terms identical in all material respects to the notes and (2) use its commercially reasonable efforts to cause the exchange offer registration statement to be declared effective under the Securities Act within 365 days of November 8, 2016. The Company filed its Form S–4 registration statement related to the registration rights agreement with the Securities and Exchange Commission on April 19, 2017, and it was declared effective June 7, 2017. All of the original notes were exchanged as of July 12, 2017.

On July 31, 2020, as part of the Exchange Offers, the Company reduced the aggregate principal amounts of Sterling Notes due 2024 by approximately $632.1 million (£496,014 par value), or 99.2% of the then outstanding Sterling Notes due 2024.

Notes Due 2025

On June 5, 2015, the Company issued $600.0 million aggregate principal amount of its 5.75% Senior Subordinated Notes due 2025 (the “Notes due 2025”) in a private offering. The Company capitalized deferred financing costs of approximately $11.4 million, related to the issuance of the Notes due 2025. The Notes due 2025 mature on June 15, 2025. The Company will pay interest on the Notes due 2025 at 5.75% per annum, semi-annually in arrears on June 15th and December 15th, commencing on December 15, 2015. The Company may redeem some or all of the Notes due 2025 at any time on or after June 15, 2020 at 102.875% of the principal amount thereof, declining ratably to 100% of the principal amount thereof on or after June 15, 2023, plus accrued and unpaid interest to the redemption date. Prior to June 15, 2020, the Company may redeem the Notes due 2025 at par plus a make-whole premium. The Company used the net proceeds from the Notes due 2025 private offering and cash on hand, to pay the consideration for the tender offer for the Notes due 2020, plus any accrued and unpaid interest and related transaction fees and expenses.

The Notes due 2025 are general unsecured senior subordinated obligations of the Company and are fully and unconditionally guaranteed on a joint and several senior subordinated unsecured basis by all of its existing and future domestic restricted subsidiaries that guarantee its other indebtedness.

~~The indenture governing the Notes due 2025 contains covenants limiting other indebtedness, dividends, purchases or redemptions of stock, transactions with affiliates, and mergers and sales of assets.~~

On June 5, 2015, in connection with the issuance of the Notes due 2025, the Company entered into a registration rights agreement. Subject to the terms of the registration rights agreement, the Company filed a registration statement on June 19, 2015 pursuant to the Securities Act of 1933, as amended, relating to an offer to exchange the original Notes due 2025 for exchange Notes due 2025 registered pursuant to an effective registration statement; the registration statement was declared effective on June 29, 2015, and the Company commenced the exchange offer. The exchange notes have terms substantially identical to the original notes except that the exchange notes do not contain terms with respect to transfer restrictions and registration rights and additional interest payable for the failure to consummate the exchange offer within 210 days after the issue date. After the exchange offer expired on July 27, 2015, all of the original Notes due 2025 were exchanged.

On July 31, 2020, as part of the Exchange Offers, the Company reduced the aggregate principal amounts of Notes due 2025 by approximately $501.7 million, or 83.61% of the then outstanding Notes due 2025.

Notes Due 2026

On November 8, 2016, the Company issued $595.0 million aggregate principal amount of its 5.875% Senior Subordinated Notes due 2026 (the "Notes due 2026") in a private offering. The Company recorded deferred financing costs of approximately $27.0 million related to the issuance of the Notes due 2026. The Notes due 2026 mature on November 15, 2026. The Company will pay interest on the Notes due 2026 at 5.875% per annum, semi-annually in arrears on May 15th and November 15th, commencing on May 15, 2017. The Company may redeem some or all of the Notes due 2026 at any time on or after November 15, 2021, at 102.938% of the principal amount thereof, declining ratably to 100% of the principal amount thereof on or after November 15, 2024, plus accrued and unpaid interest to the redemption date. On or prior to November 15, 2021, the Company may redeem the Notes due 2026 at par, including accrued and unpaid interest plus a make-whole premium. The Company used the net proceeds from the Notes due 2026 private offering to pay the consideration for the Odeon acquisition and the related refinancing of Odeon debt assumed in the acquisition.

The Notes due 2026 are general unsecured senior subordinated obligations of the Company and are fully and unconditionally guaranteed on a joint and several senior subordinated unsecured basis by all of its existing and future domestic restricted subsidiaries that guarantee its other indebtedness. Following the closing of the Odeon acquisition on

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~~November 30, 2016 and the Carmike acquisition on December 21, 2016, neither Odeon or Carmike or any of its subsidiaries will guarantee the Notes due 2026.~~

~~The indenture governing the Notes due 2026 contains covenants limiting other indebtedness, dividends, purchases or redemptions of stock, transactions with affiliates, and mergers and sales of assets.~~

On November 8, 2016, in connection with the issuance of the Notes due 2026, the Company entered into a registration rights agreement. Subject to the terms of the registration rights agreement, the Company is required to (1) file a registration statement with the SEC not later than 270 days from the issuance date with respect to the registered offer to exchange the notes for new notes of the Company having terms identical in all material respects to the notes and (2) use its commercially reasonable efforts to cause the exchange offer registration statement to be declared effective under the Securities Act within 365 days of the issuance date. The Company filed its Form S–4 registration statement

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related to the registration rights agreement with the Securities and Exchange Commission on April 19, 2017, and it was declared effective June 7, 2017. All of the original notes were exchanged as of July 12, 2017.

On July 31, 2020, as part of the Exchange Offers, the Company reduced the aggregate principal amounts of Notes due 2026 by approximately $539.4 million, or 90.65% of the then outstanding Notes due 2026.

Notes Due 2027

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

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

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

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

On July 31, 2020, as part of the Exchange Offers, the Company reduced the aggregate principal amounts of Notes due 2027 by approximately $344.3 million, or 72.48% of the then outstanding Notes due 2027.

Financial Covenants

~~Each indenture relating~~The Company currently estimates that its existing cash and cash equivalents will be sufficient to comply with minimum liquidity and financial covenant requirements under its debt covenants related to borrowings pursuant to the ~~Convertible Notes due 2024,~~Senior Secured Revolving Credit Facility and Odeon Term Loan Facility, currently and through the ~~Sterling Notes due 2024,~~next twelve months. The Company entered the ~~Notes due 2025,~~Ninth Amendment pursuant to which the ~~Notes due 2026, and~~requisite revolving lenders party thereto agreed to extend the ~~Notes due 2027 allows~~suspension period for the Company to incur specified permitted indebtedness (as defined therein) without restriction. Each indenture also allows the Company to incur any amount of additional debt as long as it can satisfy the coverage ratio of each indenture, after giving effectfinancial covenant (the secured leverage ratio) applicable to the ~~indebtedness~~Senior Secured Revolving Credit Facility from March 31, 2021 to March 31, 2022, which was further extended by the Eleventh Amendment from March 31, 2022 to March 31, 2023, as described, and on ~~a pro forma basis. Under~~ the ~~indentures~~terms and conditions specified, therein. The Company is currently subject to minimum liquidity requirements of approximately $144 million, of which $100 million is required under the conditions for the Convertible Notes due 2024, the Sterling Notes due 2024, the Notes due 2025, the Notes due 2026, and the Notes due 2027 at December 31, 2019, the Company could borrow approximately $215.0 million, net of $10.0 million in outstanding letters of credit available under its Revolving Credit Facility. If the Company cannot satisfy the coverage ratios of the indentures, generally it can borrow an additional amountExtended Covenant Suspension Period, as amended, under the Senior Secured Revolving Credit Facility, and £32.5 million (approximately $44 million) of which is required under the Odeon Term Loan Facility. Following the expiration of the Extended Covenant Suspension Period ending March 31, 2023, the Company will be subject to the financial covenant under the Senior Secured Revolving Credit Facility as of the last day of each quarter on which the aggregate principal amount of revolving loans, and letters of credit (excluding letters of credit that are cash collateralized) in excess of $25 million, outstanding under the Senior Secured Revolving Credit Facility exceeds 35% of the principal amount of commitments under the Senior Secured Revolving Credit Facility then in effect, beginning with the quarter ending June 30, 2023. The Company currently expects it will be able to comply with this financial covenant, however, the Company does not anticipate the need to borrow under the Senior Secured Revolving Credit Facility during the next twelve months. The Company’s liquidity needs thereafter will depend, among other things, on the timing of movie releases and its ability to generate cash from operations.

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The indentures also contain restrictions on the Company’s ability to pay dividends. Under the most restrictive provision set forth in the note indenture for the Notes due 2025, as of December 31, 2019, the Company could not make dividend payments in excess of approximately $2.7 billion in the aggregate. As of December 31, ~~2019,~~2021, the Company ~~had $332.0 million available for borrowing~~was in a covenant suspension period under ~~its~~the Senior Secured Revolving Credit Facility and the Odeon Revolving Credit ~~Facility.~~

~~As of December 31, 2019, the Company was in compliance with all financial covenants relating to the Senior Secured Credit~~ Facility ~~Odeon’s Revolving Credit Facility Agreement, the Convertible Notes due 2024, the Sterling Notes due 2024, the Notes due 2025, the Notes due 2026 and the Notes due 2027.~~as described above.

NOTE 9—STOCKHOLDERS’ EQUITY

Common Stock Rights and Privileges

The rights of the holders of Holdings’ Class A common stock and Holdings’ Class B common stock are identical, except with respect to voting and conversion applicable to the Class B common stock. Holders of Holdings’ ~~Class A common stock~~Common Stock are entitled to 1 vote per ~~share and holders of Holdings’ Class B common stock are entitled to 3 votes per~~ share. Holders of ~~Class A common stock and Class B common stock will~~Common Stock share ratably (based on the number of shares of ~~common stock~~Common Stock held) in any dividend declared by its board of directors, subject to any preferential rights of any outstanding preferred stock. The ~~Class A common stock~~Common Stock is not convertible into any other shares of Holdings’ capital stock. ~~Each share of Class B common stock is convertible at any time at the option~~

Common Stock Issuances

The Company entered into equity distribution agreements with sales agents to sell approximately 241.6 million and 90.9 million shares of the ~~holder into 1~~Company’s Common Stock, par value $0.01 per share, of Class A common stock. In addition, each share of Class B common stock shall convert automatically into 1 share of Class A common stock upon any transfer, whether or not for value, except for certain transfers described in Holdings’ certificate of incorporation.

~~Dividends~~

~~The following is a summary of dividends and dividend equivalents declared to stockholders~~through “at-the-market” offering programs during the ~~year~~years ended December 31, ~~2019:~~

Amount per

Total Amount






Share of

Declared
Declaration Date

Record Date

Date Paid

Common Stock

(In millions)
February 15, 2019

March 11, 2019

March 25, 2019

$
0.20

$
21.3
May 3, 2019

June 10, 2019

June 24, 2019

0.20

21.3
August 2, 2019

September 9, 2019

September 23, 2019

0.20

21.3
October 24, 2019

December 2, 2019

December 16, 2019

0.20

21.0

2021 and December 31, 2020, respectively. During the year ended December 31, ~~2019,~~2021, the Company raised gross proceeds of approximately $1,611.8 million related to the “at-the-market” offering programs and paid ~~dividends and dividend equivalents~~fees to the sales agents of ~~$84.1~~approximately $40.3 million and ~~accrued $2.3 million for~~other fees of $0.8 million. During the ~~remaining unpaid dividends at~~year ended December 31, ~~2019. The aggregate dividends paid for Class A common stock, Class B common stock, and dividend equivalents were approximately $41.7 million, $41.4 million, and $1.0 million, respectively.~~

~~On February 26,~~ 2020, the Company ~~declared a cash dividend~~raised gross proceeds of approximately $272.8 million related to the “at-the-market” offering programs and paid fees to the sales agents of approximately $8.1 million. The Company intends to use the net proceeds from the sale of the 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.

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


"At-the-market" Equity Distribution Agreement Dates	Sales Agents	Number of Class A common stock shares sold (in millions)	Gross Proceeds (in millions)
September 24, 2020	Citigroup Global Markets Inc. and Goldman Sachs & Co. LLC	15.0	$	56.1
October 20, 2020	Citigroup Global Markets Inc. and Goldman Sachs & Co. LLC	15.0		41.6
November 10, 2020	Goldman Sachs & Co. LLC and B. Riley Securities, Inc.	20.0		61.4
December 11, 2020	Goldman Sachs & Co. LLC and B. Riley Securities, Inc. (1)	40.93		113.7
	Total year ended December 31, 2020	90.93	$	272.8
December 11, 2020	Goldman Sachs & Co. LLC and B. Riley Securities, Inc. (1)	137.07		352.6
January 25, 2021	Goldman Sachs & Co. LLC and B. Riley Securities, Inc.	50.0		244.3
April 27, 2021	Goldman Sachs & Co. LLC, B. Riley Securities, Inc. and Citigroup Global Markets Inc. (2)	43.0		427.5
June 3, 2021	B. Riley Securities, Inc. and Citigroup Global Markets Inc.	11.55		587.4
	Total year ended December 31, 2021	241.62	$	1,611.8

(1)

(2)

Common Stock Transaction Related to Exchange Offers

Certain backstop purchasers of ~~$0.03 per share on Class A~~the First Lien Notes due 2026 that participated in the Exchange Offer received 5 million common shares. See Note 8—Corporate Borrowings and ~~Class B common stock, payable on~~ ~~March 23, 2020~~ ~~to stockholders of record on March 9, 2020. The dividend decrease of $0.17 per share compared to the Company’s previous historical declarations of $0.20 per share reduces the total dividend payout~~Finance Lease Obligations for ~~the quarter by approximately $18.0 million.~~further information.

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Common Stock Transactions with Mudrick

On June 1, 2021, the Company issued to Mudrick 8.5 million shares of the Company’s Common Stock and raised gross proceeds of $230.5 million and paid fees of approximately $0.1 million related to this transaction. The Company issued the shares in reliance on an exemption from registration provided by section 4(a)(2) of the Securities Act of 1933. The Company intends 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 its theatres. In addition, with these funds, the Company intends to continue exploring deleveraging opportunities.

On December 14, 2020, Mudrick received a total of 21,978,022 shares of the Company’s Common Stock; of which 8,241,758 shares relates to consideration received for a commitment fee and 13,736,264 shares as consideration received for (i) the commitment provided with respect to the First Lien Toggle Notes due 2026 and (ii) the Second Lien Exchange. See Note 8—Corporate Borrowings and Finance Lease Obligations for further information.

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 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 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

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 in Note 8—Corporate Borrowings and Finance Lease Obligations). The following is a summary of dividends and dividend equivalents declared to stockholders during the year ended December 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

During the year ended December 31, 2020, the Company paid dividends and dividend equivalents of $6.5 million and accrued $0.4 million for the remaining unpaid dividends at December 31, 2020. The aggregate dividends paid for Common Stock, Class B common stock, and dividend equivalents were approximately $1.6 million, $1.6 million, and $3.3 million, respectively.

The following is a summary of dividends and dividend equivalents declared to stockholders during the year ended December 31, ~~2018:~~2019:

Amount per

Total Amount






Share of

Declared
Declaration Date

Record Date

Date Paid

Common Stock

(In millions)
February 28, 2018

March 12, 2018

March 26, 2018

$
0.20

$
26.0
May 3, 2018

June 11, 2018

June 25, 2018

0.20

26.0
July 24, 2018

September 10, 2018

September 24, 2018

0.20

25.8
September 14, 2018

September 25, 2018

September 28, 2018

1.55

162.9
November 1, 2018

December 10, 2018

December 26, 2018

0.20

21.2


			Amount per		Total Amount
			Share of		Declared
Declaration Date	Record Date	Date Paid	Common Stock		(In millions)
February 15, 2019	March 11, 2019	March 25, 2019	$	0.20	$	21.3
May 3, 2019	June 10, 2019	June 24, 2019		0.20		21.3
August 2, 2019	September 9, 2019	September 23, 2019		0.20		21.3
October 24, 2019	December 2, 2019	December 16, 2019		0.20		21.0

During the year ended December 31, ~~2018,~~2019, the Company paid dividends and dividend equivalents of ~~$258.1~~$84.1 million and accrued ~~$4.0~~$2.3 million for the remaining unpaid dividends at December 31, ~~2018.~~2019. The aggregate dividends paid for ~~Class A common stock,~~Common Stock, Class B common stock, and dividend equivalents were approximately ~~$122.0~~$41.7 million, ~~$136.1~~$41.4 million, and ~~$0.1~~$1.0 million, respectively.

~~During the year ended December 31, 2017, the Company paid dividends and dividend equivalents~~127

Table of $104.6 million and accrued $1.1 million for the remaining unpaid dividends at December 31, 2017. The aggregate dividends paid for Class A common stock, Class B common stock, and dividend equivalents were approximately $43.9 million, $60.6 million, and $0.2 million, respectively.Contents

Related Party Transactions

As of December 31, ~~2019~~2021 and December 31, ~~2018,~~2020, the Company recorded a receivable due from Wanda of ~~$0.8 million~~$0 and ~~$0.9~~$0.7 million, respectively, for reimbursement of general administrative and other expense incurred on behalf of Wanda. ~~Total reimbursements~~The Company recorded cost reductions for general and administrative services provided on behalf of ~~other expenses from~~ Wanda ~~were $0.4 million, $0.0~~of $0, $0.3 million and ~~$0.6~~$0.4 million for the years ended December 31, ~~2019,~~2021, December 31, ~~2018,~~2020, and December 31, ~~2017,~~2019, respectively. ~~The Company’s majority shareholder,~~By the end of the first quarter of 2021, Wanda ~~owns Legendary Entertainment,~~was no longer a ~~motion picture production company. The Company will occasionally play Legendary’s films in its theatres, as a result~~related party of ~~transactions with independent film distributors.~~the Company.

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.~~2024 and entered into an amended and restated investment agreement with Silver Lake, relating to the issuance of the Convertible Notes due 2026 on August 31, 2020. See Note 8—Corporate Borrowings and Finance Lease Obligations ~~- Senior Unsecured~~for information regarding the conversion of the $600.0 million principal amount of the Company’s Convertible Notes due ~~2024 for more information.~~

~~On September 14, 2018, the Company, Silver Lake and Wanda entered~~2026 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.in January 2021. As of December 31, 2019, Wanda owns 49.85% of AMC through its 51,769,784 shares of Class B common stock. With the three-to-one voting ratio between Class B and Class A common stock, Wanda retains voting control of AMC with 74.89% of the voting power of the Company’s common stock. As discussed in Note 8, 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.

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~~Table of Contents~~

~~Temporary Equity~~

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

~~As of January 1, 2019, the remaining management employees who held 75,712 shares relinquished their put rights and the~~conversion, Silver Lake was no longer a related ~~share amount of $0.4 million was reclassified to additional paid in capital, a component of stockholders’ equity.~~

During the year ended December 31, 2018, 1 former employee and 1 current employee who held a total of 37,105 shares relinquished their put rights, therefore the related share amount of $0.4 million was reclassified to additional paid in capital, a component of stockholders’ equity.

~~Additional Public Offering~~

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

Treasury Stock

On ~~August 3, 2017,~~February 27, 2020, the Company announced that its Board of Directors ~~had approved~~authorized a ~~$100.0 million~~ share repurchase program for an aggregate purchase of up to $200.0 million shares of Common Stock. As of April 24, 2020, the Company is prohibited from making purchases under its authorized stock repurchase ~~its Class A common stock over a~~ ~~two-year period.~~

Repurchases were made at management's discretion from time to time through open-market transactions including block purchases, through privately negotiated transactions, or otherwise until mid-August 2019program in accordance with ~~all applicable securities laws~~the covenant suspension conditions in its Credit Agreement (as defined in Note 8—Corporate Borrowings and ~~regulations. The extent to which AMC repurchases its shares, and the timing~~Finance Lease Obligations). As of such repurchases, depended 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 were made under a Rule 10b5-1 plan, which permitted common stock to be repurchased when the Company’s management might otherwise be precluded from doing so under insider trading laws. The repurchase program did not obligate the Company to repurchase any minimum dollar amount or number of shares and may be suspended for periods or discontinued at any time. During the year ended December 31, ~~2018,~~2021, $200.0 million remained available for repurchase under this plan. A three-year time limit had been set for the ~~Company repurchased 500,000 shares~~completion of Class A common stock at a cost of approximately $8.2 million. During the year ended December 31, 2017, the Company repurchased 3,195,856 shares of Class A common stock at a cost of $47.5 million. Thethis program, ~~expired on August 2, 2019.~~expiring February 26, 2023.

Stock-Based Compensation

2013 Equity Incentive Plan

The 2013 Equity Incentive Plan provides for grants of non-qualified stock options, incentive stock options, stock appreciation rights, restricted stock awards, restricted stock units (“~~RSU’s”~~RSUs”), performance stock units (“~~PSU’s)~~PSUs), stock awards, and cash performance awards. The maximum number of shares of Holdings’ ~~common stock~~Common Stock available for delivery pursuant to awards granted under the second amendment to the 2013 Equity Incentive Plan is ~~9,474,000~~15 million shares. At December 31, ~~2019,~~2021, the aggregate number of shares of Holdings’ ~~common stock~~Common Stock available for grant was ~~4,674,150~~4,650,723 shares.

The following table presents the stock-based compensation expense recorded within general and administrative: other:


	Year Ended
	December 31,		December 31,		December 31,
(In millions)	2021		2020		2019
Board of director stock award expense	$	0.9	$	0.5	$	0.5
Restricted stock unit expense		12.6		9.7		9.7
Performance stock unit expense		24.5		1.2		(5.8)
Special performance stock unit expense		5.1		14.0		—
Total stock-based compensation expense	$	43.1	$	25.4	$	4.4

As of December 31, 2021, the estimated remaining unrecognized compensation cost related to stock-based compensation arrangements was approximately $16.7 million. The weighted average period over which this remaining compensation expense will be recognized is approximately 1.4 years. The Company accounts for forfeitures when they occur.

Awards Granted in 2021, 2020, and 2019 and Other Activity

AMC’s Board of Directors approved awards of stock, RSUs, and PSUs to certain of the Company’s employees and directors under the 2013 Equity Incentive Plan. During years 2021, 2020, and 2019, the grant date fair value of these awards was based on the closing price of AMC’s stock on the date of grant, which ranged from $1.73 to $15.13 per share. A dividend equivalent for restricted stock units and performance stock units equal to the amount paid in respect of

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one share of Common Stock underlying the unit began to accrue with respect to the unit on the date of grant. Such accrued dividend equivalents are paid to the holder upon vesting of the units. Each unit represents the right to receive one share of Common Stock at a future date.

The award agreements generally had the following features:

●

Board of Director Stock Award Agreement: The Company granted fully vested shares of Common Stock to its independent members of AMC’s Board of Directors during the years ended December 31, 2021, Decembers 31, 2020, and December 31, 2019 of 124,054, 77,090, and 32,464, respectively.

●

Restricted Stock Unit Award Agreement: The Company granted RSU awards of 2,687,813, 1,511,297, 730,167 to certain members of management during the years ended December 31, 2021, December 31, 2020, and December 31, 2019, respectively. The Company records stock-based compensation expense on a straight-line recognition method over the requisite vesting period. Each RSU represents the right to receive 1 share of Common Stock at a future date. The RSUs granted during 2021, 2020, and 2019 vest over three years with 1/3 vesting in each year. These RSUs will be settled within 30 days of vesting.

●

Restricted Stock Unit Award Executive Agreement: During the year ended December 31, 2019, the Company granted RSU awards of 200,000 to an executive officer (“2019 RSU executive”) of the Company with one-half vesting on the first anniversary of employment on December 2, 2020 and the remaining one-half vesting ratably over a three year period ending on December 2, 2022. All unvested RSUs shall be forfeited upon termination of services. These RSUs will be settled within 30 days of vesting.

●

Restricted Stock Unit Named Executive Officer Award Agreement: During the year ended December 31, 2017, RSU awards of 129,214 units were granted to certain executive officers covered by Section 162(m) of the Internal Revenue Code. The RSUs vest over three years with 1/3 vesting each year if the cash flow from operating activities target was met. The vested RSUs will be settled within 30 days of vesting. The RSUs will be forfeited if AMC does not achieve a specified cash flow from operating activities target.

●

Performance Stock Unit Award Agreement:2021 PSU Awards. On February 23, 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 two 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% (or 30% to 200% for PSU awards granted prior to year 2020). 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.

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, Compensation - Stock Compensation. The 2021 PSU award grant date fair value on February 23, 2021 for the 2021 Tranche Year award of 895,836 units was approximately $6.9 million, measured using performance targets at 100%. At December 31, 2021, the 2021 Tranche Year target performance conditions for both the annual Adjusted EBITDA and free cash flow were achieved at 200%.

November 3, 2021 modification. On November 3, 2021, based upon the recommendation of the Compensation Committee, the Board of Directors of the Company approved a modification to the PSUs for the awards granted in 2021 and 2020. The service condition modification included separating the vesting period subject to the participant’s continued employment through the end of the three-year cumulative period into 3 separate year service periods applicable to each tranche year. The Company accounted for the modification in accordance with ASC 718-20, Compensation-Stock Compensation, as a Type I modification (probable-to-probable) with no change to the fair value measurement of the awards.

2020 PSU Awards: During the year ended December 31, 2020, PSU awards of 1,436,297 were granted to certain members of management and executive officers, with three-year cumulative Adjusted EBITDA and

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free cash flow target conditions and service conditions, covering a performance period beginning January 1, 2020 and ending on December 31, 2022, prior to the service condition and performance condition modifications on November 3, 2021 and October 30, 2020, respectively.

2019 PSU Awards: During the year ended December 31, 2019, PSU awards of 730,167 were granted to certain members of management and executive officers, with three-year cumulative Adjusted EBITDA and diluted earnings per share performance target conditions and service conditions, covering a performance period beginning January 1, 2019 and ending on December 31, 2021, prior to the service condition and performance condition modifications on November 3, 2021 and October 30, 2020, respectively.

2018 PSU Awards: During the year ended December 31, 2018, PSU awards of 653,669 were granted to certain members of management and executive officers with three-year cumulative net profit, Adjusted EBITDA, and diluted earnings per share performance target conditions and service conditions, covering a performance period beginning January 1, 2018 and ending on December 31, 2020, prior to the performance condition modification on October 30, 2020.

October 30, 2020 modification. On October 30, 2020, based upon the recommendation of the Compensation Committee, the Board of Directors of the Company approved a modification to the PSUs for the awards granted in 2018, 2019, and 2020. The modification included separating the three-year cumulative performance targets into three separate year performance targets applicable to each tranche year. Due to the dramatic impact of the COVID-19 pandemic on the Company’s business, the Board of Directors waived attainment of the 2020 tranche year performance targets and established a vesting level for such PSUs at 90%. In addition, the service conditions were modified, and vesting is now subject to the participant’s continued employment through the end of the three-year cumulative period. The Company accounted for the modification in accordance with ASC 718-20, Compensation-Stock Compensation, as an exchange of the original award, that was not expected to vest, for a new award. The Company measured the fair value of the new award on the modification date, October 30, 2020, because the Company determined that achieving performance thresholds were probable for certain tranche awards.

2017 PSU Awards: During the year ended December 31, 2017, PSU awards were granted to certain members of management and executive officers with three-year cumulative net profit, Adjusted EBITDA, and diluted earnings per share performance target conditions and service conditions, covering a performance period beginning January 1, 2017 and ending on December 31, 2019. The performance conditions were not met as of December 31, 2019 and the Company reversed previously recorded expense of $5.8 million on these units during the year ended December 31, 2019.

●

Special Performance Stock Unit Executive Award Agreement: During the year ended December 31, 2019, a PSU market condition award of 300,000 was granted to an executive officer of the Company that would vest based upon achieving target prices for the Company’s Common Stock. This award was subsequently cancelled and replaced with the PSU market condition award granted on February 26, 2020.

On February 26, 2020 and March 5, 2020, special performance stock unit awards (“SPSUs”), totaling 3,570,000 units were granted to certain executive officers that will vest based upon achieving target prices for the Company’s Class Common Stock. The SPSUs are eligible to vest in tranches contingent upon (i) the attainment of certain 20 trading day volume weighted average closing prices and (ii) fulfillment of the three-year service requirement from the date of grant. The vested SPSUs will be settled within 30 days of vesting. Any unvested SPSUs remaining after 10 years will be forfeited. If service is terminated prior to the three year anniversary from the date of grant, unvested SPSUs shall be forfeited. The target prices and vesting tranches are set forth in the table below:


Tranche	Target Stock Price	SPSUs Vesting
1	$12.00	595,003
2	$16.00	595,003
3	$20.00	595,003
4	$24.00	595,003
5	$28.00	594,994
6	$32.00	594,994

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The Company used the Monte Carlo simulation model to estimate the fair value of the SPSUs. This model utilizes multiple input variables to estimate the probability that the market conditions will be achieved. The Company used the following assumptions in determining the fair value of the SPSUs:


		Assumptions
Expected stock price volatility		45.0%
Expected dividend yield		2.02% and 2.44%
Risk-free interest rate		1.33% and 0.92%
Grant-date stock price		$5.93 and $4.92

The expected stock price volatility was based on the historical volatility of the Company’s stock for a period equivalent to the derived service period. The expected dividend yield is based on annual expected dividend payments. The risk-free interest rate was based on the treasury yield rates as of the date of grant for a period equivalent to the performance measurement period. The fair value of each SPSU is amortized over the requisite or derived service period, which is up to 6.4 years. The SPSUs granted on February 26, 2020 and March 5, 2020 have a grant date fair value of approximately $12.2 million.

On October 30, 2020, based upon the recommendation of the Compensation Committee, the Board of Directors of the Company approved a modification to the SPSUs for the awards. Each SPSU award agreement was amended as follows:

●

The stock price thresholds (ranging from $12 to $24) and service requirement for tranches 1 through 4 of the SPSUs were eliminated and such SPSUs vested on October 30, 2020;

●

Participants shall be prohibited from selling the shares of Common Stock issued upon the foregoing vesting until October 30, 2021;

●

The stock price threshold for tranche 5 of the SPSUs was changed to $4 from $28 and the stock price threshold for tranche 6 of the SPSUs was changed to $8 from $32; and

●

The service requirement for tranches 5 and 6 was shortened to end on October 30, 2021.

As a result of the SPSU modification of market conditions, the incremental fair value amount assigned to the grant date fair value was approximately $7.3 million in accordance with ASC 718-20, Compensation-Stock Compensation. In January 2021, the market condition requirement for SPSUs 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 were recorded on a straight-line basis through October 30, 2021, which was the end of the service requirement period.

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The following table represents the nonvested RSU and PSU activity for the years ended December 31, 2021, December 31, 2020 and December 31, 2019:


		Weighted
		Average
	Shares of RSU	Grant Date
	PSU and SPSU	Fair Value
Beginning balance at January 1, 2019	1,934,447	$	21.50
Granted	1,960,334		12.89
Vested	(303,201)		21.76
Forfeited	(220,632)		17.17
Cancelled (1)	(100,855)		21.46
Beginning balance at January 1, 2020	3,270,093	$	15.88
Granted	6,517,594		4.66
Vested	(2,472,375)		8.61
Forfeited	(1,020,122)		16.97
Cancelled (1)	(2,135,929)		7.22
Beginning balance at January 1, 2021 (2)	4,159,261	$	5.51
Granted	5,089,234		7.70
Vested	(648,860)		2.82
Forfeited	(216,773)		10.74
Cancelled (1)	(541,129)		2.81
Nonvested at December 31, 2021 (3)	7,841,733	$	7.19
Tranche Years 2022 and 2023 awarded under the 2021 PSU award with grant date fair values to be determined in years 2022 and 2023, respectively	1,778,471
Total Nonvested at December 31, 2021	9,620,204

(1)

Represents vested RSUs, PSUs, and SPSUs surrendered in lieu of taxes and cancelled awards returned to the 2013 Equity Incentive Plan.

(2)

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

(3)

During January and February of 2022, participants vested in RSUs and PSUs, net of units surrendered in lieu of taxes, of 2,799,845 units. As a result, the Company paid taxes for restricted unit withholdings of approximately $52.2 million during the three months ended March 31, 2022.

NOTE 10—INCOME TAXES

Current income tax expense represents the amounts expected to be reported on the Company’s income tax returns, and deferred tax expense or benefit represents the change in net deferred tax assets and liabilities. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities as measured by the enacted tax rates that will be in effect when these differences reverse. Valuation allowances are recorded as appropriate to reduce deferred tax assets to the amount considered likely to be realized.

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. A significant piece of objective negative evidence evaluated was the cumulative loss incurred over the three-year period ended December 31, 2021 for each taxing jurisdiction. Such objective evidence limits the ability to consider other subjective evidence, such as the Company’s projections of future taxable income. For the year ended December 31, 2021, the Company remained in a cumulative loss over the past three-year period for the U.S. and international jurisdictions, with the exception of Norway and Finland.

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The Company maintains a valuation allowance against U.S. deferred tax assets as well as international jurisdictions in which it operates, with the exception of Finland and Norway. During 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 deferred tax assets held in those jurisdictions does not meet the more likely than not standard. As such, a charge of $33.1 million and $40.1 million was recorded for Germany and Spain, respectively.

Cancellation of Debt Income. On July 31, 2020, the Company consummated previously announced private offers to exchange its Existing Subordinated Notes for newly issued Second Lien Notes due 2026. See Note 8—Corporate Borrowings and Finance Lease Obligations for further information. For US tax purposes the Company was required to recognize CODI on the difference between the face value of debt exchanged and the fair market value of the new debt issued. The Company recognized $1.2 billion of CODI for tax purposes for the year ended December 31, 2020.

IRS §108 provides relief from recognizing CODI as current taxable income to the extent that the tax paying legal entity is insolvent as defined by the US Tax Code. The Company determined that the level of its insolvency at July 31, 2020 exceeded the indicated amount of CODI resulting from the debt exchange. To the extent that an entity is insolvent, rather than recognize current taxable income, the entity may reduce its tax attributes including net operating losses, capital losses, tax credits, depreciable assets, investment in subsidiaries and other investments in the amount of the excluded CODI. The Company determined that $1.2 billion of its federal net operating losses would be eliminated as a result of the tax attribute reduction.

The actual effective rate for the year ended December 31, 2021 was 0.8%. The Company’s consolidated tax rate for the year ended December 31, 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, and federal and state tax credits, partially offset by state income taxes and permanent differences related to interest, compensation, and other discrete items. No tax impact was recorded on the $2,306.4 million goodwill impairment charge incurred during the year ended December 31, 2020, as the portion impaired was permanently non-deductible. At December 31, 2021 and December 31, 2020, the Company has recorded net deferred tax liabilities of $30.7 million and of $40.2 million, respectively.

Cares Act. On March 27, 2020, 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, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property, as well as loans to certain qualifying businesses. As of the date of this filing, the Company has not participated in CARES Act loans.

The income tax provision (benefit) reflected in the consolidated statements of operations consists of the following components:


	Year Ended
(In millions)	December 31, 2021		December 31, 2020		December 31, 2019
Current:
Federal	$	—	$	0.1	$	(0.1)
Foreign		1.3		(0.1)		8.4
State		(3.9)		(4.1)		2.9
Total current		(2.6)		(4.1)		11.2
Deferred:
Federal		(3.8)		2.7		(4.2)
Foreign		(2.1)		57.6		(42.8)
State		(1.7)		3.7		13.3
Total deferred		(7.6)		64.0		(33.7)
Total provision (benefit)	$	(10.2)	$	59.9	$	(22.5)

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~~The Company recorded stock-based compensation expense~~Pre-tax losses consisted of ~~$4.4 million, $14.9 million, and $5.7 million within general and administrative: other during~~ the ~~years ended December 31, 2019, December 31, 2018, and December 31, 2017, respectively.~~

~~2019 Stock-Based Compensation Summary (in millions):~~following:

Amount Recognized

Amount

Expected to

Expected to

Expected to

Expected to

Expected to

Year Ended

Unrecognized

Recognize

Recognize

Recognize

Recognize

Recognize
Grant Tranche

December 31, 2019

December 31, 2019

2020

2021

2022

2023

2024
2019 Board of Directors

$
0.5

$
—

$
—

$
—

$
—

$
—

$
—
2019 RSU awards

3.5

7.0

3.5

3.5

—

—

—
2019 PSU awards

—

—

—

—

—

—

—
2018 RSU awards

3.1

3.0

3.0

—

—

—

—
2018 PSU awards

(5.8)

—

—

—

—

—

—
2017 RSU awards

1.6

—

—

—

—

—

—
2017 RSU NEO awards

1.4

—

—

—

—

—

—
2017 PSU awards

—

—

—

—

—

—

—
2019 RSU executive

0.1

1.6

1.1

0.3

0.2

—

—
2019 PSU executive

—

1.4

0.5

0.5

0.2

0.1

0.1

$
4.4

$
13.0

$
8.1

$
4.3

$
0.4

$
0.1

$
0.1

~~Awards Granted in 2019, 2018, and 2017~~

AMC’s Board of Directors approved awards of stock, RSU’s, and PSU’s to certain of the Company’s employees and directors under the 2013 Equity Incentive Plan. During years 2019, 2018, and 2017, the grant date fair value of these awards was based on the closing price of AMC’s stock on the date of grant, which ranged from $8.67 to $31.45 per share.

~~The award agreements generally had the following features:~~

●

~~Stock Award Agreement:~~ The Company granted fully vested shares of Class A common stock to its independent members of AMC’s Board of Directors and recognized expense in general and administrative: other expense as summarized below:

Vested

Recognized

Class A

Upon
Stock Award Agreement

Common Stock

Grant
Year Granted

Granted

(in millions)
2019

32,464

$
0.5
2018

28,055

0.5
2017

13,684

0.4

●

~~Restricted Stock Unit Award Agreement:~~ ~~The Company granted RSU awards to certain members of management. Each RSU represents the right to receive~~ ~~1 share of Class A common stock at a future date. The RSUs granted during 2019, 2018, and 2017 vest over three years with~~ ~~1/3~~ vesting in each year. These RSUs will be settled within 30 days of vesting. A dividend equivalents equal to the amount paid in respect of one share of Class A common stock underlying the RSUs began to accrue with respect to the RSUs on the date of grant. Such accrued dividend equivalents are paid to the holder upon vesting of the RSUs.

Recognized
Restricted Stock Unit

in 2019
Year Granted

Units Granted

(in millions)
2019

730,167

$
3.5
2018

656,576

3.1
2017

201,726

1.6

$
8.2

●

~~Restricted Stock Unit Award Executive Agreement:~~ ~~During the year ended December 31, 2019, the Company granted RSU awards of~~ ~~200,000 to an executive officer (“2019 RSU executive”) of the Company~~

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with one-half vesting on the first anniversary of employment on December 2, 2020 and the remaining one-half vesting ratably over a three year period ending on December 2, 2022. All unvested RSUs shall be forfeited upon termination of services. Each RSU represents the right to receive one share of Class A common stock at a future date. These RSUs will be settled within 30 days of vesting. A dividend equivalent equal to the amount paid in respect of one share of Class A common stock underlying the RSUs began to accrue with respect to the RSUs on the date of grant. Such accrued dividend equivalents are paid to the holder upon vesting of the RSUs. The Company recognized approximately $0.1 million of expense in general and administrative: other expense during the year ended December 31, 2019.

●

~~Restricted Stock Unit Named Executive Officer Award Agreement:~~ ~~During the year ended December 31, 2017, RSU awards of~~ 129,214 units were granted to certain executive officers covered by Section 162(m) of the Internal Revenue Code (“2017 RSU NEO awards”). The RSUs will be forfeited if AMC does not achieve a specified cash flow from operating activities target for each of the years ended on December 31, 2017, 2018 and 2019. The RSUs vest over three years with ~~1/3~~ vesting in each of 2017, 2018 and 2019 if the cash flow from operating activities target is met. The vested RSUs will be settled within 30 days of vesting. A dividend equivalent equal to the amount paid in respect of 1 share of Class A common stock underlying the RSUs began to accrue with respect to the RSUs on the date of grant. Such accrued dividend equivalents are paid to the holder upon vesting of the RSUs. The grant date fair value was $4.1 million based on the probable outcome of the performance targets and a stock price of $31.45 on March 31, 2017. The Company recognized expense for these awards of $1.4 million, $1.3 million, and $1.4 million in general and administrative: other expense, during the each of the years ended December 31, 2019, December 31, 2018 and December 31, 2017, respectively, based on achievement of the performance condition for 2019, 2018, and 2017.

During the year ended December 31, 2016, RSU awards of 135,981 units were granted to certain executive officers covered by Section 162(m) of the Internal Revenue Code (“2016 RSU NEO awards”). The RSUs will be forfeited if AMC does not achieve a specified cash flow from operating activities target for each of the years ending December 31, 2016, 2017 and 2018. The RSUs vest over three years with ~~1/3~~ vesting in each of 2016, 2018 and 2019 if the cash flow from operating activities target is met. The vested RSUs will be settled within 30 days of vesting. A dividend equivalent equal to the amount paid in respect of one share of Class A common stock underlying the RSUs began to accrue with respect to the RSUs on the date of grant. Such accrued dividend equivalents are paid to the holder upon vesting of the RSUs. The grant date fair value was $3.4 million based on the probable outcome of the performance targets and a stock price of $24.88 on March 1, 2016. The Company recognized expense for these awards of $1.1 million in general and administrative: other expense, during each the of years ended December 31, 2018 and December 31, 2017, respectively, based on achievement of the performance conditions for 2018 and 2017.

●

~~Performance Stock Unit Award Agreement:~~ During the year ended December 31, 2019, PSU awards of 730,167 were granted to certain members of management and executive officers, with three-year cumulative Adjusted EBITDA, diluted earnings per share, and net profit performance target conditions and service conditions, covering a performance period beginning January 1, 2019 and ending on December 31, 2021. The PSUs will vest based on achieving 80% to 120% of the performance targets with the corresponding vested unit amount ranging from 30% to 200%. If the performance target is met at 100%, the PSU awards granted during the year ended December 31, 2019 will vest at 730,167 units in the aggregate. NaN PSUs will vest if Holdings does not achieve 80% of the three-year cumulative Adjusted EBITDA, diluted earnings per share, and net profit performance target. Additionally, unvested PSU’s shall be ratably forfeited upon termination of service prior to December 31, 2021. If service terminates prior to January 2, 2020, all unvested PSU’s shall be forfeited, if service terminates prior to January 2, 2021, ~~2/3~~ ~~of unvested PSU’s shall be forfeited and if service terminates prior to January 4, 2022,~~ ~~1/3~~ of unvested PSU’s shall be forfeited. 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. A dividend equivalent equal to the amount paid in respect of one share of Class A common stock underlying the PSUs began to accrue with respect to the PSUs on the date of grant. Such accrued dividend equivalents are paid to the holder upon vesting of the PSUs. During the third quarter of 2019, the Company determined that achieving the three-year net profit performance thresholds of the 2019 Performance Stock Units was no longer probable and ceased accruing any additional expense on these units. At December 31, 2019, the Company determined that achieving the three-year net profit performance thresholds was improbable and reversed all previously recorded expense~~. If the Company later determines that the performance thresholds are~~

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probable, then historical expense would be reinstated, and the Company would resume recognizing expense. The Company did not recognize any expense for these awards in general and administrative: other expense, during the year ended December 31, 2019 and ceased accruing any expense on these units.

During the year ended December 31, 2018, PSU awards were granted to certain members of management and executive officers with three-year cumulative net profit, Adjusted EBITDA, and diluted earnings per share performance target conditions and service conditions, covering a performance period beginning January 1, 2018 and ending on December 31, 2020. During the third quarter of 2019, the Company determined that achieving the three-year net profit performance thresholds of the 2018 Performance Stock Units was no longer probable and ceased accruing any additional expense on these units. At December 31, 2019, the Company determined that achieving the three-year net profit performance thresholds was improbable and reversed all previously recorded expense. If the Company later determines that the performance thresholds are probable, then historical expense would be reinstated, and the Company would resume recognizing expense. The Company reversed all previously recorded expense and recorded a credit for these awards of $5.8 million during the year ended December 31, 2019, which reversed the expense of $5.8 million recorded during the year ended December 31, 2018 in general and administrative: other expense and ceased accruing any additional expense on these units.

During the year ended December 31, 2017, PSU awards were granted to certain members of management and executive officers with three-year cumulative net profit, Adjusted EBITDA, and diluted earnings per share performance target conditions and service conditions, covering a performance period beginning January 1, 2017 and ending on December 31, 2019. During the year ended December 31, 2017, the Company determined that achieving the three-year performance thresholds of the 2017 Performance Stock Units was improbable and reversed $1.8 million of stock-based compensation expense and ceased accruing any additional expense on these units. The Company did not recognize any further expense in years 2019 and 2018.

During the year ended December 31, 2016, PSU awards were granted to certain members of management and executive officers, with both a three-year cumulative adjusted free cash flow and net earnings performance target condition and a service condition, covering a performance period beginning January 1, 2016 and ended on December 31, 2018. During the year ended December 31, 2017, the Company determined that achieving the three-year performance thresholds of the 2016 Performance Stock Units was improbable and reversed $2.0 million of stock-based compensation expense and ceased accruing any additional expense on these units. The Company did not recognize any further expense in 2018.

●

~~Performance Stock Unit Executive Award Agreement:~~ During the year ended December 31, 2019, a PSU market condition award of 300,000 was granted to an executive officer of the Company that will vest based upon achieving target prices for the Company’s common stock (“2019 PSU executive”). Achievement of the target prices will be determined using the volume weighted average closing price of the Company’s Class A common stock over a 20 trading-day period. Any unvested PSUs remaining after 10 years will be forfeited. If service is terminated prior to December 2, 2029, all unvested PSUs shall be forfeited. The target prices and vesting tranches are set forth in the table below:

Target Stock Price

PSUs Vesting
$15.00

75,000
$20.00

75,000
$25.00

75,000
$30.00

75,000


	Year Ended
(In millions)	December 31, 2021		December 31, 2020		December 31, 2019
Domestic	$	(1,029.5)	$	(3,036.4)	$	(165.1)
Foreign		(250.5)		(1,493.1)		(6.5)
Total	$	(1,280.0)	$	(4,529.5)	$	(171.6)

The ~~vested PSUs will be settled within~~ ~~30 days~~ ~~of vesting. A dividend equivalent equal to~~difference between the ~~amount paid in respect of 1 share of Class A common stock underlying~~effective tax rate on net loss from continuing operations before income taxes and the ~~PSUs began to accrue with respect to the PSUs on the date of grant. Such accrued dividend equivalents are paid to the holder upon vesting of the PSUs.~~U.S. federal income tax statutory rate is as follows:


	Year Ended
(In millions)	December 31, 2021			December 31, 2020			December 31, 2019
Income tax expense (benefit) at the federal statutory rate	$	(268.8)		$	(951.2)		$	(36.0)
Effect of:
State income taxes		(46.9)			(89.5)			(7.2)
Increase in reserve for uncertain tax positions		(3.3)			(1.9)			8.4
Federal and state credits		(2.3)			(3.6)			(6.5)
Permanent items - goodwill impairment		—			456.3			—
Permanent items - other		(3.1)			13.2			(6.6)
Foreign rate differential		4.3			19.7			11.8
Other		(5.0)			1.7			(10.6)
Impact of UK tax rate change		(34.3)			—			—
Valuation allowance		349.2			615.2			24.2
Income tax expense (benefit)	$	(10.2)		$	59.9		$	(22.5)
Effective income tax rate		0.8	%		(1.3)	%		13.1	%

The ~~Company used the Monte Carlo simulation model to estimate the fair value~~significant components of ~~the PSUs. This model utilizes multiple input variables to estimate the probability that the market conditions will be achieved. The Company used the following assumptions in determining the fair value~~deferred income tax assets and liabilities as of ~~the PSUs:~~December 31, 2021 and December 31, 2020 are as follows:


	December 31, 2021				December 31, 2020
	Deferred Income Tax				Deferred Income Tax
(In millions)	Assets		Liabilities		Assets		Liabilities
Tangible assets	$	—	$	(131.7)	$	—	$	(179.7)
Right-of-use assets		—		(1,023.4)		—		(1,043.1)
Accrued liabilities		17.1		—		24.2		—
Intangible assets		—		(111.9)		—		(105.0)
Receivables		7.8		—		8.5		—
Investments		51.8		—		55.7		—
Capital loss carryforwards		1.6		—		1.2		—
Pension and deferred compensation		23.3		—		15.4		—
Corporate borrowings		35.2		—		42.0		—
Disallowed interest		170.6		—		32.3		—
Deferred revenue		180.6		—		193.3		—
Lease liabilities		1,304.9		—		1,294.3		—
Finance lease obligations		1.2		—		1.6		—
Other credit carryovers		25.4		—		19.6		—
Other comprehensive income		—		—		—		(1.1)
Net operating loss carryforwards		530.9		—		365.5		—
Total	$	2,350.4	$	(1,267.0)	$	2,053.6	$	(1,328.9)
Less: Valuation allowance		(1,114.1)		—		(764.9)		—
Net deferred income taxes	$	1,236.3	$	(1,267.0)	$	1,288.7	$	(1,328.9)

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		~~Year Ended December 31, 2019~~
~~Expected stock price volatility~~		~~45.0%~~
~~Expected dividend yield~~		~~9.23%~~
~~Risk-free interest rate~~		~~1.83%~~
~~Grant-date stock price~~		~~$8.67~~

The expected stock price volatility is based on the historical volatility of the Company’s stock for a period equivalent to the derived service period. The expected dividend yield is based on annual expected dividend payments. The risk-free interest rate is based on the treasury yield rates as of the date of grant for a period equivalent to the performance measurement period. The fair value of each PSU is amortized over the requisite or derived service period, which is up to 4.6 years. The PSUs granted during the year ended December 31, 2019 have a grant date fair value of $1.4 million. Since the award was granted in December 2019, the Company recognized an immaterial amount of expense for these awards in general and administrative: other expense, during the year ended December 31, 2019.

●

~~Performance Stock Unit Transition Award:~~ In recognition of the shift in 2016 from one-year to three-year performance periods for annual equity awards, on March 31, 2017, PSU transition awards were granted to certain members of management and executive officers, with net profit, Adjusted EBITDA, and diluted earnings per share performance target conditions and a service condition, covering a performance period beginning January 1, 2017 and ended on December 31, 2017.

No PSU Transition Awards vested in 2017 as the Company did not meet the fiscal year 2017 net profit threshold, and as a result, all of the PSUTs were forfeited and the units were returned to the 2013 Employee Incentive Plan pool.

~~The following table represents the nonvested RSU and PSU activity for the years ended December 31, 2019, December 31, 2018 and December 31, 2017:~~

Weighted

Average

Shares of RSU

Grant Date

and PSU

Fair Value
Beginning balance at January 1, 2017

556,510

$
24.88
Granted

701,788

31.23
Vested

(92,722)

24.88
Forfeited

(44,309)

28.68
Cancelled (1)

(37,426)

31.45
Beginning balance at January 1, 2018

1,083,841

$
28.61
Granted

1,313,152

15.65
Vested

(408,848)

21.68
Forfeited

(53,698)

20.69
Beginning balance at January 1, 2019

1,934,447

$
21.50
Granted

1,960,334

12.89
Vested

(303,201)

21.76
Forfeited

(220,632)

17.17
Cancelled

(100,855)

21.46
Nonvested at December 31, 2019

3,270,093

$
15.88

~~(1)~~

~~No PSU Transition Awards vested as the Company did not achieve the adjusted free cash flow or net earnings minimum performance target.~~

~~NOTE 10—INCOME TAXES~~

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~~Table of Contents~~

liabilities as measured by the enacted tax rates that will be in effect when these differences reverse. Valuation allowances are recorded as appropriate to reduce deferred tax assets to the amount considered likely to be realized.

Management assesses the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of the existing deferred tax assets. A significant piece of objective negative evidence evaluated was the cumulative loss incurred over the three-year period ended December 31, 2019 for domestic operations. Such objective evidence limits the ability to consider other subjective evidence, such as the Company’s projections for future taxable income. For the year ended December 31, 2019, the Company remained in a cumulative loss over the past three-year period.

On the basis of this evaluation, for the year ended December 31, 2017, a valuation allowance of $221.6 million was established domestically on the Company’s net deferred tax assets and considering indefinite-lived intangibles. The amount of deferred tax asset considered realizable, however, could be adjusted if estimates of future taxable income is reduced or increased or if objective negative evidence in the form of cumulative losses is no longer present and additional weight is given to subjective evidence such as the Company’s projections for future taxable income. For the years ended December 31, 2019 and December 31, 2018, the Company maintained its domestic valuation allowance.

~~An international valuation allowance previously established against deferred tax assets held in Spain was released in the fourth quarter of 2019 resulting in a $41.5~~ million benefit to income tax expense. A significant piece of objective positive evidence evaluated was a cumulative income position over a three-year period. Statutory taxable earnings that permit the use of these deferred tax assets, primarily net operating loss carryforwards, have stabilized to a profit position with significant improvement in 2019. Strategic initiatives have provided sufficient positive evidence that has resulted in the Company concluding the realization of these deferred tax assets is more likely than not.

On December 22, 2017, the President of the United States signed into law H.R. 1 (the “Tax Reform Act”). The legislation significantly changes U.S. tax law by, among other things, lowering corporate income tax rates, limiting the amount of deductible interest expense, limiting executive compensation, implementing a territorial tax system, and imposing a repatriation tax on deemed repatriated earnings of foreign subsidiaries. The Tax Reform Act permanently reduces the U.S. corporate income tax rate from a maximum of 35% to a flat 21% rate, effective January 1, 2018.

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to reverse. As a result of the reduction in the U.S. corporate income tax rate from 35% to 21% under the Tax Reform Act, the Company revalued its ending net deferred tax assets and related valuation allowance at December 31, 2017. As a result, the Company recognized a tax benefit of $121.8 million in the consolidated statement of operations for the year ended December 31, 2017. This tax benefit is comprised of $88.6 million of deferred tax expense associated with the revaluation of the Company’s net deferred tax assets, as reflected in the rate reconciliation, and $210.4 million of deferred tax benefit associated with the partial release of the Company’s valuation allowance as a result of the Tax Reform Act.

~~The Company has assessed the deemed mandatory repatriation provisions of the Tax Reform Act, and is projecting~~ no impact to current year domestic taxable income as it relates to undistributed earnings of its foreign subsidiaries. The Company does not intend to distribute earnings in a taxable manner, and therefore intends to limit distributions to earnings previously taxed in the U.S., or earnings that would qualify for the 100 percent dividends received deduction provided for in the Tax Reform Act, and earnings that would not result in any significant foreign taxes. As a result, the Company has not recognized a deferred tax liability on its investment in foreign subsidiaries.

While the Tax Reform Act provides for a territorial tax system, beginning in 2018, it includes two new U.S. tax base erosion provisions, the global intangible low-taxed income (“GILTI”) provisions and the base-erosion and anti-abuse tax (“BEAT”) provisions.

The GILTI provisions require the Company to include in its U.S. income tax return foreign subsidiary earnings in excess of an allowable return on the foreign subsidiary’s tangible assets. The Company does not expect it will be subject to this tax in the current and prior year and therefore has not included any tax impacts of GILTI in its consolidated financial statements for the years ended December 31, 2019 and December 31, 2018.

The BEAT provisions in the Tax Reform Act eliminates the deduction of certain base-erosion payments made to related foreign corporations, and impose a minimum tax if greater than regular tax. The Company does not expect it will be subject to this tax in the current and prior year and therefore has not included any tax impacts of BEAT in its consolidated financial statements for the years ended December 31, 2019 and December 31, 2018.

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~~The income tax provision (benefit) reflected in the consolidated statements of operations consists of the following components:~~

Year Ended

(In millions)

December 31, 2019

December 31, 2018

December 31, 2017

Current:

Federal

$
(0.1)

$
(0.5)

$
(13.4)

Foreign

8.4

5.0

5.3

State

2.9

15.5

4.4

Total current

11.2

20.0

(3.7)

Deferred:

Federal

(4.2)

0.8

116.4

Foreign

(42.8)

(7.5)

(5.5)

State

13.3

0.3

46.9

Total deferred

(33.7)

(6.4)

157.8

Total provision (benefit)

$
(22.5)

$
13.6

$
154.1

The Company generated alternative minimum taxes for the year ended December 31, 2017, which fully offset the taxes due to the utilization of tax credits. Under the Tax Reform Act, alternative minimum tax credit will be refundable in the future. The Company has reclassed the alternative minimum tax credits from deferred tax assets to an income tax receivable.

~~Pre-tax income (losses) consisted of the following:~~

Year Ended

(In millions)

December 31, 2019

December 31, 2018

December 31, 2017

Domestic

$
(165.1)

$
154.4

$
(362.3)

Foreign

(6.5)

(30.7)

29.2

Total

$
(171.6)

$
123.7

$
(333.1)

~~The difference between the effective tax rate on earnings (loss) from continuing operations before income taxes and the U.S. federal income tax statutory rate is as follows:~~

Year Ended

(In millions)

December 31, 2019

December 31, 2018

December 31, 2017

Income tax expense (benefit) at the federal statutory rate

$
(36.0)

$
26.0

$
(116.6)

Effect of:

State income taxes

(7.2)

8.9

(17.6)

Increase in reserve for uncertain tax positions

8.4

5.2

2.1

Federal and state credits

(6.5)

(5.9)

(5.2)

Permanent items - transaction costs

—

—

2.0

Permanent items - other

(6.6)

5.7

(9.4)

Foreign rate differential

11.8

(5.9)

(15.3)

Change in legislation

—

—

88.6

Other

(10.6)

9.7

4.9

Valuation allowance

24.2

(30.1)

220.6

Income tax expense (benefit)

$
(22.5)

$
13.6

$
154.1

Effective income tax rate

13.1
%

11.0
%

(46.3)
%

The valuation allowance expense reflected in the 2017 tax rate reconciliation of $220.6 million consists of the initial domestic recognition of $432.0 million, net of domestic reductions due to the tax reform act of $(210.4) million and changes due to international operations of $(1.0) million.

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~~Table of Contents~~

~~The significant components of deferred income tax assets and liabilities as of December 31, 2019 and December 31, 2018 are as follows:~~

December 31, 2019

December 31, 2018

Deferred Income Tax

Deferred Income Tax

(In millions)

Assets

Liabilities

Assets

Liabilities

Tangible assets

$
—

$
(152.6)

$
—

$
(210.6)

ROU assets

—

(1,187.2)

—

—

Accrued liabilities

17.0

—

13.6

—

Intangible assets

—

(99.7)

—

(128.7)

Receivables

7.8

—

—

(3.7)

Investments

17.8

—

12.0

—

Capital loss carryforwards

1.2

—

1.0

—

Pension, postretirement and deferred compensation

21.6

—

21.9

—

Corporate borrowings

—

(101.8)

—

(111.6)

Disallowed interest

42.1

—

14.9

—

Deferred revenue

170.8

—

201.7

—

Lease liabilities

1,377.7

—

165.6

—

Capital and financing lease obligations

2.4

—

118.5

—

Other credit carryovers

18.0

—

17.7

—

Other comprehensive income

—

(1.0)

—

(1.0)

Net operating loss carryforwards

202.8

—

199.3

—

Total

$
1,879.2

$
(1,542.3)

$
766.2

$
(455.6)

Less: Valuation allowance

(312.8)

—

(323.6)

—

Net deferred income taxes

$
1,566.4

$
(1,542.3)

$
442.6

$
(455.6)

A rollforward of the Company’s valuation allowance for deferred tax assets is as follows:


			Additions		Charged					Additions	Charged
	Balance at		Charged	Charged	(Credited)			Balance at		Charged	(Credited)
	Beginning of		(Credited)	(Credited) to	to Other	Balance at		Beginning of		to	to Other	Balance at
(In millions)	Period		to Expenses	Goodwill	Accounts(1)	End of Period		Period		Expenses(1)	Accounts(2)	End of Period
Calendar Year 2021
Valuation allowance-deferred income tax assets								$	764.9	349.2	—	$	1,114.1
Calendar Year 2020
Valuation allowance-deferred income tax assets								$	312.8	615.2	(163.1)	$	764.9
Calendar Year 2019
Valuation allowance-deferred income tax assets	$	323.6	24.2	—	(35.0)	$	312.8	$	323.6	24.2	(35.0)	$	312.8
Calendar Year 2018
Valuation allowance-deferred income tax assets	$	338.4	(30.1)	—	15.3	$	323.6
Calendar Year 2017
Valuation allowance-deferred income tax assets	$	112.2	220.6	(9.1)	14.7	$	338.4

(1)

The 2021 valuation allowance primarily relates to the Company’s increase in the current year’s federal, state and international net operating losses, for which no benefit has been recognized.

(2)

Primarily relates to amounts resulting from the Company’s changes in deferred tax assets and associated valuation allowance that are not related to income statement activity as well as amounts charged to other comprehensive income. In 2019, this includes $(28.6) million of valuation allowance associated with the sale of the Austria theatres.

The Company has federal income tax net operating loss carryforwards of ~~$380.9~~$1,185.5 million. Approximately ~~$290.9~~$320.6 million will begin to expire in ~~2020,~~2022, and will completely expire in 2036, and will be limited annually due to certain change in ownership provisions of the Internal Revenue Code. Approximately ~~$90.0~~$864.9 million can be used indefinitely. The Company’s foreign net operating losses of ~~$487.2~~$898.4 million can be used indefinitely except for approximately ~~$6.2~~$10.8 million, which will expire in various amounts between years 2022 and ~~2028.~~2033. The Company also has state income tax loss carryforwards of ~~$380.4~~$1,678.6 million. Approximately ~~$374.0~~$1,192.4 million may be used over various periods ranging from 1 to 20 years. Approximately ~~$6.4~~$486.2 million can be used indefinitely.

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~~Table of Contents~~

A reconciliation of the change in the amount of unrecognized tax benefits was as follows:


	Year Ended						Year Ended
(In millions)	December 31, 2019		December 31, 2018		December 31, 2017		December 31, 2021		December 31, 2020		December 31, 2019
Balance at beginning of period	$	22.0	$	15.3	$	12.7	$	33.5	$	31.0	$	22.0
Gross increases—current period tax positions		10.5		7.3		3.2		—		4.8		10.5
Gross decreases—prior period tax positions		(1.5)		(0.6)		0.3		(22.5)		(1.3)		(1.5)
Impact of legislation change		—		—		(0.9)
Gross decreases—settlements with authorities								(2.2)		—		—
Gross decreases—expiration of statute of limitations								(0.5)		(1.0)		—
Balance at end of period	$	31.0	$	22.0	$	15.3	$	8.3	$	33.5	$	31.0

The Company recognizes income tax-related interest expense and penalties as income tax expense and general and administrative expense, respectively. NoNaN interest expense or penalties related to federal uncertain tax positions have been recognized for the years ended December 31, ~~2019,~~2021, December 31, ~~2018,~~2020, and December 31, ~~2017.~~2019.

The Company analyzed and reviewed ~~the remaining~~ state uncertain tax positions to determine the necessity of accruing interest and penalties. For the ~~years~~year ended December 31, ~~2019~~2021, the Company recognized $0.6 million of interest expense and $0.4 million of penalties. For the year ended December 31, ~~2018,~~2020, the Company ~~determined it is not necessary to accrue additional~~recognized $1.1 million of interest expense and $0.5 million of penalties. The total amount of accrued interest and penalties for state uncertain tax positions at December 31, ~~2019~~2021 and December 31, ~~2018 related to prior years~~2020 was ~~$0.1 million~~$0 and ~~$0.1~~$1.6 million, respectively.

The total amount of net unrecognized tax benefits at December 31, ~~2019~~2021 and December 31, ~~2018~~2020 that would impact the effective tax rate, if recognized, would be ~~$12.2~~$0.3 million and ~~$15.2~~$6.9 million, respectively. ~~There are currently, unrecognized tax benefits which the~~The Company ~~anticipates will be resolved in the next 12 months; however, the Company~~believes that it is ~~unable at this time to estimate what the impact on~~reasonably possible that approximately $0.2 million of its unrecognized tax ~~benefits will be.~~positions related to state taxes may be recognized by the end of 2022 as a result of settlements or the expiration of statute of limitations.

The Company, or 1 of its subsidiaries, files income tax returns in the U.S. federal jurisdiction, and various state and foreign jurisdictions. An IRS examination of the tax year March 29, 2012 ~~is currently ongoing.~~was settled in 2021 resulting in additional federal and state net operating losses (“NOLs”). Generally, tax years beginning after ~~March 28, 2002~~December 31, 2001 are still open to examination by various taxing authorities. Additionally, as discussed above, the Company has ~~net operating loss (“NOL”)~~ NOL

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Table of Contents

carryforwards for tax years ended December 31, ~~2001~~2002 through December 31, ~~2019,~~2021, in the U.S. and various state jurisdictions which have carryforwards of varying lengths of time. These NOLs are subject to adjustment based on the statute of limitations applicable to the return in which they are utilized, not the year in which they are generated. Various state, local and foreign income tax returns are also under examination by taxing authorities. The Company does not believe that the outcome of any examination will have a material impact on its consolidated financial statements.

Utilization of the Company’s net operating loss carryforwards, disallowed business interest carryforward and other tax attributes became subject to the Section 382 ownership change limitation due to changes in our stock ownership on January 29, 2021. Management believes the Company’s ability to utilize these tax attributes has not been significantly limited by this event.

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

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~~Table of Contents~~

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. On September 2, 2021, the parties reached an agreement in principle to resolve the Actions for $18.0 million. The Company agreed to the settlement and the payment of the settlement amount to eliminate the distraction, burden, expense, and uncertainty of further litigation. The Company and the other defendants continue to expressly deny any liability or wrongdoing with respect to the matters alleged in the Actions. On November 1, 2021, the parties to the Actions signed a stipulation of settlement, which memorialized the terms of the agreement in principle, and which the plaintiffs filed with the court. Also on November 1, 2021, plaintiffs filed a motion to preliminarily approve the settlement. On November 8, 2021, the court preliminarily approved the settlement, approved the form of notice to be disseminated to class members, and scheduled a final fairness hearing on the settlement for February 10, 2022. On February 14, 2022, the court issued a final judgment approving the settlement and dismissing the action.

On May 21, 2018, a stockholder derivative complaint, captioned Gantulga v. Aron, et al., Case No. 2:18-cv-02262-JAR-TJJ (the “Gantulga Action”), was filed against certain of the Company’s officers and directors in the U.S. District Court for the District of Kansas. The Gantulga Action, which was filed on behalf of the Company, asserts claims under Section 14(a) of the ~~Securities~~ Exchange Act ~~of 1934~~ and for breaches of fiduciary duty and unjust enrichment based on allegations substantially similar to the Actions. On 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.

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Table of Contents

On October 2, 2019, a stockholder derivative complaint, captioned Kenna v. Aron, et al., Case No. 1:~~19-cv-09148~~19-cv-09148-AJN (the “Kenna Action”), was filed in the U.S. District Court for the Southern District of New York. The ~~Kenna Action asserts the same claims as the Gantulga Action based on substantially similar allegations. 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 stay was lifted as of February 9, 2022.

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 filed a joint stipulation to stay the action, which was granted on June 25, 2020. On January 11, 2022, the court lifted the stay.

On September 23, 2021, a stockholder derivative complaint, captioned Lyon v. Aron, et al., Case No. 1:21-cv-07940-AJN (the “Lyon Action”), was filed in the U.S. District Court for the Southern District of New York against certain of the Company’s current and former officers and directors. The Lyon Action asserts claims for contribution and indemnification under the Exchange Act and for breaches of fiduciary duty, waste of corporate assets, and unjust enrichment/constructive trust based on allegations substantially similar to the Actions, the Gantulga Action, the Kenna Action, the Manuel Action, and the Dinkevich Action. On January 14, 2022, defendants moved to dismiss the complaint.

On December 31, 2019, the Company received a stockholder litigation demand, requesting that the 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~~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.~~

~~The Company remains contingently liable for lease payments under certain leases~~filed a report with the court recommending that the court dismiss all of ~~theatres that it previously divested,~~the claims asserted in the ~~event that such assignees are unable~~Lao Action, and moved to ~~fulfill their future lease payment obligations. Due to~~dismiss all of the ~~variety of remedies available,~~claims in the ~~Company believes that if the current tenant defaulted~~Lao Action. The court has not yet ruled on the ~~leases it would not have a material effect on the Company’s financial condition, results of operations or cash flows.~~Special Litigation Committee’s motion to dismiss.

NOTE 12—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 inputs that are corroborated by market data.~~
~~Level 3:~~	~~Unobservable inputs that are not corroborated by market data.~~

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~~Table of Contents~~

~~Recurring Fair Value Measurements.~~ ~~The following table summarizes the fair value hierarchy of the Company’s financial assets carried at fair value on a recurring basis:~~

Fair Value Measurements at December 31, 2019 Using

Significant


Total Carrying

Quoted prices in

Significant other

unobservable

Value at

active market

observable inputs

inputs
(In millions)

December 31, 2019

(Level 1)

(Level 2)

(Level 3)
Other long-term assets:

Money market mutual funds

$
0.6

$
0.6

$
—

$
—
Derivative asset

38.0

—

—

38.0
Investments measured at net asset value (1)

11.9

—

—

—
Equity securities, available-for-sale:

Investment in NCM

0.7

0.7

—

—
Total assets at fair value

$
51.2

$
1.3

$
—

$
38.0

Corporate Borrowings:

Derivative liability

$
0.5

$
—

$
—

$
0.5
Total liabilities at fair value

$
0.5

$
—

$
—

$
0.5

Fair Value Measurements at December 31, 2018 Using

Significant


Total Carrying

Quoted prices in

Significant other

unobservable

Value at

active market

observable inputs

inputs
(In millions)

December 31, 2018

(Level 1)

(Level 2)

(Level 3)
Other long-term assets:

Money market mutual funds

$
0.5

$
0.5

$
—

$
—
Derivative asset

55.7

—

—

55.7
Investments measured at net asset value(1)

9.6

—

—

—
Total assets at fair value

$
65.8

$
0.5

$
—

$
55.7

Corporate Borrowings:

Derivative liability

$
24.0

$
—

$
—

$
24.0
Total liabilities at fair value

$
24.0

$
—

$
—

$
24.0

~~(1)~~

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

~~Valuation Techniques.~~ The Company’s money market mutual funds are invested in funds that seek to preserve principal, are highly liquid, and therefore are recorded on the balance sheet at the principal amounts deposited, which equals fair value. See Note 14—~~Accumulated Other Comprehensive Income (Loss) for the unrealized gain on equity securities recorded in accumulated other comprehensive income.~~

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 8—Corporate Borrowings and Finance Lease Obligations). The derivative features have been valued using a Monte Carlo simulation approach. The Monte Carlo simulation approach consists of simulated common stock prices from the valuation date to the maturity of the Convertible Notes and to September 14, 2020 for the contingent call option for forfeiture shares. Increases or decreases in the Company’s share price, the volatility of the share price, the passage of time, risk-free interest rate, discount yield, and dividend yield will all impact the value of the derivative instruments. The Company re-values the derivative instruments at the end of each reporting period and any changes are recorded in other expense (income) in the consolidated statements of operations.

~~113~~137

Table of Contents

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 inputs that are corroborated by market data.
Level 3:	Unobservable inputs that are not corroborated by market data.

~~Nonrecurring~~Recurring Fair Value Measurements. The following ~~table summarizes~~tables summarize the fair value hierarchy of the Company’s financial assets ~~that were measured~~carried at fair value on a ~~nonrecurring~~recurring basis:

Fair Value Measurements at December 31, 2019 Using






Significant other

Significant

Total Carrying

Quoted prices in

observable

unobservable

Value at

active market

inputs

inputs

Total
(In millions)

December 31, 2019

(Level 1)

(Level 2)

(Level 3)

Losses
Property, net:

Property net

$
29.2

$
—

$
—

$
29.2

$
23.1
Operating lease right-of-use assets

Operating lease right-of-use assets

123.3

—

—

123.3

60.0
Other long-term assets

Property owned, net

3.0

—

—

3.0

1.2
Equity interest investment

2.2

—

—

2.2

3.6
Total

$
157.7

$
—

$
—

$
157.7

87.9


			Fair Value Measurements at December 31, 2021 Using
							Significant
	Total Carrying		Quoted prices in		Significant other		unobservable
	Value at		active market		observable inputs		inputs
(In millions)	December 31, 2021		(Level 1)		(Level 2)		(Level 3)
Other long-term assets:
Money market mutual funds	$	0.5	$	0.5	$	—	$	—
Investments measured at net asset value(1)		12.4		—		—		—
Total assets at fair value	$	12.9	$	0.5	$	—	$	—


			Fair Value Measurements at December 31, 2020 Using
							Significant
	Total Carrying		Quoted prices in		Significant other		unobservable
	Value at		active market		observable inputs		inputs
(In millions)	December 31, 2020		(Level 1)		(Level 2)		(Level 3)
Other long-term assets:
Money market mutual funds	$	1.1	$	1.1	$	—	$	—
Investments measured at net asset value(1)		10.6		—		—		—
Marketable equity securities:
Investment in NCM		5.2		5.2		—		—
Total assets at fair value	$	16.9	$	6.3	$	—	$	—

(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. The plan was terminated on May 3, 2021 and will be liquidated in 2022.

~~Long-lived assets held~~Valuation Techniques. The Company’s money market mutual funds are invested in funds that seek to preserve principal, are highly liquid, and ~~used, operating lease right-of-use assets, a property held and not used, and an equity interest investment without a readibly determinable~~therefore are recorded on the balance sheet at the principal amounts deposited, which equals fair value.

Nonrecurring Fair Value Measurements. The following fair value ~~were considered impaired and~~hierarchy tables summarize the Company’s assets that were written down to their fair value at December 31, 2019 of $157.7 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. See Note 1—~~The Company and Significant Accounting Policies for further information.~~on a nonrecurring basis:

Fair Value Measurements at December 31, 2018 Using




Significant other

Significant


Total Carrying

Quoted prices in

observable

unobservable

Value at

active market

inputs

inputs

Total
(In millions)

December 31, 2018

(Level 1)

(Level 2)

(Level 3)

Losses
Property, net:

Property owned, net

$
17.3

$
—

$
—

$
17.3

$
13.8

~~Long-lived assets held and used and a favorable lease were considered impaired and were written down to their fair value at December 31, 2018 of $17.3 million.~~

~~Other Fair Value Measurement Disclosures.~~ ~~The following table summarizes 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 December 31, 2018 Using




Significant other

Significant

Total Carrying

Quoted prices in

observable

unobservable

Value at

active market

inputs

inputs
(In millions)

December 31, 2018

(Level 1)

(Level 2)

(Level 3)
Current maturities of corporate borrowings

$
15.2

$
—

$
13.4

$
1.4
Corporate borrowings

4,707.8

—

3,909.2

475.2


			Fair Value Measurements at December 31, 2021 Using
					Significant other		Significant
	Total Carrying		Quoted prices in		observable		unobservable
	Value at		active market		inputs		inputs		Total
(In millions)	December 31, 2021		(Level 1)		(Level 2)		(Level 3)		Losses
Property, net:
Property net	$	22.8	$	—	$	—	$	22.8	$	21.8
Operating lease right-of-use assets, net
Operating lease right-of-use assets, et		99.2		—		—		99.2		53.4
Other long-term assets
Property owned, net		2.0		—		—		2.0		2.0
Total	$	124.0	$	—	$	—	$	124.0	$	77.2

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~~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 market conditions. On September 14, 2018, the Company issued $600.0 million of Convertible Notes due 2024. These notes were issued by private placement, as such there is no observable market for these Convertible Notes. The Company valued these notes at principal value less a discount reflecting a market yield to maturity. See Note 8—~~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.~~


				Fair Value Measurements Using
						Significant other		Significant
		Total Carrying		Quoted prices in		observable		unobservable
		Value at		active market		inputs		inputs		Total
(In millions)	Measurement Date	Measurement Date		(Level 1)		(Level 2)		(Level 3)		Losses
Property, net:
Property net	March 31, 2020	$	40.5	$	—	$	—	$	40.5	$	30.9
Property net	September 30, 2020		14.3		—		—		14.3		8.5
Property net	December 31, 2020		25.4		—		—		25.4		20.7
Operating lease right-of-use assets
Operating lease right-of-use assets	March 31, 2020		124.0		—		—		124.0		60.4
Operating lease right-of-use assets	September 30, 2020		56.8		—		—		56.8		19.6
Operating lease right-of-use assets	December 31, 2020		69.0		—		—		69.0		37.8
Intangible assets, net
Definite-lived intangible assets	March 31, 2020		6.6		—		—		6.6		8.0
Indefinite-lived intangible assets	March 31, 2020		50.3		—		—		50.3		8.3
Definite-lived intangible assets	September 30, 2020		—		—		—		—		6.4
Indefinite-lived intangible assets	September 30, 2020		43.8		—		—		43.8		4.6
Indefinite-lived intangible assets	December 31, 2020		44.0		—		—		44.0		2.3
Goodwill
Goodwill	March 31, 2020		2,938.0		—		—		2,938.0		1,744.3
Goodwill	September 30, 2020		2,874.4		—		—		2,874.4		156.8
Goodwill	December 31, 2020		2,547.3		—		—		2,547.3		405.3
Other long-term assets
Cost method investments	March 31, 2020		—		—		—		—		7.2
Cost method investments	December 31, 2020		11.3		—		—		11.3		8.7
Equity method investments	December 31, 2020		17.2		—		—		17.2		8.6
Total		$	8,862.9	$	—	$	—	$	8,862.9	$	2,538.4

Valuation Techniques. 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. 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. At December 31, 2021, related cash flows were discounted at 10.0% for the Domestic Theatres and 11.5% for the International Theatres, at December 31, 2020, related cash flows were discounted at 11.0% for Domestic Theatres and 12.5% for International Theatres, at September 30, 2020, related cash flows were discounted at 12.0% for Domestic Theatres and 13.0% for International Theatres, and at March 31, 2020, related cash flows were discounted at 11.5% for Domestic Theatres and 13.0% for International Theatres. The Company used a long-term growth rate input of 1.0%, except for the March 31, 2020 measurement date, which the Company used a long-term growth rate input of 2.0%. These estimates determine whether impairments have been incurred and quantify the amount of any related impairment charge.

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 Method. The Royalty Savings Method values an intangible asset by estimating the royalties saved through ownership of the asset. The Company applied royalty rates of 0.5% for AMC and Odeon trade names and 1.0% for Nordic trade names to the related theatre revenues on an after-tax basis using effective tax rates. At December 31, 2020, related cash flows were discounted at 12.0% for AMC and 13.5% for Odeon and

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Nordic, at September 30, 2020, related cash flows were discounted at 13.0% for AMC and 14.0% for Odeon and Nordic, and at March 31, 2020, related cash flows were discounted at 12.5% for AMC and 14.0% for Odeon and Nordic.

The Company performed the Step 1 quantitative goodwill impairment test as of March 31, 2020, September 30, 2020, and December 31, 2020. In performing the Step 1 quantitative goodwill impairment test, the Company used an enterprise value approach to measure fair value of the reporting units. In calculating the fair value of our Domestic Theatres and International Theatres reporting units by use the income approach for enterprise valuation methodology, which utilizes discounted cash flows. The income approach provides an estimate of fair value by measuring estimated annual cash flows over a discrete projection period and applying a present value discount rate to the cash flows. The present value of the cash flows is then added to the present value equivalent of the residual value of the business to arrive at an estimated fair value of the reporting unit. At December 31, 2020, related cash flows were discounted at 11.0% for Domestic Theatres and 12.5% for International Theatres, at September 30, 2020, related cash flows were discounted at 12.0% for Domestic Theatres and 13.0% for International Theatres, and at March 31, 2020, related cash flows were discounted at 11.5% for Domestic Theatres and 13.0% for International Theatres. The Company used a long-term growth rate input of 1.0%, except for the March 31, 2020 measurement date, which the Company used a long-term growth rate input of 2.0%.

Other Fair Value Measurement Disclosures. The following tables summarize 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 December 31, 2021 Using
					Significant other		Significant
	Total Carrying		Quoted prices in		observable		unobservable
	Value at		active market		inputs		inputs
(In millions)	December 31, 2021		(Level 1)		(Level 2)		(Level 3)
Current maturities of corporate borrowings	$	20.0	$	—	$	18.1	$	—
Corporate borrowings		5,408.0		—		4,263.5		681.4


			Fair Value Measurements at December 31, 2020 Using
					Significant other		Significant
	Total Carrying		Quoted prices in		observable		unobservable
	Value at		active market		inputs		inputs
(In millions)	December 31, 2020		(Level 1)		(Level 2)		(Level 3)
Current maturities of corporate borrowings	$	20.0	$	—	$	12.9	$	—
Corporate borrowings		5,695.8		—		2,485.9		278.0

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. The Company valued these notes at principal value less an estimated discount reflecting a market yield to maturity. See Note 8—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.

NOTE 13—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 ~~two~~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, Norway, Denmark, and Saudi Arabia. The Company divested of its interest in Estonia, Latvia, and Lithuania ~~Norway,~~operations, see Note 1—The Company and ~~Denmark.~~Significant Accounting Policies for further information on the Baltics theatre sale. Operations located in Austria were sold during the first quarter of 2019. Each segment’s revenue is derived from admissions, food and beverage sales and other ancillary

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revenues, primarily screen advertising, AMC 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:


	Year Ended						Year Ended
Revenues (In millions)	December 31, 2019		December 31, 2018		December 31, 2017		December 31, 2021		December 31, 2020		December 31, 2019
U.S. markets	$	4,023.2	$	4,013.2	$	3,723.5	$	1,875.8	$	826.7	$	4,023.2
International markets		1,447.8		1,447.6		1,355.7		652.1		415.7		1,447.8
Total revenues	$	5,471.0	$	5,460.8	$	5,079.2	$	2,527.9	$	1,242.4	$	5,471.0

��

Year Ended
Adjusted EBITDA (In millions)

December 31, 2019

December 31, 2018

December 31, 2017
U.S. markets (1)

$
575.6

$
700.5

$
610.0
International markets

195.8

228.7

212.5
Total Adjusted EBITDA

$
771.4

$
929.2

$
822.5


	Year Ended						Year Ended
Capital Expenditures (In millions)	December 31, 2019		December 31, 2018		December 31, 2017
Adjusted EBITDA (In millions)							December 31, 2021		December 31, 2020		December 31, 2019
U.S. markets	$	369.4	$	395.6	$	543.7	$	(250.6)	$	(768.2)	$	575.6
International markets		148.7		180.7		83.1		(41.1)		(231.0)		195.8
Total capital expenditures	$	518.1	$	576.3	$	626.8
Total Adjusted EBITDA							$	(291.7)	$	(999.2)	$	771.4

(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.~~


	Year Ended
Capital Expenditures (In millions)	December 31, 2021		December 31, 2020		December 31, 2019
U.S. markets	$	63.9	$	109.9	$	369.4
International markets		28.5		63.9		148.7
Total capital expenditures	$	92.4	$	173.8	$	518.1

Financial information about geographic area is as follows:


	Year Ended
Revenues (In millions)	December 31, 2021		December 31, 2020		December 31, 2019
United States	$	1,875.8	$	826.7	$	4,023.2
United Kingdom		283.6		127.9		500.4
Spain		81.8		52.1		200.3
Sweden		82.3		63.2		177.5
Italy		57.5		47.5		200.0
Germany		54.4		38.2		135.0
Finland		49.1		43.4		103.0
Ireland		16.9		9.3		37.9
Other foreign countries		26.5		34.1		93.7
Total	$	2,527.9	$	1,242.4	$	5,471.0

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Table of Contents

~~Financial information about geographic area is as follows:~~

Year Ended
Revenues (In millions)

December 31, 2019

December 31, 2018

December 31, 2017
United States

$
4,023.2

$
4,013.2

$
3,723.5
United Kingdom

500.4

513.5

509.8
Spain

200.3

193.9

187.1
Italy

200.0

178.5

185.5
Sweden

177.5

192.1

154.2
Germany

135.0

114.3

129.7
Finland

103.0

101.7

77.3
Norway

37.9

34.9

17.7
Other foreign countries

93.7

118.7

94.4
Total

$
5,471.0

$
5,460.8

$
5,079.2


	As of		As of		As of		As of
Long-term assets, net (In millions)	December 31, 2019		December 31, 2018		December 31, 2021		December 31, 2020
United States	$	9,039.6	$	5,826.5
International		3,963.1		2,888.0
U.S. markets					$	6,434.5	$	6,895.3
International markets						2,516.7		2,894.1
Total long-term assets (1)	$	13,002.7	$	8,714.5	$	8,951.2	$	9,789.4

(1)

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

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


	Year Ended						Year Ended
(In millions)	December 31, 2019		December 31, 2018		December 31, 2017		December 31, 2021		December 31, 2020		December 31, 2019
Net earnings (loss)	$	(149.1)	$	110.1	$	(487.2)
Net loss							$	(1,269.8)	$	(4,589.4)	$	(149.1)
Plus:
Income tax provision (benefit)(1)		(22.5)		13.6		154.1		(10.2)		59.9		(22.5)
Interest expense		340.8		342.3		274.0		458.1		356.9		340.8
Depreciation and amortization		450.0		537.8		538.6		425.0		498.3		450.0
Impairment of long-lived assets		84.3		13.8		43.6
Certain operating expenses (1)		14.8		24.0		20.6
Impairment of long-lived assets, definite and indefinite-lived intangible assets and goodwill (2)								77.2		2,513.9		84.3
Certain operating expense (income) (3)								0.2		(9.4)		14.8
Equity in (earnings) loss of non-consolidated entities ~~(2)~~(4)		(30.6)		(86.7)		185.2		(11.0)		30.9		(30.6)
Cash distributions from non-consolidated entities ~~(3)~~(5)		35.8		35.2		45.4		12.5		17.4		35.8
Attributable EBITDA ~~(4)~~(6)		5.0		7.3		3.4		3.7		0.2		5.0
Investment income		(16.0)		(6.2)		(22.6)
Investment expense (income)								(9.2)		10.1		(16.0)
Other expense (income) ~~(5)~~(7)		13.3		(108.2)		(1.3)		(0.1)		66.9		13.3
Non-cash rent - purchase accounting (6)		25.7		—		—
Other non-cash rent expense (benefit) (8)								(24.9)		(4.9)		25.7
General and administrative — unallocated:
Merger, acquisition and other costs ~~(7)~~(9)		15.5		31.3		63.0		13.7		24.6		15.5
Stock-based compensation expense (8)		4.4		14.9		5.7
Stock-based compensation expense (10)								43.1		25.4		4.4
Adjusted EBITDA	$	771.4	$	929.2	$	822.5	$	(291.7)	$	(999.2)	$	771.4

(1)

For information regarding the income tax provision (benefit), see Note 10—Income Taxes.

(2)

During the year ended December 31, 2021, the Company recorded non-cash impairment charges related to its 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, the Company recorded goodwill non-cash impairment charges 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, the Company recorded non-cash impairment charges related to its long-lived assets of $152.5 million on 101 theatres in the U.S. markets with 1,139 screens which were related to property, net, operating lease right-of-use assets, net and other long-term assets and $25.4 million on 37 theatres in the International markets with 340 screens which were related to property, net and operating lease right-of-use assets, net. The Company recorded non-cash 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 Theatres reporting unit during the year ended December 31, 2020. The Company also recorded non-cash impairment charges of $14.4 million related to its definite-lived intangible assets in the Domestic Theatres reporting unit during the year ended December 31, 2020.

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During the year ended December 31, 2019, the Company 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.

(3)

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

~~(2)~~(4)

During the years ended December 31, 2019 and December 31, 2018, the Company recorded $25.4 million and $29.1 million, respectively, in earnings from DCIP. During the year ended December 31, 2018, the Company recorded equity in earnings related to AMC’s sale of all remaining NCM units of $28.9 million

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and a gain of $30.1 million related to the Screenvision merger. Equity in earnings of non-consolidated entities also includes loss on the surrender (disposition) of a portion of AMC’s investment in NCM of $1.1 million and a lower of carrying value or fair value impairment loss of the held-for sale portion of the Company’s investment in NCM of $16.0 million for the year ended December 31, 2018. During the year ended December 31, 2017, equity in (earnings) loss of non-consolidated entities includes an other-than-temporary impairment charge of $208.0 million to reduce the carrying value of the Company’s investment in NCM to Level 1 fair value. An other-than-temporary impairment charge of $204.5 million was recorded on the Company’s units and shares at the publicly quoted per share price on June 30, 2017 of $7.42 and an other-than-temporary impairment charge of $3.5 million was recorded on the Company’s units and shares at the publicly quoted per share price on December 31, 2017 of $6.86, based on the Company’s determination that the decline in the price per share during the respective quarters was other than temporary. Equity in (earnings) loss of non-consolidated entities ~~includes loss on the sale~~primarily consisted of ~~a portion~~equity in earnings (loss) from DCIP of ~~the Company’s investment in NCM of $22.2~~$12.2 million, $(14.5) million and $25.4 million, during the year ended December 31, ~~2017.~~2021, December 31, 2020, and December 31, 2019, respectively. In addition, the Company recorded impairment losses in the International markets during the year ended December 31, 2020 related to equity method investments of $8.6 million in equity in (earnings) loss of non-consolidated entities.

~~(3)~~(5)

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.

~~(4)~~(6)

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. As these investments relate only to the Company’s Nordic acquisition, the second quarter of 2017 represents the first time the Company has made this adjustment and does not impact prior historical presentations of Adjusted EBITDA.


	Year Ended						Year Ended
(In millions)	December 31, 2019		December 31, 2018		December 31, 2017		December 31, 2021		December 31, 2020		December 31, 2019
Equity in (earnings) loss of non-consolidated entities	$	(30.6)	$	(86.7)	$	185.2	$	(11.0)	$	30.9	$	(30.6)
Less:
Equity in (earnings) loss of non-consolidated entities excluding International theatre joint ventures		(29.2)		(81.9)		187.0		(13.5)		27.4		(29.2)
Equity in earnings of International theatre joint ventures		1.4		4.8		1.8
Income tax provision		0.4		0.4		—
Equity in earnings (loss) of International theatre joint ventures								(2.5)		(3.5)		1.4
Income tax expense								0.3		0.1		0.4
Investment income		(0.7)		(0.5)		—		(0.1)		(0.4)		(0.7)
Interest expense								0.2		0.1		—
Depreciation and amortization		3.4		2.6		1.6		5.6		3.2		3.4
Other expense		0.5		—		—		0.2		0.7		0.5
Attributable EBITDA	$	5.0	$	7.3	$	3.4	$	3.7	$	0.2	$	5.0

~~(5)~~(7)

Other expense (income) ~~for~~during the year ended December 31, ~~2019 was~~2021, primarily ~~due to expense related to the repayment~~consisted of ~~indebtedness~~a loss on debt extinguishment of ~~$16.6 million, foreign currency transaction losses of $1.5 million, non-operating net periodic benefit cost of $1.2~~$14.4 million and ~~the decrease in fair value~~financing fees of ~~the Company’s derivative asset for the contingent call option related to the Class B common stock purchase and cancellation agreement of $17.7~~$1.0 million, partially offset by ~~a decrease in fair value of~~income related to the Company’s derivative liability for the embedded conversion feature in its Convertible Notes due 2024 of $23.5 million. During the year ended December 31, 2018, the Company recorded a gain of $111.4 million as a result of a decrease in fair value of its derivative liability and an increase in fair value of the derivative asset for the Convertible Notes due 2024, partially offset by financing losses and financing related foreign currency transaction losses. Other expense (income) for the year ended December 31, 2017 includes $3.0 million financing related foreign currency transaction gains ~~partially offset by $1.3~~of $(9.8) million ~~in fees relating to third-~~and contingent lease guarantees of $(5.7) million.

Other expense (income) for the year ended December 31, 2020 included a loss of $109.0 million related to the fair value adjustments of the Company’s derivative liability and derivative asset for the Convertible Notes, financing fees related to the Exchange Offer of $39.3 million, and credit losses related to contingent

~~117~~143

Table of Contents

lease guarantees of $15.0 million, partially offset due to a gain on extinguishment of the Second Lien Notes due 2026 of $(93.6) million.

During the year ended December 31, 2019, the Company recorded a loss on repayment of indebtedness of $16.6 million and the financing related foreign currency transaction losses, partially offset by a gain of $5.8 million as a result of the decrease in fair value of its derivative liability and asset for the Convertible Notes.

~~party fees related to the Third Amendment to the Company’s Senior Secured Credit Agreement, and a $0.4 million loss on the redemption of the Bridge Loan Facility.~~

~~(6)~~(8)

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

~~(7)~~(9)

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

~~(8)~~(10)

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

~~NOTE 14—ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)~~

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

Unrealized Net

Gain (Loss)

Pension and

from Equity

Foreign

Other

Method Investees’

(In millions)

Currency

Benefits

Cash Flow Hedge

Total

Balance, December 31, 2018

$
7.2

$
(1.8)

$
0.1

$
5.5

Other comprehensive loss before reclassifications

(16.5)

(15.5)

(0.1)

(32.1)

Amounts reclassified from accumulated other comprehensive income

0.5

—

—

0.5

Balance, December 31, 2019

$
(8.8)

$
(17.3)

$
—

$
(26.1)

Unrealized Net

Unrealized Net

Pension and

Gain from

Gain from Equity

Foreign

Other

Marketable

Method Investees’

(In millions)

Currency

Benefits

Securities

Cash Flow Hedge

Total

Balance, December 31, 2017

$
129.9

$
(6.6)

$
0.6

$
1.7

$
125.6

Other comprehensive income (loss) before reclassifications

(127.7)

4.2

—

0.2

(123.3)

Amounts reclassified from accumulated other comprehensive income

1.0

—

—

(2.2)

(1.2)

Other comprehensive income (loss)

(126.7)

4.2

—

(2.0)

(124.5)

Adoption of ASU 2016-01 - reclassification to retained earnings

—

—

(0.6)

—

(0.6)

Adoption of ASU 2018-02 - reclassification to retained earnings

4.0

0.6

—

0.4

5.0

Balance, December 31, 2018

$
7.2

$
(1.8)

$
—

$
0.1

$
5.5

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~~Table of Contents~~

~~The tax effects allocated to each component of other comprehensive income (loss) is as follows:~~

Year Ended

December 31, 2019

December 31, 2018

December 31, 2017




Tax





Tax





Tax


Pre-Tax

(Expense)

Net-of-Tax

Pre-Tax

(Expense)

Net-of-Tax

Pre-Tax

(Expense)

Net-of-Tax
(In millions)

Amount

Benefit

Amount

Amount

Benefit

Amount

Amount

Benefit

Amount
Unrealized foreign currency translation adjustment (1)

$
(18.3)

$
1.8

$
(16.5)

$
(127.5)

$
(0.2)

$
(127.7)

$
142.6

$
(10.9)

$
131.7
Realized loss on foreign currency transactions

0.5

—

0.5

1.0

—

1.0

—

—

—
Pension and other benefit adjustments:

Net gain (loss) arising during the period

(16.1)

0.6

(15.5)

3.8

0.4

4.2

(2.6)

(0.4)

(3.0)
Marketable securities:

Unrealized net holding gain (loss) arising during the period

—

—

—

—

—

—

1.2

(0.5)

0.7
Realized net gain reclassified into investment expense (income)

—

—

—

—

—

—

(0.6)

0.2

(0.4)
Equity method investee's cash flow hedge:

Unrealized net holding gain (loss) arising during the period

(0.1)

—

(0.1)

0.2

—

0.2

—

—

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

—

—

—

(2.2)

—

(2.2)

(1.5)

0.6

(0.9)
Other comprehensive income (loss)

$
(34.0)

$
2.4

$
(31.6)

$
(124.7)

$
0.2

$
(124.5)

$
139.1

$
(11.0)

$
128.1

~~(1)~~

~~Deferred tax impacts of foreign currency translation for the international operations acquired during 2017 have not been recorded due to the Company’s intent to remain permanently invested.~~

~~NOTE 15—EARNINGS (LOSS) PER SHARE~~

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

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

Year Ended

Year Ended

Year Ended
(In millions)

December 31, 2019

December 31, 2018

December 31, 2017
Numerator:

Net earnings (loss) for basic earnings (loss) per share

$
(149.1)

$
110.1

$
(487.2)
Calculation of net earnings for diluted earnings (loss) per share:

Marked-to-market (gain) on derivative liability

—

(66.4)

—
Interest expense for Convertible Notes due 2024

—

9.7

—
Net earnings (loss) available for diluted earnings

$
(149.1)

$
53.4

$
(487.2)

Denominator (shares in thousands):

Weighted average shares for basic earnings per common share

103,832

120,621

128,246
Common equivalent shares for RSUs and PSUs

—

29

—
Common equivalent shares if converted: convertible notes 2024

—

9,455

—
Weighted average shares for diluted earnings per common share

103,832

130,105

128,246

Basic earnings (loss) per common share:

$
(1.44)

$
0.91

$
(3.80)
Diluted earnings (loss) per common share:

$
(1.44)

$
0.41

$
(3.80)

Vested RSUs and PSU’s have dividend rights identical to the Company’s Class A and Class B common stock and are treated as outstanding shares for purposes of computing basic and diluted earnings per share. Certain unvested RSUs and unvested PSUs are subject to performance conditions and are included in diluted earnings per share, if dilutive, based on the number of shares, if any, that would be issuable under the terms of the Company’s 2013 Equity Incentive Plan if the end of the reporting period were the end of the contingency period. During the years ended December 31, 2019 and December 31, 2018, unvested PSUs of 477,630 and 364,269, respectively, at the minimum performance target were not considered in the computation of diluted earnings per share because they would not be issuable if the end of the reporting period were the end of the contingency period and unvested RSU’s of 1,377,992 and 210,558, respectively, were not included in the computation of diluted earnings per share because they would be anti-dilutive. During the year ended December 31, 2017, unvested PSUs and Transition PSUs of 187,468 at the minimum performance target and unvested performance based RSU’s of 88,194 were not considered in the computation of diluted loss because they would anti-dilutive.

The Company uses the if-converted method for calculating any potential dilutive effect of the Convertible Notes due 2024 that were issued on September 14, 2018. The Company has not adjusted net loss for the year ended December 31, 2019 to eliminate the interest expense of $32.6 million and the gain for the derivative liability related to the Convertible Notes due 2024 of $23.5 million, in the computation of diluted loss per share because the effects would be anti-dilutive. The Company has not included in diluted weighted average shares approximately 31.7 million shares issuable upon conversion for the year ended December 30, 2019, as the effects would be anti-dilutive. For the year ended December 31, 2018, the Company adjusted net earnings to eliminate the interest expense and the gain for the derivative liability related to the Convertible Notes due 2024 of $9.7 million and $66.4 million, respectively, in the computation of diluted earnings per share. The Company has included in diluted weighted average shares approximately 9.5 million shares issuable upon conversion for the year ended December 31, 2018, as the effects were dilutive. Based on the current conversion price of $18.95 per share, the Convertible Notes due 2024 are convertible into 31,662,269 Class A common shares.

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NOTE ~~16—SUPPLEMENTAL FINANCIAL INFORMATION BY QUARTER (UNAUDITED)~~14—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, 2019	$	(8.8)	$	(17.3)	$	(26.1)
Other comprehensive income (loss) before reclassifications		67.0		(4.1)		62.9
Amounts reclassified from accumulated other comprehensive loss		1.9		—		1.9
Balance December 31, 2020	$	60.1	$	(21.4)	$	38.7
Other comprehensive income (loss)		(78.7)		12.3		(66.4)
Realized loss on foreign currency transactions reclassified into investment expense (income)		(0.4)		—		(0.4)
Balance December 31, 2021	$	(19.0)	$	(9.1)	$	(28.1)

The tax effects allocated to each component of other comprehensive income (loss) is as follows:


	Year Ended
	December 31, 2021						December 31, 2020						December 31, 2019
			Tax						Tax						Tax
	Pre-Tax		(Expense)		Net-of-Tax		Pre-Tax		(Expense)		Net-of-Tax		Pre-Tax		(Expense)		Net-of-Tax
(In millions)	Amount		Benefit		Amount		Amount		Benefit		Amount		Amount		Benefit		Amount
Unrealized foreign currency translation adjustment	$	(78.9)	$	—	$	(78.9)	$	66.8	$	0.2	$	67.0	$	(18.3)	$	1.8	$	(16.5)
Realized gain (loss) on foreign currency transactions, net of tax		(0.9)		0.5		(0.4)		1.9		—		1.9		0.5		—		0.5
Pension and other benefit adjustments:
Net gain (loss) arising during the period, net of tax		13.0		(0.7)		12.3		(4.1)		—		(4.1)		(16.1)		0.6		(15.5)
Equity method investee's cash flow hedge:
Unrealized net holding loss arising during the period		—		—		—		—		—		—		(0.1)		—		(0.1)
Other comprehensive income (loss)	$	(66.8)	$	(0.2)	$	(67.0)	$	64.6	$	0.2	$	64.8	$	(34.0)	$	2.4	$	(31.6)

2019

Quarter

Quarter

Quarter

Quarter

Year

Ended

Ended

Ended

Ended

Ended

March 31,

June 30,

September 30,

December 31,

December 31,
(In millions, except per share data)

2019

2019

2019

2019

2019
Total revenues

$
1,200.4

$
1,506.1

$
1,316.8

$
1,447.7

$
5,471.0
Operating income (loss)

(33.7)

105.5

20.8

43.4

136.0
Net earnings (loss) (1)(2)

(130.2)

49.4

(54.8)

(13.5)

(149.1)

Basic earnings (loss) per share:

$
(1.25)

$
0.48

$
(0.53)

$
(0.13)

$
(1.44)
Diluted earnings (loss) per share:

$
(1.25)

$
0.17

$
(0.53)

$
(0.13)

$
(1.44)

Weighted average shares outstanding: (in thousands)

Basic

103,783

103,845

103,850

103,850

103,832
Diluted

103,783

135,528

103,850

103,850

103,832

~~(1)~~

In the first, second, third, and fourth quarters of calendar 2019, the Company recorded $28.4 million, $(41.0) million, $(2.8) million, and $9.6 million, respectively, of other expense (income) related to derivative assets and liabilities. See Note 8—~~Corporate Borrowings and Finance Lease Obligations for a discussion of the derivative asset and derivative liability gains.~~

~~(2)~~

During the fourth quarter of 2019, the Company recorded non-cash impairment of long-lived assets of $84.3 million on 40 theatres in the U.S. markets with 512 screens and on 14 theatres in the International markets with 148 screens, and one U.S. property held and not used.

2018

Quarter

Quarter

Quarter

Quarter

Year

Ended

Ended

Ended

Ended

Ended

March 31,

June 30,

September 30,

December 31,

December 31,
(In millions, except per share data)

2018

2018

2018

2018

2018
Total revenues

$
1,383.6

$
1,442.5

$
1,221.4

$
1,413.3

$
5,460.8
Operating income (loss)

109.9

89.7

(21.9)

87.3

265.0
Net earnings (loss) (1)(2)

17.7

22.2

(100.4)

170.6

110.1

Basic earnings (loss) per share:

$
0.14

$
0.17

$
(0.82)

$
1.65

$
0.91
Diluted earnings (loss) per share:

$
0.14

$
0.17

$
(0.82)

$
0.43

$
0.41

Weighted average shares outstanding: (in thousands)

Basic

128,046

128,039

123,126

103,514

120,621
Diluted

128,046

128,105

123,126

135,450

130,105

~~(1)~~

In the third and fourth quarters of calendar 2018, the Company recorded $54.1 million and $(165.5) million, respectively, of other expense (income) related to derivative assets and liabilities. See Note 8—~~Corporate Borrowings and Finance Lease Obligations for a discussion of the derivative asset and derivative liability gains.~~

~~(2)~~

During the fourth quarter of calendar 2018, the Company recorded non-cash impairment losses of $13.8 million on 13 theatres in the U.S. markets with 150 screens and 15 theatres in the International markets with 118 screens.

~~NOTE 17—ACQUISITION~~

~~Nordic Cinema Group Holding AB~~

On March 28, 2017, the Company completed the acquisition of Nordic Cinema Group Holding AB (“Nordic”) for cash. The purchase price for Nordic was cash of SEK 5,756 million ($654.9 million), which includes payment of

~~121~~144

Table of Contents

~~interest on~~NOTE 15—LOSS PER SHARE

Basic loss per share is computed by dividing net loss by the ~~equity value~~weighted-average number of common shares outstanding. Diluted loss per share includes the effects of unvested RSUs with a service condition only and ~~repayment of shareholder loans. As a result~~unvested contingently issuable RSUs and PSUs that have service and performance conditions, if dilutive. Diluted loss per share for the years ended December 31, 2020 and December 31, 2019 also includes potential dilutive shares from the conversion feature of the acquisition, the Company assumed the indebtedness of Nordic of approximately SEK 1,269 million ($144.4 million) and indebtedness of approximately €156 million ($169.5 million) as of March 28, 2017, which was refinanced subsequent to the acquisition. The Company also assumed approximately SEK 13.5 million ($1.6 million) and approximately €1.0 million ($1.1 million) of interest rate swaps related to the indebtedness which were repaid following the acquisition. All amounts have been converted into US Dollar amounts assuming an SEK/USD exchange rate of 0.11378 and an EUR/USD exchange rate of 1.0865, which were the exchange rates on March 27, 2017.Convertible Notes due 2026, if dilutive.

The ~~acquisition was being treated as a purchase in accordance with ASC Topic 805, Business Combinations, which requires allocation~~following table sets forth the computation of ~~the purchase price to the estimated fair values of assets~~basic and liabilities acquired in the transaction. The allocation of purchase price is based on management’s judgment after evaluating several factors, including a valuation assessment. The Company finalized the appraisals for both tangible and intangible assets and liabilities during the three months ended March 31, 2018. The following is a summary of the final allocation of the purchase price:diluted loss per common share:

(In millions)

Final
Cash

$
71.4
Restricted cash

5.9
Receivables

13.4
Other current assets

23.6
Property (1)

133.2
Intangible assets (1) (2)

22.1
Goodwill (3)

792.9
Deferred tax asset

0.9
Other long-term assets (6)

75.2
Accounts payable

(30.2)
Accrued expenses and other liabilities

(36.1)
Deferred revenues and income

(41.2)
Term Loan Facility (SEK)

(144.4)
Term Loan Facility (EUR)

(169.5)
Revolving Credit Facility (1)

—
Capital lease and financing lease obligations (1)(4)

(10.0)
Deferred tax liability

(18.7)
Other long-term liabilities (5)

(33.6)
Total estimated purchase price

$
654.9


	Year Ended		Year Ended		Year Ended
(In millions)	December 31, 2021		December 31, 2020		December 31, 2019
Numerator:
Net loss for basic loss per share attributable to AMC Entertainment Holdings, Inc.	$	(1,269.1)	$	(4,589.1)	$	(149.1)
Net loss for diluted loss per share attributable to AMC Entertainment Holdings, Inc.	$	(1,269.1)	$	(4,589.1)	$	(149.1)

Denominator (shares in thousands):
Weighted average shares for basic loss per common share		477,410		117,212		103,832
Weighted average shares for diluted loss per common share		477,410		117,212		103,832
Basic loss per common share:	$	(2.66)	$	(39.15)	$	(1.44)
Diluted loss per common share:	$	(2.66)	$	(39.15)	$	(1.44)

~~(1)~~~~Amounts recorded for property include land, buildings, capital lease assets, leasehold improvements, furniture, fixtures~~

Vested RSUs, PSUs, and ~~equipment. During the year ended 31, 2018, the Company recorded measurement period adjustments primarily related~~SPSUs have dividend rights identical to the ~~preliminary valuation~~Company’s Common Stock and are treated as outstanding shares for purposes of ~~property, intangible assets, equity method investments, financing lease obligations~~computing basic and ~~related tax adjustments.~~

~~(2)Additional information for intangible assets acquired on March 28, 2017 is presented below:~~

Weighted Average

Gross
(In millions)

Amortization Period

Carrying Amount
Acquired intangible assets:

Amortizable intangible assets:

Favorable leases

7.0 years

$
3.5
Favorable subleases

4.0 years

1.1
Screen advertising agreement

5.0 years

6.6
Trade name agreement

4.0 years

0.4
Total, amortizable

5.5 years

$
11.6
Unamortized intangible assets:

Trade names

$
10.5

~~(3)Amounts recorded for goodwill are not expected to be deductible for tax purposes.~~

~~(4)Including current portion of approximately $1.1 million.~~

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~~Table of Contents~~

~~(5)Amounts recorded for other long-term liabilities include unfavorable leases of approximately $20.0 million with an amortization period of 9.3 years.~~

~~(6)Includes equity method investments of $64.7 million.~~

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

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

~~During~~diluted earnings per share. For the year ended December 31, ~~2018~~2021, December 31, 2020, and December 31, ~~2017,~~2019, unvested RSUs of 2,247,625, 1,131,333, and 1,377,992, respectively, were not included in the computation of diluted earnings (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 0, 649,209 and 477,630 for the years ended December 31, 2021, December 31, 2020, and December 31, 2019, respectively, and unvested SPSUs of 578,328 at the minimum market condition for the year ended December 31, 2020, 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 or they would be anti-dilutive.

On January 29, 2021, the $600.0 million principal amount of the Company’s Convertible Notes due 2026 were converted into the Company’s Common Stock at a conversion price of $13.51 per share and resulted in the issuance of 44,422,860 shares. For both the years ended December 31, 2020 and December 31, 2019, the Company ~~incurred acquisition-related~~used the if-converted method for calculating any potential dilutive effect of the Convertible Notes that were issued on September 14, 2018. The Company has not adjusted net loss for the year ended December 31, 2020 and ~~transition costs for Nordic~~December 31, 2019 to eliminate the interest expense of ~~approximately $1.5~~$31.8 million and ~~$10.1~~$32.6 million, ~~which were~~respectively, and the loss (gain) for the derivative liability related to the Convertible Notes of $89.4 million and $(23.5) million, respectively, in the computation of diluted loss per share because the effects would be anti-dilutive. The Company has not included in ~~general~~diluted weighted average shares approximately 35.5 million and ~~administrative expense: merger, acquisition~~31.7 million shares issuable upon conversion for the years ended December 31, 2020 and ~~other costs in~~December 31, 2019, respectively, as the ~~consolidated statements of operations. Nordic was acquired on March 28, 2017 and the Company immediately began integrating the operations.~~effects would be anti-dilutive.

NOTE ~~18—~~16—SUBSEQUENT EVENTS

First Lien Senior Secured Notes due 2029. On February ~~26, 2020, Holdings’ Board of Directors declared a cash dividend in~~14, 2022, the Company issued $950.0 million aggregate principal amount of ~~$0.03~~its 7.5% First Lien Senior Secured Notes due 2029 (“First Lien Notes due 2029”). The First Lien Notes due 2029 bear cash interest at a rate of 7.5% per ~~share~~annum payable semi-annually in arrears on ~~Class A~~February 15 and ~~Class B~~ ~~common stock, payable~~August 15, beginning on ~~March 23, 2020 to stockholders of record~~August 15, 2022. The First Lien Notes due 2029 are guaranteed on ~~March 9, 2020. The dividend decrease of $0.17 per share compared to the Company’s previous historical declarations of $0.20 per share reduces the total dividend payout for the quarter~~a senior secured basis by ~~approximately $18.0 million.~~

Holdings’ Board of Directors approved a modification to the 2018 and 2019 PSU awards in February 2020, which eliminated the net profit performance target threshold. The Company is currently evaluating the impact on its consolidated financial statements for the three months ended March 31, 2020.

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~~NOTE 19—CONDENSED CONSOLIDATING FINANCIAL INFORMATION~~

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

The condensed consolidating information for the guarantors/non-guarantors has been retrospectively revised based on the structure that exists as of December 31, 2019 and reflecting changes as a result of the Sixth Amendment.

~~Consolidating Statement of Operations~~

~~Year Ended December 31, 2019:~~

Subsidiary

Subsidiary

Consolidating

Consolidated
(In millions)

Holdings

Guarantors

Non-Guarantors

Adjustments

Holdings
Revenues















Admissions

$
—

$
2,388.2

$
913.1

$
—

$
3,301.3
Food and beverage

—

1,348.0

371.6

—

1,719.6
Other theatre

—

287.1

163.0

—

450.1
Total revenues

—

4,023.3

1,447.7

—

5,471.0
Operating costs and expenses

Film exhibition costs

—

1,311.5

387.6

—

1,699.1
Food and beverage costs

—

193.8

84.9

—

278.7
Operating expense, excluding depreciation and amortization

—

1,215.5

471.1

—

1,686.6
Rent

—

708.2

259.6

—

967.8
General and administrative:

Merger, acquisition and other costs

—

6.5

9.0

—

15.5
Other, excluding depreciation and amortization

—

86.4

66.6

—

153.0
Depreciation and amortization

—

340.4

109.6

—

450.0
Impairment of long-lived assets

—

76.6

7.7

—

84.3
Operating costs and expenses

—

3,938.9

1,396.1

—

5,335.0
Operating income

—

84.4

51.6

—

136.0
Other expense (income):

Equity in net loss of subsidiaries

382.9

151.3

—

(534.2)

—
Other expense (income)

(5.2)

18.5

0.1

—

13.4
Interest expense:

Corporate borrowings

290.8

293.0

3.0

(294.0)

292.8
Financing lease obligations

—

2.3

5.3

—

7.6
Non-cash NCM exhibitor service agreement

—

40.4

—

—

40.4
Intercompany interest expense

—

—

244.1

(244.1)

—
Equity in earnings of non-consolidated entities

—

(29.1)

(1.5)

—

(30.6)
Investment income

(519.4)

(21.0)

(13.7)

538.1

(16.0)
Total other expense, net

149.1

455.4

237.3

(534.2)

307.6
Loss before income taxes

(149.1)

(371.0)

(185.7)

534.2

(171.6)
Income tax provision (benefit)

—

11.9

(34.4)

—

(22.5)
Net loss

$
(149.1)

$
(382.9)

$
(151.3)

$
534.2

$
(149.1)

~~124~~

~~Table of Contents~~

~~Consolidating Statement of Operations~~

~~Year Ended December 31, 2018:~~

Subsidiary

Subsidiary

Consolidating

Consolidated
(In millions)

Holdings

Guarantors

Non-Guarantors

Adjustments

Holdings
Revenues















Admissions

$
—

$
2,441.5

$
943.5

$
—

$
3,385.0
Food and beverage

—

1,321.3

350.2

—

1,671.5
Other theatre

—

250.4

153.9

—

404.3
Total revenues

—

4,013.2

1,447.6

—

5,460.8
Operating costs and expenses

Film exhibition costs

—

1,323.1

387.1

—

1,710.2
Food and beverage costs

—

190.3

80.6

—

270.9
Operating expense, excluding depreciation and amortization

—

1,162.2

492.5

—

1,654.7
Rent

—

584.4

213.4

—

797.8
General and administrative:

Merger, acquisition and other costs

—

16.8

14.5

—

31.3
Other, excluding depreciation and amortization

—

112.5

66.8

—

179.3
Depreciation and amortization

—

384.0

153.8

—

537.8
Impairment of long-lived assets

—

8.1

5.7

—

13.8
Operating costs and expenses

—

3,781.4

1,414.4

—

5,195.8
Operating income

—

231.8

33.2

—

265.0
Other expense (income):

Equity in net earnings of subsidiaries

(14.5)

(13.7)

—

28.2

—
Other expense (income)

(110.5)

1.7

0.7

—

(108.1)
Interest expense:

Corporate borrowings

256.7

263.1

5.9

(263.4)

262.3
Capital and financing lease obligations

—

17.2

21.3

—

38.5
Non-cash NCM exhibitor service agreement

—

41.5

—

—

41.5
Equity in earnings of non-consolidated entities

—

(81.5)

(5.2)

—

(86.7)
Investment income

(241.8)

(27.1)

(0.7)

263.4

(6.2)
Total other expense (income), net

(110.1)

201.2

22.0

28.2

141.3
Earnings before income taxes

110.1

30.6

11.2

(28.2)

123.7
Income tax provision (benefit)

—

16.1

(2.5)

—

13.6
Net earnings

$
110.1

$
14.5

$
13.7

$
(28.2)

$
110.1

~~125~~

~~Table of Contents~~

~~Consolidating Statement of Operations~~

~~Year Ended December 31, 2017:~~

Subsidiary

Subsidiary

Consolidating

Consolidated
(In millions)

Holdings

Guarantors

Non-Guarantors

Adjustments

Holdings
Revenues















Admissions

$
—

$
2,330.9

$
898.6

$
—

$
3,229.5
Food and beverage

—

1,220.1

328.3

—

1,548.4
Other theatre

—

172.5

128.8

—

301.3
Total revenues

—

3,723.5

1,355.7

—

5,079.2
Operating costs and expenses

Film exhibition costs

—

1,224.7

379.6

—

1,604.3
Food and beverage costs

—

176.6

75.5

—

252.1
Operating expense, excluding depreciation and amortization

—

1,100.6

447.4

—

1,548.0
Rent

—

594.0

200.4

—

794.4
General and administrative:

Merger, acquisition and other costs

—

58.3

4.7

—

63.0
Other, excluding depreciation and amortization

2.0

82.7

48.5

—

133.2
Depreciation and amortization

—

404.2

134.4

—

538.6
Impairment of long-lived assets

—

43.6

—

—

43.6
Operating costs and expenses

2.0

3,684.7

1,290.5

—

4,977.2
Operating income (loss)

(2.0)

38.8

65.2

—

102.0
Other expense (income):

Equity in net (earnings) loss of subsidiaries

472.5

(45.1)

—

(427.4)

—
Other expense (income)

—

(1.7)

0.2

—

(1.5)
Interest expense:

Corporate borrowings

230.3

239.0

1.3

(239.0)

231.6
Capital and financing lease obligations

—

20.0

22.4

—

42.4
Equity in earnings of non-consolidated entities

—

187.8

(2.6)

—

185.2
Investment income

(217.6)

(43.0)

(1.0)

239.0

(22.6)
Total other expense, net

485.2

357.0

20.3

(427.4)

435.1
Earnings (loss) before income taxes

(487.2)

(318.2)

44.9

427.4

(333.1)
Income tax provision (benefit)

—

154.3

(0.2)

—

154.1
Net earnings (loss)

$
(487.2)

$
(472.5)

$
45.1

$
427.4

$
(487.2)

~~126~~

~~Table of Contents~~

~~Consolidating Statement of Comprehensive Loss~~

~~Year Ended December 31, 2019:~~

Subsidiary

Subsidiary

Consolidating

Consolidated

(In millions)

Holdings

Guarantors

Non-Guarantors

Adjustments

Holdings

Net loss

$
(149.1)

$
(382.9)

$
(151.3)

$
534.2

$
(149.1)

Other comprehensive income (loss):

Equity in other comprehensive loss of subsidiaries

(31.6)

17.2

—

14.4

—

Unrealized foreign currency translation adjustment, net of tax

—

(44.1)

27.6

—

(16.5)

Realized loss on foreign currency transactions, net of tax

—

0.5

—

—

0.5

Pension and other benefit adjustments:

Net loss arising during the period, net of tax

—

(5.1)

(10.4)

—

(15.5)

Equity method investee's cash flow hedge:

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

—

(0.1)

—

—

(0.1)

Other comprehensive income (loss)

(31.6)

(31.6)

17.2

14.4

(31.6)

Total comprehensive loss

$
(180.7)

$
(414.5)

$
(134.1)

$
548.6

$
(180.7)

~~Consolidating Statement of Comprehensive Loss~~

~~Year Ended December 31, 2018:~~

Subsidiary

Subsidiary

Consolidating

Consolidated

(In millions)

Holdings

Guarantors

Non-Guarantors

Adjustments

Holdings

Net earnings

$
110.1

$
14.5

$
13.7

$
(28.2)

$
110.1

Other comprehensive loss:

Equity in other comprehensive loss of subsidiaries

(124.5)

(99.1)

—

223.6

—

Unrealized foreign currency translation adjustment, net of tax

—

(30.7)

(97.0)

—

(127.7)

Realized loss on foreign currency transactions reclassified into other expense, net of tax

—

1.0

—

—

1.0

Pension and other benefit adjustments:

Net gain (loss) arising during the period, net of tax

—

6.3

(2.1)

—

4.2

Equity method investee's cash flow hedge:

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

—

0.2

—

—

0.2

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

—

(2.2)

—

—

(2.2)

Other comprehensive loss

(124.5)

(124.5)

(99.1)

223.6

(124.5)

Total comprehensive loss

$
(14.4)

$
(110.0)

$
(85.4)

$
195.4

$
(14.4)

~~127~~

~~Table of Contents~~

~~Consolidating Statement of Comprehensive Income (Loss)~~

~~Year Ended December 31, 2017:~~

Subsidiary

Subsidiary

Consolidating

Consolidated
(In millions)

Holdings

Guarantors

Non-Guarantors

Adjustments

Holdings
Net earnings (loss)

$
(487.2)

$
(472.5)

$
45.1

$
427.4

$
(487.2)
Other comprehensive income (loss)

Equity in other comprehensive income of subsidiaries

128.1

112.1

—

(240.2)

—
Unrealized foreign currency translation adjustment, net of tax

—

22.0

109.7

—

131.7
Pension and other benefit adjustments:

Net gain (loss) arising during the period, net of tax

—

(5.4)

2.4

—

(3.0)
Marketable securities:

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

—

0.7

—

—

0.7
Realized net gain reclassified into net investment income, net of tax

—

(0.4)

—

—

(0.4)
Equity method investee's cash flow hedge:

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

—

(0.9)

—

—

(0.9)
Other comprehensive income

128.1

128.1

112.1

(240.2)

128.1
Total comprehensive income (loss)

$
(359.1)

$
(344.4)

$
157.2

$
187.2

$
(359.1)

~~128~~

~~Table of Contents~~

~~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 liabilities

—

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

~~129~~

~~Table of Contents~~

~~Consolidating Balance Sheet~~

~~As of December 31, 2018:~~

Subsidiary

Subsidiary

Consolidating

Consolidated
(In millions)

Holdings

Guarantors

Non-Guarantors

Adjustments

Holdings
Assets















Current assets:

Cash and cash equivalents

$
0.3

$
177.8

$
135.2

$
—

$
313.3
Restricted cash

—

—

10.7

—

10.7
Receivables, net

—

163.0

100.9

(4.4)

259.5
Other current assets

—

140.7

57.1

—

197.8
Total current assets

0.3

481.5

303.9

(4.4)

781.3
Investment in equity of subsidiaries

719.0

1,430.1

—

(2,149.1)

—
Property, net

—

2,152.3

887.3

—

3,039.6
Intangible assets, net

—

225.6

126.5

—

352.1
Intercompany advances

5,362.3

(4,512.3)

(850.0)

—

—
Goodwill

(2.1)

3,074.7

1,716.1

—

4,788.7
Deferred tax asset, net

—

—

28.6

—

28.6
Other long-term assets

59.8

316.2

129.5

—

505.5
Total assets

$
6,139.3

$
3,168.1

$
2,341.9

$
(2,153.5)

$
9,495.8
Liabilities and Stockholders’ Equity

Current liabilities:

Accounts payable

$
—

$
327.2

$
129.9

$
(4.5)

$
452.6
Accrued expenses and other liabilities

31.5

197.5

149.4

0.1

378.5
Deferred revenues and income

—

314.0

100.8

—

414.8
Current maturities of corporate borrowings

13.8

1.4

—

—

15.2
Current maturities of capital and financing lease obligations

—

38.6

28.4

—

67.0
Total current liabilities

45.3

878.7

408.5

(4.4)

1,328.1
Corporate borrowings

4,696.0

—

11.8

—

4,707.8
Capital and financing lease obligations

—

194.3

298.9

—

493.2
Exhibitor services agreement

—

564.0

—

—

564.0
Deferred tax liability, net

—

17.7

23.9

—

41.6
Other long-term liabilities

—

794.4

168.7

—

963.1
Total liabilities

4,741.3

2,449.1

911.8

(4.4)

8,097.8
Temporary equity

0.4

—

—

—

0.4
Stockholders’ equity

1,397.6

719.0

1,430.1

(2,149.1)

1,397.6
Total liabilities and stockholders’ equity

$
6,139.3

$
3,168.1

$
2,341.9

$
(2,153.5)

$
9,495.8

~~130~~

~~Table of Contents~~

~~Consolidating Statement of Cash Flows~~

~~Year Ended December 31, 2019:~~

Subsidiary

Subsidiary

Consolidating

Consolidated
(In millions)

Holdings

Guarantors

Non-Guarantors

Adjustments

Holdings
Cash flows from operating activities:















Net cash provided by operating activities

$
51.1

$
316.6

$
211.3

$
—

$
579.0
Cash flows from investing activities:

Capital expenditures

—

(369.4)

(148.7)

—

(518.1)
Acquisition of theatre assets

—

(11.8)

—

—

(11.8)
Proceeds from disposition of long-term assets

—

7.9

15.3

—

23.2
Investments in non-consolidated entities, net

—

(0.1)

(9.6)

—

(9.7)
Other, net

—

0.3

—

—

0.3
Net cash used in investing activities

—

(373.1)

(143.0)

—

(516.1)
Cash flows from financing activities:

Proceeds from issuance of Term Loan due 2026

1,990.0

—

—

—

1,990.0
Payment of principal Senior Secured Notes due 2023

(230.0)

—

—

—

(230.0)
Payment of principal Senior Subordinated Notes due 2022

(375.0)

—

—

—

(375.0)
Call premiums paid for Senior Secured Notes due 2023 and Senior Subordinated Notes due 2022

(15.9)

—

—

—

(15.9)
Principal payments under Term Loans due 2022 and 2023

(1,338.5)

—

—

—

(1,338.5)
Repayments under Revolving Credit Facility

—

—

(12.0)

—

(12.0)
Scheduled principal payments under Term Loans

(21.9)

—

—

—

(21.9)
Principal payments under finance lease obligations

—

(6.1)

(4.8)

—

(10.9)
Principal payments under promissory note

—

(1.4)

—

—

(1.4)
Cash used to pay deferred financing fees

(11.9)

—

—

—

(11.9)
Cash used to pay dividends

(84.1)

—

—

—

(84.1)
Taxes paid for restricted unit withholdings

(1.3)

—

—

—

(1.3)
Change in intercompany advances

16.1

3.1

(19.2)

—

—
Net cash used in financing activities

(72.5)

(4.4)

(36.0)

—

(112.9)
Effect of exchange rate changes on cash and cash equivalents and restricted cash

21.4

(22.0)

2.1

—

1.5
Net increase (decrease) in cash and cash equivalents and restricted cash

—

(82.9)

34.4

—

(48.5)
Cash and cash equivalents and restricted cash at beginning of period

0.3

177.8

145.9

—

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

$
0.3

$
94.9

$
180.3

$
—

$
275.5

~~131~~

~~Table of Contents~~

~~Consolidating Statement of Cash Flows~~

~~Year Ended December 31, 2018:~~

Subsidiary

Subsidiary

Consolidating

Consolidated
(In millions)

Holdings
Guarantors

Non-Guarantors

Adjustments

Holdings
Cash flows from operating activities:














Net cash provided by operating activities

$
7.2

$
369.8

$
146.2

$
—

$
523.2
Cash flows from investing activities:

Capital expenditures

—

(395.5)

(180.8)

—

(576.3)
Proceeds from sale leaseback transactions

—

50.1

—

—

50.1
Proceeds from disposition of NCM

—

162.5

—

—

162.5
Proceeds from Screenvision merger

—

45.8

—

—

45.8
Proceeds from disposition of long-term assets

—

8.5

5.7

—

14.2
Investments in non-consolidated entities, net

—

(11.4)

—

—

(11.4)
Other, net

—

(3.6)

1.5

—

(2.1)
Net cash used in investing activities

—

(143.6)

(173.6)

—

(317.2)
Cash flows from financing activities:

Proceeds from issuance of convertible note due 2024

600.0

—

—

—

600.0
Net borrowings under revolving credit facilities

—

—

12.1

—

12.1
Scheduled principal payments under Term Loans

(13.8)

—

—

—

(13.8)
Principal payments under capital and financing lease obligations

—

(39.8)

(31.2)

—

(71.0)
Principal payments under promissory note

—

(1.4)

—

—

(1.4)
Cash used to pay deferred financing fees

(15.5)

—

—

—

(15.5)
Cash used to pay dividends

(258.1)

—

—

—

(258.1)
Taxes paid for restricted unit withholdings

(1.7)

—

—

—

(1.7)
Retirement of Class B common stock

(423.6)

—

—

—

(423.6)
Purchase of treasury stock

(21.8)

—

—

—

(21.8)
Change in intercompany advances

167.1

(144.7)

(22.4)

—

—
Net cash provided by (used in) financing activities

32.6

(185.9)

(41.5)

—

(194.8)
Effect of exchange rate changes on cash and cash equivalents and restricted cash

(40.6)

41.6

(6.5)

—

(5.5)
Net increase (decrease) in cash and cash equivalents and restricted cash

(0.8)

81.9

(75.4)

—

5.7
Cash and cash equivalents and restricted cash at beginning of period

1.1

95.9

221.3

—

318.3
Cash and cash equivalents and restricted cash at end of period

$
0.3

$
177.8

$
145.9

$
—

$
324.0

~~132~~

~~Table of Contents~~

~~Consolidating Statement of Cash Flows~~

~~Year Ended December 31, 2017:~~

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

$
(10.2)

$
364.3

$
183.3

$
—

$
537.4
Cash flows from investing activities:

Capital expenditures

—

(543.8)

(83.0)

—

(626.8)
Acquisition of Nordic Cinemas Group, net of cash and restricted cash acquired

—

(654.9)

77.3

—

(577.6)
Proceeds from sale leaseback transactions

—

136.2

—

—

136.2
Proceeds from disposition of NCM

—

89.0

—

—

89.0
Proceeds from disposition of Open Road

—

9.2

—

—

9.2
Proceeds (disbursements) from disposition of long-term assets

—

34.9

(10.8)

—

24.1
Investments in non-consolidated entities, net

—

(11.1)

—

—

(11.1)
Other, net

—

(2.1)

(0.2)

—

(2.3)
Net cash used in investing activities

—

(942.6)

(16.7)

—

(959.3)
Cash flows from financing activities:

Proceeds from the issuance of Senior Subordinated Sterling Notes due 2024

327.8

—

—

—

327.8
Proceeds from the issuance of Senior Subordinated Notes due 2027

475.0

—

—

—

475.0
Payment of Nordic SEK Term Loan

(144.4)

—

—

—

(144.4)
Payment of Nordic EUR Term Loan

(169.5)

—

—

—

(169.5)
Net proceeds from equity offering

616.8

—

—

—

616.8
Principal payment of Bridge Loan due 2017

(350.0)

—

—

—

(350.0)
Scheduled principal payments under Term Loans

(12.6)

—

—

—

(12.6)
Principal payments under capital and financing lease obligations

—

(41.6)

(29.1)

—

(70.7)
Principal payments under promissory note

—

(1.4)

—

—

(1.4)
Cash used to pay deferred financing fees

(29.8)

—

(3.8)

—

(33.6)
Cash used to pay dividends

(104.6)

—

—

—

(104.6)
Taxes paid for restricted unit withholdings

(6.5)

—

—

—

(6.5)
Purchase of treasury stock

(34.0)

—

—

—

(34.0)
Change in intercompany advances

(616.7)

662.1

(45.4)

—

—
Net cash provided by (used) in financing activities

(48.5)

619.1

(78.3)

—

492.3
Effect of exchange rate changes on cash and equivalents

56.8

(53.5)

14.4

—

17.7
Net increase (decrease) in cash and equivalents

(1.9)

(12.7)

102.7

—

88.1
Cash and equivalents at beginning of period

3.0

108.6

118.6

—

230.2
Cash and equivalents at end of period

$
1.1

$
95.9

$
221.3

$
—

$
318.3

~~133~~

~~Table of Contents~~

~~Independent Auditor's Report~~

~~Management~~

~~Digital Cinema Implementation Partners, LLC~~

We have audited the accompanying consolidated financial statements of Digital Cinema Implementation Partners, LLC and Subsidiaries, which comprise the consolidated balance sheets as of December 31, 2019 and 2018, and the related consolidated statements of operations and comprehensive income, members' equity and cash flows for each of the three years in the period ended December 31, 2019, and the related notes to the financial statements.

~~Management's Responsibility for the Financial Statements~~

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

~~Auditor's Responsibility~~

Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

~~We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.~~

~~Opinion~~

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Digital Cinema Implementation Partners, LLC and Subsidiaries as of December 31, 2019 and 2018, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2019 in accordance with accounting principles generally accepted in the United States of America.

~~/s/ CohnReznick LLP~~

~~Roseland, New Jersey~~

~~February 18, 2020~~

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~~Table of Contents~~

~~DIGITAL CINEMA IMPLEMENTATION PARTNERS, LLC~~

~~CONSOLIDATED BALANCE SHEETS~~

~~($ in thousands)~~

December 31,
2019
2018
ASSETS
Current assets:
Cash and cash equivalents
$ 4,814
$ 17,522
Accounts receivable, net
46,568
40,193
Other current assets
—
192
Total current assets
51,382
57,907
Property and equipment, net
531,467
606,864
Deferred warranty reimbursement costs, net
20,453
52,070
Restricted cash
—
3,702
Derivative assets
—
472
Other noncurrent assets
16,090
21,174
Total assets
$ 619,392
$ 742,189
LIABILITIES AND MEMBERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities
$ 17,976
$ 14,604
Warranty reimbursement liability, current
46,590
46,050
Total current liabilities
64,566
60,654
Warranty reimbursement liability (excluding current)
—
55,530
Long-term debt, net
—
69,737
Other noncurrent liabilities
10,474
6,820
Total liabilities
75,040
192,741
Commitments and contingencies
Members' equity
544,352
549,448
Total liabilities and members' equity
$ 619,392
$ 742,189

~~See Notes to Consolidated Financial Statements.~~

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~~Table of Contents~~

~~DIGITAL CINEMA IMPLEMENTATION PARTNERS, LLC~~

~~CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME~~

~~($ in thousands)~~

Years Ended December 31,
2019
2018
2017
REVENUES
Virtual print fees
$ 174,509
$ 178,998
$ 180,101
Exhibitor lease fees
15,013
14,976
14,938
Alternative content fees
3,671
2,873
2,147
Peak period payments
3,465
5,072
5,499
Management fees
2,938
3,328
3,413
Sales revenue
310
349
394
Subtotal, operating revenues
199,906
205,596
206,492

Warranty reimbursement costs
(22,477)
(23,663)
(23,803)
Exhibitor lease, step-up rent adjustment
(5,224)
(5,201)
(5,307)
Net operating revenues
172,205
176,732
177,382

OPERATING EXPENSES

General and administrative
15,453
9,280
9,637
Bad debt expense
674
4,198
—
Depreciation and amortization
74,137
61,018
61,058
Total operating expenses
90,264
74,496
70,695
Operating income
81,941
102,236
106,687
INTEREST EXPENSE
Interest expense
1,042
5,327
10,602
Amortization of deferred financing costs
263
885
1,536
Total interest expense
1,305
6,212
12,138
OTHER INCOME (EXPENSE)
Interest income
393
313
91
Loss on sale of assets
(2,559)
(1,250)
(1,253)
Other income
92
78
106
Total other expense
(2,074)
(859)
(1,056)
Income before taxes
78,562
95,165
93,493

Income tax expense
614
408
390

Net income
77,948
94,757
93,103

OTHER COMPREHENSIVE INCOME (LOSS)

Gain (loss) on interest rate swap contracts
(470)
(809)
659

Comprehensive income
$ 77,478
$ 93,948
$ 93,762

~~See Notes to Consolidated Financial Statements.~~

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~~Table of Contents~~

~~DIGITAL CINEMA IMPLEMENTATION PARTNERS, LLC~~

~~CONSOLIDATED STATEMENTS OF MEMBERS’ EQUITY~~

~~($ in thousands)~~

Years Ended December 31,
2019
2018
2017
Balance, beginning of year
$ 549,448
$ 472,692
$ 397,360
Capital contributions
50
5,108
4,070
Distributions to Members
(82,624)
(22,300)
(22,500)
Net income
77,948
94,757
93,103
Balance before other comprehensive income (loss)
544,822
550,257
472,033
Other comprehensive income (loss) - gain (loss) on interest rate swap contracts
(470)
(809)
659
Balance, end of year
$ 544,352
$ 549,448
$ 472,692

~~See Notes to Consolidated Financial Statements.~~

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~~Table of Contents~~

~~DIGITAL CINEMA IMPLEMENTATION PARTNERS, LLC~~

~~CONSOLIDATED STATEMENTS OF CASH FLOWS~~

~~($ in thousands)~~

Years Ended December 31,
2019
2018
2017
Operating activities:
Net income
$ 77,948
$ 94,757

$ 93,103
Adjustments to reconcile net income to net cash

provided by operating activities:

Depreciation and amortization
74,137
61,018
61,058
Amortization of deferred warranty reimbursement costs
22,477
23,663
23,803
Amortization of deferred financing costs
263
885
1,536
Amortization of derivative assets
2
(2)
—
Loss on sale of assets
2,559
1,250
1,253
Changes in operating assets and liabilities:

Accounts receivable
(6,375)
5,018
(4,469)
Other current and noncurrent assets
5,276
5,221
5,311
Accounts payable and accrued liabilities
3,056
2,013
113
Warranty reimbursement liability
(34,321)
(30,546)
(23,639)
Payment of prior period warranty reimbursement liability
(11,171)
(9,041)
(6,641)
Other noncurrent liabilities
3,654
58
2,779
Net cash provided by operating activities
137,505
154,294
154,207

Investing activities:

Purchase of property and equipment
(1,971)
(7,668)
(5,199)
Payment of prior period property and equipment
(42)
(298)
(123)
Sale of property and equipment
672
305
2,783
Net cash used in investing activities
(1,341)
(7,661)
(2,539)

Financing activities:

Paydown of long-term debt
(70,000)
(125,000)
(125,000)
Capital contributions from Members
50
5,108
4,070
Distributions to Members
(82,624)
(22,300)
(22,500)
Net cash used in financing activities
(152,574)

(142,192)

(143,430)

Net increase (decrease) in cash, cash equivalents and restricted cash
(16,410)
4,441
8,238
Cash, cash equivalents and restricted cash, beginning of year
21,224
16,783
8,545
Cash, cash equivalents and restricted cash, end of year
$ 4,814
$ 21,224
$ 16,783

Supplemental schedule of non-cash investing and financing activities:

Additions to property and equipment included in accounts payable
and accrued liabilities
$ —
$ 42
$ 298

Warranty reimbursement payable in accounts payable and
accrued liabilities
$ 11,530
$ 11,171
$ 9,041

Deferred warranty asset and warranty reimbursement obligation
$ (9,139)
$ (265)
$ (802)

~~See Notes to Consolidated Financial Statements.~~

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~~Table of Contents~~

~~DIGITAL CINEMA IMPLEMENTATION PARTNERS, LLC~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~Note 1 - Nature of Operations~~

Digital Cinema Implementation Partners, LLC, ("DCIP", and together with its consolidated wholly-owned subsidiaries, the "Company") was formed as a Delaware limited liability company on February 12, 2007 for the purpose of raising third-party capital to purchase and deploy digital cinema projection equipment ("Digital Systems") in theatres located throughout the United States and Canada. The Company is headquartered in New Jersey and has offices in Colorado and Minnesota. The Company is owned by its founding members American Multi-Cinema, Inc. ("AMC"), Cinemark Media, Inc. ("Cinemark") and Regal/DCIP Holdings, LLC ("Regal") (collectively, the "Founding Members").

On March 10, 2010, the Company completed an initial financing transaction for the deployment of Digital Systems utilizing its subsidiary entities Kasima, LLC ("Kasima"), Kasima Holdings, LLC ("Holdings") and Kasima Parent Holdings, LLC ("Parent") to execute its business plan. Kasima is a wholly-owned subsidiary of Holdings, Holdings is a wholly-owned subsidiary of Parent and Parent is a wholly-owned subsidiary of DCIP. As part of the initial financing transaction, Parent entered into a note purchase agreement with a third-party investment fund. On March 31, 2011, the Company obtained the incremental financing necessary to complete its planned deployment of Digital Systems and on May 17, 2013, the Company refinanced all of its outstanding senior secured debt, extending the term of that debt and lowering its effective interest rate. On March 31, 2014, Parent repaid, in full, the outstanding notes under the note purchase agreement. On August 2, 2019, Holdings repaid, in full, the then-outstanding debt under itsCompany’s Senior Secured Credit ~~Facility and retired that facility (see Note 7).~~

Digital Systems are purchased by Kasima and leased to each Founding Member or one of its affiliates (each such entity, an "Exhibitor") pursuant to the terms of a Master Equipment Lease Agreement ("ELA"). Kasima facilitates the installation of the leased Digital Systems into each Exhibitor's theatres pursuant to the terms of an Installation Agreement. The Exhibitor is responsible for the ongoing maintenance and insurance of the Digital Systems. The Company has also entered into (and assigned to Kasima) long-term Digital Cinema Deployment Agreements ("DCDAs") with six major motion picture studios ("Major Studios") pursuant to which Kasima receives a virtual print fee ("VPF") each time the studio books a film or certain other content on the Digital Systems. These agreements will end on the earlier of the tenth anniversary of the "mean deployment date" (May 16, 2021) or when the Company reaches “cost recoupment”, each as defined in the DCDAs (see Note 2). Other content distributors have entered into DCDAs or shorter term agreements with the Company that provide for the payment of VPFs (or as more fully described and defined in Note 2, alternative content fees or “ACFs”) to Kasima for bookings of the distributor’s content on a Digital System. One such distributor, AC JV, LLC (“Fathom Events”), is related to DCIP through common ownership.

On June 20, 2011, DCIP and Canadian Digital Cinema Partnership ("CDCP") entered into a long-term management services agreement (an "MSA" and with respect to CDCP, the "CDCP MSA") to manage a similar deployment of Digital Systems in Canada and to perform certain other specified services for CDCP related thereto (see Note 2). CDCP is a Canadian limited partnership formed by Cineplex Entertainment LP ("Cineplex") and Empire Theatres Ltd. ("Empire") to facilitate the purchase and deployment of Digital Systems to their theatres in Canada. On April 1, 2012, DCIP entered into a long-term MSA with Cinemark USA, Inc., a Texas corporation and an affiliate of Cinemark, to manage deployment of Digital Systems to theatres operated by its affiliates in Latin America (the "CNI MSA"). On September 1, 2014, DCIP entered into a long-term MSA with Fathom Events to provide it with management and software related services. The services we provide under this agreement have changed from time to time.

The Company anticipates reaching cost recoupment as defined in the DCDAs in the fourth quarter of 2020. At that time the revenue from these contracts will end and it is anticipated the ELAs will be cancelled, ownership of the digital systems will be distributed to the Founding Members and the Company will enter a period of winding down its other activities in preparation for the cessation or transfer of the Company’s business.

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~~Table of Contents~~

~~Note 2 - Summary of Significant Accounting Policies~~

~~Principles of consolidation~~

~~The consolidated financial statements include the accounts of DCIP and its subsidiaries. Intercompany accounts have been eliminated in consolidation.~~

~~New accounting standards~~

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2016-02, “Leases (Topic 842)” (as modified “ASU 2016-02”), which replaces existing leasing rules with a comprehensive lease measurement and recognition standard and disclosure requirements. ASU 2016-02 requires lessees to recognize most leases on their balance sheets as liabilities with corresponding “right-of-use” assets and was effective for annual reporting periods after December 15, 2018, subject to early adoption. The Company adopted ASU 2016-02 effective January 1, 2019. Upon adoption, th~~e Company recognized a right-of-use asset and corresponding lease liability (See Note 9).~~

The determination of whether an arrangement is, or contains, a lease is based on the substance of the arrangement at the inception date and requires an assessment of whether the fulfillment of the arrangement is dependent on the use of a specific asset or assets or the arrangement conveys a right to use the asset. A reassessment is made after inception of the lease only if one of the following applies:

a.~~there is a change in contractual terms, other than a renewal or extension of the arrangement;~~

b.~~a renewal option is exercised, or extension granted, unless the term of the renewal or extension was initially included in the lease term;~~

c.~~there is a change in the determination of whether fulfillment is dependent on a specified asset; or~~

d.~~there is a substantial change to the asset.~~

Whenever a reassessment is made, lease accounting shall commence or cease from the date when the change in circumstances gave rise to the reassessment for scenarios (a), (c) or (d) and at the date of renewal or extension period for scenario (b).

Leases where the lessor retains substantially all of the risks and rewards of ownership are classified as operating leases. Operating lease payments are recognized as an operating expense on a straight-line basis over the lease term.

~~Use of estimates~~

The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles ("GAAP") requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The Company's most significant estimates relate to depreciation and recoverability of property and equipment, amortization, the valuation of derivative agreements and the reimbursement liability concerning equipment warranty and replacement costs under the ELAs. The Company bases its estimates on historical experience and on various other assumptions that the Company believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from these estimates under different assumptions or conditions.

~~Cash and cash equivalents~~

The Company considers all highly-liquid investments with an original maturity of three months or less to be cash equivalents. The carrying amount of the Company's cash equivalents approximates fair value due to the short maturities of these investments and consists primarily of money market funds and other overnight investments. The Company maintains bank accounts with major banks, which from time to time may exceed the Federal Deposit Insurance Corporation's insured limits. The Company periodically assesses the financial condition of the institutions and believes that the risk of any loss is minimal.

~~140~~

~~Table of Contents~~

~~Concentration of credit risk~~

For the years ended December 31, 2019, 2018 and 2017, the Company had three customers that represented 36%, 33% and 34%, respectively, of operating revenues. At December 31, 2019 and 2018, three and four customers, each parties to the DCDAs, represented 50% and 55%, respectively, of net accounts receivable. None of the Company's other customers individually represented more than 10% of operating revenues or accounts receivable at December 31, 2019 or 2018, or for the years ended December 31, 2019, 2018 and 2017.

The Company has credit risk associated with certain accounts receivable, which consists primarily of amounts owed by the Major Studios and other digital content distributors. The Company actively monitors the status of its accounts receivable and has mechanisms in place to minimize the potential for incurring material accounts receivable credit losses. During 2019, 2018 and 2017, the Company incurred bad debt expense of $674,000, $4,198,000 and zero, respectively. Bad debt expense in 2018 related primarily to two studio bankruptcies. At December 31, 2019 and 2018, management has determined that there is no requirement for an allowance for doubtful accounts.

~~Concentration in foreign countries~~

The Company receives revenues from CDCP pursuant to the CDCP MSA with all payments being made in U.S. dollars. For 2019, 2018 and 2017, revenues earned from Canadian sources totaled $1,808,000, $1,812,000 and $1,799,000, respectively. Revenues earned by the Company under the CNI MSA for theatres located in Latin America was $548,000, $722,000 and $818,000, for the years ended December 31, 2019, 2018 and 2017, respectively.

~~Fair value and credit risk~~

All current assets and liabilities are carried at cost, which approximates fair value due to the short-term maturities of those instruments. The Company's Credit Facility (see Note 7) was comprised of floating rate instruments and management believes fair value approximated carrying value.

~~Property and equipment, net~~

Property and equipment, net, is stated at cost, less accumulated depreciation and amortization. Depreciation is calculated using the straight-line method over the estimated useful lives of the respective assets as follows:


~~Computer equipment and software~~	~~3-5 years~~
~~Leasehold improvements~~	~~5 years~~
~~Digital cinema projection equipment~~	~~15 years~~
~~Furniture and fixtures~~	~~7 years~~

In the fourth quarter of 2019, the Company determined that it needed to reevaluate the useful life of its digital cinema projection equipment based on accelerated replacement of systems by the Exhibitors and other indicators. It was determined the estimate of useful life needed to be changed from 17.5 years to 15 years and as of December 31, 2019, a $13,537,000 adjustment was recorded.

Leasehold improvements are amortized over the shorter of the lease term or the estimated useful life of the assets. Certain costs of computer software developed or obtained for internal use are capitalized and amortized on a straight-line basis over three to five years. Costs for general and administrative expenses, overhead, maintenance and training, as well as the cost of software coding that does not add functionality to existing systems, are expensed as incurred. Upon the sale or other disposition of any property and equipment, the cost and related accumulated depreciation and amortization are removed from the accounts and the gain or loss on disposal is included in the consolidated statements of operations and comprehensive income.

~~Fair value measurements~~

The Company accounts for and reports the fair value of certain assets and liabilities. The Company applies fair value accounting for financial assets and liabilities that are recognized or disclosed at fair value in its consolidated financial statements.

~~141~~

~~Table of Contents~~

The Company utilizes valuation techniques that maximize the use of observable inputs (Levels 1 and 2) and minimize the use of unobservable inputs (Level 3) within the fair value hierarchy established by the FASB Accounting Standards Codification ("ASC"):

~~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 reflecting the reporting entity's own assumptions.~~

The fair value of the Company's assets under its Interest Rate Swap (as defined below) was based upon observable market-based inputs that reflect the present values of the difference between estimated future fixed rate payments and future variable receipts and, therefore, is classified within Level 2. The Level 2 fair value of the Company's Interest Rate Swap at December 31, 2018 was $472,000. Together with the payoff of the Credit Facility on August 2, 2019, the Interest Rate Swap was terminated.

~~Income taxes~~

The Company is a limited liability company and, as such, is treated as a partnership for federal and state income tax purposes. Accordingly, as a partnership for tax purposes, the Company is not a taxable entity for federal income taxes and is not subject to significant state income taxes. However, the Company does pay certain state taxes based on revenue or net income that are reported as income tax expense on the consolidated statements of operations and comprehensive income. Income or loss of the Company as a limited liability company is reported to and included in the individual income tax returns of its members. Tax years ended December 31, 2018, 2017 and 2016 remain open to examination by federal and state taxing authorities.

~~Impairment of long-lived assets~~

The Company reviews the recoverability of its long-lived assets when events or conditions exist that indicate a possible impairment. The assessment for recoverability is based primarily on the Company's ability to recover the carrying value of its long-lived assets from expected future undiscounted net cash flows. If the total of expected future undiscounted net cash flows is less than the total carrying value of an asset, the asset is deemed not to be recoverable and possibly impaired. The Company then estimates the fair value of the asset to determine whether an impairment loss should be recognized. An impairment loss will be recognized if the carrying value of the asset exceeds its fair value. Fair value is determined by computing the expected future discounted cash flows. No impairment charges were recorded for the years ended December 31, 2019, 2018 or 2017.

~~Revenue recognition~~

~~The Company follows the provisions of the FASB’s ASC Topic 606, Revenue from Contracts with Customers.~~

Most of the Company's revenues are VPFs from Major Studios under the DCDAs. The Company earns VPF revenue when movies and certain other content distributed by Major Studios and other content distributors are booked and exhibited on screens utilizing the Company's Digital Systems. VPFs are earned and payable based on a fee schedule outlined in the DCDAs and other VPF agreements. The VPF revenue is recognized in the period in which it is earned, generally the first time the content is booked and exhibited in the theatre auditorium for which a Digital System has been installed.

The DCDAs with the Major Studios require the payment of VPFs for a period that ends on the earlier to occur of (i) the tenth anniversary of the "mean deployment date" (May 16, 2021) for all Digital Systems scheduled to be deployed over a period of up to five years, or (ii) the date the Company achieves "cost recoupment", each as defined in the DCDAs. Cost recoupment occurs when revenues attributable to the Digital Systems exceed the costs associated with their purchase (including financing), deployment, administration and other allowed amounts, all as defined in the DCDAs.

In addition to VPF revenue, the Company also earns a fee each time certain digital content other than feature films (e.g., concerts, sporting events and opera performances) is booked and exhibited on a Digital System. The Company refers to fees derived on a per-exhibition basis from these alternative forms of digital content as ACFs. ACFs may be paid by the

~~142~~

~~Table of Contents~~

distributor of the alternative content pursuant to an agreement with the Company or by the Exhibitor showing the content pursuant to its ELA. ACF revenue is recognized in the period in which the alternative content is exhibited.

Lease revenues in respect of the Digital Systems and certain other rental and usage fees are earned by the Company in accordance with the terms of the ELAs. All amounts due to the Company under these agreements are recognized as revenue when earned and any unearned amounts are recorded as deferred revenue. The initial lease term for each piece of equipment deployed under the ELAs begins on the date the equipment is placed in service and continues for 12 years, with the first and last month incurring one-half of the monthly lease payment otherwise due.

~~The Company generates multiple revenue streams from the leased Digital Systems under the ELAs as follows:~~

Lease fees are payable by the Exhibitors monthly and prior to March 31, 2014 were comprised of a fixed base lease rate plus a "step-up" rate component for all equipment (regardless of lease commencement date) that was to occur on October 1, 2016. The Company recognized lease revenue from these fees on a straight-line method making an allowance for the step-up in rent that was to occur. On March 31, 2014, the ELAs were amended to remove the scheduled step-up lease payments. The accumulated effects of the amendments are being amortized on a straight-line basis as a reduction in revenue over the remaining terms of the ELAs.

Peak period payments were due under the ELAs when the leased Digital Systems were taken out of service by an Exhibitor for one or more consecutive defined "peak periods" (generally a weekend) as a result of relocation, damage or a complex closing. Peak period payments, if any, were recognized, billed and paid monthly. The Founding Member’s obligation to pay these fees was terminated on October 1, 2019.

In accordance with the ELAs, the Exhibitors are required to acquire extended warranties with respect to the leased Digital Systems covering the period from the expiration of the initial included manufacturer's warranty through the date of repayment of the Credit Facility (the "Warranty End Date"), but in no event later than 12 years from the effective date of the ELAs. Following the Warranty End Date, the Exhibitors may choose to continue extended warranty coverage through the expiration of the DCDAs (the "DCDA End Date"). The DCDA End Date will occur on the earlier of (i) the tenth anniversary of the "mean deployment date" (May 16, 2021) of the Digital Systems or (ii) the date the Company achieves "cost recoupment", each as defined in the DCDAs. The Company expects that the Exhibitors will maintain extended warranty coverage through the DCDA End Date. Pursuant to the ELAs, the Company is required to reimburse the Exhibitor for the costs of the extended warranties (and/or equipment replacement costs) subject to quarterly caps set forth in the ELAs. This contractual obligation by the Company to incur costs at a future date for the extended warranties or replacement costs when the leased equipment is purchased created a liability at the purchase date and a contra revenue adjustment in respect of revenues derived under the ELAs that is recognized on a straight-line basis over the term of the lease. During the year ended December 31, 2019, based on performance to date and revised projections of future activities, management estimates that cost recoupment will be achieved in 2020. As a result, management now estimates that the warranty reimbursement obligation will end during 2020 rather than 2021. This change in estimate resulted in a $8,680,000 reduction in the overall warranty liability and related warranty asset. The impact of this change on the Company’s results of operations for the year ended December 31, 2019 and subsequent years is not material.

~~The Company also earns revenues in respect of the services DCIP provides under the MSAs. The revenues are earned ratably as the services are performed under the respective agreements.~~

~~Subsequent events~~

~~The Company has evaluated subsequent events through February 18, 2020, which is the date the consolidated financial statements were available to be issued.~~

~~Note 3 - Financing Transactions~~

On May 17, 2013, the Company refinanced its then outstanding senior secured debt, extending its term and lowering its effective interest rate. The transaction consisted of a $755,000,000 senior secured loan commitment (the Credit Facility described in Note 7) to Kasima from a group of commercial banks and institutional investors. This Credit Facility was paid off and retired on August 2, 2019.

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~~Note 4 - Consolidated Balance Sheet Components~~

~~Restricted cash~~

The Company had restricted cash of $0 and $3,702,000 at December 31, 2019 and 2018, respectively, in the form of an interest reserve escrow account and excess cost escrow account for the funding of Digital Systems in excess of costs caps, both related to the Credit Facility (see Note 7).

~~Accounts receivable, net~~

~~Accounts receivable, net consists of the following ($ in thousands):~~

December 31,

2019
��
2018
Accounts receivable
$ 47,046

$ 40,676
Accrued revenue
772

766
Deferred revenue⁽¹⁾
(1,250)

(1,249)
Total accounts receivable, net
$ 46,568

$ 40,193

⁽¹⁾~~Deferred revenue consists of unearned amounts billed but not collected at December 31, 2019 and 2018.~~

~~Accounts payable and accrued liabilities~~

~~Accounts payable and accrued liabilities consist of the following ($ in thousands):~~

December 31,

2019

2018
Warranty reimbursement payable
$ 11,530

$ 11,171
Accrued taxes payable
4,449

152
Accrued bonus and compensation
930

3,040
Other accrued liabilities
822

160
Accounts payable
245

44
Accrued equipment purchases leased to others
-

27
Accrued interest payable
-

10
Total accounts payable and accrued liabilities
$ 17,976

$ 14,604

~~Other noncurrent liabilities~~

~~Other noncurrent liabilities consist primarily of accrued long-term incentive compensation.~~

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~~Note 5 - Property and Equipment, net~~

~~Property and equipment, net consists of the following ($ in thousands):~~

December 31,

2019

2018
Equipment leased to others⁽¹⁾
$ 1,052,560

$ 1,053,029
Equipment, not deployed
-

3,520
Computer equipment and software
6,296

6,228
Leasehold improvements
233

292
Furniture and fixtures
106

124
Total property and equipment
1,059,195

1,063,193
Less accumulated depreciation and amortization
(527,728)

(456,329)
Property and equipment, net
$ 531,467

$ 606,864

⁽¹⁾~~At December 31, 2019 and 2018, the approximate carrying value of equipment leased to others was $531,000 and~~

~~$603,000, respectively.~~

~~Note 6 - Exhibitor Lease Fees~~

The Company earns lease revenues and other fees through the lease of Digital Systems to the Exhibitors in accordance with the ELAs described in Note 2. The aggregate future minimum lease revenues due under non-cancellable equipment lease agreements that have initial or remaining terms in excess of one year as of December 31, 2019 are as follows ($ in thousands) (see Note 1):

Year ending December 31,

Amount
2020

$ 14,998
2021

14,998
2022

12,640
2023

6,577
2024

2,194
Thereafter

2,302
Total

$ 53,709

~~Revenues earned under the ELAs for the years ended December 31, 2019, 2018 and 2017 totaled $18,989,000, $20,409,000 and $20,629,000, respectively.~~

~~Note 7- Long-term Debt, net~~

~~Credit facilities~~

On May 17, 2013, DCIP, Holdings and Kasima entered into a credit agreement with Barclays Bank PLC as Administrative Agent and a group of lenders which agreed to provide Kasima a $75 million revolving line of credit ("Revolver") and a $680 million term loan ("Term Loan B" and together with the Revolver, the "Credit Facility"). The Term Loan B was fully funded at the closing of the Credit Facility. Proceeds from the Term Loan B were used to repay all amounts under the then outstanding credit facility and to repay fees, transaction costs and other expenses incurred in connection with such repayment and the establishment of the Credit Facility. All costs of Digital Systems exceeding established caps must be funded by capital contributions from the Founding Members. The Credit Facility was retired on August 2, 2019 and all outstanding debt was repaid.

~~Interest expense on long-term debt was $1,042,000, $5,327,000 and $10,602,000, for the years ended December 31, 2019, 2018 and 2017, respectively.~~

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~~Derivatives~~Facilities and existing secured notes. The Company 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. The Company estimates it will record a loss on debt extinguishment related to this transaction of approximately $135 million in other expense in 2022.

The Interest Rate Swap contracts were entered into for interest expense cost protection from rising variable interest rates and are associated with the Credit Facility which was paid off and retired on August 2, 2019.

~~Note 8 - Retirement Plan~~

The Company maintains a defined contribution plan for eligible employees under Section 401(k) of the Internal Revenue Code. The Company's plan provides for eligible employees to contribute up to 80% of eligible compensation with a Company contribution of 4% of eligible wages. All employees are eligible to participate in the plan upon hire. The Company's contributions to the plan totaled $146,000, $139,000 and $140,000 for the years ended December 31, 2019, 2018 and 2017, respectively.

~~Note 9 - Operating Leases~~

The Company has various operating lease agreements for its offices. The Company has determined that the risks and benefits related to the leased properties are retained by the lessors. Accordingly, these are accounted for as operating leases. At December 31, 2019, the remaining lease terms range from two to 25 months. The agreements are renewable at the mutual consent of the parties in the contract.

~~The Company adopted ASU 2016-02 beginning January 1, 2019 and adopted the practical expedients consistently for all of its leases. Accordingly, the Company:~~

~~did not reassess whether any expired or existing contracts are or contain leases;~~

~~did not reassess the lease classification for any expired or existing leases; and~~

~~did not reassess initial direct costs for any existing leases.~~

In addition, the Company elected to retrospectively determine the lease term and assess the impairment of its right-of-use assets. At the date of transition, the Company recognized an operating lease liability and right-of-use asset. The amount of lease liability is equal to the present value of the remaining lease payments as of January 1, 2019 discounted using the Company’s secured borrowing rate as of that date.

~~A right-of-use asset is measured as the amount of the lease liability adjusted for the amount of deferred straight-line rent, prepaid rent and lease incentive allowances previously recognized.~~

~~The table below summarizes the amounts recognized in the consolidated financial statements related to operating leases:~~



~~Year ended December 31, 2019~~	~~Amount~~
~~Rent expense for short-term operating leases~~	~~$ 62~~
~~Rent expense for long-term operating leases~~	62
~~Total rent expense~~	~~$ 124~~

The following table presents the maturity profile of the Company’s operating lease liabilities based on the contractual undiscounted payments with a reconciliation of these amounts to the remaining net present value of the operating lease liability reported in the consolidated balance sheet as of December 31, 2019.

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Year ending December 31,
Amount

2020
$ 104

2021
101

2022
8

Total lease payments
213

Less: Interest
(23)

Net present value of lease liabilities
$ 190

Current portion
$ 93

Long-term portion
97

Total
$ 190

~~The weighted average remaining lease term and discount rates of the operating leases were 23 months and 4.80%, respectively, as of December 31, 2019.~~

~~Note 10 - Commitments~~

~~Employment agreements~~

The Company has employment agreements with two of its key executives setting forth key compensation terms (generally annual salary plus a defined bonus) and providing each executive with a severance benefit in the case the executive's employment is terminated without cause or the executive resigns with good reason, each as defined.

~~Tax matters~~

The Company is from time to time audited by state and local taxing authorities and as of December 31, 2019, certain assessments are in negotiation with various taxing authorities. The Company believes the potential tax liabilities will be resolved for $4,335,000 and has accrued this amount as of December 31, 2019.

~~Note 11 - Related Party Transactions~~

At December 31, 2019, all of the Company's Digital Systems are leased to the Exhibitors under the ELAs. For the years ended December 31, 2019, 2018 and 2017, revenues earned from the Exhibitors totaled $18,989,000, $20,409,000 and $20,629,000, respectively. Net accounts receivable due from the Exhibitors totaled $525,000 and $1,092,000, at December 31, 2019 and 2018, respectively, and will be settled in cash. Payments under the ELAs are generally due on the fifth day of the month after billing. At times, the Company purchases digital equipment from the Exhibitors at cost subject to caps established in the ELAs. For the years ended December 31, 2019 and 2018, the Company had no liability for reimbursement of equipment purchases due to the Exhibitors. The $11,530,000 warranty reimbursement liability represents a liability to reimburse the Exhibitors for the extended equipment warranty and other replacement costs (as defined in the ELAs) as cash payments that began in 2011 and continues through the DCDA End Date (see Note 2). Warranty reimbursements earned for the years ended December 31, 2019, 2018 and 2017 totaled $45,851,000, $41,717,000 and $32,680,000, respectively. Cash reimbursement payments for the years ended December 31, 2019, 2018 and 2017 totaled $45,492,000, $39,587,000 and $30,280,000, respectively, and payables totaled $11,530,000 and $11,171,000 as of December 31, 2019 and 2018, respectively.

In 2019, 2018 and 2017, the Exhibitors terminated their ELAs with respect to an aggregate of 83, 38, and 81 Digital Systems, respectively. Pursuant to the terms of the ELAs, the Exhibitors were required to purchase these Digital Systems from the Company at a defined Termination Amount per Digital System. In 2019, 2018 and 2017, total Termination Amounts paid by the Exhibitors in the aggregate were $673,000, $305,000 and $2,786,000, respectively, resulting in a loss on sale to the Company of $2,531,000, $1,250,000 and $1,252,000 in 2019, 2018 and 2017, respectively.

For the years ended December 31, 2019, 2018 and 2017, revenues earned from Fathom Events totaled $3,612,000, $3,719,000 and $3,004,000, respectively, (see Note 1). Accounts receivable due from Fathom Events at December 31, 2019 and 2018 totaled $671,000 and $635,000, respectively.

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Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

Not applicable

Item 9A. Controls and Procedures.

~~(a)Evaluation of disclosure 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 Annual Report on Form 10-K and have determined that such disclosure controls and procedures were effective.

~~(b)Management’s annual report on internal control over financial reporting.~~

(b)

Management’s annual report on internal control over financial reporting.

~~(c)Changes in internal control over financial reporting.~~

(c)

Changes in internal control over financial reporting.

~~As part of the adoption of ASC Topic 842, the~~The Company ~~implemented new internal controls~~has not experienced any material impact to ensure we adequately evaluated our contracts and properly assessed the new lease accounting standard’s impact on our consolidated financial statements. There were no other significant changes in the Company’sits 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 ~~adoption~~impact of COVID-19. The Company enhanced its oversight and monitoring during the ~~new standard.~~close and reporting process and assessed frequency of controls to align with decreased or no volume of transactions occurring during the 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. There were no changes in its internal control over financial reporting as defined in Exchange Act Rule 13a-15(f) during the quarter ended December 31, ~~2019,~~2021, that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Item 9B. Other Information.

None

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

Not applicable

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PART III

Item 10. Directors, Executive Officers and Corporate Governance.

For information with respect to the executive officers of the Company, see “Information about our Executive Officers” included as a separate item at the end of Part I, Item 1.1 of this Report.

All other information called for by this item is hereby incorporated herein by reference to the relevant information under the headings “Proposal 12 - Election of Directors”, “Delinquent Section 16(A) Reports”, and “Corporate Governance” ~~portions of~~in our definitive proxy statement on Schedule 14A in connection with our ~~2020~~2022 Annual Meeting of Stockholders, to be filed within 120 days after December 31, ~~2019~~2021 (the “Proxy Statement”).

Item 11. Executive Compensation.

The information called for by this item is set forth under the headings “Executive Compensation”, “Compensation Committee Report on Executive Compensation”, “Compensation Committee Interlocks and Insider Participation”, “Compensation Policies and Practices as They Relate to Risk Management”, “Director Compensation” and “Compensation Discussion and Analysis” in the Company’s ~~2020~~2022 Proxy Statement to be filed with the SEC within 120 days after December 31, ~~2019~~2021 and is incorporated herein by reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The information called for by this item is set forth under the headings “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” and “Equity Compensation Plan Information” in the Company’s ~~2020~~2022 Proxy Statement to be filed with the SEC within 120 days after December 31, ~~2019~~2021 and is incorporated herein by reference.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

The information called for by this item is set forth under the headings “Certain Relationships and Related Transactions” and “Director Independence” in the Company’s ~~2020~~2022 Proxy Statement to be filed with the SEC within 120 days after December 31, ~~2019~~2021 and is incorporated herein by reference.

Item 14. Principal ~~Accounting~~Accountant Fees and Services.

The information called for by this item is set forth under the headings “Principal ~~Accounting~~Accountant Fees and Services” and “Audit Committee Pre-Approval Policy” in the Company’s ~~2020~~2022 Proxy Statement to be filed with the SEC within 120 days after December 31, ~~2019~~2021 and is incorporated herein by reference.

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Part IV

Item 15. Exhibits, Financial Statement Schedules.

(a)(1)The following financial statements are included in Part II, Item 8.


		Page
Reports of Independent Registered Public Accounting Firm (PCAOB ID 42 and 185)		5979
Consolidated Statements of Operations—Years ended December 31, ~~2019,~~2021, December 31, ~~2018,~~2020, and December 31, ~~201~~20197		6283
Consolidated Statements of Comprehensive Loss—Years ended December 31, ~~2019,~~2021, December 31, ~~2018,~~2020, and December 31, ~~201~~20197		6384
Consolidated Balance Sheets—December 31, ~~2019~~2021 and December 31, ~~201~~20208		6485
Consolidated Statements of Cash Flows—Years ended December 31, ~~2019,~~2021, December 31, ~~2018,~~2020, and December 31, ~~201~~20197		6586
Consolidated Statements of Stockholders’ ~~Equity—~~Equity (Deficit)—Years ended December 31, ~~2019,~~2021, December 31, ~~2018,~~2020, and December 31, ~~201~~20197		6788
Notes to Consolidated Financial Statements—Years ended December 31, ~~2019,~~2021, December 31, ~~2018,~~2020, and December 31, ~~201~~20197		6990

(a)(2)

Financial Statement Schedules—All schedules have been omitted because the necessary information is included in the Notes to the Consolidated Financial Statements.

(b)

Exhibits

The Company has attached or incorporated by reference herein certain exhibits as specified below.

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Table of Contents

~~HIDDEN_ROW~~

Exhibit Number		Description
~~2.1~~		Sale and Purchase Agreement dated as of January 20, 2017, by and among AMC Entertainment Holdings, Inc., Goldcup 14139 AB, European Cinemas S.à.r.l, Bonnier Holding AB, and certain Management Shareholders. (incorporated by reference from Exhibit 2.1 to the Company’s Current Report on Form 8-K (File No. 1-33892) filed on January 23, 2017).3.1

~~3.1~~		Third Amended and Restated Certificate of Incorporation of AMC Entertainment Holdings, Inc. (incorporated by reference from Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 1-33892) filed on December 23, 2013).

~~3.2~~3.1(a)		Certificate of Amendment to the Third Amended and Restated ~~Bylaws~~Certificate of Incorporation of AMC Entertainment Holdings, Inc., dated as of July 29, 2020 (incorporated by reference from Exhibit ~~3.2~~3.1 to ~~the Company’s Registration Statement~~AMC’s Current Report on Form ~~S-1~~8-K (File No. ~~333-190904)~~1-33892) filed on ~~November 22, 2013, as amended)~~July 31, 2020).

~~3.3~~3.1(b)		Certificate of Amendment to the Third Amended and Restated Certificate of Incorporation of AMC Entertainment Holdings, Inc. dated as of January 25, 2021 (incorporated by reference from Exhibit 3.1 to AMC’s Current Report on Form 8-K (File No. 1-33892) filed on January 25, 2021).

3.1(c)		Certificate of Retirement of 24,057,143 Shares of Class B Common Stock of AMC Entertainment Holdings, Inc., dated as of November 1, 2018 (incorporated by reference from Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q (File No. 1-33892) filed on November 8, 2018).

3.1(d)		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).

3.2		Third Amended and Restated Bylaws of AMC Entertainment Holdings, Inc. (incorporated by reference from Exhibit 3.2 to the Company’s Registration Statement on Form S-1 (File No. 333-190904) filed on November 22, 2013, as amended).

3.2(a)		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 July 31, 2020).

3.2(b)		Second Amendment to the Third Amended and Restated Bylaws of AMC Entertainment Holdings, Inc. (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).

3.2(c)		Third Amendment to the Third Amended and Restated Bylaws of AMC Entertainment Holdings, Inc. effective as of May 4, 2021 (incorporated by reference from Exhibit 3.1(d) to the Company’s Quarterly Report on Form 10-Q (File No. 1-33892) filed on May 6, 2021).

4.1(a)		Credit Agreement, dated April 30, 2013, by and among AMC Entertainment Inc., the lenders and the issuers party thereto, Citicorp North America, Inc., as agent, and the other agents and arrangers party thereto (incorporated by reference from Exhibit 10.1 to AMC’s Current Report on Form 8-K (File No. 1-8747) filed on May 3, 2013).

4.1(b)		Guaranty, dated as of April 30, 2013, by AMC Entertainment Inc. and each of the other Guarantors party thereto in favor of the Guaranteed Parties named therein (incorporated by reference from Exhibit 10.2 to AMC’s Current Report on Form 8-K (File No. 1-8747) filed on May 3, 2013).

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Exhibit Number		Description
4.1(c)		Pledge and Security Agreement, dated as of April 30, 2013, by AMC Entertainment Inc. and each of the other Grantors party thereto in favor of Citicorp North America, Inc., as agent for the Secured Parties (incorporated by reference from Exhibit 10.3 to AMC’s Current Report on Form 8-K (File No. 1-8747) filed on May 3, 2013).

4.1(d)		First Amendment to Credit Agreement, dated as of December 11, 2015, by and among AMC Entertainment Inc., as borrower, the other loan parties party thereto, the lenders party thereto and Citicorp North America, Inc., as administrative agent (incorporated by reference from Exhibit 4.1(d) to the Company’s Annual Report on Form 10-K (File No. 1-33892) filed on March 10, 2016).

4.1(e)		Second Amendment to Credit Agreement, dated as of November 8, 2016, by and among AMC Entertainment Holdings, Inc., as borrower, the other loan parties party thereto, the lenders party thereto and Citicorp North America, Inc., as administrative agent. (incorporated by reference from Exhibit 4.3 to the Company’s Current Report on Form 8-K (File No. 1-33892) filed on November 8, 2016).

~~4.2~~		Indenture, dated as of June 5, 2015, respecting AMC Entertainment Inc.’s 5.75% Senior Subordinated Notes due 2025, among AMC Entertainment Inc., the Guarantors named therein and U.S. Bank National Association, as trustee (incorporated by reference from Exhibit 4.1 to AMC’s Current Report on Form 8-K (File No. 1-8747) filed on June 5, 2015).4.1(f)

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Exhibit Number		~~Description~~
~~4.3~~		Second Supplemental Indenture, dated as of March 31, 2016, with respect to $600 million aggregate principal amount of 5.75% Senior Subordinated Notes due 2025, by and between AMC Entertainment Holdings, Inc., AMC Entertainment Inc., the guarantors party thereto and U.S. Bank National Association, as trustee. (incorporated by reference from Exhibit 4.1 to the Company's Current Report on Form 8-K (File No. 1-33892) filed on March 31, 2016).

~~4.4~~		Indenture, dated as of November 8, 2016, respecting AMC Entertainment Holdings, Inc.’s 5.875% Senior Subordinated Notes due 2026 and 6.375% Senior Subordinated Notes due 2024, among AMC Entertainment Holdings, Inc., the guarantors named therein and U.S. Bank National Association, as trustee. (incorporated by reference from Exhibit 4.1 to the Company’s Current Report on Form 8-K (File No. 1-33892) filed on November 8, 2016).

~~4.4(a)~~		Registration Rights Agreement, dated November 8, 2016, respecting AMC Entertainment Holdings, Inc.’s 5.875% Senior Subordinated Notes due 2026 and 6.375% Senior Subordinated Notes due 2024, among AMC Entertainment Holdings, Inc. and Citigroup Global Markets Inc., as representative of the initial purchasers of the 5.875% Senior Subordinated Notes due 2026 and 6.375% Senior Subordinated Notes due 2024. (incorporated by reference from Exhibit 4.2 to the Company’s Current Report on Form 8-K (File No. 1-33892) filed on November 8, 2016).

~~4.5~~		Indenture, dated as of March 17, 2017, respecting AMC Entertainment Holdings, Inc.’s 6.125% Senior Subordinated Notes due 2027, among AMC Entertainment Holdings, Inc., the guarantors named therein and U.S. Bank National Association, as trustee. (incorporated by reference from Exhibit 4.1 to the Company’s Form 8-K (File No. 1-33892) filed on March 17, 2017).

~~4.6~~		Registration Rights Agreement, dated March 17, 2017, respecting AMC Entertainment Holdings, Inc.’s 6.125% Senior Subordinated Notes due 2027 and 6.375% Senior Subordinated Notes due 2024, among AMC Entertainment Holdings, Inc. and Citigroup Global Markets Inc., as representative of the initial purchasers of the 6.125% Senior Subordinated Notes due 2027 and 6.375% Senior Subordinated Notes due 2024. (incorporated by reference from Exhibit 4.2 to the Company’s Form 8-K (File No. 1-33892) filed on March 17, 2017).

~~4.7~~		Indenture by and among AMC Entertainment Holdings, Inc., the guarantors party thereto and U.S. Bank National Association, as trustee, dated as of September 14, 2018 (incorporated by reference from Exhibit 4.1 to the Company’s Current Report on Form 8-K (File No. 1-33892) filed on September 20, 2018).

~~4.8~~		Third Amendment to Credit Agreement, dated as of May 9, 2017, by and among AMC Entertainment Holdings, Inc., as borrower, the other loan parties party thereto, the lenders party thereto and Citicorp North America, Inc., as administrative agent (incorporated by reference from Exhibit 4.1 to the Company's Current Report on Form 8-K (File No. 1-33892) filed on May 11, 2017).

~~4.9~~4.1(g)		Fourth Amendment to Credit Agreement, dated as of June 13, 2017, by and among AMC Entertainment Holdings, Inc., as borrower, the other loan parties party thereto, the lenders party thereto and Citicorp North America, Inc., as administrative agent (incorporated by reference from Exhibit ~~10.1~~4.1 to the Company's ~~Quarterly~~Current Report on Form ~~10-Q~~8-K (File No. 1-33892) filed on June 13, 2017).

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Exhibit Number		~~Description~~
~~4.10~~4.1(h)		Fifth Amendment to Credit Agreement, dated as of August 14, 2018, by and among AMC Entertainment Holdings, Inc., as borrower, the other loan parties party thereto, the lenders party thereto and Citicorp North America, Inc., as administrative agent (incorporated by reference from Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q (File No. 1-33892) filed on August 7, 2018).

~~4.11~~4.1(i)		Sixth Amendment to Credit Agreement, dated as of April 22, 2019, by and among AMC Entertainment Holdings, Inc., as borrower, the lenders party thereto and Citicorp North America, Inc., as administrative agent (incorporated by reference from Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 1-33892) filed on April 25, 2019).

4.1(j)		Seventh Amendment to Credit Agreement, dated as of April 23, 2020, by and among AMC Entertainment Holdings, Inc., as borrower, the other loan parties party thereto, the lenders party thereto and Citicorp North America, Inc., 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 24, 2020).

4.1(k)		Eighth Amendment to the Credit Agreement, dated as of July 31, 2020, by and among AMC Entertainment Holdings, Inc., as borrower, and Citigroup North America, Inc. as administrative agent (incorporated by reference from Exhibit 10.3 to AMC’s Current Report on Form 8-K (File No. 1-33892) filed on July 31, 2020).

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Exhibit Number		Description
4.1(l)		Ninth Amendment to the Credit Agreement, dated as of March 8, 2021, by and among AMC Entertainment Holdings, Inc., as borrower, the other loan parties party thereto, the lenders party thereto and 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 March 9, 2021).

4.1(m)		Tenth Amendment to Credit Agreement, dated as of March 8, 2021, by and among AMC Entertainment Holdings, Inc., as borrower, the other loan parties party thereto and the lenders 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).

4.1(n)		Eleventh Amendment to Credit Agreement, dated as of December 20, 2021, by and among AMC Entertainment Holdings, Inc., as borrower, the other loan parties party thereto, the lenders party thereto and 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 December 21, 2021).

4.2		Indenture, dated as of June 5, 2015, respecting AMC Entertainment Inc.’s 5.75% Senior Subordinated Notes due 2025, among AMC Entertainment Inc., the Guarantors named therein and U.S. Bank National Association, as trustee (incorporated by reference from Exhibit 4.1 to AMC’s Current Report on Form 8-K (File No. 1-8747) filed on June 5, 2015).

4.2(a)		Second Supplemental Indenture, dated as of March 31, 2016, with respect to $600 million aggregate principal amount of 5.75% Senior Subordinated Notes due 2025, by and between AMC Entertainment Holdings, Inc., AMC Entertainment Inc., the guarantors party thereto and U.S. Bank National Association, as trustee (incorporated by reference from Exhibit 4.1 to the Company's Current Report on Form 8-K (File No. 1-33892) filed on March 31, 2016).

4.2(b)		Fourth Supplemental Indenture respecting AMC Entertainment Holdings, Inc.’s 5.75% Senior Subordinated Notes due 2025, by and among AMC Entertainment Holdings, Inc. and U.S. Bank National Association, as trustee, dated as of July 27, 2020 (incorporated by reference from Exhibit 4.9 to AMC’s Current Report on Form 8-K (File No. 1-33892) filed on July 31, 2020).

4.3		Indenture, dated as of November 8, 2016, respecting AMC Entertainment Holdings, Inc.’s 5.875% Senior Subordinated Notes due 2026 and 6.375% Senior Subordinated Notes due 2024, among AMC Entertainment Holdings, Inc., the guarantors named therein and U.S. Bank National Association, as trustee (incorporated by reference from Exhibit 4.1 to the Company’s Current Report on Form 8-K (File No. 1-33892) filed on November 8, 2016).

4.3(a)		Second Supplemental Indenture respecting AMC Entertainment Holdings, Inc.’s 5.875% Senior Subordinated Notes due 2026 and 6.375% Senior Subordinated Notes due 2024, by and among AMC Entertainment Holdings, Inc. and U.S. Bank National Association, as trustee, dated as of July 27, 2020 (incorporated by reference from Exhibit 4.11 to AMC’s Current Report on Form 8-K (File No. 1-33892) filed on July 31, 2020).

4.4		Indenture, dated as of March 17, 2017, respecting AMC Entertainment Holdings, Inc.’s 6.125% Senior Subordinated Notes due 2027, among AMC Entertainment Holdings, Inc., the guarantors named therein and U.S. Bank National Association, as trustee (incorporated by reference from Exhibit 4.1 to the Company’s Current Report on Form 8-K (File No. 1-33892) filed on March 17, 2017).

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Exhibit Number		Description

4.4(a)		Second Supplemental Indenture respecting AMC Entertainment Holdings, Inc.’s 6.125% Senior Subordinated Notes due 2027, by and among AMC Entertainment Holdings, Inc. and U.S. Bank National Association, as trustee, dated as of July 27, 2020 (incorporated by reference from Exhibit 4.10 to AMC’s Current Report on Form 8-K (File No. 1-33892) filed on July 31, 2020).

*~~4.12~~4.5		Description of the registrant’s securities registered pursuant to Section 12 of the Securities Exchange Act of 1934.

***10.14.6		~~Management Stockholders Agreement of~~Indenture respecting AMC Entertainment Holdings, Inc.~~, dated August 30, 2012,~~’s 10%/12% Cash/PIK Toggle Second Lien Subordinated Secured Notes due 2026 by and among AMC Entertainment Holdings, Inc., ~~Dalian Wanda Group Co., Ltd.~~the guarantors party thereto and ~~the management stockholders~~GLAS Trust Company LLC, as trustee and collateral agent, dated as of ~~AMC Entertainment Holdings, Inc. party thereto~~July 31, 2020 (incorporated by reference from Exhibit ~~10.3~~4.1 to ~~the Company’s Registration Statement~~AMC’s Current Report on Form ~~S-1~~8-K (File No. ~~333-190904)~~1-33892) filed on ~~October 8, 2013, as amended)~~July 31, 2020).

***10.1(a)4.6(a)		~~Amendment No. 1 to the Management Stockholders Agreement~~Form of AMC Entertainment Holdings, Inc., dated December 17, 2013, by and among AMC Entertainment Holdings, Inc., Dalian Wanda Group Co., Ltd. and the management stockholders of AMC Entertainment Holdings, Inc. party thereto10%/12% Cash/PIK Toggle Second Lien Subordinated Secured Notes due 2026 (incorporated by reference from Exhibit ~~10.1(a)~~4.2 (and is included in Exhibit 4.1) to ~~the Company’s Annual~~AMC’s Current Report on Form ~~10-K~~8-K (File No. 1-33892) filed ~~March 10, 2015)~~on July 31, 2020).

4.7		First Lien/Second Lien Intercreditor Agreement, by and among AMC Entertainment Holdings, Inc., the guarantors party thereto and the Collateral Agents, dated as of July 31, 2020 (incorporated by reference from Exhibit 10.1 to AMC’s Current Report on Form 8-K (File No. 1-33892) filed to July 31, 2020).

4.8		Joinder No. 1 to First Lien Intercreditor Agreement, by and among AMC Entertainment Holdings, Inc., the guarantors party thereto, the First Lien Credit Facilities Collateral Agent, the Additional Silver Lake First Lien Notes Collateral Agent, the New First Lien Notes Collateral Agent and the Convertible First Lien Notes Collateral Agent, dated as of July 31, 2020 (incorporated by reference from Exhibit 10.2 to AMC’s Current Report on Form 8-K (File No. 1-33892) filed on July 31, 2020).

4.9		Term Loan Facility Agreement, dated as of 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).

4.10		Indenture, dated as of February 14, 2022, among AMC Entertainment Holdings, Inc., the guarantors therein and U.S. Bank Trust Company, National Association, as trustee and collateral agent, including the form of the 7.500% First Lien Notes due 2029 (incorporated by reference from Exhibit 4.1 to the Company’s Current Report on Form 8-K (File No. 1-33892) filed on February 14, 2022).

***~~10.2~~10.1		Defined Benefit Retirement Income Plan for Certain Employees of American Multi-Cinema, Inc., as Amended and Restated, effective December 31, 2006, and as Frozen, effective December 31, 2006 (incorporated by reference from Exhibit 10.15(a) to AMC’s Annual Report on Form 10-K (File No. 1-8747) filed June 18, 2007).

153

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Exhibit Number		Description
***~~10.2(a)~~10.2		American Multi-Cinema, Inc. Supplemental Executive Retirement Plan, as Amended and Restated, generally effective January 1, 2006, and as Frozen, effective December 31, 2006 (incorporated by reference from Exhibit 10.15(b) to AMC’s Annual Report on Form 10-K (File No. 1-8747) filed June 18, 2007).

***10.3		Employment Agreement between AMC Entertainment Inc., American Multi-Cinema, Inc. and John D. McDonald which commenced July 1, 2001 (incorporated by reference from Exhibit 10.29 to Amendment No. 1 to the AMC’s Annual Report on Form 10-K (File No. 1-8747) filed on July 27, 2001).

***10.4		Employment Agreement between AMC Entertainment Inc., American Multi-Cinema, Inc. and Craig R. Ramsey which commenced on July 1, 2001 (incorporated by reference from Exhibit 10.36 to AMC’s Quarterly Report on Form 10-Q (File No. 1-8747) filed on August 12, 2002).10.4

~~10.5~~		Amended and Restated Exhibitor Services Agreement dated as of February 13, 2007 and Amended and Restated as of December 26, 2013, by and between National CineMedia, LLC and American Multi-Cinema, Inc. (Portions omitted pursuant to request for confidential treatment and filed separately with the Commission.) (incorporated by reference from Exhibit 10.2.4 to National CineMedia, Inc.’s Annual Report on Form 10-K (File No. 1-33296) filed February 21, 2014).

~~153~~

~~Table of Contents~~

~~HIDDEN_ROW~~

Exhibit Number		~~Description~~

***~~10.6~~10.5		Employment Agreement, dated as of November 6, 2002, by and among Kevin M. Connor, AMC Entertainment Inc. and American Multi-Cinema, Inc. (incorporated by reference from Exhibit 10.49 to AMC’s Annual Report on Form 10-K (File No. 1-8747) filed on June 18, 2007).

***~~10.7~~10.6		Employment Agreement, dated as of November 24, 2009, by and between Stephen A. Colanero and AMC Entertainment Inc. (incorporated by reference from Exhibit 10.48 to AMC’s Annual Report on Form 10-K (File No. 1-8747) filed on June 3, 2011).

***~~10.8~~10.6(a)		First Amendment dated October 13, 2017, to the Employment Agreement ~~dated~~between AMC Entertainment Holdings, Inc. as ~~of July 1, 2001, by and between Mark A. McDonald and~~successor in interest to AMC Entertainment, Inc. and Stephen Colanero and amends the Employment Agreement between Company and Executive which commenced November 24, 2009 (incorporated by reference from Exhibit ~~10.48~~10.2 to ~~AMC’s Annual~~the Company's Quarterly Report on Form ~~10-K~~10-Q (File No. ~~1-8747)~~1-33892) filed on ~~June 18, 2008)~~November 9, 2017).

***~~10.9~~10.7		Employment Agreement, dated as of August 18, 2010, by and between Elizabeth Frank and AMC Entertainment Inc. (incorporated by reference from Exhibit 10.65 to AMC’s Form 10-KT (File No. 1-8747) filed on March 13, 2013).

~~10.10~~		Registration Rights Agreement dated December 23, 2013 by and among AMC Entertainment Holdings, Inc. and Dalian Wanda Group Co., LTD. (incorporated by reference from Exhibit 10.17 to the Company’s Annual Report on Form 10-K (File No. 1-33892) filed on March 10, 2015).

~~10.11~~		Form of Indemnification Agreement by and between AMC Entertainment Holdings, Inc. and its Directors and Executive Officers (incorporated by reference from Exhibit 10.26 to the Company’s Registration Statement on Form S-1 (File No. 333-190904) filed on November 22, 2013, as amended).

***~~10.12~~		Employment Agreement, dated as of December 14, 2015, by and among AMC Entertainment Holdings, Inc. and Adam M. Aron (incorporated by reference from Exhibit 10.1 to the Company’s Current Report Form 8-K (File No. 1-33892) filed on December 15, 2015).10.7(a)

~~10.13~~		Tax Payment Agreement dated October 15, 2013 among Wanda America Investment Holding Co. Ltd, AMC Entertainment Holdings, Inc. and American Multi-Cinema Inc. (incorporated by reference from Exhibit 10.33 to the Company’s Annual Report on Form 10-K (File No. 1-33892) filed on March 4, 2014).

***10.14	~~Form of Stock Award Agreement (incorporated by reference from Exhibit 10.29 to the Company’s Registration Statement on Form S-1 (File No. 333-190904) filed on November 27, 2013, as amended).~~

***10.15		AMC Entertainment Holdings, Inc. 2013 Equity Incentive Plan (incorporated by reference from Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q (File No. 1-33892) filed on November 7, 2014).

***10.15(a)		AMC Entertainment Holdings, Inc. Clarifying Amendment to 2013 Equity Incentive Plan (incorporated by reference from Exhibit 10.27(a) to the Company’s Annual Report on Form 10-K (File No. 1-33892) filed on March 10, 2015).

~~154~~

~~Table of Contents~~

~~HIDDEN_ROW~~

Exhibit Number		~~Description~~
***10.16		Restated American Multi-Cinema, Inc. Non-Qualified Deferred Compensation Plan dated September 29. 2016, by American Multi-Cinema, Inc. effective January 1, 2016. (incorporated by reference from Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q (File No. 1-33892) filed on November 9, 2016).

***10.17		Form of Restricted and/or Performance Stock Unit Award Notice and Agreement under the AMC Entertainment Holdings, Inc. 2013 Equity Incentive Plan.(incorporated by reference from Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q (File No. 1-33892) filed on May 8, 2017).

***10.18		First Amendment dated October 19, 2017, to the Employment Agreement between AMC Entertainment Holdings, Inc. as successor in interest to AMC Entertainment, Inc. and Elizabeth Frank and amends the Employment Agreement between Company and Executive which commenced August 18, 2010 (incorporated by reference from Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q (File No. 1-33892) filed on November 9, 2017).

***10.1910.8		~~First Amendment dated October 13, 2017, to the Employment~~Form of Indemnification Agreement by and between AMC Entertainment Holdings, Inc. ~~as successor in interest to AMC Entertainment, Inc.~~ and ~~Stephen Colanero and amends the Employment Agreement between Company~~its Directors and Executive ~~which commenced November 24, 2009.~~Officers (incorporated by reference from Exhibit ~~10.2~~10.26 to the ~~Company's Quarterly Report~~Company’s Registration Statement on Form ~~10-Q~~S-1 (File No. ~~1-33892)~~333-190904) filed on November ~~9, 2017)~~22, 2013, as amended).

***~~10.20~~10.9		Employment Agreement, dated as of December 14, 2015, by and among AMC Entertainment Holdings, Inc. and Adam M. Aron (incorporated by reference from Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 1-33892) filed on December 15, 2015).

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Exhibit Number		Description

***10.10		AMC Entertainment Holdings, Inc. ~~Annual~~2013 Equity Incentive ~~Compensation Program Continuing Structure, as modified by the Compensation Committee March 11, 2018~~Plan (incorporated by reference from Exhibit ~~10.1~~10.2 to the ~~Company's~~Company’s Quarterly Report on Form 10-Q (File No. 1-33892) filed on ~~May~~November 7, ~~2018)~~2014).

***~~10.21~~10.10(a)		AMC Entertainment Holdings, Inc. Clarifying Amendment to 2013 Equity Incentive Plan (incorporated by reference from Exhibit 10.27(a) to the Company’s Annual Report on Form 10-K (File No. 1-33892) filed on March 10, 2015).

***10.10(b)		Second Amendment to AMC Entertainment Holdings, Inc. 2013 Equity Incentive Plan, approved as of July 29, 2020 (incorporated by reference from Exhibit 10.1 to AMC’s Current Report on Form 8-K (File No. 1-33892) filed on July 31, 2020).

***10.10(c)		Third Amendment to the AMC Entertainment Holdings, Inc. 2013 Equity Incentive Plan, approved as of October 30, 2020 (incorporated by reference from Exhibit 10.10 to AMC’s Current Report on Form 10-Q (File No. 1-33892) filed on November 4, 2020).

***10.10(d)		Form of Stock Award Agreement (incorporated by reference from Exhibit 10.29 to the Company’s Registration Statement on Form S-1 (File No. 333-190904) filed on November 27, 2013, as amended).

***10.10(e)		Form of Director Stock Award Notice and Agreement under the AMC Entertainment Holdings, Inc. 2013 Equity Incentive Plan (incorporated by reference from Exhibit 10.3 to AMC’s Quarterly Report on Form 10-Q (File No. 1-33892) filed on June 9, 2020).

***10.10(f)		Form of Restricted and/or Performance Stock Unit Award Notice and Agreement under the AMC Entertainment Holdings, Inc. 2013 Equity Incentive Plan (incorporated by reference from Exhibit 10.4 to AMC’s Quarterly Report on Form 10-Q (File No. 1-33892) filed on June 9, 2020).

***10.10(g)		Form of First Modification to the AMC Entertainment Holdings, Inc. 2013 Equity Incentive Plan Special Performance Stock Unit Award Notice & Agreement Dated February 26, 2020, First Modification Effective October 30, 2020 (incorporated by reference from Exhibit 10.11 to AMC’s Quarterly Report on Form 10-Q (File No. 1-33892) filed on November 4, 2020).

***10.11		Restated American Multi-Cinema, Inc. Non-Qualified Deferred Compensation Plan dated September 29. 2016, by American Multi-Cinema, Inc. effective January 1, 2016. (incorporated by reference from Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q (File No. 1-33892) filed on November 9, 2016).

***10.11(a)		Amendment No. 1 to the American Multi-Cinema, Inc. Non-Qualified Deferred Compensation Plan effective May 1, 2018 (incorporated by reference from Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q (File No. 1-33892) filed on August 7, 2018).

~~10.22~~10.11(b)		~~Investment Agreement by and between AMC Entertainment Holdings,~~Termination Amendment to the American Multi-Cinema, Inc. ~~and Silver Lake Alpine, L.P., dated as of September 14, 2018~~Non-Qualified Deferred Compensation Plan, effective May 3, 2021 (incorporated by reference from Exhibit ~~10.1~~10.4 to the Company’s ~~Current~~Quarterly Report on Form ~~8-K~~10-Q (File No. 1-33892) filed on ~~September 20, 2018)~~May 6, 2021)..

~~10.23~~***10.12		~~Stock Repurchase and Cancellation~~Employment Agreement ~~by and~~ between AMC Entertainment Holdings, Inc. and ~~Wanda America Entertainment, Inc., dated as of September 14, 2018~~Sean D. Goodman executed on October 6, 2020 (incorporated by reference from Exhibit ~~10.2~~10.9 to ~~the Company’s Current Report on Form 8-K (File No. 1-33892) filed on September 20, 2018)~~.

~~10.24~~		Right of First Refusal Agreement by and among AMC Entertainment Holdings, Inc., Silver Lake Alpine, L.P. and Wanda America Entertainment, Inc., dated as of September 14, 2018 (incorporated by reference from Exhibit 10.3 to the Company’s Current Report on Form 8-K (File No. 1-33892) filed on September 20, 2018).

***10.25		AMC Entertainment Holdings, Inc. Non-Employee Director Compensation Program – Amended and Restated November 1, 2018, Effective January 1, 2019 (incorporated by reference from Exhibit 10.5 to the Company’sAMC’s Quarterly Report on Form 10-Q (File No. 1-33892) filed on November ~~8, 2018)~~4, 2020).

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Table of Contents

~~HIDDEN_ROW~~

Exhibit Number		Description

~~10.26~~*10.12(a)		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).

10.13		AMC Entertainment Holdings, Inc. Annual Incentive Compensation Program Continuing Structure, as amended and restated by the Compensation Committee February ~~19, 2020.~~23, 2021 (incorporated by reference from Exhibit 10.34 to AMC’s Annual Report on Form 10-K (File No. 1-33892) filed on March 12, 2021).

***10.14		AMC Entertainment Holdings, Inc. Non-Employee Director Compensation Program – Amended and Restated July 29, 2021 (incorporated by reference from Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q (File No. 1-33892) filed on August 9, 2021).

*10.15		AMC Entertainment Holdings, Inc. Annual Incentive Compensation Program Continuing Structure, as amended and restated by the Compensation Committee February 16, 2022.

*21		Subsidiaries of AMC Entertainment Holdings, Inc.

*23.1		Consent of ~~KPMG~~Ernst & Young LLP, Independent Registered Public Accounting ~~Firm~~.

*23.2		~~Consent of CohnReznick LLP as to Digital Cinema Implementation Partners, LLC’s financial statements.~~Firm.

*23.2		Consent of KPMG LLP, Independent Registered Public Accounting Firm.

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

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

*32.1		Section 906 Certifications of Adam M. Aron (Chief Executive Officer) and ~~Craig R. Ramsey~~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 in Exhibit 101).

~~156~~

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~~(c)~~

~~Separate Financial Statements of Subsidiaries Not Consolidated~~

~~The following financial statements of Digital Cinema Implementation Partners, LLC are as follows:~~


		~~Page~~
~~Independent Auditor's Report~~		~~134~~
Consolidated Balance Sheets December 31, 2019 and 2018		~~135~~
Consolidated Statements of Operations and Comprehensive Income Years Ended December 31, 2019, 2018 and 2017		~~136~~
Consolidated Statements of Members' Equity Years Ended December 31, 2019, 2018 and 2017		~~137~~
Consolidated Statements of Cash Flows Years Ended December 31, 2019, 2018 and 2017		~~138~~
~~Notes to Consolidated Financial Statements~~		~~139~~

* Filed herewith.

** Submitted electronically with this Report.

156

Table of Contents

*** Management contract, compensatory plan or arrangement.

Item 16. Form 10-K Summary.

~~None.~~None

157

Table of Contents

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

	By:	/s/ Chris A. Cox
		Chris A. Cox
		Senior Vice President and Chief Accounting Officer
	Date: ~~February 27, 2020~~March 1, 2022

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.


/s/ ~~LIN (LINCOLN) ZHANG~~
~~Lin (Lincoln) Zhang~~ADAM M. ARON	Chairman of the Board,
		~~February 27, 2020~~
~~/s/ ADAM M. ARON~~	Chief Executive Officer ~~Director~~ and President
Adam M. Aron	(principal executive officer)
		~~February 27, 2020~~March 1, 2022
/s/ ANTHONY J. SAICH
Anthony J. Saich	Director
		~~February 27, 2020~~March 1, 2022
/s/ LEE E. WITTLINGER
Lee E. Wittlinger	Director
		~~February 27, 2020~~
~~/s/ LLOYD HILL~~
~~Lloyd Hill~~	~~Director~~
		~~February 27, 2020~~March 1, 2022
/s/ KATHLEEN M. PAWLUS
Kathleen M. Pawlus	Director
		~~February 27, 2020~~March 1, 2022
/s/ HOWARD KOCH, JR.
Howard Koch, Jr.	Director
		~~February 27, 2020~~March 1, 2022
/s/ PHILIP LADER
Philip Lader	Director
		~~February 27, 2020~~March 1, 2022
/s/ ADAM J. SUSSMAN
Adam J. Sussman	Director
		~~February 27, 2020~~
~~/s/~~ ~~MAOJUN (JOHN) ZENG~~
~~Maojun (John) Zeng~~	~~Director~~
		~~February 27, 2020~~March 1, 2022
/s/ GARY F. LOCKE
Gary F. Locke	Director
		~~February 27, 2020~~March 1, 2022
/s/ ~~CRAIG R. RAMSEY~~SEAN D. GOODMAN	Executive Vice President, ~~and~~ Chief Financial
~~Craig R. Ramsey~~Sean D. Goodman	Officer and Treasurer (principal financial officer)
		~~February 27, 2020~~March 1, 2022
/s/ CHRIS A. COX	Senior Vice President and Chief Accounting
Chris A. Cox	Officer (principal accounting officer)
		~~February 27, 2020~~March 1, 2022

158

~~Table of Contents~~

~~159~~



(Mark One)
☒	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31 ~~2019~~, 2021
OR
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to


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)

⌧
Large accelerated filer ☐☒	Accelerated filer ☒☐	Non-accelerated filer ☐

Smaller reporting company ☐	Emerging Growth Company ☐


~~Name~~	~~Age~~	~~Position(s) Held~~157
~~Adam M. Aron~~

	●	the risks and uncertainties relating to the sufficiency of our existing cash and cash equivalents and available borrowing capacity to comply with minimum liquidity and financial requirements under our debt covenants related to borrowings pursuant to the Senior Secured Revolving Credit Facility and Odeon Term Loan Facility, fund operations, and satisfy obligations including cash outflows for deferred rent and planned capital expenditures currently and through the next twelve months. In order to achieve net positive operating cash flows and long-term profitability, the Company will need to continue to increase attendance levels significantly compared to 2021. Domestic industry box office grosses increased significantly to approximately $2.1 billion during the fourth quarter of calendar 2021 and were over 72% of domestic box office grosses of $2.9 billion during the fourth quarter of calendar 2019. We believe that the sequential increases in attendance experienced each quarter as 2021 progressed are positive signs of continued demand for the movie going experience. The Company believes the anticipated volume of titles available for theatrical release and the anticipated broad appeal of many of those titles will support increased attendance levels. However, there remain significant risks that may negatively impact attendance levels, including a resurgence of COVID-19 related restrictions, potential movie-goer reluctance to attend theatres due to concerns about the COVID-19 variant strains, movie studios release schedules and direct to streaming or other changing movie studio practices. If we are unable to achieve significantly increased levels of attendance and operating revenues, we may be required to obtain additional liquidity. If such additional liquidity were not realized or insufficient, we likely would seek an in-court or out-of-court restructuring of our liabilities, and in the event of such future liquidation or bankruptcy proceeding, holders of our Class A common stock (“Common Stock” or “Common Shares”) and other securities would likely suffer a total loss of their investment;	~~Chief Executive Officer, President and Director~~
~~Craig R. Ramsey~~		68		~~Executive Vice President and Chief Financial Officer~~
~~Sean D. Goodman~~		54		~~Executive Vice President, Finance~~
~~John D. McDonald~~		62		~~Executive Vice President, U.S. Operations~~
~~Elizabeth Frank~~		50		~~Executive Vice President, Worldwide Programming and Chief Content Officer~~
~~Mark A. McDonald~~		61		~~Executive Vice President, Global Development~~
~~Stephen A. Colanero~~		53		~~Executive Vice President and Chief Marketing Officer~~
~~Kevin M. Connor~~		57		~~Senior Vice President, General Counsel and Secretary~~
~~Chris A. Cox~~		54		~~Senior Vice President and Chief Accounting Officer~~
~~Carla C. Chavarria~~		54		~~Senior Vice President, and Chief Human Resources Officer~~
~~Daniel Ellis~~		51		~~Senior Vice President, Domestic Development~~


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


		Page
PART I
Item 1.	Business	45
Item 1A.	Risk Factors	1621
Item 1B.	Unresolved Staff Comments	2738
Item 2.	Properties	2738
Item 3.	Legal Proceedings	2738
Item 4.	Mine Safety Disclosures	2838
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	2939
Item 6.	~~Selected Financial Data~~[Reserved]	3242
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3442
Item 7A.	Quantitative and Qualitative Disclosures about Market Risk	5776
Item 8.	Financial Statements and Supplementary Data	5878
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	~~148~~147
Item 9A.	Controls and Procedures	~~148~~147
Item 9B.	Other Information	~~148~~147
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	147
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	~~149~~148
Item 11.	Executive Compensation	~~149~~148
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	~~149~~148
Item 13.	Certain Relationships and Related Transactions, and Director Independence	~~149~~148
Item 14.	Principal ~~Accounting~~Accountant Fees and Services	~~149~~148
PART IV
Item 15.	Exhibits, Financial Statement Schedules	~~150~~149
Item 16	Form 10-K Summary	157