NOTE 1\u2014BASIS OF PRESENTATION
AMC Entertainment Holdings, Inc. (\u201cHoldings\u201d), through its direct and indirect subsidiaries, including American Multi-Cinema, Inc. and its subsidiaries, (collectively with Holdings, unless the context otherwise requires, the \u201cCompany\u201d or \u201cAMC\u201d), is principally involved in the theatrical exhibition business and owns, operates, or has interests in theatres located in the United States and Europe. The condensed consolidated financial statements include the accounts of Holdings and all subsidiaries and should be read in conjunction with the Company\u2019s Annual Report on Form 10\u2013K for the year ended December 31, 2023. All significant intercompany balances and transactions have been eliminated in consolidation. The Company manages its business under two reportable segments for its theatrical exhibition operations, U.S. markets and International markets.
The accompanying condensed consolidated balance sheet as of December 31, 2023, which was derived from audited financial statements, and the unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and in accordance with the instructions to Form 10\u2013Q. Accordingly, they do not include all of the information and footnotes required by the accounting principles generally accepted in the United States of America for complete consolidated financial statements. In the opinion of management, these interim financial statements reflect all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the Company\u2019s financial position and results of operations. Due to the seasonal nature of the Company\u2019s business, results for the three months ended March 31, 2024, are not necessarily indicative of the results to be expected for the year ending December 31, 2023.
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Reverse Stock Split. On August 24, 2023, the Company effectuated a reverse stock split at a ratio of share of Class A common stock (\u201cCommon Stock\u201d) for every ten shares of Common Stock. As a result of the reverse stock split, each share of Series A Convertible Participating Preferred Stock became convertible into ten shares of Common Stock, and by extension each AMC Preferred Equity Unit became equivalent to -tenth (1/10th) of a share of Common Stock. The reverse stock split did not impact the number of AMC Preferred Equity Units outstanding. The Company concluded that this change in conversion ratio is analogous to a reverse stock split of the AMC Preferred Equity Units even though the reverse stock split did not have an effect on the number of AMC Preferred Equity Units outstanding.
Accordingly, all references made to share, per share, unit, per unit, or common share amounts in the accompanying condensed consolidated financial statements and applicable disclosures have been retroactively adjusted to reflect the reverse stock split. References made to AMC Preferred Equity Units have been retroactively adjusted to reflect the effect of the reverse stock split on their equivalent Common Stock shares. On August 25, 2023, all of the Company\u2019s outstanding AMC Preferred Equity Units converted into shares of Common Stock.
Liquidity. The Company believes its existing cash and cash equivalents, together with cash generated from operations, will be sufficient to fund its operations and satisfy its obligations currently and through the next twelve months. As of March 31, 2024, the Company was subject to a minimum liquidity requirement of $100.0 million as a condition to the financial covenant suspension period under the Credit Agreement. As of April 19, 2024, and in anticipation of the maturity of the Senior Secured Revolving Credit Facility, the Company voluntarily terminated the commitments under the Senior Secured Revolving Credit Facility in full and paid off any remaining obligations with respect to the Senior Secured Revolving Credit Facility. The financial covenants and related covenant suspension conditions are no longer in effect pursuant to the terms of the Credit Agreement. The termination of the Senior Secured Revolving Credit Facility does not otherwise affect the senior secured term loan facility under the Credit Agreement. The Company currently does not expect to replace the Senior Secured Revolving Credit Facility. As of March 31, 2024, the Company had $9.2 million of letters of credit outstanding under the Senior Secured Revolving Credit Facility. The Company has entered into a new letter of credit facility in order to continue to provide letters of credit in the ordinary course of business following the termination of the Senior Secured Revolving Credit Facility.
The Company\u2019s cash burn rates are not sustainable long-term. In order to achieve sustainable net positive operating cash flows and long-term profitability, the Company believes that operating revenues will need to increase to levels in line with pre-COVID-19 operating revenues. North American box office grosses were down approximately 32% for the three months ended March 31, 2024, compared to the three months ended March 31, 2019. Until such time as the Company is able to achieve sustainable net positive operating cash flow, it is difficult to estimate the Company\u2019s future cash burn rates and liquidity requirements. Depending on the Company\u2019s assumptions regarding the timing and ability to achieve increased levels of operating revenue, the estimates of amounts of required liquidity vary significantly.
There can be no assurance that the operating revenues, attendance levels, and other assumptions used to estimate the Company\u2019s liquidity requirements and future cash burn rates will be correct, and the ability to be predictive is uncertain due to limited ability to predict studio film release dates, the overall production and theatrical release levels, and success of individual titles. Additionally, the effects of labor stoppages, including but not limited to the Writers Guild of America strike and the Screen Actors Guild \u2013 American Federation of Television and Radio Artists strike that occurred during 2023 cannot be reasonably estimated and have had, and are expected to continue to have, a negative impact in 2024 on the film slate for exhibition, the Company\u2019s future liquidity and cash burn rates. Further, there can be no assurances that the Company will be successful in generating the additional liquidity necessary to meet the Company\u2019s obligations beyond twelve months from the issuance of these financial statements on terms acceptable to the Company or at all.
The Company expects, from time to time, to continue to seek to retire or purchase its outstanding debt through cash purchases and/or exchanges for equity or debt, in open-market purchases, privately negotiated transactions or otherwise. Such repurchases or exchanges, if any, will be upon such terms and at such prices as it may determine, and will depend on prevailing market conditions, its liquidity requirements, contractual restrictions and other factors. The amounts involved may be material and to the extent equity is used, dilutive.
During the three months ended March 31, 2024, the Company executed a debt for equity exchange transaction. This transaction was treated as an early extinguishment of the debt. In accordance with ASC 470-50-40-3 the reacquisition price of the extinguished debt was determined to be the fair value of the Common Stock exchanged. The below table summarizes the debt for equity exchange. See Note 6\u2014Corporate Borrowings and Finance Lease Liabilities and Note 7\u2014Stockholders\u2019 Deficit.
Shares of | ||||||||||||
Aggregate Principal | Common Stock | Gain on | Accrued Interest | |||||||||
(In millions, except for share data) | Exchanged | Exchanged | Extinguishment | Exchanged | ||||||||
Second Lien Notes due 2026 | $ | 17.5 | 2,541,250 | $ | 5.8 | $ | 0.1 |
Cash and Cash Equivalents. As of March 31, 2024, cash and cash equivalents for the U.S. markets and International markets were $511.0 million and $113.2 million respectively, and as of December 31, 2023, cash and cash equivalents were $752.3 million and $132.0 million, respectively.
Restricted Cash. Restricted cash includes cash held in the Company\u2019s bank accounts as a guarantee for certain landlords and cash collateralized letters of credit relating to the Company\u2019s insurance and utilities programs. The following table provides a reconciliation of cash and cash equivalents and restricted cash reported in the condensed consolidated balance sheets to the total of the amounts in the condensed consolidated statements of cash flows.
As of | ||||||
(In millions) | March\u00a031, 2024 | December\u00a031, 2023 | ||||
Cash and cash equivalents | $ | 624.2 | $ | 884.3 | ||
Restricted cash | 36.5 | 27.1 | ||||
Total cash and cash equivalents and restricted cash in the statement of cash flows | $ | 660.7 | $ | 911.4 |
As of March 31, 2024, restricted cash for the U.S. markets and International markets were $10.1 million and $26.4 million, respectively. As of December 31, 2023, restricted cash for the U.S. markets and International markets were $0 and $27.1 million, respectively.
Accumulated Other Comprehensive Loss. The following table presents the change in accumulated other comprehensive loss by component:
Foreign | |||||||||
(In millions) | \u00a0\u00a0\u00a0\u00a0 | Currency | \u00a0\u00a0\u00a0\u00a0 | Pension Benefits | \u00a0\u00a0\u00a0\u00a0 | Total | |||
Balance December\u00a031, 2023 | $ | (77.7) | $ | (0.5) | $ | (78.2) | |||
Other comprehensive loss | (35.8) | 0.4 | (35.4) | ||||||
Balance March\u00a031, 2024 | $ | (113.5) | $ | (0.1) | $ | (113.6) |
Accumulated Depreciation and Amortization. Accumulated depreciation was $3,152.4\u00a0million and $3,109.8\u00a0million as of March 31, 2024, and December\u00a031, 2023, respectively, related to property. Accumulated amortization of intangible assets was $7.5\u00a0million and $7.3\u00a0million as of March 31, 2024, and December\u00a031, 2023, respectively.
Other Expense (Income). The following table sets forth the components of other expense (income):
Three Months Ended | ||||||
(In millions) | March\u00a031, 2024 | March\u00a031, 2023 | ||||
Foreign currency transaction (gains) losses | $ | 3.2 | (8.7) | |||
Non-operating components of net periodic benefit cost | 0.7 | 0.4 | ||||
Gain on extinguishment - Senior Subordinated Notes due 2026 | \u2014 | (2.3) | ||||
Gain on extinguishment - Second Lien Notes due 2026 | (5.8) | (62.8) | ||||
Equity in earnings of non-consolidated entities | (3.7) | (1.4) | ||||
Derivative stockholder settlement | \u2014 | (14.0) | ||||
Shareholder litigation | \u2014 | 126.6 | ||||
Vendor dispute settlement | (36.2) | \u2014 | ||||
Other settlement proceeds | (1.0) | \u2014 | ||||
Total other expense (income) | $ | (42.8) | $ | 37.8 |
"}]},{"name":"rpt:f-265","factDimensions":{"xbrl:concept":"us-gaap:NumberOfReportableSegments","xbrl:period":"2024-01-01T00:00:00/2024-04-01T00:00:00","xbrl:entity":"cik:0001411579","xbrl:unit":"amch:segment"},"factValues":[{"value":"2"}]},{"name":"rpt:f-266","factDimensions":{"xbrl:concept":"us-gaap:StockholdersEquityPolicyTextBlock","xbrl:period":"2024-01-01T00:00:00/2024-04-01T00:00:00","xbrl:entity":"cik:0001411579"},"factValues":[{"value":"
Reverse Stock Split. On August 24, 2023, the Company effectuated a reverse stock split at a ratio of share of Class A common stock (\u201cCommon Stock\u201d) for every ten shares of Common Stock. As a result of the reverse stock split, each share of Series A Convertible Participating Preferred Stock became convertible into ten shares of Common Stock, and by extension each AMC Preferred Equity Unit became equivalent to -tenth (1/10th) of a share of Common Stock. The reverse stock split did not impact the number of AMC Preferred Equity Units outstanding. The Company concluded that this change in conversion ratio is analogous to a reverse stock split of the AMC Preferred Equity Units even though the reverse stock split did not have an effect on the number of AMC Preferred Equity Units outstanding.
Accordingly, all references made to share, per share, unit, per unit, or common share amounts in the accompanying condensed consolidated financial statements and applicable disclosures have been retroactively adjusted to reflect the reverse stock split. References made to AMC Preferred Equity Units have been retroactively adjusted to reflect the effect of the reverse stock split on their equivalent Common Stock shares. On August 25, 2023, all of the Company\u2019s outstanding AMC Preferred Equity Units converted into shares of Common Stock.
"}]},{"name":"rpt:f-267","factDimensions":{"xbrl:concept":"amch:LiquidityPolicyPolicyTextBlock","xbrl:period":"2024-01-01T00:00:00/2024-04-01T00:00:00","xbrl:entity":"cik:0001411579"},"factValues":[{"value":"Liquidity. The Company believes its existing cash and cash equivalents, together with cash generated from operations, will be sufficient to fund its operations and satisfy its obligations currently and through the next twelve months. As of March 31, 2024, the Company was subject to a minimum liquidity requirement of $100.0 million as a condition to the financial covenant suspension period under the Credit Agreement. As of April 19, 2024, and in anticipation of the maturity of the Senior Secured Revolving Credit Facility, the Company voluntarily terminated the commitments under the Senior Secured Revolving Credit Facility in full and paid off any remaining obligations with respect to the Senior Secured Revolving Credit Facility. The financial covenants and related covenant suspension conditions are no longer in effect pursuant to the terms of the Credit Agreement. The termination of the Senior Secured Revolving Credit Facility does not otherwise affect the senior secured term loan facility under the Credit Agreement. The Company currently does not expect to replace the Senior Secured Revolving Credit Facility. As of March 31, 2024, the Company had $9.2 million of letters of credit outstanding under the Senior Secured Revolving Credit Facility. The Company has entered into a new letter of credit facility in order to continue to provide letters of credit in the ordinary course of business following the termination of the Senior Secured Revolving Credit Facility.
The Company\u2019s cash burn rates are not sustainable long-term. In order to achieve sustainable net positive operating cash flows and long-term profitability, the Company believes that operating revenues will need to increase to levels in line with pre-COVID-19 operating revenues. North American box office grosses were down approximately 32% for the three months ended March 31, 2024, compared to the three months ended March 31, 2019. Until such time as the Company is able to achieve sustainable net positive operating cash flow, it is difficult to estimate the Company\u2019s future cash burn rates and liquidity requirements. Depending on the Company\u2019s assumptions regarding the timing and ability to achieve increased levels of operating revenue, the estimates of amounts of required liquidity vary significantly.
There can be no assurance that the operating revenues, attendance levels, and other assumptions used to estimate the Company\u2019s liquidity requirements and future cash burn rates will be correct, and the ability to be predictive is uncertain due to limited ability to predict studio film release dates, the overall production and theatrical release levels, and success of individual titles. Additionally, the effects of labor stoppages, including but not limited to the Writers Guild of America strike and the Screen Actors Guild \u2013 American Federation of Television and Radio Artists strike that occurred during 2023 cannot be reasonably estimated and have had, and are expected to continue to have, a negative impact in 2024 on the film slate for exhibition, the Company\u2019s future liquidity and cash burn rates. Further, there can be no assurances that the Company will be successful in generating the additional liquidity necessary to meet the Company\u2019s obligations beyond twelve months from the issuance of these financial statements on terms acceptable to the Company or at all.
The Company expects, from time to time, to continue to seek to retire or purchase its outstanding debt through cash purchases and/or exchanges for equity or debt, in open-market purchases, privately negotiated transactions or otherwise. Such repurchases or exchanges, if any, will be upon such terms and at such prices as it may determine, and will depend on prevailing market conditions, its liquidity requirements, contractual restrictions and other factors. The amounts involved may be material and to the extent equity is used, dilutive.
During the three months ended March 31, 2024, the Company executed a debt for equity exchange transaction. This transaction was treated as an early extinguishment of the debt. In accordance with ASC 470-50-40-3 the reacquisition price of the extinguished debt was determined to be the fair value of the Common Stock exchanged. The below table summarizes the debt for equity exchange. See Note 6\u2014Corporate Borrowings and Finance Lease Liabilities and Note 7\u2014Stockholders\u2019 Deficit.
Shares of | ||||||||||||
Aggregate Principal | Common Stock | Gain on | Accrued Interest | |||||||||
(In millions, except for share data) | Exchanged | Exchanged | Extinguishment | Exchanged | ||||||||
Second Lien Notes due 2026 | $ | 17.5 | 2,541,250 | $ | 5.8 | $ | 0.1 |
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Shares of | ||||||||||||
Aggregate Principal | Common Stock | Gain on | Accrued Interest | |||||||||
(In millions, except for share data) | Exchanged | Exchanged | Extinguishment | Exchanged | ||||||||
Second Lien Notes due 2026 | $ | 17.5 | 2,541,250 | $ | 5.8 | $ | 0.1 |
"}]},{"name":"rpt:f-272","factDimensions":{"xbrl:concept":"amch:DebtInstrumentAggregatePrincipalExchanged","xbrl:period":"2024-04-01T00:00:00","xbrl:entity":"cik:0001411579","xbrl:unit":"iso4217:USD","srt:StatementScenarioAxis":"amch:EquityDebtRepurchaseMember","us-gaap:DebtInstrumentAxis":"amch:SecondLienNotesDue2026Member"},"factValues":[{"value":"17500000","decimals":-5}]},{"name":"rpt:f-273","factDimensions":{"xbrl:concept":"amch:StockIssuedDuringPeriodSharesUponExchangeOfDebtForEquity","xbrl:period":"2024-01-01T00:00:00/2024-04-01T00:00:00","xbrl:entity":"cik:0001411579","xbrl:unit":"xbrla:shares","srt:StatementScenarioAxis":"amch:EquityDebtRepurchaseMember","us-gaap:DebtInstrumentAxis":"amch:SecondLienNotesDue2026Member"},"factValues":[{"value":"2541250"}]},{"name":"rpt:f-274","factDimensions":{"xbrl:concept":"us-gaap:GainsLossesOnExtinguishmentOfDebt","xbrl:period":"2024-01-01T00:00:00/2024-04-01T00:00:00","xbrl:entity":"cik:0001411579","xbrl:unit":"iso4217:USD","srt:StatementScenarioAxis":"amch:EquityDebtRepurchaseMember","us-gaap:DebtInstrumentAxis":"amch:SecondLienNotesDue2026Member"},"factValues":[{"value":"5800000","decimals":-5}]},{"name":"rpt:f-275","factDimensions":{"xbrl:concept":"amch:DebtInstrumentAccruedInterestExchanged","xbrl:period":"2024-01-01T00:00:00/2024-04-01T00:00:00","xbrl:entity":"cik:0001411579","xbrl:unit":"iso4217:USD","srt:StatementScenarioAxis":"amch:EquityDebtRepurchaseMember","us-gaap:DebtInstrumentAxis":"amch:SecondLienNotesDue2026Member"},"factValues":[{"value":"100000","decimals":-5}]},{"name":"rpt:f-276","factDimensions":{"xbrl:concept":"us-gaap:CashAndCashEquivalentsPolicyTextBlock","xbrl:period":"2024-01-01T00:00:00/2024-04-01T00:00:00","xbrl:entity":"cik:0001411579"},"factValues":[{"value":"
Cash and Cash Equivalents. As of March 31, 2024, cash and cash equivalents for the U.S. markets and International markets were $511.0 million and $113.2 million respectively, and as of December 31, 2023, cash and cash equivalents were $752.3 million and $132.0 million, respectively.
"}]},{"name":"rpt:f-277","factDimensions":{"xbrl:concept":"us-gaap:CashAndCashEquivalentsAtCarryingValue","xbrl:period":"2024-04-01T00:00:00","xbrl:entity":"cik:0001411579","xbrl:unit":"iso4217:USD","srt:StatementGeographicalAxis":"country:US"},"factValues":[{"value":"511000000.0","decimals":-5}]},{"name":"rpt:f-278","factDimensions":{"xbrl:concept":"us-gaap:CashAndCashEquivalentsAtCarryingValue","xbrl:period":"2024-04-01T00:00:00","xbrl:entity":"cik:0001411579","xbrl:unit":"iso4217:USD","srt:StatementGeographicalAxis":"amch:InternationalMarketsMember"},"factValues":[{"value":"113200000","decimals":-5}]},{"name":"rpt:f-279","factDimensions":{"xbrl:concept":"us-gaap:CashAndCashEquivalentsAtCarryingValue","xbrl:period":"2024-01-01T00:00:00","xbrl:entity":"cik:0001411579","xbrl:unit":"iso4217:USD","srt:StatementGeographicalAxis":"country:US"},"factValues":[{"value":"752300000","decimals":-5}]},{"name":"rpt:f-280","factDimensions":{"xbrl:concept":"us-gaap:CashAndCashEquivalentsAtCarryingValue","xbrl:period":"2024-01-01T00:00:00","xbrl:entity":"cik:0001411579","xbrl:unit":"iso4217:USD","srt:StatementGeographicalAxis":"amch:InternationalMarketsMember"},"factValues":[{"value":"132000000.0","decimals":-5}]},{"name":"rpt:f-281","factDimensions":{"xbrl:concept":"us-gaap:CashAndCashEquivalentsRestrictedCashAndCashEquivalentsPolicy","xbrl:period":"2024-01-01T00:00:00/2024-04-01T00:00:00","xbrl:entity":"cik:0001411579"},"factValues":[{"value":"Restricted Cash. Restricted cash includes cash held in the Company\u2019s bank accounts as a guarantee for certain landlords and cash collateralized letters of credit relating to the Company\u2019s insurance and utilities programs. The following table provides a reconciliation of cash and cash equivalents and restricted cash reported in the condensed consolidated balance sheets to the total of the amounts in the condensed consolidated statements of cash flows.
As of | ||||||
(In millions) | March\u00a031, 2024 | December\u00a031, 2023 | ||||
Cash and cash equivalents | $ | 624.2 | $ | 884.3 | ||
Restricted cash | 36.5 | 27.1 | ||||
Total cash and cash equivalents and restricted cash in the statement of cash flows | $ | 660.7 | $ | 911.4 |
As of | ||||||
(In millions) | March\u00a031, 2024 | December\u00a031, 2023 | ||||
Cash and cash equivalents | $ | 624.2 | $ | 884.3 | ||
Restricted cash | 36.5 | 27.1 | ||||
Total cash and cash equivalents and restricted cash in the statement of cash flows | $ | 660.7 | $ | 911.4 |
Accumulated Other Comprehensive Loss. The following table presents the change in accumulated other comprehensive loss by component:
Foreign | |||||||||
(In millions) | \u00a0\u00a0\u00a0\u00a0 | Currency | \u00a0\u00a0\u00a0\u00a0 | Pension Benefits | \u00a0\u00a0\u00a0\u00a0 | Total | |||
Balance December\u00a031, 2023 | $ | (77.7) | $ | (0.5) | $ | (78.2) | |||
Other comprehensive loss | (35.8) | 0.4 | (35.4) | ||||||
Balance March\u00a031, 2024 | $ | (113.5) | $ | (0.1) | $ | (113.6) |
Foreign | |||||||||
(In millions) | \u00a0\u00a0\u00a0\u00a0 | Currency | \u00a0\u00a0\u00a0\u00a0 | Pension Benefits | \u00a0\u00a0\u00a0\u00a0 | Total | |||
Balance December\u00a031, 2023 | $ | (77.7) | $ | (0.5) | $ | (78.2) | |||
Other comprehensive loss | (35.8) | 0.4 | (35.4) | ||||||
Balance March\u00a031, 2024 | $ | (113.5) | $ | (0.1) | $ | (113.6) |
Other Expense (Income). The following table sets forth the components of other expense (income):
Three Months Ended | ||||||
(In millions) | March\u00a031, 2024 | March\u00a031, 2023 | ||||
Foreign currency transaction (gains) losses | $ | 3.2 | (8.7) | |||
Non-operating components of net periodic benefit cost | 0.7 | 0.4 | ||||
Gain on extinguishment - Senior Subordinated Notes due 2026 | \u2014 | (2.3) | ||||
Gain on extinguishment - Second Lien Notes due 2026 | (5.8) | (62.8) | ||||
Equity in earnings of non-consolidated entities | (3.7) | (1.4) | ||||
Derivative stockholder settlement | \u2014 | (14.0) | ||||
Shareholder litigation | \u2014 | 126.6 | ||||
Vendor dispute settlement | (36.2) | \u2014 | ||||
Other settlement proceeds | (1.0) | \u2014 | ||||
Total other expense (income) | $ | (42.8) | $ | 37.8 |
"}]},{"name":"rpt:f-309","factDimensions":{"xbrl:concept":"us-gaap:ScheduleOfOtherNonoperatingExpenseByComponentTextBlock","xbrl:period":"2024-01-01T00:00:00/2024-04-01T00:00:00","xbrl:entity":"cik:0001411579"},"factValues":[{"value":"
Three Months Ended | ||||||
(In millions) | March\u00a031, 2024 | March\u00a031, 2023 | ||||
Foreign currency transaction (gains) losses | $ | 3.2 | (8.7) | |||
Non-operating components of net periodic benefit cost | 0.7 | 0.4 | ||||
Gain on extinguishment - Senior Subordinated Notes due 2026 | \u2014 | (2.3) | ||||
Gain on extinguishment - Second Lien Notes due 2026 | (5.8) | (62.8) | ||||
Equity in earnings of non-consolidated entities | (3.7) | (1.4) | ||||
Derivative stockholder settlement | \u2014 | (14.0) | ||||
Shareholder litigation | \u2014 | 126.6 | ||||
Vendor dispute settlement | (36.2) | \u2014 | ||||
Other settlement proceeds | (1.0) | \u2014 | ||||
Total other expense (income) | $ | (42.8) | $ | 37.8 |
"}]},{"name":"rpt:f-310","factDimensions":{"xbrl:concept":"us-gaap:ForeignCurrencyTransactionGainLossRealized","xbrl:period":"2024-01-01T00:00:00/2024-04-01T00:00:00","xbrl:entity":"cik:0001411579","xbrl:unit":"iso4217:USD","us-gaap:IncomeStatementLocationAxis":"us-gaap:OtherExpenseMember"},"factValues":[{"value":"-3200000","decimals":-5}]},{"name":"rpt:f-311","factDimensions":{"xbrl:concept":"us-gaap:ForeignCurrencyTransactionGainLossRealized","xbrl:period":"2023-01-01T00:00:00/2023-04-01T00:00:00","xbrl:entity":"cik:0001411579","xbrl:unit":"iso4217:USD","us-gaap:IncomeStatementLocationAxis":"us-gaap:OtherExpenseMember"},"factValues":[{"value":"8700000","decimals":-5}]},{"name":"rpt:f-312","factDimensions":{"xbrl:concept":"amch:NetPeriodicBenefitCostCredit","xbrl:period":"2024-01-01T00:00:00/2024-04-01T00:00:00","xbrl:entity":"cik:0001411579","xbrl:unit":"iso4217:USD","us-gaap:IncomeStatementLocationAxis":"us-gaap:OtherExpenseMember"},"factValues":[{"value":"700000","decimals":-5}]},{"name":"rpt:f-313","factDimensions":{"xbrl:concept":"amch:NetPeriodicBenefitCostCredit","xbrl:period":"2023-01-01T00:00:00/2023-04-01T00:00:00","xbrl:entity":"cik:0001411579","xbrl:unit":"iso4217:USD","us-gaap:IncomeStatementLocationAxis":"us-gaap:OtherExpenseMember"},"factValues":[{"value":"400000","decimals":-5}]},{"name":"rpt:f-314","factDimensions":{"xbrl:concept":"us-gaap:GainsLossesOnExtinguishmentOfDebt","xbrl:period":"2023-01-01T00:00:00/2023-04-01T00:00:00","xbrl:entity":"cik:0001411579","xbrl:unit":"iso4217:USD","us-gaap:DebtInstrumentAxis":"amch:SeniorSubordinatedNotesDue2026Member","us-gaap:IncomeStatementLocationAxis":"us-gaap:OtherExpenseMember"},"factValues":[{"value":"2300000","decimals":-5}]},{"name":"rpt:f-315","factDimensions":{"xbrl:concept":"us-gaap:GainsLossesOnExtinguishmentOfDebt","xbrl:period":"2024-01-01T00:00:00/2024-04-01T00:00:00","xbrl:entity":"cik:0001411579","xbrl:unit":"iso4217:USD","us-gaap:DebtInstrumentAxis":"amch:SecondLienNotesDue2026Member","us-gaap:IncomeStatementLocationAxis":"us-gaap:OtherExpenseMember"},"factValues":[{"value":"5800000","decimals":-5}]},{"name":"rpt:f-316","factDimensions":{"xbrl:concept":"us-gaap:GainsLossesOnExtinguishmentOfDebt","xbrl:period":"2023-01-01T00:00:00/2023-04-01T00:00:00","xbrl:entity":"cik:0001411579","xbrl:unit":"iso4217:USD","us-gaap:DebtInstrumentAxis":"amch:SecondLienNotesDue2026Member","us-gaap:IncomeStatementLocationAxis":"us-gaap:OtherExpenseMember"},"factValues":[{"value":"62800000","decimals":-5}]},{"name":"rpt:f-317","factDimensions":{"xbrl:concept":"us-gaap:IncomeLossFromEquityMethodInvestments","xbrl:period":"2024-01-01T00:00:00/2024-04-01T00:00:00","xbrl:entity":"cik:0001411579","xbrl:unit":"iso4217:USD","us-gaap:IncomeStatementLocationAxis":"us-gaap:OtherExpenseMember"},"factValues":[{"value":"3700000","decimals":-5}]},{"name":"rpt:f-318","factDimensions":{"xbrl:concept":"us-gaap:IncomeLossFromEquityMethodInvestments","xbrl:period":"2023-01-01T00:00:00/2023-04-01T00:00:00","xbrl:entity":"cik:0001411579","xbrl:unit":"iso4217:USD","us-gaap:IncomeStatementLocationAxis":"us-gaap:OtherExpenseMember"},"factValues":[{"value":"1400000","decimals":-5}]},{"name":"rpt:f-319","factDimensions":{"xbrl:concept":"us-gaap:GainLossRelatedToLitigationSettlement","xbrl:period":"2023-01-01T00:00:00/2023-04-01T00:00:00","xbrl:entity":"cik:0001411579","xbrl:unit":"iso4217:USD","us-gaap:IncomeStatementLocationAxis":"us-gaap:OtherExpenseMember"},"factValues":[{"value":"14000000.0","decimals":-5}]},{"name":"rpt:f-320","factDimensions":{"xbrl:concept":"us-gaap:LossContingencyAccrualProvision","xbrl:period":"2023-01-01T00:00:00/2023-04-01T00:00:00","xbrl:entity":"cik:0001411579","xbrl:unit":"iso4217:USD","us-gaap:IncomeStatementLocationAxis":"us-gaap:OtherExpenseMember"},"factValues":[{"value":"126600000","decimals":-5}]},{"name":"rpt:f-321","factDimensions":{"xbrl:concept":"us-gaap:LitigationSettlementAmountAwardedFromOtherParty","xbrl:period":"2024-01-01T00:00:00/2024-04-01T00:00:00","xbrl:entity":"cik:0001411579","xbrl:unit":"iso4217:USD","us-gaap:IncomeStatementLocationAxis":"us-gaap:OtherExpenseMember"},"factValues":[{"value":"36200000","decimals":-5}]},{"name":"rpt:f-322","factDimensions":{"xbrl:concept":"amch:ProceedsFromOtherSettlement","xbrl:period":"2024-01-01T00:00:00/2024-04-01T00:00:00","xbrl:entity":"cik:0001411579","xbrl:unit":"iso4217:USD","us-gaap:IncomeStatementLocationAxis":"us-gaap:OtherExpenseMember"},"factValues":[{"value":"1000000.0","decimals":-5}]},{"name":"rpt:f-323","factDimensions":{"xbrl:concept":"us-gaap:OtherNonoperatingIncomeExpense","xbrl:period":"2024-01-01T00:00:00/2024-04-01T00:00:00","xbrl:entity":"cik:0001411579","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"42800000","decimals":-5}]},{"name":"rpt:f-324","factDimensions":{"xbrl:concept":"us-gaap:OtherNonoperatingIncomeExpense","xbrl:period":"2023-01-01T00:00:00/2023-04-01T00:00:00","xbrl:entity":"cik:0001411579","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"-37800000","decimals":-5}]},{"name":"rpt:f-325","factDimensions":{"xbrl:concept":"amch:LeaseDisclosureTextBlock","xbrl:period":"2024-01-01T00:00:00/2024-04-01T00:00:00","xbrl:entity":"cik:0001411579"},"factValues":[{"value":"
NOTE 2\u2014LEASES
The Company leases theatres and equipment under operating and finance leases. The Company typically does not believe that exercise of the renewal options is reasonably certain at the lease commencement and, therefore, considers the initial base term as the lease term. Lease terms vary but generally the leases provide for fixed and escalating rentals, contingent escalating rentals based on the Consumer Price Index or other indexes not to exceed certain specified amounts and variable rentals based on a percentage of revenues. The Company often receives contributions from landlords for renovations at existing locations. The Company records the amounts received from landlords as an adjustment to the right-of-use asset and amortizes the balance as a reduction to rent expense over the base term of the lease agreement. Equipment leases primarily consist of sight and sound and food and beverage equipment.
The following table reflects the lease costs for the periods presented:
Three Months Ended | ||||||||
March\u00a031, | March\u00a031, | |||||||
(In millions) | Consolidated Statements of Operations | 2024 | 2023 | |||||
Operating lease cost | ||||||||
Theatre properties | Rent | $ | 197.7 | $ | 184.2 | |||
Theatre properties | Operating expense | 0.2 | 0.3 | |||||
Equipment | Operating expense | 6.7 | 3.1 | |||||
Office and other | General and administrative: other | 1.3 | 1.3 | |||||
Finance lease cost | ||||||||
Amortization of finance lease assets | Depreciation and amortization | 0.5 | 0.5 | |||||
Interest expense on lease liabilities | Finance lease obligations | 0.9 | 0.9 | |||||
Variable lease cost | ||||||||
Theatre properties | Rent | 26.8 | 21.5 | |||||
Equipment | Operating expense | 13.4 | 13.3 | |||||
Total lease cost | $ | 247.5 | $ | 225.1 |
Cash flow and supplemental information is presented below:
Three Months Ended | ||||||
March\u00a031, | March\u00a031, | |||||
(In millions) | 2024 | 2023 | ||||
Cash paid for amounts included in the measurement of lease liabilities: | ||||||
Operating cash flows used in finance leases | $ | (0.9) | $ | (0.8) | ||
Operating cash flows used in operating leases | (234.4) | (242.8) | ||||
Financing cash flows used in finance leases | (1.2) | (1.6) | ||||
Landlord contributions: | ||||||
Operating cashflows provided by operating leases | 4.6 | 6.4 | ||||
Supplemental disclosure of noncash leasing activities: | ||||||
Right-of-use assets obtained in exchange for new operating lease liabilities (1) | 32.8 | 16.0 |
| (1) | Includes lease extensions and option exercises. |
The following table represents the weighted-average remaining lease term and discount rate as of March 31, 2024:
Weighted Average | Weighted Average | |||||
Remaining | Discount | |||||
Lease Term and Discount Rate | Lease Term (years) | Rate | ||||
Operating leases | 8.6 | 10.6% | ||||
Finance leases | 13.2 | 6.4% |
Minimum annual payments and the net present value thereof as of March 31, 2024, are as follows:
Operating Lease | Finance Lease | |||||
(In millions) | Payments | Payments | ||||
Nine months ending December 31, 2024 | $ | 686.9 | $ | 6.2 | ||
2025 | 889.4 | 7.6 | ||||
2026 | 826.4 | 7.5 | ||||
2027 | 761.6 | 7.5 | ||||
2028 | 675.8 | 7.1 | ||||
2029 | 575.9 | 7.1 | ||||
Thereafter | 2,219.9 | 38.4 | ||||
Total lease payments | 6,635.9 | 81.4 | ||||
Less imputed interest | (2,242.0) | (28.2) | ||||
Total operating and finance lease liabilities, respectively | $ | 4,393.9 | $ | 53.2 |
As of March 31, 2024, the Company had signed additional operating lease agreements for two theatres that have not yet commenced. These leases have terms ranging from 15 to 20 years and total lease payments of approximately $59.5 million. The timing of the lease commencement is dependent on the landlord providing the Company with control and access to the related facility.
During the three months ended March 31, 2023, the Company received a $13.0 million buyout incentive from a landlord which provided the landlord the right to terminate the lease of one theatre. The incentive was treated as a reduction to rent expense in the Company\u2019s condensed consolidated statement of operations.
"}]},{"name":"rpt:f-326","factDimensions":{"xbrl:concept":"us-gaap:LeaseCostTableTextBlock","xbrl:period":"2024-01-01T00:00:00/2024-04-01T00:00:00","xbrl:entity":"cik:0001411579"},"factValues":[{"value":"
Three Months Ended | ||||||||
March\u00a031, | March\u00a031, | |||||||
(In millions) | Consolidated Statements of Operations | 2024 | 2023 | |||||
Operating lease cost | ||||||||
Theatre properties | Rent | $ | 197.7 | $ | 184.2 | |||
Theatre properties | Operating expense | 0.2 | 0.3 | |||||
Equipment | Operating expense | 6.7 | 3.1 | |||||
Office and other | General and administrative: other | 1.3 | 1.3 | |||||
Finance lease cost | ||||||||
Amortization of finance lease assets | Depreciation and amortization | 0.5 | 0.5 | |||||
Interest expense on lease liabilities | Finance lease obligations | 0.9 | 0.9 | |||||
Variable lease cost | ||||||||
Theatre properties | Rent | 26.8 | 21.5 | |||||
Equipment | Operating expense | 13.4 | 13.3 | |||||
Total lease cost | $ | 247.5 | $ | 225.1 |
Three Months Ended | ||||||
March\u00a031, | March\u00a031, | |||||
(In millions) | 2024 | 2023 | ||||
Cash paid for amounts included in the measurement of lease liabilities: | ||||||
Operating cash flows used in finance leases | $ | (0.9) | $ | (0.8) | ||
Operating cash flows used in operating leases | (234.4) | (242.8) | ||||
Financing cash flows used in finance leases | (1.2) | (1.6) | ||||
Landlord contributions: | ||||||
Operating cashflows provided by operating leases | 4.6 | 6.4 | ||||
Supplemental disclosure of noncash leasing activities: | ||||||
Right-of-use assets obtained in exchange for new operating lease liabilities (1) | 32.8 | 16.0 |
| (1) | Includes lease extensions and option exercises. |
Weighted Average | Weighted Average | |||||
Remaining | Discount | |||||
Lease Term and Discount Rate | Lease Term (years) | Rate | ||||
Operating leases | 8.6 | 10.6% | ||||
Finance leases | 13.2 | 6.4% |
Operating Lease | Finance Lease | |||||
(In millions) | Payments | Payments | ||||
Nine months ending December 31, 2024 | $ | 686.9 | $ | 6.2 | ||
2025 | 889.4 | 7.6 | ||||
2026 | 826.4 | 7.5 | ||||
2027 | 761.6 | 7.5 | ||||
2028 | 675.8 | 7.1 | ||||
2029 | 575.9 | 7.1 | ||||
Thereafter | 2,219.9 | 38.4 | ||||
Total lease payments | 6,635.9 | 81.4 | ||||
Less imputed interest | (2,242.0) | (28.2) | ||||
Total operating and finance lease liabilities, respectively | $ | 4,393.9 | $ | 53.2 |
NOTE 3\u2014REVENUE RECOGNITION
Disaggregation of Revenue. Revenue is disaggregated in the following tables by major revenue types and by timing of revenue recognition:
Three Months Ended | ||||||
(In millions) | March\u00a031, 2024 | March\u00a031, 2023 | ||||
Major revenue types | ||||||
Admissions | $ | 530.5 | $ | 534.1 | ||
Food and beverage | 321.2 | 328.7 | ||||
Other theatre: | ||||||
Screen advertising | 30.3 | 30.9 | ||||
Other | 69.4 | 60.7 | ||||
Other theatre | 99.7 | 91.6 | ||||
Total revenues | $ | 951.4 | $ | 954.4 |
Three Months Ended | ||||||
(In millions) | March\u00a031,\u00a02024 | March\u00a031,\u00a02023 | ||||
Timing of revenue recognition | ||||||
Products and services transferred at a point in time | $ | 858.5 | $ | 871.8 | ||
Products and services transferred over time (1) | 92.9 | 82.6 | ||||
Total revenues | $ | 951.4 | $ | 954.4 |
| (1) | Amounts primarily include subscription and advertising revenues. |
The following tables provide the balances of receivables, net and deferred revenues and income as of March 31, 2024, and December 31, 2023:
(In millions) | March\u00a031,\u00a02024 | December 31, 2023 | ||||
Current assets | ||||||
Receivables related to contracts with customers | $ | 72.0 | $ | 113.5 | ||
Miscellaneous receivables | 68.4 | 90.2 | ||||
Receivables, net | $ | 140.4 | $ | 203.7 |
(In millions) | March\u00a031,\u00a02024 | December 31, 2023 | ||||
Current liabilities | ||||||
Deferred revenues related to contracts with customers | $ | 388.0 | $ | 415.3 | ||
Miscellaneous deferred income | 6.2 | 6.5 | ||||
Deferred revenues and income | $ | 394.2 | $ | 421.8 |
The significant changes in contract liabilities with customers included in deferred revenues and income are as follows:
Deferred Revenues | |||
Related to Contracts | |||
(In millions) | with Customers | ||
Balance December 31, 2023 | $ | 415.3 | |
Cash received in advance (1) | 66.3 | ||
Customer loyalty rewards accumulated, net of expirations: | |||
Admission revenues (2) | 4.5 | ||
Food and beverage (2) | 7.2 | ||
Other theatre (2) | (0.5) | ||
Reclassification to revenue as the result of performance obligations satisfied: | |||
Admission revenues (3) | (61.2) | ||
Food and beverage (3) | (19.0) | ||
Other theatre (4) | (22.3) | ||
Foreign currency translation adjustment | (2.3) | ||
Balance March 31, 2024 | $ | 388.0 |
\u200b
| (1) | Includes movie tickets, food and beverage, gift cards, exchange tickets, subscription membership fees, and other loyalty membership fees. |
| (2) | Amount of rewards accumulated, net of expirations, that are attributed to loyalty programs. |
| (3) | Amount of rewards redeemed that are attributed to gift cards, exchange tickets, movie tickets, and loyalty programs. |
| (4) | Amounts relate to income from non-redeemed or partially redeemed gift cards, non-redeemed exchange tickets, subscription membership fees, and loyalty program membership fees. |
The significant changes to contract liabilities included in the exhibitor services agreement in the condensed consolidated balance sheets, are as follows:
Exhibitor Services | |||
(In millions) | Agreement (1) | ||
Balance December 31, 2023 | $ | 486.6 | |
Reclassification of the beginning balance to other theatre revenue, as the result of performance obligations satisfied | (5.5) | ||
Balance March 31, 2024 | $ | 481.1 |
| (1) | Represents the carrying amount of the National CineMedia, LLC (\u201cNCM\u201d) common units that were previously received under the annual Common Unit Adjustment (\u201cCUA\u201d) and subsequent adjustments related to the NCM bankruptcy, as discussed in greater detail below. The deferred revenues are being amortized to other theatre revenues over the remainder of the 30-year term of the Exhibitor Service Agreement (\u201cESA\u201d) ending in February\u00a02037. |
NCM Bankruptcy. On April 11, 2023, NCM filed a petition under Chapter 11 of the U.S. Bankruptcy Code in the Southern District of Texas. NCM is the in-theatre advertising provider for the majority of the Company\u2019s theatres in the United States. Under the Chapter 11 plan of reorganization, which became effective on August 7, 2023 (the \u201cPlan\u201d), NCM has assumed its agreements with the Company. As part of the Plan, on August 7, 2023, NCM issued 16,581,829 common units (\u201cNCM Common Units\u201d) that were owed to the Company as part of the annual common unit adjustment. But under the terms of the Plan and the restructuring of the equity of NCM thereunder, the NCM Common Units were immediately cancelled upon the efficacy of the Plan. The Company has filed appeals with the United States District Court for the Southern District of Texas, objecting to, among other things, certain terms of the Plan, including modification of the terms of the exhibitor services agreement with other parties that were not granted to the Company and appeal of the court\u2019s order to approve cancellation of the NCM Common Unit issuance. The Company does not expect its bankruptcy to have a material impact on the Company.
Gift Cards and Exchange Tickets. The total amount of non-redeemed gift cards and exchange tickets included in deferred revenues and income in the condensed consolidated balance sheet as of March 31, 2024 was $299.4\u00a0million. 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 March 31, 2024, the amount of deferred revenues allocated to the loyalty programs included in deferred revenues and income in the condensed consolidated balance sheet was $73.3\u00a0million. The earned points will be recognized as revenue as the points are redeemed, which is estimated to occur over the next 24 months. Subscription membership fees and loyalty membership fees are recognized ratably over their respective membership periods.
The Company applies the practical expedient in ASC\u00a0606-10-50-14 and does not disclose information about remaining performance obligations that have original expected durations of one year or less.
"}]},{"name":"rpt:f-389","factDimensions":{"xbrl:concept":"us-gaap:DisaggregationOfRevenueTableTextBlock","xbrl:period":"2024-01-01T00:00:00/2024-04-01T00:00:00","xbrl:entity":"cik:0001411579"},"factValues":[{"value":"Three Months Ended | ||||||
(In millions) | March\u00a031, 2024 | March\u00a031, 2023 | ||||
Major revenue types | ||||||
Admissions | $ | 530.5 | $ | 534.1 | ||
Food and beverage | 321.2 | 328.7 | ||||
Other theatre: | ||||||
Screen advertising | 30.3 | 30.9 | ||||
Other | 69.4 | 60.7 | ||||
Other theatre | 99.7 | 91.6 | ||||
Total revenues | $ | 951.4 | $ | 954.4 |
Three Months Ended | ||||||
(In millions) | March\u00a031,\u00a02024 | March\u00a031,\u00a02023 | ||||
Timing of revenue recognition | ||||||
Products and services transferred at a point in time | $ | 858.5 | $ | 871.8 | ||
Products and services transferred over time (1) | 92.9 | 82.6 | ||||
Total revenues | $ | 951.4 | $ | 954.4 |
| (1) | Amounts primarily include subscription and advertising revenues. |
(In millions) | March\u00a031,\u00a02024 | December 31, 2023 | ||||
Current assets | ||||||
Receivables related to contracts with customers | $ | 72.0 | $ | 113.5 | ||
Miscellaneous receivables | 68.4 | 90.2 | ||||
Receivables, net | $ | 140.4 | $ | 203.7 |
(In millions) | March\u00a031,\u00a02024 | December 31, 2023 | ||||
Current liabilities | ||||||
Deferred revenues related to contracts with customers | $ | 388.0 | $ | 415.3 | ||
Miscellaneous deferred income | 6.2 | 6.5 | ||||
Deferred revenues and income | $ | 394.2 | $ | 421.8 |
Deferred Revenues | |||
Related to Contracts | |||
(In millions) | with Customers | ||
Balance December 31, 2023 | $ | 415.3 | |
Cash received in advance (1) | 66.3 | ||
Customer loyalty rewards accumulated, net of expirations: | |||
Admission revenues (2) | 4.5 | ||
Food and beverage (2) | 7.2 | ||
Other theatre (2) | (0.5) | ||
Reclassification to revenue as the result of performance obligations satisfied: | |||
Admission revenues (3) | (61.2) | ||
Food and beverage (3) | (19.0) | ||
Other theatre (4) | (22.3) | ||
Foreign currency translation adjustment | (2.3) | ||
Balance March 31, 2024 | $ | 388.0 |
\u200b
| (1) | Includes movie tickets, food and beverage, gift cards, exchange tickets, subscription membership fees, and other loyalty membership fees. |
| (2) | Amount of rewards accumulated, net of expirations, that are attributed to loyalty programs. |
| (3) | Amount of rewards redeemed that are attributed to gift cards, exchange tickets, movie tickets, and loyalty programs. |
| (4) | Amounts relate to income from non-redeemed or partially redeemed gift cards, non-redeemed exchange tickets, subscription membership fees, and loyalty program membership fees. |
Exhibitor Services | |||
(In millions) | Agreement (1) | ||
Balance December 31, 2023 | $ | 486.6 | |
Reclassification of the beginning balance to other theatre revenue, as the result of performance obligations satisfied | (5.5) | ||
Balance March 31, 2024 | $ | 481.1 |
| (1) | Represents the carrying amount of the National CineMedia, LLC (\u201cNCM\u201d) common units that were previously received under the annual Common Unit Adjustment (\u201cCUA\u201d) and subsequent adjustments related to the NCM bankruptcy, as discussed in greater detail below. The deferred revenues are being amortized to other theatre revenues over the remainder of the 30-year term of the Exhibitor Service Agreement (\u201cESA\u201d) ending in February\u00a02037. |
NOTE 4\u2014GOODWILL
The following table summarizes the changes in goodwill by reporting unit for the three months ended March 31, 2024:
U.S. | International | Consolidated Goodwill | |||||||||||||||||||||||||
(In\u00a0millions) | Gross Carrying Amount | Accumulated Impairment Losses | Net Carrying Amount | Gross Carrying Amount | Accumulated Impairment Losses | Net Carrying Amount | Gross Carrying Amount | Accumulated Impairment Losses | Net Carrying Amount | ||||||||||||||||||
Balance December 31, 2023 | $ | 3,072.6 | $ | (1,276.1) | $ | 1,796.5 | $ | 1,589.5 | $ | (1,027.3) | $ | 562.2 | $ | 4,662.1 | $ | (2,303.4) | $ | 2,358.7 | |||||||||
Currency translation adjustment | \u2014 | \u2014 | \u2014 | (45.4) | 8.8 | (36.6) | (45.4) | 8.8 | (36.6) | ||||||||||||||||||
Balance March 31, 2024 | $ | 3,072.6 | $ | (1,276.1) | $ | 1,796.5 | $ | 1,544.1 | $ | (1,018.5) | $ | 525.6 | $ | 4,616.7 | $ | (2,294.6) | $ | 2,322.1 |
"}]},{"name":"rpt:f-443","factDimensions":{"xbrl:concept":"us-gaap:ScheduleOfGoodwillTextBlock","xbrl:period":"2024-01-01T00:00:00/2024-04-01T00:00:00","xbrl:entity":"cik:0001411579"},"factValues":[{"value":"
U.S. | International | Consolidated Goodwill | |||||||||||||||||||||||||
(In\u00a0millions) | Gross Carrying Amount | Accumulated Impairment Losses | Net Carrying Amount | Gross Carrying Amount | Accumulated Impairment Losses | Net Carrying Amount | Gross Carrying Amount | Accumulated Impairment Losses | Net Carrying Amount | ||||||||||||||||||
Balance December 31, 2023 | $ | 3,072.6 | $ | (1,276.1) | $ | 1,796.5 | $ | 1,589.5 | $ | (1,027.3) | $ | 562.2 | $ | 4,662.1 | $ | (2,303.4) | $ | 2,358.7 | |||||||||
Currency translation adjustment | \u2014 | \u2014 | \u2014 | (45.4) | 8.8 | (36.6) | (45.4) | 8.8 | (36.6) | ||||||||||||||||||
Balance March 31, 2024 | $ | 3,072.6 | $ | (1,276.1) | $ | 1,796.5 | $ | 1,544.1 | $ | (1,018.5) | $ | 525.6 | $ | 4,616.7 | $ | (2,294.6) | $ | 2,322.1 |
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NOTE 5\u2014INVESTMENTS
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 50.0% voting control, and are recorded in the condensed consolidated balance sheets in other long-term assets. On December 30, 2022, the Company entered into an agreement to sell its 10.0% investment in Saudi Cinema Company, LLC for SAR 112.5 million ($30.0 million), and on January 24, 2023, the Saudi Ministry of Commerce recorded the sale of equity and the Company received the proceeds on January 25, 2023. The Company recorded a gain on the sale of $15.5 million in investment income during the three months ended March 31, 2023. Investments in non-consolidated affiliates as of March 31, 2024 include interests in Digital Cinema Distribution Coalition, LLC of 14.6%, AC JV, LLC (\u201cAC JV\u201d), owner of Fathom Events, of 32.0%, SV Holdco LLC, owner of Screenvision, of 18.4%, Digital Cinema Media Ltd. (\u201cDCM\u201d) of 50.0%, Handelsbolaget Svenska Bio Lidingo of 50.0%, Bergen Kino AS for 49.0%, Odeon Kino Stavanger/Sandnes AS of 49.0%, Capa Kinoreklame AS (\u201cCapa\u201d) of 50.0% and Vasteras Biografer (\u201cVasteras\u201d) of 50.0%. The Company also has partnership interests in four U.S. motion picture theatres and approximately 50.0% interests in 62 theatres in Europe. Indebtedness held by equity method investees is non-recourse to the Company. During the three months ended March 31, 2024 and March 31, 2023, the Company recorded equity in earnings of non-consolidated entities of $(3.7) million and $(1.4) million, respectively.
Related Party Transactions
The Company recorded the following related party transactions with equity method investees:
As of | \u00a0\u00a0\u00a0\u00a0 | As of | ||||
(In millions) | March\u00a031, 2024 | \u00a0\u00a0\u00a0\u00a0 | December 31, 2023 | |||
Due from DCM for on-screen advertising revenue | $ | 1.4 | $ | 3.3 | ||
Loan receivable from DCM | 0.6 | 0.6 | ||||
Due to AC JV for Fathom Events programming | (2.9) | (2.3) | ||||
Loan receivable from Vasteras | 1.0 | 1.0 | ||||
Due from Capa for on-screen advertising revenue | \u2014 | 1.4 | ||||
Due to Vasteras | (1.0) | (0.9) | ||||
Due to U.S. theatre partnerships | (0.6) | (0.6) |
Three Months Ended | ||||||||
(In\u00a0millions) | Consolidated Statements of Operations | March\u00a031, 2024 | March\u00a031, 2023 | |||||
DCM screen advertising revenues | Other revenues | $ | 3.3 | $ | 3.5 | |||
DCDC content delivery services | Operating expense | 0.3 | 0.3 | |||||
Gross exhibition cost on AC JV Fathom Events programming | Film exhibition costs | 7.2 | 3.0 | |||||
Screenvision screen advertising revenues | Other revenues | 1.3 | 1.5 |
Investment in Hycroft
The Company holds 2.4 million units of Hycroft Mining Holding Corporation (NASDAQ: HYMC) (\u201cHycroft\u201d), with each unit consisting of one common share of Hycroft and one common share purchase warrant. Each warrant is exercisable for one common share of Hycroft at a price of $10.68 per share over a term through March 2027. The preceding amounts have been adjusted for the reverse stock split Hycroft effectuated on November 15, 2023.
The Company accounts for the common shares of Hycroft under the equity method and has elected the fair value option in accordance with ASC 825-10. The Company accounts for the warrants as derivatives in accordance with ASC 815. Accordingly, the fair value of the investments in Hycroft are remeasured at each subsequent reporting period and unrealized gains and losses are reported in investment income.
During the three months ended March 31, 2024 and March 31, 2023, the Company recorded unrealized loss in investment income of $1.0 million and $4.6 million, respectively. See Note 9\u2014Fair Value Measurements for fair value information and the asset value for investments in Hycroft measured under the fair value option as well as the total asset value for other equity method investments.
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of | \u00a0\u00a0\u00a0\u00a0 | As of | ||||
(In millions) | March\u00a031, 2024 | \u00a0\u00a0\u00a0\u00a0 | December 31, 2023 | |||
Due from DCM for on-screen advertising revenue | $ | 1.4 | $ | 3.3 | ||
Loan receivable from DCM | 0.6 | 0.6 | ||||
Due to AC JV for Fathom Events programming | (2.9) | (2.3) | ||||
Loan receivable from Vasteras | 1.0 | 1.0 | ||||
Due from Capa for on-screen advertising revenue | \u2014 | 1.4 | ||||
Due to Vasteras | (1.0) | (0.9) | ||||
Due to U.S. theatre partnerships | (0.6) | (0.6) |
Three Months Ended | ||||||||
(In\u00a0millions) | Consolidated Statements of Operations | March\u00a031, 2024 | March\u00a031, 2023 | |||||
DCM screen advertising revenues | Other revenues | $ | 3.3 | $ | 3.5 | |||
DCDC content delivery services | Operating expense | 0.3 | 0.3 | |||||
Gross exhibition cost on AC JV Fathom Events programming | Film exhibition costs | 7.2 | 3.0 | |||||
Screenvision screen advertising revenues | Other revenues | 1.3 | 1.5 |
NOTE 6\u2014CORPORATE BORROWINGS AND FINANCE LEASE LIABILITIES
A summary of the carrying value of corporate borrowings and finance lease liabilities is as follows:
(In millions) | \u00a0\u00a0\u00a0\u00a0 | March\u00a031, 2024 | \u00a0\u00a0\u00a0\u00a0 | December 31, 2023 | ||
First Lien Secured Debt: | ||||||
Senior Secured Credit Facility-Term Loan due 2026 (8.435% as of March 31, 2024 and 8.474% as of December 31, 2023) | $ | 1,900.0 | $ | 1,905.0 | ||
12.75% Odeon Senior Secured Notes due 2027 | 400.0 | 400.0 | ||||
7.5% First Lien Notes due 2029 | 950.0 | 950.0 | ||||
Second Lien Secured Debt: | ||||||
10%/12% Cash/PIK Toggle Second Lien Subordinated Notes due 2026 | 951.4 | 968.9 | ||||
Subordinated Debt: | ||||||
6.375% Senior Subordinated Notes due 2024 (\u00a34.0 million par value as of March 31, 2024) | 5.0 | 5.1 | ||||
5.75% Senior Subordinated Notes due 2025 | 98.3 | 98.3 | ||||
5.875% Senior Subordinated Notes due 2026 | 51.5 | 51.5 | ||||
6.125% Senior Subordinated Notes due 2027 | 125.5 | 125.5 | ||||
Total principal amount of corporate borrowings | $ | 4,481.7 | $ | 4,504.3 | ||
Finance lease liabilities | \u00a0 | 53.2 | \u00a0 | 55.4 | ||
Deferred financing costs | (29.3) | (31.1) | ||||
Net premium (1) | 90.6 | 104.2 | ||||
Total carrying value of corporate borrowings and finance lease liabilities | $ | 4,596.2 | $ | 4,632.8 | ||
Less: | ||||||
Current maturities of corporate borrowings | (25.0) | \u00a0 | (25.1) | |||
Current maturities of finance lease liabilities | (5.2) | (5.4) | ||||
Total noncurrent carrying value of corporate borrowings and finance lease liabilities | $ | 4,566.0 | $ | 4,602.3 |
| (1) | The following table provides the net premium (discount) amounts of corporate borrowings: |
March\u00a031, | December\u00a031, | |||||
(In millions) | 2024 | 2023 | ||||
10%/12% Cash/PIK Toggle Second Lien Subordinated Notes due 2026 | $ | 118.7 | $ | 133.9 | ||
Senior Secured Credit Facility-Term Loan due 2026 | (2.9) | (3.3) | ||||
12.75% Odeon Senior Secured Notes due 2027 | (25.2) | (26.4) | ||||
Net premium | $ | 90.6 | $ | 104.2 |
The following table provides the principal payments required and maturities of corporate borrowing as of March 31, 2024:
Principal | |||
Amount of | |||
Corporate | |||
(In millions) | \u00a0\u00a0\u00a0\u00a0 | Borrowings | |
Nine months ended December 31, 2024 | $ | 20.0 | |
2025 | 118.3 | ||
2026 | \u00a0 | 2,867.9 | |
2027 | \u00a0 | 525.5 | |
2028 | \u00a0 | \u2014 | |
2029 | \u00a0 | 950.0 | |
Total | $ | 4,481.7 |
Debt Repurchases and Exchanges
During the three months ended March 31, 2024, the Company executed a debt for equity exchange transaction. This transaction was treated as an early extinguishment of debt. In accordance with ASC 470-50-40-3, the reacquisition price of the extinguished debt was determined to be the fair value of the Common Stock exchanged. The below table summarizes the debt for equity exchange.
Shares of | ||||||||||||
Aggregate Principal | Common Stock | Gain on | Accrued Interest | |||||||||
(In millions, except for share data) | Exchanged | Exchanged | Extinguishment | Exchanged | ||||||||
Second Lien Notes due 2026 | $ | 17.5 | 2,541,250 | $ | 5.8 | $ | 0.1 |
The below table summarizes the cash debt repurchase transactions during the three months ended March 31, 2023, including related party transactions with Antara:
Aggregate Principal | Reacquisition | Gain on | Accrued Interest | |||||||||
(In millions) | Repurchased | Cost | Extinguishment | Paid | ||||||||
Related party transactions: | ||||||||||||
Second Lien Notes due 2026 | $ | 41.9 | $ | 24.4 | $ | 25.3 | $ | 0.7 | ||||
5.875% Senior Subordinated Notes due 2026 | 4.1 | 1.7 | 2.3 | 0.1 | ||||||||
Total related party transactions | 46.0 | 26.1 | 27.6 | 0.8 | ||||||||
Non-related party transactions: | ||||||||||||
Second Lien Notes due 2026 | 57.5 | 30.4 | 37.5 | 1.1 | ||||||||
Total non-related party transactions | 57.5 | 30.4 | 37.5 | 1.1 | ||||||||
Total debt repurchases | $ | 103.5 | $ | 56.5 | $ | 65.1 | $ | 1.9 |
See Note 7\u2014Stockholders\u2019 Deficit for discussion of the $100.0 million aggregate principal amount of Second Lien Notes due 2026 repurchased from Antara in exchange for 9,102,619 AMC Preferred Equity Units not included in the table above.
Financial Covenants
As of March 31, 2024, the Company was subject to a minimum liquidity requirement of $100.0 million as a condition to the financial covenant suspension period under the Credit Agreement. As of April 19, 2024, and in anticipation of the maturity of the Senior Secured Revolving Credit Facility, the Company voluntarily terminated the commitments under the Senior Secured Revolving Credit Facility in full and paid off any remaining obligations with respect to the Senior Secured Revolving Credit Facility. The financial covenants and related covenant suspension conditions are no longer in effect pursuant to the terms of the Credit Agreement. The termination of the Senior Secured Revolving Credit Facility does not otherwise affect the senior secured term loan facility under the Credit Agreement. The Company currently does not expect to replace the Senior Secured Revolving Credit Facility.
"}]},{"name":"rpt:f-518","factDimensions":{"xbrl:concept":"us-gaap:ScheduleOfDebtInstrumentsTextBlock","xbrl:period":"2024-01-01T00:00:00/2024-04-01T00:00:00","xbrl:entity":"cik:0001411579"},"factValues":[{"value":"(In millions) | \u00a0\u00a0\u00a0\u00a0 | March\u00a031, 2024 | \u00a0\u00a0\u00a0\u00a0 | December 31, 2023 | ||
First Lien Secured Debt: | ||||||
Senior Secured Credit Facility-Term Loan due 2026 (8.435% as of March 31, 2024 and 8.474% as of December 31, 2023) | $ | 1,900.0 | $ | 1,905.0 | ||
12.75% Odeon Senior Secured Notes due 2027 | 400.0 | 400.0 | ||||
7.5% First Lien Notes due 2029 | 950.0 | 950.0 | ||||
Second Lien Secured Debt: | ||||||
10%/12% Cash/PIK Toggle Second Lien Subordinated Notes due 2026 | 951.4 | 968.9 | ||||
Subordinated Debt: | ||||||
6.375% Senior Subordinated Notes due 2024 (\u00a34.0 million par value as of March 31, 2024) | 5.0 | 5.1 | ||||
5.75% Senior Subordinated Notes due 2025 | 98.3 | 98.3 | ||||
5.875% Senior Subordinated Notes due 2026 | 51.5 | 51.5 | ||||
6.125% Senior Subordinated Notes due 2027 | 125.5 | 125.5 | ||||
Total principal amount of corporate borrowings | $ | 4,481.7 | $ | 4,504.3 | ||
Finance lease liabilities | \u00a0 | 53.2 | \u00a0 | 55.4 | ||
Deferred financing costs | (29.3) | (31.1) | ||||
Net premium (1) | 90.6 | 104.2 | ||||
Total carrying value of corporate borrowings and finance lease liabilities | $ | 4,596.2 | $ | 4,632.8 | ||
Less: | ||||||
Current maturities of corporate borrowings | (25.0) | \u00a0 | (25.1) | |||
Current maturities of finance lease liabilities | (5.2) | (5.4) | ||||
Total noncurrent carrying value of corporate borrowings and finance lease liabilities | $ | 4,566.0 | $ | 4,602.3 |
March\u00a031, | December\u00a031, | |||||
(In millions) | 2024 | 2023 | ||||
10%/12% Cash/PIK Toggle Second Lien Subordinated Notes due 2026 | $ | 118.7 | $ | 133.9 | ||
Senior Secured Credit Facility-Term Loan due 2026 | (2.9) | (3.3) | ||||
12.75% Odeon Senior Secured Notes due 2027 | (25.2) | (26.4) | ||||
Net premium | $ | 90.6 | $ | 104.2 |
Principal | |||
Amount of | |||
Corporate | |||
(In millions) | \u00a0\u00a0\u00a0\u00a0 | Borrowings | |
Nine months ended December 31, 2024 | $ | 20.0 | |
2025 | 118.3 | ||
2026 | \u00a0 | 2,867.9 | |
2027 | \u00a0 | 525.5 | |
2028 | \u00a0 | \u2014 | |
2029 | \u00a0 | 950.0 | |
Total | $ | 4,481.7 |
Shares of | ||||||||||||
Aggregate Principal | Common Stock | Gain on | Accrued Interest | |||||||||
(In millions, except for share data) | Exchanged | Exchanged | Extinguishment | Exchanged | ||||||||
Second Lien Notes due 2026 | $ | 17.5 | 2,541,250 | $ | 5.8 | $ | 0.1 |
The below table summarizes the cash debt repurchase transactions during the three months ended March 31, 2023, including related party transactions with Antara:
Aggregate Principal | Reacquisition | Gain on | Accrued Interest | |||||||||
(In millions) | Repurchased | Cost | Extinguishment | Paid | ||||||||
Related party transactions: | ||||||||||||
Second Lien Notes due 2026 | $ | 41.9 | $ | 24.4 | $ | 25.3 | $ | 0.7 | ||||
5.875% Senior Subordinated Notes due 2026 | 4.1 | 1.7 | 2.3 | 0.1 | ||||||||
Total related party transactions | 46.0 | 26.1 | 27.6 | 0.8 | ||||||||
Non-related party transactions: | ||||||||||||
Second Lien Notes due 2026 | 57.5 | 30.4 | 37.5 | 1.1 | ||||||||
Total non-related party transactions | 57.5 | 30.4 | 37.5 | 1.1 | ||||||||
Total debt repurchases | $ | 103.5 | $ | 56.5 | $ | 65.1 | $ | 1.9 |
NOTE 7\u2014STOCKHOLDERS\u2019 DEFICIT
Reverse Stock Split
On August 24, 2023, the Company effectuated a reverse stock split at a ratio of share of Common Stock for every ten shares of Common Stock. As a result of the reverse stock split, each share of Series A Convertible Participating Preferred Stock became convertible into ten shares of Common Stock, and by extension each AMC Preferred Equity Unit became equivalent to -tenth (1/10th) of a share of Common Stock. The reverse stock split did not impact the number of AMC Preferred Equity Units outstanding. The Company concluded that this change in conversion ratio is analogous to a reverse stock split of the AMC Preferred Equity Units even though the reverse stock split did not have an effect on the number of AMC Preferred Equity Units outstanding.
Accordingly, all references made to share, per share, unit, per unit, or common share amounts in the accompanying consolidated financial statements and applicable disclosures have been retroactively adjusted to reflect the effect of the reverse stock split. References made to AMC Preferred Equity Units have been retroactively adjusted to reflect the effect of the reverse stock split on their equivalent Common Stock shares. On August 25, 2023, all of the Company\u2019s outstanding AMC Preferred Equity Units converted into shares of Common Stock.
Share Issuances
During the three months ended March 31, 2023, the Company raised gross proceeds of approximately $80.3 million and paid fees to a sales agent and incurred other third-party issuance costs of approximately $2.0 million and $7.8 million, respectively, through its at-the-market offering of approximately 4.9 million shares of its AMC Preferred Equity Units. The Company paid $6.8 million of other third-party issuance costs during the three months ended March 31, 2023.
Antara Transactions
On December 22, 2022, the Company entered into the Forward Purchase Agreement with Antara pursuant to which the Company agreed to (i) sell to Antara 10,659,511 AMC Preferred Equity Units for an aggregate purchase price of $75.1 million and (ii) simultaneously purchase from Antara $100.0 million aggregate principal amount of the Company\u2019s 10%/12% Cash/PIK Toggle Second Lien Notes due 2026 in exchange for 9,102,619 AMC Preferred Equity Units. On February 7, 2023, the Company issued 19,762,130 AMC Preferred Equity Units to Antara in exchange for $75.1 million in cash and $100.0 million aggregate principal amount of the Company\u2019s 10%/12% Cash/PIK Toggle Second Lien Notes due 2026. The Company recorded $193.7 million to stockholders\u2019 deficit as a result of the transaction. The Company paid $1.4 million of accrued interest in cash upon exchange of the notes.
AMC Preferred Equity Units
Each AMC Preferred Equity Unit was a depositary share and represented an interest in a share of Series A Convertible Participating Preferred Stock evidenced by a depositary receipt pursuant to a deposit agreement. Each AMC Preferred Equity Unit was designed to have the same economic and voting rights as a share of Common Stock. On August 25, 2023, all outstanding AMC Preferred Equity Units were converted to Common Stock. As of March 31, 2024, the Company has 50,000,000 authorized shares of preferred stock available for issuance.
Stock-Based Compensation
The following table presents the stock-based compensation expense recorded within general and administrative: other:
Three Months Ended | ||||||
March\u00a031, | March\u00a031, | |||||
(In millions) | 2024 | 2023 | ||||
Equity classified awards: | ||||||
Special awards expense | $ | 2.1 | $ | 20.2 | ||
Board of director stock award expense | \u2014 | 0.9 | ||||
Restricted stock unit expense | 2.1 | 3.0 | ||||
Performance stock unit expense | 0.1 | 1.7 | ||||
Total equity classified awards: | 4.3 | 25.8 | ||||
Liability classified awards: | ||||||
Restricted and performance stock unit expense | \u2014 | 0.1 | ||||
Total liability classified awards: | \u2014 | 0.1 | ||||
Total stock-based compensation expense | $ | 4.3 | $ | 25.9 |
As of March 31, 2024, the estimated remaining unrecognized compensation cost related to stock-based compensation grants was approximately $10.9 million, which reflects assumptions related to attainment of performance targets based on the scales as described below. The weighted average period over which this remaining compensation expense is expected to be recognized is approximately 1.1 years.
Special Awards
On February 22, 2024, the compensation committee of AMC\u2019s Board of Directors (\u201cCompensation Committee\u201d) approved modification of the performance goals applicable to all 2023 Tranche Year PSU awards. This was accounted for as a modification to the 2023 Tranche Year PSU awards which lowered the Adjusted EBITDA and free cash flow performance targets such that 200% vesting was achieved for both targets. This modification resulted in the immediate additional vesting of 478,055 2023 Trance Year PSUs (21,829 cash settled units and 456,226 equity settled units). This was treated as a Type 3 modification (improbable-to-probable) which required the Company to recognize additional stock compensation expense based on the modification date fair values of the incremental PSUs. During the three months ended March 31, 2024, the Company recognized $2.1 million of stock compensation expense related to these awards.
On February 23, 2023, the Compensation Committee approved special awards in lieu of vesting of the 2022 Tranche Year PSU awards. The special awards were accounted for as modification to the 2022 Tranche Year PSU awards which lowered the Adjusted EBITDA and free cash flow performance targets such that 200% vesting was achieved for both targets. This modification resulted in the immediate additional vesting of 238,959 Common Stock PSUs and 238,959 AMC Preferred Equity Unit PSUs. This was treated as a Type 3 modification (improbable-to-probable) which requires the Company to recognize additional stock compensation expense based on the modification date fair values of the Common Stock PSUs and AMC Preferred Equity Units PSUs of $14.9 million and $5.3 million, respectively. During the three months ended March 31, 2023, the Company recognized $20.2 million of stock compensation expense related to these awards.
Awards Granted in 2024
Performance Stock Unit Awards: In 2023 and 2022 the Compensation Committee awarded PSUs to certain members of management and executive officers, with the PSUs divided into three separate year tranches, with each tranche allocated to a fiscal year with the performance period (\u201cTranche Year\u201d). The PSUs within each Tranche Year are further divided between two performance targets: the Adjusted EBITDA performance target and the free cash flow performance target. The PSUs will vest if 80% to 120% of the performance targets are attained, with the corresponding vested unit amount ranging from 50% to 200% of the PSUs awarded. No PSUs will vest for each Tranche Year if the Company does not achieve 80% of the Tranche Year\u2019s Adjusted EBITDA or 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 \u2013 Stock compensation.
The equity classified 2023 PSU award grant date fair value for the 2024 Tranche Year award of 105,357 units was $0.5 million and the equity classified 2022 PSU award grant date fair value for the 2024 Tranche Year award of 44,081 units was $0.2 million, measured using performance targets at 100%.
Liability Classified Awards
Certain PSUs are expected to be settled in cash and accordingly have been classified as liabilities within accrued expenses and other liabilities in the condensed consolidated balance sheets. The liability classified 2023 and 2022 PSU awards for the 2024 Tranche Year were also granted when the annual performance targets were set. The vesting requirements and vesting periods are identical to the equity classified awards described above. The Company recognizes expenses related to these awards based on the fair value of the Common Stock shares, giving effect to the portion of services rendered during the requisite services period.
As of March 31, 2024, there were 58,101 nonvested underlying Common Stock RSUs and PSUs related to awards classified as liabilities. There are 43,524 nonvested underlying Common Stock RSUs and PSUs (2024 Tranche Year) that are currently classified as liabilities and 14,577 nonvested underlying Common Stock PSUs (2025 Tranche Year) which have not been granted for accounting purposes as the performance targets for the 2025 PSU Tranche Years have yet to be established.
The following table represents the equity classified nonvested RSU and PSU activity for the three months ended March 31, 2024:
\u00a0\u00a0\u00a0\u00a0 | \u00a0\u00a0\u00a0\u00a0 | ||||
Weighted | |||||
Average | |||||
Common Stock | Grant\u00a0Date | ||||
RSUs and PSUs (3) | Fair\u00a0Value | ||||
Nonvested at January 1, 2024 | 747,423 | $ | 44.35 | ||
Granted (1) | 149,481 | 4.42 | |||
Granted - Special Award | 456,226 | 4.42 | |||
Vested | (246,982) | 43.84 | |||
Vested - Special Award | (242,360) | 4.42 | |||
Forfeited | (1,089) | 40.32 | |||
Cancelled (2) | (228,015) | 43.86 | |||
Cancelled - Special Award (2) | (213,866) | 4.42 | |||
Nonvested at March\u00a031, 2024 | 420,818 | $ | 30.77 | ||
Tranche Year 2025 awarded under the 2023 PSU award with grant date fair values to be determined in year 2025 | 105,099 | ||||
Total Nonvested at March\u00a031, 2024 | 525,917 |
| (1) | The number of PSU shares granted under the Tranche Year 2024 assumes the Company will attain a performance target at 100% for the Adjusted EBITDA target and 100% for the free cash flow target. |
| (2) | Represents vested RSUs and PSUs surrendered in lieu of taxes. As a result, the Company paid taxes for restricted unit withholdings of approximately $2.2 million during the three months ended March 31, 2024. |
| (3) | Includes AMC Preferred Equity Unit RSUs and PSUs that were converted to Common Stock RSUs and PSUs. |
Three Months Ended | ||||||
March\u00a031, | March\u00a031, | |||||
(In millions) | 2024 | 2023 | ||||
Equity classified awards: | ||||||
Special awards expense | $ | 2.1 | $ | 20.2 | ||
Board of director stock award expense | \u2014 | 0.9 | ||||
Restricted stock unit expense | 2.1 | 3.0 | ||||
Performance stock unit expense | 0.1 | 1.7 | ||||
Total equity classified awards: | 4.3 | 25.8 | ||||
Liability classified awards: | ||||||
Restricted and performance stock unit expense | \u2014 | 0.1 | ||||
Total liability classified awards: | \u2014 | 0.1 | ||||
Total stock-based compensation expense | $ | 4.3 | $ | 25.9 |
\u00a0\u00a0\u00a0\u00a0 | \u00a0\u00a0\u00a0\u00a0 | ||||
Weighted | |||||
Average | |||||
Common Stock | Grant\u00a0Date | ||||
RSUs and PSUs (3) | Fair\u00a0Value | ||||
Nonvested at January 1, 2024 | 747,423 | $ | 44.35 | ||
Granted (1) | 149,481 | 4.42 | |||
Granted - Special Award | 456,226 | 4.42 | |||
Vested | (246,982) | 43.84 | |||
Vested - Special Award | (242,360) | 4.42 | |||
Forfeited | (1,089) | 40.32 | |||
Cancelled (2) | (228,015) | 43.86 | |||
Cancelled - Special Award (2) | (213,866) | 4.42 | |||
Nonvested at March\u00a031, 2024 | 420,818 | $ | 30.77 | ||
Tranche Year 2025 awarded under the 2023 PSU award with grant date fair values to be determined in year 2025 | 105,099 | ||||
Total Nonvested at March\u00a031, 2024 | 525,917 |
| (1) | The number of PSU shares granted under the Tranche Year 2024 assumes the Company will attain a performance target at 100% for the Adjusted EBITDA target and 100% for the free cash flow target. |
| (2) | Represents vested RSUs and PSUs surrendered in lieu of taxes. As a result, the Company paid taxes for restricted unit withholdings of approximately $2.2 million during the three months ended March 31, 2024. |
| (3) | Includes AMC Preferred Equity Unit RSUs and PSUs that were converted to Common Stock RSUs and PSUs. |
Condensed Consolidated Statements of Stockholders\u2019 Deficit
For the Three Months Ended March 31, 2024
Accumulated | |||||||||||||||||
Class\u00a0A Voting | Additional | Other | Total AMC | ||||||||||||||
Common Stock | Paid-in | Comprehensive | Accumulated | Stockholders\u2019 | |||||||||||||
(In millions, except share and per share data) | \u00a0\u00a0\u00a0\u00a0 | Shares | \u00a0\u00a0\u00a0\u00a0 | Amount | Capital | Loss | \u00a0\u00a0\u00a0\u00a0 | Deficit | \u00a0\u00a0\u00a0\u00a0 | Deficit | |||||||
Balances December 31, 2023 | 260,574,392 | $ | 2.6 | $ | 6,221.9 | $ | (78.2) | $ | (7,994.2) | $ | (1,847.9) | ||||||
Net loss | \u2014 | \u2014 | \u2014 | \u2014 | (163.5) | (163.5) | |||||||||||
Other comprehensive loss | \u2014 | \u2014 | \u2014 | (35.4) | \u2014 | (35.4) | |||||||||||
Debt for equity exchange | 2,541,250 | \u2014 | 14.2 | \u2014 | \u2014 | 14.2 | |||||||||||
Taxes paid for restricted unit withholdings | \u2014 | \u2014 | (2.2) | \u2014 | \u2014 | (2.2) | |||||||||||
Share issuance costs | \u2014 | \u2014 | (0.5) | \u2014 | \u2014 | (0.5) | |||||||||||
Stock-based compensation (1) | 489,342 | \u2014 | 4.3 | \u2014 | \u2014 | 4.3 | |||||||||||
Balances March 31, 2024 | 263,604,984 | $ | 2.6 | $ | 6,237.7 | $ | (113.6) | $ | (8,157.7) | $ | (2,031.0) |
| (1) | Vested Common Stock RSUs and PSUs. |
Condensed Consolidated Statements of Stockholders\u2019 Deficit
For the Three Months Ended March 31, 2023
Preferred Stock | ||||||||||||||||||||||||
Series A Convertible | Accumulated | |||||||||||||||||||||||
Class A | Participating | Depositary Shares of | Additional | Other | Total AMC | |||||||||||||||||||
Common Stock | Preferred Stock | AMC Preferred | Paid-in | Comprehensive | Accumulated | Stockholders\u2019 | ||||||||||||||||||
(In millions, except share and per share data) | \u00a0\u00a0\u00a0\u00a0 | Shares (3) | \u00a0\u00a0\u00a0\u00a0 | Amount | \u00a0\u00a0\u00a0\u00a0 | Shares | Equity Units (3) | \u00a0\u00a0\u00a0\u00a0 | Amount | Capital | Loss | \u00a0\u00a0\u00a0\u00a0 | Deficit | \u00a0\u00a0\u00a0\u00a0 | Deficit | |||||||||
Balances December 31, 2022 | 51,683,892 | $ | 0.5 | 7,245,872 | 72,458,706 | $ | 0.1 | $ | 5,049.8 | $ | (77.3) | $ | (7,597.6) | $ | (2,624.5) | |||||||||
Net loss | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | (235.5) | (235.5) | |||||||||||||||
Other comprehensive loss | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | (7.3) | \u2014 | (7.3) | |||||||||||||||
Share Issuance | \u2014 | \u2014 | 492,880 | 4,928,800 | \u2014 | 70.5 | \u2014 | \u2014 | 70.5 | |||||||||||||||
Antara Forward Purchase Agreement (2) | \u2014 | \u2014 | 1,976,213 | 19,762,130 | \u2014 | 193.7 | \u2014 | \u2014 | 193.7 | |||||||||||||||
Taxes paid for restricted unit withholdings | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | (13.1) | \u2014 | \u2014 | (13.1) | |||||||||||||||
Stock-based compensation (1) | 235,346 | \u2014 | 26,944 | 269,444 | \u2014 | 25.9 | \u2014 | \u2014 | 25.9 | |||||||||||||||
Balances March 31, 2023 | 51,919,238 | $ | 0.5 | 9,741,909 | 97,419,080 | $ | 0.1 | $ | 5,326.8 | $ | (84.6) | $ | (7,833.1) | $ | (2,590.3) |
| (1) | Includes 8,555 Common Stock shares and 15,370 AMC Preferred Equity Units awarded to the Board of Directors, 226,791 vested Common Stock RSUs and PSUs, and 254,074 vested AMC Preferred Equity Units RSUs and PSUs. |
| (2) | Includes $75.1 million of cash proceeds and $118.6 million carrying value of the debt exchanged for AMC Preferred Equity Units. |
| (3) | Share counts have been retroactively adjusted to reflect the effect of the reverse stock split. |
Accumulated | |||||||||||||||||
Class\u00a0A Voting | Additional | Other | Total AMC | ||||||||||||||
Common Stock | Paid-in | Comprehensive | Accumulated | Stockholders\u2019 | |||||||||||||
(In millions, except share and per share data) | \u00a0\u00a0\u00a0\u00a0 | Shares | \u00a0\u00a0\u00a0\u00a0 | Amount | Capital | Loss | \u00a0\u00a0\u00a0\u00a0 | Deficit | \u00a0\u00a0\u00a0\u00a0 | Deficit | |||||||
Balances December 31, 2023 | 260,574,392 | $ | 2.6 | $ | 6,221.9 | $ | (78.2) | $ | (7,994.2) | $ | (1,847.9) | ||||||
Net loss | \u2014 | \u2014 | \u2014 | \u2014 | (163.5) | (163.5) | |||||||||||
Other comprehensive loss | \u2014 | \u2014 | \u2014 | (35.4) | \u2014 | (35.4) | |||||||||||
Debt for equity exchange | 2,541,250 | \u2014 | 14.2 | \u2014 | \u2014 | 14.2 | |||||||||||
Taxes paid for restricted unit withholdings | \u2014 | \u2014 | (2.2) | \u2014 | \u2014 | (2.2) | |||||||||||
Share issuance costs | \u2014 | \u2014 | (0.5) | \u2014 | \u2014 | (0.5) | |||||||||||
Stock-based compensation (1) | 489,342 | \u2014 | 4.3 | \u2014 | \u2014 | 4.3 | |||||||||||
Balances March 31, 2024 | 263,604,984 | $ | 2.6 | $ | 6,237.7 | $ | (113.6) | $ | (8,157.7) | $ | (2,031.0) |
| (1) | Vested Common Stock RSUs and PSUs. |
Preferred Stock | ||||||||||||||||||||||||
Series A Convertible | Accumulated | |||||||||||||||||||||||
Class A | Participating | Depositary Shares of | Additional | Other | Total AMC | |||||||||||||||||||
Common Stock | Preferred Stock | AMC Preferred | Paid-in | Comprehensive | Accumulated | Stockholders\u2019 | ||||||||||||||||||
(In millions, except share and per share data) | \u00a0\u00a0\u00a0\u00a0 | Shares (3) | \u00a0\u00a0\u00a0\u00a0 | Amount | \u00a0\u00a0\u00a0\u00a0 | Shares | Equity Units (3) | \u00a0\u00a0\u00a0\u00a0 | Amount | Capital | Loss | \u00a0\u00a0\u00a0\u00a0 | Deficit | \u00a0\u00a0\u00a0\u00a0 | Deficit | |||||||||
Balances December 31, 2022 | 51,683,892 | $ | 0.5 | 7,245,872 | 72,458,706 | $ | 0.1 | $ | 5,049.8 | $ | (77.3) | $ | (7,597.6) | $ | (2,624.5) | |||||||||
Net loss | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | (235.5) | (235.5) | |||||||||||||||
Other comprehensive loss | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | (7.3) | \u2014 | (7.3) | |||||||||||||||
Share Issuance | \u2014 | \u2014 | 492,880 | 4,928,800 | \u2014 | 70.5 | \u2014 | \u2014 | 70.5 | |||||||||||||||
Antara Forward Purchase Agreement (2) | \u2014 | \u2014 | 1,976,213 | 19,762,130 | \u2014 | 193.7 | \u2014 | \u2014 | 193.7 | |||||||||||||||
Taxes paid for restricted unit withholdings | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | (13.1) | \u2014 | \u2014 | (13.1) | |||||||||||||||
Stock-based compensation (1) | 235,346 | \u2014 | 26,944 | 269,444 | \u2014 | 25.9 | \u2014 | \u2014 | 25.9 | |||||||||||||||
Balances March 31, 2023 | 51,919,238 | $ | 0.5 | 9,741,909 | 97,419,080 | $ | 0.1 | $ | 5,326.8 | $ | (84.6) | $ | (7,833.1) | $ | (2,590.3) |
| (1) | Includes 8,555 Common Stock shares and 15,370 AMC Preferred Equity Units awarded to the Board of Directors, 226,791 vested Common Stock RSUs and PSUs, and 254,074 vested AMC Preferred Equity Units RSUs and PSUs. |
| (2) | Includes $75.1 million of cash proceeds and $118.6 million carrying value of the debt exchanged for AMC Preferred Equity Units. |
| (3) | Share counts have been retroactively adjusted to reflect the effect of the reverse stock split. |
NOTE 8\u2014INCOME TAXES
The Company\u2019s worldwide effective income tax rate is based on actual income (loss), statutory rates, valuation allowances against deferred tax assets and tax planning opportunities available in the various jurisdictions in which it operates. The Company is using a discrete income tax calculation for the three months ended March 31, 2024, due to the lingering effects of the COVID-19 pandemic and recent labor stoppages on the industry. Historically, for interim financial reporting, the Company estimated the worldwide annual income tax rate based on projected taxable income (loss) for the full year and recorded a quarterly income tax provision or benefit in accordance with the anticipated annual rate, adjusted for discrete items, if any. The Company will return to the historic approach of computing quarterly tax expense based on an annual effective rate in the future interim period when more reliable estimates of annual income become available. The Company recognizes income tax-related interest expense and penalties as income tax expense and general and administrative expense, respectively.
The Organization for Economic Co-operation and Development (\u201cOECD\u201d) has issued model rules, which generally provide for a jurisdictional minimum effective tax rate of 15.0%. Various countries have or are in the process of enacting legislation intended to implement the principles effective January 1, 2024. The Company\u2019s adoption of the OECD's global tax reform is not expected to have a material impact on its 2024 income tax expense.
The Company evaluates its deferred tax assets each period to determine if a valuation allowance is required based on whether it is \u201cmore likely than not\u201d 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 valuation allowance is recorded against the Company\u2019s U.S. deferred tax assets and most of the Company\u2019s international deferred tax assets as the Company has determined the realization of these assets does not meet the more likely than not criteria.
The effective tax rate for the three months ended March 31, 2024, reflects the impact of these valuation allowances against U.S. and international deferred tax assets generated during the period. The actual effective rate for the three months ended March 31, 2024, was (1.1)%. The Company\u2019s consolidated tax rate for the three months ended March 31, 2024, differs from the U.S. statutory tax rate primarily due to the valuation allowances in U.S. and foreign jurisdictions, foreign tax rate differences, federal and state tax credits, permanent differences and other discrete items.
"}]},{"name":"rpt:f-784","factDimensions":{"xbrl:concept":"amch:MinimumEffectiveTaxRate","xbrl:period":"2024-01-01T00:00:00/2024-04-01T00:00:00","xbrl:entity":"cik:0001411579"},"factValues":[{"value":"0.150","decimals":3}]},{"name":"rpt:f-785","factDimensions":{"xbrl:concept":"us-gaap:EffectiveIncomeTaxRateContinuingOperations","xbrl:period":"2024-01-01T00:00:00/2024-04-01T00:00:00","xbrl:entity":"cik:0001411579"},"factValues":[{"value":"-0.011","decimals":3}]},{"name":"rpt:f-786","factDimensions":{"xbrl:concept":"us-gaap:FairValueDisclosuresTextBlock","xbrl:period":"2024-01-01T00:00:00/2024-04-01T00:00:00","xbrl:entity":"cik:0001411579"},"factValues":[{"value":"NOTE 9\u2014FAIR 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\u00a01: | Quoted market prices in active markets for identical assets or liabilities. |
Level\u00a02: | Observable market based inputs or unobservable inputs that are corroborated by market data. |
Level\u00a03: | Unobservable inputs that are not corroborated by market data. |
Recurring Fair Value Measurements. The following table summarizes the fair value hierarchy of the Company\u2019s financial assets carried at fair value on a recurring basis as of March 31, 2024:
Fair Value Measurements at March\u00a031, 2024 Using | ||||||||||||
Significant | ||||||||||||
\u00a0\u00a0\u00a0\u00a0 | Total\u00a0Carrying | \u00a0\u00a0\u00a0\u00a0 | Quoted\u00a0prices\u00a0in | \u00a0\u00a0\u00a0\u00a0 | Significant\u00a0other | \u00a0\u00a0\u00a0\u00a0 | unobservable | |||||
Value at | active\u00a0market | observable\u00a0inputs | inputs | |||||||||
(In millions) | March\u00a031, 2024 | (Level\u00a01) | (Level\u00a02) | (Level\u00a03) | ||||||||
Other long-term assets: | ||||||||||||
Investment in Hycroft warrants | $ | 2.8 | $ | \u2014 | $ | \u2014 | $ | 2.8 | ||||
Marketable equity securities: | ||||||||||||
Investment in Hycroft | 5.2 | 5.2 | \u2014 | \u2014 | ||||||||
Total assets at fair value | $ | 8.0 | $ | 5.2 | $ | \u2014 | $ | 2.8 |
Other Fair Value Measurement Disclosures. The Company is required to disclose the fair value of financial instruments that are not recognized at fair value in the statement of financial position for which it is practicable to estimate that value:
\u00a0\u00a0\u00a0\u00a0 | Fair Value Measurements at March\u00a031, 2024 Using | |||||||||||
\u00a0\u00a0\u00a0\u00a0 | \u00a0\u00a0\u00a0\u00a0 | Significant\u00a0other | \u00a0\u00a0\u00a0\u00a0 | Significant | ||||||||
Total\u00a0Carrying | Quoted\u00a0prices\u00a0in | observable | unobservable | |||||||||
Value at | active\u00a0market | inputs | inputs | |||||||||
(In millions) | March\u00a031, 2024 | (Level\u00a01) | (Level\u00a02) | (Level\u00a03) | ||||||||
Current maturities of corporate borrowings | $ | 25.0 | $ | \u2014 | $ | 21.6 | $ | \u2014 | ||||
Corporate borrowings | \u00a0 | 4,518.0 | \u00a0 | \u2014 | \u00a0 | 3,510.8 | \u2014 |
Valuation Technique. Quoted market prices and observable market-based inputs were used to estimate fair value for Level\u00a02 inputs. The Company valued these notes at principal value less an estimated discount reflecting a market yield to maturity. See Note\u00a06\u2014Corporate Borrowings and Finance Lease Liabilities 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.
"}]},{"name":"rpt:f-787","factDimensions":{"xbrl:concept":"us-gaap:FairValueAssetsMeasuredOnRecurringBasisTextBlock","xbrl:period":"2024-01-01T00:00:00/2024-04-01T00:00:00","xbrl:entity":"cik:0001411579"},"factValues":[{"value":"Fair Value Measurements at March\u00a031, 2024 Using | ||||||||||||
Significant | ||||||||||||
\u00a0\u00a0\u00a0\u00a0 | Total\u00a0Carrying | \u00a0\u00a0\u00a0\u00a0 | Quoted\u00a0prices\u00a0in | \u00a0\u00a0\u00a0\u00a0 | Significant\u00a0other | \u00a0\u00a0\u00a0\u00a0 | unobservable | |||||
Value at | active\u00a0market | observable\u00a0inputs | inputs | |||||||||
(In millions) | March\u00a031, 2024 | (Level\u00a01) | (Level\u00a02) | (Level\u00a03) | ||||||||
Other long-term assets: | ||||||||||||
Investment in Hycroft warrants | $ | 2.8 | $ | \u2014 | $ | \u2014 | $ | 2.8 | ||||
Marketable equity securities: | ||||||||||||
Investment in Hycroft | 5.2 | 5.2 | \u2014 | \u2014 | ||||||||
Total assets at fair value | $ | 8.0 | $ | 5.2 | $ | \u2014 | $ | 2.8 |
"}]},{"name":"rpt:f-788","factDimensions":{"xbrl:concept":"us-gaap:EquitySecuritiesFvNi","xbrl:period":"2024-04-01T00:00:00","xbrl:entity":"cik:0001411579","xbrl:unit":"iso4217:USD","us-gaap:FairValueByMeasurementFrequencyAxis":"us-gaap:FairValueMeasurementsRecurringMember","us-gaap:FinancialInstrumentAxis":"amch:InvestmentInHycroftMiningHoldingCorporationWarrantsMember"},"factValues":[{"value":"2800000","decimals":-5}]},{"name":"rpt:f-789","factDimensions":{"xbrl:concept":"us-gaap:EquitySecuritiesFvNi","xbrl:period":"2024-04-01T00:00:00","xbrl:entity":"cik:0001411579","xbrl:unit":"iso4217:USD","us-gaap:FairValueByFairValueHierarchyLevelAxis":"us-gaap:FairValueInputsLevel3Member","us-gaap:FairValueByMeasurementFrequencyAxis":"us-gaap:FairValueMeasurementsRecurringMember","us-gaap:FinancialInstrumentAxis":"amch:InvestmentInHycroftMiningHoldingCorporationWarrantsMember"},"factValues":[{"value":"2800000","decimals":-5}]},{"name":"rpt:f-790","factDimensions":{"xbrl:concept":"us-gaap:EquityMethodInvestments","xbrl:period":"2024-04-01T00:00:00","xbrl:entity":"cik:0001411579","xbrl:unit":"iso4217:USD","us-gaap:FairValueByMeasurementFrequencyAxis":"us-gaap:FairValueMeasurementsRecurringMember","us-gaap:FinancialInstrumentAxis":"amch:HycroftMiningHoldingCorporationMember"},"factValues":[{"value":"5200000","decimals":-5}]},{"name":"rpt:f-791","factDimensions":{"xbrl:concept":"us-gaap:EquityMethodInvestments","xbrl:period":"2024-04-01T00:00:00","xbrl:entity":"cik:0001411579","xbrl:unit":"iso4217:USD","us-gaap:FairValueByFairValueHierarchyLevelAxis":"us-gaap:FairValueInputsLevel1Member","us-gaap:FairValueByMeasurementFrequencyAxis":"us-gaap:FairValueMeasurementsRecurringMember","us-gaap:FinancialInstrumentAxis":"amch:HycroftMiningHoldingCorporationMember"},"factValues":[{"value":"5200000","decimals":-5}]},{"name":"rpt:f-792","factDimensions":{"xbrl:concept":"us-gaap:AssetsFairValueDisclosure","xbrl:period":"2024-04-01T00:00:00","xbrl:entity":"cik:0001411579","xbrl:unit":"iso4217:USD","us-gaap:FairValueByMeasurementFrequencyAxis":"us-gaap:FairValueMeasurementsRecurringMember"},"factValues":[{"value":"8000000.0","decimals":-5}]},{"name":"rpt:f-793","factDimensions":{"xbrl:concept":"us-gaap:AssetsFairValueDisclosure","xbrl:period":"2024-04-01T00:00:00","xbrl:entity":"cik:0001411579","xbrl:unit":"iso4217:USD","us-gaap:FairValueByFairValueHierarchyLevelAxis":"us-gaap:FairValueInputsLevel1Member","us-gaap:FairValueByMeasurementFrequencyAxis":"us-gaap:FairValueMeasurementsRecurringMember"},"factValues":[{"value":"5200000","decimals":-5}]},{"name":"rpt:f-794","factDimensions":{"xbrl:concept":"us-gaap:AssetsFairValueDisclosure","xbrl:period":"2024-04-01T00:00:00","xbrl:entity":"cik:0001411579","xbrl:unit":"iso4217:USD","us-gaap:FairValueByFairValueHierarchyLevelAxis":"us-gaap:FairValueInputsLevel3Member","us-gaap:FairValueByMeasurementFrequencyAxis":"us-gaap:FairValueMeasurementsRecurringMember"},"factValues":[{"value":"2800000","decimals":-5}]},{"name":"rpt:f-795","factDimensions":{"xbrl:concept":"amch:ScheduleOfFairValueOfFinancialInstrumentsNotRecognizedInStatementOfFinancialPositionTableTextBlock","xbrl:period":"2024-01-01T00:00:00/2024-04-01T00:00:00","xbrl:entity":"cik:0001411579"},"factValues":[{"value":"
\u00a0\u00a0\u00a0\u00a0 | Fair Value Measurements at March\u00a031, 2024 Using | |||||||||||
\u00a0\u00a0\u00a0\u00a0 | \u00a0\u00a0\u00a0\u00a0 | Significant\u00a0other | \u00a0\u00a0\u00a0\u00a0 | Significant | ||||||||
Total\u00a0Carrying | Quoted\u00a0prices\u00a0in | observable | unobservable | |||||||||
Value at | active\u00a0market | inputs | inputs | |||||||||
(In millions) | March\u00a031, 2024 | (Level\u00a01) | (Level\u00a02) | (Level\u00a03) | ||||||||
Current maturities of corporate borrowings | $ | 25.0 | $ | \u2014 | $ | 21.6 | $ | \u2014 | ||||
Corporate borrowings | \u00a0 | 4,518.0 | \u00a0 | \u2014 | \u00a0 | 3,510.8 | \u2014 |
NOTE 10\u2014OPERATING SEGMENTS
The Company reports information about operating segments in accordance with ASC\u00a0280-10, 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 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, and Denmark. The Company sold its interest in Saudi Arabia in January 2023. See Note 5\u2014Investments for further information. Each segment\u2019s revenue is derived from admissions, food and beverage sales and other ancillary revenues, primarily screen advertising, loyalty membership fees, ticket sales, gift card income and exchange ticket income. The measure of segment profit and loss the Company uses to evaluate performance and allocate its resources is Adjusted EBITDA, as defined in the reconciliation table below. The Company does not report asset information by segment because that information is not used to evaluate the performance of or allocate resources between segments.
Below is a breakdown of select financial information by reportable operating segment:
Three Months Ended | ||||||
Revenues (In millions) | \u00a0\u00a0\u00a0\u00a0 | March\u00a031, 2024 | March\u00a031, 2023 | |||
U.S. markets | $ | 689.1 | $ | 704.5 | ||
International markets | 262.3 | 249.9 | ||||
Total revenues | $ | 951.4 | $ | 954.4 |
Three Months Ended | ||||||
Adjusted EBITDA (In millions) | \u00a0\u00a0\u00a0\u00a0 | March\u00a031, 2024 | \u00a0\u00a0\u00a0\u00a0 | March\u00a031, 2023 | ||
U.S. markets | $ | (27.6) | $ | 10.9 | ||
International markets | (4.0) | (3.8) | ||||
Total Adjusted EBITDA (1) | $ | (31.6) | $ | 7.1 |
| (1) | The Company presents Adjusted EBITDA as a supplemental measure of its performance. The Company defines Adjusted EBITDA as net earnings (loss) plus (i)\u00a0income tax provision (benefit), (ii)\u00a0interest expense and (iii)\u00a0depreciation and amortization, as further adjusted to eliminate the impact of certain items that the Company does not consider indicative of the Company\u2019s 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 broadly consistent with how Adjusted EBITDA is defined in the Company\u2019s debt indentures. |
Three Months Ended | ||||||
Capital Expenditures (In millions) | \u00a0\u00a0\u00a0\u00a0 | March\u00a031, 2024 | \u00a0\u00a0\u00a0\u00a0 | March\u00a031, 2023 | ||
U.S. markets | $ | 31.7 | $ | 34.6 | ||
International markets | 18.8 | 12.8 | ||||
Total capital expenditures | $ | 50.5 | $ | 47.4 |
As of | As of | |||||
Long-term assets, net (In millions) | March\u00a031, 2024 | December 31, 2023 | ||||
U.S. markets | $ | 5,712.3 | $ | 5,795.6 | ||
International markets | 1,913.4 | 2,010.5 | ||||
Total long-term assets (1) | $ | 7,625.7 | $ | 7,806.1 |
| (1) | Long-term assets are comprised of property, net, operating lease right-of-use assets, intangible assets, goodwill, deferred tax assets, net and other long-term assets. |
The following table sets forth a reconciliation of net loss to Adjusted EBITDA:
Three Months Ended | ||||||
(In\u00a0millions) | March\u00a031, 2024 | March\u00a031, 2023 | ||||
Net loss | $ | (163.5) | $ | (235.5) | ||
Plus: | ||||||
Income tax provision (1) | \u00a0 | 1.8 | \u00a0 | 1.9 | ||
Interest expense | \u00a0 | 101.2 | \u00a0 | 101.1 | ||
Depreciation and amortization | \u00a0 | 81.6 | \u00a0 | 93.6 | ||
Certain operating expense (2) | \u00a0 | 0.5 | \u00a0 | 1.1 | ||
Equity in earnings of non-consolidated entities | \u00a0 | (3.7) | \u00a0 | (1.4) | ||
Cash distributions from non-consolidated entities (3) | \u00a0 | 1.3 | \u00a0 | \u2014 | ||
Attributable EBITDA (4) | 0.6 | 0.5 | ||||
Investment income (5) | \u00a0 | (5.1) | \u00a0 | (13.5) | ||
Other expense (income) (6) | \u00a0 | (38.8) | \u00a0 | 42.8 | ||
Other non-cash rent benefit (7) | (11.7) | (9.6) | ||||
General and administrative \u2014 unallocated: | ||||||
Merger, acquisition and other costs (8) | \u00a0 | (0.1) | \u00a0 | 0.2 | ||
Stock-based compensation expense (9) | \u00a0 | 4.3 | \u00a0 | 25.9 | ||
Adjusted EBITDA | $ | (31.6) | $ | 7.1 |
| (1) | For information regarding the income tax provision, see Note 8\u2014Income Taxes. |
| (2) | Amounts represent preopening expense related to temporarily closed screens under renovation, theatre and other closure expense for the permanent closure of screens, including the related accretion of interest, disposition of assets and other non-operating gains or losses included in operating expenses. The Company has excluded these items as they are non-cash in nature or are non-operating in nature. |
| (3) | Includes U.S. non-theatre distributions from equity method investments and International non-theatre distributions from equity method investments to the extent received. The Company believes including cash distributions is an appropriate reflection of the contribution of these investments to the Company\u2019s operations. |
| (4) | Attributable EBITDA includes the EBITDA from equity investments in theatre operators in certain International markets. See below for a reconciliation of the Company\u2019s equity in loss of non-consolidated entities to attributable EBITDA. Because these equity investments in theatre operators are 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\u2019s gift card and package ticket program. |
Three Months Ended | ||||||
(In\u00a0millions) | March\u00a031, 2024 | March\u00a031, 2023 | ||||
Equity in (earnings) of non-consolidated entities | $ | (3.7) | $ | (1.4) | ||
Less: | ||||||
Equity in (earnings) of non-consolidated entities excluding International theatre joint ventures | (3.5) | (1.1) | ||||
Equity in earnings of International theatre joint ventures | 0.2 | 0.3 | ||||
Income tax benefit | \u2014 | (0.1) | ||||
Investment expense | 0.1 | 0.1 | ||||
Depreciation and amortization | 0.3 | 0.2 | ||||
Attributable EBITDA | $ | 0.6 | $ | 0.5 |
| (5) | Investment expense (income) during the three months ended March 31, 2024, primarily includes deterioration in estimated fair value of the Company\u2019s investment in common shares of Hycroft of $0.5 million, deterioration in estimated fair value of the Company\u2019s investment in warrants to purchase common shares of Hycroft of $0.5 million and interest income of $(6.1) million. |
Investment expense (income) during the three months ended March 31, 2023 included deterioration in estimated fair value of the Company\u2019s investment in common shares of Hycroft of $2.3 million, deterioration in estimated fair value of the Company's investment in warrants to purchase common shares of Hycroft of $2.3 million, and a $(15.5) million gain on the sale of the Company\u2019s investment in Saudi Cinema Company, LLC, and interest income of $(2.3) million.
| (6) | Other expense (income) during the three months ended March 31, 2024, includes a vendor dispute settlement of $(36.2) million, foreign currency transaction losses of $3.2 million and gains on debt extinguishment of $(5.8) million. |
Other expense (income) during the three months ended March 31, 2023, included a non-cash litigation contingency charge of $116.6 million, partially offset by foreign currency transaction gains of $(8.7) million and gains on debt extinguishment of $(65.1) million.
| (7) | Reflects amortization expense for certain intangible assets reclassified from depreciation and amortization to rent expense due to the adoption of ASC\u00a0842, Leases and deferred rent benefit related to the impairment of right-of-use operating lease assets. |
| (8) | Merger, acquisition and other costs are excluded as they are non-operating in nature. |
| (9) | Non-cash or non-recurring expense included in general and administrative: other. |
Three Months Ended | ||||||
Revenues (In millions) | \u00a0\u00a0\u00a0\u00a0 | March\u00a031, 2024 | March\u00a031, 2023 | |||
U.S. markets | $ | 689.1 | $ | 704.5 | ||
International markets | 262.3 | 249.9 | ||||
Total revenues | $ | 951.4 | $ | 954.4 |
Three Months Ended | ||||||
Adjusted EBITDA (In millions) | \u00a0\u00a0\u00a0\u00a0 | March\u00a031, 2024 | \u00a0\u00a0\u00a0\u00a0 | March\u00a031, 2023 | ||
U.S. markets | $ | (27.6) | $ | 10.9 | ||
International markets | (4.0) | (3.8) | ||||
Total Adjusted EBITDA (1) | $ | (31.6) | $ | 7.1 |
| (1) | The Company presents Adjusted EBITDA as a supplemental measure of its performance. The Company defines Adjusted EBITDA as net earnings (loss) plus (i)\u00a0income tax provision (benefit), (ii)\u00a0interest expense and (iii)\u00a0depreciation and amortization, as further adjusted to eliminate the impact of certain items that the Company does not consider indicative of the Company\u2019s 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 broadly consistent with how Adjusted EBITDA is defined in the Company\u2019s debt indentures. |
Three Months Ended | ||||||
Capital Expenditures (In millions) | \u00a0\u00a0\u00a0\u00a0 | March\u00a031, 2024 | \u00a0\u00a0\u00a0\u00a0 | March\u00a031, 2023 | ||
U.S. markets | $ | 31.7 | $ | 34.6 | ||
International markets | 18.8 | 12.8 | ||||
Total capital expenditures | $ | 50.5 | $ | 47.4 |
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As of | As of | |||||
Long-term assets, net (In millions) | March\u00a031, 2024 | December 31, 2023 | ||||
U.S. markets | $ | 5,712.3 | $ | 5,795.6 | ||
International markets | 1,913.4 | 2,010.5 | ||||
Total long-term assets (1) | $ | 7,625.7 | $ | 7,806.1 |
| (1) | Long-term assets are comprised of property, net, operating lease right-of-use assets, intangible assets, goodwill, deferred tax assets, net and other long-term assets. |
The following table sets forth a reconciliation of net loss to Adjusted EBITDA:
Three Months Ended | ||||||
(In\u00a0millions) | March\u00a031, 2024 | March\u00a031, 2023 | ||||
Net loss | $ | (163.5) | $ | (235.5) | ||
Plus: | ||||||
Income tax provision (1) | \u00a0 | 1.8 | \u00a0 | 1.9 | ||
Interest expense | \u00a0 | 101.2 | \u00a0 | 101.1 | ||
Depreciation and amortization | \u00a0 | 81.6 | \u00a0 | 93.6 | ||
Certain operating expense (2) | \u00a0 | 0.5 | \u00a0 | 1.1 | ||
Equity in earnings of non-consolidated entities | \u00a0 | (3.7) | \u00a0 | (1.4) | ||
Cash distributions from non-consolidated entities (3) | \u00a0 | 1.3 | \u00a0 | \u2014 | ||
Attributable EBITDA (4) | 0.6 | 0.5 | ||||
Investment income (5) | \u00a0 | (5.1) | \u00a0 | (13.5) | ||
Other expense (income) (6) | \u00a0 | (38.8) | \u00a0 | 42.8 | ||
Other non-cash rent benefit (7) | (11.7) | (9.6) | ||||
General and administrative \u2014 unallocated: | ||||||
Merger, acquisition and other costs (8) | \u00a0 | (0.1) | \u00a0 | 0.2 | ||
Stock-based compensation expense (9) | \u00a0 | 4.3 | \u00a0 | 25.9 | ||
Adjusted EBITDA | $ | (31.6) | $ | 7.1 |
| (1) | For information regarding the income tax provision, see Note 8\u2014Income Taxes. |
| (2) | Amounts represent preopening expense related to temporarily closed screens under renovation, theatre and other closure expense for the permanent closure of screens, including the related accretion of interest, disposition of assets and other non-operating gains or losses included in operating expenses. The Company has excluded these items as they are non-cash in nature or are non-operating in nature. |
| (3) | Includes U.S. non-theatre distributions from equity method investments and International non-theatre distributions from equity method investments to the extent received. The Company believes including cash distributions is an appropriate reflection of the contribution of these investments to the Company\u2019s operations. |
| (4) | Attributable EBITDA includes the EBITDA from equity investments in theatre operators in certain International markets. See below for a reconciliation of the Company\u2019s equity in loss of non-consolidated entities to attributable EBITDA. Because these equity investments in theatre operators are 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\u2019s gift card and package ticket program. |
Three Months Ended | ||||||
(In\u00a0millions) | March\u00a031, 2024 | March\u00a031, 2023 | ||||
Equity in (earnings) of non-consolidated entities | $ | (3.7) | $ | (1.4) | ||
Less: | ||||||
Equity in (earnings) of non-consolidated entities excluding International theatre joint ventures | (3.5) | (1.1) | ||||
Equity in earnings of International theatre joint ventures | 0.2 | 0.3 | ||||
Income tax benefit | \u2014 | (0.1) | ||||
Investment expense | 0.1 | 0.1 | ||||
Depreciation and amortization | 0.3 | 0.2 | ||||
Attributable EBITDA | $ | 0.6 | $ | 0.5 |
| (5) | Investment expense (income) during the three months ended March 31, 2024, primarily includes deterioration in estimated fair value of the Company\u2019s investment in common shares of Hycroft of $0.5 million, deterioration in estimated fair value of the Company\u2019s investment in warrants to purchase common shares of Hycroft of $0.5 million and interest income of $(6.1) million. |
Investment expense (income) during the three months ended March 31, 2023 included deterioration in estimated fair value of the Company\u2019s investment in common shares of Hycroft of $2.3 million, deterioration in estimated fair value of the Company's investment in warrants to purchase common shares of Hycroft of $2.3 million, and a $(15.5) million gain on the sale of the Company\u2019s investment in Saudi Cinema Company, LLC, and interest income of $(2.3) million.
| (6) | Other expense (income) during the three months ended March 31, 2024, includes a vendor dispute settlement of $(36.2) million, foreign currency transaction losses of $3.2 million and gains on debt extinguishment of $(5.8) million. |
Other expense (income) during the three months ended March 31, 2023, included a non-cash litigation contingency charge of $116.6 million, partially offset by foreign currency transaction gains of $(8.7) million and gains on debt extinguishment of $(65.1) million.
| (7) | Reflects amortization expense for certain intangible assets reclassified from depreciation and amortization to rent expense due to the adoption of ASC\u00a0842, Leases and deferred rent benefit related to the impairment of right-of-use operating lease assets. |
| (8) | Merger, acquisition and other costs are excluded as they are non-operating in nature. |
| (9) | Non-cash or non-recurring expense included in general and administrative: other. |
NOTE 11\u2014COMMITMENTS 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\u2019s 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 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 \u201cLao Action\u201d), was filed against certain of the Company\u2019s directors, Wanda, two of Wanda\u2019s affiliates, Silver Lake, and one of Silver Lake\u2019s affiliates in the Delaware Court of Chancery. The Lao Action asserted 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\u00a014, 2018, and the special cash dividend of $1.55 per share of Common Stock that was payable on September\u00a028, 2018 to the Company\u2019s stockholders of record as of September 25, 2018. On June 6, 2022, the parties signed a stipulation of settlement to resolve the Lao Action for $17.4 million (the \u201cSettlement Amount\u201d). Defendants agreed to the settlement and the payment of the Settlement Amount solely to eliminate the burden, expense, and uncertainty of further litigation, and continue to expressly deny any liability or wrongdoing with respect to the matters alleged in the Lao Action. On November 30, 2022, the court issued an order and final judgment approving the settlement and dismissing the action. The order and final judgment included a fee and expense award to plaintiff\u2019s counsel in the amount of $3.4 million to be paid out of the Settlement Amount. On January 6, 2023, the remainder of the Settlement Amount of $14.0 million was paid to the Company. The Company recorded the settlement as a gain in other income during the three months ended March 31, 2023.
On February 20, 2023, two putative stockholder class actions were filed in the Delaware Court of Chancery, captioned Allegheny County Employees\u2019 Retirement System v. AMC Entertainment Holdings, Inc., et al., C.A No. 2023-0215-MTZ (Del. Ch.) (the \u201cAllegheny Action\u201d), and Munoz v Adam M. Aron, et al., C.A. No. 2023-0216-MTZ (Del. Ch.) (the \u201cMunoz Action\u201d) and which have been subsequently consolidated into In re AMC Entertainment Holdings, Inc. Stockholder Litigation C.A. No. 2023-0215-MTZ (Del. Ch.) (the \u201cShareholder Litigation\u201d). The Allegheny Action asserted a claim for breach of fiduciary duty against certain of the Company\u2019s directors and a claim for breach of 8 Del. C. \u00a7 242 against those directors and the Company, arising out of the Company\u2019s creation of the APEs, the Antara Transactions, and the Charter Amendments. The Munoz Action, which was filed by the stockholders who had previously made demands to inspect certain of the Company\u2019s books and records pursuant to 8 Del. C. \u00a7 220, asserted a claim for breach of fiduciary duty against the Company\u2019s current directors and former director Lee Wittlinger, arising out of the same conduct challenged in the Allegheny Action. The Allegheny Action sought a declaration that the issuance of the APEs violated 8 Del. C. \u00a7 242(b), an order that holders of the Company\u2019s Common Stock be provided with a separate vote from the holders of the APEs on the Charter Amendments or that the APEs be enjoined from voting on the Charter Amendments, and an award of money damages. The Munoz Action sought to enjoin the APEs from voting on the Charter Amendments.
On February 27, 2023, the Delaware Court of Chancery entered a status quo order that allowed the March 14, 2023 vote on the Charter Amendments to proceed, but precluded the Company from implementing the Charter Amendments pending a ruling by the court on the plaintiffs\u2019 then-anticipated preliminary injunction motion (the \u201cStatus Quo Order\u201d).
On April 2, 2023, the parties entered into a binding settlement term sheet to settle the Shareholder Litigation, which among other things, provided that the parties would jointly request that the Status Quo Order be lifted. Pursuant to the term sheet, the Company agreed, following and subject to AMC\u2019s completion of the Conversion and Reverse Stock Split, to make a non-cash settlement payment to record holders of Common Stock immediately prior to the Conversion (and after giving effect to the Reverse Stock Split) of share of Common Stock for every 7.5 shares of Common Stock owned by such record holders. The Company\u2019s obligation to make the Settlement Payment was
contingent on the Status Quo Order being lifted and the Company effecting the Charter Amendments. The defendants agreed to the settlement and the payment of the Settlement Payment solely to eliminate the burden, expense, and uncertainty of further litigation, and continue to expressly deny any liability or wrongdoing with respect to the matters alleged in the Shareholder Litigation. On April 3, 2023, the plaintiffs filed an unopposed motion to lift the Status Quo Order, but on April 5, 2023, the court denied the motion to lift the Status Quo Order.
On April 27, 2023, the parties jointly filed a Stipulation and Agreement of Compromise, Settlement, and Release (the \u201cSettlement Stipulation\u201d) with the court, which fully memorialized the settlement that the parties agreed to in the term sheet. On June 29\u201330, 2023, the court held a settlement hearing to consider whether to approve the settlement as outlined in the Settlement Stipulation.
On July 21, 2023, the court issued an opinion which, citing issues with the scope of the release sought under the proposed settlement, declined to approve the settlement as presented. On July 22, 2023, the parties filed an addendum to the Settlement Stipulation in an effort to address the issues with the scope of the release raised by the court and requested that the court approve the settlement with the revised release set forth in the addendum.
On August 11, 2023, the court approved the settlement of the Shareholder Litigation and lifted the Status Quo Order. On August 14, 2023, the Company filed the amendment to its Third Amended and Restated Certificate of Incorporation, effective as of August 24, 2023, which was previously approved by the Company\u2019s stockholders at the special meeting held on March 14, 2023 to implement the Charter Amendments. The Reverse Stock Split occurred on August 24, 2023, the conversion of APEs into Common Stock occurred on August 25, 2023, and the Settlement Payment was made on August 28, 2023. On September 15, 2023, the Court entered an order dismissing the Shareholder Litigation in its entirety and with prejudice. On October 13, 2023, a purported Company stockholder who objected to the settlement of the Shareholder Litigation filed a notice of appeal of the Court\u2019s order approving the settlement. As of January 26, 2024, the appeal was fully briefed before the Delaware Supreme Court and oral arguments on the appeal will be held on May 8, 2024.
In connection with the Shareholder Litigation, the Company recorded a $126.6 million charge to other expense during the three months ended March 31, 2023. The charge was based on an estimated fair value for the Settlement Payment of $116.6 million and estimated legal fees, net of probable insurance recoveries of $10.0 million as of March 31, 2023. The Company made the Settlement Payment on August 28, 2023, and recorded the disbursement to stockholders\u2019 deficit. The final value of the Settlement Payment was $99.3 million.
On August 14, 2023, a putative class action on behalf of APE holders, captioned Simons v. AMC Entertainment Holdings, Inc., C.A. No. 2023-0835-MTZ (the \u201cSimons Action\u201d), was filed against the Company in the Delaware Court of Chancery. The Simons Action asserts claims for a declaratory judgment, injunctive relief, and breach of contract, and alleges that the Settlement Payment in the Shareholder Litigation violates the Certificate of Designations that governed the APEs prior to the conversion of the APEs into Common Stock. On September 12, 2023, the Company filed a motion to dismiss the complaint. On December 26, 2023, plaintiff filed an amended complaint, which added a claim for breach of the implied covenant of good faith and fair dealing. On February 16, 2024, the Company filed a motion to dismiss the amended complaint. The motion to dismiss is scheduled for oral argument on October 2, 2024.
On May 4, 2023, the Company filed a lawsuit in the Superior Court of the State of Delaware against seventeen insurers participating in its directors & officers insurance program, seeking recovery for losses incurred in connection with its defense and settlement of the Shareholder Litigation, including the Settlement Payment. The insurance recovery action is captioned, AMC Entertainment Holdings, Inc. v. XL Specialty Insurance Co., et al., Case No. N23C-05-045 AML CCLD (Del. Super. May 4, 2023) (the \u201cCoverage Action\u201d). In the suit, AMC seeks up to $80 million in coverage under its Executive and Corporate Securities Liability Insurance Policies sold by the defendants, which provide coverage for the policy period of January 1, 2022, through January 1, 2023 (the \u201cPolicies\u201d) in excess of a $10 million deductible. The primary insurer in the Coverage Action has paid its full $5 million limit. The remainder of the insurers contest whether they owe coverage for the Settlement Payment, claiming it does not constitute a \u201cLoss\u201d under their insurance policies. AMC may have claims for coverage from additional insurers as well, however, those insurers\u2019 policies contain mandatory arbitration provisions, so they have not been included in the Coverage Action.
On October 6, 2023, an action captioned Mathew, et al. v. Citigroup Global Markets, et al., Case No. 1:23-cv-12302-FDS (the \u201cMathew Action\u201d), was filed in the U.S. District Court for the District of Massachusetts. The Mathew Action names the Company as a nominal defendant. On November 16, 2023, plaintiffs filed an amended complaint. On
January 9, 2024, the Company filed a motion to dismiss the amended complaint. On January 11, 2024, plaintiffs filed a motion for leave to file a second amended complaint. On January 24, 2024, the Company filed an opposition to plaintiff\u2019s motion for leave to file a second amended complaint.
On December 18, 2023, an action captioned Miller, et al. v. AMC Entertainment Holdings, Inc. et al., C.A. No. 2023-1259-LM (Del. Ch.) (the \u201cMiller Action\u201d), was filed against the Company and two of its officers in the Delaware Court of Chancery. Plaintiffs in the Miller Action seek to inspect certain of the Company\u2019s books and records pursuant to 8 Del. C. \u00a7 220 in order to investigate allegations concerning alleged manipulation of the Company\u2019s Common Stock. On February 7, 2024, the parties filed a stipulation dismissing the Company\u2019s two officers from the action. On April 17, 2024, the parties filed a stipulation dismissing the Miller Action with prejudice.
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NOTE 12\u2014LOSS PER SHARE
On August 24, 2023, the Company effectuated a reverse stock split at a ratio of share of Common Stock for every ten shares of Common Stock. As a result of the reverse stock split, each share of Series A Convertible Participating Preferred Stock became convertible into ten shares of Common Stock, and by extension each AMC Preferred Equity Unit became equivalent to -tenth (1/10th) of a share of Common Stock. The reverse stock split did not impact the number of AMC Preferred Equity Units outstanding. The Company concluded that this change in conversion ratio is analogous to a reverse stock split of the AMC Preferred Equity Units even though the reverse stock split did not have an effect on the number of AMC Preferred Equity Units outstanding.
Accordingly, all references made to share, per share, unit, per unit, or common share amounts in the accompanying condensed consolidated financial statements and applicable disclosures have been retroactively adjusted to reflect the reverse stock split. References made to AMC Preferred Equity Units have been retroactively adjusted to reflect the effect of the reverse stock split on their equivalent Common Stock shares.
Basic loss per share is computed by dividing net loss by the weighted-average number of common shares outstanding. Diluted loss per share includes the effects of unvested RSUs with a service condition only and unvested contingently issuable PSUs that have service and performance conditions, if dilutive.
The following table sets forth the computation of basic and diluted loss per common share:
Three Months Ended | ||||||
(In millions) | \u00a0\u00a0\u00a0\u00a0 | March\u00a031, 2024 | \u00a0\u00a0\u00a0\u00a0 | March\u00a031, 2023 | ||
Numerator: | ||||||
Net loss for basic and diluted loss per share | $ | (163.5) | $ | (235.5) | ||
Denominator (shares in thousands): | ||||||
Weighted average shares for basic loss per common share | \u00a0 | 263,411 | \u00a0 | 137,395 | ||
Basic and diluted loss per common share | (0.62) | (1.71) |
Vested RSUs and PSUs have dividend rights identical to the Company\u2019s Common Stock and are treated as outstanding shares for purposes of computing basic and diluted earnings per share.
Unvested RSUs of 271,738 for the three months ended March 31, 2024 were not included in the computation of diluted loss per share because they would be anti-dilutive. Unvested RSUs of 531,957 for the three months ended March 31, 2023 were not included in the computation of diluted loss per share because they would be anti-dilutive.
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 award agreements if the end of the reporting period were the end of the contingency period. Unvested PSUs of 149,080 for the three months ended March 31, 2024 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. Unvested PSUs of 297,829 at certain performance targets for the three months ended March 31, 2023 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.
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(In millions) | \u00a0\u00a0\u00a0\u00a0 | March\u00a031, 2024 | \u00a0\u00a0\u00a0\u00a0 | March\u00a031, 2023 | ||
Numerator: | ||||||
Net loss for basic and diluted loss per share | $ | (163.5) | $ | (235.5) | ||
Denominator (shares in thousands): | ||||||
Weighted average shares for basic loss per common share | \u00a0 | 263,411 | \u00a0 | 137,395 | ||
Basic and diluted loss per common share | (0.62) | (1.71) |
NOTE 13\u2014SUBSEQUENT EVENTS
Share Issuance. Through the date of this filing, the Company has received gross proceeds of approximately $103.5 million through its at-the-market offering of approximately 32.0 million shares of its Common Stock and paid fees to the sales agents of approximately $2.6 million.
Termination of Senior Secured Revolving Credit Facility. As of April 19, 2024, and in anticipation of the maturity of the Senior Secured Revolving Credit Facility, the Company has voluntarily terminated the commitments under the Senior Secured Revolving Credit Facility in full and paid off any remaining obligations with respect to the Senior Secured Revolving Credit Facility (the \u201cRevolver Payoff\u201d). Immediately from and after the Revolver Payoff, the financial covenant that required, in certain circumstances, compliance with a certain secured leverage ratio and the related covenant suspension conditions are no longer in effect pursuant to the terms of the Credit Agreement. The termination of the Senior Secured Revolving Credit Facility does not otherwise affect the senior secured term loan facility under the Credit Agreement.
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