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 six months ended June 30, 2024, are not necessarily indicative of the results to be expected for the year ending December 31, 2024.
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 for periods prior to August 24, 2023, have been retroactively adjusted to reflect the reverse stock split. References made to AMC Preferred Equity Units have also 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 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. 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 revenues will need to increase to levels at least in line with pre-COVID-19 revenues. North American box office grosses were down approximately 36% for the six months ended June 30, 2024, compared to the six months ended June 30, 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 revenue, the estimates of amounts of required liquidity vary significantly.
There can be no assurance that the 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 had a negative impact in 2024 on the film slate for exhibition, the Company\u2019s 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. See Note 13\u2014Subsequent Events for more information about various debt refinancing transactions that occurred subsequent to June 30, 2024.
The below table summarizes the various debt for equity exchange transactions that occurred during the six months ended June 30, 2024. The transactions were treated as 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. 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 | $ | 191.4 | 27,545,325 | $ | 91.1 | $ | 7.4 |
During the six months ended June 30, 2024, the Company raised gross proceeds of $250.0 million and paid fees to sales agents and incurred other third-party issuance costs of approximately $6.3 million and $0.6 million, respectively, through its at-the-market offering of approximately 72.5 million shares of Common Stock. The Company paid $0.7 million of other third-party issuance costs during the six months ended June 30, 2024.
Cash and Cash Equivalents. As of June 30, 2024, cash and cash equivalents for the U.S. markets and International markets were $655.7 million and $114.6 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) | June\u00a030, 2024 | December\u00a031, 2023 | ||||
Cash and cash equivalents | $ | 770.3 | $ | 884.3 | ||
Restricted cash | 48.3 | 27.1 | ||||
Total cash and cash equivalents and restricted cash in the statement of cash flows | $ | 818.6 | $ | 911.4 |
As of June 30, 2024, restricted cash for the U.S. markets and International markets were $20.0 million and $28.3 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 income (loss) | (33.1) | 0.5 | (32.6) | ||||||
Balance June\u00a030, 2024 | $ | (110.8) | $ | \u2014 | $ | (110.8) |
Accumulated Depreciation and Amortization. Accumulated depreciation was $3,197.1\u00a0million and $3,109.8\u00a0million as of June 30, 2024, and December\u00a031, 2023, respectively, related to property. Accumulated amortization of intangible assets was $7.7\u00a0million and $7.3\u00a0million as of June 30, 2024, and December\u00a031, 2023, respectively.
Other Expense (Income). The following table sets forth the components of other expense (income):
Three Months Ended | Six Months Ended | |||||||||||
(In millions) | June\u00a030, 2024 | June\u00a030, 2023 | June\u00a030, 2024 | June\u00a030, 2023 | ||||||||
Foreign currency transaction (gains) losses | $ | (0.6) | (7.5) | $ | 2.6 | (16.2) | ||||||
Non-operating components of net periodic benefit cost | 0.4 | 0.5 | 1.1 | 0.9 | ||||||||
Gain on extinguishment - Senior Subordinated Notes due 2026 | \u2014 | \u2014 | \u2014 | (2.3) | ||||||||
Gain on extinguishment - Second Lien Notes due 2026 | (85.3) | (21.6) | (91.1) | (84.4) | ||||||||
Equity in earnings of non-consolidated entities | (1.0) | (0.8) | (4.7) | (2.2) | ||||||||
Derivative stockholder settlement | \u2014 | \u2014 | \u2014 | (14.0) | ||||||||
Shareholder litigation and recoveries | (19.1) | (1.2) | (19.1) | 125.4 | ||||||||
Vendor dispute settlement | \u2014 | \u2014 | (36.2) | \u2014 | ||||||||
Other settlement proceeds | (2.6) | \u2014 | (3.6) | \u2014 | ||||||||
\u2014 | (1.3) | \u2014 | (1.3) | |||||||||
Total other expense (income) | $ | (108.2) | $ | (31.9) | $ | (151.0) | $ | 5.9 |
"}]},{"name":"rpt:f-332","factDimensions":{"xbrl:concept":"us-gaap:NumberOfReportableSegments","xbrl:period":"2024-01-01T00:00:00/2024-07-01T00:00:00","xbrl:entity":"cik:0001411579","xbrl:unit":"amch:segment"},"factValues":[{"value":"2"}]},{"name":"rpt:f-333","factDimensions":{"xbrl:concept":"us-gaap:StockholdersEquityPolicyTextBlock","xbrl:period":"2024-01-01T00:00:00/2024-07-01T00:00:00","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 for periods prior to August 24, 2023, have been retroactively adjusted to reflect the reverse stock split. References made to AMC Preferred Equity Units have also 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-334","factDimensions":{"xbrl:concept":"amch:LiquidityPolicyPolicyTextBlock","xbrl:period":"2024-01-01T00:00:00/2024-07-01T00:00:00","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 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. 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 revenues will need to increase to levels at least in line with pre-COVID-19 revenues. North American box office grosses were down approximately 36% for the six months ended June 30, 2024, compared to the six months ended June 30, 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 revenue, the estimates of amounts of required liquidity vary significantly.
There can be no assurance that the 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 had a negative impact in 2024 on the film slate for exhibition, the Company\u2019s 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. See Note 13\u2014Subsequent Events for more information about various debt refinancing transactions that occurred subsequent to June 30, 2024.
The below table summarizes the various debt for equity exchange transactions that occurred during the six months ended June 30, 2024. The transactions were treated as 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. 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 | $ | 191.4 | 27,545,325 | $ | 91.1 | $ | 7.4 |
During the six months ended June 30, 2024, the Company raised gross proceeds of $250.0 million and paid fees to sales agents and incurred other third-party issuance costs of approximately $6.3 million and $0.6 million, respectively, through its at-the-market offering of approximately 72.5 million shares of Common Stock. The Company paid $0.7 million of other third-party issuance costs during the six months ended June 30, 2024.
"}]},{"name":"rpt:f-335","factDimensions":{"xbrl:concept":"amch:PercentageOfGrossesNorthAmericanBoxOffice","xbrl:period":"2024-01-01T00:00:00/2024-07-01T00:00:00","xbrl:entity":"cik:0001411579"},"factValues":[{"value":"0.36","decimals":2}]},{"name":"rpt:f-336","factDimensions":{"xbrl:concept":"amch:ScheduleOfDebtForEquityExchange","xbrl:period":"2024-01-01T00:00:00/2024-07-01T00:00:00","xbrl:entity":"cik:0001411579"},"factValues":[{"value":"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 | $ | 191.4 | 27,545,325 | $ | 91.1 | $ | 7.4 |
Cash and Cash Equivalents. As of June 30, 2024, cash and cash equivalents for the U.S. markets and International markets were $655.7 million and $114.6 million respectively, and as of December 31, 2023, cash and cash equivalents were $752.3 million and $132.0 million, respectively.
"}]},{"name":"rpt:f-347","factDimensions":{"xbrl:concept":"us-gaap:CashAndCashEquivalentsAtCarryingValue","xbrl:period":"2024-07-01T00:00:00","xbrl:entity":"cik:0001411579","xbrl:unit":"iso4217:USD","srt:StatementGeographicalAxis":"country:US"},"factValues":[{"value":"655700000","decimals":-5}]},{"name":"rpt:f-348","factDimensions":{"xbrl:concept":"us-gaap:CashAndCashEquivalentsAtCarryingValue","xbrl:period":"2024-07-01T00:00:00","xbrl:entity":"cik:0001411579","xbrl:unit":"iso4217:USD","srt:StatementGeographicalAxis":"amch:InternationalMarketsMember"},"factValues":[{"value":"114600000","decimals":-5}]},{"name":"rpt:f-349","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-350","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-351","factDimensions":{"xbrl:concept":"us-gaap:CashAndCashEquivalentsRestrictedCashAndCashEquivalentsPolicy","xbrl:period":"2024-01-01T00:00:00/2024-07-01T00:00:00","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) | June\u00a030, 2024 | December\u00a031, 2023 | ||||
Cash and cash equivalents | $ | 770.3 | $ | 884.3 | ||
Restricted cash | 48.3 | 27.1 | ||||
Total cash and cash equivalents and restricted cash in the statement of cash flows | $ | 818.6 | $ | 911.4 |
As of June 30, 2024, restricted cash for the U.S. markets and International markets were $20.0 million and $28.3 million, respectively. As of December 31, 2023, restricted cash for the U.S. markets and International markets were $0 and $27.1 million, respectively.
"}]},{"name":"rpt:f-352","factDimensions":{"xbrl:concept":"us-gaap:ScheduleOfCashAndCashEquivalentsTableTextBlock","xbrl:period":"2024-01-01T00:00:00/2024-07-01T00:00:00","xbrl:entity":"cik:0001411579"},"factValues":[{"value":"As of | ||||||
(In millions) | June\u00a030, 2024 | December\u00a031, 2023 | ||||
Cash and cash equivalents | $ | 770.3 | $ | 884.3 | ||
Restricted cash | 48.3 | 27.1 | ||||
Total cash and cash equivalents and restricted cash in the statement of cash flows | $ | 818.6 | $ | 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 income (loss) | (33.1) | 0.5 | (32.6) | ||||||
Balance June\u00a030, 2024 | $ | (110.8) | $ | \u2014 | $ | (110.8) |
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 income (loss) | (33.1) | 0.5 | (32.6) | ||||||
Balance June\u00a030, 2024 | $ | (110.8) | $ | \u2014 | $ | (110.8) |
Accumulated Depreciation and Amortization. Accumulated depreciation was $3,197.1\u00a0million and $3,109.8\u00a0million as of June 30, 2024, and December\u00a031, 2023, respectively, related to property. Accumulated amortization of intangible assets was $7.7\u00a0million and $7.3\u00a0million as of June 30, 2024, and December\u00a031, 2023, respectively.
"}]},{"name":"rpt:f-374","factDimensions":{"xbrl:concept":"us-gaap:AccumulatedDepreciationDepletionAndAmortizationPropertyPlantAndEquipment","xbrl:period":"2024-07-01T00:00:00","xbrl:entity":"cik:0001411579","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"3197100000","decimals":-5}]},{"name":"rpt:f-375","factDimensions":{"xbrl:concept":"us-gaap:AccumulatedDepreciationDepletionAndAmortizationPropertyPlantAndEquipment","xbrl:period":"2024-01-01T00:00:00","xbrl:entity":"cik:0001411579","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"3109800000","decimals":-5}]},{"name":"rpt:f-376","factDimensions":{"xbrl:concept":"us-gaap:FiniteLivedIntangibleAssetsAccumulatedAmortization","xbrl:period":"2024-07-01T00:00:00","xbrl:entity":"cik:0001411579","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"7700000","decimals":-5}]},{"name":"rpt:f-377","factDimensions":{"xbrl:concept":"us-gaap:FiniteLivedIntangibleAssetsAccumulatedAmortization","xbrl:period":"2024-01-01T00:00:00","xbrl:entity":"cik:0001411579","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"7300000","decimals":-5}]},{"name":"rpt:f-378","factDimensions":{"xbrl:concept":"amch:OtherExpensePolicyTextBlock","xbrl:period":"2024-01-01T00:00:00/2024-07-01T00:00:00","xbrl:entity":"cik:0001411579"},"factValues":[{"value":"Other Expense (Income). The following table sets forth the components of other expense (income):
Three Months Ended | Six Months Ended | |||||||||||
(In millions) | June\u00a030, 2024 | June\u00a030, 2023 | June\u00a030, 2024 | June\u00a030, 2023 | ||||||||
Foreign currency transaction (gains) losses | $ | (0.6) | (7.5) | $ | 2.6 | (16.2) | ||||||
Non-operating components of net periodic benefit cost | 0.4 | 0.5 | 1.1 | 0.9 | ||||||||
Gain on extinguishment - Senior Subordinated Notes due 2026 | \u2014 | \u2014 | \u2014 | (2.3) | ||||||||
Gain on extinguishment - Second Lien Notes due 2026 | (85.3) | (21.6) | (91.1) | (84.4) | ||||||||
Equity in earnings of non-consolidated entities | (1.0) | (0.8) | (4.7) | (2.2) | ||||||||
Derivative stockholder settlement | \u2014 | \u2014 | \u2014 | (14.0) | ||||||||
Shareholder litigation and recoveries | (19.1) | (1.2) | (19.1) | 125.4 | ||||||||
Vendor dispute settlement | \u2014 | \u2014 | (36.2) | \u2014 | ||||||||
Other settlement proceeds | (2.6) | \u2014 | (3.6) | \u2014 | ||||||||
\u2014 | (1.3) | \u2014 | (1.3) | |||||||||
Total other expense (income) | $ | (108.2) | $ | (31.9) | $ | (151.0) | $ | 5.9 |
"}]},{"name":"rpt:f-379","factDimensions":{"xbrl:concept":"us-gaap:ScheduleOfOtherNonoperatingExpenseByComponentTextBlock","xbrl:period":"2024-01-01T00:00:00/2024-07-01T00:00:00","xbrl:entity":"cik:0001411579"},"factValues":[{"value":"
Three Months Ended | Six Months Ended | |||||||||||
(In millions) | June\u00a030, 2024 | June\u00a030, 2023 | June\u00a030, 2024 | June\u00a030, 2023 | ||||||||
Foreign currency transaction (gains) losses | $ | (0.6) | (7.5) | $ | 2.6 | (16.2) | ||||||
Non-operating components of net periodic benefit cost | 0.4 | 0.5 | 1.1 | 0.9 | ||||||||
Gain on extinguishment - Senior Subordinated Notes due 2026 | \u2014 | \u2014 | \u2014 | (2.3) | ||||||||
Gain on extinguishment - Second Lien Notes due 2026 | (85.3) | (21.6) | (91.1) | (84.4) | ||||||||
Equity in earnings of non-consolidated entities | (1.0) | (0.8) | (4.7) | (2.2) | ||||||||
Derivative stockholder settlement | \u2014 | \u2014 | \u2014 | (14.0) | ||||||||
Shareholder litigation and recoveries | (19.1) | (1.2) | (19.1) | 125.4 | ||||||||
Vendor dispute settlement | \u2014 | \u2014 | (36.2) | \u2014 | ||||||||
Other settlement proceeds | (2.6) | \u2014 | (3.6) | \u2014 | ||||||||
\u2014 | (1.3) | \u2014 | (1.3) | |||||||||
Total other expense (income) | $ | (108.2) | $ | (31.9) | $ | (151.0) | $ | 5.9 |
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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 | Six Months Ended | |||||||||||||
June\u00a030, | June\u00a030, | June\u00a030, | June\u00a030, | |||||||||||
(In millions) | Consolidated Statements of Operations | 2024 | 2023 | 2024 | 2023 | |||||||||
Operating lease cost | ||||||||||||||
Theatre properties | Rent | $ | 195.1 | $ | 202.0 | $ | 392.8 | $ | 386.2 | |||||
Theatre properties | Operating expense | 0.8 | 0.3 | 1.0 | 0.6 | |||||||||
Equipment | Operating expense | 7.4 | 3.9 | 14.1 | 7.0 | |||||||||
Office and other | General and administrative: other | 1.4 | 1.4 | 2.7 | 2.7 | |||||||||
Finance lease cost | ||||||||||||||
Amortization of finance lease assets | Depreciation and amortization | \u2014 | 0.5 | 0.5 | 1.0 | |||||||||
Interest expense on lease liabilities | Finance lease obligations | 0.6 | 1.0 | 1.5 | 1.9 | |||||||||
Variable lease cost | ||||||||||||||
Theatre properties | Rent | 23.3 | 18.8 | 50.1 | 40.3 | |||||||||
Equipment | Operating expense | 16.0 | 20.4 | 29.4 | 33.7 | |||||||||
Total lease cost | $ | 244.6 | $ | 248.3 | $ | 492.1 | $ | 473.4 |
Cash flow and supplemental information is presented below:
Six Months Ended | ||||||
June\u00a030, | June\u00a030, | |||||
(In millions) | 2024 | 2023 | ||||
Cash paid for amounts included in the measurement of lease liabilities: | ||||||
Operating cash flows used in finance leases | $ | (1.7) | $ | (1.6) | ||
Operating cash flows used in operating leases | (463.7) | (494.1) | ||||
Financing cash flows used in finance leases | (2.4) | (3.1) | ||||
Landlord contributions: | ||||||
Operating cash flows provided by operating leases | 15.6 | 8.3 | ||||
Supplemental disclosure of noncash leasing activities: | ||||||
Right-of-use assets obtained in exchange for new operating lease liabilities (1) | 54.0 | 82.6 |
| (1) | Includes lease extensions and option exercises. |
The following table represents the weighted-average remaining lease term and discount rate as of June 30, 2024:
Weighted Average | Weighted Average | |||||
Remaining | Discount | |||||
Lease Term and Discount Rate | Lease Term (years) | Rate | ||||
Operating leases | 8.4 | 10.6% | ||||
Finance leases | 13.4 | 6.4% |
Minimum annual payments and the net present value thereof as of June 30, 2024, are as follows:
Operating Lease | Finance Lease | |||||
(In millions) | Payments | Payments | ||||
Six months ending December 31, 2024 | $ | 456.2 | $ | 3.8 | ||
2025 | 894.0 | 7.1 | ||||
2026 | 831.3 | 7.1 | ||||
2027 | 766.3 | 7.1 | ||||
2028 | 680.2 | 7.1 | ||||
2029 | 578.6 | 7.1 | ||||
Thereafter | 2,227.6 | 38.6 | ||||
Total lease payments | 6,434.2 | 77.9 | ||||
Less imputed interest | (2,148.3) | (27.3) | ||||
Total operating and finance lease liabilities, respectively | $ | 4,285.9 | $ | 50.6 |
As of June 30, 2024, the Company had signed additional operating lease agreements for three theatres that have not yet commenced. These leases have terms ranging from 15 to 20 years and total lease payments of approximately $68.9 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 six months ended June 30, 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-412","factDimensions":{"xbrl:concept":"us-gaap:LeaseCostTableTextBlock","xbrl:period":"2024-01-01T00:00:00/2024-07-01T00:00:00","xbrl:entity":"cik:0001411579"},"factValues":[{"value":"
Three Months Ended | Six Months Ended | |||||||||||||
June\u00a030, | June\u00a030, | June\u00a030, | June\u00a030, | |||||||||||
(In millions) | Consolidated Statements of Operations | 2024 | 2023 | 2024 | 2023 | |||||||||
Operating lease cost | ||||||||||||||
Theatre properties | Rent | $ | 195.1 | $ | 202.0 | $ | 392.8 | $ | 386.2 | |||||
Theatre properties | Operating expense | 0.8 | 0.3 | 1.0 | 0.6 | |||||||||
Equipment | Operating expense | 7.4 | 3.9 | 14.1 | 7.0 | |||||||||
Office and other | General and administrative: other | 1.4 | 1.4 | 2.7 | 2.7 | |||||||||
Finance lease cost | ||||||||||||||
Amortization of finance lease assets | Depreciation and amortization | \u2014 | 0.5 | 0.5 | 1.0 | |||||||||
Interest expense on lease liabilities | Finance lease obligations | 0.6 | 1.0 | 1.5 | 1.9 | |||||||||
Variable lease cost | ||||||||||||||
Theatre properties | Rent | 23.3 | 18.8 | 50.1 | 40.3 | |||||||||
Equipment | Operating expense | 16.0 | 20.4 | 29.4 | 33.7 | |||||||||
Total lease cost | $ | 244.6 | $ | 248.3 | $ | 492.1 | $ | 473.4 |
Six Months Ended | ||||||
June\u00a030, | June\u00a030, | |||||
(In millions) | 2024 | 2023 | ||||
Cash paid for amounts included in the measurement of lease liabilities: | ||||||
Operating cash flows used in finance leases | $ | (1.7) | $ | (1.6) | ||
Operating cash flows used in operating leases | (463.7) | (494.1) | ||||
Financing cash flows used in finance leases | (2.4) | (3.1) | ||||
Landlord contributions: | ||||||
Operating cash flows provided by operating leases | 15.6 | 8.3 | ||||
Supplemental disclosure of noncash leasing activities: | ||||||
Right-of-use assets obtained in exchange for new operating lease liabilities (1) | 54.0 | 82.6 |
| (1) | Includes lease extensions and option exercises. |
Weighted Average | Weighted Average | |||||
Remaining | Discount | |||||
Lease Term and Discount Rate | Lease Term (years) | Rate | ||||
Operating leases | 8.4 | 10.6% | ||||
Finance leases | 13.4 | 6.4% |
Operating Lease | Finance Lease | |||||
(In millions) | Payments | Payments | ||||
Six months ending December 31, 2024 | $ | 456.2 | $ | 3.8 | ||
2025 | 894.0 | 7.1 | ||||
2026 | 831.3 | 7.1 | ||||
2027 | 766.3 | 7.1 | ||||
2028 | 680.2 | 7.1 | ||||
2029 | 578.6 | 7.1 | ||||
Thereafter | 2,227.6 | 38.6 | ||||
Total lease payments | 6,434.2 | 77.9 | ||||
Less imputed interest | (2,148.3) | (27.3) | ||||
Total operating and finance lease liabilities, respectively | $ | 4,285.9 | $ | 50.6 |
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 | Six Months Ended | |||||||||||
(In millions) | June\u00a030, 2024 | June\u00a030, 2023 | June\u00a030, 2024 | June\u00a030, 2023 | ||||||||
Major revenue types | ||||||||||||
Admissions | $ | 564.4 | $ | 744.1 | $ | 1,094.9 | $ | 1,278.2 | ||||
Food and beverage | 367.1 | 488.2 | 688.3 | 816.9 | ||||||||
Other theatre: | ||||||||||||
Screen advertising | 30.2 | 32.3 | 60.5 | 63.2 | ||||||||
Other | 68.9 | 83.3 | 138.3 | 144.0 | ||||||||
Other theatre | 99.1 | 115.6 | 198.8 | 207.2 | ||||||||
Total revenues | $ | 1,030.6 | $ | 1,347.9 | $ | 1,982.0 | $ | 2,302.3 |
Three Months Ended | Six Months Ended | |||||||||||
(In millions) | June\u00a030,\u00a02024 | June\u00a030,\u00a02023 | June\u00a030,\u00a02024 | June\u00a030,\u00a02023 | ||||||||
Timing of revenue recognition | ||||||||||||
Products and services transferred at a point in time | $ | 932.9 | $ | 1,260.4 | $ | 1,791.4 | $ | 2,132.2 | ||||
Products and services transferred over time (1) | 97.7 | 87.5 | 190.6 | 170.1 | ||||||||
Total revenues | $ | 1,030.6 | $ | 1,347.9 | $ | 1,982.0 | $ | 2,302.3 |
| (1) | Amounts primarily include subscription and advertising revenues. |
The following tables provide the balances of receivables, net and deferred revenues and income as of June 30, 2024, and December 31, 2023:
(In millions) | June\u00a030,\u00a02024 | December 31, 2023 | ||||
Current assets | ||||||
Receivables related to contracts with customers | $ | 83.6 | $ | 113.5 | ||
Miscellaneous receivables | 72.4 | 90.2 | ||||
Receivables, net | $ | 156.0 | $ | 203.7 |
(In millions) | June\u00a030,\u00a02024 | December 31, 2023 | ||||
Current liabilities | ||||||
Deferred revenues related to contracts with customers | $ | 392.0 | $ | 415.3 | ||
Miscellaneous deferred income | 7.1 | 6.5 | ||||
Deferred revenues and income | $ | 399.1 | $ | 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) | 148.5 | ||
Customer loyalty rewards accumulated, net of expirations: | |||
Admission revenues (2) | 10.6 | ||
Food and beverage (2) | 16.3 | ||
Other theatre (2) | (1.3) | ||
Reclassification to revenue as the result of performance obligations satisfied: | |||
Admission revenues (3) | (120.6) | ||
Food and beverage (3) | (38.0) | ||
Other theatre (4) | (36.3) | ||
Foreign currency translation adjustment | (2.5) | ||
Balance June 30, 2024 | $ | 392.0 |
\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 | (11.1) | ||
Balance June 30, 2024 | $ | 475.5 |
| (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 June 30, 2024 was $293.8\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 June 30, 2024, the amount of deferred revenues allocated to the loyalty programs included in deferred revenues and income in the condensed consolidated balance sheet was $74.5\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-492","factDimensions":{"xbrl:concept":"us-gaap:DisaggregationOfRevenueTableTextBlock","xbrl:period":"2024-01-01T00:00:00/2024-07-01T00:00:00","xbrl:entity":"cik:0001411579"},"factValues":[{"value":"Three Months Ended | Six Months Ended | |||||||||||
(In millions) | June\u00a030, 2024 | June\u00a030, 2023 | June\u00a030, 2024 | June\u00a030, 2023 | ||||||||
Major revenue types | ||||||||||||
Admissions | $ | 564.4 | $ | 744.1 | $ | 1,094.9 | $ | 1,278.2 | ||||
Food and beverage | 367.1 | 488.2 | 688.3 | 816.9 | ||||||||
Other theatre: | ||||||||||||
Screen advertising | 30.2 | 32.3 | 60.5 | 63.2 | ||||||||
Other | 68.9 | 83.3 | 138.3 | 144.0 | ||||||||
Other theatre | 99.1 | 115.6 | 198.8 | 207.2 | ||||||||
Total revenues | $ | 1,030.6 | $ | 1,347.9 | $ | 1,982.0 | $ | 2,302.3 |
Three Months Ended | Six Months Ended | |||||||||||
(In millions) | June\u00a030,\u00a02024 | June\u00a030,\u00a02023 | June\u00a030,\u00a02024 | June\u00a030,\u00a02023 | ||||||||
Timing of revenue recognition | ||||||||||||
Products and services transferred at a point in time | $ | 932.9 | $ | 1,260.4 | $ | 1,791.4 | $ | 2,132.2 | ||||
Products and services transferred over time (1) | 97.7 | 87.5 | 190.6 | 170.1 | ||||||||
Total revenues | $ | 1,030.6 | $ | 1,347.9 | $ | 1,982.0 | $ | 2,302.3 |
| (1) | Amounts primarily include subscription and advertising revenues. |
(In millions) | June\u00a030,\u00a02024 | December 31, 2023 | ||||
Current assets | ||||||
Receivables related to contracts with customers | $ | 83.6 | $ | 113.5 | ||
Miscellaneous receivables | 72.4 | 90.2 | ||||
Receivables, net | $ | 156.0 | $ | 203.7 |
(In millions) | June\u00a030,\u00a02024 | December 31, 2023 | ||||
Current liabilities | ||||||
Deferred revenues related to contracts with customers | $ | 392.0 | $ | 415.3 | ||
Miscellaneous deferred income | 7.1 | 6.5 | ||||
Deferred revenues and income | $ | 399.1 | $ | 421.8 |
Deferred Revenues | |||
Related to Contracts | |||
(In millions) | with Customers | ||
Balance December 31, 2023 | $ | 415.3 | |
Cash received in advance (1) | 148.5 | ||
Customer loyalty rewards accumulated, net of expirations: | |||
Admission revenues (2) | 10.6 | ||
Food and beverage (2) | 16.3 | ||
Other theatre (2) | (1.3) | ||
Reclassification to revenue as the result of performance obligations satisfied: | |||
Admission revenues (3) | (120.6) | ||
Food and beverage (3) | (38.0) | ||
Other theatre (4) | (36.3) | ||
Foreign currency translation adjustment | (2.5) | ||
Balance June 30, 2024 | $ | 392.0 |
\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 | (11.1) | ||
Balance June 30, 2024 | $ | 475.5 |
| (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 six months ended June 30, 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 | (40.3) | 7.1 | (33.2) | (40.3) | 7.1 | (33.2) | ||||||||||||||||||
Balance June 30, 2024 | $ | 3,072.6 | $ | (1,276.1) | $ | 1,796.5 | $ | 1,549.2 | $ | (1,020.2) | $ | 529.0 | $ | 4,621.8 | $ | (2,296.3) | $ | 2,325.5 |
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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 | (40.3) | 7.1 | (33.2) | (40.3) | 7.1 | (33.2) | ||||||||||||||||||
Balance June 30, 2024 | $ | 3,072.6 | $ | (1,276.1) | $ | 1,796.5 | $ | 1,549.2 | $ | (1,020.2) | $ | 529.0 | $ | 4,621.8 | $ | (2,296.3) | $ | 2,325.5 |
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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 six months ended June 30, 2023. Investments in non-consolidated affiliates as of June 30, 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 of 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%. Through its various investments the Company has interests in four U.S. theatres and 62 theatres in Europe. Indebtedness held by equity method investees is non-recourse to the Company. During the three months ended June 30, 2024 and June 30, 2023, the Company recorded equity in earnings of non-consolidated entities of $(1.0) million and $(0.8) million, respectively. During the six months ended June 30, 2024 and June 30, 2023, the Company recorded equity in earnings of $(4.7) million and $(2.2) 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) | June\u00a030, 2024 | \u00a0\u00a0\u00a0\u00a0 | December 31, 2023 | |||
Due from DCM for on-screen advertising revenue | $ | 2.1 | $ | 3.3 | ||
Loan receivable from DCM | 0.7 | 0.6 | ||||
Due to AC JV for Fathom Events programming | (3.1) | (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 | (0.7) | (0.6) |
Three Months Ended | Six Months Ended | |||||||||||||
(In\u00a0millions) | Consolidated Statements of Operations | June\u00a030, 2024 | June\u00a030, 2023 | June\u00a030, 2024 | June\u00a030, 2023 | |||||||||
DCM screen advertising revenues | Other revenues | $ | 3.3 | $ | 4.1 | $ | 6.6 | $ | 7.6 | |||||
DCDC content delivery services | Operating expense | 0.3 | 0.3 | 0.6 | 0.6 | |||||||||
Gross exhibition cost on AC JV Fathom Events programming | Film exhibition costs | 5.7 | 4.0 | 12.9 | 7.0 | |||||||||
Screenvision screen advertising revenues | Other revenues | 1.6 | 2.4 | 2.9 | 3.9 |
Investment in Hycroft
The Company holds approximately 2.4 million common shares of Hycroft Mining Holding Corporation (NASDAQ: HYMC) (\u201cHycroft\u201d) and approximately 2.3 million warrants to purchase common shares. 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 June 30, 2024 and June 30, 2023, the Company recorded unrealized (gain) loss in investment income of $(0.7) million and $5.5 million, respectively. During the six months ended June 30, 2024 and June 30, 2023, the Company recorded unrealized loss in investment income of $0.3 million and $10.1 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) | June\u00a030, 2024 | \u00a0\u00a0\u00a0\u00a0 | December 31, 2023 | |||
Due from DCM for on-screen advertising revenue | $ | 2.1 | $ | 3.3 | ||
Loan receivable from DCM | 0.7 | 0.6 | ||||
Due to AC JV for Fathom Events programming | (3.1) | (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 | (0.7) | (0.6) |
Three Months Ended | Six Months Ended | |||||||||||||
(In\u00a0millions) | Consolidated Statements of Operations | June\u00a030, 2024 | June\u00a030, 2023 | June\u00a030, 2024 | June\u00a030, 2023 | |||||||||
DCM screen advertising revenues | Other revenues | $ | 3.3 | $ | 4.1 | $ | 6.6 | $ | 7.6 | |||||
DCDC content delivery services | Operating expense | 0.3 | 0.3 | 0.6 | 0.6 | |||||||||
Gross exhibition cost on AC JV Fathom Events programming | Film exhibition costs | 5.7 | 4.0 | 12.9 | 7.0 | |||||||||
Screenvision screen advertising revenues | Other revenues | 1.6 | 2.4 | 2.9 | 3.9 |
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 | June\u00a030, 2024 | \u00a0\u00a0\u00a0\u00a0 | December 31, 2023 | ||
First Lien Secured Debt: | ||||||
Senior Secured Credit Facility-Term Loan due 2026 (8.444% as of June 30, 2024 and 8.474% as of December 31, 2023) | $ | 1,895.0 | $ | 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 | 777.6 | 968.9 | ||||
Subordinated Debt: | ||||||
6.375% Senior Subordinated Notes due 2024 (\u00a34.0 million par value as of June 30, 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 | $ | 4,302.9 | $ | 4,504.3 | ||
Finance lease liabilities | \u00a0 | 50.6 | \u00a0 | 55.4 | ||
Deferred financing costs | (27.5) | (31.1) | ||||
Net premium (1) | 60.1 | 104.2 | ||||
Total carrying value of corporate borrowings and finance lease liabilities | $ | 4,386.1 | $ | 4,632.8 | ||
Less: | ||||||
Current maturities of corporate borrowings | (123.1) | \u00a0 | (25.1) | |||
Current maturities of finance lease liabilities | (4.3) | (5.4) | ||||
Total noncurrent carrying value of corporate borrowings and finance lease liabilities | $ | 4,258.7 | $ | 4,602.3 |
| (1) | The following table provides the net premium (discount) amounts of corporate borrowings: |
June\u00a030, | December\u00a031, | |||||
(In millions) | 2024 | 2023 | ||||
10%/12% Cash/PIK Toggle Second Lien Subordinated Notes due 2026 | $ | 86.5 | $ | 133.9 | ||
Senior Secured Credit Facility-Term Loan due 2026 | (2.6) | (3.3) | ||||
12.75% Odeon Senior Secured Notes due 2027 | (23.8) | (26.4) | ||||
Net premium | $ | 60.1 | $ | 104.2 |
The following table provides the principal payments required and maturities of corporate borrowing as of June 30, 2024:
Principal | |||
Amount of | |||
Corporate | |||
(In millions) | \u00a0\u00a0\u00a0\u00a0 | Borrowings | |
Six months ended December 31, 2024 | $ | 15.0 | |
2025 | 118.3 | ||
2026 | \u00a0 | 2,694.1 | |
2027 | \u00a0 | 525.5 | |
2028 | \u00a0 | \u2014 | |
2029 | \u00a0 | 950.0 | |
Total | $ | 4,302.9 |
Debt Repurchases and Exchanges
The below table summarizes the various debt for equity exchange transactions that occurred during the six months ended June 30, 2024. The transactions were treated as early extinguishments 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.
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 | $ | 191.4 | 27,545,325 | $ | 91.1 | $ | 7.4 |
The below table summarizes the cash debt repurchase transactions during the six months ended June 30, 2023, including repurchases with a related party:
Aggregate Principal | Reacquisition | Gain on | Accrued Interest | |||||||||
(In millions) | Repurchased | Cost | Extinguishment | Paid | ||||||||
Related party transactions: | ||||||||||||
Second Lien Notes due 2026 | $ | 58.9 | $ | 36.2 | $ | 33.4 | $ | 1.0 | ||||
5.875% Senior Subordinated Notes due 2026 | 4.1 | 1.7 | 2.3 | 0.1 | ||||||||
Total related party transactions | 63.0 | 37.9 | 35.7 | 1.1 | ||||||||
Non-related party transactions: | ||||||||||||
Second Lien Notes due 2026 | 82.5 | 46.2 | 51.0 | 2.1 | ||||||||
Total non-related party transactions | 82.5 | 46.2 | 51.0 | 2.1 | ||||||||
Total debt repurchases | $ | 145.5 | $ | 84.1 | $ | 86.7 | $ | 3.2 |
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.
See Note 13\u2014Subsequent Events for discussion of debt refinancing transactions that occurred after the balance sheet date.
Financial Covenants
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-649","factDimensions":{"xbrl:concept":"us-gaap:ScheduleOfDebtInstrumentsTextBlock","xbrl:period":"2024-01-01T00:00:00/2024-07-01T00:00:00","xbrl:entity":"cik:0001411579"},"factValues":[{"value":"(In millions) | \u00a0\u00a0\u00a0\u00a0 | June\u00a030, 2024 | \u00a0\u00a0\u00a0\u00a0 | December 31, 2023 | ||
First Lien Secured Debt: | ||||||
Senior Secured Credit Facility-Term Loan due 2026 (8.444% as of June 30, 2024 and 8.474% as of December 31, 2023) | $ | 1,895.0 | $ | 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 | 777.6 | 968.9 | ||||
Subordinated Debt: | ||||||
6.375% Senior Subordinated Notes due 2024 (\u00a34.0 million par value as of June 30, 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 | $ | 4,302.9 | $ | 4,504.3 | ||
Finance lease liabilities | \u00a0 | 50.6 | \u00a0 | 55.4 | ||
Deferred financing costs | (27.5) | (31.1) | ||||
Net premium (1) | 60.1 | 104.2 | ||||
Total carrying value of corporate borrowings and finance lease liabilities | $ | 4,386.1 | $ | 4,632.8 | ||
Less: | ||||||
Current maturities of corporate borrowings | (123.1) | \u00a0 | (25.1) | |||
Current maturities of finance lease liabilities | (4.3) | (5.4) | ||||
Total noncurrent carrying value of corporate borrowings and finance lease liabilities | $ | 4,258.7 | $ | 4,602.3 |
June\u00a030, | December\u00a031, | |||||
(In millions) | 2024 | 2023 | ||||
10%/12% Cash/PIK Toggle Second Lien Subordinated Notes due 2026 | $ | 86.5 | $ | 133.9 | ||
Senior Secured Credit Facility-Term Loan due 2026 | (2.6) | (3.3) | ||||
12.75% Odeon Senior Secured Notes due 2027 | (23.8) | (26.4) | ||||
Net premium | $ | 60.1 | $ | 104.2 |
Principal | |||
Amount of | |||
Corporate | |||
(In millions) | \u00a0\u00a0\u00a0\u00a0 | Borrowings | |
Six months ended December 31, 2024 | $ | 15.0 | |
2025 | 118.3 | ||
2026 | \u00a0 | 2,694.1 | |
2027 | \u00a0 | 525.5 | |
2028 | \u00a0 | \u2014 | |
2029 | \u00a0 | 950.0 | |
Total | $ | 4,302.9 |
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 | $ | 191.4 | 27,545,325 | $ | 91.1 | $ | 7.4 |
The below table summarizes the cash debt repurchase transactions during the six months ended June 30, 2023, including repurchases with a related party:
Aggregate Principal | Reacquisition | Gain on | Accrued Interest | |||||||||
(In millions) | Repurchased | Cost | Extinguishment | Paid | ||||||||
Related party transactions: | ||||||||||||
Second Lien Notes due 2026 | $ | 58.9 | $ | 36.2 | $ | 33.4 | $ | 1.0 | ||||
5.875% Senior Subordinated Notes due 2026 | 4.1 | 1.7 | 2.3 | 0.1 | ||||||||
Total related party transactions | 63.0 | 37.9 | 35.7 | 1.1 | ||||||||
Non-related party transactions: | ||||||||||||
Second Lien Notes due 2026 | 82.5 | 46.2 | 51.0 | 2.1 | ||||||||
Total non-related party transactions | 82.5 | 46.2 | 51.0 | 2.1 | ||||||||
Total debt repurchases | $ | 145.5 | $ | 84.1 | $ | 86.7 | $ | 3.2 |
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 for periods prior to August 24, 2023, have been retroactively adjusted to reflect the effect of the reverse stock split. References made to AMC Preferred Equity Units have also 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 six months ended June 30, 2024, the Company raised gross proceeds of $250.0 million and paid fees to sales agents and incurred other third-party issuance costs of approximately $6.3 million and $0.6 million, respectively, through its at-the-market offering of approximately 72.5 million shares of Common Stock. The Company paid $0.7 million of other third-party issuance costs during the six months ended June 30, 2024.
During the six months ended June 30, 2023, the Company raised gross proceeds of approximately $114.5 million and paid fees to a sales agent and incurred other third-party issuance costs of approximately $2.9 million and $8.3 million, respectively, through its at-the-market offering of approximately 7.1 million shares of AMC Preferred Equity Units. The Company paid $11.0 million of other third-party issuance costs during the six months ended June 30, 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 June 30, 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 | Six Months Ended | |||||||||||
June\u00a030, | June\u00a030, | June\u00a030, | June\u00a030, | |||||||||
(In millions) | 2024 | 2023 | 2024 | 2023 | ||||||||
Equity classified awards: | ||||||||||||
Special awards expense | $ | \u2014 | $ | \u2014 | $ | 2.1 | $ | 20.2 | ||||
Board of directors stock award expense | 1.0 | \u2014 | 1.0 | 0.9 | ||||||||
Restricted stock unit expense | 2.7 | 3.8 | 4.8 | 6.8 | ||||||||
Performance stock unit expense | 0.7 | 3.7 | 0.8 | 5.4 | ||||||||
Total equity classified awards: | 4.4 | 7.5 | 8.7 | 33.3 | ||||||||
Liability classified awards: | ||||||||||||
Restricted and performance stock unit expense | 0.1 | 0.3 | 0.1 | 0.4 | ||||||||
Total liability classified awards: | 0.1 | 0.3 | 0.1 | 0.4 | ||||||||
Total stock-based compensation expense | $ | 4.5 | $ | 7.8 | $ | 8.8 | $ | 33.7 |
As of June 30, 2024, the estimated remaining unrecognized compensation cost related to stock-based compensation grants was approximately $23.4 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 1.2 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 Tranche 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 six months ended June 30, 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 six months ended June 30, 2023, the Company recognized $20.2 million of stock compensation expense related to these awards.
Awards Granted in 2024
On June 5, 2024, the Company\u2019s shareholders approved a new equity incentive plan (\u201c2024 EIP\u201d). The 2024 EIP has 25.0 million shares of Common Stock available for awards under the plan. Awards that may be granted under the 2024 EIP include options, stock appreciation rights, restricted stock awards, restricted stock units, cash awards, and other equity-based awards. The 2024 EIP will be unlimited in duration and, in the event of termination, will remain in effect as long as any shares of awards under it are outstanding and not fully vested.
On June 5, 2024, the Company\u2019s board of directors granted awards of stock, restricted stock units (\u201cRSUs\u201d) and performance stock units (\u201cPSUs\u201d) to certain of the Company\u2019s employees and directors under the 2024 EIP. Each RSU or PSU is convertible into one share of Common Stock upon vesting. Each RSU and PSU held by a participant as of a dividend record date is entitled to a dividend equivalent equal to the amount paid with respect to one share of Common
Stock underlying the unit. Any such accrued dividend equivalents are paid to the holder only upon vesting of the units. Each unit represents the right to receive one share of Common Stock at a future date.
The awards generally had the following features:
| \u25cf | Board of Directors Stock Awards: The Company granted 195,924 fully vested shares of Common Stock to the independent members of the Company\u2019s board of directors with a grant date fair value of $1.0 million. |
| \u25cf | Restricted Stock Unit Awards: The Company granted 2,307,931 RSUs to certain members of management with a grant date fair value of $11.9 million. The Company records stock-based compensation expense on a straight-line recognition method over the requisite vesting period. The RSUs vest over three years, with vesting each year. These RSUs will be settled within 30 days of vesting. |
| \u25cf | Performance Stock Unit Awards: A total of 2,307,931 PSUs were awarded (\u201c2024 PSU award\u201d) to certain members of management and executive officers, with the total PSUs divided into three separate year tranches, with each tranche allocated to a fiscal year within 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 2024 PSU awards 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. If the performance targets are met at 100%, the 2024 PSU awards will vest at 2,307,931 units in the aggregate. 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 2024 PSU award grant date fair value for the 2024 Tranche Year award of 769,260 units was $4.0 million, 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 PSU awards for the 2024 Tranche Year were 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 expense 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 June 30, 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 six months ended June 30, 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) | 3,226,672 | 5.12 | |||
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 June\u00a030, 2024 | 3,498,009 | 8.23 | |||
Tranche Year 2025 awarded under the 2023 PSU award with grant date fair values to be determined in year 2025 | 1,643,770 | ||||
Total Nonvested at June\u00a030, 2024 | 5,141,779 |
| (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 six months ended June 30, 2024. |
| (3) | Includes AMC Preferred Equity Unit RSUs and PSUs that were converted to Common Stock RSUs and PSUs. |
Three Months Ended | Six Months Ended | |||||||||||
June\u00a030, | June\u00a030, | June\u00a030, | June\u00a030, | |||||||||
(In millions) | 2024 | 2023 | 2024 | 2023 | ||||||||
Equity classified awards: | ||||||||||||
Special awards expense | $ | \u2014 | $ | \u2014 | $ | 2.1 | $ | 20.2 | ||||
Board of directors stock award expense | 1.0 | \u2014 | 1.0 | 0.9 | ||||||||
Restricted stock unit expense | 2.7 | 3.8 | 4.8 | 6.8 | ||||||||
Performance stock unit expense | 0.7 | 3.7 | 0.8 | 5.4 | ||||||||
Total equity classified awards: | 4.4 | 7.5 | 8.7 | 33.3 | ||||||||
Liability classified awards: | ||||||||||||
Restricted and performance stock unit expense | 0.1 | 0.3 | 0.1 | 0.4 | ||||||||
Total liability classified awards: | 0.1 | 0.3 | 0.1 | 0.4 | ||||||||
Total stock-based compensation expense | $ | 4.5 | $ | 7.8 | $ | 8.8 | $ | 33.7 |
\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) | 3,226,672 | 5.12 | |||
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 June\u00a030, 2024 | 3,498,009 | 8.23 | |||
Tranche Year 2025 awarded under the 2023 PSU award with grant date fair values to be determined in year 2025 | 1,643,770 | ||||
Total Nonvested at June\u00a030, 2024 | 5,141,779 |
| (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 six months ended June 30, 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 Six Months Ended June 30, 2024
Accumulated | |||||||||||||||||
Class\u00a0A | Additional | Other | Total | ||||||||||||||
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) | ||||||
Net loss | \u2014 | \u2014 | \u2014 | \u2014 | (32.8) | (32.8) | |||||||||||
Other comprehensive income | \u2014 | \u2014 | \u2014 | 2.8 | \u2014 | 2.8 | |||||||||||
Debt for equity exchange | 25,004,075 | 0.3 | 116.1 | \u2014 | \u2014 | 116.4 | |||||||||||
Share issuance | 72,549,972 | 0.7 | 242.9 | \u2014 | \u2014 | 243.6 | |||||||||||
Stock-based compensation | 195,924 | \u2014 | 4.4 | \u2014 | \u2014 | 4.4 | |||||||||||
Balances June 30, 2024 | 361,354,955 | $ | 3.6 | $ | 6,601.1 | $ | (110.8) | $ | (8,190.5) | $ | (1,696.6) |
| (1) | Vested Common Stock RSUs and PSUs. |
Condensed Consolidated Statements of Stockholders\u2019 Deficit
For the Six Months Ended June 30, 2023
Preferred Stock | ||||||||||||||||||||||||
Series A Convertible | Accumulated | |||||||||||||||||||||||
Class A | Participating | Depositary Shares of | Additional | Other | Total | |||||||||||||||||||
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) | |||||||||
Net earnings | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 8.6 | 8.6 | |||||||||||||||
Other comprehensive loss | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | (40.0) | \u2014 | (40.0) | |||||||||||||||
AMC Preferred Equity Units issuance | \u2014 | \u2014 | 212,156 | 2,121,562 | \u2014 | 32.7 | \u2014 | \u2014 | 32.7 | |||||||||||||||
Taxes paid for restricted unit withholdings | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | (1.1) | \u2014 | \u2014 | (1.1) | |||||||||||||||
Stock-based compensation | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 7.5 | \u2014 | \u2014 | 7.5 | |||||||||||||||
Balances June 30, 2023 | 51,919,238 | $ | 0.5 | 9,954,065 | 99,540,642 | $ | 0.1 | $ | 5,365.9 | $ | (124.6) | $ | (7,824.5) | $ | (2,582.6) |
| (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 | Additional | Other | Total | ||||||||||||||
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) | ||||||
Net loss | \u2014 | \u2014 | \u2014 | \u2014 | (32.8) | (32.8) | |||||||||||
Other comprehensive income | \u2014 | \u2014 | \u2014 | 2.8 | \u2014 | 2.8 | |||||||||||
Debt for equity exchange | 25,004,075 | 0.3 | 116.1 | \u2014 | \u2014 | 116.4 | |||||||||||
Share issuance | 72,549,972 | 0.7 | 242.9 | \u2014 | \u2014 | 243.6 | |||||||||||
Stock-based compensation | 195,924 | \u2014 | 4.4 | \u2014 | \u2014 | 4.4 | |||||||||||
Balances June 30, 2024 | 361,354,955 | $ | 3.6 | $ | 6,601.1 | $ | (110.8) | $ | (8,190.5) | $ | (1,696.6) |
| (1) | Vested Common Stock RSUs and PSUs. |
Preferred Stock | ||||||||||||||||||||||||
Series A Convertible | Accumulated | |||||||||||||||||||||||
Class A | Participating | Depositary Shares of | Additional | Other | Total | |||||||||||||||||||
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) | |||||||||
Net earnings | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 8.6 | 8.6 | |||||||||||||||
Other comprehensive loss | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | (40.0) | \u2014 | (40.0) | |||||||||||||||
AMC Preferred Equity Units issuance | \u2014 | \u2014 | 212,156 | 2,121,562 | \u2014 | 32.7 | \u2014 | \u2014 | 32.7 | |||||||||||||||
Taxes paid for restricted unit withholdings | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | (1.1) | \u2014 | \u2014 | (1.1) | |||||||||||||||
Stock-based compensation | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | 7.5 | \u2014 | \u2014 | 7.5 | |||||||||||||||
Balances June 30, 2023 | 51,919,238 | $ | 0.5 | 9,954,065 | 99,540,642 | $ | 0.1 | $ | 5,365.9 | $ | (124.6) | $ | (7,824.5) | $ | (2,582.6) |
| (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 six months ended June 30, 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 six months ended June 30, 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 six months ended June 30, 2024, was (1.3)%. The Company\u2019s consolidated tax rate for the six months ended June 30, 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-990","factDimensions":{"xbrl:concept":"amch:MinimumEffectiveTaxRate","xbrl:period":"2024-01-01T00:00:00/2024-07-01T00:00:00","xbrl:entity":"cik:0001411579"},"factValues":[{"value":"0.150","decimals":3}]},{"name":"rpt:f-991","factDimensions":{"xbrl:concept":"us-gaap:EffectiveIncomeTaxRateContinuingOperations","xbrl:period":"2024-01-01T00:00:00/2024-07-01T00:00:00","xbrl:entity":"cik:0001411579"},"factValues":[{"value":"-0.013","decimals":3}]},{"name":"rpt:f-992","factDimensions":{"xbrl:concept":"us-gaap:FairValueDisclosuresTextBlock","xbrl:period":"2024-01-01T00:00:00/2024-07-01T00:00:00","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 June 30, 2024:
Fair Value Measurements at June\u00a030, 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) | June\u00a030, 2024 | (Level\u00a01) | (Level\u00a02) | (Level\u00a03) | ||||||||
Other long-term assets: | ||||||||||||
Investment in Hycroft warrants | $ | 3.1 | $ | \u2014 | $ | \u2014 | $ | 3.1 | ||||
Marketable equity securities: | ||||||||||||
Investment in Hycroft | 5.7 | 5.7 | \u2014 | \u2014 | ||||||||
Total assets at fair value | $ | 8.8 | $ | 5.7 | $ | \u2014 | $ | 3.1 |
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 June\u00a030, 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) | June\u00a030, 2024 | (Level\u00a01) | (Level\u00a02) | (Level\u00a03) | ||||||||
Current maturities of corporate borrowings | $ | 123.1 | $ | \u2014 | $ | 113.8 | $ | \u2014 | ||||
Corporate borrowings | \u00a0 | 4,212.4 | \u00a0 | \u2014 | \u00a0 | 3,624.7 | \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-993","factDimensions":{"xbrl:concept":"us-gaap:FairValueAssetsMeasuredOnRecurringBasisTextBlock","xbrl:period":"2024-01-01T00:00:00/2024-07-01T00:00:00","xbrl:entity":"cik:0001411579"},"factValues":[{"value":"Fair Value Measurements at June\u00a030, 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) | June\u00a030, 2024 | (Level\u00a01) | (Level\u00a02) | (Level\u00a03) | ||||||||
Other long-term assets: | ||||||||||||
Investment in Hycroft warrants | $ | 3.1 | $ | \u2014 | $ | \u2014 | $ | 3.1 | ||||
Marketable equity securities: | ||||||||||||
Investment in Hycroft | 5.7 | 5.7 | \u2014 | \u2014 | ||||||||
Total assets at fair value | $ | 8.8 | $ | 5.7 | $ | \u2014 | $ | 3.1 |
"}]},{"name":"rpt:f-994","factDimensions":{"xbrl:concept":"us-gaap:EquitySecuritiesFvNi","xbrl:period":"2024-07-01T00:00:00","xbrl:entity":"cik:0001411579","xbrl:unit":"iso4217:USD","us-gaap:FairValueByMeasurementFrequencyAxis":"us-gaap:FairValueMeasurementsRecurringMember","us-gaap:FinancialInstrumentAxis":"amch:InvestmentInHycroftMiningHoldingCorporationWarrantsMember"},"factValues":[{"value":"3100000","decimals":-5}]},{"name":"rpt:f-995","factDimensions":{"xbrl:concept":"us-gaap:EquitySecuritiesFvNi","xbrl:period":"2024-07-01T00:00:00","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":"3100000","decimals":-5}]},{"name":"rpt:f-996","factDimensions":{"xbrl:concept":"us-gaap:EquityMethodInvestments","xbrl:period":"2024-07-01T00:00:00","xbrl:entity":"cik:0001411579","xbrl:unit":"iso4217:USD","us-gaap:FairValueByMeasurementFrequencyAxis":"us-gaap:FairValueMeasurementsRecurringMember","us-gaap:FinancialInstrumentAxis":"amch:HycroftMiningHoldingCorporationMember"},"factValues":[{"value":"5700000","decimals":-5}]},{"name":"rpt:f-997","factDimensions":{"xbrl:concept":"us-gaap:EquityMethodInvestments","xbrl:period":"2024-07-01T00:00:00","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":"5700000","decimals":-5}]},{"name":"rpt:f-998","factDimensions":{"xbrl:concept":"us-gaap:AssetsFairValueDisclosure","xbrl:period":"2024-07-01T00:00:00","xbrl:entity":"cik:0001411579","xbrl:unit":"iso4217:USD","us-gaap:FairValueByMeasurementFrequencyAxis":"us-gaap:FairValueMeasurementsRecurringMember"},"factValues":[{"value":"8800000","decimals":-5}]},{"name":"rpt:f-999","factDimensions":{"xbrl:concept":"us-gaap:AssetsFairValueDisclosure","xbrl:period":"2024-07-01T00:00:00","xbrl:entity":"cik:0001411579","xbrl:unit":"iso4217:USD","us-gaap:FairValueByFairValueHierarchyLevelAxis":"us-gaap:FairValueInputsLevel1Member","us-gaap:FairValueByMeasurementFrequencyAxis":"us-gaap:FairValueMeasurementsRecurringMember"},"factValues":[{"value":"5700000","decimals":-5}]},{"name":"rpt:f-1000","factDimensions":{"xbrl:concept":"us-gaap:AssetsFairValueDisclosure","xbrl:period":"2024-07-01T00:00:00","xbrl:entity":"cik:0001411579","xbrl:unit":"iso4217:USD","us-gaap:FairValueByFairValueHierarchyLevelAxis":"us-gaap:FairValueInputsLevel3Member","us-gaap:FairValueByMeasurementFrequencyAxis":"us-gaap:FairValueMeasurementsRecurringMember"},"factValues":[{"value":"3100000","decimals":-5}]},{"name":"rpt:f-1001","factDimensions":{"xbrl:concept":"amch:ScheduleOfFairValueOfFinancialInstrumentsNotRecognizedInStatementOfFinancialPositionTableTextBlock","xbrl:period":"2024-01-01T00:00:00/2024-07-01T00:00:00","xbrl:entity":"cik:0001411579"},"factValues":[{"value":"
\u00a0\u00a0\u00a0\u00a0 | Fair Value Measurements at June\u00a030, 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) | June\u00a030, 2024 | (Level\u00a01) | (Level\u00a02) | (Level\u00a03) | ||||||||
Current maturities of corporate borrowings | $ | 123.1 | $ | \u2014 | $ | 113.8 | $ | \u2014 | ||||
Corporate borrowings | \u00a0 | 4,212.4 | \u00a0 | \u2014 | \u00a0 | 3,624.7 | \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 | Six Months Ended | |||||||||||
Revenues (In millions) | \u00a0\u00a0\u00a0\u00a0 | June\u00a030, 2024 | June\u00a030, 2023 | June\u00a030, 2024 | \u00a0\u00a0\u00a0\u00a0 | June\u00a030, 2023 | ||||||
U.S. markets | $ | 815.9 | $ | 1,087.4 | $ | 1,505.0 | \u00a0\u00a0\u00a0\u00a0 | $ | 1,791.9 | |||
International markets | 214.7 | 260.5 | 477.0 | \u00a0\u00a0\u00a0\u00a0 | 510.4 | |||||||
Total revenues | $ | 1,030.6 | $ | 1,347.9 | $ | 1,982.0 | \u00a0\u00a0\u00a0\u00a0 | $ | 2,302.3 |
Three Months Ended | Six Months Ended | |||||||||||
Adjusted EBITDA (In millions) | \u00a0\u00a0\u00a0\u00a0 | June\u00a030, 2024 | \u00a0\u00a0\u00a0\u00a0 | June\u00a030, 2023 | June\u00a030, 2024 | \u00a0\u00a0\u00a0\u00a0 | June\u00a030, 2023 | |||||
U.S. markets | $ | 49.3 | $ | 174.8 | $ | 21.7 | $ | 185.7 | ||||
International markets | (19.9) | 7.7 | (23.9) | 3.9 | ||||||||
Total Adjusted EBITDA (1) | $ | 29.4 | $ | 182.5 | $ | (2.2) | $ | 189.6 |
| (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 | Six Months Ended | |||||||||||
Capital Expenditures (In millions) | \u00a0\u00a0\u00a0\u00a0 | June\u00a030, 2024 | \u00a0\u00a0\u00a0\u00a0 | June\u00a030, 2023 | June\u00a030, 2024 | \u00a0\u00a0\u00a0\u00a0 | June\u00a030, 2023 | |||||
U.S. markets | $ | 33.8 | $ | 36.8 | $ | 65.5 | $ | 71.4 | ||||
International markets | 10.8 | 11.8 | 29.6 | 24.6 | ||||||||
Total capital expenditures | $ | 44.6 | $ | 48.6 | $ | 95.1 | $ | 96.0 |
As of | As of | |||||
Long-term assets, net (In millions) | June\u00a030, 2024 | December 31, 2023 | ||||
U.S. markets | $ | 5,632.3 | $ | 5,795.6 | ||
International markets | 1,886.9 | 2,010.5 | ||||
Total long-term assets (1) | $ | 7,519.2 | $ | 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 | Six Months Ended | |||||||||||
(In\u00a0millions) | June\u00a030, 2024 | June\u00a030, 2023 | \u00a0\u00a0\u00a0\u00a0 | June\u00a030, 2024 | June\u00a030, 2023 | |||||||
Net earnings (loss) | $ | (32.8) | $ | 8.6 | $ | (196.3) | $ | (226.9) | ||||
Plus: | ||||||||||||
Income tax provision (1) | \u00a0 | 0.7 | \u00a0 | 0.4 | \u00a0 | 2.5 | \u00a0 | 2.3 | ||||
Interest expense | \u00a0 | 99.0 | \u00a0 | 102.6 | \u00a0 | 200.2 | \u00a0 | 203.7 | ||||
Depreciation and amortization | \u00a0 | 78.8 | \u00a0 | 96.8 | \u00a0 | 160.4 | \u00a0 | 190.4 | ||||
Certain operating expense (2) | \u00a0 | 1.0 | \u00a0 | (0.9) | \u00a0 | 1.5 | \u00a0 | 0.2 | ||||
Equity in earnings of non-consolidated entities | \u00a0 | (1.0) | \u00a0 | (0.8) | \u00a0 | (4.7) | \u00a0 | (2.2) | ||||
Cash distributions from non-consolidated entities (3) | \u00a0 | 1.6 | \u00a0 | 1.7 | \u00a0 | 2.9 | \u00a0 | 1.7 | ||||
Attributable EBITDA (4) | (0.7) | (0.3) | (0.1) | 0.2 | ||||||||
Investment expense (income) (5) | \u00a0 | (6.1) | \u00a0 | 5.1 | \u00a0 | (11.2) | \u00a0 | (8.4) | ||||
Other expense (income) (6) | \u00a0 | (105.0) | \u00a0 | (30.1) | \u00a0 | (143.8) | \u00a0 | 12.7 | ||||
Other non-cash rent benefit (7) | (10.7) | (9.0) | (22.4) | (18.6) | ||||||||
General and administrative \u2014 unallocated: | ||||||||||||
Merger, acquisition and other costs (8) | \u00a0 | 0.1 | \u00a0 | 0.6 | \u00a0 | \u2014 | \u00a0 | 0.8 | ||||
Stock-based compensation expense (9) | \u00a0 | 4.5 | \u00a0 | 7.8 | \u00a0 | 8.8 | \u00a0 | 33.7 | ||||
Adjusted EBITDA | $ | 29.4 | $ | 182.5 | $ | (2.2) | $ | 189.6 |
| (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 | Six Months Ended | |||||||||||
(In\u00a0millions) | June\u00a030, 2024 | June\u00a030, 2023 | \u00a0\u00a0\u00a0\u00a0 | June\u00a030, 2024 | June\u00a030, 2023 | |||||||
Equity in (earnings) of non-consolidated entities | $ | (1.0) | $ | (0.8) | $ | (4.7) | $ | (2.2) | ||||
Less: | ||||||||||||
Equity in (earnings) of non-consolidated entities excluding International theatre joint ventures | (2.1) | (1.5) | (5.6) | (2.6) | ||||||||
Equity in (loss) of International theatre joint ventures | (1.1) | (0.7) | (0.9) | (0.4) | ||||||||
Income tax benefit | (0.1) | (0.1) | (0.1) | (0.2) | ||||||||
Investment expense | \u2014 | \u2014 | 0.1 | 0.1 | ||||||||
Interest expense | 0.1 | 0.1 | 0.1 | 0.1 | ||||||||
Depreciation and amortization | 0.4 | 0.4 | 0.7 | 0.6 | ||||||||
Attributable EBITDA | $ | (0.7) | $ | (0.3) | $ | (0.1) | $ | 0.2 |
| (5) | Investment expense (income) during the three months ended June 30, 2024 includes appreciation in the estimated fair value of the Company\u2019s investment in common shares of Hycroft of $(0.4) million, appreciation in estimated fair value of the Company\u2019s investment in warrants to purchase common shares of Hycroft of $(0.3) million and interest income of $(5.4) million. Investment expense (income) during the three months ended June 30, 2023 included deterioration in estimated fair value of the Company\u2019s investment in common shares of Hycroft of $3.2 million, deterioration in estimated fair value of the Company's investment in warrants to purchase common shares of Hycroft of $2.3 million, and interest income of $(2.5) million. |
Investment expense (income) during the six months ended June 30, 2024 includes deterioration in estimated fair value of the Company\u2019s investment in common shares of Hycroft of $0.1 million, deterioration in estimated fair value of the Company\u2019s investment in warrants to purchase common shares of Hycroft of $0.2 million, and interest income of $(11.5) million. Investment expense (income) during the six months ended June 30, 2023 included deterioration in estimated fair value of the Company\u2019s investment in common shares of Hycroft of $5.5 million, deterioration in estimated fair value of the Company\u2019s investment in warrants to purchase common shares of Hycroft of $4.6 million, $(15.5) million gain on the sale of the Company\u2019s investment in Saudi Cinema Company, LLC and interest income of $(4.8) million.
| (6) | Other expense (income) during the three months ended June 30, 2024 includes shareholder litigation recoveries of $(19.1) million, foreign currency transaction gains of $(0.6) million and gains on debt extinguishment of $(85.3) million. Other expense (income) during the three months ended June 30, 2023 included a non-cash litigation contingency adjustment of $(1.2) million, foreign currency transaction gains of $(7.5) million, and gains on debt extinguishment of $(21.6) million. |
Other expense (income) during the six months ended June 30, 2024 includes shareholder litigation recoveries of $(19.1) million, gains on debt extinguishment of $(91.1) million, a vendor dispute settlement of $(36.2) million, and foreign currency transaction losses of $2.6 million. Other expense (income) during the six months ended June 30, 2023 included a non-cash litigation contingency charge of $115.4 million, partially offset by gains on debt extinguishment of $(86.7) million and foreign currency transaction gains of $(16.2) 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 | Six Months Ended | |||||||||||
Revenues (In millions) | \u00a0\u00a0\u00a0\u00a0 | June\u00a030, 2024 | June\u00a030, 2023 | June\u00a030, 2024 | \u00a0\u00a0\u00a0\u00a0 | June\u00a030, 2023 | ||||||
U.S. markets | $ | 815.9 | $ | 1,087.4 | $ | 1,505.0 | \u00a0\u00a0\u00a0\u00a0 | $ | 1,791.9 | |||
International markets | 214.7 | 260.5 | 477.0 | \u00a0\u00a0\u00a0\u00a0 | 510.4 | |||||||
Total revenues | $ | 1,030.6 | $ | 1,347.9 | $ | 1,982.0 | \u00a0\u00a0\u00a0\u00a0 | $ | 2,302.3 |
Three Months Ended | Six Months Ended | |||||||||||
Adjusted EBITDA (In millions) | \u00a0\u00a0\u00a0\u00a0 | June\u00a030, 2024 | \u00a0\u00a0\u00a0\u00a0 | June\u00a030, 2023 | June\u00a030, 2024 | \u00a0\u00a0\u00a0\u00a0 | June\u00a030, 2023 | |||||
U.S. markets | $ | 49.3 | $ | 174.8 | $ | 21.7 | $ | 185.7 | ||||
International markets | (19.9) | 7.7 | (23.9) | 3.9 | ||||||||
Total Adjusted EBITDA (1) | $ | 29.4 | $ | 182.5 | $ | (2.2) | $ | 189.6 |
| (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 | Six Months Ended | |||||||||||
Capital Expenditures (In millions) | \u00a0\u00a0\u00a0\u00a0 | June\u00a030, 2024 | \u00a0\u00a0\u00a0\u00a0 | June\u00a030, 2023 | June\u00a030, 2024 | \u00a0\u00a0\u00a0\u00a0 | June\u00a030, 2023 | |||||
U.S. markets | $ | 33.8 | $ | 36.8 | $ | 65.5 | $ | 71.4 | ||||
International markets | 10.8 | 11.8 | 29.6 | 24.6 | ||||||||
Total capital expenditures | $ | 44.6 | $ | 48.6 | $ | 95.1 | $ | 96.0 |
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As of | As of | |||||
Long-term assets, net (In millions) | June\u00a030, 2024 | December 31, 2023 | ||||
U.S. markets | $ | 5,632.3 | $ | 5,795.6 | ||
International markets | 1,886.9 | 2,010.5 | ||||
Total long-term assets (1) | $ | 7,519.2 | $ | 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 | Six Months Ended | |||||||||||
(In\u00a0millions) | June\u00a030, 2024 | June\u00a030, 2023 | \u00a0\u00a0\u00a0\u00a0 | June\u00a030, 2024 | June\u00a030, 2023 | |||||||
Net earnings (loss) | $ | (32.8) | $ | 8.6 | $ | (196.3) | $ | (226.9) | ||||
Plus: | ||||||||||||
Income tax provision (1) | \u00a0 | 0.7 | \u00a0 | 0.4 | \u00a0 | 2.5 | \u00a0 | 2.3 | ||||
Interest expense | \u00a0 | 99.0 | \u00a0 | 102.6 | \u00a0 | 200.2 | \u00a0 | 203.7 | ||||
Depreciation and amortization | \u00a0 | 78.8 | \u00a0 | 96.8 | \u00a0 | 160.4 | \u00a0 | 190.4 | ||||
Certain operating expense (2) | \u00a0 | 1.0 | \u00a0 | (0.9) | \u00a0 | 1.5 | \u00a0 | 0.2 | ||||
Equity in earnings of non-consolidated entities | \u00a0 | (1.0) | \u00a0 | (0.8) | \u00a0 | (4.7) | \u00a0 | (2.2) | ||||
Cash distributions from non-consolidated entities (3) | \u00a0 | 1.6 | \u00a0 | 1.7 | \u00a0 | 2.9 | \u00a0 | 1.7 | ||||
Attributable EBITDA (4) | (0.7) | (0.3) | (0.1) | 0.2 | ||||||||
Investment expense (income) (5) | \u00a0 | (6.1) | \u00a0 | 5.1 | \u00a0 | (11.2) | \u00a0 | (8.4) | ||||
Other expense (income) (6) | \u00a0 | (105.0) | \u00a0 | (30.1) | \u00a0 | (143.8) | \u00a0 | 12.7 | ||||
Other non-cash rent benefit (7) | (10.7) | (9.0) | (22.4) | (18.6) | ||||||||
General and administrative \u2014 unallocated: | ||||||||||||
Merger, acquisition and other costs (8) | \u00a0 | 0.1 | \u00a0 | 0.6 | \u00a0 | \u2014 | \u00a0 | 0.8 | ||||
Stock-based compensation expense (9) | \u00a0 | 4.5 | \u00a0 | 7.8 | \u00a0 | 8.8 | \u00a0 | 33.7 | ||||
Adjusted EBITDA | $ | 29.4 | $ | 182.5 | $ | (2.2) | $ | 189.6 |
| (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 | Six Months Ended | |||||||||||
(In\u00a0millions) | June\u00a030, 2024 | June\u00a030, 2023 | \u00a0\u00a0\u00a0\u00a0 | June\u00a030, 2024 | June\u00a030, 2023 | |||||||
Equity in (earnings) of non-consolidated entities | $ | (1.0) | $ | (0.8) | $ | (4.7) | $ | (2.2) | ||||
Less: | ||||||||||||
Equity in (earnings) of non-consolidated entities excluding International theatre joint ventures | (2.1) | (1.5) | (5.6) | (2.6) | ||||||||
Equity in (loss) of International theatre joint ventures | (1.1) | (0.7) | (0.9) | (0.4) | ||||||||
Income tax benefit | (0.1) | (0.1) | (0.1) | (0.2) | ||||||||
Investment expense | \u2014 | \u2014 | 0.1 | 0.1 | ||||||||
Interest expense | 0.1 | 0.1 | 0.1 | 0.1 | ||||||||
Depreciation and amortization | 0.4 | 0.4 | 0.7 | 0.6 | ||||||||
Attributable EBITDA | $ | (0.7) | $ | (0.3) | $ | (0.1) | $ | 0.2 |
| (5) | Investment expense (income) during the three months ended June 30, 2024 includes appreciation in the estimated fair value of the Company\u2019s investment in common shares of Hycroft of $(0.4) million, appreciation in estimated fair value of the Company\u2019s investment in warrants to purchase common shares of Hycroft of $(0.3) million and interest income of $(5.4) million. Investment expense (income) during the three months ended June 30, 2023 included deterioration in estimated fair value of the Company\u2019s investment in common shares of Hycroft of $3.2 million, deterioration in estimated fair value of the Company's investment in warrants to purchase common shares of Hycroft of $2.3 million, and interest income of $(2.5) million. |
Investment expense (income) during the six months ended June 30, 2024 includes deterioration in estimated fair value of the Company\u2019s investment in common shares of Hycroft of $0.1 million, deterioration in estimated fair value of the Company\u2019s investment in warrants to purchase common shares of Hycroft of $0.2 million, and interest income of $(11.5) million. Investment expense (income) during the six months ended June 30, 2023 included deterioration in estimated fair value of the Company\u2019s investment in common shares of Hycroft of $5.5 million, deterioration in estimated fair value of the Company\u2019s investment in warrants to purchase common shares of Hycroft of $4.6 million, $(15.5) million gain on the sale of the Company\u2019s investment in Saudi Cinema Company, LLC and interest income of $(4.8) million.
| (6) | Other expense (income) during the three months ended June 30, 2024 includes shareholder litigation recoveries of $(19.1) million, foreign currency transaction gains of $(0.6) million and gains on debt extinguishment of $(85.3) million. Other expense (income) during the three months ended June 30, 2023 included a non-cash litigation contingency adjustment of $(1.2) million, foreign currency transaction gains of $(7.5) million, and gains on debt extinguishment of $(21.6) million. |
Other expense (income) during the six months ended June 30, 2024 includes shareholder litigation recoveries of $(19.1) million, gains on debt extinguishment of $(91.1) million, a vendor dispute settlement of $(36.2) million, and foreign currency transaction losses of $2.6 million. Other expense (income) during the six months ended June 30, 2023 included a non-cash litigation contingency charge of $115.4 million, partially offset by gains on debt extinguishment of $(86.7) million and foreign currency transaction gains of $(16.2) 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 six months ended June 30, 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 were 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 AMC Preferred Equity Units, the Antara Transactions, and the Charter Amendments. The Munoz Action, which was filed by 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 AMC Preferred Equity Units 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 AMC Preferred Equity Units on the Charter Amendments or that the AMC Preferred Equity Units be enjoined from voting on the Charter Amendments, and an award of money damages. The Munoz Action sought to enjoin the AMC Preferred Equity Units 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. 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 AMC Preferred Equity Units 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 decision approving the settlement. On May 22, 2024, the Delaware Supreme Court affirmed the Court\u2019s decision approving the settlement of the Shareholder Litigation.
In connection with the Shareholder Litigation, the Company recorded a $125.4 million charge to other expense during the six months ended June 30, 2023. The charge was based on an estimated fair value for the Settlement Payment of $115.4 million and estimated legal fees, net of probable insurance recoveries of $10.0 million as of June 30, 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 AMC Preferred Equity Units prior to the conversion of the AMC Preferred Equity Units 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 Company has reached confidential settlement agreements with multiple insurers in the Coverage Action.
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 named 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 June 17, 2024, the court granted the Company\u2019s motion to dismiss and denied plaintiffs\u2019 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.
On May 2, 2024, the United States District Court for the Southern District of New York issued an order granting final approval of a proposed settlement reached by all parties to an action brought by plaintiffs Dennis J. Donoghue and Mark Rubenstein, each of whom are shareholders of the Company, for the Company to recover \u201cshort-swing\u201d profits under Section 16(b) of the Securities Exchange Act of 1934 (the \u201cExchange Act\u201d) alleged to have been realized by defendants Antara Capital Master Fund LP, Antara Capital Fund GP LLC, Antara Capital LP, Antara Capital GP LLC, and Himanshu Gulati (collectively, the \u201cAntara Defendants\u201d) in connection with their purchases and sales of the Company\u2019s securities. The Company is party to the suit in name only, which was brought for the benefit of the Company. The Company received $2.6 million in connection with this action during the three and six months ended June 30, 2024.
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NOTE 12\u2014EARNINGS (LOSS) 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 for periods prior to August 24, 2023, have been retroactively adjusted to reflect the reverse stock split. References made to AMC Preferred Equity Units have also been retroactively adjusted to reflect the effect of the reverse stock split on their equivalent Common Stock shares.
Basic earnings (loss) per share is computed by dividing net earnings (loss) by the weighted-average number of common shares outstanding. Diluted earnings (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 earnings (loss) per common share:
Three Months Ended | Six Months Ended | |||||||||||
(In millions) | \u00a0\u00a0\u00a0\u00a0 | June\u00a030, 2024 | \u00a0\u00a0\u00a0\u00a0 | June\u00a030, 2023 | \u00a0\u00a0\u00a0\u00a0 | June\u00a030, 2024 | \u00a0\u00a0\u00a0\u00a0 | June\u00a030, 2023 | ||||
Numerator: | ||||||||||||
Net earnings (loss) for basic and diluted earnings (loss) per share | $ | (32.8) | $ | 8.6 | $ | (196.3) | $ | (226.9) | ||||
Denominator (shares in thousands): | ||||||||||||
Weighted average shares for basic loss per common share | \u00a0 | 321,581 | \u00a0 | 151,302 | \u00a0 | 292,496 | \u00a0 | 144,387 | ||||
Common equivalent shares for RSUs and PSUs | \u00a0 | \u2014 | \u00a0 | 45 | \u00a0 | \u2014 | \u00a0 | \u2014 | ||||
Weighted average shares for diluted earnings (loss) per common share | 321,581 | 151,347 | 292,496 | 144,387 | ||||||||
Basic earnings (loss) per common share | $ | (0.10) | $ | 0.06 | $ | (0.67) | $ | (1.57) | ||||
Diluted earnings (loss) per common share | $ | (0.10) | $ | 0.06 | $ | (0.67) | $ | (1.57) |
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 (loss) per share.
Unvested RSUs of 2,579,669 for each of the three and six months ended June 30, 2024 were not included in the computation of diluted earnings (loss) per share because they would be anti-dilutive. Unvested RSUs of 491,439 and 531,957 for the three and six months ended June 30, 2023, respectively, were not included in the computation of diluted earnings (loss) per share because they would be anti-dilutive.
Unvested PSUs are subject to performance conditions and are included in diluted earnings (loss) 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 918,340 for each of the three and six months ended June 30, 2024 were not included in the computation of diluted earnings (loss) per share because they would not be issuable if the end of the reporting period were the end of the contingency period or they would be anti-dilutive. Unvested PSUs of 292,904 and 297,823 at certain performance targets for the three and six months ended June 30, 2023, respectively, were not included in the computation of diluted loss per share because they would not be issuable if the end of the reporting period were the end of the contingency period or they would be anti-dilutive.
"}]},{"name":"rpt:f-1181","factDimensions":{"xbrl:concept":"us-gaap:ScheduleOfEarningsPerShareBasicAndDilutedTableTextBlock","xbrl:period":"2024-01-01T00:00:00/2024-07-01T00:00:00","xbrl:entity":"cik:0001411579"},"factValues":[{"value":"Three Months Ended | Six Months Ended | |||||||||||
(In millions) | \u00a0\u00a0\u00a0\u00a0 | June\u00a030, 2024 | \u00a0\u00a0\u00a0\u00a0 | June\u00a030, 2023 | \u00a0\u00a0\u00a0\u00a0 | June\u00a030, 2024 | \u00a0\u00a0\u00a0\u00a0 | June\u00a030, 2023 | ||||
Numerator: | ||||||||||||
Net earnings (loss) for basic and diluted earnings (loss) per share | $ | (32.8) | $ | 8.6 | $ | (196.3) | $ | (226.9) | ||||
Denominator (shares in thousands): | ||||||||||||
Weighted average shares for basic loss per common share | \u00a0 | 321,581 | \u00a0 | 151,302 | \u00a0 | 292,496 | \u00a0 | 144,387 | ||||
Common equivalent shares for RSUs and PSUs | \u00a0 | \u2014 | \u00a0 | 45 | \u00a0 | \u2014 | \u00a0 | \u2014 | ||||
Weighted average shares for diluted earnings (loss) per common share | 321,581 | 151,347 | 292,496 | 144,387 | ||||||||
Basic earnings (loss) per common share | $ | (0.10) | $ | 0.06 | $ | (0.67) | $ | (1.57) | ||||
Diluted earnings (loss) per common share | $ | (0.10) | $ | 0.06 | $ | (0.67) | $ | (1.57) |
NOTE 13\u2014SUBSEQUENT EVENTS
Debt Refinancing. On July 22, 2024 (the \u201cClosing Date\u201d), the Company completed a series of refinancing transactions with two creditor groups to refinance and extend to 2029 and 2030 the maturities of approximately $1.6 billion of the Company\u2019s debt previously maturing in 2026 (collectively, the \u201cDebt Refinancing\u201d). These arrangements provide for the potential additional refinancing of up to approximately $800 million of debt maturing in 2026 or earlier.
In connection with the Debt Refinancing:
| \u25cf | The Company and Muvico, LLC, a newly formed indirect wholly-owned subsidiary of the Company (\u201cMuvico\u201d), entered into that certain Credit Agreement (the \u201cNew Term Loan Credit Agreement\u201d), by and among the Company and Muvico, each, as a borrower (collectively, the \u201cNew Term Loan Borrowers\u201d), the lenders party thereto and Wilmington Savings Fund Society, FSB, as administrative agent and collateral agent pursuant to which the Company and Muvico jointly and severally borrowed $1.2 billion of new term loans maturing in 2029 (the \u201cNew Term Loans\u201d). |
| \u25cf | The New Term Loans were (i) used as consideration for the open market purchase of $1.1 billion of the Company\u2019s existing senior secured term loans maturing in 2026 (the \u201cExisting Term Loans\u201d) and (ii) exchanged for $104.2 million of the Company\u2019s 10%/12% Cash/PIK Toggle Second Lien Subordinated Secured Notes due 2026 (the \u201cSecond Lien Notes\u201d). Under the terms of the New Term Loan Credit Agreement, lenders of the remaining Existing Term Loans will be entitled to exchange their remaining Existing Term Loans for the New Term Loans subject to certain terms and conditions. |
| \u25cf | Muvico also completed a private offering for cash of $414.4 million aggregate principal amount of 6.00%/8.00% Cash/PIK Toggle Senior Secured Exchangeable Notes due 2030 (the \u201cExchangeable |
| Notes\u201d), which are guaranteed by the Company, the existing guarantors under the Existing Term Loans, and the Existing First Lien Notes (as defined herein) (the \u201cExisting Guarantors\u201d) and Centertainment (as defined below) and which are exchangeable into the Company\u2019s Common Stock on the terms described herein. |
| \u25cf | Muvico used the proceeds from the offering of the Exchangeable Notes to repurchase $414.4 million aggregate principal amount of the Second Lien Notes. Muvico is entitled to issue up to an additional $50.0 million of the Exchangeable Notes (the \u201cAdditional Exchangeable Notes\u201d), the proceeds of which must be used to repurchase other outstanding debt due in 2025, 2026, and 2027. |
In connection with the formation of Muvico, among other things, the Company and certain of its subsidiaries (collectively, \u201cAMC\u201d) transferred certain leases, owned real property and related assets and rights in respect of 175 theatres to Muvico, along with certain intellectual property, including the AMC brand name, pursuant to an asset transfer agreement. In connection with the foregoing, the Company and Muvico (i) entered into a management services agreement, pursuant to which Muvico engaged AMC to manage and operate the transferred theatres and (ii) Muvico granted AMC a license to use the transferred intellectual property.
Muvico is a direct subsidiary of Centertainment Development, LLC (\u201cCentertainment\u201d). Each of Muvico and Centertainment is an \u201cunrestricted subsidiary\u201d under the Existing Term Loans and the Existing First Lien Notes and therefore not subject to various restrictive covenants under the covenants governing such indebtedness.
On August 1, 2024, the Company completed follow-on open market repurchases of the Company\u2019s Existing Term Loans, and in exchange, issued to such selling holders the Company\u2019s New Term Loans pursuant to the New Term Loan Credit Agreement, by and among the Company and Muvico, LLC as co-borrowers, the lenders party thereto and Wilmington Savings Fund Society, FSB, as administrative agent and collateral agent. As of August 1, 2024, the Company completed open market purchase of $1,864.0 million aggregate principal amount of its Existing Term Loans and issued $1,993.3 million aggregate principal amount of the New Term Loans. Accordingly, as of such date, the Company had approximately $31.0 million aggregate principal amount of Existing Term Loans outstanding. No Additional Exchangeable Notes have been issued as of the date of this filing.
The following sections provide summaries of the key terms and provisions of the Existing Credit Agreement Amendment (as defined herein), the New Term Loans, and the Exchangeable Notes.
\u00a0
Existing Credit Agreement Amendment
\u00a0
On the Closing Date, the Company entered into that certain Fourteenth Amendment to Credit Agreement (the\u00a0\u201cExisting Credit Agreement Amendment\u201d), by and among the Company, the Existing Guarantors, the lenders party thereto (which constituted the \u201cRequired Lenders\u201d as defined in the Existing Credit Agreement referred to below, the\u00a0\u201cSpecified Existing Lenders\u201d) and Wilmington Savings Fund Society, FSB, as administrative agent and as collateral agent, which amends the credit agreement governing the Existing Term Loans (as amended through the Thirteenth Amendment to Credit Agreement, dated as of June\u00a023, 2023, the\u00a0\u201cExisting Credit Agreement\u201d). Pursuant to the Existing Credit Agreement Amendment, certain provisions of the Existing Credit Agreement, including certain affirmative covenants, negative covenants and events of default were removed with the consent of the Specified Existing Lenders. In addition, the Specified Existing Lenders consented to all of the transactions described herein and consented to, and directed Wilmington Savings Fund Society, FSB, as collateral agent in respect of the Existing Term Loans, to enter into the Credit Facilities Intercreditor Agreement (as defined below).
\u00a0\u00a0
New Term Loan Credit Agreement
\u00a0
Amortization, Interest, Guarantees and Security
\u00a0
The New Term Loan Credit Agreement provides for (i)\u00a0the New Term Loans in an initial aggregate principal amount of $1,229,415,340 and (ii)\u00a0the ability of the New Term Loan Borrowers to incur additional New Term Loans, the proceeds of which will be used in connection with future open market purchases of the Existing Term Loans.
The New Term Loans mature on January\u00a04, 2029 (or, if at least $190,000,000 of the Existing First Lien Notes have not been repurchased (and cancelled), repaid or refinanced by October\u00a05, 2028, then October\u00a05, 2028). The New Term Loans are subject to amortization of principal, payable in quarterly installments on the last business day of each
fiscal quarter, commencing on September\u00a030, 2024, equal to 1.00% per annum. The remaining aggregate principal amount outstanding (together with accrued and unpaid interest on the principal amount) of the New Term Loans is payable at maturity.
\u00a0The New Term Loans bear interest, at the option of the New Term Loan Borrowers, at rates equal to either (i)\u00a0a base rate plus a margin of between 500 and 600 basis points depending on the total leverage ratio of the Company and its subsidiaries on a consolidated basis (the\u00a0\u201cTotal Leverage Ratio\u201d) or (ii)\u00a0Term SOFR plus a margin of between 600 and 700 basis points depending on the Total Leverage Ratio. Until the delivery under the New Term Loan Credit Agreement of the financial statements for the first full fiscal quarter ending after the Closing Date, the New Term Loans bear interest, at the option of the Company, at either (a)\u00a0the base rate plus a margin of 600\u00a0basis points or (b)\u00a0Term SOFR plus a margin of 700\u00a0basis points.
The New Term Loans are guaranteed, subject to limited exceptions, by Centertainment and Muvico and their future respective subsidiaries (collectively, the\u00a0\u201cCentertainment Group Parties\u201d) and the Existing Guarantors, and are secured by liens on substantially all of the tangible and intangible assets owned by the Company and such guarantors, in each case, subject to limited exceptions set forth in the New Term Loan Credit Agreement.
Covenants and Events of Default
\u00a0
The New Term Loan Credit Agreement contains covenants that limit the Company and its subsidiaries\u2019 ability to, among other things: (i)\u00a0incur additional indebtedness or guarantee indebtedness; (ii)\u00a0create liens; (iii)\u00a0declare or pay dividends, redeem stock or make other distributions to stockholders; (iv) make investments; (v)\u00a0enter into transactions with its affiliates; (vi)\u00a0consolidate, merge, sell or otherwise dispose of all or substantially all of their respective assets; and (vii)\u00a0maintain cash in the accounts of the Company and its subsidiaries (other than the Centertainment Group Parties). These covenants are subject to a number of important limitations and exceptions. The New Term Loan Credit Agreement also provides for events of default, which, if any of them occurs, would permit or require the principal, premium, if any, interest and any other monetary obligations on all the then outstanding New Term Loans to become immediately due and payable.
Exchangeable Notes Indenture
\u00a0
Interest, Guarantees and Security
\u00a0
The Exchangeable Notes were issued pursuant to an indenture (the\u00a0\u201cExchangeable Notes Indenture\u201d) dated as of the Closing Date, by and among Muvico, Centertainment, the Company, the Existing Guarantors and GLAS Trust Company LLC, as trustee and as collateral agent.
The Exchangeable Notes will bear interest at a rate of 6.00% per annum, if paid in cash, and 8.00% per annum, if paid in-kind by issuing the Exchangeable Notes (\u201cPIK Notes\u201d) having the same terms and conditions as the Exchangeable Notes in each case, payable semi-annually in arrears on June 15 and December 15, beginning on December 15, 2024. The Exchangeable Notes will mature on April 30, 2030, unless redeemed or exchanged in full prior to such maturity date, pursuant to the terms contained in the Exchangeable Notes Indenture.
Muvico\u2019s obligations under the Exchangeable Notes are fully and unconditionally guaranteed on a joint and several basis by the Company, Centertainment and its future subsidiaries (subject to certain exceptions), and all of the Company\u2019s existing and future subsidiaries that guarantee the Company\u2019s other indebtedness, including under the New Term Loan Credit Agreement. The Exchangeable Notes are secured (a)\u00a0on a second lien priority basis by substantially all of the tangible and intangible assets of the Centertainment Group Parties and (b)\u00a0on a first lien priority basis (but subject to a limitation on the amount of obligations so secured) by substantially all of the tangible and intangible assets of the Company and the Existing Guarantors, subject to certain turnover obligations relative to the New Term Loans.
Exchange Mechanics; Soft Call; Fundamental Change; Redemption
\u00a0
At any time prior to the close of business on the second Trading Day (as defined in the Exchangeable Notes Indenture) immediately preceding the final maturity date of the Exchangeable Notes, each holder of the Exchangeable Notes shall have the right, at its option, to surrender for exchange all or a portion of its Exchangeable Notes at the Exchange Rate (as defined in the Exchangeable Notes Indenture) for Common Stock of the Company. The Exchange Rate is initially set at 176.6379 shares of the Common Stock per $1,000 principal amount of the Exchangeable Notes exchanged, which reflects a price of $5.66 per share Common Stock (\u201cExchange Price\u201d), which price is equal to 113% of the closing price per share of the Common Stock on July 19, 2024. The Exchange Rate is subject to customary adjustments and anti-dilution protections (as provided in the Exchangeable Notes Indenture).
At any time prior to the close of business on the second Trading Day immediately preceding the final maturity date of the Exchangeable Notes, Muvico will also have the right, at its election, to redeem all (but not less than all) of the outstanding Exchangeable Notes at a price equal to the aggregate principal amount of the Exchangeable Notes, plus accrued and unpaid interest thereon to, but excluding, the date of such redemption if the Daily VWAP (as defined in the Exchangeable Notes Indenture) per share of Common Stock exceeds 140% of the Exchange Price for fifteen (15) consecutive Trading Days ending on (and including) the Trading Day immediately before the date on which Muvico sends a notice to holders calling such Exchangeable Notes for redemption (a\u00a0\u201cSoft Call Notice\u201d). Any such Soft Call Notice will provide that the applicable redemption of the Exchangeable Notes will occur on a business day of Muvico\u2019s choosing, not more than (10) and not less than (5) business days after the date of the Soft Call Notice. Notwithstanding the foregoing, holders of Exchangeable Notes will be entitled within (2) business days of such Soft Call Notice to submit their Exchangeable Notes for exchange under the terms of the Exchangeable Notes Indenture.
In the event that holders of Exchangeable Notes voluntarily elect to exchange their Exchangeable Notes, such holders will also be entitled to a make-whole premium (the \u201cExchange Adjustment Consideration\u201d) equal to (i) prior to the third anniversary of the Issue Date, 18.0% of the aggregate principal amount of the Exchangeable Notes being exchanged\u037e (ii)\u00a0on or after the third anniversary and prior to the fourth anniversary of the Issue Date, 12.0% of the aggregate principal amount of the Exchangeable Notes being exchanged; and (iii) on or after the fourth anniversary of the Issue Date and prior to the fifth anniversary, 6.0% of the aggregate principal amount of the Exchangeable Notes being exchanged. Muvico, at its option, will be entitled to pay the Exchange Adjustment Consideration in the form of shares of Common Stock (using a modified exchange price equal to 140% of the Exchange Price), subject to restrictions under the New Credit Agreement, cash in twelve (12) equal installments over the twelve-month period following the applicable exchange or a combination thereof.
If certain corporate events that constitute a Fundamental Change (as defined in the Exchangeable Notes Indenture) occur, then holders will have the right to require Muvico to repurchase their Exchangeable Notes at a cash repurchase price equal to 100% of the aggregate principal amount of the Exchangeable Notes to be repurchased, plus accrued and unpaid interest, if any, thereon to, but excluding, the Fundamental Change Repurchase Date (as defined in the Exchangeable Notes Indenture). The definition of Fundamental Change includes certain business combination transactions involving the Company, stockholder approval of any plan or proposal for the liquidation or dissolution of the Company and certain de-listing events with respect to the Common Stock.
Muvico will also be required to mandatorily redeem all of the issued and outstanding Exchangeable Notes at a purchase price equal to 100% of the aggregate principal amount, plus accrued and unpaid interest to, but excluding, the date of purchase in the event that, as of (90) days prior to the maturity date of the Company\u2019s 7.50% first lien secured notes due 2029 (the\u00a0\u201cExisting First Lien Notes\u201d), the aggregate principal amount outstanding of the Existing First Lien Notes with a maturity date prior to April 30, 2030 exceeds $190,000,000.
Covenants and Events of Default
\u00a0
The Exchangeable Notes Indenture contains covenants that limit the Centertainment Group Parties\u2019 ability to, among other things: (i) incur additional indebtedness or guarantee indebtedness; (ii) create liens; (iii) declare or pay dividends, redeem stock or make other distributions to stockholders; (iv) make investments; (v) enter into transactions with its affiliates; (vi) consolidate, merge, sell or otherwise dispose of all or substantially all of their respective assets; and (vii) impair the security interest in the collateral. These covenants are subject to a number of important limitations and exceptions. The Exchangeable Notes Indenture also incorporates the other restrictive covenants contained in the New Term Loan Credit Agreement. The Exchangeable Notes Indenture also provides for events of default, which, if any of
them occurs, would permit or require the principal, premium, if any, interest and any other monetary obligations on all the then outstanding Exchangeable Notes to be due and payable immediately.
\u00a0
Additional Exchangeable Notes
\u00a0
The Exchangeable Notes Indenture provides that Muvico may issue an additional $50.0 million aggregate principal amount of Additional Exchangeable Notes from time to time to fund purchases of the Company\u2019s remaining outstanding Second Lien Notes, 5.75% senior subordinated notes due 2025 and the existing term loan facilities under the Existing Credit Agreement. Until the date that is three (3) months following the Issue Date, only the initial purchasers of the Exchangeable Notes and their designated affiliates have the right to purchase for cash such Additional Exchangeable Notes, and the proceeds may only be used to repurchase outstanding debt securities on terms agreed with such purchasers and/or their designated affiliates. Any such Additional Exchangeable Notes, if issued, will have the same terms and exchange price as the Exchangeable Notes originally issued under the Exchangeable Notes Indenture.
The Company is evaluating the accounting treatments associated with these refinancing transactions and the analysis of the financial effect is ongoing.
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