Form: 425

Filing under Securities Act Rule 425 of certain prospectuses and communications in connection with business combination transactions

October 24, 2016

Exhibits

425: Filing under Securities Act Rule 425 of certain prospectuses and communications in connection with business combination transactions

Published on October 24, 2016


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Exhibit 99.3

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

        The following unaudited pro forma condensed combined financial statements of AMC Entertainment Holdings, Inc. ("AMC" or the "Company") are presented to illustrate the estimated effects of (i) the pending acquisition of Odeon and UCI Cinemas Holdings Limited ("Odeon" or the "Odeon Acquisition"); (ii) the incurrence of $535,000,000 aggregate principal amount of Senior Subordinated Notes due 2026 (the "Dollar Notes"), £300,000,000 aggregate principal amount of Senior Subordinated Notes due 2024 (the "Sterling Notes") and $500,000,000 aggregate principal amount of incremental term loans and; (iii) the issuance of £125,000,000 ($166,000,000) of the Company's Class A Common Stock in a private placement for the Odeon Acquisition (clauses (ii) and (iii) referred to as the "Financings"). The pro forma financial information is based in part on certain assumptions regarding the foregoing transactions that the Company believes are factually supportable and expected to have a continuing impact on our consolidated results. The unaudited pro forma condensed combined statements of operations for the year ended December 31, 2015, for the six months ended June 30, 2016 and for the six months ended June 30, 2015, combine the historical consolidated statements of operations of the Company and Odeon, giving effect to the Odeon Acquisition and the Financings as if they had been completed on January 1, 2015. The unaudited pro forma condensed combined balance sheet as of June 30, 2016, combines the historical consolidated balance sheets of Odeon and the Company, giving effect to the Odeon Acquisition and the Financings as if they had occurred on June 30, 2016. The historical consolidated financial information for Odeon has been adjusted to comply with generally accepted accounting principles in the United States ("GAAP"). The classification of certain items presented by Odeon under U.K. GAAP has been modified in order to align with the presentation used by the Company under GAAP . In addition to the GAAP adjustments and the reclassifications, amounts have also been translated to USD. The unaudited pro forma condensed combined financial statements should be read in conjunction with the accompanying notes to the unaudited pro forma condensed combined financial statements. In addition, the unaudited pro forma condensed combined financial information was based on, and should be read in conjunction with, the following historical consolidated financial statements and accompanying notes and Form 8-K for the Odeon Acquisition:

    •
    The Company's Current Report on Form 8-K filed on July 13, 2016, including exhibits thereto, which describes the proposed Odeon Acquisition;

    •
    Audited Consolidated financial statements of the Company as of and for the year ended December 31, 2015, which are included in the Company's Annual Report on Form 10-K for the year ended December 31, 2015;

    •
    Audited consolidated financial statements of Odeon audited under generally accepted auditing standards in the United States ("U.S. GAAS") and prepared following generally accepted accounting practice in the United Kingdom ("U.K. GAAP") as of and for the year ended December 31, 2015, which are included herein;

    •
    The section titled "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's Annual Report on Form 10-K for the year ended December 31, 2015;

    •
    Unaudited consolidated financial statements of the Company as of and for the six months ended June 30, 2016 and six months ended June 30, 2015, which are included in the Company's Quarterly Report on Form 10-Q for the six months ended June 30, 2016;

    •
    Unaudited consolidated financial statements of Odeon prepared following U.K. GAAP as of and for the six months ended June 30, 2016 and for the six months ended June 30, 2015, which are included herein; and

1

    •
    The section titled "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's Quarterly Report on Form 10-Q for the six months ended June 30, 2016.

        The unaudited pro forma condensed combined financial statements have been prepared by the Company, as the acquirer, using the acquisition method of accounting in accordance with U.S. GAAP. The acquisition method of accounting is dependent upon certain valuation and other studies that have yet to commence or progress to a stage where there is sufficient information for a definitive measurement. Before the Odeon Acquisition is completed, there are limitations regarding what the Company can learn about Odeon. The assets and liabilities of Odeon have been measured based on various preliminary estimates using assumptions that the Company believes are reasonable based on information that is currently available. The Company has not yet determined fair value of property, net, intangibles or capital and financing lease obligations acquired; therefore the carrying value has been used in the preliminary purchase price allocation and in the pro forma financial statements. The preliminary purchase price allocation for Odeon is subject to revision as a more detailed analysis is completed and additional information on the fair value of Odeon's assets and liabilities becomes available. The final allocation of the purchase price, which will be based upon actual tangible and intangible assets acquired as well as liabilities assumed, will be determined after the completion of the Odeon Acquisition, and could differ materially from the unaudited pro forma condensed combined financial statements presented here. Any change in the fair value of the net assets of Odeon will change the amount of the purchase price allocable to goodwill. Additionally, differences in the anticipated closing date of December 31, 2016 through the date the Odeon Acquisition is completed and changes in currency translation rates, will change the amount of goodwill recorded for the Odeon Acquisition and the actual number of shares issued for the Odeon Acquisition. The pro forma adjustments are preliminary and have been made solely for the purpose of providing unaudited pro forma condensed combined financial statements prepared in accordance with the rules and regulations of the SEC.

        The unaudited pro forma condensed combined financial statements make certain assumptions regarding the amount and terms, including assumed pricing of common stock to be put into place in connection with the Odeon Acquisition as further described in Note 4 Purchase Price.

        The unaudited pro forma condensed combined financial information has been presented for information purposes only. The unaudited pro forma condensed combined financial information does not purport to represent the actual results of operations that the Company and Odeon would have achieved had the companies been combined during the periods presented in the unaudited pro forma condensed combined financial statements and is not intended to project the future results of operations that the combined company may achieve after the Odeon Acquisition. The unaudited pro forma condensed combined financial information does not reflect any potential cost savings that may be realized as a result of the Odeon Acquisition and also does not reflect any restructuring or integration-related costs to achieve those potential cost savings. No historical transactions between Odeon and the Company during the periods presented in the unaudited pro forma condensed combined financial statements have been identified at this time.

2


 AMC ENTERTAINMENT HOLDINGS, INC.
UNAUDITED CONDENSED COMBINED PRO FORMA BALANCE SHEET
AS OF JUNE 30, 2016
(DOLLARS IN THOUSANDS)

 
   AMC Historical   Odeon Historical   Odeon Pro Forma Adjustments    
   AMC
Pro Forma
for the Odeon
Acquisition 		 
 
    
   (Note 2)
   (Note 6)
    
    
  

Assets

                              

Cash and equivalents

   $ 93,316   $ 35,967   $ 225,424   (a)   $ 354,707  

Current assets

     162,156     79,134     —         241,290  

Property, net

     1,447,997     860,305     —   (g)     2,308,302  

Intangible assets, net

     233,329     55,430     —   (g)     288,759  

Goodwill

     2,410,713     215,953     (215,953 ) (b)     3,316,925  

                906,212   (b)        

Other long-term assets

     601,030     53,258     —         654,288  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total assets

   $ 4,948,541   $ 1,300,047   $ 915,683       $ 7,164,271  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Liabilities and Stockholders' Equity

                              

Current liabilities

   $ 601,166   $ 227,236   $ (3,545 ) (h)   $ 813,002  

                (1,457 ) (h)        

                (10,398 ) (h)        

Current Maturities:

                              

Corporate Borrowings and Capital and Financing Lease Obligations

     19,196     20,603     —         39,799  

Corporate borrowings:

                              

5.75% Senior Subordinated Notes due 2025

     589,810     —     —         589,810  

Senior Subordinated Notes due 2026

     —     —     535,000   (a)     516,725  

                (18,725 ) (c)        

Senior Subordinated GBP Notes due 2024

     —     —     397,260   (a)     383,356  

                (13,904 ) (c)        

5.875% Senior Subordinated Notes due 2022

     369,569     —     —         369,569  

Senior Secured Term Loan Facility due 2022

     861,230     —     500,000   (a)     1,349,980  

                (11,250 ) (c)        

Revolving Credit Facility due 2020

     —     —     —         —  

9% Senior Secured Note GBP due 2018

     —     392,874     13,126   (e)     —  

                (406,000 ) (a)        

Floating Rate Senior Secured Note EUR due 2018

           217,337     4,663   (e)     —  

                (222,000 ) (a)        

10.89% Shareholder Loans due 2019

     —     795,426     (795,426 ) (f)     —  

5% Promissory Note Payable NCM due 2019

     4,166     —     —         4,166  

Capital and financing lease obligations

     88,664     290,449     —   (g)     379,113  

Other long-term liabilities

     860,814     253,028     (30,835 ) (h)     1,019,232  

                (17,887 ) (h)        

                (45,888 ) (h)        
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total liabilities

     3,394,615     2,196,953     (127,266 )       5,464,302  

Class A Common Stock

     1,080     —     —         1,080  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Stockholders' Equity

                              

Class A Common Stock

     215     —     —         215  

Class B Common Stock

     758     —     —         758  

Additional paid-in capital

     1,185,539     —     166,000   (a)     1,351,539  

Treasury Stock

     (680 )   —     —         (680 )

Accumulated other comprehensive income

     1,596     —     —         1,596  

Accumulated earnings (deficit)

     365,418     (896,906 )   896,906   (d)     345,461  

                —            

              $ (19,957 ) (c)        
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total stockholders' equity

     1,552,846     (896,906 )   1,042,949         1,698,889  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total liabilities and Stockholders' Equity

   $ 4,948,541   $ 1,300,047   $ 915,683       $ 7,164,271  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

See Notes to Unaudited Pro Forma Condensed Combined Financial Statements

3


 AMC ENTERTAINMENT HOLDINGS, INC.
UNAUDITED CONDENSED COMBINED PRO FORMA STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2015
(dollars in thousands, except per share data)

 
   AMC Historical   Odeon Historical   Odeon Pro Forma Adjustments    
   AMC
Pro Forma
for the Odeon
Acquisition 		 
 
    
   Note (3)
   Note (6)
    
    
  

Revenues

   $ 2,946,900   $ 1,141,963     —       $ 4,088,863  

Cost of operations

     1,945,748     753,518     —         2,699,266  

Rent

     467,822     136,312     1,669   (l)     609,442  

                3,639   (l)        

                —            

General and administrative:

                              

Merger, acquisition and transaction costs

     3,398     8,432     —   (j)     7,040  

                (4,790 ) (j)        

Other

     58,212     44,854     —         103,066  

Depreciation and amortization

     232,961     95,525     —         328,486  

                          —  

Impairment of long-lived assets

     1,702     8,275               9,977  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Operating costs and expenses

     2,709,843     1,046,916     518         3,757,277  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Operating income

     237,057     95,047     (518 )       331,586  

Other expense (income)

     10,684     (38,734 )   8,447   (l)     (19,603 )

Interest expense

     106,088     177,959     (141,577 ) (i)     227,955  

                80,132   (i)        

                5,353   (i)        

Equity in earnings of non-consolidated entities

     (37,131 )   (109 )   —         (37,240 )

Investment income

     (6,115 )   —     —         (6,115 )
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total other expense

     73,526     139,116     (47,645 )       164,997  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Earnings (loss) before income taxes

     163,531     (44,069 )   47,127         166,589  

Income tax provision

     59,675     1,214     (33,339 ) (k)     27,550  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Net earnings (loss)

   $ 103,856   $ (45,283 ) $ 80,466       $ 139,039  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Basic earnings per share

   $ 1.06                   $ 1.34  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Average shares outstanding—Basic

     97,963           6,021   Note (4)     103,984  

Diluted earnings per share

   $ 1.06                   $ 1.34  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Average shares outstanding—Diluted

     98,029           6,021   Note (4)     104,050  

See Notes to Unaudited Pro Forma Condensed Combined Financial Statements

4


 AMC ENTERTAINMENT HOLDINGS, INC.
UNAUDITED CONDENSED COMBINED PRO FORMA STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 2016
(dollars in thousands, except per share data)

 
   AMC
Historical 		  Odeon
Historical 		  Odeon
Pro Forma
Adjustments 		   
   AMC
Pro Forma
for the Odeon
Acquisition 		 
 
    
   Note (3)
   Note (6)
    
    
  

Revenues

   $ 1,529,979   $ 526,182     —       $ 2,056,161  

Cost of operations

     995,698     361,508     —         1,357,206  

Rent

     247,403     66,647     1,983   (l)     318,196  

                2,163   (l)        

                —            

General and administrative:

                              

Merger, acquisition and transaction costs

     10,152     9,595     (3,778 ) (j)     6,614  

                (9,355 ) (j)        

Other

     39,150     24,257     —         63,407  

Depreciation and amortization

     122,721     45,915     —         168,636  

Impairment of long-lived assets

     —     158               158  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Operating costs and expenses

     1,415,124     508,080     (8,987 )       1,914,217  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Operating income

     114,855     18,102     8,987         141,944  

Other expense (income)

     (84 )   74,499     1,614   (l)     76,029  

Interest expense

     54,097     90,169     (72,327 ) (i)     113,733  

                39,168   (i)        

                2,626   (i)        

Equity in (earnings) loss of non-consolidated entities

     (16,113 )   345     —         (15,768 )

Investment income

     (9,778 )   —     —         (9,778 )
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total other expense

     28,122     165,013     (28,919 )       164,216  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Earnings (loss) before income taxes

     86,733     (146,911 )   37,906         (22,272 )

Income tax provision (benefit)

     34,475     (663 )   (14,826 ) (k)     18,986  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Net earnings (loss)

   $ 52,258   $ (146,248 ) $ 52,732       $ (41,258 )
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Basic earnings per share

   $ 0.53                   $ (0.40 )
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Average shares outstanding—Basic

     98,197           6,021   Note (4)     104,218  

Diluted earnings per share

   $ 0.53                   $ (0.40 )
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Average shares outstanding—Diluted

     98,237           6,021   Note (4)     104,258  

See Notes to Unaudited Pro Forma Condensed Combined Financial Statements

5


 AMC ENTERTAINMENT HOLDINGS, INC.
UNAUDITED CONDENSED COMBINED PRO FORMA STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 2015
(dollars in thousands, except per share data)

 
   AMC
Historical 		  Odeon
Historical 		  Odeon
Pro Forma
Adjustments 		   
   AMC
Pro Forma
for the Odeon
Acquisition 		 
 
    
   Note (3)
   Note (6)
    
    
  

Revenues

   $ 1,474,203   $ 531,219     —       $ 2,005,422  

Cost of operations

     975,491     366,052     —         1,341,543  

Rent

     232,943     67,398     218   (l)     302,372  

                1,813   (l)        

                —            

General and administrative:

                              

Merger, acquisition and transaction costs

     1,839     1,225     —   (j)     3,064  

                —   (j)        

Other

     22,678     20,139     —         42,817  

Depreciation and amortization

     115,026     47,742     —         162,768  

Impairment of long-lived assets

     —     —               —  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Operating costs and expenses

     1,347,977     502,556     2,031         1,852,564  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Operating income

     126,226     28,663     (2,031 )       152,858  

Other expense (income)

     9,273     (61,446 )   1,549   (l)     (50,624 )

Interest expense

     55,500     91,099     (72,508 ) (i)     116,785  

                40,020   (i)        

                2,674   (i)        

Equity in (earnings) loss of non-consolidated entities

     (10,686 )   462     —         (10,224 )

Investment income

     (5,202 )   —     —         (5,202 )
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total other expense

     48,885     30,115     (28,265 )       50,735  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Earnings (loss) before income taxes

     77,341     (1,452 )   26,234         102,123  

Income tax provision (benefit)

     27,280     (1,927 )   (16,651 ) (k)     8,702  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Net earnings (loss)

   $ 50,061   $ 475   $ 42,885       $ 93,421  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Basic earnings per share

   $ 0.51                   $ 0.90  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Average shares outstanding—Basic

     97,949           6,021   Note (4)     103,970  

Diluted earnings per share

   $ 0.51                   $ 0.90  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Average shares outstanding—Diluted

     97,987           6,021   Note (4)     104,008  

See Notes to Unaudited Pro Forma Condensed Combined Financial Statements

6

1. Description of the transactions and basis of pro forma presentation

Odeon Acquisition

        In July 2016, we announced an offer to purchase all of the issued and to be issued share capital of Odeon and UCI Cinemas Holdings Limited ("Odeon" or the "Odeon Acquisition"). Under the original terms of the Odeon Acquisition, Odeon shareholders will receive £389,000,000 ($515,000,000) in cash and new shares of the Company's Class A Common Stock with a value of £125,000,000 ($166,000,000). The Odeon Acquisition is equal to a total value of approximately £514,000,000 ($681,000,000) for Odeon's entire issued and to be issued capital assuming the transaction closed on June 30, 2016 and a currency translation rate of 1.3242 on June 30, 2016. Based on these assumptions, $515,000,000 will be paid in cash to Odeon shareholders and 6,021,000 new shares will be issued to Odeon shareholders on the acquisition date. We have agreed to file a registration statement to allow Odeon shareholders to resell their shares at specified times after closing and has granted certain other piggy-back registration rights. The estimated transaction value of £514,000,000 assumes a closing date of December 31, 2016 and includes interest from the locked box date of December 31, 2015 at 5.9617% through December 31, 2016 of approximately £28,900,000.

        Odeon operates 242 theatres and 2,236 screens in 7 countries (UK, Ireland, Italy, Spain, Austria, Portugal and Germany). The Company anticipates completing the Odeon Acquisition in the fourth quarter of 2016, subject to satisfaction of closing conditions. The acquisition is subject to European Commission approval.

        The unaudited pro forma condensed combined balance sheet as of June 30, 2016, was prepared by combining the historical unaudited condensed consolidated balance sheet data as of June 30, 2016 for each of the Company and Odeon (as adjusted to comply with GAAP) as if the Odeon Acquisition and the Financings (see Note 5) had been consummated on that date. In addition to certain GAAP adjustments, certain balance sheet reclassifications have also been reflected in order to conform Odeon's balance sheet to the Company's balance sheet presentation. Refer to Note 2 for a discussion of these GAAP and reclassification adjustments.

        The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2015 and for the six months ended June 30, 2016 and 2015 combines the results of operations of the Company and Odeon (as adjusted to comply with GAAP) as if the Odeon Acquisition and the Financings (see Note 5) had been consummated on January 1, 2015. In addition to certain GAAP adjustments, certain statements of operations reclassifications have also been reflected in order to conform the Company's statement of operations presentation. Refer to Note 3 for a discussion of these GAAP and reclassification adjustments.

        The historical consolidated financial information has been adjusted in the accompanying unaudited pro forma condensed combined financial information to give effect to pro forma events that are (i) directly attributable to the acquisitions, (ii) factually supportable, and (iii) with respect to the unaudited pro forma condensed combined statements of operations, expected to have a continuing impact on the consolidated results.

        The acquisition method of accounting, based on ASC 805, uses the fair value concepts defined in ASC 820, "Fair Value Measurement" (ASC 820). Fair value is defined in ASC 820 as the "price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date." This is an exit price concept for the valuation of an asset or liability. Market participants are assumed to be buyers or sellers in the most advantageous market for the asset or liability. Fair value measurement for an asset assumes the highest and best use by these market participants, and as a result, assets may be required to be recorded which are not intended to be used or sold and/or to value assets at a fair value measurement that do not reflect management's intended use for those assets. Fair value measurements can be highly subjective and it is

7

possible the application of reasonable judgment could develop different assumptions resulting in a range of alternative estimates using the same facts and circumstances.

        ASC 820 requires, among other things, that assets acquired and liabilities assumed in a business combination be recognized at fair value as of the acquisition date. As of the date of this filing the accompanying unaudited pro forma purchase price allocation is preliminary and is subject to further adjustments as additional information becomes available and as additional analyses are performed. The Company has not yet determined fair value of property, net intangibles or capital and financing leases acquired; therefore the carrying value has been used in the preliminary purchase price allocation and in the unaudited pro forma condensed combined financial statements.

2. Odeon Balance Sheet

        Odeon's condensed consolidated financial statements were prepared for the purpose of the reporting requirements of Rule 3-05 of Regulation S-X and in accordance with the accounting and disclosure requirements of FRS 102, The Financial Reporting Standard applicable in the UK and Ireland ("FRS 102"), which differs in certain respects from GAAP. The following schedule summarizes the necessary material adjustments to conform Odeon's condensed consolidated balance sheet as of June 30, 2016 to GAAP and USD (in thousands) and accounting policies and classification of certain items presented by Odeon under U.K. GAAP have been modified in order to align with the presentation used by the Company for its accounting policies and classification under GAAP (in thousands):

        Odeon's balance sheet has been translated into the Company's reporting currency, U.S. dollars, at a rate of GBP 1.00= USD 1.3242, the exchange rate as of June 30, 2016.

8


 BALANCE SHEET
AS OF JUNE 30, 2016

 
   Local Currency—GBP   USD  
 
   Odeon
Pro Forma
Reclassified
Amounts
Presented 		  Odeon
U.S. GAAP
Adjustments 		   
   Odeon
Historical
U.S. GAAP 		  Odeon
Historical
U.S. GAAP 		 

Assets

                              

Cash and equivalents

   £ 27,161   £ —       £ 27,161   $ 35,967  

Current assets

     59,760     —         59,760     79,134  

Property, net

     424,095     200,338   (i)(f)     649,679     860,305  

          (5,379 ) (i)(e)              

          11,625   (i)(k)              

          19,000   (i)(l)              

Intangible assets, net

     —     1,359   (i)(j)     41,859     55,430  

          40,500   (i)(j)              

Goodwill

     126,136     (77,679 ) (i)(f)     163,082     215,953  

          104,440   (i)(d)              

          (96,562 ) (i)(a)              

          7,747   (i)(j)              

          99,000   (i)(l)              

Other long-term assets

     23,052     17,167   (i)(h)     40,219     53,258  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total assets

   £ 660,204   £ 321,556       £ 981,760   $ 1,300,047  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Liabilities and Stockholders' Deficit

                              

Current liabilities

   £ 177,292     (9,466 ) (i)(g)   £ 171,603   $ 227,236  

          1,100   (i)(i)              

          2,677   (i)(c)              

Current Maturities:

    
 		    
 		  

 

    
 		    
 		  

Corporate Borrowings and Capital and Financing Lease Obligations

     1,349     14,210   (i)(f)     15,559     20,603  

Corporate borrowings:

                              

9% Senior Secured Note GBP due 2018

     296,688               296,688     392,874  

Floating Rate Senior Secured Note EUR due 2018

     164,127               164,127     217,337  

10.89% Shareholder Loans due 2019

     600,684     —         600,684     795,426  

Capital and financing lease obligations

     3,699     204,015   (i)(f)     219,339     290,449  

          11,625   (i)(k)              

Other long-term liabilities

     123,098     (33,257 ) (i)(a)     191,080     253,028  

          9,203   (i)(b)              

          13,773   (i)(c)              

          34,805   (i)(i)              

          25,058   (i)(j)              

          18,400   (i)(l)              
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total liabilities

     1,366,937     292,143         1,659,080     2,196,953  

Stockholders' Deficit

    
(706,733
)		  
89		  

(i)(h)

    
(677,320
)		  
(896,906
)

          (51 ) (i)(h)              

          17,129   (i)(h)              

          (24,845 ) (i)(a)              

          (39,978 ) (i)(a)              

          1,518   (i)(a)              

          (10,103 ) (i)(f)              

          (85,464 ) (i)(f)              

          (2,909 ) (i)(b)              

          (6,294 ) (i)(b)              

          (12,874 ) (i)(c)              

          (3,576 ) (i)(c)              

          17,599   (i)(d)              

          979   (i)(d)              

          85,862   (i)(d)              

          9,466   (i)(g)              

          (2,654 ) (i)(e)              

          (2,724 ) (i)(e)              

          3,478   (i)(i)              

          (39,383 ) (i)(i)              

          5,631   (i)(j)              

          18,917   (i)(j)              

          (800 ) (i)(l)              

          100,400   (i)(l)              
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total liabilities and Stockholders' Deficit

   £ 660,204   £ 321,556       £ 981,760   $ 1,300,047  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

   

See Notes to Unaudited Pro Forma Condensed Combined Financial Statements

9

        (i)    The adjustments presented above to Odeon's balance sheet related to:

            (a)   Under U.K. GAAP Odeon maintains a liability for leased properties still in use that are expected to generate losses in the future. Under GAAP, a liability cannot be recorded for losses related to contractual lease obligations until the cease use date has occurred. Odeon reduces the onerous lease provision when performance improves for properties previously forecast to generate cash losses. The Company has made the following adjustments related to the removal of the onerous lease provision and liability following GAAP:

 
   As of
June 30, 2016 		 

Remove onerous lease liability

   £ (33,257 )

Reduce goodwill

     (96,562 )

Record increase to accumulated deficit subsequent to January 1, 2015

     (24,845 )

Record increase to accumulated deficit prior to January 1, 2015

     (39,978 )

Record increase to accumulated other comprehensive income

     1,518  

            (b)   Under U.K. GAAP, fixed increases in rental payments that are meant to approximate the rate of inflation are not included in the calculation of straight-line rent expense but would be included under GAAP. The Company has made the following adjustment to include the estimated deferred rent expense and liability for operating leases as follows:

 
   As of
June 30, 2016 		 

Record liability for deferred rent expense

   £ 9,203  

Record increase to accumulated deficit subsequent to January 1, 2015

     (2,909 )

Record increase to accumulated deficit prior to January 1, 2015

     (6,294 )

            (c)   Odeon occasionally receives premium payments from landlords that provide the landlord with the right to terminate the lease at the discretion of the landlord. Historically Odeon has recognized such payments in the year of payment. Under GAAP, such payments would generally be considered the same as incentives from a landlord and would be deferred over the period from receipt of the payment over the remainder of the expected lease term. The Company has made the following adjustments to defer the amounts received from landlords for operating leases:

 
   As of
June 30, 2016 		 

Record long-term portion of liability for landlord benefits

   £ 13,773  

Record short-term portion of liability

     2,677  

Record increase to accumulated deficit subsequent to January 1, 2015

     (12,874 )

Record increase to accumulated deficit prior to January 1, 2015

     (3,576 )

            (d)   Goodwill is amortized under U.K. GAAP but is not amortized under GAAP. Transaction expenses are capitalized as part of acquisition consideration under U.K. GAAP. The Company has made the following adjustment to reinstate goodwill for amounts amortized under U.K. GAAP and to reverse the capitalization of transaction expenses as follows:

 
   As of
June 30, 2016 		 

Reinstate goodwill

   £ 104,440  

Record decrease to accumulated deficit subsequent to January 1, 2015

     17,599  

Record increase to accumulated other comprehensive income

     979  

Record decrease to accumulated deficit prior to January 1, 2015

     85,862  

10

            (e)   Under U.K. GAAP impairment charges recorded previously can be reversed. However, under GAAP, impairment charges recorded in prior periods are not reversed in future periods. The Company has made the following adjustments related to reversing previously recorded impairment charges and to reverse depreciation on these long-lived assets under U.K. GAAP as follows:

 
   As of
June 30, 2016 		 

Property, net

   £ (5,379 )

Record increase to accumulated deficit subsequent to January 1, 2015

     (2,654 )

Record increase to accumulated deficit prior to January 1, 2015

     (2,724 )

            (f)    Reflects the adjustment to account for certain build-to-suit and capital leases. Build-to-suit leases are treated as financing transactions under GAAP when the lessee is involved in the construction of the leased assets. Odeon had significant continuing involvement in relation to the leased properties upon completion of their construction activities and, accordingly, the lease arrangements failed the sale and leaseback test. Under U.K. GAAP, these leases were treated as operating leases. This results in the recognition of the leased assets at their net book value, a related finance liability and a corresponding goodwill adjustment under GAAP for leases acquired in business combinations. The Company has made the following adjustments related to these capital and financing leases following GAAP:

 
   As of
June 30, 2016 		 

Record build to suit and capital lease assets

   £ 200,338  

Record short-term capital and finance lease obligation

     14,210  

Record long-term capital and finance lease obligation

     204,015  

Adjust Goodwill

     (77,679 )

Record increase to accumulated deficit subsequent to January 1, 2015

     (10,103 )

Record increase to accumulated deficit prior to January 1, 2015

     (85,464 )

            (g)   Represents adjustments for share based compensation expense related to Odeon's senior long-term incentive program ("Senior LTIP") that is contingent upon the consummation of the Odeon Acquisition. Under GAAP recognition of share based compensation expense that is contingent on the consummation of a transaction is deferred until the transaction is consummated.

 
   As of
June 30, 2016 		 

Remove liability for LTIP

   £ (9,466 )

Record decrease to accumulated deficit subsequent to January 1, 2015

     9,466  

            (h)   Following pension accounting rules under U.K. GAAP, the net pension assets associated with an overfunded pension plan are generally not recognized on the balance sheet. However, such pension assets are recognized under GAAP. The Company has made the following adjustment to recognize the net pension asset following GAAP:

 
   As of
June 30, 2016 		 

Record net pension asset

   £ 17,167  

Record decrease to accumulated deficit subsequent to January 1, 2015

     89  

Record increase to accumulated deficit prior to January 1, 2015

     (51 )

Record increase to accumulated other comprehensive income

     17,129  

11

            (i)    Under GAAP and following the variable interest consolidation model, certain entities required consolidation in the historical accounts that did not require consolidation under U.K. GAAP. In addition, under GAAP gains from sale leaseback transactions are typically deferred over the term of the lease. The following adjustments represent the impact of consolidating the variable interest entities, the subsidiaries of Odeon Property Group LLP (the "PropCos"), and the impact of deferring gains from historic sale leaseback transactions related to the PropCos under GAAP.

 
   As of
June 30, 2016 		 

Record PropCo current liabilities

   £ 1,100  

Record PropCo deferred gain

     34,805  

Record PropCo decrease to accumulated deficit subsequent to January 1, 2015

     3,478  

Record PropCo increase to accumulated deficit prior to January 1, 2015

     (39,383 )

            (j)    Under U.K. GAAP, identifiable intangible assets and liabilities are not required to be separately identified and recorded on an entity's balance sheet in connection with a business combination. Under GAAP, identifiable intangible assets and liabilities such as favorable and unfavorable leases and tradenames are required to be separately identified and determined to be indefinite-lived or definite lived intangible assets or liabilities. The following adjustments record the balances for identified tradenames, favorable lease assets and unfavorable lease liabilities under GAAP.

 
   As of
June 30, 2016 		 

Record favorable lease asset definite lived intangible

   £ 1,359  

Record tradename indefinite lived intangible

     40,500  

Record adjustment to Goodwill

     7,747  

Record unfavorable lease liability definite lived intangible

     25,058  

Record decrease to accumulated deficit subsequent to January 1, 2015

     5,631  

Record decrease to accumulated deficit prior to January 1, 2015

     18,917  

            (k)   Under GAAP, construction in progress for locations recorded as financing leases in (f) above are recorded as increases to property and the related financing lease obligation.

 
   As of
June 30, 2016 		 

Record property

   £ 11,625  

Record financing lease obligation

     11,625  

            (l)    Timing differences arising historically in Odeon did not result in significant deferred tax assets or liabilities recorded on the balance sheet in respect of foreign jurisdictions due to the availability of off balance sheet deferred tax assets, including net operating loss carryforwards. Consequently, GAAP adjustments do not result in significant additional deferred tax assets or liabilities. Odeon has made a GAAP policy election not to include any tax basis in the reported position for certain leasehold assets in the UK and Ireland where its tax basis declines or 'wastes' over time. As a result, an adjustment is required to increase the reported deferred tax liability for

12

    these territories and record associated increases in the carrying value of the assets themselves, or goodwill for those assets acquired via business combinations.

 
   As of
June 30, 2016 		 

Record fixed assets

   £ 19,000  

Record goodwill

     99,000  

Record deferred tax liability

     18,400  

Record increase to accumulated deficit subsequent to January 1, 2015

     (800 )

Record decrease to accumulated deficit prior to January 1, 2015

     100,400  

Summary of Reclassification Adjustments for Odeon

        The classification of certain items presented by Odeon under U.K. GAAP has been modified in order to align with the presentation used by the Company under GAAP as shown below. The reclassification adjustments to the Balance Sheet as of June 30, 2016 relate to the structure of the Consolidated Balance Sheet for Odeon following its policies under U.K. GAAP which utilize different naming and aggregation standards than the Company's presentation following its policies under GAAP and separately identifies items such as goodwill as intangible assets. The reclassification adjustments to conform Odeon's historical financial statement presentation to the Company's historical financial statement presentation have also been condensed to conform with the amounts presented in the unaudited pro forma condensed combined financial statement presentations included herein. There have been no changes in total stockholders' deficit as a result of these reclassifications.

13


 Odeon
Summary of pro forma reclassification adjustment for Odeon—Balance sheet
As of June 30, 2016

 
   UK GAAP  
 
   Odeon Historical Presentation
(in £) 		  Reclassification
Adjustments to
conform to AMC
Presentation
(in £) 		  Reclassified amounts
(in £) 		  Pro Forma
Reclassified
Amounts
Presented
(in £) 		 
 
   (in thousands)
  

As of June 30, 2016

                          

Intangible assets

     126,136     (126,136 )   —        

Goodwill

     —     126,136     126,136     126,136  

Tangible assets

     428,080     (428,080 )   —        

Property, net

           424,095     424,095     424,095  

Investments in joint ventures

     848     (848 )   —        

Other long-term assets

           14,986     14,986        

Deferred charges on revolving credit facility

           539     539        

Deferred tax asset

           6,716     6,716        

Long-term: Receivables, net

           811     811        
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Other Long-Term Assets

                       23,052  

Stocks

     7,258     (7,258 )   —        

Other current assets

     —     7,258     7,258        

Debtors due within one year

     52,502     (52,502 )   —        

Short-term: Receivables, net

           21,118     21,118        

Other current assets

           31,384     31,384        
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Current Assets

                       59,760  

Debtors due after more than one year

     17,680     (17,680 )   —        

Cash at bank and in hand

     27,161     (27,161 )   —        

Cash and Equivalents

           27,161     27,161     27,161  

Creditors: amounts falling due within one year

     178,641     (178,641 )   —        

Short-term: Accounts payable

           46,920     46,920        

Short-term: Accrued expenses and other liabilities

           115,617     115,617        

Deferred revenues and income

           14,755     14,755        

Current liabilities

                       177,292  

Current maturities of corporate borrowings and capital and financing lease obligations

           1,349     1,349     1,349  

Creditors: amounts falling due after more than one year

     1,145,981     (1,145,981 )   —        

9% Senior Secured Note GBP due 2018

           296,688     296,688     296,688  

Floating Rate Senior Secured Note EUR due 2018

           164,127     164,127     164,127  

10.89% Shareholder Loans due 2019

           600,684     600,684     600,684  

Capital and financing lease obligations

           3,699     3,699     3,699  

Other long term liabilities

           117,803     117,803        

Deferred tax liability

     5,295     —     5,295        

Provisions

     35,151     (35,151 )   —        

Pensions and similar obligations

     1,330     (1,330 )   —        
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Other long-term liabilities

                       123,098  

called up share capital

     120,645     —     120,645        

Other reserves

     (10,353 )   10,353     —        

Additional Paid-In Capital

           (10,353 )   (10,353 )      

Profit and loss account

     (817,025 )   16,721     (800,304 )      

Accumulated Other Comprehensive Income

           (16,721 )   (16,721 )      
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Stockholders' Deficit

                       (706,733 )

14

3. Odeon's Statements of Operations

        Odeon's condensed consolidated financial statements were prepared for the purpose of the reporting requirements of Rule 3-05 of Regulation S-X and in accordance with FRS 102. The following schedule summarizes the necessary material adjustments to the Odeon condensed consolidated statements of operations for the year ended December 31, 2015, the six months ended June 30, 2016 and the six months ended June 30, 2015 to conform to GAAP and to record the results in the reporting currency of the Company, dollars (in thousands), and the accounting policies and classification of certain items presented by Odeon under U.K. GAAP for the year ended December 31, 2015 and the six months ended June 30, 2016 have been modified in order to align with the presentation used by the Company for its accounting policies and classifications under GAAP (in thousands):

15


 STATEMENT OF OPERATIONS
FOR THE YEAR ENDED
DECEMBER 31, 2015

 
   Local Currency—GBP   USD  
 
   Odeon Pro Forma
Reclassified Amounts
Presented 		  Odeon
U.S. GAAP
Adjustments 		   
   Odeon Historical U.S. GAAP   Odeon Historical U.S. GAAP  

Revenues

     £747,164   £ —         £747,164   $ 1,141,963  

Cost of operations

     493,012     —         493,012     753,518  

Rent

     87,676     24,994   (ii)(a)     89,186     136,312  

          1,982   (ii)(b)              

          14,876   (ii)(c)              

          (36,186 ) (ii)(f)              

          (4,156 ) (ii)(j)              

General and administrative:

                              

Merger, acquisition and transaction costs

     5,517     —         5,517     8,432  

Other

     36,144     (6,980 ) (ii)(g)     29,347     44,854  

          (517 ) (ii)(h)              

          700   (ii)(i)              

Depreciation and amortization

     54,134     (11,604 ) (ii)(d)     62,500     95,525  

          (316 ) (ii)(e)              

          18,877   (ii)(f)              

          409   (ii)(j)              

          1,000   (ii)(k)              

Impairment of long-lived assets

     2,156     3,258   (ii)(e)     5,414     8,275  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Operating costs and expenses

     678,639     6,337         684,976     1,046,916  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Operating income

     68,525     (6,337 )       62,188     95,047  

Other expense (income)

     (22,693 )   (3,026 ) (ii)(i)     (25,343 )   (38,734 )

          376   (ii)(h)              

Interest expense

     95,278     23,804   (ii)(f)     116,435     177,959  

          (2,647 ) (ii)(a)              

          —   (ii)(h)              

Equity in earnings of non-consolidated entities

     (71 )   —         (71 )   (109 )

Investment income

     —     —         —     —  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total other expense

     72,514     18,507         91,021     139,116  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Earnings before income taxes

     (3,989 )   (24,844 )       (28,833 )   (44,069 )

Income tax provision

     894     (100 ) (ii)(k)     794     1,214  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Net loss

   £ (4,883 )   £(24,744 )     £ (29,627 ) $ (45,283 )
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

See Notes to Unaudited Pro Forma Condensed Combined Financial Statements

16


 STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED
JUNE 30, 2016

 
   Local Currency—GBP   USD  
 
   Odeon Pro Forma
Reclassified Amounts
Presented 		  Odeon
U.S. GAAP
Adjustments 		   
   Odeon
Historical
U.S. GAAP 		  Odeon
Historical
U.S. GAAP 		 

Revenues

   £ 367,303   £ —       £ 367,303   $ 526,182  

Cost of operations

     252,352     —         252,352     361,508  

Rent

     65,257     2,839   (ii)(a)     46,523     66,647  

          927   (ii)(b)              

          (2,002 ) (ii)(c)              

          (18,426 ) (ii)(f)              

          (2,072 ) (ii)(j)              

General and administrative:

                              

Merger, acquisition and transaction costs

     6,698     —         6,698     9,595  

Other

     19,794     (2,486 ) (ii)(g)     16,933     24,257  

          (375 ) (ii)(h)              

          —   (ii)(i)              

Depreciation and amortization

     27,893     (5,996 ) (ii)(d)     32,051     45,915  

          (287 ) (ii)(e)              

          9,753   (ii)(f)              

          188   (ii)(j)              

          500   (ii)(k)              

Impairment of long-lived assets

     110     —   (ii)(e)     110     158  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Operating costs and expenses

     372,104     (17,437 )       354,667     508,080  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Operating income

     (4,801 )   17,437         12,636     18,102  

Other expense (income)

     52,365     (788 ) (ii)(i)     52,004     74,499  

          427   (ii)(h)              

Interest expense

     51,003     12,281   (ii)(f)     62,943     90,169  

          (341 ) (ii)(a)              

          —   (ii)(h)              

Equity in loss of non-consolidated entities

     241     —         241     345  

Investment income

     —     —         —     —  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total other expense

     103,609     11,579         115,188     165,013  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Earnings (loss) before income taxes

     (108,410 )   5,858         (102,552 )   (146,911 )

Income tax provision

     137     (600 ) (ii)(k)     (463 )   (663 )
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Net loss

     £(108,547 ) £ 6,458         £(102,089 ) $ (146,248 )
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

See Notes to Unaudited Pro Forma Condensed Combined Financial Statements

17


 STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED
JUNE 30, 2015

 
   Local Currency—GBP   USD  
 
   Odeon Pro Forma
Reclassified Amounts
Presented 		  Odeon
U.S. GAAP
Adjustments 		   
   Odeon
Historical
U.S. GAAP 		  Odeon
Historical
U.S. GAAP 		 

Revenues

   £ 348,706   £ —       £ 348,706   $ 531,219  

Cost of operations

     240,286     —         240,286     366,052  

Rent

     54,601     3,728   (ii)(a)     44,242     67,398  

          991   (ii)(b)              

          4,991   (ii)(c)              

          (18,008 ) (ii)(f)              

          (2,061 ) (ii)(j)              

General and administrative:

                              

Merger, acquisition and transaction costs

     804     —         804     1,225  

Other

     12,769     —   (ii)(g)     13,220     20,139  

          (249 ) (ii)(h)              

          700   (ii)(i)              

Depreciation and amortization

     27,249     (5,802 ) (ii)(d)     31,339     47,742  

          (158 ) (ii)(e)              

          9,347   (ii)(f)              

          203   (ii)(j)              

          500   (ii)(k)              

Impairment of long-lived assets

     —     —   (ii)(e)     —     —  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Operating costs and expenses

     335,709     (5,818 )       329,891     502,556  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Operating income

     12,997     5,818         18,815     28,663  

Other expense (income)

     (39,002 )   (1,513 ) (ii)(i)     (40,335 )   (61,446 )

          180   (ii)(h)              

Interest expense

     49,151     11,972   (ii)(f)     59,800     91,099  

          (1,323 ) (ii)(a)              

          —   (ii)(h)              

Equity in loss of non-consolidated entities

     303     —         303     462  

Investment income

     —     —         —     —  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total other expense

     10,452     9,316         19,768     30,115  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Earnings (loss) before income taxes

     2,545     (3,498 )       (953 )   (1,452 )

Income tax provision

     (1,215 )   (50 ) (ii)(k)     (1,265 )   (1,927 )
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Net loss

   £ 3,760   £ (3,448 )     £ 312   $ 475  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

See Notes to Unaudited Pro Forma Condensed Combined Financial Statements

18

        Odeon's condensed consolidated statement of operations for the year ended December 31, 2015 has been translated into U.S. dollars at a rate of GBP 1.00=USD 1.5284, the average exchange rate for the year ended December 31, 2015.

        Odeon's condensed consolidated statement of operations for the six months ended June 30, 2016 has been translated into U.S. dollars at a rate of GBP 1.00= 1.4326, the average exchange rate for the six months ended June 30, 2016.

        Odeon's condensed consolidated statement of operations for the six months ended June 30, 2015 has been translated into U.S. dollars at a rate of GBP 1.00= 1.5234, the average exchange rate for the six months ended June 30, 2015.

        (ii)   Reflects the following GAAP adjustments (in thousands):

            (a)   Under U.K. GAAP, Odeon maintains a liability for leased properties still in use that are expected to generate losses in the future. Under GAAP, liability cannot be recorded for losses related to contractual lease obligations until the cease use date has occurred. Odeon adjusts the onerous lease provision when performance improves for properties previously forecast to generate cash losses. The Company has made the following adjustment to remove the benefit of the change in provision for onerous leases and to remove related accretion of interest on the liability as follows:

 
   Year Ended
December 31,
2015 		  Six Months
Ended
June 30, 2016 		  Six Months
Ended
June 30, 2015 		 

Remove benefit of onerous lease provision released

   £ 24,994   £ 2,839   £ 3,728  

Remove interest expense for onerous leases

     (2,647 )   (341 )   (1,323 )

            (b)   Under U.K. GAAP, fixed increases in rental payments that are meant to approximate the rate of inflation are not included in the calculation of straight-line rent expense but would be included under GAAP. The Company has made the following adjustment to include the estimated deferred rent expense for operating leases as follows:

 
   Year Ended
December 31,
2015 		  Six Months
Ended
June 30, 2016 		  Six Months
Ended
June 30, 2015 		 

Record deferred rent expense, net of amortization of the deferred amount

   £ 1,982   £ 927   £ 991  

            (c)   Odeon occasionally receives premium payments from landlords that provide the landlord with the right to terminate the lease at the discretion of the landlord. Historically Odeon has recognized such payments in the year of payment. Under GAAP, such payments would generally be considered the same as incentives from a landlord and would be recognized on a straight-line basis over the period from receipt of the payment over the remainder of the expected lease term. The Company has made the following adjustment to remove the benefits received from landlords for operating leases and to replace that amount with amortization of the deferred amounts over the terms of the leases as follows:

 
   Year Ended
December 31,
2015 		  Six Months
Ended
June 30, 2016 		  Six Months
Ended
June 30, 2015 		 

Remove lease incentive benefits and replace that amount with amortization of deferred amounts

   £ 14,876   £ (2,002 ) £ 4,991  

19

            (d)   Goodwill is amortized under U.K. GAAP but is not amortized under GAAP. The Company has made the following adjustment to remove the expense related to goodwill amortization under U.K. GAAP as follows:

 
   Year Ended
December 31,
2015 		  Six Months
Ended
June 30, 2016 		  Six Months
Ended
June 30, 2015 		 

Remove amortization of goodwill

   £ (11,604 ) £ (5,996 ) £ (5,802 )

            (e)   Under U.K. GAAP impairment charges recorded previously can be reversed. However, under GAAP, impairment charges recorded in prior periods are not reversed in future periods. During the six months ended June 30, 2016 and 2015, Odeon did not record any reversals of previous impairment charges. The Company has made the following adjustments to reverse the reinstatement of previously recorded impairment charges and to reverse depreciation on these long-lived assets under U.K. GAAP as follows:

 
   Year Ended
December 31,
2015 		  Six Months
Ended
June 30, 2016 		  Six Months
Ended
June 30, 2015 		 

Remove reversal of previous impairments

   £ 3,258   £ —   £ —  

Remove depreciation expense

     (316 )   (287 )   (158 )

            (f)    Reflects the adjustment to interest expense, depreciation expense and rent expense to account for capital leases and build-to-suit leases, which should be accounted as financing transactions under GAAP as a result of the involvement of Odeon during the construction of such leased properties and its significant continuing involvement upon completion of construction activities. These leases were accounted for as operating leases under U.K. GAAP.

 
   Year Ended
December 31,
2015 		  Six Months
Ended
June 30, 2016 		  Six Months
Ended
June 30, 2015 		 

Record interest expense for build to suit and capital leases

   £ 23,804   £ 12,281   £ 11,972  

Record depreciation expense

     18,877     9,753     9,347  

Remove rent expense for operating leases

     (36,186 )   (18,426 )   (18,008 )

            (g)   Represents share based compensation expense related to Odeon's senior long-term incentive program ("Senior LTIP") that is contingent upon the consummation of the Odeon Acquisition. Under GAAP recognition of share based compensation expense that is contingent on the consummation of a transaction is deferred until the transaction is consummated.

 
   Year Ended
December 31,
2015 		  Six Months
Ended
June 30, 2016 		  Six Months
Ended
June 30, 2015 		 

Remove Senior LTIP expense

   £ (6,980 ) £ (2,486 ) £ —  

            (h)   Under U.K. GAAP, actuarial losses or gains are recognized immediately through other comprehensive income during the year of occurrence. Under GAAP, these are recognized in other comprehensive income and amortiz.ed through the income statement over the average life expectancy of inactive participants following the corridor approach, which allows the Company to defer amortization of actuarial losses or gains through the income statement which are lower than

20

    the greater of 10% of the fair value of the pension plan assets or the projected benefit obligation at the start of the period

 
   Year Ended
December 31,
2015 		  Six Months
Ended
June 30, 2016 		  Six Months
Ended
June 30, 2015 		 

Records reclassification of pension plan interest income from Other expense

   £ (517 ) £ (375 ) £ (249 )

Records reclassification of pension plan interest income and amortization of actuarial gain

     376     427     180  

            (i)    Under GAAP, gains from sale leaseback transactions are typically deferred over the term of the lease. The following adjustments represent the impact of amortizing the deferred gains from historic sale leaseback transactions related to the PropCos under GAAP, as well as eliminating the intercompany loan activity:

 
   Year Ended
December 31,
2015 		  Six Months
Ended
June 30, 2016 		  Six Months
Ended
June 30, 2015 		 

Record amortization of deferred sale lease back gain

   £ (3,026 ) £ (788 ) £ (1,513 )

Record release of provision

     700     —     700  

            (j)    Under U.K. GAAP, identifiable intangible assets and liabilities are not required to be separately identified and recorded on an entity's balance sheet in connection with a business combination. Under GAAP, identifiable intangible assets and liabilities such as favorable and unfavorable leases are required to be separately identified and determined to be indefinite-lived or definite lived intangible assets or liabilities. The following adjustments record the amortization for identified favorable lease assets and unfavorable lease liabilities under GAAP.

 
   Year Ended
December 31,
2015 		  Six Months
Ended
June 30, 2016 		  Six Months
Ended
June 30, 2015 		 

Record amortization of unfavorable lease liability

   £ (4,156 ) £ (2,072 ) £ (2,061 )

Record amortization of favorable lease asset

     409     188     203  

            (k)   Income and expenses recorded historically by Odeon were not significantly tax effected in foreign jurisdictions as a result of available unrecorded deferred tax assets including net operating loss carryforwards. As a result GAAP adjustments do not result in significant amounts of additional income tax expense or benefit in these foreign jurisdictions. Odeon has made a GAAP policy election not to include any tax basis in the reported position for certain leasehold assets in the UK and Ireland where its tax basis declines or 'wastes' over time. As a result, the value of the assets is grossed up under GAAP to reflect the associated deferred tax liability acquired and an adjustment is required to increase depreciation and record the related tax credit.

 
   Year Ended
December 31,
2015 		  Six Months
Ended
June 30, 2016 		  Six Months
Ended
June 30, 2015 		 

Remove income tax benefit related to adjustment (g) above

   £ (100 ) £ (600 ) £ (50 )

Record depreciation expense for fixed assets recorded related to policy election

     1,000     500     500  

21

Summary of Reclassification Adjustments for Odeon

        The classification of certain items presented by Odeon under U.K. GAAP has been modified in order to align with the presentation used by the Company under GAAP as shown below. The reclassification adjustments to the Income Statements for the year ended December 31, 2015, the six months ended June 30, 2016 and the six months ended June 30, 2015 relate to the structure of the Consolidated Income Statement for Odeon following its policies under U.K. GAAP which utilize different naming and aggregation standards than the Company's presentation following its policies under GAAP and breaks out items such as revenues as turnover. The reclassification adjustments to conform Odeon's historical financial statement presentation to the Company's historical financial statement presentation have also been condensed to conform with the amounts presented in the pro forma condensed and combined financial statement presentations included herein. There have been no changes in Odeon's historical net loss for any period as a result of these reclassifications.

22


 Odeon
Summary of pro forma reclassification adjustment for Odeon—Income Statement
Year ended December 31, 2015

 
   UK GAAP  
 
   Odeon Historical
UK GAAP
Presentation
(in £) 		  Reclassification
Adjustments to
conform to AMC
Presentation
(in £) 		  Reclassified
amounts
(in £) 		  Pro Forma
Reclassified
Amounts
Presented
(in £) 		 
 
   (in thousands)
  

12 months ended December 31, 2015

                          

Turnover

     747,164     (747,164 )            

Admissions

           500,734     500,734        

Food and beverage

           180,331     180,331        

Other theatre

           66,099     66,099        
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Revenues

                       747,164  

Cost of sales

     274,250     (274,250 )            

Film exhibition costs

           210,709     210,709        

Food and beverage costs

           42,793     42,793        

Distribution costs, administration expenses and other operating income

     415,185     (415,185 )            

Operating expense

           239,510     239,510        
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Cost of operations

                       493,012  

Rent

           87,676     87,676     87,676  

General and administrative:

                          

Merger, acquisition and transaction costs

           5,517     5,517     5,517  

Other

           36,144     36,144     36,144  

Depreciation and amortization

           54,134     54,134     54,134  

Impairment of long-lived assets

           2,156     2,156     2,156  

Other expense (income)

           (22,693 )   (22,693 )   (22,693 )

Interest payable and similar charges

     95,393     (95,393 )            

Corporate borrowings

           92,631     92,631        

Capital and financing lease obligations

           2,647     2,647        
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Interest expense

                       95,278  

Group's share of profit in joint ventures

     (186 )   186              

Other interest receivable and similar income

     (22,987 )   22,987              

Equity in earnings of non-consolidated entities

           (71 )   (71 )   (71 )

Investment income

           —              

Profit on disposal of properties

     (10,502 )   10,502              

Income tax provision (benefit)

     894           894     894  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Net loss

     (4,883 )   —     (4,883 )   (4,883 )
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

23


 Odeon
Summary of pro forma reclassification adjustment for Odeon—Income Statement
Six months ended June 30, 2016

 
   UK GAAP  
 
   Odeon Historical
UK GAAP
Presentation
(in £) 		  Reclassification
Adjustments to
conform to AMC
Presentation
(in £) 		  Reclassified
amounts
(in £) 		  Pro Forma
Reclassified
Amounts
Presented
(in £) 		 
 
   (in thousands)
  

6 months ended June 30, 2016

                          

Turnover

     367,303     (367,303 )            

Admissions

           244,943     244,943        

Food and beverage

           90,658     90,658        

Other theatre

           31,702     31,702        
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Revenues

                       367,303  

Cost of sales

     134,914     (134,914 )            

Film exhibition costs

           102,110     102,110        

Food and beverage costs

           21,944     21,944        

Distribution costs, administration expenses and other operating income

     239,226     (239,226 )            

Operating expense

           128,298     128,298        
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Cost of operations

                       252,352  

Rent

           65,257     65,257     65,257  

General and administrative:

                          

Merger, acquisition and transaction costs

           6,698     6,698     6,698  

Other

           19,794     19,794     19,794  

Depreciation and amortization

           27,893     27,893     27,893  

Impairment of long-lived assets

           110     110     110  

Other expense (income)

           52,365     52,365     52,365  

Interest payable and similar charges

     101,337     (101,337 )            

Corporate borrowings

           50,488     50,488        

Capital and financing lease obligations

           515     515        
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Interest expense

                       51,003  

Group's share of profit in joint ventures

     200     (200 )            

Other interest receivable and similar income

                          

Equity in earnings of non-consolidated entities

           241     241     241  

Investment income

                          

Profit/(loss) on disposal of properties

     36     (36 )            

Income tax provision (benefit)

     137           137     137  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Net loss

     (108,547 )   —     (108,547 )   (108,547 )
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

24


 Odeon
Summary of pro forma reclassification adjustment for Odeon—Income Statement
Six months ended June 30, 2015

 
   UK GAAP  
 
   Odeon Historical
UK GAAP
Presentation
(in £) 		  Reclassification
Adjustments to
conform to AMC
Presentation
(in £) 		  Reclassified
amounts
(in £) 		  Pro Forma
Reclassified
Amounts
Presented
(in £) 		 
 
   (in thousands)
  

6 months ended June 30, 2015

                          

Turnover

     348,706     (348,706 )            

Admissions

           236,990     236,990        

Food and beverage

           84,973     84,973        

Other theatre

           26,743     26,743        
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Revenues

                       348,706  

Cost of sales

     126,301     (126,301 )            

Film exhibition costs

           98,462     98,462        

Food and beverage costs

           20,007     20,007        

Distribution costs, administration expenses and other operating income

     208,458     (208,458 )            

Operating expense

           121,817     121,817        
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Cost of operations

                       240,286  

Rent

           54,601     54,601     54,601  

General and administrative:

                          

Merger, acquisition and transaction costs

           804     804     804  

Other

           12,769     12,769     12,769  

Depreciation and amortization

           27,249     27,249     27,249  

Impairment of long-lived assets

           —     —     —  

Other expense (income)

           (39,002 )   (39,002 )   (39,002 )

Interest payable and similar charges

     49,306     (49,306 )            

Corporate borrowings

           47,596     47,596        

Capital and financing lease obligations

           1,555     1,555        
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Interest expense

                       49,151  

Group's share of profit in joint ventures

     232     (232 )            

Other interest receivable and similar income

     (38,369 )   38,369              

Equity in earnings of non-consolidated entities

           303     303     303  

Investment income

                          

Profit/(loss) on disposal of properties

     233     (233 )            

Income tax provision (benefit)

     (1,215 )         (1,215 )   (1,215 )
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Net earnings

     3,760     —     3,760     3,760  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

4. Purchase Price

Odeon

        The transaction represents a total value of approximately £514,000,000 ($681,000,000) for Odeon's share capital based on a currency translation rate of GBP 1.00=1.3242 U.S. dollars on June 30, 2016. Approximately 75% of this estimated purchase price will be paid in cash to the Odeon shareholders and approximately 25% will be paid through the issuance to them of shares of the Company's Class A

25

common stock. The estimated transaction value of £514,000,000 assumes a closing date of December 31, 2016 and includes interest from the locked box date of December 31, 2015 at 5.9617% through December 31, 2016 of approximately £28,900,000. Should the transaction close before December 31, 2016 or after December 31, 2016, the purchase price would be adjusted downward by approximately £80,000 per day or upward by approximately £80,000 per day, respectively.

        The preliminary estimate of cash consideration expected to be transferred to effect the Odeon Acquisition is approximately £389,000,000 or approximately $515,000,000. Estimated cash consideration is based on the preliminary estimate of the number of shares outstanding on the acquisition date. These estimated amounts do not purport to represent what the actual cash consideration transferred will be when the acquisition closes (in thousands, except for share price):

    Acquisition Consideration:

Estimated number of Company shares to be issued based on 20 day average share price of $27.49 three days prior to June 30, 2016

     6,021  
​ ​ ​ ​ ​

Estimated $USD price paid with shares based on a currency translation rate of 1.3242 on June 30, 2016

   $ 166,000  

Plus

        

Cash distribution to Odeon shareholders

   $ 515,000  
​ ​ ​ ​ ​

Total preliminary estimated acquisition consideration

   $ 681,000  
​ ​ ​ ​ ​
​ ​ ​ ​ ​
​ ​ ​ ​ ​

        The sensitivity table below shows a range of shares issued based on hypothetical Company share prices on the acquisition date.

(Unaudited, in thousands, except for
the estimated share price)
   % increase /
decrease 		  Average
Share
Price 		  Estimated
Shares 		  £ Estimated
Purchase
Consideration 		  $ Estimated
Purchase
Consideration 		 

As presented in the unaudited pro forma combined results

         $ 27.49     6,021   £ 514,000   $ 681,000  

20% decrease in the estimated share price

     –20 %   21.99     7,527     514,000     681,000  

10% decrease in the estimated share price

     –10 %   24.74     6,691     514,000     681,000  

10% increase in the estimated share price

     10 %   30.24     5,474     514,000     681,000  

20% increase in the estimated share price

     20 %   32.99     5,017     514,000     681,000  

        The sensitivity table below shows a range of estimated purchase consideration based on hypothetical currency translation rates on the acquisition date.

(Unaudited, in thousands, except for
the translation rates)
   % increase /
decrease 		  Estimated
Translation
Rate 		  £ Estimated
Purchase
Consideration 		  $ Estimated
Purchase
Consideration 		 

As presented in the pro forma combined results

           1.3242   £ 514,000   $ 681,000  

20% decrease in the estimated translation rate

     –20 %   1.0593     514,000     544,000  

10% decrease in the estimated translation rate

     –10 %   1.1918     514,000     613,000  

10% increase in the estimated translation rate

     10 %   1.4566     514,000     749,000  

20% increase in the estimated translation rate

     20 %   1.6022     514,000     824,000  

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        Under the acquisition method of accounting, the total estimated purchase price is allocated to Odeon's assets and liabilities based upon their estimated fair value as of the date of completion of the acquisition. Based upon the estimated purchase price and the preliminary valuation, the preliminary purchase price allocation, which is subject to change based on Odeon's final analysis, is as follows (in thousands):

Cash and cash equivalents

   $ 35,967  

Current assets

     79,134  

Property, net

     860,305 (a)

Goodwill

     906,212  

Intangible assets:

        

Tradename—Indefinite lived asset

     53,630 (a)

Favorable lease—Definite lived asset

     1,800 (a)

Other assets

     53,258  
​ ​ ​ ​ ​

Total assets acquired

     1,990,306  

Current liabilities

     (211,836 )

9% Senior Secured Note GBP due 2018

     (406,000 )

4.93% Senior Secured Note EUR due 2018

     (222,000 )

Capital lease and financing lease obligations

     (311,052) (a)

Other liabilities

     (158,418 )
​ ​ ​ ​ ​

Net assets acquired

   $ 681,000  
​ ​ ​ ​ ​
​ ​ ​ ​ ​
​ ​ ​ ​ ​
(a)
The Company has not yet determined fair value of property, net, intangibles or capital and financing lease obligations acquired; therefore the carrying value has been used in the preliminary purchase price allocation and in the unaudited pro forma condensed combined financial statements.

5. Proposed Acquisition Financings

Odeon

        In connection with the Odeon Acquisition, the Company anticipates incurring the following indebtedness: $535,000,000 aggregate principal amount of Senior Subordinated Notes due 2026;
£300,000,000 ($397,260,000) aggregate principal amount of Senior Subordinated Notes due 2024; and
$500,000,000 aggregate principal amount of incremental term loans. We have assumed for purposes of this pro forma information a weighted average interest rate of 5.3% per year for indebtedness incurred as part of the Financing. An increase or decrease of 0.50% of the assumed weighted average interest rate would increase or decrease interest expense by approximately $7.2 million for the twelve months ended December 31, 2015 and approximately $3.6 million for the six months ended June 30, 2016.

6. Pro Forma Adjustments

        The accompanying unaudited pro forma condensed combined financial statements have been prepared as if the transactions described above were completed on June 30, 2016 for balance sheet purposes and as of January 1, 2015 for statement of operations purposes.

        In connection with the proposed Carmike Acquisition, we expect to draw upon additional financing sources, which may include a combination of additional debt or equity financing and the proceeds of asset sales, or in the event those sources are not available, drawings under committed credit facilities. In the event the Carmike Acquisition is completed prior to the Odeon Acquisition, a portion of the proceeds of the financings set forth in this pro forma financial information will be used to finance the transactions related to the Carmike Acquisition instead, in which event we would expect that the

27

financing sources which would have been used to finance the Carmike Acquisition would be used to finance the transactions associated with the Odeon Acquisition.

        (a)   Represents the following anticipated sources and uses of funds for the Odeon Acquisition ($ in thousands):

SOURCES AND USES ODEON  
Sources of Funds
  Amount  
Uses of Funds
  Amount  

Proceeds from issuance of $535 million Dollar Notes

   $ 535,000  

Transaction fees and expenses

   $ 63,836  

Proceeds from issuance of $300 million GBP Sterling Notes

     397,260            

Proceeds from issuance of incremental term loans

     500,000         —  

       

9% Senior Secured Note GBP due 2018

     406,000  

       

Floating Rate Senior Secured Note EUR due 2018

     222,000  

AMC equity issued to seller

     166,000  

Acquisition of Odeon

     681,000  

       

Company Cash

   $ 225,424  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​

  $ 1,598,260       $ 1,598,260  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​

        Transaction fees and expenses are estimated as follows (in thousands):

Deferred charges $535 million Dollar Notes

   $ 18,725  

Deferred charges $300 million Sterling Notes

     13,904  

Incremental term loans

     11,250  

Transaction expenses

   $ 19,957  
​ ​ ​ ​ ​

Transaction fees and expenses above

   $ 63,836  
​ ​ ​ ​ ​
​ ​ ​ ​ ​
​ ​ ​ ​ ​

        (b)   Remove historical Odeon goodwill and replace with goodwill from purchase price allocation. See Note 4 Purchase Price above.

        (c)   Amount represents transaction fees and expenses in (a) above. Transaction fees related to the issuance of debt are capitalized and amortized to interest expense over the term of the related notes. Other expenses are non-recurring in nature and recorded directly to retained earnings.

        (d)   Eliminate Odeon historical equity in connection with purchase accounting.

        (e)   Adjust debt balances assumed in Odeon Acquisition to fair value.

        (f)    Eliminate shareholder loans that are extinguished at closing with the estimated acquisition consideration.

        (g)   The Company has not yet determined fair value of property, net, intangibles or capital and financing lease obligations acquired; therefore the carrying value has been used in the preliminary purchase price allocation and in the unaudited pro forma condensed combined financial statements.. See Note 4 Purchase Price above.

28

        (h)   In connection with the application of purchase accounting, deferred rent, deferred gain and landlord allowance amounts were reset to fair value of $0.

        (i)    Adjustments to interest expense and other expense have been made to reflect the elimination of the Shareholder Loans due 2019 and refinancing of the 9% Senior Secured Note GBP due 2018 and the Floating Rate Senior Secured Note due 2018 as follows (see Note 5 Proposed Acquisition Financing above for a sensitivity analysis showing the impact of a change in interest rates on interest expense):

 
   Year Ended
December 31,
2015 		  Six Months
Ended
June 30,
2016 		  Six Months
Ended
June 30,
2015 		 

Eliminate historical interest expense for amounts extinguished above

   $ (141,577 ) $ (72,327 ) $ (72,508 )

Cash interest on new indebtedness incurred. 

     80,132     39,168     40,020  

Amortization of deferred charges on new indebtedness incurred

     5,353     2,626     2,674  

        (j)    Adjustment to remove the non-recurring direct incremental costs of the Odeon Acquisition which are reflected in the historical financial statements of the Company and Odeon.

 
   Year Ended
December 31,
2015 		  Six Months
Ended
June 30,
2016 		  Six Months
Ended
June 30,
2015 		 

Remove the Company's costs

   $ —   $ (3,778 ) $ —  

Remove Odeon's costs

     (4,790 )   (9,355 )   —  

        (k)   Adjustment to record tax benefit in U.S. tax jurisdictions at the Company's effective income tax rate of 39% for M&A costs of the Company and interest expense related to indebtedness issued by the Company. Income and expenses recorded historically by Odeon were not significantly tax effected in foreign jurisdictions as a result of available unrecorded deferred tax assets including net operating loss carryforwards. As a result pro forma adjustments do not result in significant amounts of additional income tax expense or benefit in these foreign jurisdictions.

 
   Year Ended
December 31,
2015 		  Six Months
Ended
June 30,
2016 		  Six Months
Ended
June 30,
2015 		 

Record tax effect in U.S. tax jurisdictions

   $ (33,339 ) $ (14,826 ) $ (16,651 )

        (l)    Adjustment to increase rent for the elimination of deferred rent, deferred gain and landlord allowance credits recorded historically as a result of the fair value adjustment in (h) above.

 
   Year Ended
December 31,
2015 		  Six Months
Ended
June 30,
2016 		  Six Months
Ended
June 30,
2015 		 

Remove deferred rent credits

   $ 1,669   $ 1,983   $ 218  

Remove deferred gain credits

     8,447     1,614     1,549  

Remove landlord allowance credits

     3,639     2,163     1,813  

29



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UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
AMC ENTERTAINMENT HOLDINGS, INC. UNAUDITED CONDENSED COMBINED PRO FORMA BALANCE SHEET AS OF JUNE 30, 2016 (DOLLARS IN THOUSANDS)
AMC ENTERTAINMENT HOLDINGS, INC. UNAUDITED CONDENSED COMBINED PRO FORMA STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 2015 (dollars in thousands, except per share data)
AMC ENTERTAINMENT HOLDINGS, INC. UNAUDITED CONDENSED COMBINED PRO FORMA STATEMENT OF OPERATIONS SIX MONTHS ENDED JUNE 30, 2016 (dollars in thousands, except per share data)
AMC ENTERTAINMENT HOLDINGS, INC. UNAUDITED CONDENSED COMBINED PRO FORMA STATEMENT OF OPERATIONS SIX MONTHS ENDED JUNE 30, 2015 (dollars in thousands, except per share data)
BALANCE SHEET AS OF JUNE 30, 2016
Odeon Summary of pro forma reclassification adjustment for Odeon—Balance sheet As of June 30, 2016
STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2015
STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2016
STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2015
Odeon Summary of pro forma reclassification adjustment for Odeon—Income Statement Year ended December 31, 2015
Odeon Summary of pro forma reclassification adjustment for Odeon—Income Statement Six months ended June 30, 2016
Odeon Summary of pro forma reclassification adjustment for Odeon—Income Statement Six months ended June 30, 2015