Form: 8-K

Current report filing

November 30, 2016

Exhibits

8-K: Current report filing

Published on November 30, 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 acquisition of Odeon and UCI Cinemas Holdings Limited ("Odeon" or the "Odeon Acquisition"); (ii) the incurrence of $595,000,000 aggregate principal amount of Senior Subordinated Notes due 2026 (the "Dollar Notes") and £250,000,000 aggregate principal amount of Senior Subordinated Notes due 2024 (the "Sterling Notes") and $500,000,000 aggregate principal amount of incremental term loans (the "New Term Loans due 2023") and; (iii) the issuance of £122,226,000 ($159,000,000) 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 nine months ended September 30, 2016 and for the nine months ended September 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 September 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 September 30, 2016. The historical consolidated financial information for Odeon has been adjusted to comply with U.S. Generally Accepted Accounting Principles ("U.S. GAAP"). The classification of certain items presented by Odeon under UK Generally Accepted Accounting Practice ("UK GAAP") has been modified in order to align with the presentation used by the Company under U.S. GAAP. In addition to the U.S. 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 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, the unaudited consolidated financial statements of the Company as of and for the nine months ended September 30, 2016 and the nine months ended September 30, 2015, which are contained in the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2016, the audited consolidated financial statements of Odeon audited under generally accepted auditing standards in the United States ("U.S. GAAS") and prepared in accordance with UK GAAP as of and for the year ended December 31, 2015, which have been filed as an exhibit to the Company's Current Report on Form 8-K dated as of October 24, 2016, the unaudited condensed consolidated financial statements of Odeon prepared in accordance with UK GAAP as of and for the nine months ended September 30, 2016 and for the nine months ended September 30, 2015, which have been filed as an exhibit to the Company's Current Report on Form 8-K dated as of November 30, 2016 and the information contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2015 and the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2016 under "Management's Discussion and Analysis of Financial Condition and Results of Operations."

        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

1

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. 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 Securities and Exchange Commission ("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 SEPTEMBER 30, 2016
(DOLLARS IN THOUSANDS)

 
   AMC
Historical 		  Odeon
Historical 		  Odeon Pro
Forma
Adjustments 		   
   AMC Pro
Forma Odeon
Acquistion 		 
 
    
   (Note 2)
   (Note 6)
    
    
  

Assets

                              

Cash and equivalents

   $ 46,312   $ 26,977   $ 229,060   (a)   $ 302,349  

                —            

Current assets

     149,315     81,165     —         230,480  

Property, net

     1,537,951     850,571     —   (g)     2,388,522  

Intangible assets, net

     231,179     54,356     —   (g)     285,535  

Goodwill

     2,410,713     217,224     (217,224 ) (b)     3,321,868  

                911,155   (b)        

Other long-term assets

     593,786     38,634     —         632,420  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total assets

   $ 4,969,256   $ 1,268,927   $ 922,991       $ 7,161,174  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Liabilities and Stockholders' Equity

                              

Current liabilities

   $ 575,757   $ 231,052   $ (3,484 ) (h)   $ 782,405  

                (2,168 ) (h)        

                (11,341 ) (h)        

                (5,680 ) (a)        

                (1,731 ) (a)        

Current Maturities:

                              

Corporate Borrowings and Capital and Financing Lease Obligations

     19,400     28,253     —         47,653  

Corporate borrowings:

                              

5.75% Senior Subordinated Notes due 2025        

     590,064     —     —         590,064  

Senior Subordinated Notes due 2026

     —     —     595,000   (a)     574,100  

                (20,900 ) (c)        

Senior Subordinated GBP Notes due 2026

     —     —     325,375   (a)     314,175  

                (11,200 ) (c)        

5.875% Senior Subordinated Notes due 2022        

     369,811     —     —         369,811  

Senior Secured Term Loan Facility due 2022        

     859,298     —     500,000   (a)     1,346,235  

                (13,063 ) (c)        

Revolving Credit Facility due 2020

     20,000     —     —         20,000  

9% Senior Secured Note GBP due 2018

     —     386,842     12,158   (e)     —  

                (399,000 ) (a)        

Floating Rate Senior Secured Note EUR due 2018

           222,515     2,485   (e)     —  

                (225,000 ) (a)        

10.89% Shareholder Loans due 2019

     —     819,210     (819,210 ) (f)     —  

5% Promissory Note Payable NCM due 2019        

     4,166     —     —         4,166  

Capital and financing lease obligations

     86,289     282,416     —   (g)     368,705  

Other long-term liabilities

     877,690     241,306     (29,933 ) (h)     1,027,820  

                (16,111 ) (h)        

                (45,132 ) (h)        
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total liabilities

     3,402,475     2,211,594     (168,935 )       5,445,134  

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

     1,187,244     —     159,000   (a)     1,346,244  

Treasury Stock

     (680 )   —     —         (680 )

Accumulated other comprehensive income

     2,070     —     —         2,070  

Accumulated earnings (deficit)

     376,094     (942,667 )   942,667   (d)     366,353  

                —            

                (9,741 ) (c)        
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total stockholders' equity

     1,565,701     (942,667 )   1,091,926         1,714,960  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total liabilities and Stockholders' Equity

   $ 4,969,256   $ 1,268,927   $ 922,991       $ 7,161,174  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

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 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)     221,364  

                75,715   (i)        

                5,356   (i)        

                (27,699 ) (i)        

                25,522   (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     (54,236 )       158,406  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Earnings (loss) before income taxes

     163,531     (44,069 )   53,718         173,180  

Income tax provision

     59,675     1,214     (30,769 ) (k)     30,120  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Net earnings (loss)

   $ 103,856   $ (45,283 ) $ 84,487       $ 143,060  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Basic earnings per share

   $ 1.06                   $ 1.39  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Average shares outstanding—Basic

     97,963           5,126   Note (4)     103,089  

Diluted earnings per share

   $ 1.06                   $ 1.39  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Average shares outstanding—Diluted

     98,029           5,126   Note (4)     103,155  

See Notes to Unaudited Pro Forma Condensed Combined Financial Statements

4


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

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

Revenues

   $ 2,309,750   $ 779,329     —         3,089,079  

Cost of operations

     1,500,270     544,142     —         2,044,412  

Rent

     369,307     100,942     2,326   (l)     476,214  

                3,639   (l)        

                —            

General and administrative:

                              

Merger, acquisition and transaction costs

     15,113     9,541     (6,183 ) (j)     9,239  

                (9,232 ) (j)        

Other

     58,935     35,174     —         94,109  

Depreciation and amortization

     185,746     70,553     —         256,299  

Impairment of long-lived assets

     —     302               302  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Operating costs and expenses

     2,129,371     760,654     (9,450 )       2,880,575  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Operating income

     180,379     18,675     9,450         208,504  

Other expense (income)

     (5 )   99,025     2,354   (l)     101,374  

Interest expense

     80,875     131,557     (106,930 ) (i)     159,874  

                55,157   (i)        

                4,018   (i)        

                (26,686 ) (i)        

                21,883   (i)        

Equity in (earnings) loss of non-consolidated entities

     (28,143 )   175     —         (27,968 )

Investment income

     (9,602 )   —     —         (9,602 )
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total other expense

     43,125     230,757     (50,204 )       223,678  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Earnings (loss) before income taxes

     137,254     (212,082 )   59,654         (15,174 )

Income tax provision (benefit)

     54,560     2,451     (18,794 ) (k)     38,217  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Net earnings (loss)

   $ 82,694   $ (214,533 ) $ 78,448       $ (53,391 )
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Basic earnings per share

   $ 0.84                   $ (0.52 )
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Average shares outstanding—Basic

     98,196           5,126   Note (4)     103,322  

Diluted earnings per share

   $ 0.84                   $ (0.52 )
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Average shares outstanding—Diluted

     98,211           5,126   Note (4)     103,377  

See Notes to Unaudited Pro Forma Condensed Combined Financial Statements

5


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

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

Revenues

   $ 2,163,043   $ 779,254     —         2,942,297  

Cost of operations

     1,435,466     527,257     —         1,962,723  

Rent

     348,804     103,344     (251 ) (l)     454,633  

                2,736   (l)        

                —            

General and administrative:

                              

Merger, acquisition and transaction costs

     2,590     3,188     —   (j)     5,778  

                —   (j)        

Other

     41,384     36,064     —         77,448  

Depreciation and amortization

     173,034     71,726     —         244,760  

Impairment of long-lived assets

     —     827               827  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Operating costs and expenses

     2,001,278     742,406     2,485         2,746,169  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Operating income

     161,765     36,848     (2,485 )       196,128  

Other expense (income)

     9,273     (36,320 )   6,812   (l)     (20,235 )

Interest expense

     80,468     134,574     (106,670 ) (i)     167,954  

                56,831   (i)        

                4,018   (i)        

                (20,158 ) (i)        

                18,891   (i)        

Equity in (earnings) loss of non-consolidated entities

     (21,536 )   501     —         (21,035 )

Investment income

     (5,039 )   —     —         (5,039 )
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total other expense

     63,166     98,755     (40,276 )       121,645  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Earnings (loss) before income taxes

     98,599     (61,907 )   37,791         74,483  

Income tax provision (benefit)

     36,360     (463 )   (23,237 ) (k)     12,660  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Net earnings (loss)

   $ 62,239   $ (61,444 ) $ 61,028       $ 61,823  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Basic earnings per share

   $ 0.64                   $ 0.60  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Average shares outstanding—Basic

     97,959           5,126   Note (4)     103,085  

Diluted earnings per share

   $ 0.63                   $ 0.60  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Average shares outstanding—Diluted

     98,024           5,126   Note (4)     103,150  

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 £387,874,000 ($505,000,000) in cash and new shares of the Company's Class A Common Stock with a value of £122,226,000 ($159,000,000). The Odeon Acquisition is equal to a total value of approximately £510,100,000 ($664,000,000) for Odeon's entire issued and to be issued capital assuming the transaction closed on September 30, 2016 and a currency translation rate of 1.3015 on September 30, 2016. Based on these assumptions, $505,000,000 will be paid in cash to Odeon shareholders and 5,126,000 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 have granted certain other piggy-back registration rights. The estimated transaction value of £510,100,000 is based on the closing date of November 30, 2016 and includes interest from the locked box date of December 31, 2015 at 5.9617% through November 30, 2016 of approximately £26,500,000.

        Odeon operates 244 theatres and 2,243 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 September 30, 2016, was prepared by combining the historical unaudited condensed consolidated balance sheet data as of September 30, 2016 for each of the Company and Odeon (as adjusted to comply with U.S. GAAP) as if the Odeon Acquisition and the Financings (see Note 5) had been consummated on that date. In addition to certain U.S. 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 U.S. GAAP and reclassification adjustments.

        The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2015 and for the nine months ended September 30, 2016 and 2015 combines the results of operations of the Company and Odeon (as adjusted to comply with U.S. GAAP) as if the Odeon Acquisition and the Financings (see Note 5) had been consummated on January 1, 2015. In addition to certain U.S. 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 U.S. 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 Accounting Standards Codification ("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

7

can be highly subjective and it is 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 U.S. GAAP. The following schedule summarizes the necessary material adjustments to conform Odeon's condensed consolidated balance sheet as of September 30, 2016 to U.S. GAAP and USD (in thousands) and accounting policies and classification of certain items presented by Odeon under UK GAAP have been modified in order to align with the presentation used by the Company for its accounting policies and classification under U.S. 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 1.3015, the exchange rate as of September 30, 2016.

8


 BALANCE SHEET
AS OF SEPTEMBER 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

   £ 20,728   £ —       £ 20,728   $ 26,977  

Current assets

     62,363     —         62,363     81,165  

Property, net

     430,752     195,445   (i)(f)     653,531     850,571  

          (5,236 ) (i)(e)              

          13,770   (i)(k)              

          18,800   (i)(l)              

Intangible assets, net

     —     1,264   (i)(j)     41,764     54,356  

          40,500   (i)(j)              

Goodwill

     125,693     (77,679 ) (i)(f)     166,903     217,224  

          108,704   (i)(d)              

          (96,562 ) (i)(a)              

          7,747   (i)(j)              

          99,000   (i)(l)              

Other long-term assets

     16,389     13,495   (i)(h)     29,684     38,634  

          (200 ) (i)(l)              
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total assets

   £ 655,925   £ 319,048       £ 974,973   $ 1,268,927  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Liabilities and Stockholders' Deficit

                              

Current liabilities

   £ 184,199     (11,014 ) (i)(g)   £ 177,528   $ 231,052  

          1,666   (i)(i)              

          2,677   (i)(c)              

Current Maturities:

    
 		    
 		  

 

    
 		    
 		  

Corporate Borrowings and Capital and Financing Lease Obligations

     7,334     14,374   (i)(f)     21,708     28,253  

Corporate borrowings:

                              

9% Senior Secured Note GBP due 2018

     297,228               297,228     386,842  

Floating Rate Senior Secured Note EUR due 2018

     170,968               170,968     222,515  

10.89% Shareholder Loans due 2019

     629,435     —         629,435     819,210  

Capital and financing lease obligations

     3,424     199,799   (i)(f)     216,993     282,416  

          13,770   (i)(k)              

Other long-term liabilities

     116,766     (32,752 ) (i)(a)     185,406     241,306  

          9,662   (i)(b)              

          13,174   (i)(c)              

          33,845   (i)(i)              

          24,011   (i)(j)              

          20,700   (i)(l)              
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total liabilities

     1,409,354     289,912         1,699,266     2,211,594  

Stockholders' Deficit

    
(753,429
)		  
248		  

(i)(h)

    
(724,293
)		  
(942,667
)

          (51 ) (i)(h)              

          13,298   (i)(h)              

          (26,044 ) (i)(a)              

          (39,978 ) (i)(a)              

          2,212   (i)(a)              

          (10,943 ) (i)(f)              

          (85,464 ) (i)(f)              

          (3,368 ) (i)(b)              

          (6,294 ) (i)(b)              

          (12,275 ) (i)(c)              

          (3,576 ) (i)(c)              

          20,183   (i)(d)              

          2,659   (i)(d)              

          85,862   (i)(d)              

          11,014   (i)(g)              

          (2,512 ) (i)(e)              

          (2,724 ) (i)(e)              

          3,872   (i)(i)              

          (39,383 ) (i)(i)              

          6,583   (i)(j)              

          18,917   (i)(j)              

          (3,500 ) (i)(l)              

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

Total liabilities and Stockholders' Deficit

   £ 655,925   £ 319,048       £ 974,973   $ 1,268,927  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

   

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 UK GAAP Odeon maintains a liability for leased properties still in use that are expected to generate losses in the future. Under U.S. 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 U.S. GAAP:

 
   As of
September 30, 2016 		 

Remove onerous lease liability

   £ (32,752 )

Reduce goodwill

     (96,562 )

Record increase to accumulated deficit subsequent to January 1, 2015

     (26,044 )

Record increase to accumulated deficit prior to January 1, 2015

     (39,978 )

Record increase to accumulated other comprehensive income

     2,212  

            (b)   Under UK 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 U.S. GAAP. The Company has made the following adjustment to include the estimated deferred rent expense and liability for operating leases as follows:

 
   As of
September 30, 2016 		 

Record liability for deferred rent expense

   £ 9,662  

Record increase to accumulated deficit subsequent to January 1, 2015

     (3,368 )

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 U.S. 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
September 30, 2016 		 

Record long-term portion of liability for landlord benefits

   £ 13,174  

Record short-term portion of liability

     2,677  

Record increase to accumulated deficit subsequent to January 1, 2015

     (12,275 )

Record increase to accumulated deficit prior to January 1, 2015

     (3,576 )

            (d)   Goodwill is amortized under UK GAAP but is not amortized under U.S. GAAP. Transaction expenses are capitalized as part of acquisition consideration under UK GAAP. The

10

    Company has made the following adjustment to reinstate goodwill for amounts amortized under UK GAAP and to reverse the capitalization of transaction expenses as follows:

 
   As of
September 30, 2016 		 

Reinstate goodwill

   £ 108,704  

Record decrease to accumulated deficit subsequent to January 1, 2015

     20,183  

Record increase to accumulated other comprehensive income

     2,659  

Record decrease to accumulated deficit prior to January 1, 2015

     85,862  

            (e)   Under UK GAAP impairment charges recorded previously can be reversed. However, under U.S. 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 UK GAAP as follows:

 
   As of
September 30, 2016 		 

Property, net

   £ (5,236 )

Record increase to accumulated deficit subsequent to January 1, 2015

     (2,512 )

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 U.S. 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 UK 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 U.S. GAAP for leases acquired in business combinations. The Company has made the following adjustments related to these capital and financing leases following U.S. GAAP:

 
   As of
September 30, 2016 		 

Record build to suit and capital lease assets

   £ 195,445  

Record short-term capital and finance lease obligation

     14,374  

Record long-term capital and finance lease obligation

     199,799  

Adjust Goodwill

     (77,679 )

Record increase to accumulated deficit subsequent to January 1, 2015

     (10,943 )

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 U.S. 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
September 30, 2016 		 

Remove liability for Senior LTIP

   £ (11,014 )

Record decrease to accumulated deficit subsequent to January 1, 2015

     11,014  

11

            (h)   Following pension accounting rules under UK 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 U.S. GAAP. The Company has made the following adjustment to recognize the net pension asset following U.S. GAAP:

 
   As of
September 30, 2016 		 

Record net pension asset

   £ 13,495  

Record decrease to accumulated deficit subsequent to January 1, 2015

     248  

Record increase to accumulated deficit prior to January 1, 2015

     (51 )

Record increase to accumulated other comprehensive income

     13,298  

            (i)    Under U.S. GAAP and following the variable interest consolidation model, certain entities required consolidation in the historical accounts that did not require consolidation under UK GAAP. In addition, under U.S. 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 U.S. GAAP.

 
   As of
September 30, 2016 		 

Record PropCos current liabilities

   £ 1,666  

Record PropCos deferred gain

     33,845  

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

     3,872  

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

     (39,383 )

            (j)    Under UK 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 U.S. 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 U.S. GAAP.

 
   As of
September 30, 2016 		 

Record favorable lease asset definite lived intangible

   £ 1,264  

Record tradename indefinite lived intangible

     40,500  

Record adjustment to Goodwill

     7,747  

Record unfavorable lease liability definite lived intangible

     24,011  

Record decrease to accumulated deficit subsequent to January 1, 2015

     6,583  

Record decrease to accumulated deficit prior to January 1, 2015

     18,917  

12

            (k)   Under U.S. 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
September 30, 2016 		 

Record property

   £ 13,770  

Record financing lease obligation

     13,770  

            (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, U.S. GAAP adjustments do not result in significant additional deferred tax assets or liabilities. Odeon has made a U.S. 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 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
September 30, 2016 		 

Record fixed assets

   £ 18,800  

Record goodwill

     99,000  

Record decrease to deferred tax asset

     (200 )

Record deferred tax liability

     20,700  

Record increase to accumulated deficit subsequent to January 1, 2015

     (3,500 )

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 UK GAAP has been modified in order to align with the presentation used by the Company under U.S. GAAP as shown below. The reclassification adjustments to the Balance Sheet as of September 30, 2016 relate to the structure of the Consolidated Balance Sheet for Odeon following its policies under UK GAAP which utilize different naming and aggregation standards than the Company's presentation following its policies under U.S. 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 September 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 September 30, 2016

                          

Intangible assets

     125,693     (125,693 )   —        

Goodwill

     —     125,693     125,693     125,693  

Tangible assets

     430,752     (430,752 )   —        

Property, net

           430,752     430,752     430,752  

Investments in joint ventures

     939     (939 )   —        

Other long-term assets

           7,554     7,554        

Deferred charges on revolving credit facility

           399     399        

Deferred tax asset

           6,989     6,989        

Long-term: Receivables, net

           1,447     1,447        
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Other Long-Term Assets

                       16,389  

Stocks

     7,374     (7,374 )   —        

Other current assets

           7,374     7,374        

Debtors due within one year

     54,989     (54,989 )   —        

Short-term: Receivables, net

           19,910     19,910        

Other current assets

           35,079     35,079        
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Current Assets

                       62,363  

Debtors due after more than one year

     15,051     (15,051 )   —        

Cash at bank and in hand

     20,728     (20,728 )   —        

Cash and Equivalents

           20,728     20,728     20,728  

Creditors: amounts falling due within one year

     191,533     (191,533 )   —        

Short-term: Accounts payable

           37,892     37,892        

Short-term: Accrued expenses and other liabilities

           129,167     129,167        

Deferred revenues and income

           17,140     17,140        
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Current liabilities

                       184,199  

Current maturities of corporate borrowings and capital and financing lease obligations

           7,334     7,334     7,334  

Creditors: amounts falling due after more than one year

     1,174,900     (1,174,900 )   —        

9% Senior Secured Note GBP due 2018

           297,228     297,228     297,228  

Floating Rate Senior Secured Note EUR due 2018

           170,968     170,968     170,968  

10.89% Shareholder Loans due 2019

           629,435     629,435     629,435  

Capital and financing lease obligations

           3,424     3,424     3,424  

Other long term liabilities

           112,112     112,112        

Deferred tax liability

     4,654     —     4,654        

Provisions

     34,741     (34,741 )   —        

Pensions and similar obligations

     3,127     (3,127 )   —        
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Other long-term liabilities

                       116,766  

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

     (863,721 )   24,037     (839,684 )      

Accumulated Other Comprehensive Income

           (24,037 )   (24,037 )      
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Stockholders' Deficit

                       (753,429 )

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 nine months ended September 30, 2016 and the nine months ended September 30, 2015 to conform to U.S. 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 UK GAAP for the year ended December 31, 2015 and the nine months ended September 30, 2016 and the nine months ended September 30, 2015 have been modified in order to align with the presentation used by the Company for its accounting policies and classifications under U.S. 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 NINE MONTHS ENDED
SEPTEMBER 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

   £ 559,825   £ —       £ 559,825   $ 779,329  

Cost of operations

     390,880     —         390,880     544,142  

Rent

     100,268     4,216   (ii)(a)     72,511     100,942  

          1,386   (ii)(b)              

          (2,601 ) (ii)(c)              

          (27,639 ) (ii)(f)              

          (3,119 ) (ii)(j)              

General and administrative:

                              

Merger, acquisition and transaction costs

     6,854     —         6,854     9,541  

Other

     29,842     (4,034 ) (ii)(g)     25,267     35,174  

          (541 ) (ii)(h)              

          —   (ii)(i)              

Depreciation and amortization

     43,962     (8,579 ) (ii)(d)     50,681     70,553  

          (431 ) (ii)(e)              

          14,646   (ii)(f)              

          283   (ii)(j)              

          800   (ii)(k)              

Impairment of long-lived assets

     217     —   (ii)(e)     217     302  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Operating costs and expenses

     572,023     (25,613 )       546,410     760,654  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Operating income

     (12,198 )   25,613         13,415     18,675  

Other expense (income)

     71,882     (1,182 ) (ii)(i)     71,134     99,025  

          434   (ii)(h)              

Interest expense

     77,580     17,442   (ii)(f)     94,503     131,557  

          (519 ) (ii)(a)              

          —   (ii)(h)              

Equity in loss of non-consolidated entities

     126     —         126     175  

Investment income

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

Total other expense

     149,588     16,175         165,763     230,757  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Earnings (loss) before income taxes

     (161,786 )   9,438         (152,348 )   (212,082 )

Income tax provision

     (39 )   1,800   (ii)(k)     1,761     2,451  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Net loss

     (161,747 )   7,638         (154,109 ) $ (214,533 )
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

See Notes to Unaudited Pro Forma Condensed Combined Financial Statements

17


 STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED
SEPTEMBER 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

   £ 508,593   £ —       £ 508,593   $ 779,254  

Cost of operations

     344,123     —         344,123     527,257  

Rent

     80,780     5,653   (ii)(a)     67,449     103,344  

          1,487   (ii)(b)              

          9,649   (ii)(c)              

          (27,012 ) (ii)(f)              

          (3,108 ) (ii)(j)              

General and administrative:

                              

Merger, acquisition and transaction costs

     2,081     —         2,081     3,188  

Other

     28,026     (4,815 ) (ii)(g)     23,538     36,064  

          (373 ) (ii)(h)              

          700   (ii)(i)              

Depreciation and amortization

     40,627     (8,706 ) (ii)(d)     46,813     71,726  

          (237 ) (ii)(e)              

          14,073   (ii)(f)              

          306   (ii)(j)              

          750   (ii)(k)              

Impairment of long-lived assets

     540     —   (ii)(e)     540     827  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Operating costs and expenses

     496,177     (11,633 )       484,544     742,406  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Operating income

     12,416     11,633         24,049     36,848  

Other expense (income)

     (21,713 )   (2,269 ) (ii)(i)     (23,705 )   (36,320 )

          277   (ii)(h)              

Interest expense

     71,925     17,923   (ii)(f)     87,832     134,574  

          (2,016 ) (ii)(a)              

          —   (ii)(h)              

Equity in loss of non-consolidated entities

     327     —         327     501  

Investment income

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

Total other expense

     50,539     13,915         64,454     98,755  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Earnings (loss) before income taxes

     (38,123 )   (2,282 )       (40,405 )   (61,907 )

Income tax provision

     (227 )   (75 ) (ii)(k)     (302 )   (463 )
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Net loss

     (37,896 )   (2,207 )       (40,103 ) $ (61,444 )
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

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 nine months ended September 30, 2016 has been translated into U.S. dollars at a rate of GBP 1.00= 1.3921, the average exchange rate for the nine months ended September 30, 2016.

        Odeon's condensed consolidated statement of operations for the nine months ended September 30, 2015 has been translated into U.S. dollars at a rate of GBP 1.00= 1.5322, the average exchange rate for the nine months ended September 30, 2015.

        (ii)   Reflects the following U.S. GAAP adjustments (in thousands):

            (a)   Under UK GAAP, Odeon maintains a liability for leased properties still in use that are expected to generate losses in the future. Under U.S. 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 		  Nine Months
Ended
September 30, 2016 		  Nine Months
Ended
September 30, 2015 		 

Remove benefit of onerous lease provision released

   £ 24,994   £ 4,216   £ 5,653  

Remove interest expense for onerous leases

     (2,647 )   (519 )   (2,016 )

            (b)   Under UK 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 U.S. 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 		  Nine Months
Ended
September 30, 2016 		  Nine Months
Ended
September 30, 2015 		 

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

   £ 1,982   £ 1,386   £ 1,487  

            (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 U.S. 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

19

    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 		  Nine Months
Ended
September 30, 2016 		  Nine Months
Ended
September 30, 2015 		 

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

   £ 14,876   £ (2,601 ) £ 9,649  

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

 
   Year Ended
December 31,
2015 		  Nine Months
Ended
September 30, 2016 		  Nine Months
Ended
September 30, 2015 		 

Remove amortization of goodwill

   £ (11,604 ) £ (8,579 ) £ (8,706 )

            (e)   Under UK GAAP impairment charges recorded previously can be reversed. However, under U.S. GAAP, impairment charges recorded in prior periods are not reversed in future periods. During the nine months ended September 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 UK GAAP as follows:

 
   Year Ended
December 31,
2015 		  Nine Months
Ended
September 30, 2016 		  Nine Months
Ended
September 30, 2015 		 

Remove reversal of previous impairments

   £ 3,258   £ —   £ —  

Remove depreciation expense

     (316 )   (431 )   (237 )

            (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 U.S. 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 UK GAAP.

 
   Year Ended
December 31,
2015 		  Nine Months
Ended
September 30, 2016 		  Nine Months
Ended
September 30, 2015 		 

Record interest expense for build to suit and capital leases

   £ 23,804   £ 17,442   £ 17,923  

Record depreciation expense

     18,877     14,646     14,073  

Remove rent expense for operating leases

     (36,186 )   (27,639 )   (27,012 )

            (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

20

    Acquisition. Under U.S. 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 		  Nine Months
Ended
September 30, 2016 		  Nine Months
Ended
September 30, 2015 		 

Remove Senior LTIP expense

   £ (6,980 ) £ (4,034 ) £ (4,815 )

            (h)   Under UK GAAP, actuarial losses or gains are recognized immediately through other comprehensive income during the year of occurrence. Under U.S. GAAP, these are recognized in other comprehensive income and amortized 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 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 		  Nine Months
Ended
September 30, 2016 		  Nine Months
Ended
September 30, 2015 		 

Records reclassification of pension plan interest income from Other expense

   £ (517 ) £ (541 ) £ (373 )

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

     376     434     277  

            (i)    Under U.S. 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 U.S. GAAP, as well as eliminating the intercompany loan activity:

 
   Year Ended
December 31,
2015 		  Nine Months
Ended
September 30, 2016 		  Nine Months
Ended
September 30, 2015 		 

Record amortization of deferred sale lease back gain

   £ (3,026 ) £ (1,182 ) £ (2,269 )

Record release of provision

     700     —     700  

            (j)    Under UK 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 U.S. 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 U.S. GAAP.

 
   Year Ended
December 31,
2015 		  Nine Months
Ended
September 30, 2016 		  Nine Months
Ended
September 30, 2015 		 

Record amortization of unfavorable lease liability

   £ (4,156 ) £ (3,119 ) £ (3,108 )

Record amortization of favorable lease asset

     409     283     306  

            (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

21

    loss carryforwards. As a result U.S. GAAP adjustments do not result in significant amounts of additional income tax expense or benefit in these foreign jurisdictions. Odeon has made a U.S. 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 U.S. 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 		  Nine Months
Ended
September 30, 2016 		  Nine Months
Ended
September 30, 2015 		 

Remove income tax benefit related to adjustment (g) above

   £ (100 ) £ 1,800   £ (75 )

Record depreciation expense for fixed assets recorded related to policy election

     1,000     800     750  

Summary of Reclassification Adjustments for Odeon

        The classification of certain items presented by Odeon under UK GAAP has been modified in order to align with the presentation used by the Company under U.S. GAAP as shown below. The reclassification adjustments to the Income Statements for the year ended December 31, 2015, the nine months ended September 30, 2016 and the nine months ended September 30, 2015 relate to the structure of the Consolidated Income Statement for Odeon following its policies under UK GAAP which utilize different naming and aggregation standards than the Company's presentation following its policies under U.S. 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
Nine months ended September 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)
  

9 months ended September 30, 2016

                          

Turnover

     559,825     (559,825 )            

Admissions

           372,503     372,503        

Food and beverage

           140,903     140,903        

Other theatre

           46,419     46,419        
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Revenues

                       559,825  

Cost of sales

     207,745     (207,745 )            

Film exhibition costs

           156,025     156,025        

Food and beverage costs

           35,460     35,460        

Distribution costs, administration expenses and other operating income

     364,778     (364,778 )            

Operating expense

           199,395     199,395        
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Cost of operations

                       390,880  

Rent

           100,268     100,268     100,268  

General and administrative:

                          

Merger, acquisition and transaction costs

           6,854     6,854     6,854  

Other

           29,842     29,842     29,842  

Depreciation and amortization          

           43,962     43,962     43,962  

Impairment of long-lived assets

           217     217     217  

Other expense (income)

           71,882     71,882     71,882  

Interest payable and similar charges

     148,987     (148,987 )            

Corporate borrowings

           76,812     76,812        

Capital and financing lease obligations

           768     768        
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Interest expense

                       77,580  

Group's share of loss in joint ventures

     71     (71 )            

Other interest receivable and similar income

                          

Equity in earnings of non-consolidated entities

           126     126     126  

Investment income

                          

Loss on disposal of properties

     30     (30 )            

Income tax provision (benefit)          

     (39 )         (39 )   (39 )
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Net loss

     (161,747 )   —     (161,747 )   (161,747 )
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

24


 Odeon
Summary of pro forma reclassification adjustment for Odeon—Income Statement
Nine months ended September 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)
  

9 months ended September 30, 2015

                          

Turnover

     508,593     (508,593 )            

Admissions

           343,029     343,029        

Food and beverage

           126,871     126,871        

Other theatre

           38,693     38,693        
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Revenues

                       508,593  

Cost of sales

     183,655     (183,655 )            

Film exhibition costs

           142,044     142,044        

Food and beverage costs

           29,740     29,740        

Distribution costs, administration expenses and other operating income

     320,603     (320,603 )            

Operating expense

           172,339     172,339        
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Cost of operations

                       344,123  

Rent

           80,780     80,780     80,780  

General and administrative:

                          

Merger, acquisition and transaction costs

           2,081     2,081     2,081  

Other

           28,026     28,026     28,026  

Depreciation and amortization          

           40,627     40,627     40,627  

Impairment of long-lived assets

           540     540     540  

Other expense (income)

           (21,713 )   (21,713 )   (21,713 )

Interest payable and similar charges

     72,136     (72,136 )            

Corporate borrowings

           69,620     69,620        

Capital and financing lease obligations

           2,305     2,305        
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Interest expense

                       71,925  

Group's share of loss in joint ventures

     240     (240 )            

Other interest receivable and similar income

     (21,822 )   21,822              

Equity in earnings of non-consolidated entities

           327     327     327  

Investment income

                          

Profit on disposal of properties

     (8,096 )   8,096              

Income tax provision (benefit)          

     (227 )         (227 )   (227 )
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Net loss

     (37,896 )   —     (37,896 )   (37,896 )
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

4. Purchase Price

Odeon

        The transaction represents a total value of approximately £510,100,000 ($664,000,000) for Odeon's share capital based on a currency translation rate of GBP 1.00=1.3015 U.S. dollars on September 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

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Company's Class A common stock. The estimated transaction value of £510,100,000 is based on the closing date of November 30, 2016 and includes interest from the locked box date of December 31, 2015 at 5.9617% through November 30, 2016 of approximately £26,500,000.

        The preliminary estimate of cash consideration expected to be transferred to effect the Odeon Acquisition is approximately £387,874,000 or approximately $505,000,000. 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 $31.02 three days prior to September 30, 2016

     5,126  
​ ​ ​ ​ ​

Estimated $USD price paid with shares based on a currency translation rate of 1.3015 on September 30, 2016

   $ 159,000  

Plus

        

Cash distribution to Odeon shareholders

   $ 505,000  
​ ​ ​ ​ ​

Total preliminary estimated acquisition consideration

   $ 664,000  
​ ​ ​ ​ ​
​ ​ ​ ​ ​
​ ​ ​ ​ ​

        The actual number of shares issued on November 30, 2016 was 4,536,466 based on a 20 day average share price of $33.44 three days prior to November 30, 2016 and a translation rate of 1.24.

        The actual purchase price on November 30, 2016 was $638,000,000 based on a translation rate of 1.25.

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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

   $ 26,977  

Current assets

     81,165  

Property, net

     850,571 (a)

Goodwill

     911,155  

Intangible assets:

        

Tradename—Indefinite lived asset

     52,711 (a)

Favorable lease—Definite lived asset

     1,645 (a)

Other assets

     38,634  
​ ​ ​ ​ ​

Total assets acquired

     1,962,858  

Current liabilities

     (214,059 )

9% Senior Secured Note GBP due 2018

     (399,000 )

4.93% Senior Secured Note EUR due 2018

     (225,000 )

Capital lease and financing lease obligations

     (310,669) (a)

Other liabilities

     (150,130 )
​ ​ ​ ​ ​

Net assets acquired

   $ 664,000  
​ ​ ​ ​ ​
​ ​ ​ ​ ​
​ ​ ​ ​ ​
(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. Acquisition Financings

        In connection with the Odeon Acquisition, the Company incurred the following indebtedness on November 8, 2016: $595,000,000 aggregate principal amount of Senior Subordinated Notes due 2026;
£250,000,000 ($325,375,000) aggregate principal amount of Senior Subordinated Notes due 2024; and
$500,000,000 aggregate principal amount of New Term Loans due 2023. We also amended our existing Term Loans due 2022 to lower the interest rate from LIBOR plus 3.75% to LIBOR plus 2.75% and to remove a LIBOR floor of 0.75%. We have assumed an interest rate based on one-month LIBOR of 0.53% resulting in an interest rate of 3.28% for our Term Loans due 2022 and 2023. An increase or decrease of 0.50% of the assumed LIBOR based interest rate for our Term Loans due 2022 and 2023 would increase or decrease interest expense by approximately $6.4 million for the twelve months ended December 31, 2015 and approximately $5.2 million for the nine months ended September 30, 2016 and approximately $4.8 million for the nine months ended September 30, 2015.

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 September 30, 2016 for balance sheet purposes and as of January 1, 2015 for statement of operations purposes.

        In connection with the proposed acquisition of Carmike Cinemas, Inc. (the "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.

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        (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 $595 million Dollar Notes

   $ 595,000  

Transaction fees and expenses

   $ 54,904  

Proceeds from issuance of £250 million GBP Sterling Notes

     325,375  

Interest on 9% Senior Secured Note GBP due 2018

     5,680  

Proceeds from issuance of incremental

        

 

        

New Term Loans due 2023

     500,000  

Interest on Floating Rate Senior Secured Note EUR due 2018

     1,731  

       

9% Senior Secured Note GBP due 2018

     399,000  

       

Floating Rate Senior Secured Note EUR due 2018

     225,000  

AMC equity issued to seller

     159,000  

Acquisition of Odeon

     664,000  

       

Company Cash

   $ 229,060  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​

  $ 1,579,375       $ 1,579,375  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​

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

Deferred charges $595 million Dollar Notes

   $ 20,900  

Deferred charges £250 million Sterling Notes

     11,200  

Deferred charges and discount $500 million New Term Loans due 2023

     13,063  

Transaction expenses

   $ 9,741  
​ ​ ​ ​ ​

Transaction fees and expenses above

   $ 54,904  
​ ​ ​ ​ ​
​ ​ ​ ​ ​
​ ​ ​ ​ ​

        (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.

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        (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 		  Nine Months
Ended
September 30,
2016 		  Nine Months
Ended
September 30,
2015 		 

Eliminate historical interest expense for amounts extinguished above

   $ (141,577 ) $ (106,930 ) $ (106,670 )

Cash interest on new indebtedness incurred. 

     75,715     55,157     56,831  

Amortization of deferred charges on new indebtedness incurred

     5,356     4,018     4,018  

Eliminate historical interest on Term Loans due 2022

     (27,699 )   (26,686 )   (20,158 )

Interest on Term Loans due 2022 based on amended pricing

     25,522     21,883     18,891  

        (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 		  Nine Months
Ended
September 30,
2016 		  Nine Months
Ended
September 30,
2015 		 

Remove the Company's costs

   $ —   $ (6,183 ) $ —  

Remove Odeon's costs

     (4,790 )   (9,232 )   —  

        (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 		  Nine Months
Ended
September 30,
2016 		  Nine Months
Ended
September 30,
2015 		 

Record tax effect in U.S. tax jurisdictions

   $ (30,769 ) $ (18,794 ) $ (23,237 )

        (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 		  Nine Months
Ended
September 30,
2016 		  Nine Months
Ended
September 30,
2015 		 

Remove deferred rent credits

   $ 1,669   $ 2,326   $ (251 )

Remove deferred gain credits

     8,447     2,354     6,812  

Remove landlord allowance credits

     3,639     3,639     2,736  

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QuickLinks

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