8-K: Current report filing

Exhibit 99.2

11500 Ash Street

Leawood, Kansas 66211

November 6, 2017

CFO Commentary on

Third Quarter 2017 Financial Results

Financial Information

Reconciliations and definitions of non-GAAP financial measures (Adjusted EBITDA, Adjusted EBITDA Margin) are provided in the financial schedules included below and in our financial tables that accompany our third quarter 2017 earnings press release issued November 6, 2017 and available at http://investor.amctheatres.com. 

Additional information detailing select unaudited pro forma financial data for the three-month and nine month  period ended September 30, 2016 and September 30, 2017 is included below in this CFO commentary which has been published in the investor relations section of AMC’s website located at http://investor.amctheatres.com and furnished with the SEC on Form 8-K dated November 6, 2017.  The Company believes the pro forma information provides a more comparable view of its results relative to prior periods. The select unaudited pro forma data for the periods combines the historical financial data of operations of AMC, Odeon, Carmike and Nordic, giving effect to the acquisitions, financings and theatre divestitures as if they had been completed on January 1, 2016.  The historical consolidated financial information for Odeon, Carmike and Nordic have been adjusted to comply with U.S. Generally Accepted Accounting Principles (“U.S. GAAP”), including the effects of purchase accounting adjustments. 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 AMC under U.S. GAAP.  The classification of certain items presented by Nordic under International Financial Reporting Standards (“IFRS”) has been modified in order to align with the presentation used by AMC under U.S. GAAP. In addition to the U.S. GAAP adjustments and the reclassifications, amounts for Odeon and Nordic have also been translated to U.S. Dollars. The unaudited pro forma financial information is provided for informational purposes only and is not necessarily indicative of what our results of operations would actually have been had the acquisitions

occurred on the date indicated.  Please refer to the August 1, 2017 and August 4, 2017, Form 8-K’s for additional information on pro forma financial statement adjustments.

Conference Call

The Company will host a conference call on Monday, November 6, 2017, at 4:00 p.m. CST/5:00 p.m. EST to review results for the third quarter ended September 30, 2017.

To listen to the call, please dial (877) 407-3982 in the U.S. or (201) 493-6780 outside the U.S. You may also listen to the conference call via the internet by visiting the investor relations section of the AMC website at www.investor.amctheatres.com for a link to the webcast. Investors and interested parties should go to the website at least 15 minutes prior to the call to register and/or download and install any necessary audio software.

Third quarter ended September 30, 2017

U.S. Industry Box Office: With fewer wide releases and difficult comparisons from “Suicide Squad” and “Secret Life of Pets” in the year ago quarter, the North American industry box office experienced its first sub $4 billion summer in more than a decade.  However, after a weak July and a particularly weak August, the quarter rebounded somewhat in September with the surprise hit, “IT”, which drove September to the strongest ever on record.  Nonetheless the North American industry box office declined approximately 14% for the third quarter compared to last year.

The top ten titles of the third quarter totaled 3.6%  more of total box office than the year ago period, so it was a lack of depth and breadth in the medium and smaller titles which impacted the quarter the most. 

   Consolidated Results

Compared to the third quarter of 2016, consolidated admissions revenues for the quarter increased 51.7% to $753.5 million while food and beverage revenues grew 45.2% to $361.4 million and other theatre revenues grew 87.1% to $63.8 million.  Consolidated total revenues grew 51.2% in the third quarter to $1,178.7 million. The increase in revenue was primarily due to the acquisitions of Odeon in November 2016, Carmike in December 2016, and Nordic in March 2017.

Consolidated net earnings for the third quarter declined $73.1 million to a loss of $42.7 million compared to the same quarter a year ago. Consolidated net earnings margin for the third quarter was (3.6%) compared to 3.9% in the third quarter of 2016. Included in the net loss for the third quarter of 2017 is a $21 million loss on sale of common stock of National CineMedia, LLC (NASDAQ: NCMI) (“NCM”), and an additional $44.7 million of interest expense related to our acquisitions as compared to the same quarter a year ago.

Consolidated diluted earnings per share (“diluted EPS”) decreased $0.64 to a loss of $0.33 per share compared to earnings of $0.31 per share for the same period a year ago.  Average diluted shares outstanding in the third quarter of 2017 increased approximately 33.5% compared to the third quarter last year.

Consolidated Adjusted EBITDA for the third quarter grew 2.1% to $147.4 million and Adjusted EBITDA margin declined to 12.5% from 18.5% compared to the year ago period. 

2017 Consolidated Pro Forma Results vs. 2016 Consolidated Pro Forma Results

To provide greater transparency and more relevant year-over-year comparisons, we have included pro forma financial data in the tables section of this CFO commentary. The select unaudited pro forma data for the quarters ended September 30, 2016 and September 30, 2017 combines the historical financial data of operations of AMC, Odeon, Carmike and Nordic, giving effect to the acquisitions, financings and theatre divestitures as if they had been completed on January 1, 2016.  The historical consolidated financial information for Odeon and Nordic has been adjusted to comply with U.S. 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 AMC under U.S. GAAP. The classification of certain items presented by Nordic under IFRS has been modified in order to align with the presentation used by AMC under U.S. GAAP. In addition to the U.S. GAAP adjustments and the reclassifications, amounts have also been translated to U.S. Dollars. The unaudited pro forma financial information is provided for informational purposes only and is not necessarily indicative of what our results of operations would actually have been had the acquisitions occurred on the date indicated. Please refer to the August 1, 2017 and August 4, 2017 Form 8-K’s for additional information on pro forma financial statement adjustments.

The exchange rates used to calculate constant currency were the same for both the three months ended September 30, 2017 and September 30, 2016, so there is no effect given for changes in currency rates.

Compared to the pro forma third quarter of 2016, pro forma third quarter 2017 consolidated total revenues decreased 9.8% and were comprised of a 10.1% decrease in admissions revenues, a 10.4% decrease in food and beverage revenues, and a 3.3% decrease in other theatre revenues. 

Consolidated net loss for the third quarter increased $20.8 million to $38.6 million compared to the pro forma results in the same quarter last year.

Likewise, consolidated Adjusted EBITDA for the third quarter declined 31.3% to $147.4 million and Adjusted EBITDA margin decreased 390 basis points to 12.5% compared to the same proforma period a year ago. 

2017 U.S. Segment Pro Forma Results vs. 2016 U.S. Segment Pro Forma Results    

Compared to the pro forma U.S. segment third quarter of 2016, third quarter 2017 pro forma total U.S. revenues decreased 13.0% to $845.7 million and were comprised of a 13.2% decline in admissions revenue to $531.7 million (approximately 90 basis point industry outperformance), a 12.9% decrease in food and beverage revenues to $278.3 million, and a 11.0% decrease in other theatre revenues to $35.7 million. 

Total U.S. attendance decreased 19.9% to 54.3 million while average ticket price for the quarter increased 8.4% to $9.80 compared to the pro forma results in the same quarter a year ago.   This growth in average ticket price is a result of increases in attendance for PLF and IMAX® premium formats and strategic price increases, which more than offset the average ticket price pressure from a decline in 3-D attendance in the third quarter.

Despite a 12.9% decline in U.S. food and beverage revenues, food and beverage revenue per patron increased 8.7% to $5.13 compared to the third quarter last year.  Over the course of the third quarter, we rolled out additional new Coke Freestyle machines, and introduced our new Feature Fare menu to nearly 200 additional theatres.  Due in part to the higher cost of food related to the Feature Fare menu, our U.S. food and beverage gross margin for the quarter decreased 130 basis points to 85.2%, however U.S. food and beverage gross profit per patron increased approximately 7.1%. 

At quarter-end we operated 27 dine-in-theatres and served alcohol at 266 locations.

U.S. other revenue saw a 11.0% decrease to $35.7 million compared to the prior year’s pro forma quarter.  Contributing to the decline was a change in sales volume and estimated breakage for certain package tickets.

AMC’s U.S. film exhibition costs continue to be a bright spot, declining 16.8% to $269.2 million compared to last year’s pro forma results, representing 50.6% of admissions revenue, a 220-basis point improvement compared to last year.  These results are consistent with the film concentration of the top U.S. titles this year versus last year, and the conversion of the former Carmike theatre’s film rent terms to AMC’s terms.

Pro forma U.S. operating expenses for the quarter was nearly unchanged at $272.9 million compared to last year and represented 32.3% of revenues as compared to 28.0% in the same pro forma period a year ago.  U.S. operating expenses for the third quarter pro forma 2017 and pro forma 2016 period include $3.7 million and $7.7 million, respectively, of certain operating expenses that are excluded from our calculation of Adjusted EBITDA.  Excluding these costs from both periods, adjusted operating expenses for the third quarter increased 1.4% to $269.2 million, and represented 31.8% of revenues, a 450-basis point increase from the prior year proforma period.  We are disclosing adjusted operating expenses because we believe they are more indicative of our ongoing performance.  Contributing to the increase in operating expense was a higher proportion of fixed expenses, increases in strategic initiative start-up costs and minimum wage impacts. 

Pro forma U.S. rent expense for the third quarter increased 2.1% to $148.2 million, on roughly the 1% more average screens. Rent per average screen increased approximately 1.3% compared to the pro forma quarter last year.

Pro forma U.S. depreciation and amortization increased 15.1% to $98.9 million in the third quarter compared to the same period last year, primarily due to additional capital expenditures during the first, second, and third quarters of 2017 and calendar year 2016.

Pro Forma U.S. net loss for the third quarter was $34.7 million compared to net earnings of $14.9 million in the same pro forma period a year ago. Negatively impacting third quarter 2017 U.S. net losses was the $21 million loss on sale of common stock of National CineMedia, Inc. (NASDAQ: NCMI) (“NCM”).

Pro forma U.S. Adjusted EBITDA for the quarter declined 38.5% to $107.6 million compared to the pro forma third quarter last year, as U.S. adjusted EBITDA margins decreased 530 basis points to 12.7%.

International Industry Box Office: The third quarter international box office also saw weakness in the countries served by Odeon and Nordic, but not to the same degree as the North American box office. 

The industry box office was down approximately 4.3% in the countries served by Odeon and down approximately 11.6% in the countries served by Nordic. 

2017 International Segment Results vs. 2016 International Segment Pro Forma Results    

Compared to the pro forma third quarter of 2016, third quarter total international revenues decreased 0.6% to $333.0 million, and were comprised of a 1.6% decline in admissions revenue to $221.8 million, a 0.5% decline in food and beverage revenues to $83.1 million, and an 8.5% increase in other theatre revenues to $28.1 million. 

Total International attendance decreased 8.5% to 25.2 million and average ticket price for the quarter increased 7.5% to $8.81.  Odeon’s strategic pricing increases and less promotional activity compared to last year’s quarter helped drive the increase in average ticket price.

International food and beverage revenue per patron increased 8.8% to $3.30 while International food and beverage gross margin for the quarter increased 220 basis points to 76.5%.

AMC’s International film exhibition costs for the quarter increased 0.9% to $95.6 million, representing 43.1% of admissions revenue and a 110 basis point increase compared to last year.  These results are consistent with the film concentration of the top International titles this year versus last year.

International operating expense for the quarter was down slightly to $110.3 million compared to last year and represented 33.1% of revenues as compared to 33.2% in the same pro forma period a year ago.

International rent expense for the third quarter declined 3.7% to $52.5 million, on roughly 1.5% fewer average screens.

International depreciation and amortization declined 8.6% to $36.3 million in the third quarter compared to the same period last year.

International net loss for the third quarter declined $28.8 million to a net loss of $3.9 million, compared to net losses of $32.7 million in the same pro forma period a year ago.  The third quarter of last year included other expense of $25.3 million related to foreign currency transaction losses on Odeon’s indebtedness.

International Adjusted EBITDA for the third quarter increased nearly 1% to $39.8 million compared to the pro forma third quarter last year.  International Adjusted EBITDA margins increased 20 basis points to 12.0%.  As we continue to integrate the Odeon circuit, deploy initiatives and manage expenses, we are confident that Adjusted EBITDA and Adjusted EBITDA margins will improve.

AMC Screens

During the third quarter of 2017, we opened two new theatres with a total of 22 screens, and acquired two theatres with 15 screens.  We permanently closed 21 screens, temporarily closed 176 screens and reopened 123 screens to implement our strategy and install consumer experience upgrades. As of September 30, 2017, we owned or operated 1,006 theatres with 11,046 screens across 15 countries.

Capital Expenditures

Total gross capital expenditures for the quarter ended September 30, 2017 totaled $149.7 million and after $33.6 million of landlord contributions yielded net capital expenditures of $116.1 million. Recliner renovations accounted for the majority of the capital expenditures in the third quarter.

We expect gross capital expenditures for 2017 to total approximately $500 million to $550 million, with landlords contributing approximately $100 million to $120 million, resulting in a net cash outlay of approximately $400 to $430 million.

Balance Sheet

With respect to the balance sheet, we finished the third quarter with $260.0 million in cash and cash equivalents and a total debt balance of approximately $4.96 billion, including capital and financing lease obligations.

As of September 30, 2017, we were in compliance with all debt covenants.

Dividend

Consistent with our plans to augment shareholder returns through the return of capital, AMC’s Board of Directors, at its regular board meeting on October 27, 2017, authorized the fifteenth consecutive quarterly dividend of $.20 per share, payable on December 18, 2017, to holders of record on December 4, 2017.

Since our IPO on December 18, 2013, AMC has returned nearly $296 million to shareholders in the form of dividends or dividend equivalents.

Share Repurchase Plan

On August 3, 2017, we announced that our Board of Directors had approved a $100 million share repurchase program to repurchase our Class A common stock over a two-year period.

Repurchases may be made at management's discretion from time to time through open market transactions including block purchases, through privately negotiated transactions, or otherwise over the next two years in accordance with all applicable securities laws and regulations. The extent to which AMC repurchases its shares, and the timing of such repurchases, will depend upon a variety of factors, including liquidity, capital needs of the business, market conditions, regulatory requirements and other corporate considerations, as determined by AMC’s management team. Repurchases may be made under a Rule 10b5-1 plan, which would permit common stock to be repurchased when our management might otherwise be precluded from doing so under insider trading laws. The repurchase program does not obligate us to repurchase any minimum dollar amount or number of shares and may be suspended for periods or discontinued at any time.

During the three months ended September 30, 2017, we repurchased 1,068,300 shares of Class A common stock at a cost of $16.5 million.

Open Road Films

On August 4, 2017, the Company completed a transaction for the sale of all the issued and outstanding ownership interests in Open Road Releasing, LLC for total proceeds of $28.8 million.  AMC received $14.0 million in net proceeds after transaction expenses for its 50% investment and payment of amounts due from Open Road and recognized a gain on sale of $17.2 million.

Theatre Sale and Leaseback

On September 14, 2017, the Company completed the sale and leaseback of the real estate assets associated with seven theatres for proceeds net of closing costs of $128.4 million. The gain on sale of approximately $78.2 million has been deferred and will be amortized over the remaining lease term.

AMC owns approximately 10% of its theatres in its domestic circuit, and Odeon owns less than 5% of its theatres.

National CineMedia, Inc.

On September 18, 2017, the Company entered into an agreement to sell 12.0 million common shares in NCM for net proceeds of approximately $71.6 million, representing a price per share of $6.09 per share. The sale was completed on September 20, 2017 and the Company recognized a loss on sale of approximately $17.9 million including transaction costs on the sale of these units.

On September 29, 2017, the Company sold an additional 2.8 million common shares of NCM for net proceeds of approximately $17.8 million, representing a price per share of $6.49. The Company recognized a loss on sale of approximately $3.1 million including transaction costs on the sale of these units.

The sale of 14.8 million common shares of NCM satisfies AMC’s 2017 ownership requirement under the consent decree with the U.S. Department of Justice in connection with AMC’s acquisition of Carmike  in December 2016.

Website Information

This CFO Commentary, along with other news about AMC, is available at www.amctheatres.com. We routinely post information that may be important to investors in the Investor Relations section of our website, www.investor.amctheatres.com. We use this website as a means of disclosing material, non-public information and for complying with our disclosure obligations under Regulation FD, and we encourage investors to consult that section of our website regularly for important information about AMC. The information contained on, or that may be accessed through, our website is not incorporated by reference into, and is not a part of, this document. Investors interested in automatically receiving news and information when posted to our website can also visit www.investor.amctheatres.com to sign up for E-mail Alerts.

Forward-Looking Statements

This CFO Commentary includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as “forecast,” “guidance,” “plan,” “estimate,” “will,” “would,” “project,” “maintain,” “intend,” “expect,” “anticipate,” “prospect,” “strategy,” “future,” “likely,” “may,” “should,” “believe,” “continue,” “opportunity,” “potential,” and other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements are based on information available at the time the statements are made and/or management’s good faith belief as of that time with respect to future events, and are subject to risks, trends, uncertainties and other facts that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. These risks, trends, uncertainties and facts include, but are not limited to, risks related to: motion picture production and performance; AMC’s lack of control over distributors of films; intense competition in the geographic areas in which AMC operates; AMC’s ability to

execute cost-cutting and revenue enhancement initiatives; box office performance through the remainder of 2017; increased use of alternative film delivery methods or other forms of entertainment; additional impairment related to AMC’s NCM investment; shrinking exclusive theatrical release windows; the performance of AMC’s non-consolidated entities; international economic, political and other risks; risks and uncertainties relating to AMC’s significant indebtedness;  limitations on the availability of capital;  risks relating to AMC’s inability to achieve the expected benefits and performance from its recent acquisitions; AMC’s ability to comply with a settlement it entered into with the U.S. Department of Justice pursuant to which it agreed to divest theatres and divest holdings in National CineMedia, LLC; AMC’s ability to refinance its indebtedness on favorable terms; optimizing AMC’s theatre circuit through construction and the transformation of its existing theatres may be subject to delay and unanticipated costs;  failures, unavailability or security breaches of AMC’s information systems; risks relating to impairment losses, including with respect to goodwill and other intangibles, and theatre and other closure charges; AMC’s ability to utilize net operating loss carryforwards to reduce its future tax liability or valuation allowances taken with respect to deferred tax assets; review by antitrust authorities in connection with acquisition opportunities; risks relating to unexpected costs or unknown liabilities relating to recently completed acquisitions; risks relating to the incurrence of legal liability; general political, social and economic conditions and risks, trends, uncertainties and other factors discussed in the reports AMC has filed with the SEC. Should one or more of these risks, trends, uncertainties or facts materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by the forward-looking statements contained herein. Accordingly, you are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they are made. Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. For a detailed discussion of risks, trends and uncertainties facing AMC, see the section entitled “Risk Factors” in AMC’s Annual Report on Form 10-K, filed with the SEC on March 10, 2017 and the risks, trends and uncertainties identified in its other public filings. AMC does not intend, and undertakes no duty, to update any information contained herein to reflect future events or circumstances, except as required by applicable law.

(tables follow)

Reconciliation of Adjusted EBITDA and Adjusted EBITDA Margin:

(dollars in millions) (unaudited)

Select pro forma financial data:

 Three Months Ended September 30, 2017 and Three Months Ended September 30, 2016:

(dollars in millions),  (unaudited)

The select unaudited pro forma data for the three-month periods ended September 30, 2017 and 2016 combine the historical financial data of operations of AMC, Odeon, Carmike and Nordic, giving effect to the acquisitions, financings and theatre divestitures as if they had been completed on January 1, 2016.  The historical consolidated financial information for Odeon and Nordic has been adjusted to comply with U.S. 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 AMC under U.S. GAAP. The classification of certain items presented by Nordic under IFRS has been modified in order to align with the presentation used by AMC under U.S. GAAP. In addition to the U.S. GAAP adjustments and the reclassifications, amounts have also been translated to U.S. Dollars.  The unaudited pro forma financial information is provided for informational purposes only and is not necessarily indicative of what

our results of operations would actually have been had the acquisitions occurred on the date indicated.  Reconciliations of the pro forma information to our historical financial information are provided in the tables below titled “Unaudited Pro Form Condensed Combined Financial Information.” Please refer to the August 1, 2017 Form 8-K for additional information on pro forma financial statement adjustments.

Reconciliation of pro forma Adjusted EBITDA

Three Months Ended September 30, 2017 and Three Months Ended September 30, 2016:

(dollars in millions) (unaudited)

The select unaudited pro forma data for the three-month periods ended September 30, 2017 and 2016 combine the historical financial data of operations of AMC, Odeon, Carmike and Nordic, giving effect to the acquisitions, financings and theatre divestitures as if they had been completed on January 1, 2016.  The historical consolidated financial information for Odeon and Nordic has been adjusted to comply with U.S. 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 AMC under U.S. GAAP. The classification of certain items presented by Nordic under IFRS has been modified in order to align with the presentation used by AMC under U.S. GAAP. In addition to the U.S. GAAP adjustments and the reclassifications, amounts have also been translated to U.S. Dollars.  The unaudited pro forma financial information is provided for informational purposes only and is not necessarily indicative of what our results of operations would actually have been had the acquisitions occurred on the date indicated.  Reconciliations of the pro forma information to our historical financial information are provided in the tables below titled “Unaudited Pro Form Condensed Combined Financial Information.” Please refer to the August 1, 2017 Form 8-K for additional information on pro forma financial statement adjustments. 

Select pro forma financial data

Nine Months Ended September 30, 2017 and Nine Months Ended September 30, 2016:

(dollars in millions), (unaudited)

The select unaudited pro forma data for the nine-month periods ended September 30, 2017 and 2016 combine the historical financial data of operations of AMC, Odeon, Carmike and Nordic, giving effect to the acquisitions, financings and theatre divestitures as if they had been completed on January 1, 2016.  The historical consolidated financial information for Odeon and Nordic has been adjusted to comply with U.S. 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 AMC under U.S. GAAP. The classification of certain items presented by Nordic under IFRS has been modified in order to align with the presentation used by AMC under U.S. GAAP. In addition to the U.S. GAAP adjustments and the reclassifications, amounts have also been translated to U.S. Dollars.  The unaudited pro forma financial information is provided for informational purposes only and is not necessarily indicative of what our results of operations would actually have been had the acquisitions occurred on the date indicated.  Reconciliations of the

pro forma information to our historical financial information are provided in the tables below titled “Unaudited Pro Form Condensed Combined Financial Information.” Please refer to the August 1, 2017 Form 8-K for additional information on pro forma financial statement adjustments.

Reconciliation of pro forma Adjusted EBITDA 

Nine Months Ended September 30, 2017 and Nine Months Ended September 30, 2016:

(dollars in millions) (unaudited)

The select unaudited pro forma data for the nine-month periods ended September 30, 2017 and 2016 combine the historical financial data of operations of AMC, Odeon, Carmike and Nordic, giving effect to the acquisitions, financings and theatre divestitures as if they had been completed on January 1, 2016.  The historical consolidated financial information for Odeon and Nordic has been adjusted to comply with U.S. 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 AMC under U.S. GAAP. The classification of certain items presented by Nordic under IFRS has been modified in order to align with the presentation used by AMC under U.S. GAAP. In addition to the U.S. GAAP adjustments and the reclassifications, amounts have also been translated to U.S. Dollars.  The unaudited pro forma financial information is provided for informational purposes only and is not necessarily indicative of what our results of operations would actually have been had the acquisitions occurred on the date indicated.  Reconciliations of the pro forma information to our historical financial information are provided in the tables below titled “Unaudited Pro Form Condensed Combined Financial Information.” Please refer to the August 1, 2017 Form 8-K for additional information on pro forma financial statement adjustments.

Adjusted EBITDA and Adjusted EBITDA Margin have important limitations as analytical tools, and you should not consider them in isolation, or as a substitute for analysis of our results as reported under U.S. GAAP. For example,

Adjusted EBITDA and Adjusted EBITDA Margin:

Reconciliation of Historical Attributable EBITDA (Unaudited)

Reconciliation of Pro Forma Attributable EBITDA (Unaudited)

UNAUDITED PRO FORMA

CONDENSED COMBINED FINANCIAL INFORMATION

The following unaudited pro forma condensed combined financial information of AMC Entertainment Holdings, Inc. (“AMC”  or the “Company”) is presented to illustrate the estimated effects of (i) the acquisition of Odeon and UCI Cinemas Holdings Limited (“Odeon”  or the “Odeon Acquisition”), the acquisition of Carmike Cinemas, Inc. (“Carmike or the “Carmike Acquisition”) and the acquisition of Nordic Cinema Group Holdings AB (“Nordic or the “Nordic 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”) used to fund the Odeon Acquisition; (iii) the issuance of 4,536,466 shares ($156,735,000) of the Company’s Class A Common Stock in a private placement in connection with the Odeon Acquisition and the issuance of 8,189,808 shares ($273,949,000) of the Company’s Class A Common Stock in connection with the Carmike Acquisition, (iv) the issuance of $475,000,000 aggregate principal amount of 6.125% Senior Subordinated Notes due 2027 and £250,000,000 aggregate principal amount of 6.375% Senior Subordinated Notes due 2024 used to fund the Nordic (clauses (ii), (iii) and (iv) collectively referred to as the “Financings”); (v) the issuance of 20,330,874 shares ($640,423,000 at an offering price of $31.50 per share of the Company’s Class A Common Stock to repay the $350,000,000 aggregate principal amount of Bridge Loans incurred to partially finance the Carmike Acquisition and for general and corporate purposes (the “2017 Equity Offering”) and (vi) the settlement the Company entered into with the United States Department of Justice, pursuant to which the Company agreed to divest theatres in 15 local markets where it has an overlap with Carmike (the “Theatre Divestitures”).

The pro forma financial information is based in part on certain assumptions regarding the foregoing transactions that we believe 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 three and nine months ended September 30, 2017 and the three and nine months ended September 30, 2016, combine the historical consolidated statements of operations of the Company, Odeon, Carmike and Nordic, giving effect to the Odeon Acquisition, the Carmike Acquisition, the Nordic Acquisition, the Financings, the Theatre Divestitures and the 2017 Equity Offering as if they had been completed on January 1, 2016. The historical consolidated financial information for Odeon and Nordic have 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”) and by Nordic under International Financial Reporting Standards (“IFRS”) 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 for Odeon and Nordic have also been translated to U.S. dollars. 

The unaudited pro forma condensed combined financial information has 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. The assets and liabilities of Odeon, Carmike and Nordic have been measured based on various preliminary estimates using assumptions that the Company believes are reasonable based on information that is currently available. The preliminary purchase price allocations for Odeon, Carmike and Nordic are subject to revision as a  more detailed analysis is completed.  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 within one year from the completion of the Odeon Acquisition, Carmike Acquisition and Nordic Acquisition respectively, and could differ materially from the unaudited pro forma condensed combined financial information presented here. Any change in the fair value of the net assets of Odeon, Carmike and Nordic will change the amount of the purchase price allocable to goodwill and will also change any resultant depreciation and amortization or other similarly impacted income statement amounts. The pro forma adjustments are preliminary and have been made solely for the purpose of providing unaudited pro forma condensed combined financial information prepared in accordance with the rules and regulations of the Securities and Exchange Commission.

The unaudited pro forma condensed combined financial information does not purport to represent the actual results of operations that the Company, Odeon, Carmike and Nordic 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, Carmike Acquisition and Nordic 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, Carmike Acquisition and Nordic Acquisition and also does not reflect any restructuring or integration-related costs to achieve those potential cost savings. No historical transactions between Odeon, Carmike, Nordic and the Company during the periods presented in the unaudited pro forma condensed combined financial statements have been identified at this time.

The unaudited pro forma condensed combined financial information does not give effect to the settlement we entered into with the United States Department of Justice, pursuant to which we agreed to divest most of our holdings and relinquish all of our governance rights in NCM, our joint venture for cinema screen advertising, and (ii) agreed to transfer 24 theatres with a  total of 384 screens to the network of Screenvision LLC, the cinema screen advertising business in which Carmike participates.

The Company previously filed unaudited pro forma condensed combined statements of operations in its 8-K/A on March 13, 2017,  8-K on August 1, 2017 and 8K on August 4, 2017 and  has updated Note 5 from the previously file 8-K/A and 8-K to include the pro forma impacts of the Nordic Acquisition, the Nordic Financing and the Theatre Divestitures for 2017.

AMC ENTERTAINMENT HOLDINGS, INC.

UNAUDITED CONDENSED COMBINED PRO FORMA STATEMENT OF OPERATIONS

THREE MONTHS ENDED SEPTEMBER 30, 2016

(dollars in thousands)