November 8, 2022 - 10-Q: Quarterly report pursuant to Section 13 or 15(d)

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Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

September 30,
(Mark One)
☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2022
OR
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to

Commission file number 001-33892

AMC ENTERTAINMENT HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization)	26-0303916 (I.R.S. Employer Identification No.)
One AMC Way 11500 Ash Street, Leawood, KS (Address of principal executive offices)	66211 (Zip Code)

Registrant’s telephone number, including area code: (913) 213-2000

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulations S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer ☒

Accelerated filer ☐

Non-accelerated filer ☐

Smaller reporting company ☐

Emerging growth company ☐

If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standard provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of each exchange on which registered
Class A common stock	AMC	New York Stock Exchange
AMC Preferred Equity Units, each constituting a depositary share representing a 1/100th interest in a share of Series A Convertible Participating Preferred Stock	APE	New York Stock Exchange

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.


Title of each class of common stock		Number of shares outstanding as of November 8, 2022
Class A common stock		516,820,595*
*In addition, as of November 8, 2022 the issuer had 531,716,231 outstanding AMC Preferred Equity Units, each representing participating voting and economic rights in the equivalent of one (1) share of Class A common stock

Table of Contents

AMC ENTERTAINMENT HOLDINGS, INC.

INDEX

		Page Number
	PART I—FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	3
	Condensed Consolidated Statements of Operations	3
	Condensed Consolidated Statements of Comprehensive Loss	4
	Condensed Consolidated Balance Sheets	5
	Condensed Consolidated Statements of Cash Flows	6
	Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	35
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	67
Item 4.	Controls and Procedures	68
	PART II—OTHER INFORMATION
Item 1.	Legal Proceedings	68
Item 1A.	Risk Factors	69
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	72
Item 3.	Defaults Upon Senior Securities	72
Item 4.	Mine Safety Disclosures	72
Item 5.	Other Information	72
Item 6.	Exhibits	73
	Signature	74

Table of Contents

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements. (Unaudited)

AMC ENTERTAINMENT HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS


	Three Months Ended				Nine Months Ended
(In millions, except share and per share amounts)	September 30, 2022		September 30, 2021		September 30, 2022		September 30, 2021

	(unaudited)				(unaudited)
Revenues
Admissions	$	545.3	$	425.1	$	1,640.1	$	727.6
Food and beverage		333.3		265.2		982.5		476.8
Other theatre		89.8		72.9		297.9		151.8
Total revenues		968.4		763.2		2,920.5		1,356.2
Operating costs and expenses
Film exhibition costs		263.2		176.5		781.7		297.4
Food and beverage costs		58.5		42.9		165.7		78.9
Operating expense, excluding depreciation and amortization below		400.6		321.5		1,147.6		747.4
Rent		223.2		214.9		668.8		612.5
General and administrative:
Merger, acquisition and other costs		0.3		1.4		0.4		12.4
Other, excluding depreciation and amortization below		40.6		47.5		161.2		153.7
Depreciation and amortization		96.9		103.7		293.0		323.5
Operating costs and expenses		1,083.3		908.4		3,218.4		2,225.8
Operating loss		(114.9)		(145.2)		(297.9)		(869.6)
Other expense, net:
Other expense (income)		(1.0)		(11.7)		91.6		(71.8)
Interest expense:
Corporate borrowings		85.1		88.7		246.6		328.3
Finance lease obligations		1.0		1.2		3.2		4.0
Non-cash NCM exhibitor services agreement		9.6		9.4		28.6		28.7
Equity in (earnings) loss of non-consolidated entities		(2.8)		(6.7)		3.3		(1.2)
Investment expense (income)		18.3		—		12.2		(8.3)
Total other expense, net		110.2		80.9		385.5		279.7
Net loss before income taxes		(225.1)		(226.1)		(683.4)		(1,149.3)
Income tax provision (benefit)		1.8		(1.9)		2.5		(13.9)
Net loss		(226.9)		(224.2)		(685.9)		(1,135.4)
Less: Net loss attributable to noncontrolling interests		—		—		—		(0.7)
Net loss attributable to AMC Entertainment Holdings, Inc.	$	(226.9)	$	(224.2)	$	(685.9)	$	(1,134.7)
Net loss per share:
Basic	$	(0.22)	$	(0.22)	$	(0.66)	$	(1.22)
Diluted	$	(0.22)	$	(0.22)	$	(0.66)	$	(1.22)
Average shares outstanding:
Basic (in thousands)		1,033,686		1,026,660		1,033,056		930,278
Diluted (in thousands)		1,033,686		1,026,660		1,033,056		930,278

See Notes to Condensed Consolidated Financial Statements.

Table of Contents

AMC ENTERTAINMENT HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS


	Three Months Ended				Nine Months Ended
(In millions)	September 30, 2022		September 30, 2021		September 30, 2022		September 30, 2021

	(unaudited)				(unaudited)
Net loss	$	(226.9)	$	(224.2)	$	(685.9)	$	(1,135.4)
Other comprehensive income (loss):
Unrealized foreign currency translation adjustments		(26.1)		(18.8)		(78.4)		(52.4)
Realized loss on foreign currency transactions reclassified into investment expense (income), net of tax		—		—		—		(0.9)
Pension adjustments:
Net gain arising during the period		0.1		—		0.3		3.8
Other comprehensive income (loss):		(26.0)		(18.8)		(78.1)		(49.5)
Total comprehensive loss		(252.9)		(243.0)		(764.0)		(1,184.9)
Comprehensive loss attributable to noncontrolling interests		—		—		—		(0.9)
Comprehensive loss attributable to AMC Entertainment Holdings, Inc.	$	(252.9)	$	(243.0)	$	(764.0)	$	(1,184.0)

See Notes to Condensed Consolidated Financial Statements.

Table of Contents

AMC ENTERTAINMENT HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


(In millions, except share data)	September 30, 2022		December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	684.6	$	1,592.5
Restricted cash		21.2		27.8
Receivables, net		108.4		168.5
Other current assets		91.0		81.5
Total current assets		905.2		1,870.3
Property, net		1,750.8		1,962.5
Operating lease right-of-use assets, net		3,873.1		4,155.9
Intangible assets, net		144.8		153.4
Goodwill		2,307.4		2,429.8
Deferred tax asset, net		0.4		0.6
Other long-term assets		224.4		249.0
Total assets	$	9,206.1	$	10,821.5
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable	$	230.7	$	377.1
Accrued expenses and other liabilities		349.1		367.5
Deferred revenues and income		343.4		408.6
Current maturities of corporate borrowings		128.1		20.0
Current maturities of finance lease liabilities		5.7		9.5
Current maturities of operating lease liabilities		565.6		605.2
Total current liabilities		1,622.6		1,787.9
Corporate borrowings		5,197.2		5,408.0
Finance lease liabilities		50.5		63.2
Operating lease liabilities		4,246.7		4,645.2
Exhibitor services agreement		510.9		510.4
Deferred tax liability, net		31.5		31.3
Other long-term liabilities		125.7		165.0
Total liabilities		11,785.1		12,611.0
Commitments and contingencies
Stockholders’ deficit:
AMC Entertainment Holdings, Inc.'s stockholders' deficit:
Preferred stock, $.01 par value per share, 50,000,000 shares authorized; including Series A Convertible Participating Preferred Stock, 10,000,000 authorized, 5,195,206 issued and outstanding as of September 30, 2022; 5,139,791 issued and outstanding as of December 31, 2021, represented by AMC Preferred Equity Units, each representing a 1/100th interest in a share of Series A Convertible Participating Preferred Stock, of which 1,000,000,000 is authorized; 519,520,595 issued and outstanding as of September 30, 2022; 513,979,100 issued and outstanding as of December 31, 2021		0.1		0.1
Class A common stock ($.01 par value, 524,173,073 shares authorized; 516,820,595 shares issued and outstanding as of September 30, 2022; 513,979,100 shares issued and outstanding as of December 31, 2021)		5.2		5.1
Additional paid-in capital		4,831.8		4,857.4
Accumulated other comprehensive loss		(106.2)		(28.1)
Accumulated deficit		(7,309.9)		(6,624.0)
Total stockholders' deficit		(2,579.0)		(1,789.5)
Total liabilities and stockholders’ deficit	$	9,206.1	$	10,821.5

See Notes to Condensed Consolidated Financial Statements.

Table of Contents

AMC ENTERTAINMENT HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS



	Nine Months Ended
(In millions)	September 30, 2022		September 30, 2021

Cash flows from operating activities:	(unaudited)
Net loss	$	(685.9)	$	(1,135.4)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		293.0		323.5
Deferred income taxes		1.1		(11.6)
Loss on extinguishment of debt		96.4		14.4
Unrealized loss on investments in Hycroft		3.4		—
Unrealized loss on investments in NCM		11.1		—
Amortization of net discount (premium) on corporate borrowings to interest expense		(48.5)		10.5
Amortization of deferred financing costs to interest expense		10.0		19.5
PIK interest expense		—		116.2
Non-cash portion of stock-based compensation		22.3		18.8
Loss on disposition of assets		0.5		—
Gain on disposition of Baltics		—		(5.5)
Loss on dispositions		—		0.3
Equity in loss from non-consolidated entities, net of distributions		7.8		4.8
Landlord contributions		16.2		17.7
Other non-cash rent benefit		(20.6)		(22.2)
Deferred rent		(130.2)		(84.5)
Net periodic benefit income		(0.4)		(0.5)
Change in assets and liabilities:
Receivables		61.1		(41.8)
Other assets		(15.8)		(34.1)
Accounts payable		(138.9)		(31.2)
Accrued expenses and other liabilities		(93.1)		188.8
Other, net		15.3		(8.3)
Net cash used in operating activities		(595.2)		(660.6)
Cash flows from investing activities:
Capital expenditures		(129.7)		(53.9)
Proceeds from disposition of Baltics, net of cash and transaction costs		—		34.2
Acquisition of theatre assets		(17.8)		(5.8)
Proceeds from disposition of long-term assets		10.8		3.4
Proceeds from sale of securities		11.4		—
Investments in non-consolidated entities, net		(27.9)		(9.3)
Other, net		(0.5)		0.1
Net cash used in investing activities		(153.7)		(31.3)
Cash flows from financing activities:
Proceeds from issuance of First Lien Notes due 2029		950.0		—
Proceeds from issuance of Odeon Term Loan due 2023		—		534.3
Proceeds from First Lien Toggle Notes due 2026		—		100.0
Principal payments under First Lien Notes due 2025		(500.0)		—
Principal payments under First Lien Notes due 2026		(300.0)		(35.0)
Principal payments under First Lien Toggle Notes due 2026		(73.5)		—
Premium paid to extinguish First Lien Notes due 2025		(34.5)		—
Premium paid to extinguish First Lien Notes due 2026		(25.6)		(5.3)
Premium paid to extinguish First Lien Toggle Notes due 2026		(14.6)		—
Repurchase of Second Lien Notes due 2026		(50.0)		—
Repayments under revolving credit facilities		—		(335.0)

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Scheduled principal payments under Term Loan due 2026		(15.0)		(15.0)
Net proceeds from Class A common stock issuance		—		1,570.7
Net proceeds from Class A common stock issuance to Mudrick		—		230.4
Net proceeds from AMC Preferred Equity Units issuance		7.8		—
Payments related to sale of noncontrolling interest		—		(0.4)
Principal payments under finance lease obligations		(7.9)		(6.2)
Cash used to pay for deferred financing costs		(19.3)		(19.9)
Cash used to pay dividends		(0.7)		—
Taxes paid for restricted unit withholdings		(52.2)		—
Net cash provided by (used in) financing activities		(135.5)		2,018.6
Effect of exchange rate changes on cash and cash equivalents and restricted cash		(30.1)		(7.9)
Net increase (decrease) in cash and cash equivalents and restricted cash		(914.5)		1,318.8
Cash and cash equivalents and restricted cash at beginning of period		1,620.3		321.4
Cash and cash equivalents and restricted cash at end of period	$	705.8	$	1,640.2
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest (including amounts capitalized of $0.1 million and $0.2 million, respectively)	$	254.5	$	116.6
Income taxes paid (received), net	$	1.1	$	(6.0)
Schedule of non-cash activities:
Investment in NCM	$	15.0	$	—
Construction payables at period end	$	38.6	$	18.0
AMC Preferred Equity Units issuance costs payable at period end	$	3.5	$	—

See Notes to Condensed Consolidated Financial Statements.

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AMC ENTERTAINMENT HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2022

(Unaudited)

NOTE 1—BASIS OF PRESENTATION

AMC Entertainment Holdings, Inc. (“Holdings”), through its direct and indirect subsidiaries, including American Multi-Cinema, Inc. and its subsidiaries, (collectively with Holdings, unless the context otherwise requires, the “Company” or “AMC”), is principally involved in the theatrical exhibition business and owns, operates or has interests in theatres located in the United States and Europe.

Temporarily suspended or limited operations. Total consolidated revenues increased $1,564.3 million for the nine months ended September 30, 2022, compared to the nine months ended September 30, 2021. The increase in total consolidated revenues was primarily due to the reduced impact of the COVID-19 pandemic on the current year which resulted in increased operating capacity and increased availability of films with broad consumer appeal. The following table summarizes theatre operations for the Company in 2021:


	As of		As of		As of		As of
	January 1,		March 31,		June 30,		September 30,
Theatre Operations:	2021		2021		2021		2021
Percentage of theatres operated - Domestic	66.8	%	99.2	%	99.8	%	99.8	%
Percentage of theatres operated - International	30.3	%	27.3	%	94.9	%	99.2	%
Percentage of theatres operated - Consolidated	52.9	%	72.2	%	98.0	%	99.6	%

During the nine months ended September 30, 2022, the Company operated essentially 100% of its U.S. and International theatres. As of September 30, 2022 there are no restrictions on operations in any of the U.S. or International theatres.

Liquidity. As of September 30, 2022, the Company has cash and cash equivalents of approximately $684.6 million. In response to the COVID-19 pandemic, the Company adjusted certain elements of its business strategy and took significant steps to preserve cash. The Company continues to take measures to further strengthen its financial position and enhance its operations by minimizing non-essential costs, including reductions to its variable costs and elements of its fixed cost structure, introducing new initiatives, and optimizing its theatrical footprint.

Additionally, the Company enhanced future liquidity through debt refinancing that extended maturities and repurchased debt at 69% of par value. See Note 6—Corporate Borrowings and Finance Lease Liabilities and Note 13—Subsequent Events for further information.

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The table below summarizes net increase (decrease) in cash and cash equivalents and restricted cash by quarter for the year ended December 31, 2021:


	Three Months Ended								Year Ended
	March 31,		June 30,		September 30,		December 31,		December 31,
(In millions)	2021		2021		2021		2021		2021
Cash flows from operating activities:
Net cash provided by (used in) operating activities	$	(312.9)	$	(233.8)	$	(113.9)	$	46.5	$	(614.1)
Cash flows from investing activities:
Net cash provided by (used in) investing activities		(16.0)		13.5		(28.8)		(36.9)		(68.2)
Cash flows from financing activities:
Net cash provided by (used in) financing activities		854.7		1,212.2		(48.3)		(27.9)		1,990.7
Effect of exchange rate changes on cash and cash equivalents and restricted cash		(5.1)		5.6		(8.4)		(1.6)		(9.5)
Net increase (decrease) in cash and cash equivalents and restricted cash		520.7		997.5		(199.4)		(19.9)		1,298.9
Cash and cash equivalents and restricted cash at beginning of period		321.4		842.1		1,839.6		1,640.2		321.4
Cash and cash equivalents and restricted cash at end of period	$	842.1	$	1,839.6	$	1,640.2	$	1,620.3	$	1,620.3

The Company’s net cash used in operating activities improved by $79.1 million during the three months ended June 30, 2021 compared to the three months ended March 31, 2021, $119.9 million during the three months ended September 30, 2021 compared to the three months ended June 30, 2021, and $160.4 million during the three months ended December 31, 2021 compared to the three months ended September 30, 2021.

The table below summarizes net decrease in cash equivalents and restricted cash by quarter for the nine months ended September 30, 2022:


	Three Months Ended						Nine Months Ended
	March 31,		June 30,		September 30,		September 30,
(In millions)	2022		2022		2022		2022
Cash flows from operating activities:
Net cash used in operating activities	$	(295.0)	$	(76.6)	$	(223.6)	$	(595.2)
Cash flows from investing activities:
Net cash used in investing activities		(54.9)		(48.0)		(50.8)		(153.7)
Cash flows from financing activities:
Net cash provided by (used in) financing activities		(76.3)		(59.7)		0.5		(135.5)
Effect of exchange rate changes on cash and cash equivalents and restricted cash		(5.5)		(16.4)		(8.2)		(30.1)
Net decrease in cash and cash equivalents and restricted cash		(431.7)		(200.7)		(282.1)		(914.5)
Cash and cash equivalents and restricted cash at beginning of period		1,620.3		1,188.6		987.9		1,620.3
Cash and cash equivalents and restricted cash at end of period	$	1,188.6	$	987.9	$	705.8	$	705.8

The Company’s net cash provided by (used in) operating activities deteriorated by $341.5 million during the three months ended March 31, 2022 compared to the three months ended December 31, 2021 from $46.5 million to $(295.0) million. The decline in net cash provided by operating activities from the three months ended December 31, 2021 to the three months ended March 31, 2022 was primarily attributable to a decrease in attendance and increase in net

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loss and increases in seasonal working capital uses as the Company paid for the strong late fourth quarter 2021 results in early first quarter of 2022. The Company’s net cash used in operating activities improved by $218.4 million during the three months ended June 30, 2022 compared to the three months ended March 31, 2022 from $(295.0) million to $(76.6) million. The improvement in net cash used in operating activities from the three months ended March 31, 2022 to the three months ended June 30, 2022 was primarily attributable to an increase in attendance and decrease in net loss and decreases in seasonal working capital uses as the Company paid for the strong second quarter 2022 results in early third quarter of 2022. The Company’s net cash used in operating activities deteriorated by $(147.0) million during the three months ended September 30, 2022 compared to the three months ended June 30, 2022 from $(76.6) million to $(223.6) million. The deterioration in net cash provided by operating activities from the three months ended June 30, 2022 to the three months ended September 30, 2022 was primarily attributable to a decrease in attendance and increase in net loss and increases in seasonal working capital uses as the Company paid for the second quarter 2022 expenses in the third quarter of 2022. The Company has also continued to repay rent amounts that were deferred during the COVID-19 pandemic, which increases its cash outflows from operating activities. See Note 2—Leases for a summary of the estimated future repayment terms for the remaining $195.8 million of rentals that were deferred during the COVID-19 pandemic.

The Company’s net cash used in investing activities included:

●

$34.8 million of capital expenditures and $27.9 million of investments in non-consolidated entities, partially offset by proceeds from the disposition of long-term assets of $7.2 million during the three months ended March 31, 2022.

●

$40.4 million of capital expenditures, $17.8 million for the acquisition of theatres, partially offset by proceeds of $11.4 million from the sale of securities in conjunction with the liquidation of a non-qualified deferred compensation plan during the three months ended June 30, 2022.

●

$54.5 million of capital expenditures, partially offset by proceeds from the disposition of long-term assets of $3.6 million during the three months ended September 30, 2022.

The Company’s net cash used in financing activities included:

●

$955.7 million of principal and premium payments, $52.2 million of taxes paid for restricted unit withholdings, and $17.7 million of cash used to pay for deferred financing costs, partially offset by proceeds from the Company’s debt issuance of $950.0 million, during the three months ended March 31, 2022.

●

$57.9 million of principal and premium payments, $1.1 million of cash used to pay for deferred financing costs, and $0.7 million of AMC Preferred Equity Unit issuance costs during the three months ended June 30, 2022.

●

$7.4 million of principal payments and $0.5 million of cash used to pay deferred financing costs, partially offset by $8.5 million of net proceeds from AMC Preferred Equity Units issuance during the three months ended September 30, 2022.

The Company believes its existing cash and cash equivalents, together with cash generated from operations, will be sufficient to fund its operations, satisfy its obligations, including cash outflows to repay rent amounts that were deferred during the COVID-19 pandemic and planned capital expenditures, and comply with minimum liquidity and financial covenant requirements under its debt covenants related to borrowings pursuant to the Senior Secured Revolving Credit Facility for at least the next 12 months. In order to achieve net positive operating cash flows and long-term profitability, the Company believes that box office revenues will need to increase significantly compared to 2021 and the combined first, second, and third quarter of 2022 to levels in line with pre COVID-19 box office revenues. The Company believes the global re-opening of its theatres, the anticipated volume of titles available for theatrical release, and the anticipated broad appeal of many of those titles will support increased attendance levels. The Company believes that recent attendance levels are positive signs of continued demand for the moviegoing experience. For the nine months ended September 30, 2022 attendance was 151.4 million patrons, an 82.5 million patron increase from the approximately 68.9 million patrons for the nine months ended September 30, 2021. However, these attendance levels are still significantly below pre COVID-19 levels. The Company’s business is seasonal, with higher attendance and revenues generally occurring during the summer months and holiday seasons. The Company’s cash resources and needs will

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continue to be impacted during the fourth quarter by interest payments, deferred rent payments and the cash used in part to repay in full the Odeon Term Loan Facility. If anticipated levels of attendance during the fourth quarter holiday season and beyond do not materialize, the rate of cash burn will be higher than expected. Moreover, it is difficult to predict future attendance levels and there remain significant risks that may negatively impact attendance, including a potential resurgence of COVID-19 related restrictions, potential movie-goer reluctance to attend theatres due to concerns about COVID-19 variant strains, movie studios release schedules, the production and theatrical release of fewer films compared to levels before the onset of the COVID-19 pandemic, and direct to streaming or other changing movie studio practices.

The Company currently estimates that its existing cash and cash equivalents will be sufficient to comply with minimum liquidity and financial covenant requirements under its debt covenants related to borrowings pursuant to the Senior Secured Revolving Credit Facility, currently and through the next twelve months. The Company entered the Ninth Amendment to the Credit Agreement, dated as of March 8, 2021, pursuant to which the requisite revolving lenders party thereto agreed to extend the suspension period for the financial covenant (the secured leverage ratio) applicable to the Senior Secured Revolving Credit Facility from March 31, 2021 to March 31, 2022, which was further extended from March 31, 2022 to March 31, 2023 by the Eleventh Amendment, dated as of December 20, 2021, as described, and on the terms and conditions specified, therein. As of September 30, 2022, the Company was subject to minimum liquidity requirements of approximately $136.2 million, of which $100 million is required under the conditions for the Extended Covenant Suspension Period, as amended, under the Senior Secured Revolving Credit Facility, and £32.5 million (approximately $36.2 million) of which is required under the Odeon Term Loan Facility. The Company was released from the Odeon Term Loan Facility minimum liquidity requirement on October 20, 2022, following the complete repayment of the loan. There is no minimum liquidity requirement with the new Odeon Notes due 2027. See Note 13—Subsequent Events for more information. Following the expiration of the Extended Covenant Suspension Period ending March 31, 2023, the Company will be subject to the financial covenant under the Senior Secured Revolving Credit Facility beginning with the quarter ending June 30, 2023. The Company currently expects it will be able to comply with this financial covenant; however, the Company’s ability to comply will depend on projected increased levels of theatre attendance.

The 11.25% Odeon Term Loan Facility due 2023 (“Odeon Term Loan Facility”) was to mature on August 19, 2023, during the third fiscal quarter of the Company’s next calendar year. On October 20, 2022, the Company completely repaid the Odeon Term Loan Facility using existing cash and $363.0 million net proceeds from the issuance of new senior secured notes. Accordingly, the Company has classified $363.0 million of the Odeon Term Loan Facility as a long-term liability in the condensed consolidated balance sheets. The remaining $108.1 million of principal has been classified as a current liability. See Note 13—Subsequent Events for more information.

The Company may, at any time and from time to time, seek to retire or purchase its outstanding debt through cash purchases and/or exchanges for equity or debt, in open-market purchases, privately negotiated transactions or otherwise. Such repurchases or exchanges, if any, will be upon such terms and at such prices as it may determine, and will depend on prevailing market conditions, its liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.

The Company received rent concessions provided by the lessors that aided in mitigating the economic effects of COVID-19 during the pandemic. These concessions primarily consisted of rent abatements and the deferral of rent payments. As a result, deferred lease amounts were approximately $195.8 million as of September 30, 2022. Including repayments of deferred lease amounts, the Company’s cash expenditures for rent increased significantly during the nine months ended September 30, 2022, compared to the nine months ended September 30, 2021. See Note 2—Leases for a summary of the estimated future repayment terms for the deferred lease amounts due to COVID-19 and also a summary of the estimated future repayment terms for the minimum operating lease and finance lease amounts.

AMC Preferred Equity Units. On August 4, 2022, the Company announced that its Board of Directors declared a special dividend of one AMC Preferred Equity Unit (an “AMC Preferred Equity Unit”) for each share of Class A common stock outstanding at the close of business on August 15, 2022, the record date. The dividend was paid at the close of business on August 19, 2022 to investors who held Class A common stock as of August 22, 2022, the ex-dividend date.

Each AMC Preferred Equity Unit is a depositary share and represents an interest in one one-hundredth (1/100th) of a share of Series A Convertible Participating Preferred Stock evidenced by a depositary receipt pursuant to a deposit agreement. The Company has 50,000,000 Preferred Stock shares authorized, 10,000,000 of which have currently

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been allocated and 5,195,206 have been issued under the depositary agreement as Series A Convertible Participating Preferred Stock, leaving 40,000,000 unallocated Preferred Stock shares. Each AMC Preferred Equity Unit is designed to have the same economic and voting rights as a share of Class A common stock. Trading of the AMC Preferred Equity Units on the New York Stock Exchange (the “NYSE”) began on August 22, 2022 under the ticker symbol “APE”. Due to the characteristics of the AMC Preferred Equity Units, the special dividend had the effect of a stock split pursuant to ASC 505-20-25-4. Accordingly, all references made to share, per share, or common share amounts in the accompanying consolidated financial statements and applicable disclosures include Class A common stock and AMC Preferred Equity Units and have been retroactively adjusted to reflect the effects of the special dividend as a stock split. See Note 7—Stockholders’ Equity and Note 12—Loss Per Share.

Use of estimates. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Principles of consolidation. The accompanying unaudited condensed consolidated financial statements include the accounts of AMC, as discussed above, and should be read in conjunction with the Company’s Annual Report on Form 10–K for the year ended December 31, 2021. The accompanying condensed consolidated balance sheet as of December 31, 2021, which was derived from audited financial statements, and the unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and in accordance with the instructions to Form 10–Q. Accordingly, they do not include all of the information and footnotes required by the accounting principles generally accepted in the United States of America for complete consolidated financial statements. In the opinion of management, these interim financial statements reflect all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the Company’s financial position and results of operations. All significant intercompany balances and transactions have been eliminated in consolidation. Due to the seasonal nature of the Company’s business and the recovery of the industry from the global COVID-19 pandemic, results for the nine months ended September 30, 2022 are not necessarily indicative of the results to be expected for the year ending December 31, 2022. The Company manages its business under two reportable segments for its theatrical exhibition operations, U.S. markets and International markets.

Cash and equivalents. At September 30, 2022, cash and cash equivalents for the U.S. markets and International markets were $583.5 million and $101.1 million respectively, and at December 31, 2021, cash and cash equivalents were $1,311.4 million and $281.1 million, respectively.

Restricted cash. Restricted cash is cash held in the Company’s bank accounts in International markets as a guarantee for certain landlords.

Accumulated other comprehensive loss. The following table presents the change in accumulated other comprehensive loss by component:


	Foreign
(In millions)	Currency		Pension Benefits		Total
Balance December 31, 2021	$	(19.0)	$	(9.1)	$	(28.1)
Other comprehensive income (loss)		(78.4)		0.3		(78.1)
Balance September 30, 2022	$	(97.4)	$	(8.8)	$	(106.2)

Accumulated depreciation and amortization. Accumulated depreciation was $2,716.4 million and $2,583.4 million at September 30, 2022 and December 31, 2021, respectively, related to property. Accumulated amortization of intangible assets was $42.1 million and $41.2 million at September 30, 2022 and December 31, 2021, respectively.

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Other expense (income). The following table sets forth the components of other expense (income):


	Three Months Ended				Nine Months Ended
(In millions)	September 30, 2022		September 30, 2021		September 30, 2022		September 30, 2021
Decreases related to contingent lease guarantees	$	(0.1)	$	—	$	(0.2)	$	(5.7)
Governmental assistance due to COVID-19 - International markets		(5.4)		(24.7)		(16.2)		(75.1)
Governmental assistance due to COVID-19 - U.S. markets		(1.6)		(0.4