United States Securities and Exchange Commission Washington, D.C
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Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (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, 2020 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 26-0303916 (State or other jurisdiction of (I.r.S. employer incorporation or organization) 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 Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. Number of shares Title of each class of common stock outstanding as of October 30, 2020 Class a common stock 85,624,174 51,769,784 Class B 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 42 Item 3. Quantitative and Qualitative Disclosures About Market Risk 78 Item 4. Controls and Procedures 79 PART II—OTHER INFORMATION Item 1. Legal Proceedings 79 Item 1A. Risk Factors 80 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 83 Item 3. Defaults Upon Senior Securities 84 Item 5. Other Information 84 Item 6. Exhibits 89 Signatures 92 2 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 September 30, September 30, September 30, September 30, (In millions, except share and per share amounts) 2020 2019 2020 2019 (unaudited) (unaudited) revenues admissions $ 62.9 $ 797.3 $ 631.8 $ 2,424.3 Food and beverage 29.1 420.0 317.6 1,281.3 other theatre 27.5 99.5 130.5 317.7 Total revenues 119.5 1,316.8 1,079.9 4,023.3 operating costs and expenses Film exhibition costs 26.6 416.8 298.5 1,264.6 Food and beverage costs 8.8 67.2 66.7 205.1 operating expense, excluding depreciation and amortization below 192.1 419.0 663.8 1,259.2 rent 214.3 238.7 676.2 726.6 General and administrative: merger, acquisition and other costs 1.0 4.7 3.0 11.2 other, excluding depreciation and amortization below 32.7 37.5 91.3 126.9 Depreciation and amortization 123.5 112.1 365.7 337.1 Impairment of long-lived assets, definite and indefinite-lived intangible assets and goodwill 195.9 — 2,047.8 — operating costs and expenses 794.9 1,296.0 4,213.0 3,930.7 operating income (loss) (675.4) 20.8 (3,133.1) 92.6 other expense (income): other expense (income) 125.0 (1.3) 145.3 5.1 Interest expense: Corporate borrowings 82.8 73.2 233.7 218.7 Finance lease obligations 1.4 1.8 4.5 6.0 non-cash nCm exhibitor services agreement 10.1 10.1 30.1 30.4 equity in (earnings) loss of non-consolidated entities 10.6 (7.5) 25.9 (24.2) Investment expense (income) (4.1) (0.5) 4.0 (18.7) Total other expense, net 225.8 75.8 443.5 217.3 Loss before income taxes (901.2) (55.0) (3,576.6) (124.7) Income tax provision (benefit) 4.6 (0.2) 66.7 10.9 net loss (905.8) (54.8) (3,643.3) (135.6) Less: net income (loss) attributable to noncontrolling interests — — — — net loss attributable to amC entertainment Holdings, Inc. $ (905.8) $ (54.8) $ (3,643.3) $ (135.6) Loss per share attributable to amC entertainment Holdings, Inc.'s common stockholders: Basic $ (8.41) $ (0.53) $ (34.56) $ (1.31) Diluted $ (8.41) $ (0.53) $ (34.56) $ (1.31) average shares outstanding: Basic (in thousands) 107,695 103,850 105,428 103,826 Diluted (in thousands) 107,695 103,850 105,428 103,826 See notes to Condensed Consolidated Financial Statements. 3 Table of Contents AMC ENTERTAINMENT HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, (In millions) 2020 2019 2020 2019 (unaudited) (unaudited) net loss $ (905.8) $ (54.8) $ (3,643.3) $ (135.6) other comprehensive income (loss): Unrealized foreign currency translation adjustments 11.4 (68.2) (26.8) (102.9) realized loss on foreign currency transactions reclassified into other expense — — — 0.6 Pension adjustments: realized net loss reclassified into other expense, net of tax 0.2 0.1 0.9 0.2 equity method investee's cash flow hedge: Unrealized net holding loss arising during the period — — — (0.1) other comprehensive income (loss) 11.6 (68.1) (25.9) (102.2) Total comprehensive loss (894.2) (122.9) (3,669.2) (237.8) Comprehensive income (loss) attributable to noncontrolling interests — — — — Comprehensive loss attributable to amC entertainment Holdings, Inc. $ (894.2) $ (122.9) $ (3,669.2) $ (237.8) See notes to Condensed Consolidated Financial Statements. 4 Table of Contents AMC ENTERTAINMENT HOLDINGS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (In millions, except share data) September 30, 2020 December 31, 2019 ASSETS Current assets: Cash and cash equivalents $ 417.9 $ 265.0 restricted cash 10.9 10.5 receivables, net 97.5 254.2 other current assets 82.3 143.4 Total current assets 608.6 673.1 Property, net 2,332.5 2,649.2 operating lease right-of-use assets, net 4,475.8 4,796.0 Intangible assets, net 164.5 195.3 Goodwill 2,874.4 4,789.1 Deferred tax asset, net 0.6 70.1 other long-term assets 419.8 503.0 Total assets $ 10,876.2 $ 13,675.8 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: accounts payable $ 376.9 $ 543.3 accrued expenses and other liabilities 268.9 324.6 Deferred revenues and income 400.9 449.2 Current maturities of corporate borrowings 20.0 20.0 Current maturities of finance lease liabilities 10.5 10.3 Current maturities of operating lease liabilities 511.0 585.8 Total current liabilities 1,588.2 1,933.2 Corporate borrowings 5,803.8 4,733.4 Finance lease liabilities 84.2 89.6 operating lease liabilities 4,909.4 4,913.8 exhibitor services agreement 542.0 549.7 Deferred tax liability, net 43.4 46.0 other long-term liabilities 240.6 195.9 Total liabilities 13,211.6 12,461.6 Commitments and contingencies Stockholders’ equity (deficit): amC entertainment Holdings, Inc.'s stockholders' equity: Class a common stock ($.01 par value, 524,173,073 shares authorized; 61,882,218 shares issued and 58,149,593 outstanding as of September 30, 2020; 55,812,702 shares issued and 52,080,077 outstanding as of December 31, 2019) 0.6 0.5 Class B common stock ($.01 par value, 51,769,784 shares authorized, issued and outstanding as of September 30, 2020 and December 31, 2019) 0.5 0.5 additional paid-in capital 2,125.0 2,001.9 Treasury stock (3,732,625 shares as of September 30, 2020 and December 31, 2019, at cost) (56.4) (56.4) accumulated other comprehensive loss (52.0) (26.1) accumulated deficit (4,387.8) (706.2) Total amC entertainment Holdings, Inc.'s stockholders’ equity (deficit) (2,370.1) 1,214.2 noncontrolling interests 34.7 — Total equity (deficit) (2,335.4) 1,214.2 Total liabilities and stockholders’ equity (deficit) $ 10,876.2 $ 13,675.8 See notes to Condensed Consolidated Financial Statements.