Fourth Quarter Highlights
- Total Revenues of $1.448 billion, up 2.4% from last year (up
3.2% in constant currency)
- Net Loss of $13.5 million
- Adjusted Net Income for basic earnings per share of $38.9
million, up 105.8% compared to last year
- Adjusted EBITDA of $269.1 million, up 11.6% (up 12.5% in
constant currency) after adjusting 2018 for ASC 842 impact
- Net cash provided by operating activities of $368.8 million, up
$144.4 million from last year
- Adjusted Free Cash Flow of $303.1 million, up $185.7 million
from last year after adjusting 2018 for cash flow classification
impact of ASC 842
- Total liquidity of $597 million, comprised of $265 million of
cash and $332 million of availability under revolving lines of
credit as of December 31, 2019.
- Consolidated average ticket price of $9.47, up 3.3% from last
year (up 4.0% in constant currency)
- Consolidated food and beverage revenue per patron of $4.74, up
2.4% from last year (up 2.8% in constant currency)
AMC Entertainment Holdings, Inc. (NYSE: AMC) (“AMC” or “the
Company”), today reported results for the fourth quarter and
year-ended December 31, 2019.
“We are very pleased to have delivered another quarter of strong
results to finish 2019. Despite the U.S. industry box office
declining 1.6% in the fourth quarter, AMC grew revenue 2.4%, and
Adjusted EBITDA 11.6%, year-over-year, after adjusting 2018 for the
non-cash accounting impact of ASC 842. These results, when combined
with our disciplined approach to capital expenditures, generated
approximately $303.1 million of adjusted free cash flow for the
fourth quarter of 2019. These impressive results illustrate the
power of customer engagement through the AMC platform, especially
from our A-List subscription program and AMC Stubs loyalty program
in the U.S., returns from our industry-leading recliner seating
investments both in the U.S. and overseas, as well as the strength
of our diversified geographic footprint,” said Adam Aron, CEO and
President of AMC.
Aron added, “In the fourth quarter, AMC once again vastly
outperformed the rest of the U.S. theatre industry, among other
metrics by a stunning 607 basis points on admissions revenue per
screen. It was the seventh consecutive quarter that AMC added
market share in the United States. Likewise, we generated record
fourth quarter food and beverage revenues per patron in both the
U.S. and international markets, as fourth quarter U.S. and
international food and beverage revenues per patron grew 2.5% and
7.8%, in constant currency, respectively.”
Key Financial Results (presented in
millions, except operating data)
Quarter Ended December
31,
Year Ended December
31,
2019
2018
Change
2019
2018
Change
GAAP Results*
Revenue
$
1,447.7
$
1,413.3
2.4
%
$
5,471.0
$
5,460.8
0.2
%
Net earnings (loss)
$
(13.5
)
$
170.6
$
(184.1
)
$
(149.1
)
$
110.1
$
(259.2
)
Net cash provided by operating
activities
$
368.8
$
224.4
64.3
%
$
579.0
$
523.2
10.7
%
Non-GAAP Results**
Total revenues (2019 constant currency
adjusted)
$
1,457.9
$
1,413.3
3.2
%
$
5,550.1
$
5,460.8
1.6
%
Adjusted EBITDA
$
269.1
$
264.1
1.9
%
$
771.4
$
929.2
(17.0
)
%
Adjusted EBITDA (2019 constant currency
adjusted; 2018 adjusted for ASC 842)
$
271.3
$
241.1
12.5
%
$
781.4
$
835.9
(6.5
)
%
Adjusted Free Cash Flow (2018 adjusted for
ASC 842)
$
303.1
$
117.4
$
185.7
$
358.5
$
240.6
$
117.9
Free cash flow (2018 Adjusted for ASC
842)
$
198.9
$
8.7
$
190.2
$
60.9
$
(110.7
)
$
171.6
Adjusted net earnings (loss) for basic
earnings per share
$
38.9
$
18.9
$
20.0
$
(112.1
)
$
12.5
$
(124.6
)
Operating Metrics
Attendance (in thousands)
92,563
94,063
(1.6
)
%
356,443
358,901
(0.7
)
%
U.S. markets attendance (in thousands)
62,319
65,194
(4.4
)
%
250,370
255,736
(2.1
)
%
International markets attendance (in
thousands)
30,244
28,869
4.8
%
106,073
103,165
2.8
%
Average screens
10,656
10,695
(0.4
)
%
10,669
10,696
(0.3
)
%
* Please refer to our form 10-K filed
today for a discussion of items included in GAAP net earnings
(loss).
** Please refer to the tables included
later in this press release for definitions and full
reconciliations of non-U.S. GAAP financial measures.
Selected Fourth Quarter Financial
Results
- Revenue: Fourth quarter total revenues were $1.448
billion, up 2.4% on a GAAP basis (up 3.2% in constant currency)
from the year-ago quarter. This reflects a 2.4% increase in
constant currency admissions revenue driven by strong U.S. average
ticket price growth of 6.4%, a 1.3% increase in constant currency
food and beverage revenue driven by solid constant currency food
and beverage revenue per patron growth of 2.8%, and a 15.4%
constant currency increase in other revenues, largely from
increases in online ticketing fees.
- Net Loss: Net loss was $13.5 million, as compared to net
income of $170.6 million in the year-ago quarter. The fourth
quarter loss includes approximately $84.3 million of expense
related to impairments of long-lived assets, the majority of which
is attributable to impairments of operating lease right-of-use
assets from the adoption of ASC 842, and approximately $9.6 million
of expense associated with the fair-value remeasurement of a
derivative liability and derivative asset related to the Company’s
Convertible Notes due 2024, offset by approximately $41.5 million
of income from a non-recurring tax benefit related to international
operations. Net income for the fourth quarter a year ago included
approximately $165.5 million of income related to the fair-value
remeasurement of a derivative liability and derivative asset
associated with the Company’s Convertible Notes due 2024.
- Adjusted Net Income: Adjusted net income for basic
earnings per share was $38.9 million, up 105.8% from the prior year
quarter. Adjusted net income normalizes results for the impact of
the fair-value remeasurement of the derivative liability and
derivative asset related to the Company’s Convertible Notes due
2024, the impact related to the impairment of long-lived assets,
and the benefit of the non-recurring international tax credit in
each period presented.
- Adjusted EBITDA: Total Adjusted EBITDA was $269.1
million. Total Adjusted EBITDA grew 11.6% year-over-year (up 12.5%
in constant currency), after adjusting the year-ago quarter for
$23.0 million in non-cash accounting impact of ASC 842 for
comparability. U.S. markets Adjusted EBITDA increased 18.4%, while
International markets Adjusted EBITDA was unchanged (increased 2.7%
in constant currency) after adjusting the year ago quarter for the
non-cash accounting impact of ASC 842.
- Cash Flow: Net cash provided by operating activities was
$368.8 million growing 75.5% or $158.7 million after adjusting 2018
for the $14.3 million cash flow classification impact of ASC 842
from financing activities to operating activities. Adjusted Free
Cash Flow was $303.1 million and Free Cash Flow was $198.9 million,
up $185.7 million and $190.2 million, respectively, compared to
last year, after adjusting for the cash flow classification impact
of ASC 842.
Selected Full-Year Financial
Results
- Revenue: Full-year total revenues were a record $5.47
billion, up 0.2% on a GAAP basis (up 1.6% on a constant currency
basis) from last year. Results were driven by strength in food and
beverage revenues, up 2.9% (up 4.1% in constant currency) from a
combination of higher food and beverage revenues per patron and
increases in international attendance, and by increases in other
revenues which were up 11.3% (up 13.6% in constant currency),
primarily the result of higher online ticket fee revenues.
- Net Loss: Net loss was $149.1 million, compared with net
earnings of $110.1 million last year. The 2019 net loss included an
increase in impairments of long-lived assets of $70.5 million,
primarily related to the implementation of ASC 842, and an increase
in income tax benefit of $41.5 million related to our international
operations. The 2018 net earnings included approximately $111.4
million of income related to the fair-value remeasurement of a
derivative liability and derivative asset.
- Adjusted Net Income (loss): Adjusted net loss for basic
loss per share was $112.1 million compared to adjusted net income
of $12.5 million a year ago. Adjusted net income normalizes results
for the impact of the fair-value remeasurement of the derivative
liability and derivative asset related to the Company’s Convertible
Notes due 2024, the impact related to the impairment of long-lived
assets, and the benefit of the non-recurring international tax
credit in each period presented.
- Adjusted EBITDA: Total Adjusted EBITDA was $771.4
million. Total Adjusted EBITDA declined 7.7% year-over-year (down
6.5% in constant currency), after adjusting the prior year for
$93.3 million in non-cash accounting impact of ASC 842. 2018
Adjusted EBITDA benefited from a one-time $35 million reduction in
rent expense related to a lease modification.
- Cash Flow: Net cash provided by operating activities was
$579.0 million, up 24.4% or $113.4 million after adjusting 2018 for
the $57.6 million cash flow classification impact of ASC 842 from
financing activities to operating activities. Adjusted Free Cash
Flow was $358.5 million and Free Cash Flow was $60.9 million, up
$117.9 million and $171.6 million, respectively, compared to last
year, after adjusting 2018 for the cash flow classification impact
of ASC 842.
Other Key Highlights
- Industry Performance: In the fourth quarter of 2019, the
U.S. industry box office generated $2.9 billion in admissions sales
(a 1.6% year-over-year decline on a 5.3% decrease in attendance and
a 3.8% increase in average ticket price). AMC outperformed the U.S.
industry on both attendance per screen and admissions revenue per
screen by approximately 230 and 490 basis points, respectively, and
after excluding AMC from the U.S. industry statistics, that
outperformance grew to approximately 285 and 610 basis points,
respectively. The fourth quarter of 2019 marks the seventh
consecutive quarter of attendance per screen outperformance and the
fourth consecutive quarter of admissions revenue outperformance
versus the industry. Internationally, the industry box office in
countries served by Odeon grew 9.7%, in constant currency, or 6.1%,
weighted for the countries in which we operate. The industry box
office across Europe benefited from a more family friendly film
slate compared to a year ago, offset by less local content. The
2019 fourth quarter marked the second highest fourth quarter
attendance ever for AMC, both in the U.S. and International
markets.
- AMC Stubs A-List Program: Since its launch in June 2018,
the A-List tier of our successful AMC Stubs loyalty program has
attracted more than 900,000 subscribers. During the first quarter
of 2019, AMC implemented a 10% membership price increase in ten
states and a 20% price increase in five states. Based on an average
monthly frequency of 2.4x for our A-List members in the fourth
quarter, their associated full-price bring-along guest attendance,
their food and beverage spend and the price increases in the first
quarter, we believe the A-List program was profitable in the fourth
quarter and year ended December 31, 2019 compared to our estimated
results if the program had not existed. A-List membership levels
and contributions continue to exceed our expectations.
- Circuit Update: As of December 31, 2019, AMC owned,
operated, or had interests in 636 theatres in the U.S. and 368
theatres internationally. In the fourth quarter, the Company added
premium recliner seating to 20 theatres, including 10 in the U.S.
and 10 internationally, bringing the U.S. penetration of theatres
offering recliner seating to approximately 81% of addressable
theatres, and approximately 19% of addressable European theatres.
Premium large format offerings continue to attract guests by
delivering the best sight and sound experience, and the Company
added nine new Dolby screens, four new IMAX screens and three new
Prime at AMC screens during the quarter.
- New Lease Accounting Standard (ASC 842): The Company
adopted ASC 842 on January 1, 2019. As previously disclosed, ASC
842 is an accounting change with no impact on AMC’s business or
total cash flows. While this new rule introduces certain
presentation changes to all three of AMC’s core financial
statements, it does not affect day-to-day operations or cash
generation. As a result of adopting ASC 842, the key changes are as
follows: (i) the Company’s consolidated balance sheet now includes
operating lease right-of-use assets and operating lease liabilities
of $4.8 billion and $5.5 billion, respectively, at December 31,
2019; (ii) the Company’s income statement for the three months
ended December 31, 2019 includes additional rent expense of $28.9
million, a decline in depreciation and amortization of $24.0
million and a decline in interest expense of $6.9 million; and
(iii) the Company’s cash flows provided by operating activities for
the twelve months ended December 31, 2019 is lowered by $56.0
million, offset by an equivalent increase in the Company’s cash
flows provided by financing activities.
Conference Call / Webcast
Information
The Company will host a conference call via webcast for
investors and other interested parties beginning at 4:00 p.m.
CST/5:00 p.m. EST on Thursday, February 27, 2020. To listen to the
conference call via the internet, please visit 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.
Participants may also listen to the call by dialing (877)
407-3982, or (201) 493-6780 for international participants. An
archive of the webcast will be available on the Company’s website
after the call for a limited time.
About AMC Entertainment Holdings, Inc.
AMC is the largest movie exhibition company in the United
States, the largest in Europe and the largest throughout the world
with approximately 1,000 theatres and 11,000 screens across the
globe. AMC has propelled innovation in the exhibition industry by:
deploying its Signature power-recliner seats; delivering enhanced
food and beverage choices; generating greater guest engagement
through its loyalty and subscription programs, web site and mobile
apps; offering premium large format experiences and playing a wide
variety of content including the latest Hollywood releases and
independent programming. AMC operates among the most productive
theatres in the United States' top markets, having the #1 or #2
market share positions in 21 of the 25 largest metropolitan areas
of the United States. AMC is also #1 or #2 in market share in 12 of
the 15 countries it serves in North America, Europe and the Middle
East. For more information, visit www.amctheatres.com.
Website Information
This press release, 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 email alerts.
Forward-Looking Statements
This press release 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,” “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
Stubs A-List may not meet anticipated revenue projections which
could negatively impact projected operating results; increased use
of alternative film delivery methods or other forms of
entertainment; shrinking exclusive theatrical release windows;
general and international economic, political, regulatory and other
risks, including risks related to the United Kingdom’s exit from
the European Union or widespread health emergencies, such as the
novel coronavirus or other pandemics or epidemics; risks and
uncertainties relating to AMC’s significant indebtedness; AMC’s
ability to execute cost cutting and revenue enhancement
initiatives; box office performance; limitations on the
availability of capital; certain covenants in the agreements that
govern AMC’s indebtedness may limit its ability to take advantage
of certain business opportunities;; 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 interest expense deductions,
interest deduction carry forwards and net operating loss
carryforwards to reduce its future tax liability or valuation
allowances taken with respect to deferred tax assets; our ability
to recognize certain international deferred tax assets which do not
have a valuation allowance recorded; review by antitrust
authorities in connection with acquisition opportunities; risks
relating to the incurrence of legal liability including costs
associated with recently filed class action lawsuits; 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 reports on Forms
10-K and Form 10-Q filed with the SEC, 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.
AMC Entertainment Holdings,
Inc.
Consolidated Statements of
Operations
For the Calendar Periods Ended December
31, 2019 and December 31, 2018
(dollars in millions, except share and per
share data)
(unaudited)
Quarter Ended
Year Ended
December 31,
December 31,
2019
2018
2019
2018
Revenues
Admissions
$
877.0
$
862.3
$
3,301.3
$
3,385.0
Food and beverage
438.3
435.1
1,719.6
1,671.5
Other theatre
132.4
115.9
450.1
404.3
Total revenues
1,447.7
1,413.3
5,471.0
5,460.8
Operating costs and expenses
Film exhibition costs
434.5
433.5
1,699.1
1,710.2
Food and beverage costs
73.6
68.9
278.7
270.9
Operating expense, excluding depreciation
and amortization below
427.4
417.8
1,686.6
1,654.7
Rent
241.2
204.7
967.8
797.8
General and administrative:
Merger, acquisition and other costs
4.3
4.2
15.5
31.3
Other, excluding depreciation and
amortization below
26.1
43.7
153.0
179.3
Depreciation and amortization
112.9
139.4
450.0
537.8
Impairment of long-lived assets
84.3
13.8
84.3
13.8
Operating costs and expenses
1,404.3
1,326.0
5,335.0
5,195.8
Operating income
43.4
87.3
136.0
265.0
Other expense (income):
Other expense (income)
8.3
(165.6
)
13.4
(108.1
)
Interest expense:
Corporate borrowings
74.1
74.1
292.8
262.3
Capital and financing lease
obligations
1.6
9.0
7.6
38.5
Non-cash NCM exhibitor services
agreement
10.0
10.3
40.4
41.5
Equity in earnings of non-consolidated
entities
(6.4
)
(12.7
)
(30.6
)
(86.7
)
Investment expense (income)
2.7
1.2
(16.0
)
(6.2
)
Total other expense
90.3
(83.7
)
307.6
141.3
Earnings (loss) before income taxes
(46.9
)
171.0
(171.6
)
123.7
Income tax provision (benefit)
(33.4
)
0.4
(22.5
)
13.6
Net earnings (loss)
$
(13.5
)
$
170.6
$
(149.1
)
$
110.1
Diluted earnings (loss) per share
$
(0.13
)
$
0.43
$
(1.44
)
$
0.41
Average shares outstanding diluted (in
thousands)
103,850
135,450
103,832
130,105
Consolidated Balance Sheet Data (at
period end):
(dollars in millions)
(unaudited)
As of
As of
December 31, 2019
December 31, 2018
Cash and cash equivalents
$
265.0
$
313.3
Corporate borrowings
4,753.4
4,723.0
Other long-term liabilities
195.9
963.1
Finance lease liabilities
99.9
560.2
Stockholders' equity
1,214.2
1,397.6
Total assets
13,675.8
9,495.8
Consolidated Other Data:
(in millions, except operating data)
(unaudited)
Quarter Ended
Year Ended
December 31,
December 31,
Consolidated
2019
2018
2019
2018
Net cash provided by operating
activities
$
368.8
$
224.4
$
579.0
$
523.2
Net cash used in investing activities
$
(167.7
)
$
(202.9
)
$
(516.1
)
$
(317.2
)
Net cash used in financing activities
$
(40.0
)
$
(39.5
)
$
(112.9
)
$
(194.8
)
Adjusted free cash flow
$
303.1
$
131.7
$
358.5
$
298.2
Free cash flow
$
198.9
$
23.0
$
60.9
$
(53.1
)
Capital expenditures
$
(169.9
)
$
(201.4
)
$
(518.1
)
$
(576.3
)
Screen additions
47
43
85
89
Screen acquisitions
6
—
70
39
Screen dispositions
29
34
210
211
Construction openings, net
72
111
5
5
Average screens
10,656
10,695
10,669
10,696
Number of screens operated
11,041
11,091
11,041
11,091
Number of theatres operated
1,004
1,006
1,004
1,006
Screens per theatre
11.0
11.0
11.0
11.0
Attendance (in thousands)
92,563
94,063
356,443
358,901
Segment Other Data:
(in millions, except per patron amounts
and operating data)
(unaudited)
Quarter Ended
Year Ended
December 31,
December 31,
2019
2018
2019
2018
Other operating data:
Attendance (patrons, in
thousands):
U.S. markets
62,319
65,194
250,370
255,736
International markets
30,244
28,869
106,073
103,165
Consolidated
92,563
94,063
356,443
358,901
Average ticket price (in
dollars):
U.S. markets
$
9.85
$
9.26
$
9.54
$
9.55
International markets
$
8.69
$
8.96
$
8.61
$
9.15
Consolidated
$
9.47
$
9.17
$
9.26
$
9.43
Food and beverage revenues per patron
(in dollars):
U.S. markets
$
5.33
$
5.20
$
5.38
$
5.17
International markets
$
3.51
$
3.33
$
3.50
$
3.40
Consolidated
$
4.74
$
4.63
$
4.82
$
4.66
Average Screen Count (month end
average):
U.S. markets
7,998
8,014
8,000
8,028
International markets
2,658
2,681
2,669
2,668
Consolidated
10,656
10,695
10,669
10,696
Segment Information:
(unaudited, in millions)
Quarter Ended
Year Ended
December 31,
December 31,
2019
2018
2019
2018
Revenues
U.S. markets
$
1,024.1
$
1,006.1
$
4,023.2
$
4,013.2
International markets
423.6
407.2
1,447.8
1,447.6
Consolidated
$
1,447.7
$
1,413.3
$
5,471.0
$
5,460.8
Adjusted EBITDA
U.S. markets
$
179.8
$
164.9
$
575.6
$
700.5
International markets
89.3
99.2
195.8
228.7
Consolidated
$
269.1
$
264.1
$
771.4
$
929.2
Capital Expenditures
U.S. markets
$
125.5
$
130.7
$
369.4
$
395.6
International markets
44.4
70.7
148.7
180.7
Consolidated
$
169.9
$
201.4
$
518.1
$
576.3
Reconciliation of Adjusted EBITDA and
Adjusted EBITDA Margin:
(dollars in millions)
(unaudited)
Quarter Ended
Year Ended
December 31,
December 31,
2019
2018
2019
2018
Net earnings (loss)
$
(13.5
)
$
170.6
$
(149.1
)
$
110.1
Plus:
Income tax provision (benefit)
(33.4
)
0.4
(22.5
)
13.6
Interest expense
85.7
93.4
340.8
342.3
Depreciation and amortization
112.9
139.4
450.0
537.8
Impairment of long-lived assets
84.3
13.8
84.3
13.8
Certain operating expenses (2)
4.7
7.8
14.8
24.0
Equity in earnings of non-consolidated
entities (3)
(6.4
)
(12.7
)
(30.6
)
(86.7
)
Cash distributions from non-consolidated
entities (4)
18.8
4.3
35.8
35.2
Attributable EBITDA (5)
1.2
3.6
5.0
7.3
Investment expense (income)
2.7
1.2
(16.0
)
(6.2
)
Other expense (income) (6)
8.7
(165.9
)
13.3
(108.2
)
Non-cash rent - purchase accounting
(7)
6.2
—
25.7
—
General and administrative
expense—unallocated:
Merger, acquisition and other costs
(8)
4.3
4.2
15.5
31.3
Stock-based compensation expense (credit)
(9)
(7.1
)
4.0
4.4
14.9
Adjusted EBITDA (1)
$
269.1
$
264.1
$
771.4
$
929.2
Adjusted EBITDA margin (1)
18.6
%
18.7
%
14.1
%
17.0
%
Total revenues
$
1,447.7
$
1,413.3
$
5,471.0
$
5,460.8
Net earnings (loss) margin (10)
-0.9
%
12.1
%
-2.7
%
2.0
%
Rent
$
241.2
$
204.7
$
967.8
$
797.8
1)
We present Adjusted EBITDA and Adjusted EBITDA margin as
supplemental measures of our performance. We define Adjusted EBITDA
as net earnings (loss) plus (i) income tax provision (benefit),
(ii) interest expense and (iii) depreciation and amortization, as
further adjusted to eliminate the impact of certain items that we
do not consider indicative of our ongoing operating performance and
to include attributable EBITDA from equity investments in theatre
operations in international markets and any cash distributions of
earnings from other equity method investees. These further
adjustments are itemized above. You are encouraged to evaluate
these adjustments and the reasons we consider them appropriate for
supplemental analysis. We define Adjusted EBITDA margin as Adjusted
EBITDA divided by total revenues. In evaluating Adjusted EBITDA,
you should be aware that in the future we may incur expenses that
are the same as or similar to some of the adjustments in this
presentation. Our presentation of Adjusted EBITDA and Adjusted
EBITDA margin should not be construed as an inference that our
future results will be unaffected by unusual or non-recurring
items. Adjusted EBITDA and Adjusted EBITDA margin are non-U.S. GAAP
financial measures commonly used in our industry and should not be
construed as an alternative to net earnings (loss) as an indicator
of operating performance (as determined in accordance with U.S.
GAAP). Adjusted EBITDA and Adjusted EBITDA margin may not be
comparable to similarly titled measures reported by other
companies. We have included Adjusted EBITDA and Adjusted EBITDA
margin because we believe they provide management and investors
with additional information to measure our performance and estimate
our value.
Adjusted EBITDA has important limitations as an analytical tool,
and you should not consider it 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:
- does not reflect our capital expenditures, future requirements
for capital expenditures or contractual commitments;
- does not reflect changes in, or cash requirements for, our
working capital needs;
- does not reflect the significant interest expenses, or the cash
requirements necessary to service interest or principal payments,
on our debt;
- excludes income tax payments that represent a reduction in cash
available to us;
- does not reflect any cash requirements for the assets being
depreciated and amortized that may have to be replaced in the
future; and
- does not reflect the impact of divestitures that were required
in connection with recently completed acquisitions.
2)
Amounts represent preopening expense related to temporarily
closed screens under renovation, theatre and other closure expense
for the permanent closure of screens including the related
accretion of interest, non-cash deferred digital equipment rent
expense, and disposition of assets and other non-operating gains or
losses included in operating expenses. The Company has excluded
these items as they are non-cash in nature, include components of
interest cost for the time value of money or are non-operating in
nature.
3)
For the three and twelve months ended December 31, 2019, the
Company recorded $4.3 million and $25.4 million, respectively, in
earnings from DCIP. For the twelve months ended December 31, 2018,
the Company recorded equity in earnings related to its sale of all
remaining NCM units of $28.9 million and a gain of $30.1 million
related to the Screenvision merger. Equity in earnings of
non-consolidated entities also includes loss on the surrender
(disposition) of a portion of the Company’s investment in NCM of
$1.1 million during the twelve months ended December 31, 2018.
Equity in earnings of non-consolidated entities for the twelve
months ended December 31, 2018 includes a lower of carrying value
impairment loss on the held-for-sale portion of NCM of $16.0
million.
4)
Includes U.S. non-theatre distributions from equity method
investments and International non-theatre distributions from equity
method investments to the extent received. The Company believes
including cash distributions is an appropriate reflection of the
contribution of these investments to its operations.
5)
Attributable EBITDA includes the EBITDA from minority equity
investments in theatre operators in certain international markets.
See below for a reconciliation of the Company’s equity (earnings)
loss of non-consolidated entities to attributable EBITDA. Because
these equity investments are in theatre operators in regions where
the Company holds a significant market share, the Company believes
attributable EBITDA is more indicative of the performance of these
equity investments and management uses this measure to monitor and
evaluate these equity investments. The Company also provides
services to these theatre operators including information
technology systems, certain on-screen advertising services and our
gift card and package ticket program. As these investments relate
only to our Nordic acquisition, the second quarter of 2017
represents the first time the Company has made this adjustment and
does not impact prior historical presentations of Adjusted
EBITDA.
Reconciliation of Attributable
EBITDA
(dollars in millions)
(Unaudited)
Quarter Ended
Year Ended
December 31,
December 31,
2019
2018
2019
2018
Equity in earnings of non-consolidated
entities
$
(6.4
)
$
(12.7
)
$
(30.6
)
$
(86.7
)
Less:
Equity in earnings of non-consolidated
entities excluding international theatre JV's
(6.0
)
(9.8
)
(29.2
)
(81.9
)
Equity in earnings of International
theatre JV's
0.4
2.9
1.4
4.8
Income tax provision
0.2
0.2
0.4
0.4
Investment income
(0.1
)
(0.2
)
(0.7
)
(0.5
)
Interest expense
(0.1
)
—
—
—
Depreciation and amortization
0.6
0.7
3.4
2.6
Other expense
0.2
—
0.5
—
Attributable EBITDA
$
1.2
$
3.6
$
5.0
$
7.3
6)
Other expense (income) for the three months ended December 31,
2019 includes income due to the increase in fair value of the
derivative asset related to the Company’s Convertible Notes due
2024 of $18.0 million, expense as a result of the decrease in fair
value of its derivative liability of $8.6 million, and foreign
currency transaction losses of $0.8 million. Other expense for the
twelve months ended December 31, 2019 was primarily due to expense
related to modifications of term loans income of $16.6 million,
foreign currency transaction losses of $1.5 million, non-operating
net periodic benefit cost of $1.2 million, the decrease in fair
value of our derivative asset for the contingent call option
related to the Class B common stock purchase and cancellation
agreement of $17.7 million, partially offset by income a decrease
in fair value of the derivative liability related to the Company’s
Convertible Notes due 2024 of $23.5 million. During the twelve
months ended December 31, 2018, we recorded gain of $111.4 million
as a result of a decrease in fair value of our derivative liability
and an increase in fair value of our derivative asset for the
Convertible Notes due 2024.
7)
Reflects amortization of certain intangible assets reclassified
from depreciation and amortization to rent expense, due to the
adoption of ASC 842.
8)
Merger, acquisition and transition costs are excluded as they
are non-operating in nature.
9)
Stock-based compensation expense is non-cash or non-recurring
expense included in General and Administrative: Other.
10)
Net earnings (loss) margin is defined as net earnings (loss)
divided by total revenues.
Reconciliation of Adjusted Free Cash
Flow and Free Cash Flow (1)
(dollars in millions)
(unaudited)
Quarter Ended
Year Ended
December 31,
December 31,
2019
2018
2019
2018
Net cash provided by operating
activities
$
368.8
$
224.4
$
579.0
$
523.2
Plus:
Merger, acquisition and other costs(2)
4.3
4.2
15.5
31.3
Less:
Maintenance capital expenditures(3)
52.5
69.4
129.5
128.7
Landlord contributions(5)
17.5
27.5
106.5
127.6
Adjusted free cash flow (1)
$
303.1
$
131.7
$
358.5
$
298.2
Quarter Ended
Year Ended
December 31,
December 31,
2019
2018
2019
2018
Net cash provided by operating
activities
$
368.8
$
224.4
$
579.0
$
523.2
Less: total capital expenditures
(169.9
)
(201.4
)
(518.1
)
(576.3
)
Free cash flow (1)
$
198.9
$
23.0
$
60.9
$
(53.1
)
Reconciliation of Capital
Expenditures:
Capital expenditures
Growth capital expenditures(4)
$
141.4
$
147.9
$
388.2
$
459.8
Maintenance capital expenditures(3)
52.5
69.4
129.5
128.7
Change in construction payables(6)
(24.0
)
(15.9
)
0.4
(12.2
)
Total capital expenditures
$
169.9
$
201.4
$
518.1
$
576.3
AMC is disclosing non-U.S. GAAP financial measures “Adjusted
Free Cash Flow” and “Free Cash Flow” as measures of our liquidity.
We believe these measures are indicative of our ability to generate
cash in excess of maintenance capital expenditures and certain
other non-operating costs and for other uses including repayment of
our corporate borrowings and generating cash for growth
opportunities.
1)
We present “Adjusted Free Cash Flow” and “Free Cash Flow” as
supplemental measures of our liquidity. Management uses Adjusted
Free Cash Flow measure and we believe it is helpful to investors as
an indication of our ability to generate cash in-excess-of
maintenance capital expenditures and certain other non-operating
and costs and for other uses including repayment of our corporate
borrowings and generating cash for growth opportunities. Adjusted
Free Cash Flow is a non-U.S. GAAP financial measure and is defined
as net cash provided by operating activities, plus merger,
acquisition and other costs, less maintenance capital expenditures
and landlord contributions. Adjusted free cash flow does not
represent the residual cash flow available for discretionary
expenditures. It should be considered in addition to, not a
substitute for or superior to net cash provided by operating
activities.
Free cash flow is an important financial
measure for use in evaluating our liquidity, as it measures our
ability to generate additional cash from our business operations.
Free cash flow should be considered in addition to, rather than as
a substitute for, net cash provided by operating activities as a
measure of our liquidity. Additionally, our definition of free cash
flow is limited and does not represent residual cash flows
available for discretionary expenditures due to the fact that the
measure does not deduct the payments required for debt service and
other obligations or payments made for business acquisitions.
Therefore, we believe it is important to view free cash flow as
supplemental to our entire statement of cash flows.
The term adjusted free cash flow and free
cash flow may differ from similar measures reported by other
companies. Also provided is a reconciliation of Capital
Expenditures disclosed in the Consolidated Statement of Cash Flows
made up of growth capital expenditures, maintenance capital
expenditures and change in construction payables as further
explanation of the components of adjusted free cash flow.
2)
Merger, acquisition and other costs are excluded as they are
non-operating.
3)
Maintenance capital expenditures are amounts required to keep
our existing theatres in compliance with regulatory requirements
and in a sustainable good operating condition, including
expenditures for repair of HVAC, sight and sound systems,
compliance with ADA requirements and technology upgrades of
existing systems.
4)
Growth capital expenditures are investments that enhance the
guest experience and grow revenues and profits and include
initiatives such as theatre remodels, acquisitions, newly built
theatres, premium large formats, enhanced food and beverage
offerings and service models and technology that enable
efficiencies and additional revenue opportunities. We did not
deduct these from adjusted free cash flow because they are
discretionary, and the related benefits may not be fully reflected
in our net cash provided by operating activities.
5)
Landlord contributions represent reimbursements in our strategic
growth initiatives by our landlords.
6)
Change in construction payables are changes in amounts accrued
for capital expenditures and are not deducted or added back to
Adjusted Free Cash Flow and Free Cash Flow as they fluctuate
significantly from period to period based on the timing of actual
payments.
Reconciliation of Consolidated Adjusted
EBITDA and Adjusted Free Cash Flow Under ASC 842
(dollars in millions)
(Unaudited)
Quarter Ended December
31,
2019
2018
Change
Total Adjusted EBITDA
Total Adjusted EBITDA (as reported)
$
269.1
$
264.1
1.9
%
Certain adjustments to rent expense
(a)
—
(23.0
)
Total Adjusted EBITDA (post-ASC 842)
269.1
241.1
11.6
%
Impact of ASC 842 on Adjusted EBITDA
$
(22.7
)
$
(23.0
)
(a) The adjustments for certain rent
expense items include cash rent for legacy build-to-suit financing
lease obligations of $21.2 million and deferred rent related to
deferred gain amortization of $1.8 million.
Year Ended December
31,
2019
2018
Change
Total Adjusted EBITDA
Total Adjusted EBITDA (as reported)
$
771.4
$
929.2
(17.0
)
%
Certain adjustments to rent expense
(a)
—
(93.3
)
Total Adjusted EBITDA (post-ASC 842)
771.4
835.9
(7.7
)
%
Impact of ASC 842 on Adjusted EBITDA
$
(90.8
)
$
(93.3
)
(a) The adjustments for certain rent
expense items include cash rent for legacy build-to-suit financing
lease obligations of $87.1 million and deferred rent related to
deferred gain amortization of $6.2 million.
Reconciliation of net earnings to
Adjusted EBITDA for 2018 (adjusted for ASC 842 (see footnotes
above):
(dollars in millions)
Quarter Ended
Year Ended
December 31,
December 31,
2018
2018
Net earnings
$
182.9
127.3
Plus:
Income tax provision
0.4
13.6
Interest expense
86.5
312.8
Depreciation and amortization
115.4
432.1
Certain operating expenses (2)
7.8
24.0
Equity in earnings of non-consolidated
entities (3)
(12.7
)
(86.7
)
Cash distributions from non-consolidated
entities (4)
4.3
35.2
Attributable EBITDA (5)
3.6
7.3
Investment income
1.2
(6.2
)
Other income (6)
(165.9
)
(108.2
)
Non-cash rent - purchase accounting
(7)
9.4
38.5
General and administrative
expense—unallocated:
Merger, acquisition and other costs
(8)
4.2
31.3
Stock-based compensation expense (9)
4.0
14.9
Adjusted EBITDA (1)
$
241.1
$
835.9
Quarter Ended December
31,
2019
2018
Change
Adjusted free cash flow
Adjusted free cash flow (as reported)
$
303.1
$
131.7
*
%
Adjustment to cash flow used in operating
activities (a)
—
(14.3
)
Adjusted free cash flow (post-ASC 842)
303.1
117.4
*
%
Impact of ASC 842 on Adjusted free cash
flow
$
(14.0
)
$
(14.3
)
Quarter Ended December
31,
2019
2018
Change
Free cash flow
Free cash flow (as reported)
$
198.9
$
23.0
*
%
Adjustment to cash flow used in operating
activities (a)
—
(14.3
)
Free cash flow (post-ASC 842)
198.9
8.7
*
%
Impact of ASC 842 on Free cash flow
$
(14.0
)
$
(14.3
)
(a) Adjustments for principal payments for
build-to-suit financing lease obligations that previously were
reported in net cash used in financing activities.
* Increase over 100%.
Year Ended December
31,
2019
2018
Change
Adjusted free cash flow
Adjusted free cash flow (as reported)
$
358.5
$
298.2
20.2
%
Adjustment to cash flow used in operating
activities (a)
—
(57.6
)
Adjusted free cash flow (post-ASC 842)
358.5
240.6
49.0
%
Impact of ASC 842 on Adjusted free cash
flow
$
(56.0
)
$
(57.6
)
Year Ended December
31,
2019
2018
Change
Free cash flow
Free cash flow (as reported)
$
60.9
$
(53.1
)
*
%
Adjustment to cash flow used in operating
activities (a)
—
(57.6
)
Free cash flow (post-ASC 842)
60.9
(110.7
)
*
%
Impact of ASC 842 on Free cash flow
$
(56.0
)
$
(57.6
)
(a) Adjustments for principal payments for
build-to-suit financing lease obligations that previously were
reported in net cash used in financing activities.
Select Consolidated Constant Currency
financial data (see Note 10):
Quarter and Year Ended December 31,
2019
(dollars in millions) (unaudited)
Quarter Ended
Year Ended
December 31, 2019
December 31, 2019
Constant Currency (10)
Constant Currency (10)
US
International
Total
US
International
Total
Revenues
Admissions
$
614.1
$
269.3
$
883.4
$
2,388.2
$
963.2
$
3,351.4
Food and beverage
332.3
108.5
440.8
1,348.0
391.5
1,739.5
Other theatre
77.7
56.0
133.7
287.0
172.2
459.2
Total revenues
1,024.1
433.8
1,457.9
4,023.2
1,526.9
5,550.1
Operating costs and expenses
Film exhibition costs
322.3
115.0
437.3
1,311.5
409.0
1,720.5
Food and beverage costs
48.2
25.9
74.1
193.8
89.4
283.2
Operating expense
305.3
125.0
430.3
1,215.5
497.2
1,712.7
Rent
177.1
65.8
242.9
708.2
274.1
982.3
General and administrative:
Merger, acquisition and other costs
0.7
3.6
4.3
6.5
9.5
16.0
Other
12.0
14.3
26.3
86.4
70.4
156.8
Depreciation and amortization
88.2
25.2
113.4
340.4
115.9
456.3
Impairment of long-lived assets
76.6
7.7
84.3
76.6
7.7
84.3
Operating costs and expenses
1,030.4
382.5
1,412.9
3,938.9
1,473.2
5,412.1
Operating income (loss)
(6.3
)
51.3
45.0
84.3
53.7
138.0
Other expense (income)
8.7
(0.4
)
8.3
13.3
0.2
13.5
Interest expense
83.9
2.1
86.0
332.6
8.9
341.5
Equity in earnings of non-consolidated
entities
(5.9
)
(0.4
)
(6.3
)
(29.1
)
(1.7
)
(30.8
)
Investment expense (income)
2.7
—
2.7
(3.0
)
(14.8
)
(17.8
)
Total other expense
89.4
1.3
90.7
313.8
(7.4
)
306.4
Loss before income taxes
(95.7
)
50.0
(45.7
)
(229.5
)
61.1
(168.4
)
Income tax provision (benefit)
3.0
(37.4
)
(34.4
)
11.9
(35.1
)
(23.2
)
Net income (loss)
$
(98.7
)
$
87.4
$
(11.3
)
$
(241.4
)
$
96.2
$
(145.2
)
Attendance
62,319
30,244
92,563
250,370
106,073
356,443
Average Screens
7,998
2,658
10,656
8,000
2,669
10,669
Average Ticket Price
$
9.85
$
8.90
$
9.54
$
9.54
$
9.08
$
9.40
Reconciliation of Consolidated Constant
Currency Adjusted EBITDA and Adjusted EBITDA Margin (see Note
10):
Quarter and Year Ended December 31,
2019
(dollars in millions) (unaudited)
Quarter Ended
Year Ended
December 31, 2019
December 31, 2019
Constant Currency (10)
Constant Currency (10)
Net loss
$
(11.3
)
$
(145.2
)
Plus:
Income tax benefit
(34.4
)
(23.2
)
Interest expense
86.0
341.5
Depreciation and amortization
113.4
456.3
Impairment of long-lived assets
84.3
84.3
Certain operating expenses (2)
4.8
15.1
Equity in earnings of non-consolidated
entities (3)
(6.3
)
(30.8
)
Cash distributions from non-consolidated
entities (4)
18.7
35.8
Attributable EBITDA (5)
1.2
5.3
Investment expense (income)
2.7
(17.8
)
Other expense (6)
8.8
13.4
Non-cash rent expense - purchase
accounting (7)
6.2
26.1
General and administrative
expense—unallocated:
Merger, acquisition and other costs
(8)
4.3
16.0
Stock-based compensation expense (9)
(7.1
)
4.6
Adjusted EBITDA (1)
$
271.3
$
781.4
Adjusted EBITDA margin (1)
18.6
%
14.1
%
Total revenues
$
1,457.9
$
5,550.1
Net earnings (loss) margin (11)
-0.8
%
-2.6
%
Adjusted EBITDA (in millions) (1)
U.S. markets
$
179.6
$
575.6
International markets
91.7
205.8
Total Adjusted EBITDA
$
271.3
$
781.4
1)
We present Adjusted EBITDA and Adjusted EBITDA margin as
supplemental measures of our performance. We define Adjusted EBITDA
as net earnings (loss) plus (i) income tax provision (benefit),
(ii) interest expense and (iii) depreciation and amortization, as
further adjusted to eliminate the impact of certain items that we
do not consider indicative of our ongoing operating performance and
to include attributable EBITDA from equity investments in theatre
operations in international markets and any cash distributions of
earnings from other equity method investees. These further
adjustments are itemized above. You are encouraged to evaluate
these adjustments and the reasons we consider them appropriate for
supplemental analysis. We define Adjusted EBITDA margin as Adjusted
EBITDA divided by total revenues. In evaluating Adjusted EBITDA and
Adjusted EBITDA margin, you should be aware that in the future we
may incur expenses that are the same as or similar to some of the
adjustments in this presentation. Our presentation of Adjusted
EBITDA and Adjusted EBITDA margin should not be construed as an
inference that our future results will be unaffected by unusual or
non-recurring items. Adjusted EBITDA and Adjusted EBITDA margin are
non-U.S. GAAP financial measures commonly used in our industry and
should not be construed as an alternative to net earnings (loss) as
an indicator of operating performance (as determined in accordance
with U.S. GAAP). Adjusted EBITDA and Adjusted EBITDA margin may not
be comparable to similarly titled measures reported by other
companies. We have included Adjusted EBITDA and Adjusted EBITDA
margin because we believe they provide management and investors
with additional information to measure our performance and estimate
our value.
Adjusted EBITDA has important limitations as analytical tools,
and you should not consider it 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:
- does not reflect our capital expenditures, future requirements
for capital expenditures or contractual commitments;
- does not reflect changes in, or cash requirements for, our
working capital needs;
- does not reflect the significant interest expenses, or the cash
requirements necessary to service interest or principal payments,
on our debt;
- excludes income tax payments that represent a reduction in cash
available to us;
- does not reflect any cash requirements for the assets being
depreciated and amortized that may have to be replaced in the
future; and
- does not reflect the impact of divestitures that were required
in connection with recently completed acquisitions.
2)
Amounts represent preopening
expense related to temporarily closed screens under renovation,
theatre and other closure expense for the permanent closure of
screens including the related accretion of interest, non-cash
deferred digital equipment rent, and disposition of assets and
other non-operating gains or losses included in operating expenses.
We have excluded these items as they are non-cash in nature,
include components of interest cost for the time value of money or
are non-operating in nature.
3)
During the three and nine months ended September 30, 2019, the
Company recorded $6.5 million and $21.1 million, respectively, in
earnings from DCIP. During the three months ended September 30,
2018, we recorded equity in earnings related to our sale of all
remaining NCM units of $28.9 million and a gain of $30.1 million
related to the Screenvision merger. Equity in loss of
non-consolidated entities also includes loss on the surrender
(disposition) of a portion of our investment in NCM of $1.1 million
during the nine months ended September 30, 2018. Equity in
(earnings) loss of non-consolidated entities includes a lower of
carrying value or fair value impairment loss of the held-for sale
portion of our investment in NCM of $16.0 million for the nine
months ended September 30, 2018.
4)
Includes U.S. non-theatre distributions from equity method
investments and International non-theatre distributions from equity
method investments to the extent received. We believe including
cash distributions is an appropriate reflection of the contribution
of these investments to our operations.
5)
Attributable EBITDA includes the EBITDA from equity investments
in theatre operators in certain international markets. See below
for a reconciliation of our equity (earnings) loss of
non-consolidated entities to attributable EBITDA. Because these
equity investments are in theatre operators in regions where we
hold a significant market share, we believe attributable EBITDA is
more indicative of the performance of these equity investments and
management uses this measure to monitor and evaluate these equity
investments. We also provide services to these theatre operators
including information technology systems, certain on-screen
advertising services and our gift card and package ticket program.
As these investments relate only to our Nordic acquisition, the
second quarter of 2017 represents the first time we have made this
adjustment and does not impact prior historical presentations of
Adjusted EBITDA.
Reconciliation of Constant Currency
Attributable EBITDA
(Unaudited)
Quarter Ended
Year Ended
December 31,
December 31,
2019
2019
(In millions)
Constant Currency
Constant Currency
Equity in earnings of non-consolidated
entities
$
(6.2
)
$
(30.7
)
Less:
Equity in earnings of non-consolidated
entities excluding international theatre JV's
(5.8
)
(29.2
)
Equity in earnings of International
theatre JV's
0.4
1.5
Income tax provision
0.3
0.4
Investment income
—
(0.6
)
Depreciation and amortization
0.5
3.5
Other expense
—
0.5
Attributable EBITDA
$
1.2
$
5.3
6)
Other expense (income) for the three months ended September 30,
2019 includes income of $8.5 million due to the increase in fair
value of the derivative asset related to the Company’s Convertible
Notes due 2024, expense of $5.7 million as a result of the decrease
in fair value of its derivative liability, and loss on Pound
sterling forward contract of $0.7 million. Other expense for the
nine months ended September 30, 2019 includes $16.6 million of fees
related to modifications of term loans income and $1.7 million loss
on GBP forward contract, partially offset by income of $14.9
million due to the decrease in fair value of the derivative
liability related to the Company’s Convertible Notes due 2024.
During the three months ended September 30, 2018, the Company
recorded expense of $54.1 million as a result of an increase in
fair value of the derivative liability for the Convertible Notes
due 2024. Other expense (income) for the three and nine months
ended September 30, 2018 includes financing losses and financing
related foreign currency transaction losses.
7)
Reflects amortization of certain intangible assets reclassified
from depreciation and amortization to rent expense, due to the
adoption of ASC 842.
8)
Merger, acquisition and transition costs are excluded as it is
non-operating in nature.
9)
Stock-based compensation expense is Non-cash or non-recurring
expense included in General and Administrative: Other.
10)
The International segment information for the three and nine
months ended September 30, 2019 has been adjusted for constant
currency. Constant currency amounts, which are non-GAAP
measurements were calculated using the average exchange rate for
the corresponding period for 2018. We translate the results of our
international operating segment from local currencies into U.S.
dollars using currency rates in effect at different points in time
in accordance with U.S. GAAP. Significant changes in foreign
exchange rates from one period to the next can result in meaningful
variations in reported results. We are providing constant currency
amounts for our international operating segment to present a
period-to-period comparison of business performance that excludes
the impact of foreign currency fluctuations.
11)
Net earnings (loss) margin is defined as net earnings (loss)
divided by total revenues.
Reconciliation of Adjusted Net Earnings
(Loss) and Adjusted Earnings (Loss) Per Common share:
Quarter and Year Ended December 31,
2019
(dollars in millions, except share and per
share data)
(unaudited)
Quarter Ended
Year Ended
December 31,
December 31,
December 31,
December 31,
2019
2018
2019
2018
Numerator:
Net earnings (loss)
$
(13.5
)
$
170.6
$
(149.1
)
$
110.1
Calculation of adjusted net earnings
(loss) for basic and diluted earnings (loss) per share:
Impairment of long-lived assets
84.3
13.8
84.3
13.8
Marked-to-market loss (gain) on derivative
asset
18.2
(45.0
)
17.7
(45.0
)
Marked-to-market loss (gain) on derivative
liability
(8.6
)
(120.5
)
(23.5
)
(66.4
)
Tax benefit for Spain valuation
allowance
(41.5
)
—
(41.5
)
—
Adjusted net earnings (loss) for basic
earnings (loss) per share
$
38.9
$
18.9
$
(112.1
)
$
12.5
Interest expense for Convertible Notes due
2024
8.4
—
—
—
Adjusted net earnings (loss) for diluted
earnings (loss) per share
$
47.3
$
18.9
$
(112.1
)
$
12.5
Denominator (shares in
thousands):
Weighted average shares for basic earnings
(loss) per common share
103,850
103,514
103,832
120,621
Common equivalent shares for RSUs and
PSUs
549
—
—
—
Common equivalent shares if converted:
convertible notes due 2024
31,662
—
—
—
Weighted average shares for diluted
earnings (loss) per common share
136,061
103,514
103,832
120,621
Adjusted basic earnings (loss) per common
share
$
0.37
$
0.18
$
(1.08
)
$
0.10
Adjusted diluted earnings (loss) per
common share
$
0.35
$
0.18
$
(1.08
)
$
0.10
We present adjusted net earnings (loss) for basic and diluted
loss per share and adjusted basic and diluted net earnings (loss)
per common share as supplemental measures of our performance. We
have included these measures because we believe they provide
management and investors with additional information that is
helpful when evaluating our underlying performance and comparing
our results on a year-over-year normalized basis. Adjusted net
earnings (loss) for basic and diluted loss per share eliminates the
impact of certain items that we do not consider indicative of our
underlying operating performance. These adjustments are itemized
above. Adjusted net earnings (loss) per (basic and diluted) common
share is adjusted net earnings (loss) (for basic and diluted
purposes) divided by weighted average basic and diluted shares
outstanding. Weighted average shares for diluted purposes include
common equivalents for RSUs, PSUs, and the conversion of our
Convertible Notes due 2024 if dilutive. Adjusted net earnings
(loss) for diluted earnings per share removes the interest expense
on the Convertible Notes due 2024 if dilutive. The impact of RSUs,
PSUs, conversion of Convertible Notes due 2024 and the interest
expense on the Convertible Notes due 2024 was anti-dilutive in each
period other than the quarter ended December 31, 2019. You are
encouraged to evaluate the adjustments itemized above and the
reasons we consider them appropriate for supplemental analysis. In
evaluating adjusted net earnings (loss) and adjusted net earnings
(loss) per common share, you should be aware that in the future we
may incur expenses that are the same as or similar to some of the
adjustments in this presentation. Our presentation of adjusted net
earnings (loss) and adjusted net earnings (loss) per common share
(basic and diluted) should not be construed as an inference that
our future results will be unaffected by unusual or non-recurring
items. Adjusted net earnings (loss) and adjusted net earnings
(loss) per common share are non-U.S. GAAP financial measures and
should not be construed as alternatives to net earnings (loss) and
earnings (loss) per common share (basic and diluted) as indicators
of operating performance (as determined in accordance with U.S.
GAAP). Adjusted net earnings (loss) and adjusted net earnings
(loss) per common share (basic and diluted) may not be comparable
to similarly titled measures reported by other companies.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200227005974/en/
INVESTOR RELATIONS: John Merriwether, 866-248-3872
InvestorRelations@amctheatres.com
MEDIA CONTACTS: Ryan Noonan, 913-213-2183
rnoonan@amctheatres.com
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