Repurchases approximately $30.0 million of AMC
stock as of November 3, 2017
Updates Guidance for Full Year 2017
AMC Entertainment Holdings, Inc. (NYSE: AMC) (“AMC” or “the
Company”), today reported results for the third quarter ended
September 30, 2017.
Highlights for the third quarter ended September 30, 2017,
include the following:
- Total revenues increased 51.2% to
$1,178.7 million compared to total revenues of
$779.8 million for the quarter ended September 30, 2016. Total
revenues in 2017 included approximately $333.0 million of revenues
from our international theatres as compared to $1.5 million in the
three-month period a year ago, due to the acquisitions of Odeon
Cinemas Group (“Odeon”) and Nordic Cinema Group Holding AB
(“Nordic”).
- Admissions revenues increased 51.7% to
$753.5 million compared to $496.8 million for the same
period a year ago.
- Food and beverage revenues increased
45.2% to $361.4 million, compared to $248.9 million for
the quarter ended September 30, 2016.
- Net earnings decreased $73.1 million to
a net loss of $42.7 million compared to net earnings of
$30.4 million for the quarter ended September 30, 2016.
- Diluted earnings per share (“diluted
EPS”) decreased $0.64 to a loss of $0.33 per share compared to
earnings of $0.31 per share for the same period a year ago. Average
diluted shares outstanding in the third quarter of 2017 increased
approximately 33.5% compared to the third quarter last year as a
result of equity consideration for the Odeon and Carmike Cinemas
(“Carmike”) acquisitions completed in 2016 and the successful
completion of an equity offering in February 2017.
- Total Adjusted EBITDA(1) increased 2.1%
to $147.4 million compared to $144.4 million for the
quarter ended September 30, 2016. International Adjusted EBITDA for
the third quarter grew $39.9 million to $39.8 compared to $(0.1)
million a year ago.
“We have been predicting weakness in the third quarter industry
box office, due to the quantity and subject matter of the films
that were scheduled to be released. Not surprisingly, our
foreshadow was accurate. In a high fixed-cost, low variable-cost
business, this has led to lower EBITDA generation for AMC in the
third quarter of 2017. We, however, remain bullish about the fourth
quarter movie slate. Among many other hit films this year, movies
like ‘It’ in September, ‘Thor: Ragnarok’ in November
and soon ‘Star Wars: The Last Jedi’ in December, demonstrate
for all to see what we know to be true. When Hollywood and
international movie makers offer appealing movies, Americans and
Europeans will pour into our theatres in huge numbers and pay
top-dollar to do so. In our view, the weakness of the summer box
office is not indicative of a long-term trend, especially
immediately after two and a half years of record box office
performance and just before what we expect will be strong and
robust consumer demand through year end. We are similarly confident
and excited about the film slate that is coming in 2018 and again
in 2019. Accordingly, we remain optimistic about the viability and
strength of the movie theatre industry generally, and of AMC
specifically,” said Adam Aron, CEO and President of AMC
Entertainment.
Aron added, “Additionally, AMC has taken numerous crucial steps
over the past ninety days to significantly enhance the prospects
for AMC's success in 2018, 2019 and beyond. We have sought to
balance our capital allocation, with the aim of deleveraging over
the next two years. We refocused our capital allocation toward the
highest returns, importantly including high-return projects
featuring the full renovation of key Odeon and former Carmike
theatres, as well as buying back more than $30 million of AMC
common shares at historically low prices. We strengthened our
liquidity position by trimming our 2017-2018 capital expenditure
plan by some $200 million and by generating more than $235 million
in cash by monetizing non-strategic assets. We continued to
dramatically enhance and upgrade the consumer appeal of our
theatres in the U.S. and Europe by offering our guests a better
product and continued to strengthen the bond we have established
with our guests through our compelling marketing activity. We also
are paying keen attention to improving our income statement by
tightening down our costs and by instituting creative pricing
actions, both up and down, to drive increased revenues. These
strategies, among others, will continue in 2018 and beyond, and we
remain optimistic about our ability to deliver strong financial
results in the coming years.”
Highlights for the nine months ended September 30, 2017
include the following:
- Total revenues increased 58.6% to
$3,662.4 million compared to total revenues of
$2,309.8 million for the nine months ended September 30, 2016.
Total revenues for 2017 included approximately $917.2 million of
revenues from our international theatres as compared to $4.8
million in the nine month period a year ago, due to the
acquisitions of Odeon and Nordic.
- Admissions revenues grew 59.7% to
$2,332.4 million compared to $1,460.6 million for the
nine months ended September 30, 2016.
- Food and beverage revenues increased
53.8% to $1,133.1 million, compared to $736.6 million for
the nine months ended September 30, 2016.
- Net earnings decreased $293.5 million
to a net loss of $210.8 million and diluted earnings per share
decreased $2.49 per share to a loss of $1.65 per share compared to
net earnings of $82.7 million and net earnings per share of
$0.84 per share, respectively, for the nine months ended September
30, 2016. Included in the net loss for the nine months of 2017 was
a $204.5 million pre-tax impairment charge related to the NCM
investment.
- Total Adjusted EBITDA(1) grew 27.1% to
$534.3 million compared to $420.4 million for the nine
months ended September 30, 2016. International Adjusted EBITDA grew
$113.8 million to $113.7 million compared to $(0.1) million in the
same period a year ago.
(1) (Reconciliations and definitions of non-GAAP financial
measures are provided in the financial schedules accompanying this
press release.)
CFO Commentary
Commentary on the quarter by Craig Ramsey, AMC's Executive Vice
President and Chief Financial Officer, is available at
http://investor.amctheatres.com.
Additional information detailing select unaudited pro forma
financial data for the quarter and nine months ended September 30,
2016 and September 30, 2017 is included in the second quarter 2017
CFO Commentary. The select unaudited pro forma data for the periods
combines the historical financial data of operations of AMC, Odeon,
Carmike and Nordic, giving effect to the acquisitions, financings
and theatre divestitures as if they had been completed on
January 1, 2016. The historical consolidated financial
information for Odeon and Nordic has been adjusted to comply with
U.S. GAAP. The classification of certain items presented by Odeon
under U.K. GAAP has been modified in order to align with the
presentation used by AMC under U.S. GAAP. The classification of
certain items presented by Nordic under IFRS has been modified in
order to align with the presentation used by AMC under U.S. GAAP.
In addition to the U.S. GAAP adjustments and the reclassifications,
amounts have also been translated to U.S. Dollars. The unaudited
pro forma financial information is provided for informational
purposes only and is not necessarily indicative of what our results
of operations would actually have been had the acquisitions
occurred on the date indicated. Please refer to the August 1, 2017
Form 8-K for additional information on pro forma financial
statement adjustments.
Update of Share Repurchase
Program
On August 3, 2017, AMC announced that its Board of Directors
authorized the repurchase of up to $100 million of the Company’s
Class A common stock over a two-year period.
As of November 3, 2017, the Company has repurchased more than
30% of the authorized $100 million, having purchased more than 2.0
million shares of AMC’s Class A common stock for approximately
$30.0 million, representing an average share price of $14.86.
Update of Full Year 2017
Guidance
Based upon the results for the first nine months of 2017, the
Company is updating its guidance for fiscal 2017. The Company does
not intend to update this guidance or provide guidance for
subsequent years beyond this guidance for fiscal 2017.
The updated 2017 guidance ranges are as follows:
Updated 2017
Guidance Ranges
Total Revenues $5.00 to $5.20 billion Net Loss $175.0 to $155.0
million Diluted loss per share $1.35 to $1.20 Adjusted EBITDA
$810 to $865 million
Gross Capital Expenditures $600 to $670 million Net Capital
Expenditures $500 to $550 million Total Attendance 340 to 350
million attendees Total Average Screens 10,650 to 10,700 screens
This guidance reflects management’s estimates based solely upon
information available to it as of the date of this press release.
The ranges provided constitute forward-looking statements, are
subject to change, and actual results may differ from these
estimates and such differences may be material.
The Company’s 2017 guidance contains a number of assumptions,
including:
- 2017 guidance anticipates the 2017
North American industry box office generates approximately $11.1
billion in revenues.
- 2017 guidance includes the Company’s
achieving its anticipated $30 million adjusted EBITDA contribution
from cost reductions and revenue enhancements.
- 2017 guidance includes no further
charges related to the NCM investment, goodwill impairments or
other impairments or charges.
- 2017 guidance includes cash
distributions from non-consolidated entities. These cash
distributions are outside the Company’s control and are subject to
variability.
- 2017 guidance includes variability in
tax rates based on the country mix of profit and loss before
taxes.
Adjusted EBITDA is a non-GAAP financial measure, and a table
reconciling expected net loss to expected Adjusted EBITDA is
included in this release.
Dividends
On August 3, 2017, the Company declared a regular quarterly
dividend of $0.20 per share for the quarter ended June 30, 2017,
which was paid on September 25, 2017, to shareholders of record on
September 11, 2017. The total dividends paid in the third quarter
of 2017 were approximately $26.2 million.
On October 27, 2017, the Company declared a regular quarterly
dividend of $0.20 per share of for the quarter ended September 30,
2017, payable on December 18, 2017 to stockholders of record
on December 4, 2017.
Goodwill Analysis
We evaluate goodwill for impairment annually as of the beginning
of the fourth fiscal quarter and any time an event occurs or
circumstances change that would more likely than not reduce the
fair value for a reporting unit below its carrying amount. Based on
recent declines in the trading price of our Class A common stock,
we performed an interim goodwill impairment test during the third
quarter of 2017. The Company believes that no impairment is
required for the 2017 third quarter and is finalizing the analysis
and documentation supporting this position. Additional information
will be provided in our Form 10-Q for the quarter ended September
30, 2017 which we expect to file by November 9, 2017. Management’s
view of anticipated future period financial results includes the
assumption that no impairment would be required to be taken in
those periods, as well. Any impairment charges that we may take in
the future could be material to our results of operations and
financial condition.
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 Monday, November 6, 2017. 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 (NYSE: AMC) is the largest movie exhibition company in the
U.S., in Europe and throughout the world with 1,006 theatres and
11,046 screens across the globe. AMC has propelled innovation in
the exhibition industry by: deploying more plush power-recliner
seats; delivering enhanced food and beverage choices; generating
greater guest engagement through its loyalty program, web site and
smart phone 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 22 of the 25 largest
metropolitan areas of the United States, including the top three
markets (NY, LA, Chicago). Through its Odeon subsidiary AMC
operates in 14 European countries and is the #1 theatre chain in
Estonia, Finland, Italy, Latvia, Lithuania, Spain, Sweden and UK
& Ireland. 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;
increased use of alternative film delivery methods or other forms
of entertainment; shrinking exclusive theatrical release windows;
international economic, political and other risks; risks and
uncertainties relating to AMC’s significant indebtedness; AMC’s
ability to execute cost cutting and revenue enhancement
initiatives; box office performance throughout the remainder of
2017; additional impairment related to AMC’s NCM investment;
limitations on the availability of capital; risks relating to AMC’s
inability to achieve the expected benefits and performance from its
recent acquisitions; AMC’s ability to comply with a settlement it
entered into with the U.S. Department of Justice pursuant to which
it agreed to divest theatres and divest holdings in National
CineMedia, LLC; AMC’s ability to refinance its indebtedness on
favorable terms; optimizing AMC’s theatre circuit through
construction and the transformation of its existing theatres may be
subject to delay and unanticipated costs; failures, unavailability
or security breaches of AMC’s information systems; risks relating
to impairment losses, including with respect to goodwill and other
intangibles, and theatre and other closure charges; AMC’s ability
to utilize net operating loss carryforwards to reduce its future
tax liability or valuation allowances taken with respect to
deferred tax assets; review by antitrust authorities in connection
with acquisition opportunities; risks relating to unexpected costs
or unknown liabilities relating to recently completed acquisitions;
risks relating to the incurrence of legal liability; general
political, social and economic conditions and risks, trends,
uncertainties and other factors discussed in the reports AMC has
filed with the SEC. Should one or more of these risks, trends,
uncertainties or facts materialize, or should underlying
assumptions prove incorrect, actual results may vary materially
from those indicated or anticipated by the forward-looking
statements contained herein. Accordingly, you are cautioned not to
place undue reliance on these forward-looking statements, which
speak only as of the date they are made. Forward-looking statements
should not be read as a guarantee of future performance or results,
and will not necessarily be accurate indications of the times at,
or by, which such performance or results will be achieved. For a
detailed discussion of risks, trends and uncertainties facing AMC,
see the section entitled “Risk Factors” in AMC’s Annual Report on
Form 10-K, filed with the SEC on March 10, 2017, and the
risks, trends and uncertainties identified in its other public
filings. AMC does not intend, and undertakes no duty, to update any
information contained herein to reflect future events or
circumstances, except as required by applicable law.
AMC Entertainment Holdings,
Inc.Consolidated Statements of OperationsFor the
Fiscal Periods Ended 9/30/17 and 9/30/16(dollars in millions,
except share and per share data)(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30, 2017
2016 2017 2016 Revenues
Admissions $ 753.5 $ 496.8 $ 2,332.4 $ 1,460.6 Food and beverage
361.4 248.9 1,133.1 736.6 Other theatre 63.8
34.1 196.9 112.6 Total revenues
1,178.7 779.8 3,662.4
2,309.8 Operating costs and expenses Film
exhibition costs 364.8 259.1 1,164.2 784.4 Food and beverage costs
60.7 33.9 182.6 102.0 Operating expense 383.2 211.6 1,128.8 613.9
Rent 200.7 121.9 590.9 369.3 General and administrative: Merger,
acquisition and transaction costs 5.6 4.9 57.2 15.1 Other 32.8 19.8
113.4 58.9 Depreciation and amortization 135.2
63.1 393.9 185.8 Operating costs
and expenses 1,183.0 714.3
3,631.0 2,129.4 Operating income (loss)
(4.3 ) 65.5 31.4 180.4 Other expense (income): Other expense
(income) (0.6 ) 0.1 (2.3 ) — Interest expense: Corporate borrowings
60.8 24.6 171.7 74.4 Capital and financing lease obligations 10.6
2.1 31.7 6.4 Equity in (earnings) loss of non-consolidated entities
1.8 (12.0 ) 199.1 (28.1 ) Investment (income) expense (16.6
) 0.2 (21.6 ) (9.6 ) Total other
expense 56.0 15.0 378.6
43.1 Earnings (loss) before income taxes (60.3
) 50.5 (347.2 ) 137.3 Income tax provision (benefit) (17.6 )
20.1 (136.4 ) 54.6 Net Earnings
(loss) $ (42.7 ) $ 30.4 $ (210.8 ) $ 82.7
Diluted earnings
(loss) per share $ (0.33 ) $ 0.31 $ (1.65 ) $ 0.84
Average shares outstanding diluted (in thousands)
131,077 98,284 127,902
98,211
Consolidated Balance Sheet Data (at
period end):(dollars in millions)(unaudited)
As of As of September 30,
December 31, 2017 2016 Cash and equivalents $
260.0 $ 207.1 Corporate borrowings 4,292.6 3,760.9 Other long-term
liabilities 847.7 706.5 Capital and financing lease obligations
668.3 675.4 Stockholders' equity 2,424.4 2,009.6 Total assets
9,910.7 8,641.8
Consolidated Other Data:(in
millions, except operating data)(unaudited)
Three Months Ended
Nine Months Ended September 30, September 30,
Consolidated
2017 2016 2017
2016 Net cash provided by operating activities $
119.3 $ 77.3 $ 229.1 $ 211.3 Capital expenditures $ (149.7 ) $
(116.3 ) $ (467.7 ) $ (256.6 ) Screen additions 22 — 64 12 Screen
acquisitions 15 15 720 26 Screen dispositions 21 — 257 38
Construction openings (closures), net (53 ) (54 ) (39 ) (131 )
Average screens 10,707 5,240 10,640 5,278 Number of screens
operated 11,046 5,295 11,046 5,295 Number of theatres operated
1,006 388 1,006 388 Screens per theatre 11.0 13.6 11.0 13.6
Attendance (in thousands) 79,451 51,895 254,441 153,136
Segment Other Data:(in millions,
except per patron amounts and operating data)(unaudited)
Three Months Ended
Nine Months Ended September 30, September 30,
2017 2016 2017 2016 Other
operating data: Attendance (patrons, in thousands): U.S.
markets 54,269 51,750 179,041 152,717 International markets
25,182 145 75,400 419 Consolidated
79,451 51,895 254,441 153,136
Average ticket price (in dollars): U.S. markets $ 9.80 $
9.58 $ 9.59 $ 9.54 International markets $ 8.81 $ 6.90 $ 8.17 $
7.40 Consolidated $ 9.48 $ 9.57 $ 9.17 $ 9.54
Food and
beverage revenues per patron (in dollars): U.S. markets $ 5.13
$ 4.80 $ 5.05 $ 4.81 International markets $ 3.30 $ 2.76 $ 3.03 $
3.10 Consolidated $ 4.55 $ 4.80 $ 4.45 $ 4.81
Average
Screen Count (month end average): U.S. markets 8,028 5,224
8,083 5,262 International markets 2,679 16
2,557 16 Consolidated 10,707 5,240
10,640 5,278
Segment Information(unaudited, in
millions)
Three Months Ended
Nine Months Ended September 30, September 30,
2017 2016 2017 2016
Revenues U.S. markets $ 845.7 $ 778.3 $ 2,745.2 $
2,305.0 International markets 333.0 1.5
917.2 4.8 Consolidated $ 1,178.7 $ 779.8 $
3,662.4 $ 2,309.8
Adjusted EBITDA U.S. markets
$ 107.6 $ 144.5 $ 420.6 $ 420.5 International markets 39.8
(0.1 ) 113.7 (0.1 ) Consolidated $ 147.4 $
144.4 $ 534.3 $ 420.4
Capital
Expenditures U.S. markets $ 126.9 $ 116.3 $ 416.6 $ 256.6
International markets 22.8 — 51.1
— Consolidated $ 149.7 $ 116.3 $ 467.7 $ 256.6
Reconciliation of Adjusted
EBITDA:(dollars in millions)(unaudited)
Three Months Ended
Nine Months Ended September 30, September 30,
2017 2016 2017
2016 Net earnings (loss) $ (42.7 ) $ 30.4 $ (210.8 )
$ 82.7 Plus: Income tax provision (benefit) (17.6 ) 20.1 (136.4 )
54.6 Interest expense 71.4 26.7 203.4 80.8 Depreciation and
amortization 135.2 63.0 393.9 185.7 Certain operating expenses (2)
3.7 5.8 12.5 13.0 Equity in (earnings) loss of non-consolidated
entities (3) 1.8 (12.0 ) 199.1 (28.1 ) Cash distributions from
non-consolidated entities (4) 6.5 3.4 33.1 21.7 Attributable EBITDA
(5) 0.8 — 1.8 — Investment expense (income) (16.6 ) 0.2 (21.6 )
(9.6 ) Other income (6) (0.6 ) 0.1 (1.8 ) — General and
administrative expense—unallocated: Merger, acquisition and
transaction costs (7) 5.6 5.0 57.2 15.1 Stock-based compensation
expense (8) (0.1 ) 1.7 3.9
4.5 Adjusted EBITDA(1) $ 147.4 $ 144.4
$ 534.3 $ 420.4 1) We
present Adjusted EBITDA as a supplemental measure 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. 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 should not be construed as an inference that our future
results will be unaffected by unusual or non-recurring items.
Adjusted EBITDA is a non-U.S. GAAP financial measure 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 may not
be comparable to similarly titled measures reported by other
companies. We have included Adjusted EBITDA because we believe it
provides 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:
- 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 may be 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) Equity in (earnings) loss of
non-consolidated entities includes an other-than-temporary
impairment of the Company’s investment in NCM of $204.5 million for
the nine months ended September 30, 2017. The other-than-temporary
impairment charge reflects recording our units and shares at the
publicly quoted per share price on June 30, 2017 of $7.42 based on
the Company’s determination that the decline in the price per share
during the quarter was other than temporary. Equity in (earnings)
loss of non-consolidated entities includes loss on the sale of a
portion of the Company’s investment in NCM of $21.0 million and
$22.2 million during the three and nine months ended September 30,
2017, respectively. 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 equity investments in theatre operators in
certain international markets. See below for a reconciliation of
the Company’s equity earnings 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
(Unaudited)
Three Months Ended Nine
Months Ended (In millions) September 30, 2017
September 30, 2016 September 30, 2017 September
30, 2016 Equity in loss of non-consolidated entities $ 1.8 $ —
$ 199.1 $ — Less: Equity in loss of non-consolidated entities
excluding international theatre JV's 2.1 —
199.6 — Equity in earnings of International theatre JV's 0.3
— 0.5 — Depreciation and amortization 0.5 —
1.3 — Attributable EBITDA $ 0.8 $ — $ 1.8 $ —
6) Other income for the nine months ended September 30, 2017
includes $3.2 million financing related foreign currency
transaction gains, partially offset by $1.0 million in fees
relating to third party fees related to the Third Amendment to our
Senior Secured Credit Agreement and a $0.4 million loss on the
redemption of the Bridge Loan Facility. Other income for the three
months ended September 30, 2017 includes $0.5 million related to
foreign currency transaction gains. 7) Merger, acquisition
and transition costs are excluded as it is non-operating in nature.
8) Non-cash or non-recurring expense included in General and
Administrative: Other.
Supplemental Non-GAAP
Disclosures2017 Operating Results Guidance(Dollars in
millions)
AMC Entertainment Holdings, Inc.
Reconciliation of Adjusted EBITDA Guidance
(Unaudited, dollars in millions) Twelve Months Ended
Twelve Months December 31, 2017 Ended
Low High December 31, 2016 Net Earnings (loss)
$
(175.0
) $
(155.0
) $ 115.9 Plus: Income tax provision (benefit)
(130.0
)
(110.0
) 40.7 Interest expense 275.0 285.0 121.5 Depreciation and
amortization 545.0 550.0 273.7 Certain operating expenses (2) 14.0
15.0 20.1 Equity in (earnings) loss of non-consolidated entities
(3) 180.0 185.0 (47.7 ) Cash distributions from non-consolidated
entities (4) 50.0 55.0 40.0 Attributable EBITDA (5) 3.0 5.0 —
Investment (income) expense (15.0 ) (30.0 ) (10.2 ) Other expense
(income) (6) 2.5 (3.0 ) 0.3 General and administrative
expense-unallocated: Merger, acquisition and transaction costs (7)
55.0 60.0 47.9 Stock-based compensation expense (8) 5.5
8.0 6.8 Adjusted EBITDA (1) $
810.0
$
865.0
$ 609.0 (1)
We present Adjusted EBITDA as a
supplemental measure 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. 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 should not be construed as an
inference that our future results will be unaffected by unusual or
non-recurring items. Adjusted EBITDA is a non-U.S. GAAP financial
measure 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 may not be comparable to similarly titled measures
reported by other companies. We have included Adjusted EBITDA
because we believe it provides 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:
- 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 may be 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) Equity in (earnings) loss of non-consolidated entities includes
an other-than-temporary impairment of our investment in NCM of
$204.5 million for the nine months ended September 30, 2017. The
other-than-temporary impairment charge reflects recording our units
and shares at the publicly quoted per share price on June 30, 2017
of $7.42 based on our determination that the decline in the price
per share during the respective quarter was other than temporary.
Equity in (earnings) loss of non-consolidated entities includes
loss on the sale of a portion of our investment in NCM of $21.0
million and $22.2 million during the three and nine months ended
September 30, 2017, respectively. (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 equity investments in theatre
operators in certain international markets. See below for a
reconciliation of our equity earnings 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.
AMC Entertainment Holdings, Inc.
Reconciliation of Attributable EBITDA Guidance
(Unaudited, dollars in millions) Twelve Months Ended
Twelve Months December 31, 2017 Ended
Reconciliation of attributable EBITDA guidance: Low
High December 31, 2016 Equity in loss
of non-consolidated entities $ 180.0 $ 185.0 $ — Less: Equity in
loss of non-consolidated entities excluding international theatre
JV’s 179.5 183.0 — Equity in earnings
International theatre JV’s 0.5 2.0 — Income tax provision 0.4 0.5 —
Investment income (expense) (0.1) — — Interest expense 0.4 0.5 —
Depreciation and amortization 1.8 2.0 —
Attributable EBITDA $ 3.0 $ 5.0 $ — (6) Other
income for the nine months ended September 30, 2017 includes $3.2
million financing related foreign currency transaction gains,
partially offset by $1.0 million in fees relating to third party
fees related to the Third Amendment to our Senior Secured Credit
Agreement and a $0.4 million loss on the redemption of the Bridge
Loan Facility. Other income for the three months ended September
30, 2017 includes $0.5 million related to foreign currency
transaction gains. (7) Merger, acquisition and transition
costs are excluded as it is non-operating in nature. (8)
Non-cash or non-recurring expense included in General and
Administrative: Other.
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AMC Entertainment Holdings, Inc.INVESTOR
RELATIONS:John Merriwether,
866-248-3872InvestorRelations@amctheatres.comorMEDIA
CONTACTS:Ryan Noonan, 913-213-2183rnoonan@amctheatres.com
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