NOTE 17 – CONDENSED CONSOLIDATING FINANCIAL INFORMATION

Years Ended December 31, 2016, December 31, 2015, and December 31, 2014

The accompanying condensed consolidating financial information has been prepared and presented pursuant to SEC Regulation S-X Rule 3-10, Financial statements of guarantors and issuers of guaranteed securities registered or being registered. Each of the subsidiary guarantors are 100% owned by Holdings. The subsidiary guarantees of the Company’s Notes due 2022 the Sterling Notes due 2024, the Notes due 2025 and Notes due 2026 are full and unconditional and joint and several and subject to customary release provisions. The Company and its subsidiary guarantors’ investments in its consolidated subsidiaries are presented under the equity method of accounting.

Year Ended December 31, 2016:


			Subsidiary		Subsidiary		Consolidating		Consolidated
(In thousands)	Holdings		Guarantors		Non-Guarantors		Adjustments		Holdings
Revenues
Admissions	$	—	$	1,945,162	$	104,266	$	—	$	2,049,428
Food and beverage		—		972,940		46,153		—		1,019,093
Other theatre		—		152,346		14,979		—		167,325
Total revenues		—		3,070,448		165,398		—		3,235,846
Operating costs and expenses
Film exhibition costs		—		1,039,948		49,553		—		1,089,501
Food and beverage costs		—		134,199		7,968		—		142,167
Operating expense		—		830,824		42,632		—		873,456
Rent		—		491,131		14,332		—		505,463
General and administrative:
Merger, acquisition and transaction costs		—		46,943		952		—		47,895
Other		1,996		84,800		3,923		—		90,719
Depreciation and amortization		—		252,948		15,295		—		268,243
Impairment of long-lived assets		—		5,544		—		—		5,544
Operating costs and expenses		1,996		2,886,337		134,655		—		3,022,988
Operating income (loss)		(1,996)		184,111		30,743		—		212,858
Other expense (income):
Equity in net (earnings) loss of subsidiaries		(119,732)		(32,669)		—		152,401		—
Other expense (income)		—		(429)		(17)		—		(446)
Interest expense:
Corporate borrowings		110,526		123,671		57		(123,523)		110,731
Capital and financing lease obligations		—		8,490		2,316		—		10,806
Equity in earnings of non-consolidated entities		—		(46,920)		(798)		—		(47,718)
Investment income		(104,457)		(28,327)		(893)		123,523		(10,154)
Total other expense (income)		(113,663)		23,816		665		152,401		63,219
Earnings before income taxes		111,667		160,295		30,078		(152,401)		149,639
Income tax provision		—		40,563		(2,591)		—		37,972
Net earnings	$	111,667	$	119,732	$	32,669	$	(152,401)	$	111,667

Year Ended December 31, 2015:


			Subsidiary		Subsidiary		Consolidating		Consolidated
(In thousands)	Holdings		Guarantors		Non-Guarantors		Adjustments		Holdings
Revenues
Admissions	$	—	$	1,887,584	$	4,453	$	—	$	1,892,037
Food and beverage		—		908,153		1,933		—		910,086
Other theatre		—		144,275		502		—		144,777
Total revenues		—		2,940,012		6,888		—		2,946,900
Operating costs and expenses
Film exhibition costs		—		1,019,327		2,130		—		1,021,457
Food and beverage costs		—		128,144		425		—		128,569
Operating expense		75		791,917		3,730		—		795,722
Rent		—		465,830		1,992		—		467,822
General and administrative:
Merger, acquisition and transaction costs		—		3,398		—		—		3,398
Other		—		58,174		38		—		58,212
Depreciation and amortization		—		232,896		65		—		232,961
Impairment of long-lived assets		—		1,702		—		—		1,702
Operating costs and expenses		75		2,701,388		8,380		—		2,709,843
Operating income (loss)		(75)		238,624		(1,492)		—		237,057
Other expense (income):
Equity in net (earnings) loss of subsidiaries		(93,375)		994		—		92,381		—
Other expense (income)		—		10,684		—		—		10,684
Interest expense:
Corporate borrowings		97,163		129,517		—		(129,823)		96,857
Capital and financing lease obligations		—		9,231		—		—		9,231
Equity in earnings of non-consolidated entities		—		(37,131)		—		—		(37,131)
Investment income		(107,719)		(27,721)		(498)		129,823		(6,115)
Total other expense (income)		(103,931)		85,574		(498)		92,381		73,526
Earnings (loss) before income taxes		103,856		153,050		(994)		(92,381)		163,531
Income tax provision		—		59,675		—		—		59,675
Net earnings (loss)	$	103,856	$	93,375	$	(994)	$	(92,381)	$	103,856

Year Ended December 31, 2014:


			Subsidiary		Subsidiary		Consolidating		Consolidated
(In thousands)	Holdings		Guarantors		Non-Guarantors		Adjustments		Holdings
Revenues
Admissions	$	—	$	1,760,781	$	4,607	$	—	$	1,765,388
Food and beverage		—		795,789		1,946		—		797,735
Other theatre		—		131,931		336		—		132,267
Total revenues		—		2,688,501		6,889		—		2,695,390
Operating costs and expenses
Film exhibition costs		—		932,108		2,138		—		934,246
Food and beverage costs		—		111,532		459		—		111,991
Operating expense		96		729,282		3,960		—		733,338
Rent		—		453,106		2,133		—		455,239
General and administrative:
Merger, acquisition and transaction costs		—		1,161		—		—		1,161
Other		—		64,831		42		—		64,873
Depreciation and amortization		—		216,258		63		—		216,321
Impairment of long-lived assets		—		3,149		—		—		3,149
Operating costs and expenses		96		2,511,427		8,795		—		2,520,318
Operating income (loss)		(96)		177,074		(1,906)		—		175,072
Other expense (income):
Equity in net (earnings) loss of subsidiaries		(51,401)		1,905		—		49,496		—
Other expense (income)		—		(8,344)		—		—		(8,344)
Interest expense:
Corporate borrowings		110,861		149,759		—		(149,548)		111,072
Capital and financing lease obligations		—		9,867		—		—		9,867
Equity in earnings of non-consolidated entities		—		(26,615)		—		—		(26,615)
Investment income		(123,636)		(34,056)		(1)		149,548		(8,145)
Total other expense (income)		(64,176)		92,516		(1)		49,496		77,835
Earnings (loss) before income taxes		64,080		84,558		(1,905)		(49,496)		97,237
Income tax provision		—		33,470		—		—		33,470
Earnings (loss) from continuing operations		64,080		51,088		(1,905)		(49,496)		63,767
Gain from discontinued operations, net of income taxes		—		313		—		—		313
Net earnings (loss)	$	64,080	$	51,401	$	(1,905)	$	(49,496)	$	64,080

Year Ended December 31, 2016:


			Subsidiary		Subsidiary		Consolidating		Consolidated
(In thousands)	Holdings		Guarantors		Non-Guarantors		Adjustments		Holdings
Net earnings	$	111,667	$	119,732	$	32,669	$	(152,401)	$	111,667
Equity in other comprehensive income (loss) of subsidiaries		(5,355)		(3,629)		—		8,984		—
Unrealized foreign currency translation adjustment, net of tax		—		(181)		(3,700)		—		(3,881)
Pension and other benefit adjustments:
Net gain (loss) arising during the period, net of tax		—		(364)		71		—		(293)
Amortization of net loss (gain) reclassified into general and administrative: other, net of tax		—		16		—		—		16
Settlement gain reclassified into general and administrative, other, net of tax		—		(3)		—		—		(3)
Marketable securities:										—
Unrealized holding gain arising during the period, net of tax		—		589		—		—		589
Realized net gain reclassified into investment income, net of tax		—		(1,816)		—		—		(1,816)
Equity method investees’ cash flow hedge:										—
Unrealized net holding loss arising during the period, net of tax		—		(309)		—		—		(309)
Realized net loss reclassified into equity in earnings of non-consolidated entities, net of tax		—		342		—		—		342
Other comprehensive income (loss)		(5,355)		(5,355)		(3,629)		8,984		(5,355)
Total comprehensive income	$	106,312	$	114,377	$	29,040	$	(143,417)	$	106,312

Year Ended December 31, 2015:


			Subsidiary		Subsidiary		Consolidating		Consolidated
(In thousands)	Holdings		Guarantors		Non-Guarantors		Adjustments		Holdings
Net earnings (loss)	$	103,856	$	93,375	$	(994)	$	(92,381)	$	103,856
Equity in other comprehensive income (loss) of subsidiaries		(10,040)		552		—		9,488		—
Unrealized foreign currency translation adjustment, net of tax		—		820		552		—		1,372
Pension and other benefit adjustments:
Net gain arising during the period, net of tax		—		166		—		—		166
Prior service credit arising during the period, net of tax		—		746		—		—		746
Amortization of net (gain) loss reclassified into general and administrative: other, net of tax		—		(1,679)		—		—		(1,679)
Amortization of prior service credit reclassified into general and administrative: other, net of tax		—		(1,762)		—		—		(1,762)
Curtailment gain reclassified into general and administrative: other, net of tax		—		(7,239)		—		—		(7,239)
Settlement gain reclassified into general and administrative: other, net of tax		—		(196)		—		—		(196)
Marketable securities:
Unrealized holding loss arising during the period, net of tax		—		(1,056)		—		—		(1,056)
Realized net gain reclassified into net investment income, net of tax		—		(156)		—		—		(156)
Equity method investees’ cash flow hedge:
Unrealized net holding loss arising during the period, net of tax		—		(693)		—		—		(693)
Realized net loss reclassified into equity in earnings of non-consolidated entities, net of tax		—		457		—		—		457
Other comprehensive income (loss)		(10,040)		(10,040)		552		9,488		(10,040)
Total comprehensive income (loss)	$	93,816	$	83,335	$	(442)	$	(82,893)	$	93,816

Year Ended December 31, 2014:


			Subsidiary		Subsidiary		Consolidating		Consolidated
(In thousands)	Holdings		Guarantors		Non-Guarantors		Adjustments		Holdings
Net earnings (loss)	$	64,080	$	51,401	$	(1,905)	$	(49,496)	$	64,080
Equity in other comprehensive income (loss) of subsidiaries		(11,360)		732		—		10,628		—
Unrealized foreign currency translation adjustment, net of tax		—		246		732		—		978
Pension and other benefit adjustments:
Net loss arising during the period, net of tax		—		(13,543)		—		—		(13,543)
Amortization of net (gain) loss reclassified into general and administrative: other, net of tax		—		(844)		—		—		(844)
Amortization of prior service credit reclassified into general and administrative: other, net of tax		—		(1,016)		—		—		(1,016)
Marketable securities:
Unrealized holding gain arising during the period, net of tax		—		2,627		—		—		2,627
Realized net gain reclassified into net investment income, net of tax		—		(31)		—		—		(31)
Equity method investees’ cash flow hedge:
Unrealized net holding loss arising during the period, net of tax		—		(59)		—		—		(59)
Realized net loss reclassified into equity in earnings of non-consolidated entities, net of tax		—		528		—		—		528
Other comprehensive income (loss)		(11,360)		(11,360)		732		10,628		(11,360)
Total comprehensive income (loss)	$	52,720	$	40,041	$	(1,173)	$	(38,868)	$	52,720

As of December 31, 2016:


			Subsidiary		Subsidiary		Consolidating		Consolidated
(In thousands)	Holdings		Guarantors		Non-Guarantors		Adjustments		Holdings
Assets
Current assets:
Cash and equivalents	$	2,989	$	94,733	$	109,351	$	—	$	207,073
Receivables, net		201		165,867		47,599		—		213,667
Other current assets		1,842		151,862		109,199		—		262,903
Total current assets		5,032		412,462		266,149		—		683,643
Investment in equity of subsidiaries		2,330,743		709,662		—		(3,040,405)		—
Property, net		—		1,585,577		1,450,282		—		3,035,859
Intangible assets, net		—		228,373		136,769		—		365,142
Intercompany advances		3,443,793		(1,781,339)		(1,662,454)		—		—
Goodwill		(2,143)		2,422,094		1,513,009		—		3,932,960
Deferred tax asset		—		87,541		2,904		—		90,445
Other long-term assets		7,706		475,860		50,226		—		533,792
Total assets	$	5,785,131	$	4,140,230	$	1,756,885	$	(3,040,405)	$	8,641,841
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	—	$	380,994	$	120,767	$	—	$	501,761
Accrued expenses and other liabilities		17,613		197,569		113,767		—		328,949
Deferred revenues and income		—		232,357		44,880		—		277,237
Current maturities of corporate borrowings and capital and financing lease obligations		13,806		10,799		56,638		—		81,243
Total current liabilities		31,419		821,719		336,052		—		1,189,190
Corporate borrowings		3,742,978		2,777		—		—		3,745,755
Capital and financing lease obligations		—		83,863		525,496		—		609,359
Exhibitor services agreement		—		359,244		35		—		359,279
Deferred tax liability		—		—		20,962		—		20,962
Other long-term liabilities		—		541,884		164,678		—		706,562
Total liabilities		3,774,397		1,809,487		1,047,223		—		6,631,107
Temporary equity		1,080		—		—		—		1,080
Stockholders’ equity		2,009,654		2,330,743		709,662		(3,040,405)		2,009,654
Total liabilities and stockholders’ equity	$	5,785,131	$	4,140,230	$	1,756,885	$	(3,040,405)	$	8,641,841

As of December 31, 2015:


			Subsidiary		Subsidiary		Consolidating		Consolidated
(In thousands)	Holdings		Guarantors		Non-Guarantors		Adjustments		Holdings
Assets
Current assets:
Cash and equivalents	$	1,944	$	167,023	$	42,283	$	—	$	211,250
Receivables, net		(21)		105,477		53		—		105,509
Other current assets		—		96,302		1,306		—		97,608
Total current assets		1,923		368,802		43,642		—		414,367
Investment in equity of subsidiaries		1,638,903		31,609		—		(1,670,512)		—
Property, net		—		1,401,686		242		—		1,401,928
Intangible assets, net		—		237,376		—		—		237,376
Intercompany advances		1,805,829		(1,811,112)		5,283		—		—
Goodwill		(2,143)		2,408,834		—		—		2,406,691
Deferred tax asset		295		125,903		—		—		126,198
Other long-term assets		9,686		492,057		14		—		501,757
Total assets	$	3,454,493	$	3,255,155	$	49,181	$	(1,670,512)	$	5,088,317
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	—	$	312,591	$	434	$	—	$	313,025
Accrued expenses and other liabilities		7,188		151,619		(143)		—		158,664
Deferred revenues and income		—		221,679		—		—		221,679
Current maturities of corporate borrowings and capital and financing lease obligations		8,806		9,980		—		—		18,786
Total current liabilities		15,994		695,869		291		—		712,154
Corporate borrowings		1,898,432		4,166		—		—		1,902,598
Capital and financing lease obligations		—		93,273		—		—		93,273
Exhibitor services agreement		—		377,599		—		—		377,599
Other long-term liabilities		—		445,345		17,281		—		462,626
Total liabilities		1,914,426		1,616,252		17,572		—		3,548,250
Temporary equity		1,364		—		—		—		1,364
Stockholders’ equity		1,538,703		1,638,903		31,609		(1,670,512)		1,538,703
Total liabilities and stockholders’ equity	$	3,454,493	$	3,255,155	$	49,181	$	(1,670,512)	$	5,088,317

Year Ended December 31, 2016:


			Subsidiary		Subsidiary		Consolidating		Consolidated
(In thousands)	Holdings		Guarantors		Non-Guarantors		Adjustments		Holdings
Cash flows from operating activities:
Net cash provided by (used in) operating activities	$	7,238	$	438,652	$	(14,235)	$	—	$	431,655
Cash flows from investing activities:
Capital expenditures		—		(410,906)		(10,807)		—		(421,713)
Acquisition of Odeon, net of cash acquired		—		(480,338)		41,605				(438,733)
Acquisition of Carmike, net of cash acquired		—		(584,291)		86,493				(497,798)
Acquisition of Starplex, net of cash acquired		—		681		—		—		681
Proceeds from disposition of long-term assets		—		19,909		—		—		19,909
Investments in non-consolidated entities, net		—		(10,481)		—		—		(10,481)
Other, net		—		(6,515)		—		—		(6,515)
Net cash provided by (used in) investing activities		—		(1,471,941)		117,291		—		(1,354,650)
Cash flows from financing activities:
Proceeds from the issuance of Term Loan due 2023		498,750		—		—		—		498,750
Proceeds from issuance of Senior Subordinated Sterling Notes due 2024		310,000		—		—		—		310,000
Proceeds from issuance of Senior Subordinated Notes due 2026		595,000		—		—		—		595,000
Proceeds from issuance of Bridge Loan due 2017		350,000		—		—		—		350,000
Payment of Odeon Senior Subordinated GBP Notes due 2018		(380,678)		—		—		—		(380,678)
Payment of Odeon Senior Subordinated EUR Notes due 2018		(212,495)		—		—		—		(212,495)
Payments under Revolving Credit Facility		(75,000)		—		—		—		(75,000)
Payments of stock issuance costs		(763)		—		—		—		(763)
Principal payments under Term Loan		(8,806)		—		—		—		(8,806)
Principal payments under capital and financing lease obligations		—		(8,591)		(2,261)		—		(10,852)
Principal payments under promissory note		—		(1,389)		—		—		(1,389)
Cash used to pay dividends		(79,627)		—		—		—		(79,627)
Deferred financing fees		(65,877)		—		—		—		(65,877)
Change in intercompany advances		(935,110)		968,063		(32,953)		—		—
Net cash provoded by (used in) financing activities		(4,606)		958,083		(35,214)		—		918,263
Effect of exchange rate changes on cash and equivalents		(1,587)		2,916		(774)		—		555
Net increase (decrease) in cash and equivalents		1,045		(72,290)		67,068		—		(4,177)
Cash and equivalents at beginning of period		1,944		167,023		42,283		—		211,250
Cash and equivalents at end of period	$	2,989	$	94,733	$	109,351	$	—	$	207,073

Year Ended December 31, 2015:


			Subsidiary		Subsidiary		Consolidating		Consolidated
(In thousands)	Holdings		Guarantors		Non-Guarantors		Adjustments		Holdings
Cash flows from operating activities:
Net cash provided by operating activities	$	15,017	$	449,121	$	3,419	$	—	$	467,557
Cash flows from investing activities:
Capital expenditures		—		(333,395)		(28)		—		(333,423)
Acquisition of Starplex Cinemas, net of cash acquired		—		(172,853)		—		—		(172,853)
Proceeds from disposition of long-term assets		—		604		—		—		604
Investments in non-consolidated entities, net		—		(1,915)		—		—		(1,915)
Other, net		—		(1,849)		—		—		(1,849)
Net cash used in investing activities		—		(509,408)		(28)		—		(509,436)
Cash flows from financing activities:
Proceeds from issuance of Senior Subordinated Notes due 2025		600,000		—		—		—		600,000
Proceeds from extension and modification of Term Loan due 2022		124,375		—		—		—		124,375
Repurchase of Senior Subordinated Notes due 2020		(645,701)		—		—		—		(645,701)
Net borrowings under Revolving Credit Facility		75,000		—		—		—		75,000
Principal payments under Term Loan		(5,813)		—		—		—		(5,813)
Principal payments under capital and financing lease obligations		—		(7,840)		—		—		(7,840)
Principal payments under promissory note		—		(1,389)		—		—		(1,389)
Principal amount of coupon payment under Senior Subordinated Notes due 2020		(3,486)		—		—		—		(3,486)
Deferred financing costs		(21,252)		—		—		—		(21,252)
Change in intercompany advances		(60,042)		62,742		(2,700)		—		—
Cash used to pay dividends		(78,608)		—		—		—		(78,608)
Net cash used in financing activities		(15,527)		53,513		(2,700)		—		35,286
Effect of exchange rate changes on cash and equivalents		—		(320)		(43)		—		(363)
Net decrease in cash and equivalents		(510)		(7,094)		648		—		(6,956)
Cash and equivalents at beginning of period		2,454		174,117		41,635		—		218,206
Cash and equivalents at end of period	$	1,944	$	167,023	$	42,283	$	—	$	211,250

Year Ended December 31, 2014:


			Subsidiary		Subsidiary		Consolidating		Consolidated
(In thousands)	Holdings		Guarantors		Non-Guarantors		Adjustments		Holdings
Cash flows from operating activities:
Net cash provided by operating activities	$	13,212	$	280,990	$	3,100	$	—	$	297,302
Cash flows from investing activities:
Capital expenditures		—		(270,677)		(57)		—		(270,734)
Proceeds from disposition of long-term assets		—		238		—		—		238
Investments in non-consolidated entities, net		—		(1,522)		—		—		(1,522)
Other, net		—		327		—		—		327
Net cash used in investing activities		—		(271,634)		(57)		—		(271,691)
Cash flows from financing activities:
Proceeds from issuance of Senior Subordinated Notes due 2022		375,000		—		—		—		375,000
Repurchase of Senior Notes due 2019		(639,728)		—		—		—		(639,728)
Payment of initial public offering costs		—		(281)		—		—		(281)
Principal payments under Term Loan		(7,750)		—		—		—		(7,750)
Principal payments under capital and financing lease obligations		—		(6,941)		—		—		(6,941)
Principal payments under promissory note		—		(1,389)		—		—		(1,389)
Principal amount of coupon payment under Senior Subordinated Notes due 2020		(6,227)		—		—		—		(6,227)
Cash used to pay deferred financing costs		(7,952)		—		—		—		(7,952)
Cash used to pay dividends		(58,504)		—		—		—		(58,504)
Purchase of treasury stock		(92)		—		—		—		(92)
Change in intercompany advances		331,867		(328,651)		(3,216)		—		—
Net cash used in financing activities		(13,386)		(337,262)		(3,216)		—		(353,864)
Effect of exchange rate changes on cash and equivalents		—		34		(29)		—		5
Net decrease in cash and equivalents		(174)		(327,872)		(202)		—		(328,248)
Cash and equivalents at beginning of period		2,628		501,989		41,837		—		546,454
Cash and equivalents at end of period	$	2,454	$	174,117	$	41,635	$	—	$	218,206