NOTE 16—CONDENSED CONSOLIDATING FINANCIAL INFORMATION

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, the Notes due 2026, and the Notes due 2027 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.

Consolidating Statement of Operations

Three Months Ended September 30, 2018:


			Subsidiary		Subsidiary		Consolidating		Consolidated
(In millions)	Holdings		Guarantors		Non-Guarantors		Adjustments		Holdings
Revenues
Admissions	$	—	$	446.6	$	304.8	$	—	$	751.4
Food and beverage		—		240.5		144.3		—		384.8
Other theatre		—		49.4		35.8		—		85.2
Total revenues		—		736.5		484.9		—		1,221.4
Operating costs and expenses
Film exhibition costs		—		240.8		138.0		—		378.8
Food and beverage costs		—		37.2		26.4		—		63.6
Operating expense, excluding depreciation and amortization		—		227.3		173.2		—		400.5
Rent		—		127.9		75.8		—		203.7
General and administrative:
Merger, acquisition and transaction costs		—		9.0		9.1		—		18.1
Other, excluding depreciation and amortization		—		31.7		16.7		—		48.4
Depreciation and amortization		—		69.2		61.0		—		130.2
Operating costs and expenses		—		743.1		500.2		—		1,243.3
Operating loss		—		(6.6)		(15.3)		—		(21.9)
Other expense (income):
Equity in net (earnings) loss of subsidiaries		42.5		(10.4)		—		(32.1)		—
Other expense (income)		54.1		0.5		(0.5)		—		54.1
Interest expense:
Corporate borrowings		63.6		59.8		0.8		(59.9)		64.3
Capital and financing lease obligations		—		1.7		7.7		—		9.4
Non-cash NCM exhibitor service agreement		—		10.3		—		—		10.3
Equity in earnings of non-consolidated entities		—		(37.2)		(32.8)		—		(70.0)
Investment income		(59.8)		(0.9)		0.1		59.9		(0.7)
Total other expense (income)		100.4		23.8		(24.7)		(32.1)		67.4
Earnings (loss) before income taxes		(100.4)		(30.4)		9.4		32.1		(89.3)
Income tax provision (benefit)		—		12.1		(1.0)		—		11.1
Net earnings (loss)	$	(100.4)	$	(42.5)	$	10.4	$	32.1	$	(100.4)

Consolidating Statement of Operations

Three Months Ended September 30, 2017:


			Subsidiary		Subsidiary		Consolidating		Consolidated
(In millions)	Holdings		Guarantors		Non-Guarantors		Adjustments		Holdings
Revenues
Admissions	$	—	$	438.2	$	315.3	$	—	$	753.5
Food and beverage		—		222.0		139.4		—		361.4
Other theatre		—		36.7		27.1		—		63.8
Total revenues		—		696.9		481.8		—		1,178.7
Operating costs and expenses
Film exhibition costs		—		221.5		143.3		—		364.8
Food and beverage costs		—		33.5		27.2		—		60.7
Operating expense, excluding depreciation and amortization		—		216.5		166.7		—		383.2
Rent		—		123.0		77.7		—		200.7
General and administrative:
Merger, acquisition and transaction costs		—		3.7		1.9		—		5.6
Other, excluding depreciation and amortization		0.3		16.4		15.9		—		32.6
Depreciation and amortization		—		72.9		62.3		—		135.2
Operating costs and expenses		0.3		687.5		495.0		—		1,182.8
Operating income (loss)		(0.3)		9.4		(13.2)		—		(4.1)
Other expense (income):
Equity in net (earnings) loss of subsidiaries		38.9		20.9		—		(59.8)		—
Other expense (income)		—		(0.1)		(0.3)		—		(0.4)
Interest expense:
Corporate borrowings		60.3		57.7		0.5		(57.7)		60.8
Capital and financing lease obligations		—		1.9		8.7		—		10.6
Equity in (earnings) loss of non-consolidated entities		—		3.8		(2.0)		—		1.8
Investment income		(56.8)		(17.0)		(0.5)		57.7		(16.6)
Total other expense		42.4		67.2		6.4		(59.8)		56.2
Loss before income taxes		(42.7)		(57.8)		(19.6)		59.8		(60.3)
Income tax benefit		—		(18.9)		1.3		—		(17.6)
Net loss	$	(42.7)	$	(38.9)	$	(20.9)	$	59.8	$	(42.7)

Consolidating Statement of Operations

Nine Months Ended September 30, 2018:


			Subsidiary		Subsidiary		Consolidating		Consolidated
(In millions)	Holdings		Guarantors		Non-Guarantors		Adjustments		Holdings
Revenues
Admissions	$	—	$	1,514.8	$	1,007.9	$	—	$	2,522.7
Food and beverage		—		776.5		459.9		—		1,236.4
Other theatre		—		170.9		117.5		—		288.4
Total revenues		—		2,462.2		1,585.3		—		4,047.5
Operating costs and expenses
Film exhibition costs		—		824.0		452.7		—		1,276.7
Food and beverage costs		—		118.0		84.0		—		202.0
Operating expense, excluding depreciation and amortization		—		694.1		542.8		—		1,236.9
Rent		—		356.1		237.0		—		593.1
General and administrative:
Merger, acquisition and transaction costs		—		15.2		11.9		—		27.1
Other, excluding depreciation and amortization		—		84.7		50.9		—		135.6
Depreciation and amortization		—		211.4		187.0		—		398.4
Operating costs and expenses		—		2,303.5		1,566.3		—		3,869.8
Operating income		—		158.7		19.0		—		177.7
Other expense (income):
Equity in net earnings of subsidiaries		(5.3)		(26.6)		—		31.9		—
Other expense		55.1		1.1		1.3		—		57.5
Interest expense:
Corporate borrowings		185.7		185.4		2.8		(185.7)		188.2
Capital and financing lease obligations		—		5.2		24.3		—		29.5
Non-cash NCM exhibitor service agreement		—		31.2		—		—		31.2
Equity in earnings of non-consolidated entities		—		(40.1)		(33.9)		—		(74.0)
Investment income		(175.0)		(17.4)		(0.7)		185.7		(7.4)
Total other expense (income)		60.5		138.8		(6.2)		31.9		225.0
Earnings before income taxes		(60.5)		19.9		25.2		(31.9)		(47.3)
Income tax provision (benefit)		—		14.6		(1.4)		—		13.2
Net earnings (loss)	$	(60.5)	$	5.3	$	26.6	$	(31.9)	$	(60.5)

Consolidating Statement of Operations

Nine Months Ended September 30, 2017:


			Subsidiary		Subsidiary		Consolidating		Consolidated
(In millions)	Holdings		Guarantors		Non-Guarantors		Adjustments		Holdings
Revenues
Admissions	$	—	$	1,402.3	$	930.1	$	—	$	2,332.4
Food and beverage		—		707.4		425.7		—		1,133.1
Other theatre		—		118.8		78.1		—		196.9
Total revenues		—		2,228.5		1,433.9		—		3,662.4
Operating costs and expenses
Film exhibition costs		—		738.8		425.4		—		1,164.2
Food and beverage costs		—		100.5		82.1		—		182.6
Operating expense, excluding depreciation and amortization		—		652.7		476.1		—		1,128.8
Rent		—		370.9		220.0		—		590.9
General and administrative:
Merger, acquisition and transaction costs		—		54.3		2.9		—		57.2
Other, excluding depreciation and amortization		1.8		65.2		46.0		—		113.0
Depreciation and amortization		—		219.4		174.5		—		393.9
Operating costs and expenses		1.8		2,201.8		1,427.0		—		3,630.6
Operating income (loss)		(1.8)		26.7		6.9		—		31.8
Other expense (income):
Equity in net (earnings) loss of subsidiaries		199.8		19.0		—		(218.8)		—
Other income		—		(1.3)		(0.6)		—		(1.9)
Interest expense:
Corporate borrowings		170.1		167.1		1.5		(167.0)		171.7
Capital and financing lease obligations		—		5.8		25.9		—		31.7
Equity in (earnings) loss of non-consolidated entities		—		201.2		(2.1)		—		199.1
Investment (income) expense		(160.9)		(27.3)		(0.4)		167.0		(21.6)
Total other expense		209.0		364.5		24.3		(218.8)		379.0
Earnings (loss) before income taxes		(210.8)		(337.8)		(17.4)		218.8		(347.2)
Income tax provision (benefit)		—		(138.0)		1.6		—		(136.4)
Net earnings (loss)	$	(210.8)	$	(199.8)	$	(19.0)	$	218.8	$	(210.8)

Consolidating Statement of Comprehensive Loss

Three Months Ended September 30, 2018:


			Subsidiary		Subsidiary		Consolidating		Consolidated
(In millions)	Holdings		Guarantors		Non-Guarantors		Adjustments		Holdings
Net earnings (loss)	$	(100.4)	$	(42.5)	$	10.4	$	32.1	$	(100.4)
Other comprehensive income (loss)
Equity in other comprehensive income (loss) of subsidiaries		(8.0)		(5.3)		—		13.3		—
Unrealized foreign currency translation adjustment, net of tax		—		(0.2)		(5.5)		—		(5.7)
Pension and other benefit adjustments:
Net gain arising during the period, net of tax		—		—		0.1		—		0.1
Equity method investees’ cash flow hedge:
Realized net gain reclassified to equity in earnings of non-consolidated entities, net of tax		—		(1.9)		—		—		(1.9)
Other comprehensive loss		(8.0)		(7.4)		(5.4)		13.3		(7.5)
Total comprehensive income (loss)	$	(108.4)	$	(49.9)	$	5.0	$	45.4	$	(107.9)

Consolidating Statement of Comprehensive Income (Loss)

Three Months Ended September 30, 2017:


			Subsidiary		Subsidiary		Consolidating		Consolidated
(In millions)	Holdings		Guarantors		Non-Guarantors		Adjustments		Holdings
Net loss	$	(42.7)	$	(38.9)	$	(20.9)	$	59.8	$	(42.7)
Other comprehensive income (loss)
Equity in other comprehensive income (loss) of subsidiaries		33.7		34.6		—		(68.3)		—
Unrealized foreign currency translation adjustment, net of tax		—		(0.2)		34.6		—		34.4
Marketable securities:
Unrealized holding gain arising during the period, net of tax		—		0.2		—		—		0.2
Equity method investees’ cash flow hedge:
Unrealized net holding gain arising during the period, net of tax		—		0.1		—		—		0.1
Realized net holding gain reclassified to equity in earnings of non-consolidated entities, net of tax		—		(1.0)		—		—		(1.0)
Other comprehensive income		33.7		33.7		34.6		(68.3)		33.7
Total comprehensive income (loss)	$	(9.0)	$	(5.2)	$	13.7	$	(8.5)	$	(9.0)

Consolidating Statement of Comprehensive Loss

Nine Months Ended September 30, 2018:


			Subsidiary		Subsidiary		Consolidating		Consolidated
(In millions)	Holdings		Guarantors		Non-Guarantors		Adjustments		Holdings
Net earnings	$	(60.5)	$	5.3	$	26.6	$	(31.9)	$	(60.5)
Other comprehensive income (loss)
Equity in other comprehensive income (loss) of subsidiaries		(103.9)		(75.4)		—		179.3		—
Unrealized foreign currency translation adjustment, net of tax		—		(27.5)		(74.1)		—		(101.6)
Realized loss on foreign currency transactions, net of tax		—		1.0		—		—		1.0
Pension and other benefit adjustments:
Net loss arising during the period, net of tax		—		—		(1.3)		—		(1.3)
Equity method investees’ cash flow hedge:
Unrealized net holding (loss) gain arising during the period, net of tax		—		0.2		—		—		0.2
Realized net gain reclassified to equity in earnings of non-consolidated entities, net of tax		—		(2.2)		—		—		(2.2)
Other comprehensive loss		(103.9)		(103.9)		(75.4)		179.3		(103.9)
Total comprehensive loss	$	(164.4)	$	(98.6)	$	(48.8)	$	147.4	$	(164.4)

Consolidating Statement of Comprehensive Income (Loss)

Nine Months Ended September 30, 2017:


			Subsidiary		Subsidiary		Consolidating		Consolidated
(In millions)	Holdings		Guarantors		Non-Guarantors		Adjustments		Holdings
Net earnings (loss)	$	(210.8)	$	(199.8)	$	(19.0)	$	218.8	$	(210.8)
Other comprehensive income (loss)
Equity in other comprehensive income (loss) of subsidiaries		108.3		109.0		—		(217.3)		—
Unrealized foreign currency translation adjustment, net of tax		—		(0.2)		109.5		—		109.3
Pension and other benefit adjustments:
Amortization of net loss (gain) reclassified into general and administrative: other, net of tax		—		—		(0.5)		—		(0.5)
Marketable securities:
Unrealized net holding gain arising during the period, net of tax		—		0.5		—		—		0.5
Realized net gain reclassified into net investment income, net of tax		—		(0.1)		—		—		(0.1)
Equity method investees’ cash flow hedge:
Realized net loss reclassified to equity in earnings of non-consolidated entities, net of tax		—		(0.9)		—		—		(0.9)
Other comprehensive income		108.3		108.3		109.0		(217.3)		108.3
Total comprehensive income (loss)	$	(102.5)	$	(91.5)	$	90.0	$	1.5	$	(102.5)

Consolidating Balance Sheet

As of September 30, 2018:


			Subsidiary		Subsidiary		Consolidating		Consolidated
(In millions)	Holdings		Guarantors		Non-Guarantors		Adjustments		Holdings
Assets
Current assets:
Cash and cash equivalents	$	0.4	$	229.3	$	103.6	$	—	$	333.3
Restricted cash		—		—		11.0		—		11.0
Receivables, net		—		84.3		76.0		(5.1)		155.2
Assets held for sale		—		—		—		—		—
Other current assets		—		107.4		79.6		—		187.0
Total current assets		0.4		421.0		270.2		(5.1)		686.5
Investment in equity of subsidiaries		686.5		1,468.7		—		(2,155.2)		—
Property, net		—		1,557.3		1,471.3		—		3,028.6
Intangible assets, net		—		211.8		147.5		—		359.3
Intercompany advances		5,471.4		(3,569.2)		(1,902.2)		—		—
Goodwill		(2.1)		2,422.1		2,400.8		—		4,820.8
Deferred tax asset, net		—		—		98.2		(68.7)		29.5
Other long-term assets		4.6		299.8		133.9		—		438.3
Total assets	$	6,160.8	$	2,811.5	$	2,619.7	$	(2,229.0)	$	9,363.0
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	—	$	290.8	$	109.5	$	(5.2)	$	395.1
Accrued expenses and other liabilities		59.7		164.8		162.5		0.1		387.1
Deferred revenues and income		—		220.2		73.0		—		293.2
Current maturities of corporate borrowings and capital and financing lease obligations		13.8		11.3		57.9		—		83.0
Total current liabilities		73.5		687.1		402.9		(5.1)		1,158.4
Corporate borrowings		4,832.3		1.4		6.6		—		4,840.3
Capital and financing lease obligations		—		66.3		450.4		—		516.7
Exhibitor services agreement		—		567.7		—		—		567.7
Deferred tax liability, net		—		85.2		27.8		(68.7)		44.3
Other long-term liabilities		—		717.4		263.3		—		980.7
Total liabilities		4,905.8		2,125.1		1,151.0		(73.8)		8,108.1
Temporary equity		0.4		—		—		—		0.4
Stockholders’ equity		1,254.6		686.4		1,468.7		(2,155.2)		1,254.5
Total liabilities and stockholders’ equity	$	6,160.8	$	2,811.5	$	2,619.7	$	(2,229.0)	$	9,363.0

Consolidating Balance Sheet

As of December 31, 2017:


			Subsidiary		Subsidiary		Consolidating		Consolidated
(In millions)	Holdings		Guarantors		Non-Guarantors		Adjustments		Holdings
Assets
Current assets:
Cash and cash equivalents	$	1.1	$	85.0	$	223.9	$	—	$	310.0
Restricted cash		—		—		8.3		—		8.3
Receivables, net		0.4		186.4		84.7		—		271.5
Assets held for sale		—		80.0		—		—		80.0
Other current assets		—		118.0		84.6		—		202.6
Total current assets		1.5		469.4		401.5		—		872.4
Investment in equity of subsidiaries		2,450.6		1,513.4		—		(3,964.0)		—
Property, net		—		1,591.1		1,525.4		—		3,116.5
Intangible assets, net		—		218.9		161.6		—		380.5
Intercompany advances		3,914.1		(1,893.3)		(2,020.8)		—		—
Goodwill		(2.1)		2,422.1		2,511.7		—		4,931.7
Deferred tax asset, net		—		—		97.6		(68.7)		28.9
Other long-term assets		5.8		326.5		143.6		—		475.9
Total assets	$	6,369.9	$	4,648.1	$	2,820.6	$	(4,032.7)	$	9,805.9
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	—	$	373.7	$	195.9	$	—	$	569.6
Accrued expenses and other liabilities		24.2		165.3		161.6		—		351.1
Deferred revenues and income		—		270.8		130.2		—		401.0
Current maturities of corporate borrowings and capital and financing lease obligations		13.8		11.8		62.1		—		87.7
Total current liabilities		38.0		821.6		549.8		—		1,409.4
Corporate borrowings		4,218.7		1.4		—		—		4,220.1
Capital and financing lease obligations		—		73.5		505.4		—		578.9
Exhibitor services agreement		—		530.9		—		—		530.9
Deferred tax liability, net		—		85.3		33.0		(68.7)		49.6
Other long-term liabilities		—		684.8		219.0		—		903.8
Total liabilities		4,256.7		2,197.5		1,307.2		(68.7)		7,692.7
Temporary equity		0.8		—		—		—		0.8
Stockholders’ equity		2,112.4		2,450.6		1,513.4		(3,964.0)		2,112.4
Total liabilities and stockholders’ equity	$	6,369.9	$	4,648.1	$	2,820.6	$	(4,032.7)	$	9,805.9

Consolidating Statement of Cash Flows

Nine Months Ended September 30, 2018:


			Subsidiary		Subsidiary		Consolidating		Consolidated
(In millions)	Holdings		Guarantors		Non-Guarantors		Adjustments		Holdings
Cash flows from operating activities:
Net cash provided by operating activities	$	44.0	$	141.7	$	113.1	$	—	$	298.8
Cash flows from investing activities:
Capital expenditures		—		(194.2)		(180.7)		—		(374.9)
Proceeds from sale leaseback transactions		—		50.1		—		—		50.1
Proceeds from Screenvision merger		—		—		45.8		—		45.8
Proceeds from disposition of NCM		—		162.5		—		—		162.5
Proceeds from disposition of long-term assets		—		4.5		9.4		—		13.9
Investments in non-consolidated entities, net		—		(11.0)		—		—		(11.0)
Other, net		—		(2.4)		1.7		—		(0.7)
Net cash provided by (used in) investing activities		—		9.5		(123.8)		—		(114.3)
Cash flows from financing activities:
Proceeds from issuance of Senior Unsecured Convertible Notes due 2024		600.0		—		—		—		600.0
Net borrowings under Revolving Credit Facility		—		—		6.6		—		6.6
Principal payments under Term Loan		(10.3)		—		—		—		(10.3)
Principal payments under capital and financing lease obligations		—		(7.8)		(45.7)		—		(53.5)
Cash used to pay deferred financing costs		(14.3)		—		—		—		(14.3)
Cash used to pay dividends		(237.4)		—		—		—		(237.4)
Taxes paid for restricted unit withholdings		(1.7)		—		—		—		(1.7)
Retirement of Class B common stock		(422.9)		—		—		—		(422.9)
Purchase of treasury stock		(21.8)		—		—		—		(21.8)
Change in intercompany advances		87.2		(23.5)		(63.7)		—		—
Net cash used in financing activities		(21.2)		(31.3)		(102.8)		—		(155.3)
Effect of exchange rate changes on cash and cash equivalents and restricted cash		(23.4)		24.3		(4.1)		—		(3.2)
Net increase (decrease) in cash and cash equivalents and restricted cash		(0.6)		144.2		(117.6)		—		26.0
Cash and cash equivalents and restricted cash at beginning of period		1.1		85.0		232.2		—		318.3
Cash and cash equivalents and restricted cash at end of period	$	0.5	$	229.2	$	114.6	$	—	$	344.3

Consolidating Statement of Cash Flows

Nine Months Ended September 30, 2017:


			Subsidiary		Subsidiary		Consolidating		Consolidated
(In millions)	Holdings		Guarantors		Non-Guarantors		Adjustments		Holdings
Cash flows from operating activities:
Net cash provided by operating activities	$	42.0	$	64.0	$	123.6	$	—	$	229.6
Cash flows from investing activities:
Capital expenditures		—		(320.5)		(147.2)		—		(467.7)
Acquisition of Nordic, net of cash and restricted cash acquired		—		(654.9)		77.3		—		(577.6)
Acquisition of Carmike Cinemas, Inc., net of cash and restricted cash acquired		—		0.1		—		—		0.1
Proceeds from sale leaseback transaction		—		128.4		—		—		128.4
Proceeds from disposition of NCM, Inc. shares		—		89.4		—		—		89.4
Proceeds from disposition of Open Road				9.2						9.2
Proceeds from disposition of long-term assets		—		9.1		13.4		—		22.5
Investments in non-consolidated entities, net		—		(11.6)		1.6		—		(10.0)
Other, net		—		(3.4)		(0.2)		—		(3.6)
Net cash used in investing activities		—		(754.2)		(55.1)		—		(809.3)
Cash flows from financing activities:
Proceeds from the issuance of Senior Subordinated Sterling Notes due 2024		327.8		—		—		—		327.8
Proceeds from the issuance of Senior Subordinated Notes due 2027		475.0		—		—		—		475.0
Payment of Nordic SEK Term Loan		(144.4)		—		—		—		(144.4)
Payment of Nordic EUR Term Loan		(169.5)		—		—		—		(169.5)
Net proceeds from equity offering		616.8		—		—		—		616.8
Net borrowings under Revolving Credit Facility		60.0								60.0
Principal payment of Bridge Loan due 2017		(350.0)		—		—		—		(350.0)
Principal payments under Term Loan		(9.1)		—		—		—		(9.1)
Principal payments under capital and financing lease obligations		—		(6.9)		(47.2)		—		(54.1)
Cash used to pay deferred financing costs		(29.8)		—		—		—		(29.8)
Cash used to pay dividends		(78.7)		—		—		—		(78.7)
Taxes paid for restricted unit withholdings		(6.5)								(6.5)
Purchase of treasury stock		(16.5)								(16.5)
Change in intercompany advances		(771.4)		773.7		(2.3)		—		—
Net cash provided by (used in) financing activities		(96.3)		766.8		(49.5)		—		621.0
Effect of exchange rate changes on cash and cash equivalents and restricted cash		51.4		(44.5)		13.0		—		19.9
Net decrease in cash and cash equivalents and restricted cash		(2.9)		32.1		32.0		—		61.2
Cash and cash equivalents and restricted cash at beginning of period		3.0		94.7		132.5		—		230.2
Cash and cash equivalents and restricted cash at end of period	$	0.1	$	126.8	$	164.5	$	—	$	291.4