REVENUE RECOGNITION (Tables)

9 Months Ended

Sep. 30, 2018

Summary of cumulative effect of the changes made for the adoption of the new revenue standard


(In millions)	Balance at December 31, 2017 Without Adoption of ASC 606		Adjustments Due to ASC 606		Balance at January 1, 2018
Assets:
Other long-term assets	$	475.9	$	11.1	$	487.0
Current liabilities:
Deferred revenues and income		401.0		(10.0)		391.0
Long-term liabilities:
Exhibitor services agreement		530.9		52.9		583.8
Stockholders' equity:
Accumulated deficit		(207.9)		(31.8)		(239.7)

The disclosure of the impact of the adoption of ASC 606 on the Company’s consolidated statement of operations is as follows:


	Three Months Ended September 30, 2018
(In millions)	Without Adoption of ASC 606		Adjustments		As Reported
Revenues:
Admissions	$	751.7	$	(0.3)	$	751.4
Food and beverage		384.9		(0.1)		384.8
Other theatre		73.9		11.3		85.2
Total revenues		1,210.5		10.9		1,221.4
Operating costs and expenses:
Operating expense, excluding depreciation and amortization		395.2		5.3		400.5
Non-cash interest expense related to NCM exhibitor service agreement		—		10.3		10.3
Net loss		(95.7)		(4.7)		(100.4)


	Nine Months Ended September 30, 2018
(In millions)	Without Adoption of ASC 606		Adjustments		As Reported
Revenues:
Admissions	$	2,523.7	$	(1.0)	$	2,522.7
Food and beverage		1,236.7		(0.3)		1,236.4
Other theatre		252.3		36.1		288.4
Total revenues		4,012.7		34.8		4,047.5
Operating costs and expenses:
Operating expense, excluding depreciation and amortization		1,216.4		20.5		1,236.9
Non-cash interest expense related to NCM exhibitor service agreement		—		31.2		31.2
Net loss		(43.6)		(16.9)		(60.5)

Schedule of disaggregated revenue


	Three Months Ended		Nine Months Ended
(In millions)	September 30, 2018		September 30, 2018
Major revenue types
Admissions	$	751.4	$	2,522.7
Food and beverage		384.8		1,236.4
Other theatre:
Advertising		31.2		102.5
Other theatre		54.0		185.9
Other theatre		85.2		288.4
Total revenues	$	1,221.4	$	4,047.5


	Three Months Ended		Nine Months Ended
(In millions)	September 30, 2018		September 30, 2018
Timing of revenue recognition
Products and services transferred at a point in time	$	1,162.4	$	3,891.8
Products and services transferred over time (1)		59.0		155.7
Total revenues	$	1,221.4	$	4,047.5

(1)

Amounts primarily include advertising revenues.

Schedule of contract balances


(In millions)	September 30, 2018		December 31, 2017
Current assets:
Receivables related to contracts with customers	$	74.3	$	204.3
Miscellaneous receivables		80.9		67.2
Receivables, net	$	155.2	$	271.5


(In millions)	September 30, 2018		December 31, 2017
Current liabilities:
Deferred revenue related to contracts with customers	$	288.6	$	376.1
Miscellaneous deferred income		4.6		24.9
Deferred revenue and income	$	293.2	$	401.0

Schedule of changes in customer contracts


	Deferred Revenues
	Related to Contracts
(In millions)	with Customers
Balance as of December 31, 2017	$	376.1
Cumulative effect of initially applying ASC 606		(10.0)
Cash received in advance (1)		285.6
Customer loyalty rewards accumulated, net of expirations:
Admission revenues (2)		21.8
Food and beverage (2)		39.1
Other theatre (2)		3.9
Reclassification to revenue as the result of performance obligations satisfied:
Admission revenues (3)		(304.0)
Food and beverage (3)		(61.5)
Other theatre (4)		(61.6)
Business combination - Nordic purchase price allocation (5)		(2.3)
Foreign currency translation adjustment		1.5
Balance as of September 30, 2018	$	288.6

(1)

Includes movie tickets, food and beverage, gift cards, exchange tickets, and AMC Stubs® loyalty membership fees.

(2)

Amount of rewards accumulated, net of expirations, that are attributed to AMC Stubs® and other loyalty programs.

(3)

Amount of rewards redeemed that are attributed to gift cards, exchange tickets, movie tickets, AMC Stubs® loyalty programs and other loyalty programs.

(4)

Amounts relate to income from non-redeemed or partially redeemed gift cards, non-redeemed exchange tickets, AMC Stubs® loyalty membership fees and other loyalty programs.

(5)

See Note 3 – Acquisitions for further information.

The significant changes to contract liabilities included in the exhibitor services agreement, classified as long-term liabilities in the consolidated balance sheets, are as follows:


	Exhibitor Services
(In millions)	Agreement
Balance as of December 31, 2017	$	530.9
Cumulative effect of initially applying ASC 606		52.9
Common Unit Adjustment – surrender of common units (1)		(5.2)
Reclassification of the beginning balance to other theatre revenue, as the result of performance obligations satisfied		(10.9)
Balance as of September 30, 2018	$	567.7

(1)

Represents the fair value amount of the NCM common units that were surrendered due to the annual Common Unit Adjustment. Such amount will reduce the deferred revenues that are being amortized to other theatre revenues over the remainder of the 30-year term of the ESA ending in February 2037. See Note 5—Investments for further information.

Schedule of components of liabilities included in the exhibitor services agreement


(In millions)	Three Months Ended December 31, 2018		Year Ended 2019		Year Ended 2020		Year Ended 2021		Year Ended 2022		Years Ended 2023 through February 2037
Exhibitor services agreement	$	3.7	$	15.7	$	16.8	$	18.1	$	19.4	$	494.0