OPERATING SEGMENT (Tables)
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9 Months Ended |
Sep. 30, 2018 |
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| OPERATING SEGMENTS |
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| Schedule of financial information by reportable operating segment |
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Three Months Ended
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Nine Months Ended
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Revenues (In millions)
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September 30, 2018
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September 30, 2017
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September 30, 2018
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September 30, 2017
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U.S. markets
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$
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895.6
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$
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845.7
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$
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3,007.1
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$
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2,745.2
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International markets
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325.8
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333.0
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1,040.4
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917.2
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Total revenues
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$
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1,221.4
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$
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1,178.7
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$
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4,047.5
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$
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3,662.4
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Three Months Ended
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Nine Months Ended
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Adjusted EBITDA (1) (In millions)
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September 30, 2018
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September 30, 2017
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September 30, 2018
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September 30, 2017
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U.S. markets (2)
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$
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105.0
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$
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107.6
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$
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535.6
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$
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420.6
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International markets
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37.4
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39.8
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129.5
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113.7
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Total Adjusted EBITDA
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$
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142.4
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$
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147.4
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$
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665.1
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$
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534.3
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(1)
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The Company presents Adjusted EBITDA as a supplemental measure of its performance. The Company defines 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 the Company does not consider indicative of its ongoing operating performance and to include attributable EBITDA from equity investments in theatre operations in international markets and any cash distributions of earnings from its other equity method investees. The measure of segment profit and loss the Company uses to evaluate performance and allocate its resources is Adjusted EBITDA, which is consistent with how Adjusted EBITDA is defined in our debt indentures. |
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(2)
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Distributions from NCM are reported entirely within the U.S. markets segment. |
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Three Months Ended
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Nine Months Ended
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Capital Expenditures (In millions)
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September 30, 2018
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September 30, 2017
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September 30, 2018
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September 30, 2017
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U.S. markets
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$
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92.9
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$
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126.9
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$
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264.9
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$
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416.6
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International markets
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40.9
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22.8
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110.0
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51.1
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Total capital expenditures
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$
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133.8
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$
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149.7
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$
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374.9
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$
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467.7
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| Schedule of information about the Company's revenues from continuing operations and assets by geographic area |
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Three Months Ended
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Nine Months Ended
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Revenues (In millions)
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September 30, 2018
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September 30, 2017
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September 30, 2018
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September 30, 2017
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United States
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$
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895.6
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$
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845.7
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$
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3,007.1
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$
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2,745.2
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United Kingdom
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123.4
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127.8
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379.7
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366.9
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Spain
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47.9
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47.4
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139.7
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132.3
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Sweden
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43.1
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47.9
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137.0
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89.2
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Italy
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29.5
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33.2
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124.1
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125.9
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Germany
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22.3
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26.6
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79.6
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86.6
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Finland
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22.2
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21.9
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72.3
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41.5
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Ireland
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10.3
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10.2
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29.6
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28.2
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Other foreign countries
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27.1
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18.0
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78.4
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46.6
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Total
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$
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1,221.4
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$
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1,178.7
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$
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4,047.5
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$
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3,662.4
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As of
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As of
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Long-term assets, net (In millions)
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September 30, 2018
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December 31, 2017
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United States
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$
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5,775.9
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$
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5,866.8
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International
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2,900.6
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3,066.7
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Total long-term assets (1)
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$
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8,676.5
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$
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8,933.5
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(1)
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Long-term assets are comprised of property, intangible assets, goodwill, deferred income tax assets and other long-term assets. |
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| Schedule of reconciliation of net earnings to Adjusted EBITDA |
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Three Months Ended
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Nine Months Ended
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(In millions)
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September 30, 2018
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September 30, 2017
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September 30, 2018
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September 30, 2017
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Net earnings (loss)
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$
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(100.4)
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$
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(42.7)
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$
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(60.5)
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$
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(210.8)
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Plus:
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Income tax provision (benefit)
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11.1
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(17.6)
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13.2
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(136.4)
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Interest expense
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84.0
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71.4
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248.9
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203.4
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Depreciation and amortization
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130.2
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135.2
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398.4
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393.9
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Certain operating expenses (1)
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6.6
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3.7
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16.2
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12.5
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Equity in (earnings) loss of non-consolidated entities (2)
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(70.0)
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1.8
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(74.0)
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199.1
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Cash distributions from non-consolidated entities (3)
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3.1
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6.5
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30.9
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33.1
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Attributable EBITDA (4)
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2.1
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0.8
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3.7
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1.8
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Investment (income) expense
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(0.7)
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(16.6)
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(7.4)
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(21.6)
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Other expense (income) (5)
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54.1
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(0.6)
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57.7
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(1.8)
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General and administrative — unallocated:
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Merger, acquisition and transaction costs (6)
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18.1
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5.6
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27.1
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57.2
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Stock-based compensation expense (7)
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4.2
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(0.1)
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10.9
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3.9
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Adjusted EBITDA
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$
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142.4
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$
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147.4
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$
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665.1
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$
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534.3
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(1)
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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. |
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(2)
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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 three months ended March 31, 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. The nine months ended September 30, 2017 included an other-than-temporary impairment loss of $204.5 million, on our investment in NCM. The three months ended September 30, 2017 included a loss on the sale of NCM shares of $21.0 million. The impairment charges reflect recording our held-for-sale units and other-than-temporary impaired shares at the publicly quoted per share price on March 31, 2018 of $5.19 and June 30, 2017 of $7.42. |
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(3)
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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. |
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(4)
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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 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 made this adjustment and does not impact prior historical presentations of Adjusted EBITDA. |
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Three Months Ended
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Nine Months Ended
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(In millions)
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September 30, 2018
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September 30, 2017
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September 30, 2018
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September 30, 2017
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Equity in (earnings) loss of non-consolidated entities
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$
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(70.0)
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$
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1.8
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$
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(74.0)
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$
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199.1
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Less:
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Equity in (earnings) loss of non-consolidated entities excluding international theatre JV's
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(68.5)
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2.1
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(72.1)
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199.6
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Equity in earnings (loss) of International theatre JV's
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1.5
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0.3
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1.9
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0.5
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Income tax provision
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0.1
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—
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0.2
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—
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Investment income
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(0.1)
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—
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(0.3)
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—
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Depreciation and amortization
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0.6
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0.5
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1.9
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1.3
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Attributable EBITDA
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$
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2.1
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$
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0.8
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$
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3.7
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$
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1.8
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(5)
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Other expense (income) for the three and nine months ended September 30, 2018 includes financing losses and financing related foreign currency transaction losses. During the three months ended September 30, 2018, we recorded expense of $54.1 million as a result of an increase in fair value of our derivative liability for the Convertible Notes due 2024. |
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(6)
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Merger, acquisition and transition costs are excluded as they are non-operating in nature. |
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(7)
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Stock-based compensation expense is non-cash or non-recurring expense included in general and administrative: other. |
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