CONDENSED CONSOLIDATING FINANCIAL INFORMATION

12 Months Ended

Dec. 31, 2019

CONDENSED CONSOLIDATING FINANCIAL INFORMATION

CONDENSED CONSOLIDATING FINANCIAL INFORMATION

NOTE 19—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 Convertible Notes due 2024, the Sterling Notes due 2024, the Notes due 2025, 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.

The condensed consolidating information for the guarantors/non-guarantors has been retrospectively revised based on the structure that exists as of December 31, 2019 and reflecting changes as a result of the Sixth Amendment.

Consolidating Statement of Operations

Year Ended December 31, 2019:


					Subsidiary			Subsidiary			Consolidating			Consolidated
(In millions)		Holdings			Guarantors			Non-Guarantors			Adjustments			Holdings
Revenues
Admissions		$	—		$	2,388.2		$	913.1		$	—		$	3,301.3
Food and beverage			—			1,348.0			371.6			—			1,719.6
Other theatre			—			287.1			163.0			—			450.1
Total revenues			—			4,023.3			1,447.7			—			5,471.0
Operating costs and expenses
Film exhibition costs			—			1,311.5			387.6			—			1,699.1
Food and beverage costs			—			193.8			84.9			—			278.7
Operating expense, excluding depreciation and amortization			—			1,215.5			471.1			—			1,686.6
Rent			—			708.2			259.6			—			967.8
General and administrative:
Merger, acquisition and other costs			—			6.5			9.0			—			15.5
Other, excluding depreciation and amortization			—			86.4			66.6			—			153.0
Depreciation and amortization			—			340.4			109.6			—			450.0
Impairment of long-lived assets			—			76.6			7.7			—			84.3
Operating costs and expenses			—			3,938.9			1,396.1			—			5,335.0
Operating income			—			84.4			51.6			—			136.0
Other expense (income):
Equity in net loss of subsidiaries			382.9			151.3			—			(534.2)			—
Other expense (income)			(5.2)			18.5			0.1			—			13.4
Interest expense:
Corporate borrowings			290.8			293.0			3.0			(294.0)			292.8
Financing lease obligations			—			2.3			5.3			—			7.6
Non-cash NCM exhibitor service agreement			—			40.4			—			—			40.4
Intercompany interest expense			—			—			244.1			(244.1)			—
Equity in earnings of non-consolidated entities			—			(29.1)			(1.5)			—			(30.6)
Investment income			(519.4)			(21.0)			(13.7)			538.1			(16.0)
Total other expense, net			149.1			455.4			237.3			(534.2)			307.6
Loss before income taxes			(149.1)			(371.0)			(185.7)			534.2			(171.6)
Income tax provision (benefit)			—			11.9			(34.4)			—			(22.5)
Net loss		$	(149.1)		$	(382.9)		$	(151.3)		$	534.2		$	(149.1)

Consolidating Statement of Operations

Year Ended December 31, 2018:


					Subsidiary			Subsidiary			Consolidating			Consolidated
(In millions)		Holdings			Guarantors			Non-Guarantors			Adjustments			Holdings
Revenues
Admissions		$	—		$	2,441.5		$	943.5		$	—		$	3,385.0
Food and beverage			—			1,321.3			350.2			—			1,671.5
Other theatre			—			250.4			153.9			—			404.3
Total revenues			—			4,013.2			1,447.6			—			5,460.8
Operating costs and expenses
Film exhibition costs			—			1,323.1			387.1			—			1,710.2
Food and beverage costs			—			190.3			80.6			—			270.9
Operating expense, excluding depreciation and amortization			—			1,162.2			492.5			—			1,654.7
Rent			—			584.4			213.4			—			797.8
General and administrative:
Merger, acquisition and other costs			—			16.8			14.5			—			31.3
Other, excluding depreciation and amortization			—			112.5			66.8			—			179.3
Depreciation and amortization			—			384.0			153.8			—			537.8
Impairment of long-lived assets			—			8.1			5.7			—			13.8
Operating costs and expenses			—			3,781.4			1,414.4			—			5,195.8
Operating income			—			231.8			33.2			—			265.0
Other expense (income):
Equity in net earnings of subsidiaries			(14.5)			(13.7)			—			28.2			—
Other expense (income)			(110.5)			1.7			0.7			—			(108.1)
Interest expense:
Corporate borrowings			256.7			263.1			5.9			(263.4)			262.3
Capital and financing lease obligations			—			17.2			21.3			—			38.5
Non-cash NCM exhibitor service agreement			—			41.5			—			—			41.5
Equity in earnings of non-consolidated entities			—			(81.5)			(5.2)			—			(86.7)
Investment income			(241.8)			(27.1)			(0.7)			263.4			(6.2)
Total other expense (income), net			(110.1)			201.2			22.0			28.2			141.3
Earnings before income taxes			110.1			30.6			11.2			(28.2)			123.7
Income tax provision (benefit)			—			16.1			(2.5)			—			13.6
Net earnings		$	110.1		$	14.5		$	13.7		$	(28.2)		$	110.1

Consolidating Statement of Operations

Year Ended December 31, 2017:


					Subsidiary			Subsidiary			Consolidating			Consolidated
(In millions)		Holdings			Guarantors			Non-Guarantors			Adjustments			Holdings
Revenues
Admissions		$	—		$	2,330.9		$	898.6		$	—		$	3,229.5
Food and beverage			—			1,220.1			328.3			—			1,548.4
Other theatre			—			172.5			128.8			—			301.3
Total revenues			—			3,723.5			1,355.7			—			5,079.2
Operating costs and expenses
Film exhibition costs			—			1,224.7			379.6			—			1,604.3
Food and beverage costs			—			176.6			75.5			—			252.1
Operating expense, excluding depreciation and amortization			—			1,100.6			447.4			—			1,548.0
Rent			—			594.0			200.4			—			794.4
General and administrative:
Merger, acquisition and other costs			—			58.3			4.7			—			63.0
Other, excluding depreciation and amortization			2.0			82.7			48.5			—			133.2
Depreciation and amortization			—			404.2			134.4			—			538.6
Impairment of long-lived assets			—			43.6			—			—			43.6
Operating costs and expenses			2.0			3,684.7			1,290.5			—			4,977.2
Operating income (loss)			(2.0)			38.8			65.2			—			102.0
Other expense (income):
Equity in net (earnings) loss of subsidiaries			472.5			(45.1)			—			(427.4)			—
Other expense (income)			—			(1.7)			0.2			—			(1.5)
Interest expense:
Corporate borrowings			230.3			239.0			1.3			(239.0)			231.6
Capital and financing lease obligations			—			20.0			22.4			—			42.4
Equity in earnings of non-consolidated entities			—			187.8			(2.6)			—			185.2
Investment income			(217.6)			(43.0)			(1.0)			239.0			(22.6)
Total other expense, net			485.2			357.0			20.3			(427.4)			435.1
Earnings (loss) before income taxes			(487.2)			(318.2)			44.9			427.4			(333.1)
Income tax provision (benefit)			—			154.3			(0.2)			—			154.1
Net earnings (loss)		$	(487.2)		$	(472.5)		$	45.1		$	427.4		$	(487.2)

Consolidating Statement of Comprehensive Loss

Year Ended December 31, 2019:


					Subsidiary			Subsidiary			Consolidating			Consolidated
(In millions)		Holdings			Guarantors			Non-Guarantors			Adjustments			Holdings
Net loss		$	(149.1)		$	(382.9)		$	(151.3)		$	534.2		$	(149.1)
Other comprehensive income (loss):
Equity in other comprehensive loss of subsidiaries			(31.6)			17.2			—			14.4			—
Unrealized foreign currency translation adjustment, net of tax			—			(44.1)			27.6			—			(16.5)
Realized loss on foreign currency transactions, net of tax			—			0.5			—			—			0.5
Pension and other benefit adjustments:
Net loss arising during the period, net of tax			—			(5.1)			(10.4)			—			(15.5)
Equity method investee's cash flow hedge:
Unrealized net holding loss arising during the period, net of tax			—			(0.1)			—			—			(0.1)
Other comprehensive income (loss)			(31.6)			(31.6)			17.2			14.4			(31.6)
Total comprehensive loss		$	(180.7)		$	(414.5)		$	(134.1)		$	548.6		$	(180.7)

Consolidating Statement of Comprehensive Loss

Year Ended December 31, 2018:


					Subsidiary			Subsidiary			Consolidating			Consolidated
(In millions)		Holdings			Guarantors			Non-Guarantors			Adjustments			Holdings
Net earnings		$	110.1		$	14.5		$	13.7		$	(28.2)		$	110.1
Other comprehensive loss:
Equity in other comprehensive loss of subsidiaries			(124.5)			(99.1)			—			223.6			—
Unrealized foreign currency translation adjustment, net of tax			—			(30.7)			(97.0)			—			(127.7)
Realized loss on foreign currency transactions reclassified into other expense, net of tax			—			1.0			—			—			1.0
Pension and other benefit adjustments:
Net gain (loss) arising during the period, net of tax			—			6.3			(2.1)			—			4.2
Equity method investee's cash flow hedge:
Unrealized net holding 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			(124.5)			(124.5)			(99.1)			223.6			(124.5)
Total comprehensive loss		$	(14.4)		$	(110.0)		$	(85.4)		$	195.4		$	(14.4)

Consolidating Statement of Comprehensive Income (Loss)

Year Ended December 31, 2017:


					Subsidiary			Subsidiary			Consolidating			Consolidated
(In millions)		Holdings			Guarantors			Non-Guarantors			Adjustments			Holdings
Net earnings (loss)		$	(487.2)		$	(472.5)		$	45.1		$	427.4		$	(487.2)
Other comprehensive income (loss)
Equity in other comprehensive income of subsidiaries			128.1			112.1			—			(240.2)			—
Unrealized foreign currency translation adjustment, net of tax			—			22.0			109.7			—			131.7
Pension and other benefit adjustments:
Net gain (loss) arising during the period, net of tax			—			(5.4)			2.4			—			(3.0)
Marketable securities:
Unrealized net holding gain arising during the period, net of tax			—			0.7			—			—			0.7
Realized net gain reclassified into net investment income, net of tax			—			(0.4)			—			—			(0.4)
Equity method investee's cash flow hedge:
Realized net gain reclassified into equity in earnings of non-consolidated entities, net of tax			—			(0.9)			—			—			(0.9)
Other comprehensive income			128.1			128.1			112.1			(240.2)			128.1
Total comprehensive income (loss)		$	(359.1)		$	(344.4)		$	157.2		$	187.2		$	(359.1)

Consolidating Balance Sheet

As of December 31, 2019:


					Subsidiary			Subsidiary			Consolidating			Consolidated
(In millions)		Holdings			Guarantors			Non-Guarantors			Adjustments			Holdings
Assets
Current assets:
Cash and cash equivalents		$	0.3		$	94.9		$	169.8		$	—		$	265.0
Restricted cash			—			—			10.5			—			10.5
Receivables, net			—			160.1			104.0			(9.9)			254.2
Other current assets			—			108.5			34.9			—			143.4
Total current assets			0.3			363.5			319.2			(9.9)			673.1
Investment in equity of subsidiaries			452.6			1,962.8			—			(2,415.4)			—
Property, net			—			1,969.3			679.9			—			2,649.2
Operating lease right-of-use assets, net			—			3,491.8			1,304.2			—			4,796.0
Intangible assets, net			—			130.6			64.7			—			195.3
Intercompany advances			5,488.0			(5,097.7)			(390.3)			—			—
Goodwill			(2.1)			3,074.7			1,716.5			—			4,789.1
Deferred tax asset, net			—			—			70.1			—			70.1
Other long-term assets			47.4			328.0			127.6			—			503.0
Total assets		$	5,986.2		$	6,223.0		$	3,891.9		$	(2,425.3)		$	13,675.8
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable		$	—		$	382.8		$	170.5		$	(10.0)		$	543.3
Accrued expenses and other liabilities			18.6			184.0			121.9			0.1			324.6
Deferred revenues and income			—			348.9			100.3			—			449.2
Current maturities of corporate borrowings			20.0			—			—			—			20.0
Current maturities of finance lease liabilities			—			5.3			5.0			—			10.3
Current maturities of operating lease liabilities			—			449.5			136.3			—			585.8
Total current liabilities			38.6			1,370.5			534.0			(9.9)			1,933.2
Corporate borrowings			4,733.4			—			—			—			4,733.4
Finance lease liabilities			—			13.9			75.7			—			89.6
Operating lease liabilities			—			3,666.8			1,247.0						4,913.8
Exhibitor services agreement			—			549.7			—			—			549.7
Deferred tax liability, net			—			26.8			19.2			—			46.0
Other long-term liabilities			—			142.7			53.2			—			195.9
Total liabilities			4,772.0			5,770.4			1,929.1			(9.9)			12,461.6
Stockholders’ equity			1,214.2			452.6			1,962.8			(2,415.4)			1,214.2
Total liabilities and stockholders’ equity		$	5,986.2		$	6,223.0		$	3,891.9		$	(2,425.3)		$	13,675.8

Consolidating Balance Sheet

As of December 31, 2018:


					Subsidiary			Subsidiary			Consolidating			Consolidated
(In millions)		Holdings			Guarantors			Non-Guarantors			Adjustments			Holdings
Assets
Current assets:
Cash and cash equivalents		$	0.3		$	177.8		$	135.2		$	—		$	313.3
Restricted cash			—			—			10.7			—			10.7
Receivables, net			—			163.0			100.9			(4.4)			259.5
Other current assets			—			140.7			57.1			—			197.8
Total current assets			0.3			481.5			303.9			(4.4)			781.3
Investment in equity of subsidiaries			719.0			1,430.1			—			(2,149.1)			—
Property, net			—			2,152.3			887.3			—			3,039.6
Intangible assets, net			—			225.6			126.5			—			352.1
Intercompany advances			5,362.3			(4,512.3)			(850.0)			—			—
Goodwill			(2.1)			3,074.7			1,716.1			—			4,788.7
Deferred tax asset, net			—			—			28.6			—			28.6
Other long-term assets			59.8			316.2			129.5			—			505.5
Total assets		$	6,139.3		$	3,168.1		$	2,341.9		$	(2,153.5)		$	9,495.8
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable		$	—		$	327.2		$	129.9		$	(4.5)		$	452.6
Accrued expenses and other liabilities			31.5			197.5			149.4			0.1			378.5
Deferred revenues and income			—			314.0			100.8			—			414.8
Current maturities of corporate borrowings			13.8			1.4			—			—			15.2
Current maturities of capital and financing lease obligations			—			38.6			28.4			—			67.0
Total current liabilities			45.3			878.7			408.5			(4.4)			1,328.1
Corporate borrowings			4,696.0			—			11.8			—			4,707.8
Capital and financing lease obligations			—			194.3			298.9			—			493.2
Exhibitor services agreement			—			564.0			—			—			564.0
Deferred tax liability, net			—			17.7			23.9			—			41.6
Other long-term liabilities			—			794.4			168.7			—			963.1
Total liabilities			4,741.3			2,449.1			911.8			(4.4)			8,097.8
Temporary equity			0.4			—			—			—			0.4
Stockholders’ equity			1,397.6			719.0			1,430.1			(2,149.1)			1,397.6
Total liabilities and stockholders’ equity		$	6,139.3		$	3,168.1		$	2,341.9		$	(2,153.5)		$	9,495.8

Consolidating Statement of Cash Flows

Year Ended December 31, 2019:


					Subsidiary			Subsidiary			Consolidating			Consolidated
(In millions)		Holdings			Guarantors			Non-Guarantors			Adjustments			Holdings
Cash flows from operating activities:
Net cash provided by operating activities		$	51.1		$	316.6		$	211.3		$	—		$	579.0
Cash flows from investing activities:
Capital expenditures			—			(369.4)			(148.7)			—			(518.1)
Acquisition of theatre assets			—			(11.8)			—			—			(11.8)
Proceeds from disposition of long-term assets			—			7.9			15.3			—			23.2
Investments in non-consolidated entities, net			—			(0.1)			(9.6)			—			(9.7)
Other, net			—			0.3			—			—			0.3
Net cash used in investing activities			—			(373.1)			(143.0)			—			(516.1)
Cash flows from financing activities:
Proceeds from issuance of Term Loan due 2026			1,990.0			—			—			—			1,990.0
Payment of principal Senior Secured Notes due 2023			(230.0)			—			—			—			(230.0)
Payment of principal Senior Subordinated Notes due 2022			(375.0)			—			—			—			(375.0)
Call premiums paid for Senior Secured Notes due 2023 and Senior Subordinated Notes due 2022			(15.9)			—			—			—			(15.9)
Principal payments under Term Loans due 2022 and 2023			(1,338.5)			—			—			—			(1,338.5)
Repayments under Revolving Credit Facility			—			—			(12.0)			—			(12.0)
Scheduled principal payments under Term Loans			(21.9)			—			—			—			(21.9)
Principal payments under finance lease obligations			—			(6.1)			(4.8)			—			(10.9)
Principal payments under promissory note			—			(1.4)			—			—			(1.4)
Cash used to pay deferred financing fees			(11.9)			—			—			—			(11.9)
Cash used to pay dividends			(84.1)			—			—			—			(84.1)
Taxes paid for restricted unit withholdings			(1.3)			—			—			—			(1.3)
Change in intercompany advances			16.1			3.1			(19.2)			—			—
Net cash used in financing activities			(72.5)			(4.4)			(36.0)			—			(112.9)
Effect of exchange rate changes on cash and cash equivalents and restricted cash			21.4			(22.0)			2.1			—			1.5
Net increase (decrease) in cash and cash equivalents and restricted cash			—			(82.9)			34.4			—			(48.5)
Cash and cash equivalents and restricted cash at beginning of period			0.3			177.8			145.9			—			324.0
Cash and cash equivalents and restricted cash at end of period		$	0.3		$	94.9		$	180.3		$	—		$	275.5

Consolidating Statement of Cash Flows

Year Ended December 31, 2018:


					Subsidiary			Subsidiary			Consolidating			Consolidated
(In millions)		Holdings			Guarantors			Non-Guarantors			Adjustments			Holdings
Cash flows from operating activities:
Net cash provided by operating activities		$	7.2		$	369.8		$	146.2		$	—		$	523.2
Cash flows from investing activities:
Capital expenditures			—			(395.5)			(180.8)			—			(576.3)
Proceeds from sale leaseback transactions			—			50.1			—			—			50.1
Proceeds from disposition of NCM			—			162.5			—			—			162.5
Proceeds from Screenvision merger			—			45.8			—			—			45.8
Proceeds from disposition of long-term assets			—			8.5			5.7			—			14.2
Investments in non-consolidated entities, net			—			(11.4)			—			—			(11.4)
Other, net			—			(3.6)			1.5			—			(2.1)
Net cash used in investing activities			—			(143.6)			(173.6)			—			(317.2)
Cash flows from financing activities:
Proceeds from issuance of convertible note due 2024			600.0			—			—			—			600.0
Net borrowings under revolving credit facilities			—			—			12.1			—			12.1
Scheduled principal payments under Term Loans			(13.8)			—			—			—			(13.8)
Principal payments under capital and financing lease obligations			—			(39.8)			(31.2)			—			(71.0)
Principal payments under promissory note			—			(1.4)			—			—			(1.4)
Cash used to pay deferred financing fees			(15.5)			—			—			—			(15.5)
Cash used to pay dividends			(258.1)			—			—			—			(258.1)
Taxes paid for restricted unit withholdings			(1.7)			—			—			—			(1.7)
Retirement of Class B common stock			(423.6)			—			—			—			(423.6)
Purchase of treasury stock			(21.8)			—			—			—			(21.8)
Change in intercompany advances			167.1			(144.7)			(22.4)			—			—
Net cash provided by (used in) financing activities			32.6			(185.9)			(41.5)			—			(194.8)
Effect of exchange rate changes on cash and cash equivalents and restricted cash			(40.6)			41.6			(6.5)			—			(5.5)
Net increase (decrease) in cash and cash equivalents and restricted cash			(0.8)			81.9			(75.4)			—			5.7
Cash and cash equivalents and restricted cash at beginning of period			1.1			95.9			221.3			—			318.3
Cash and cash equivalents and restricted cash at end of period		$	0.3		$	177.8		$	145.9		$	—		$	324.0

Consolidating Statement of Cash Flows

Year Ended December 31, 2017:


					Subsidiary			Subsidiary			Consolidating			Consolidated
(In millions)		Holdings			Guarantors			Non-Guarantors			Adjustments			Holdings
Cash flows from operating activities:
Net cash provided by (used in) operating activities		$	(10.2)		$	364.3		$	183.3		$	—		$	537.4
Cash flows from investing activities:
Capital expenditures			—			(543.8)			(83.0)			—			(626.8)
Acquisition of Nordic Cinemas Group, net of cash and restricted cash acquired			—			(654.9)			77.3			—			(577.6)
Proceeds from sale leaseback transactions			—			136.2			—			—			136.2
Proceeds from disposition of NCM			—			89.0			—			—			89.0
Proceeds from disposition of Open Road			—			9.2			—			—			9.2
Proceeds (disbursements) from disposition of long-term assets			—			34.9			(10.8)			—			24.1
Investments in non-consolidated entities, net			—			(11.1)			—			—			(11.1)
Other, net			—			(2.1)			(0.2)			—			(2.3)
Net cash used in investing activities			—			(942.6)			(16.7)			—			(959.3)
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
Principal payment of Bridge Loan due 2017			(350.0)			—			—			—			(350.0)
Scheduled principal payments under Term Loans			(12.6)			—			—			—			(12.6)
Principal payments under capital and financing lease obligations			—			(41.6)			(29.1)			—			(70.7)
Principal payments under promissory note			—			(1.4)			—			—			(1.4)
Cash used to pay deferred financing fees			(29.8)			—			(3.8)			—			(33.6)
Cash used to pay dividends			(104.6)			—			—			—			(104.6)
Taxes paid for restricted unit withholdings			(6.5)			—			—			—			(6.5)
Purchase of treasury stock			(34.0)			—			—			—			(34.0)
Change in intercompany advances			(616.7)			662.1			(45.4)			—			—
Net cash provided by (used) in financing activities			(48.5)			619.1			(78.3)			—			492.3
Effect of exchange rate changes on cash and equivalents			56.8			(53.5)			14.4			—			17.7
Net increase (decrease) in cash and equivalents			(1.9)			(12.7)			102.7			—			88.1
Cash and equivalents at beginning of period			3.0			108.6			118.6			—			230.2
Cash and equivalents at end of period		$	1.1		$	95.9		$	221.3		$	—		$	318.3