CONDENSED CONSOLIDATING FINANCIAL INFORMATION

3 Months Ended

Mar. 31, 2020

CONDENSED CONSOLIDATING FINANCIAL INFORMATION

CONDENSED CONSOLIDATING FINANCIAL INFORMATION

NOTE 13—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 the Convertible Notes due 2024, 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.

The condensed consolidating information for the guarantors/non-guarantors has been retrospectively revised based on the structure that exists as of March 31, 2020 and reflecting changes as a result of the Sixth Amendment to the Senior Secured Credit Facility.

Condensed Consolidating Statement of Operations

Three Months Ended March 31, 2020:


					Subsidiary			Subsidiary			Consolidating			Consolidated
(In millions)		Holdings			Guarantors			Non-Guarantors			Adjustments			Holdings
Revenues
Admissions		$	—		$	389.1		$	178.9		$	—		$	568.0
Food and beverage			—			216.6			71.5			—			288.1
Other theatre			—			55.6			29.8			—			85.4
Total revenues			—			661.3			280.2			—			941.5
Operating costs and expenses
Film exhibition costs			—			198.9			72.8			—			271.7
Food and beverage costs			—			34.9			18.5			—			53.4
Operating expense, excluding depreciation and amortization			—			251.9			105.0			—			356.9
Rent			—			174.4			63.4			—			237.8
General and administrative:
Merger, acquisition and other costs			—			0.3			(0.1)			—			0.2
Other, excluding depreciation and amortization			—			17.3			15.9			—			33.2
Depreciation and amortization			—			92.4			30.1			—			122.5
Impairment of long-lived assets, indefinite-lived intangible assets and goodwill			—			1,214.3			637.6			—			1,851.9
Operating costs and expenses			—			1,984.4			943.2			—			2,927.6
Operating loss			—			(1,323.1)			(663.0)			—			(1,986.1)
Other expense (income):
Equity in net loss of subsidiaries			2,158.2			744.2			—			(2,902.4)			—
Other expense			20.2			5.3			1.4			—			26.9
Interest expense:
Corporate borrowings			70.7			71.0			0.8			(71.2)			71.3
Financing lease obligations			—			0.4			1.2			—			1.6
Non-cash NCM exhibitor service agreement			—			9.9			—			—			9.9
Intercompany interest expense			—			—			6.0			(6.0)			—
Equity in loss of non-consolidated entities			—			1.9			1.0			—			2.9
Investment expense (income)			(72.8)			5.3			(0.3)			77.2			9.4
Total other expense, net			2,176.3			838.0			10.1			(2,902.4)			122.0
Loss before income taxes			(2,176.3)			(2,161.1)			(673.1)			2,902.4			(2,108.1)
Income tax provision (benefit)			—			(2.9)			71.1			—			68.2
Net loss		$	(2,176.3)		$	(2,158.2)		$	(744.2)		$	2,902.4		$	(2,176.3)

Condensed Consolidating Statement of Operations

Three Months Ended March 31, 2019:


					Subsidiary			Subsidiary			Consolidating			Consolidated
(In millions)		Holdings			Guarantors			Non-Guarantors			Adjustments			Holdings
Revenues
Admissions		$	—		$	515.4		$	216.1		$	—		$	731.5
Food and beverage			—			287.6			81.2			—			368.8
Other theatre			—			64.2			35.9			—			100.1
Total revenues			—			867.2			333.2			—			1,200.4
Operating costs and expenses
Film exhibition costs			—			277.3			88.0			—			365.3
Food and beverage costs			—			43.0			18.5			—			61.5
Operating expense, excluding depreciation and amortization			—			285.6			117.2			—			402.8
Rent			—			176.6			65.4			—			242.0
General and administrative:
Merger, acquisition and other costs			—			1.2			2.1			—			3.3
Other, excluding depreciation and amortization			—			27.5			18.7			—			46.2
Depreciation and amortization			—			83.6			29.4			—			113.0
Operating costs and expenses			—			894.8			339.3			—			1,234.1
Operating loss			—			(27.6)			(6.1)			—			(33.7)
Other expense (income):
Equity in net loss of subsidiaries			294.7			196.9			—			(491.6)			—
Other expense			28.9			0.5			0.4			—			29.8
Interest expense:
Corporate borrowings			70.8			71.0			0.7			(71.2)			71.3
Finance lease obligations			—			0.7			1.4			—			2.1
Non-cash NCM exhibitor service agreement			—			10.2			—			—			10.2
Intercompany interest expense			—			—			197.5			(197.5)			—
Equity in earnings of non-consolidated entities			—			(6.1)			(0.4)			—			(6.5)
Investment income			(264.2)			(9.6)			(11.0)			268.7			(16.1)
Total other expense			130.2			263.6			188.6			(491.6)			90.8
Loss before income taxes			(130.2)			(291.2)			(194.7)			491.6			(124.5)
Income tax provision			—			3.5			2.2			—			5.7
Net loss		$	(130.2)		$	(294.7)		$	(196.9)		$	491.6		$	(130.2)

Condensed Consolidating Statement of Comprehensive Loss

Three Months Ended March 31, 2020:


					Subsidiary			Subsidiary			Consolidating			Consolidated
(In millions)		Holdings			Guarantors			Non-Guarantors			Adjustments			Holdings
Net loss		$	(2,176.3)		$	(2,158.2)		$	(744.2)		$	2,902.4		$	(2,176.3)
Other comprehensive loss:
Equity in other comprehensive loss of subsidiaries			(93.5)			(108.6)			—			202.1			—
Unrealized foreign currency translation adjustments, net of tax			—			15.1			(108.7)			—			(93.6)
Pension adjustments:
Realized net loss reclassified into other expense, net of tax			—			—			0.1			—			0.1
Other comprehensive loss			(93.5)			(93.5)			(108.6)			202.1			(93.5)
Total comprehensive loss		$	(2,269.8)		$	(2,251.7)		$	(852.8)		$	3,104.5		$	(2,269.8)

Condensed Consolidating Statement of Comprehensive Loss

Three Months Ended March 31, 2019:


					Subsidiary			Subsidiary			Consolidating			Consolidated
(In millions)		Holdings			Guarantors			Non-Guarantors			Adjustments			Holdings
Net loss		$	(130.2)		$	(294.7)		$	(196.9)		$	491.6		$	(130.2)
Other comprehensive loss:
Equity in other comprehensive loss of subsidiaries			(24.9)			(15.6)			—			40.5			—
Unrealized foreign currency translation adjustments, net of tax			—			(9.7)			(15.7)			—			(25.4)
Realized loss on foreign currency transactions reclassified into other expense, net of tax			—			0.5			—			—			0.5
Pension adjustments:
Realized net loss reclassified into other expense, net of tax			—			—			0.1			—			0.1
Equity method investee's cash flow hedge:
Unrealized net holding loss arising during the period, net of tax			—			(0.1)			—			—			(0.1)
Other comprehensive loss			(24.9)			(24.9)			(15.6)			40.5			(24.9)
Total comprehensive loss		$	(155.1)		$	(319.6)		$	(212.5)		$	532.1		$	(155.1)

Condensed Consolidating Balance Sheet

As of March 31, 2020:


					Subsidiary			Subsidiary			Consolidating			Consolidated
(In millions)		Holdings			Guarantors			Non-Guarantors			Adjustments			Holdings
Assets
Current assets:
Cash and cash equivalents		$	0.5		$	129.1		$	170.2		$	—		$	299.8
Restricted cash			—			—			10.0			—			10.0
Receivables, net			—			57.6			79.5			(10.3)			126.8
Other current assets			—			82.0			33.2			—			115.2
Total current assets			0.5			268.7			292.9			(10.3)			551.8
Investment in equity of subsidiaries			877.2			996.1			—			(1,873.3)			—
Property, net			—			1,889.2			631.2			—			2,520.4
Operating lease right-of-use assets, net			—			3,402.6			1,199.7			—			4,602.3
Intangible assets, net			—			121.7			53.4			—			175.1
Intercompany advances			3,002.5			(2,623.7)			(378.8)			—			—
Goodwill			(2.1)			1,949.8			990.3			—			2,938.0
Deferred tax asset, net			—			—			0.5			—			0.5
Other long-term assets			26.8			310.8			112.6			—			450.2
Total assets		$	3,904.9		$	6,315.2		$	2,901.8		$	(1,883.6)		$	11,238.3
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable		$	—		$	157.2		$	190.3		$	(10.4)		$	337.1
Accrued expenses and other liabilities			47.9			124.8			90.2			0.1			263.0
Deferred revenues and income			—			320.6			79.7			—			400.3
Current maturities of corporate borrowings			20.0			—			—			—			20.0
Current maturities of finance lease liabilities			—			5.3			4.9			—			10.2
Current maturities of operating lease liabilities			—			453.2			128.3			—			581.5
Total current liabilities			67.9			1,061.1			493.4			(10.3)			1,612.1
Corporate borrowings			4,911.0			—			109.8			—			5,020.8
Finance lease liabilities			—			12.7			72.3			—			85.0
Operating lease liabilities			—			3,621.1			1,163.2			—			4,784.3
Exhibitor services agreement			—			550.4			—			—			550.4
Deferred tax liability, net			—			27.6			20.1			—			47.7
Other long-term liabilities			—			165.1			46.9			—			212.0
Total liabilities			4,978.9			5,438.0			1,905.7			(10.3)			12,312.3
Stockholders’ equity (deficit)			(1,074.0)			877.2			996.1			(1,873.3)			(1,074.0)
Total liabilities and stockholders’ equity		$	3,904.9		$	6,315.2		$	2,901.8		$	(1,883.6)		$	11,238.3

Condensed 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 obligations			—			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

Condensed Consolidating Statement of Cash Flows

Three Months Ended March 31, 2020:


					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		$	35.2		$	(259.6)		$	40.4		$	—		$	(184.0)
Cash flows from investing activities:
Capital expenditures			—			(56.9)			(34.8)			—			(91.7)
Proceeds from disposition of long-term assets			—			3.1			0.3			—			3.4
Other, net			—			0.9			—			—			0.9
Net cash used in investing activities			—			(52.9)			(34.5)			—			(87.4)
Cash flows from financing activities:
Borrowings under revolving credit facilities			215.0			—			110.1			—			325.1
Scheduled principal payments under Term Loans			(5.0)			—			—			—			(5.0)
Principal payments under finance lease obligations			—			(1.3)			(1.0)			—			(2.3)
Cash used to pay deferred financing costs			(0.1)			—			—			—			(0.1)
Cash used to pay dividends			(4.3)			—			—			—			(4.3)
Taxes paid for restricted unit withholdings			(1.0)			—			—			—			(1.0)
Change in intercompany advances			(201.5)			308.7			(107.2)			—			—
Net cash provided by financing activities			3.1			307.4			1.9			—			312.4
Effect of exchange rate changes on cash and cash equivalents and restricted cash			(38.1)			39.3			(7.9)			—			(6.7)
Net increase (decrease) in cash and cash equivalents and restricted cash			0.2			34.2			(0.1)			—			34.3
Cash and cash equivalents and restricted cash at beginning of period			0.3			94.9			180.3			—			275.5
Cash and cash equivalents and restricted cash at end of period		$	0.5		$	129.1		$	180.2		$	—		$	309.8

Condensed Consolidating Statement of Cash Flows

Three Months Ended March 31, 2019:


					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		$	228.0		$	(231.3)		$	4.7		$	—		$	1.4
Cash flows from investing activities:
Capital expenditures			—			(75.6)			(39.2)			—			(114.8)
Proceeds from disposition of long-term assets			—			3.9			13.4			—			17.3
Investments in non-consolidated entities, net			—			(0.1)			—			—			(0.1)
Other, net			—			(0.9)			—			—			(0.9)
Net cash used in investing activities			—			(72.7)			(25.8)			—			(98.5)
Cash flows from financing activities:
Repayments under revolving credit facilities			—			—			(3.8)			—			(3.8)
Scheduled principal payments under Term Loans			(3.4)			—			—			—			(3.4)
Principal payments under finance lease obligations			—			(2.5)			(1.3)			—			(3.8)
Cash used to pay dividends			(21.8)			—			—			—			(21.8)
Taxes paid for restricted unit withholdings			(1.1)			—			—			—			(1.1)
Change in intercompany advances			(219.6)			242.9			(23.3)			—			—
Net cash provided by (used in) financing activities			(245.9)			240.4			(28.4)			—			(33.9)
Effect of exchange rate changes on cash and cash equivalents and restricted cash			17.9			(17.6)			1.9			—			2.2
Net decrease in cash and cash equivalents and restricted cash			—			(81.2)			(47.6)			—			(128.8)
Cash and cash equivalents and restricted cash at beginning of period			0.3			177.7			146.0			—			324.0
Cash and cash equivalents and restricted cash at end of period		$	0.3		$	96.5		$	98.4		$	—		$	195.2