| REVENUE RECOGNITION |
NOTE 3—REVENUE RECOGNITION Disaggregation of Revenue. Revenue is disaggregated in the following tables by major revenue types and by timing of revenue recognition: | | | | | | | | | | | | | | | Three Months Ended | | Six Months Ended | (In millions) | | June 30, 2023 | | June 30, 2022 | | June 30, 2023 | | June 30, 2022 | Major revenue types | | | | | | | | | | | Admissions | | $ | 744.1 | | $ | 651.0 | | $ | 1,278.2 | | $ | 1,094.8 | Food and beverage | | | 488.2 | | | 396.7 | | | 816.9 | | | 649.2 | Other theatre: | | | | | | | | | | | | | Screen advertising | | | 32.3 | | | 32.3 | | | 63.2 | | | 61.2 | Other | | | 83.3 | | | 86.4 | | | 144.0 | | | 146.9 | Other theatre | | | 115.6 | | | 118.7 | | | 207.2 | | | 208.1 | Total revenues | | $ | 1,347.9 | | $ | 1,166.4 | | $ | 2,302.3 | | $ | 1,952.1 |
| | | | | | | | | | | | | | | Three Months Ended | | Six Months Ended | (In millions) | | June 30, 2023 | | June 30, 2022 | | June 30, 2023 | | June 30, 2022 | Timing of revenue recognition | | | | | | | | | Products and services transferred at a point in time | | $ | 1,260.4 | | $ | 1,082.7 | | $ | 2,132.2 | | $ | 1,790.8 | Products and services transferred over time (1) | | | 87.5 | | | 83.7 | | | 170.1 | | | 161.3 | Total revenues | | $ | 1,347.9 | | $ | 1,166.4 | | $ | 2,302.3 | | $ | 1,952.1 |
| (1) | Amounts primarily include subscription and advertising revenues. |
The following tables provide the balances of receivables, net and deferred revenues and income: | | | | | | | (In millions) | | June 30, 2023 | | December 31, 2022 | Current assets | | | | | | | Receivables related to contracts with customers | | $ | 44.7 | | $ | 92.3 | Miscellaneous receivables | | | 93.1 | | | 74.3 | Receivables, net | | $ | 137.8 | | $ | 166.6 |
| | | | | | | (In millions) | | June 30, 2023 | | December 31, 2022 | Current liabilities | | | | | | | Deferred revenues related to contracts with customers | | $ | 381.0 | | $ | 398.8 | Miscellaneous deferred income | | | 4.3 | | | 3.9 | Deferred revenues and income | | $ | 385.3 | | $ | 402.7 |
The significant changes in contract liabilities with customers included in deferred revenues and income are as follows: | | | | | | Deferred Revenues | | | Related to Contracts | (In millions) | | with Customers | Balance December 31, 2022 | | $ | 398.8 | Cash received in advance (1) | | | 150.7 | Customer loyalty rewards accumulated, net of expirations: | | | | Admission revenues (2) | | | 10.5 | Food and beverage (2) | | | 20.2 | Other theatre (2) | | | (0.3) | Reclassification to revenue as the result of performance obligations satisfied: | | | | Admission revenues (3) | | | (137.9) | Food and beverage (3) | | | (39.1) | Other theatre (4) | | | (21.4) | Foreign currency translation adjustment | | | (0.5) | Balance June 30, 2023 | | $ | 381.0 |
| (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. |
The significant changes to contract liabilities included in the exhibitor services agreement in the condensed consolidated balance sheets, are as follows: | | | | | | Exhibitor Services | (In millions) | | Agreement (1) | Balance December 31, 2022 | | $ | 505.8 | Reclassification, net of adjustments, for portion of the beginning balance to other theatre revenue, as the result of performance obligations satisfied | | | (8.5) | Balance June 30, 2023 | | $ | 497.3 |
| (1) | Represents the carrying amount of the National CineMedia, LLC (“NCM”) common units that were previously received under the annual Common Unit Adjustment (“CUA”). The deferred revenues are being amortized to other theatre revenues over the remainder of the 30-year term of the Exhibitor Service Agreement (“ESA”) ending in February 2037. |
NCM Bankruptcy. On April 11, 2023, National CineMedia, LLC filed a petition under Chapter 11 of the U.S. Bankruptcy Code in the Southern District of Texas. NCM is the in-theatre advertising provider for the majority of our theatres in the United States. Under the Chapter 11 plan of reorganization, which became effective on August 7, 2023 (the “Plan”), NCM has assumed its agreements with us. We do not expect its bankruptcy to have a material impact on the Company. However, certain payments due to AMC from NCM for periods prior to the bankruptcy filing have been delayed during the pendency of the Chapter 11 proceedings. Additionally, as part of the Plan, on August 7, 2023, NCM issued, 16,581,829 common units (“NCM Common Units”) that were owed to AMC as part of the annual common unit adjustment. But under the terms of the Plan and the restructuring of the equity of NCM thereunder, the NCM Common Units were immediately cancelled upon the efficacy of the Plan. AMC has filed appeals with the United States District Court for the Southern District of Texas, objecting to, among other things, certain terms of the Plan, including appeal of the court’s order to approve cancellation of the NCM Common Unit Issuance. Gift Cards and Exchange Tickets. The total amount of non-redeemed gift cards and exchange tickets included in deferred revenues and income in the condensed consolidated balance sheet as of June 30, 2023 was $285.3 million. This will be recognized as revenues as the gift cards and exchange tickets are redeemed or as the non-redeemed gift card and exchange ticket revenues are recognized in proportion to the pattern of actual redemptions, which is estimated to occur over the next 24 months. Loyalty Programs. As of June 30, 2023, the amount of deferred revenues allocated to the loyalty programs included in deferred revenues and income in the condensed consolidated balance sheet was $72.7 million. The earned points will be recognized as revenue as the points are redeemed, which is estimated to occur over the next 24 months. The AMC Stubs® annual membership fee is recognized ratably over the one-year membership period. The Company applies the practical expedient in ASC 606-10-50-14 and does not disclose information about remaining performance obligations that have original expected durations of one year or less.
|