FAIR VALUE MEASUREMENTS

12 Months Ended

Dec. 31, 2023

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

NOTE 12—FAIR VALUE MEASUREMENTS

Fair value refers to the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the market in which the entity transacts business. The inputs used to develop these fair value measurements are established in a hierarchy, which ranks the quality and reliability of the information used to determine the fair values. The fair value classification is based on levels of inputs. Assets and liabilities that are carried at fair value are classified and disclosed in one of the following categories:

Level 1:	Quoted market prices in active markets for identical assets or liabilities.
Level 2:	Observable inputs that are corroborated by market data.
Level 3:	Unobservable inputs that are not corroborated by market data.

Recurring Fair Value Measurements. The following tables summarize the fair value hierarchy of the Company’s financial assets carried at fair value on a recurring basis:


					Fair Value Measurements at December 31, 2023 Using
											Significant
		Total Carrying			Quoted prices in			Significant other			unobservable
		Value at			active market			observable inputs			inputs
(In millions)		December 31, 2023			(Level 1)			(Level 2)			(Level 3)
Other long-term assets:
Investment in Hycroft warrants		$	3.3		$	—		$	—		$	3.3
Marketable equity securities:
Investment in Hycroft			5.8			5.8			—			—
Total		$	9.1		$	5.8		$	—		$	3.3


					Fair Value Measurements at December 31, 2022 Using
											Significant
		Total Carrying			Quoted prices in			Significant other			unobservable
		Value at			active market			observable inputs			inputs
(In millions)		December 31, 2022			(Level 1)			(Level 2)			(Level 3)
Other long-term assets:
Investment in Hycroft warrants		$	9.2		$	—		$	—		$	9.2
Marketable equity securities:
Investment in Hycroft			12.5			12.5			—			—
Total		$	21.7		$	12.5		$	—		$	9.2

Valuation Techniques. The equity method investment in Hycroft was measured at fair value using Hycroft’s stock price at the date of measurement. To estimate the fair value of the Company’s investment in Hycroft warrants, the Company valued the warrants using the Black Scholes pricing model. Such judgments and estimates included estimates of volatility of 130.0% and discount rate of 4.0%. The discount rate is based on the treasury yield that matches the term as of the measurement date. Other inputs included the term of 3.2 years, exercise price of $10.68 and Hycroft’s stock price at the date of measurement. The preceding exercise price has been adjusted for the one-for-ten reverse stock split Hycroft effectuated on November 15, 2023. There is considerable management judgment with respect to the inputs used in determining fair value, and, accordingly, actual results could vary significantly from such estimates, which fall under Level 3 within the fair value measurement hierarchy. See Note 6—Investments for further information regarding the investments in Hycroft.

Nonrecurring Fair Value Measurements. The following fair value hierarchy tables summarize the Company’s assets that were written down to their fair value on a nonrecurring basis as part of our impairment evaluation:


					Fair Value Measurements at December 31, 2023 Using
								Significant other			Significant
		Total Carrying			Quoted prices in			observable			unobservable			Total
		Value at			active market			inputs			inputs			Impairment
(In millions)		December 31, 2023			(Level 1)			(Level 2)			(Level 3)			Losses
Property, net:
Property, net		$	34.4		$	—		$	—		$	34.4		$	30.3
Operating lease right-of-use assets:
Operating lease right-of-use assets			93.5			—			—			93.5			76.6
Other long-term assets:
Cost method investments (1)			10.3			—			—			10.3			1.0
Total		$	138.2		$	—		$	—		$	138.2		$	107.9

(1)

Impairment losses for cost method investments are recorded in investment expense (income).


					Fair Value Measurements at December 31, 2022 Using
								Significant other			Significant
		Total Carrying			Quoted prices in			observable			unobservable			Total
		Value at			active market			inputs			inputs			Impairment
(In millions)		December 31, 2022			(Level 1)			(Level 2)			(Level 3)			Losses
Property, net:
Property, net		$	57.3		$	—		$	—		$	57.3		$	27.8
Operating lease right-of-use assets:
Operating lease right-of-use assets			138.4			—			—			138.4			105.3
Total		$	195.7		$	—		$	—		$	195.7		$	133.1

Valuation Techniques. There is considerable management judgment with respect to cash flow estimates and appropriate discount rates to be used in determining fair value, and, accordingly, actual results could vary significantly from such estimates, which fall under Level 3 within the fair value measurement hierarchy. Such judgments and estimates include estimates of future attendance, revenues, cash flows, rent relief, cost savings, capital expenditures, and the cost of capital, among others. At December 31, 2023, related cash flows were discounted at 9.0% for the Domestic Theatres and 11.0% for the International Theatres, at December 31, 2022, related cash flows were discounted at 10.0% for Domestic Theatres and 12.5% for International Theatres.

Other Fair Value Measurement Disclosures. The following tables summarize the fair value of financial instruments that are not recognized at fair value in the statement of financial position for which it is practicable to estimate that value:


					Fair Value Measurements at December 31, 2023 Using
								Significant other			Significant
		Total Carrying			Quoted prices in			observable			unobservable
		Value at			active market			inputs			inputs
(In millions)		December 31, 2023			(Level 1)			(Level 2)			(Level 3)
Current maturities of corporate borrowings		$	25.1		$	—		$	21.5		$	—
Corporate borrowings			4,552.3			—			3,674.7			—


					Fair Value Measurements at December 31, 2022 Using
								Significant other			Significant
		Total Carrying			Quoted prices in			observable			unobservable
		Value at			active market			inputs			inputs
(In millions)		December 31, 2022			(Level 1)			(Level 2)			(Level 3)
Current maturities of corporate borrowings		$	20.0		$	—		$	10.8		$	—
Corporate borrowings			5,120.8			—			2,516.2			—

Valuation Technique. Quoted market prices and observable market based inputs were used to estimate fair value for Level 2 inputs. The Company valued these notes at principal value less an estimated discount reflecting a market yield to maturity. See Note 8—Corporate Borrowings and Finance Lease Liabilities for further information.

The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, and accrued liabilities approximate fair value because of the short maturity of these instruments.

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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