| REVENUE RECOGNITION |
NOTE 2—REVENUE RECOGNITION Disaggregation of Revenue. Revenue is disaggregated in the following tables by major revenue types and by timing of revenue recognition: | | | | | | | | | | | | Year Ended | (In millions) | | December 31, 2024 | | December 31, 2023 | | December 31, 2022 | Major revenue types | | | | | | | | Admissions | | $ | 2,560.5 | | $ | 2,690.5 | | $ | 2,201.4 | Food and beverage | | | 1,624.9 | | | 1,669.8 | | | 1,313.7 | Other theatre: | | | | | | | | | | Advertising | | | 132.9 | | | 129.5 | | | 122.7 | Other theatre | | | 318.9 | | | 322.8 | | | 273.6 | Other theatre | | | 451.8 | | | 452.3 | | | 396.3 | Total revenues | | $ | 4,637.2 | | $ | 4,812.6 | | $ | 3,911.4 |
| | | | | | | | | | | | Year Ended | (In millions) | | December 31, 2024 | | December 31, 2023 | | December 31, 2022 | Timing of revenue recognition | | | | | | | Products and services transferred at a point in time | | $ | 4,224.7 | | $ | 4,424.1 | | $ | 3,579.9 | Products and services transferred over time (1) | | | 412.5 | | | 388.5 | | | 331.5 | Total revenues | | $ | 4,637.2 | | $ | 4,812.6 | | $ | 3,911.4 |
| (1) | Amounts primarily include subscription and advertising revenues. |
The following tables provide the balances of receivables, net and deferred revenues and income: | | | | | | | (In millions) | | December 31, 2024 | | December 31, 2023 | Current assets | | | | | | | Receivables related to contracts with customers | | $ | 86.0 | | $ | 113.5 | Miscellaneous receivables | | | 82.1 | | | 90.2 | Receivables, net | | $ | 168.1 | | $ | 203.7 |
| | | | | | | (In millions) | | December 31, 2024 | | December 31, 2023 | Current liabilities | | | | | | | Deferred revenues related to contracts with customers | | $ | 425.6 | | $ | 415.3 | Miscellaneous deferred income | | | 6.8 | | | 6.5 | Deferred revenues and income | | $ | 432.4 | | $ | 421.8 |
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) | | | 331.7 | Customer loyalty rewards accumulated, net of expirations: | | | | Admission revenues (2) | | | 22.3 | Food and beverage revenues (2) | | | 37.8 | Other theatre revenues (2) | | | (1.3) | Reclassification to revenue as the result of performance obligations satisfied: | | | | Admission revenues (3) | | | (237.5) | Food and beverage revenues (3) | | | (70.1) | Other theatre revenues (4) | | | (64.1) | Foreign currency translation adjustment | | | (2.3) | Balance December 31, 2023 | | $ | 415.3 | Cash received in advance (1) | | | 354.1 | Customer loyalty rewards accumulated, net of expirations: | | | | Admission revenues (2) | | | 22.6 | Food and beverage revenues (2) | | | 39.5 | Other theatre revenues (2) | | | (2.6) | Reclassification to revenue as the result of performance obligations satisfied: | | | | Admission revenues (3) | | | (254.1) | Food and beverage revenues (3) | | | (75.8) | Other theatre revenues (4) | | | (73.2) | Foreign currency translation adjustment | | | (0.2) | Balance December 31, 2024 | | $ | 425.6 |
| (1) | Includes movie tickets, food and beverage, gift cards, exchange tickets, subscription membership fees, and other loyalty membership fees. |
| (2) | Amount of rewards accumulated, net of expirations, that are attributed to loyalty programs. |
| (3) | Amount of rewards redeemed that are attributed to gift cards, exchange tickets, movie tickets, and loyalty programs. |
| (4) | Amounts relate to income from non-redeemed or partially redeemed gift cards, non-redeemed exchange tickets, subscription membership fees, and loyalty programs membership fees. |
The significant changes to contract liabilities included in the ESA in the 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 | | | (19.2) | Balance December 31, 2023 | | | 486.6 | Reclassification of the beginning balance to other theatre revenue, as the result of performance obligations satisfied | | | (22.6) | Balance December 31, 2024 | | $ | 464.0 |
| (1) | Represents the carrying amount of the NCM common units that were previously received under the annual CUA and subsequent adjustments related to the NCM Bankruptcy, as discussed in greater detail below. The deferred revenues are being amortized to other theatre revenues over the remainder of the 30-year term of the ESA ending in February 2037. |
NCM Bankruptcy. On April 11, 2023, NCM 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 the Company’s 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 the Company. As part of the Plan, on August 7, 2023, NCM issued 16,581,829 common units (“NCM Common Units”) that were owed to the Company as part of the annual common unit adjustment. However, under the terms of the Plan and the restructuring of the equity of NCM thereunder, the NCM Common Units were immediately cancelled upon the effective date of the Plan. On August 13, 2023, in response to an appeal by the Company regarding certain terms of the Plan, including modification of the terms of the exhibitor services agreement with other parties that were not similarly granted to the Company and appeal of the court’s order to approve cancellation of the NCM Common Unit issuance, the United States District Court for the Southern District of Texas affirmed the rulings of the bankruptcy court, including confirmation of the Plan. The Company filed an appeal to these rulings with the United States Court of Appeals for the Fifth Circuit and such appeal remains pending. The Company does not expect NCM’s bankruptcy or the appeal to have a material impact on the Company. Transaction Price Allocated to the Remaining Performance Obligations. The following table includes the amount of NCM ESA, included in exhibitor services agreement in the Company’s consolidated balance sheets, that is expected to be recognized as revenues in the future related to performance obligations that are unsatisfied as of December 31, 2024: | | | | (In millions) | | Exhibitor Services Agreement | Year ended 2025 | | $ | 24.4 | Year ended 2026 | | | 26.2 | Year ended 2027 | | | 28.2 | Year ended 2028 | | | 30.4 | Year ended 2029 | | | 32.8 | Years ended 2030 through February 2037 | | | 322.0 | Total | | $ | 464.0 |
Gift Cards and Exchange Tickets. The total amount of non-redeemed gift cards and exchange tickets included in deferred revenues and income as of December 31, 2024 was $327.9 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 December 31, 2024, the amount of deferred revenues allocated to the loyalty programs included in deferred revenues and income was $79.3 million. The earned points will be recognized as revenue as the points are redeemed, which is estimated to occur over the next 24 months. Subscription membership fees and loyalty membership fees are recognized ratably over their respective membership periods. 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.
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