NOTE 1—THE COMPANY AND SIGNIFICANT ACCOUNTING POLICIES

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AMC Entertainment Holdings, Inc. (“Holdings”), through its direct and indirect subsidiaries, including American Multi-Cinema, Inc. (“Multi-Cinema”) and its subsidiaries, (collectively with Holdings, unless the context otherwise requires, the “Company” or “AMC”), is principally involved in the theatrical exhibition business and owns, operates or has interests in theatres located in the United States and Europe.

Reverse Stock Split. On August 24, 2023, the Company effectuated a reverse stock split at a ratio of one share of Common Stock for every ten shares of Common Stock. As a result of the reverse stock split, each share of Series A Convertible Participating Preferred Stock became convertible into ten shares of Common Stock, and by extension each AMC Preferred Equity Unit became equivalent to one-tenth (1/10th) of a share of Common Stock. The reverse stock split did not impact the number of AMC Preferred Equity Units outstanding. The Company concluded that this change in conversion ratio is analogous to a reverse stock split of the AMC Preferred Equity Units even though the reverse stock split did not have an effect on the number of AMC Preferred Equity Units outstanding.

Accordingly, all references made to share, per share, unit, per unit, or common share amounts in the accompanying consolidated financial statements and applicable disclosures have been retroactively adjusted to reflect the effects of the subsequent reverse stock split. References made to AMC Preferred Equity Units have been retroactively adjusted to reflect the effect of the reverse stock split on their equivalent Common Stock shares.

Liquidity. The Company believes its existing cash and cash equivalents, together with cash generated from operations, will be sufficient to fund its operations and satisfy its obligations currently and through the next twelve months. The Company’s cash burn rates are not sustainable long-term. In order to achieve sustainable net positive cash flows from operating activities and long-term profitability, the Company believes that revenues will need to increase to levels at least in line with pre-COVID-19 revenues. North America box office grosses were down approximately 22% for the year ended December 31, 2025, compared to the year ended December 31, 2019. Until such time as the Company is able to achieve sustainable net positive cash flows from operating activities, it is difficult to estimate the Company’s future cash burn rates and liquidity requirements. Depending on the Company’s assumptions regarding the timing and ability to achieve increased levels of revenue, the estimates of amounts of required liquidity vary significantly.

There can be no assurance that the revenues, attendance levels, and other assumptions used to estimate the Company’s liquidity requirements and future cash burn rates will be correct, and the ability to be predictive is uncertain due to limited ability to predict studio film release dates, the overall production and theatrical release levels, and success of individual titles. Further, there can be no assurances that the Company will be successful in generating the additional liquidity necessary to meet the Company’s obligations beyond twelve months from the issuance of these financial statements on terms acceptable to the Company or at all.

The Company expects, from time to time, to continue to seek to retire or purchase its outstanding debt through cash purchases and/or exchanges for equity or debt, in open-market purchases, privately negotiated transactions or otherwise. Such repurchases or exchanges, if any, will be upon such terms and at such prices as it may determine, and will depend on prevailing market conditions, its liquidity requirements, the availability of authorized share capital, contractual restrictions and other factors. The amounts involved may be material and to the extent equity is used, dilutive. See Note 7—Corporate Borrowings and Finance Lease Liabilities for a summary of debt transactions that occurred during the years ended December 31, 2025, December 31, 2024, and December 31, 2023. Additionally, the Company has bolstered its liquidity through sales of its Common Stock, see Note 8—Stockholders’ Deficit and Note 14—Subsequent Events for further information on these sales.

Use of Estimates. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Principles of Consolidation. The consolidated financial statements include the accounts of Holdings and all subsidiaries, as discussed above. All significant intercompany balances and transactions have been eliminated in consolidation. The Company manages its business under two reportable segments for its theatrical exhibition operations: U.S. markets and International markets.

Revenues. The Company recognizes revenue, net of sales tax, when it satisfies a performance obligation by transferring control over a product or service to a customer. Admissions and food and beverage revenues are recorded at a point in time when a film is exhibited to a customer and when a customer takes possession of food and beverage offerings.

The Company defers 100% of the revenue associated with the sales of gift cards and exchange tickets until such time as the items are redeemed or estimated income from non-redemption is recorded. The Company recognizes revenue from non-redeemed or partially redeemed gift cards in proportion to the pattern of rights exercised by the customer (the “Proportional Method”). The Company estimates the non-redemption rate for its gift card sales and then applies the rates to the current month sales. The non-redemption rates range from 13% to 30%. The Company recognizes the total amount of expected revenue for non-redemption for that current month’s sales as income over the next one to 36 months in proportion to the pattern of actual redemptions. The non-redemption revenue is recorded in other theatre revenues. The Company has used significant amounts of historical data to estimate its non-redemption rates and redemption patterns. The Company also recognizes revenue from non-redeemed or partially redeemed exchange tickets using the Proportional Method. In the International markets, certain exchange tickets are subject to expiration dates, which triggers recognition of non-redemption in other revenues.

The Company recognizes ticket fee revenues based on a gross transaction price. The Company is a principal (as opposed to agent) in the arrangement with third-party internet ticketing companies in regard to the sale of online tickets because the Company controls the online tickets before they are transferred to the customer. The online ticket fee revenues and the third-party commission or service fees are recorded in the line items other theatre revenues and operating expense, respectively, in the consolidated statements of operations.

Film Exhibition Costs. Film exhibition costs are accrued based on the applicable box office receipts and estimates of the final settlement to the film licensors. Film exhibition costs include certain advertising costs. As of December 31, 2025 and December 31, 2024, the Company recorded film payables of $144.4 million and $143.9 million, respectively, which are included in accounts payable in the accompanying consolidated balance sheets. During the year ended December 31, 2025, films licensed from the Company’s seven largest movie studio distributors based on revenues accounted for approximately 83% of our U.S. admissions revenues, which consisted of Disney, Warner Bros., Universal, Sony, Paramount, 20th Century Studios, and Lionsgate Films. In Europe, approximately 76% of the Company’s box office revenue came from films attributed to our five largest movie distributor groups, which consisted of Disney, Universal, Warner Bros., Paramount, and Sony. The Company’s revenues attributable to individual distributors may vary significantly from year to year depending upon the commercial success of each distributor’s films in any given year.

Food and Beverage Costs. The Company records rebate payments from vendors as a reduction of food and beverage costs when earned.

Exhibitor Services Agreement. The Company recognizes advertising revenues, which are included in other theatre revenues in the consolidated statements of operations, when it satisfies a performance obligation by transferring a promised good or service to the customers. The advertising contracts with customers generally consist of a series of distinct periods of service, satisfied over time, to provide rights to advertising services. The Company’s exhibitor services agreement with National CineMedia, LLC (“NCM”) includes a significant financing component due to the significant length of time between receiving the non-cash consideration and fulfilling the performance obligation. On April 17, 2025, NCM and the Company entered into the Second Amended and Restated Exhibitor Services Agreement (the “Amended ESA”). The term of the Amended ESA has been extended by five years through February 13, 2042. The Company treated the Amended ESA as a contract modification pursuant to ASC 606 – Revenue from Contracts with Customers. Accordingly, the Company has allocated the additional consideration received from the contract modification to the exhibitor services agreement contract liability and updated the discount rate used for the significant financing component to 16.12%. Prior to the contract modification, the weighted average discount rate used to account for the significant financing component was approximately 7.5%. The contract liability will be reclassified to other theatre revenue over the new term of the Amended ESA as the remaining performance obligations are satisfied. See Note 2—Revenue Recognition for further information regarding the Amended ESA.

Customer Loyalty Programs. The Company offers a range of customer loyalty programs worldwide. Depending on the specific program, members can earn rewards, receive discounts, and access exclusive offers and services available only to members. Certain loyalty programs we offer, such as A-List, operate on a subscription model and enable members to watch multiple movies for a recurring fee. Rewards earned by members are redeemable on future purchases at our locations.

The portion of the admissions and food and beverage revenues attributed to the rewards is deferred. Upon redemption or expiration, deferred revenues associated with the rewards are recognized as revenues. The Company estimates reward non-redemption rates using historical information when assigning value to the rewards at the time of sale. Membership fees, net of estimated refunds, for our paid loyalty programs are initially deferred and allocated to the material rights for discounted or free products and services. Revenue is recognized as the rights are redeemed based on estimated utilization, over the membership period in admissions, food and beverage, and other revenues.

Membership fees for our subscription programs are recognized ratably over the subscription period in admissions revenue.

Advertising Costs. The Company expenses advertising costs as incurred and does not have any direct-response advertising recorded as assets. Advertising costs were $21.5 million, $22.2 million, and $43.6 million for the years ended December 31, 2025, December 31, 2024, and December 31, 2023, respectively. Advertising costs are recorded in operating expense in the accompanying consolidated statements of operations.

Cash and Cash Equivalents. All investments purchased with an original maturity of three months or less are classified as cash equivalents. As of December 31, 2025, cash and cash equivalents for the U.S. markets and International markets were $302.6 million and $125.9 million, respectively. As of December 31, 2024, cash and cash equivalents were $513.0 million and $119.3 million, respectively.

Restricted Cash. Restricted cash includes cash held in the Company's bank accounts as a guarantee for certain landlords, legal settlements, and cash collateralized letters of credit relating to the Company’s insurance and utilities programs. The following table provides a reconciliation of cash and cash equivalents and restricted cash reported in the consolidated balance sheet to the total of the amounts in the consolidated statements of cash flows.

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As of December 31, 2025, restricted cash for the U.S. markets and International markets was $20.5 million and $28.3 million, respectively. As of December 31, 2024, restricted cash for the U.S. markets and International markets was $20.7 million and $27.8 million, respectively.

Intangible Assets. Amortizable intangible assets are being amortized on a straight-line basis over the estimated remaining useful lives of the assets. The Company evaluates definite-lived intangible assets whenever events or changes in circumstances indicate that the carrying amount of the intangible asset may not be fully recoverable. Indefinite-lived intangible assets are not amortized but rather evaluated for impairment annually as of the beginning of the fourth quarter or more frequently if events or circumstances indicate that it is more likely than not that the asset is impaired.

The Company first assesses the qualitative factors to determine whether the existence of events and circumstances indicate that it is more likely than not the fair value of an indefinite-lived intangible asset is less than its carrying amount as a basis for determining whether it is necessary to perform the quantitative impairment test. There were no intangible asset impairment charges incurred during the years ended December 31, 2025, December 31, 2024, and December 31, 2023.

Investments. The Company accounts for its investments in non-consolidated entities using the equity method when Company’s ownership interest provides the Company with significant influence. The Company follows the guidance in ASC 323-30-35-3, investment in a limited liability company, which prescribes the use of the equity method for investments where the Company has significant influence. Under the equity method, the Company shall recognize its

share of the earnings or losses of an investee. In 2024, the Company reclassified equity earnings and losses to other expense (income), all comparative periods have also been reclassified. Equity investments without readily determinable fair values are recorded at cost less impairment. The Company classifies gains and losses on sales of investments or impairments of investments without a readily determinable fair value in investment expense (income). Investments in non-consolidated entities are presented within other long-term assets in the consolidated balance sheets.

The Company holds common shares and warrants to purchase common shares of Hycroft. The common shares and warrants are recorded at fair value at each reporting period and unrealized gains and losses are reported in investment expense (income). In December 2025, the Company sold 2.3 million shares of Hycroft common stock and warrants for 1.3 million shares for $24.1 million. The Company retained warrants to purchase approximately 1 million Hycroft common shares and approximately 64,000 Hycroft common shares.

During the years ended December 31, 2025, December 31, 2024, and December 31, 2023, the Company recorded realized and unrealized losses (gains) related to the investments in Hycroft of $(34.4) million, $2.9 million, and $12.6 million, respectively in investment income.

On December 30, 2022, the Company entered into an agreement to sell its 10.0% investment in Saudi Cinema Company LLC for SAR 112.5 million ($30.0 million), and on January 24, 2023, the Saudi Ministry of Commerce recorded the sale of equity and the Company received the proceeds on January 25, 2023. The Company recorded a gain on the sale of $(15.5) million in investment income during the year ended December 31, 2023.

Related Party Transactions. The Company conducts business with certain of its equity method investees in the ordinary course of business. Transactions primarily relate to advertising revenue and film exhibition costs for film rent. The Company recorded related party advertising revenue of $26.9 million, $26.7 million, and $28.6 million during the years ended December 31, 2025, December 31, 2024, and December 31, 2023, respectively. The Company recorded related party film exhibition costs of $17.5 million, $29.6 million, and $17.5 million during the years ended December 31, 2025, December 31, 2024, and December 31, 2023, respectively.

Derivatives. The Company remeasures the derivative liabilities related to the conversion features in its Existing Exchangeable Notes and New Exchangeable Notes at fair value each reporting period, with changes in fair value recorded in the consolidated statement of operations in other expense (income). The Company has obtained independent third-party valuation studies to assist in determining fair value. The valuation studies use binomial lattice models and are based on significant inputs not observable in the market and thus represent Level 3 measurements within the fair value measurement hierarchy. The binomial lattice models consist of simulated Common Stock prices from the valuation date to the maturity of the Existing Exchangeable Notes and New Exchangeable Notes. The inputs used to value the derivative include the share price of the Common Stock, the volatility of the share price, time to maturity, risk-free interest rate, credit spread, and the discount yield. The volatility of the Company’s Common Stock, the Common Stock price at the end of each reporting period, and the remaining amount of time until maturity of the Existing Exchangeable Notes and New Exchangeable Notes are key inputs for the estimation of fair value that are expected to change each reporting period.

The Company recorded other income related to the change in fair value of the derivatives of $(37.4) million and $(75.8) million as of December 31, 2025 and December 31, 2024, respectively. See Note 7—Corporate Borrowings and Finance Lease Obligations and Note 10—Fair Value Measurements for further discussions regarding the Company’s derivatives.

Goodwill. The Company’s recorded goodwill was $2,416.1 million and $2,301.1 million as of December 31, 2025 and December 31, 2024, respectively. Goodwill represents the excess of purchase price over fair value of net tangible and identifiable intangible assets resulting from the acquisition of Holdings on August 30, 2012 and subsequent business combinations. The Company has assigned goodwill to two reporting units (Domestic Theatres and International Theatres). The Company performs a qualitative assessment of goodwill at least annually as of the beginning of the fourth quarter or more frequently if events or circumstances indicate that it is more likely than not that the fair value for a reporting unit is less than its carrying amount, including goodwill.

The Company will perform a quantitative impairment test of goodwill if the qualitative assessment concludes that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. The quantitative impairment test of goodwill involves estimating the fair value of the reporting unit and comparing that value to its

carrying value. If the estimated fair value of the reporting unit is less than its carrying value, the difference is recorded as goodwill impairment charge, not to exceed the total amount of goodwill allocated to that reporting unit.

The Company performed qualitative assessments as of October 1, 2025 and October 1, 2024 and concluded that it was not more likely than not that the fair value of either of the Company’s two reporting units was less than their respective carrying amounts. The Company also concluded that there were no triggering events requiring additional assessments that had occurred between October 1, 2025 and December 31, 2025 and October 1, 2024 and December 31, 2024, respectively.

Leases. The Company leases theatres and equipment under operating and finance leases. Many of the leases contain options to extend the leases for additional periods. The Company typically does not believe that the exercise of the renewal options is reasonably assured at the inception of the lease agreements and, therefore, considers the initial base term as the lease term. Lease terms vary but generally, the leases provide for fixed and escalating rentals, contingent escalating rentals based on the Consumer Price Index or other indexes not to exceed certain specified amounts, and variable rentals based on a percentage of revenues. The Company often receives incentives from lessors to assist with renovations at existing locations. The Company records the incentives received from the lessors as an adjustment to the right-of-use asset which results in a reduction to lease costs over the lease term. Operating lease cost for theatre properties are recorded as rent expense in the consolidated statements of operations, except when the lease costs pertain to periods before a theatre opens or after it closes; in those cases, the costs are recorded to operating expense. Operating lease cost for equipment leases is recorded in operating expense in the consolidated statements of operations. The operating lease cost relating to the fixed lease payments is recorded on a straight-line basis over the lease term. Finance lease cost for both theatre properties and equipment are recorded as finance lease interest and depreciation and amortization in the consolidated statements of operations.

Lease right-of-use assets and lease liabilities are recorded at the lease commencement date based on the present value of minimum lease payments over the remaining lease term. The minimum lease payments include base rent and other fixed payments, including fixed maintenance costs. The present value of the lease payments is calculated using the incremental borrowing rate, which was determined using a portfolio approach based on the rate of interest that the Company would have to pay to borrow an amount equal to the lease payments on a collateralized basis over a similar term.

The Company elected the practical expedient to not separate lease and non-lease components and also elected the short-term practical expedient for all leases that qualify. As a result, the Company will not recognize right-of-use assets or liabilities for short-term leases that qualify for the short-term practical expedient, but instead will recognize the lease payments as lease cost on a straight-line basis over the lease term. The Company’s lease agreements do not contain residual value guarantees. Short-term leases and sublease arrangements are immaterial. Equipment leases primarily consist of food and beverage and digital equipment.

Impairment of Long-lived Assets. The Company reviews long-lived assets, including definite-lived intangibles, theatre assets (including operating lease right-of-use assets), and internal-use software whenever events or changes in circumstances indicate that the carrying amount of the asset or asset group may not be fully recoverable. The Company evaluates events or circumstances, including competition in the markets where it operates, that would indicate the carrying value of the asset groups may not be fully recoverable. If an event or circumstance is identified that indicates the carrying value may not be recoverable, the sum of future undiscounted cash flows is compared to the carrying value. If the carrying value exceeds the future undiscounted cash flows, the asset group may be impaired. If the asset group is determined to be impaired, the carrying value of the asset group is reduced to fair value as estimated primarily by using a discounted cash flow model, with the difference recorded as an impairment charge. Management believes that individual theatres are the lowest level for which there are identifiable cash flows and therefore each individual theatre represents an asset group. The Company evaluates theatre asset groups for recoverability using projected data of theatre level cash flow as its primary indicator of potential impairment, giving consideration to the seasonality of its business when making these evaluations. The fair value of assets is determined as either the expected selling price less selling costs (where appropriate) or the present value of the estimated future cash flows, adjusted as necessary for market participant factors.

There is considerable management judgment necessary to determine the estimated future cash flows and fair values of the Company’s theatres and other long-lived assets. Actual future cash flows could vary significantly from such

estimates. The estimated future cash flows are considered Level 3 inputs within the fair value measurement hierarchy, see Note 10—Fair Value Measurements for further information.

The following table summarizes the Company’s impairments, including impairments of equity investments, for the years ended December 31, 2025, December 31, 2024, and December 31, 2023:

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During the year ended December 31, 2025, the Company recorded non-cash impairment of long-lived assets of $28.0 million on 47 theatres in the U.S. markets with 560 screens (in Alabama, Colorado, Connecticut, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Louisiana, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Carolina, Pennsylvania, Tennessee, Texas, Utah, Virginia, Washington, and Wisconsin) and $15.5 million on 20 theatres in the International markets with 159 screens (in Germany, Italy, Spain, Sweden, and the United Kingdom), which were related to property, net and operating lease right-of-use assets, net. In addition, during the year ended December 31, 2025, the Company recorded impairment losses of $10.3 million within investment income related to an equity investment without a readily determinable fair value in the U.S. markets.

During the year ended December 31, 2024, the Company recorded non-cash impairment of long-lived assets of $51.9 million on 39 theatres in the U.S. markets with 469 screens and $20.4 million on 23 theatres in the International markets with 188 screens, which were related to property, net and operating lease right-of-use assets, net.

During the year ended December 31, 2023, the Company recorded non-cash impairment of long-lived assets of $49.2 million on 68 theatres in the U.S. markets with 738 screens and $57.7 million on 57 theatres in the International markets with 488 screens, which were related to property, net and operating lease right-of-use assets, net. In addition, during the year ended December 31, 2023, the Company recorded impairment losses of $1.0 million within investment income, related to an equity investment without a readily determinable fair value in the U.S. markets.

Foreign Currency Translation. Operations outside the United States are generally measured using the local currency as the functional currency. Assets and liabilities are translated to U.S. dollars using exchange rates as of the balance sheet date. Income and expense items are translated using average exchange rates. The foreign currency translation adjustments are a separate component of accumulated other comprehensive income (loss). Gains and losses from foreign currency transactions are included in net earnings (loss), except intercompany transactions of a long-term investment nature, which are included in comprehensive income (loss). Upon substantial liquidation of an investment in a foreign entity, the related foreign currency translation adjustment in accumulated other comprehensive income (loss) is reclassified into earnings as part of the gain or loss on disposition.

Contingencies. The Company, in the normal course of business, is a party to various ordinary course claims from vendors (including food and beverage suppliers and film distributors), landlords, competitors, and other legal proceedings. If management believes that a loss arising from these actions is probable and can reasonably be estimated, the Company records the amount of the loss, or the minimum estimated liability when the loss is estimated using a range and no point is more probable than another. As additional information becomes available, any potential liability related to these actions is assessed and the estimates are revised, if necessary. Management believes that the ultimate outcome of such matters discussed below, individually and in the aggregate, will not have a material adverse effect on the Company’s financial position or overall trends in results of operations. However, litigation and claims are subject to inherent uncertainties and unfavorable outcomes can occur. An unfavorable outcome might include monetary damages. If an unfavorable outcome were to occur, there exists the possibility of a material adverse impact on the results of operations in the period in which the outcome occurs or in future periods. An unfavorable outcome could also have a material adverse effect on the Company’s financial position or the market prices of the Company’s securities, including the Company’s Common Stock.

Employee Benefit Plans. The Company sponsors frozen non-contributory qualified and non-qualified defined benefit pension plans in the U.S. and frozen defined benefit pension plans in the United Kingdom and Sweden. The Company also sponsors various defined contribution plans.

The following table sets forth the plans’ benefit obligations and plan assets included in the consolidated balance sheets:

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All pension plans are frozen; therefore, aggregated accumulated benefit obligations are equal to aggregated projected benefit obligations as of December 31, 2025 and December 31, 2024, respectively.

The Company expects to contribute $3.0 million to the U.S. pension plans during the year ended December 31, 2026. The Company intends to make future cash contributions to the plans in an amount necessary to meet minimum funding requirements according to applicable benefit plan regulations.

The weighted-average assumptions used to determine benefit obligations are as follows:

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The weighted-average assumptions used to determine net periodic benefit cost are as follows:

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Pension actuarial gains and losses are recorded in stockholders’ deficit as a component of accumulated other comprehensive loss. For further information, see Note 12—Accumulated Other Comprehensive Loss for pension amounts and activity recorded in accumulated other comprehensive loss.

For the years ended December 31, 2025, December 31, 2024, and December 31, 2023, net periodic benefit costs were $1.2 million, $1.8 million, and $1.4 million, respectively. The non-operating component of net periodic benefit costs is recorded in other expense (income) in the consolidated statements of operations.

The following table provides the benefits expected to be paid in each of the next five years, and in the aggregate for the five years thereafter:

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The Company’s investment objectives for its U.S. defined benefit pension plan investments are: (1) to preserve the value of its principal; (2) to maximize a real long-term return with respect to the plan assets consistent with

minimizing risk; (3) to achieve and maintain adequate asset coverage for accrued benefits under the plan; and (4) to maintain sufficient liquidity for payment of the plan obligations and expenses. The Company uses a diversified allocation of equity, debt, commodity and real estate exposures that are customized to the plan’s cash flow benefit needs. A weighted average targeted allocation percentage is assigned to each asset class as follows: equity securities of 30%, debt securities of 67%, and private real estate of 3%. The International pension benefit plans do not have an established asset target allocation.

Investments in the pension plan assets are measured at fair value on a recurring basis. As of December 31, 2025, for the U.S. investment portfolio, 95% were valued using the net asset value per share (or its equivalent) as a practical expedient and 5% of the investment included pooled separate accounts valued using market prices for the underlying instruments that were observable in the market or could be derived by observable market data from independent external valuation information (Level 2 of the fair value hierarchy). As of December 31, 2025, for the International investment portfolio, 8% consisting of cash and equivalents was valued using quoted market prices from actively traded markets (Level 1 of the fair value hierarchy), 38% was an insurance contract whose value has been set equal to the present value of the related benefit obligation (Level 3 of the fair value hierarchy), and 54% were valued using the net asset value per share (or its equivalent) as a practical expedient.

In June 2023, the High Court in the UK issued a ruling in respect of Virgin Media Limited v NTL Pension Trustees II Limited, that decided certain amendments were invalid when amending contracted-out salary-related defined benefit pension plans in the period from April 6, 1997 until April 6, 2016, if these amendments were not accompanied by actuarial confirmations (section 37 certificates). An appeal on this decision was heard in June 2024 and The Court of Appeal ruled in July 2024 that the appeal was unsuccessful, i.e., it upheld the original High Court judgment, removing uncertainty around its application. In light of the ruling, the Company initiated an investigation with its pension trustees, of all known amendments to its two UK defined benefit pension plans during the affected period, with a view to determining whether section 37 certificates have been obtained where deemed required. The initial review concluded that across the two plans there are three documents where a section 37 certificate may have been required but the amendment document is silent. In June 2025, the UK government announced it will introduce legislation to give pension plans the ability to retrospectively obtain written actuarial confirmations that historic benefit changes met the necessary standards. This therefore provides clarity around plan liabilities and member benefit levels. On September 1, 2025, the UK government published the bill with these amendments. This legislation will not be in place until it has received royal assent, which is expected to occur in 2026. The Company will continue to monitor this change in legislation and assess any further reviews and potential retrospective confirmation with the trustees in due course.

The Company sponsors various defined contribution plans worldwide which include company match features. The expense related to defined contribution plans for the years ended December 31, 2025, December 31, 2024, and December 31, 2023, was $11.7 million, $10.5 million, and $9.8 million, respectively.

Income and Operating Taxes. The Company accounts for income taxes in accordance with ASC 740-10. Under ASC 740-10, deferred income tax effects of transactions reported in different periods for financial reporting and income tax return purposes are recorded by the asset and liability method. This method gives consideration to the future tax consequences of deferred income or expense items and recognizes changes in income tax laws in the period of enactment.

Holdings and its U.S. subsidiaries file a consolidated U.S. federal income tax return and combined income tax returns in certain state jurisdictions. Foreign subsidiaries file income tax returns in foreign jurisdictions. Income taxes are determined based on separate company computations of income or loss. Tax sharing arrangements are in place and utilized when tax benefits from affiliates in the consolidated group are used to offset what would otherwise be taxable income generated by Holdings or another affiliate.

Casualty Insurance. The Company is self-insured for general liability up to $1.0 million per occurrence and carries a $0.5 million deductible limit per occurrence for workers’ compensation claims. The Company utilizes actuarial projections of its ultimate losses to calculate its reserves and expense. The actuarial method includes an allowance for adverse developments on known claims and an allowance for claims which have been incurred but which have not yet been reported. As of December 31, 2025 and December 31, 2024, the Company recorded casualty insurance reserves of $33.7 million and $25.7 million, respectively. The Company recorded expenses related to general liability and workers’ compensation claims of $64.2 million, $65.5 million, and $53.1 million for the years ended December 31, 2025, December 31, 2024, and December 31, 2023, respectively. Casualty insurance expense is recorded in operating expense.

Government Assistance. The Company recognizes government assistance when the conditions of the grant have been met and there is reasonable assurance that the assistance will be received. Grants relating to specific costs are treated as a reduction of that cost in the consolidated statement of operations. General grants are recorded within other expense (income). Grants related to the construction of long-lived assets are treated as reductions to the cost of the associated assets.

During the year ended December 31, 2025, the Company recognized government assistance in other expense (income) of $10.8 million related to cash grants received in the International markets to support businesses impacted by the COVID-19 pandemic. The Company concluded all grant criteria had been met and that the likelihood of recapture was remote, therefore the entire award has been recognized. During the year ended December 31, 2024, the Company recognized government assistance in other income of $0.1 million related to government assistance for theatres impacted by flooding in Spain. During the year ended December 31, 2023, the Company recognized government assistance in other income of $4.8 million, primarily related to grants in the International markets. The general requirements of the grants were that the grantees must have lost income due to the COVID-19 pandemic. The Company concluded all grant criteria had been met and therefore have recognized the entire award.

Additionally, the Company recognized $1.1 million, $4.5 million and $3.2 million of government assistance as reduction to property, net during the years ended December 31, 2025, December 31, 2024, and December 31, 2023, respectively. The assistance relates to the construction of capital assets related to the innovation, modernization, and digitalization of the theatrical exhibition industry in certain countries in the International markets.

During the years ended December 31, 2025, December 31, 2024, and December 31, 2023, the Company was awarded $0.0 million, $9.7 million and $10.0 million, respectively, of tax credits in our International markets that have been or will be utilized to offset employer payroll tax or value-added tax liabilities. The tax credits are granted by the government to support entities in the film exhibition industry. The Company recorded these credits as reductions to operating expense in 2024 and as reductions to rent and operating expense during 2023 as those expenses were the basis for the tax credits awarded.

Other Expense (Income): The following table sets forth the components of other expense (income):

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Accounting Pronouncements Recently Adopted

Income Tax Disclosures. In December 2023, the Financial Accounting Standards Bord (“FASB”) issued ASU 2023-09, Income Taxes (Topic 740) Improvements to Income Tax Disclosures (“ASU 2023-09”). The amendments in ASU 2023-09 require entities to disclose on an annual basis (1) specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold. The amendments also require that entities disclose various information about income taxes paid and (1) income (or loss) from continuing operations before income tax expense (or benefit) disaggregated between domestic and (2) foreign and income tax expense (or benefit) from continuing operations disaggregated by federal (national), state, and foreign. The Company adopted the new standard during the fourth quarter of 2025 on a full retrospective basis and recast certain prior period amounts and disclosures to conform to current year presentation. See Note 9—Income Taxes for the required disclosure information resulting from ASU 2023-09.

Accounting Pronouncements Issued Not Yet Adopted

Disaggregation of Income Statement Expenses. In November 2024, the FASB issued ASU 2024-03, Income Statement (Subtopic 220-40)—Reporting Comprehensive Income-Expense Disaggregation Disclosures (“ASU 2024-03”). The amendments in ASU 2024-03 require that public business entities disclose additional information about specific expense categories in the notes to financial statements for interim and annual reporting periods. ASU 2024-03 is effective for the Company for the year ended December 31, 2027. The Company is currently evaluating the effect that ASU 2024-03 will have on its consolidated financial statements.

Induced Conversions of Convertible Debt Instruments. In November 2024, the FASB issued ASU 2024-04, Debt—Debt with Conversion and Other Options (Subtopic 470-20) Induced Conversions of Convertible Debt Instruments (“ASU 2024-04”). The amendments in ASU 2024-04 clarify the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion. The amendments are effective for annual reporting periods beginning after December 15, 2025. The Company is currently evaluating the effect that ASU 2024-04 will have on its consolidated financial statements.

Internal-Use Software. In September 2025, the FASB issued ASU 2025-06, Intangibles–Goodwill and Other (Subtopic 350-40) Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”), which is intended to modernize the accounting for software costs that are accounted for under Subtopic 350-40. ASU 2025-06 removes references to prescriptive and sequential software development stages and replaces them with a probable-to-complete recognition threshold. ASU 2025-06 also clarifies which disclosures apply to capitalized internal-use software costs. ASU 2025-06 is effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those reporting periods. Early adoption at the beginning of a fiscal year is permitted. The Company is currently evaluating the effect that ASU 2025-06 will have on its consolidated financial statements.

Derivatives Scope Refinements and Share-Based Noncash Consideration. In September 2025, the FASB issued ASU 2025-07, Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606) (“ASU 2025-07”), which (1) refines the scope of the guidance on derivatives in Topic 815 and (2) clarifies the guidance on share-based payments from a customer in ASC 606. ASU 2025-07 is intended to address concerns about the application of derivative accounting to contracts that have features based on the operations or activities of one of the parties to the contract and to reduce diversity in the accounting for share-based payments in revenue contracts. ASU 2025-07 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those reporting periods. Early adoption is permitted. The Company is currently evaluating the effect that ASU 2025-07 will have on its consolidated financial statements.

Accounting for Government Grants. In December 2025, the FASB issued ASU 2025-10, Accounting for Government Grants Received by Business Entities (Topic 832) (“ASU 2025-10”), which establishes the accounting for a government grant received by a business entity, including guidance for a grant related to an asset and a grant related to income. ASU 2025-10 adds guidance on Topic 832 on the recognition, measurement, and presentation of government grants. ASU 2025-10 is effective for annual reporting periods beginning after December 15, 2028, and interim reporting periods within those annual reporting periods. Early adoption is permitted in both interim and annual reporting periods in which financial statements have not yet been issued or made available for issuance. The Company is currently evaluating the impact of ASU 2025-10 on its consolidated financial statements.

Interim Reporting Narrow-Scope Improvements. In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270) Narrow-Scope Improvements (“ASU 2025-11”). The amendments in ASU 2025-11 clarify interim disclosure requirements and the applicability of Topic 270. The amendments in ASU 2025-11 also include a disclosure principle that requires entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. ASU 2025-11 is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of ASU 2025-11 on its consolidated financial statements.