Forward-Looking Statements
In addition to historical information, this Quarterly Report on Form 10-Q contains "forward-looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as "may," "will," "forecast," "estimate," "project," "intend," "plan," "expect," "should," "believe" and other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. Examples of forward-looking statements include statements we make regarding the impact of COVID-19 and our liquidity. These forward-looking statements are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions and speak only as of the date on which it is made. These forward-looking statements involve known and unknown risks, uncertainties, assumptions and other factors, including those discussed in "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations," which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to, the following:
the impact of the COVID-19 virus on us, the motion picture exhibition industry,
and the economy in general, including our response to the COVID-19 virus
? related to suspension of operations at our theatres, personnel reductions and
other cost-cutting measures and measures to maintain necessary liquidity and
increases in expenses relating to precautionary measures at our facilities to
protect the health and well-being of our customers and employees;
the manner, timing and amount of benefit we receive under the Coronavirus Aid,
? Relief, and Economic Security Act (the "CARES Act") or other applicable
governmental benefits and support for which we are eligible domestically and
internationally;
? risks relating to impairment losses, including with respect to goodwill and
other intangibles, and theatre and other closure charges;
? risks relating to motion picture production and performance;
? our lack of control over distributors of films;
? intense competition in the geographic areas in which we operate;
? increased use of alternative film delivery methods including premium video on
demand or other forms of entertainment;
? shrinking exclusive theatrical release windows;
? AMC Stubs® A-List may not meet anticipated revenue projections which could
result in a negative impact upon operating results;
general and international economic, political, regulatory, social and financial
? market conditions and other risks including the effects of the exit of the
? risks and uncertainties relating to our significant indebtedness, including our
borrowing capacity under our revolving credit agreements;
? our ability to execute cost cutting and revenue enhancement initiatives as
previously disclosed and in connection with response to COVID-19;
? limitations on the availability of capital may prevent us from deploying
strategic initiatives; 46 Table of Contents
? certain covenants in the agreements that govern our indebtedness may limit our
ability to take advantage of certain business opportunities;
? our ability to achieve expected synergies, benefits and performance from our
strategic theatre acquisitions and strategic initiatives;
? our ability to refinance our indebtedness on terms favorable to us or at all;
? optimizing our theatre circuit through new construction and the transformation
of our existing theatres may be subject to delay and unanticipated costs;
? failures, unavailability or security breaches of our information systems;
? our ability to utilize interest expense deductions may be limited annually due
to Section 163(j) of the Tax Cuts and Jobs Act of 2017;
? our ability to recognize interest deduction carryforwards and net operating
loss carryforwards to reduce our future tax liability;
? our ability to recognize certain international deferred tax assets which
currently do not have a valuation allowance recorded;
? impact of the elimination of the calculation of USD LIBOR rates on our
contracts indexed to USD LIBOR:
? review by antitrust authorities in connection with acquisition opportunities;
? risks relating to the incurrence of legal liability, including costs associated
with recently filed securities class action lawsuits;
dependence on key personnel for current and future performance and our ability
? to attract and retain senior executives and other key personnel, including in
connection with any future acquisitions;
? risks of poor financial results may prevent us from deploying strategic
initiatives;
? operating a business in international markets AMC is unfamiliar with, including
acceptance by movie-goers of AMC initiatives that are new to those markets;
increased costs in order to comply or resulting from failure to comply with
? governmental regulation, including the General Data Protection Regulation
("GDPR"), the California Consumer Privacy Act and pending future domestic
privacy laws and regulations;
geopolitical events, including the threat of terrorism or cyber-attacks, or
? widespread health emergencies, such as the novel coronavirus or other pandemics
or epidemics, causing people to avoid our theatres or other public places where
large crowds are in attendance;
the ability to obtain suitable equity and/or debt financing and the continued
? availability of financing, in the amounts and on the terms necessary to support
our future refinancing requirements and business; and
? other risks referenced from time to time in filings with the
This list of factors that may affect future performance and the accuracy of forward-looking statements is illustrative but not exhaustive. In addition, new risks and uncertainties may arise from time to time. Accordingly, all forward-looking statements should be evaluated with an understanding of their inherent uncertainty and we caution accordingly against relying on forward-looking statements. 47
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Readers are urged to consider these factors carefully in evaluating the forward-looking statements. For further information about these and other risks and uncertainties as well as strategic initiatives, see Item 1A. "Risk Factors" of Part II of this Form 10-Q and Item 1A. "Risk Factors," and Item 1. "Business" in our Annual Report on Form 10-K for the year endedDecember 31, 2019 , and our other public filings. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by these cautionary statements. The forward-looking statements included herein are made only as of the date of this Quarterly Report on Form 10-Q, and we do not undertake any obligation to release publicly any revisions to such forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
Temporarily Suspended Operations
As of or beforeMarch 17, 2020 , we temporarily suspended all theatre operations in ourU.S. markets and International markets in compliance with local, state, and federal governmental restrictions and recommendations on social gatherings to prevent the spread of COVID-19 and as a precaution to help ensure the health and safety of our guests and theatre staff. As a result of these temporarily suspended operations, our revenues and expenses for the three and six months endedJune 30, 2020 are significantly lower than our revenues and expenses for the three and six months endedJune 30, 2019 . The theatre operations in theU.S. markets remained suspended for the entire second quarter of 2020. We resumed limited operations in the International markets in early June. As ofJune 30, 2020 , we had resumed operations at 37 theatres in nine countries in our International markets and recorded attendance of 100,000 guests during the three months endedJune 30, 2020 . OnJuly 23, 2020 , we announced we are currently planning to reopen ourU.S. movie theatres in mid to lateAugust 2020 . In International markets, as of the end ofJuly 2020 , we already have resumed operations in more than 130 theatres in all of the countries we serve inEurope and theMiddle East . Overview AMC is the world's largest theatrical exhibition company and an industry leader in innovation and operational excellence. We operate theatres in 15 countries and are the market leader in nine of those. Our theatrical exhibition revenues are generated primarily from box office admissions and theatre food and beverage sales. The balance of our revenues are generated from ancillary sources, including on-screen advertising, fees earned from our AMC Stubs® customer frequency membership program, rental of theatre auditoriums, income from gift card and exchange ticket sales, online ticketing fees and arcade games located in theatre lobbies. As ofJune 30, 2020 , we owned, operated or had interests in 978 theatres and 10,833 screens.
Film Content
Box office admissions are our largest source of revenue. We predominantly license "first-run" films from distributors owned by major film production companies and from independent distributors on a film-by-film and theatre-by-theatre basis. Film exhibition costs are accrued based on the applicable admissions revenues and estimates of the final settlement pursuant to our film licenses. Licenses that we enter into typically state that rental fees are based on aggregate terms established prior to the opening of the picture. In certain circumstances and less frequently, our rental fees are based on a mutually agreed settlement upon the conclusion of the picture. In certain circumstances and less frequently, our rental fees are established on a weekly basis for the coming week's percentage forecast. Some European licenses use a per capita agreement instead, paying a flat amount per ticket, where the sum is agreed in advance of the film showing. Under an aggregate terms formula, we pay the distributor a specified percentage of box office gross or pay based on a scale of percentages tied to different amounts of box office gross, or inEurope , we pay based on the number of weeks since release. The settlement process allows for negotiation based upon how a film actually performs. Our 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. Our results of operations may vary significantly from quarter to quarter and from year to year based on the timing and popularity of film
releases. 48 Table of Contents Movie Screens During the six months endedJune 30, 2020 , we opened one new theatre with eight screens, added five additional screens to existing theatres, permanently closed 214 screens, temporarily closed 18 screens to install consumer experience upgrades and reopened 11 screens to install consumer experience upgrades. The following table provides details of our theatre circuit by segment for the periods indicated: U.S. Markets International Markets Number of Number of Number of Number of Screens As of Screens As of Screens As of Screens As of Format June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 IMAX® 188 188 35 30 Dolby CinemaTM 150 138 5 3
Other Premium Large Format ("PLF") 55 51
71 66 Dine-in theatres 725 668 8 2 Premium seating 3,282 3,029 470 447 Guest Amenities
We seek to upgrade the quality of our theatre circuit through substantial renovations featuring our seating concepts, acquisitions, new builds (including expansions), expansion of food and beverage offerings (including dine-in theatres), and by disposing of older screens through closures and sales.
Recliner seating is the key feature of theatre renovations, which drive a 34% increase in attendance, on average, at these locations in their first year post renovation. These renovations, in conjunction with capital contributions from our landlords, involve stripping theatres to their basic structure in order to replace finishes throughout, upgrade the sight and sound experience, install modernized points of sale and, most importantly, replace traditional theatre seats with plush, electric recliners that allow customers to deploy a leg rest and fully recline at the push of a button.
As of
Open-source internet ticketing makes our AMC seats (over 1.1 million) in all ourU.S. theatres and auditoriums, for all our showtimes as available as possible, on as many websites as possible. Our tickets are sold over the internet, directly or through mobile apps, at our own website and app, and other third-party ticketing vendors. Food and beverage sales are our second largest source of revenue after box office admissions. Food and beverage items traditionally include popcorn, soft drinks, candy and hot dogs. Different varieties of food and beverage items are offered at our theatres based on preferences in the particular geographic region. Our traditional food and beverage strategy emphasizes prominent and appealing food and beverage offerings designed for rapid service and efficiency, including a customer friendly self-serve experience. To address recent consumer trends, we have expanded our menu of enhanced food and beverage products to include made-to-order drinks and meals, customized coffee, healthy snacks, premium beers, wine and mixed drinks, flatbread pizzas, more varieties of hot dogs, four flavors of popcorn and other menu items. We operate 51Dine-In Theatres in theU.S. and twoDine-In Theatres inEurope that deliver chef-inspired menus with seat-side or delivery service to luxury recliners with tables.
Loyalty Programs and Other Marketing
In ourU.S. markets, we begin the process of engagement with AMC Stubs® our customer loyalty program which allows members to earn rewards, receive discounts and participate in exclusive members-only offerings and services. It features a traditional paid tier called AMC Stubs Premiere™ for a$15 annual membership fee and a non- 49 Table of Contents paid tier called AMC Stubs Insider™. Both programs reward loyal guests for their patronage of AMC theatres. Rewards earned are redeemable on future purchases at AMC locations. The portion of the admissions and food and beverage revenues attributed to the rewards is deferred as a reduction of admissions and food and beverage revenues and is allocated between admissions and food and beverage revenues based on expected member redemptions. Upon redemption, deferred rewards are recognized as revenues along with associated cost of goods. We estimate point breakage in assigning value to the points at the time of sale based on historical trends. The program's annual membership fee is allocated to the material rights for discounted or free products and services and is initially deferred, net of estimated refunds, and recognized as the rights are redeemed based on estimated utilization, over the one-year membership period in admissions, food and beverage, and other revenues. A portion of the revenues related to a material right are deferred as a virtual rewards performance obligation using the relative standalone selling price method and are recognized as the rights are redeemed or expire. AMC Stubs® A-List is our monthly subscription-based tier of the AMC Stubs® loyalty program. This program offers guests admission to movies at AMC up to three times per week including multiple movies per day and repeat visits to already seen movies for$19.95 to$23.95 per month depending upon geographic market. AMC Stubs® A-List also includes premium offerings including IMAX®, Dolby Cinema™ at AMC,RealD , Prime and BigD. AMC Stubs® A-List members can book tickets on-line in advance and select specific seats atAMC Theatres with reserved seating. As ofJune 30, 2020 , we had more than 23,100,000 member households enrolled in AMC Stubs® A-List, AMC Stubs Premiere™ and AMC Stubs Insider™ programs, combined. In our International markets, we currently have loyalty programs in the major territories in which we operate. The movie-goers can earn points for spending money at the theatre, and those points can be redeemed for tickets and concession items at a later date. Odeon currently has more than 8,700,000 members in these various loyalty programs. We are currently evaluating the Odeon loyalty programs to determine how best to reward our European movie-goers and heighten guest loyalty to drive additional attendance to Odeon theatres. The programs have been paused during the suspension of operations at all of our theatres. Our marketing efforts are not limited to our loyalty programs as we continue to improve our customer connections through our website and mobile apps and expand our online and movie offerings. In select markets during 2019, we upgraded our mobile applications with the ability to order food and beverage offerings via our mobile applications while ordering tickets ahead of scheduled showtimes. Also, in 2019, we launched AMC Theatres On Demand, a new service where members of the AMC Stubs® loyalty program can rent or buy movies. We believe our competitive advantage of a robust and easy-to-use online and mobile presence combined with an effective loyalty program that provides better market intelligence to anticipate customers' future behavior should allow us to capture incremental share of both entertainment dollars and time.
Critical Accounting Policies and Estimates
Long-lived Assets Impairments. We evaluate indefinite-lived intangible assets for impairment annually or more frequently as specific events or circumstances dictate. We operate in a very competitive business environment and our revenues are highly dependent on movie content supplied by film producers. In addition, it is common for us to closely monitor certain locations where operating performance may not meet our expectations. We review long-lived assets, including definite-lived intangible assets and theatre assets (including operating lease right-of-use assets) whenever events or changes in circumstances indicate that the carrying amount of the asset group may not be fully recoverable. We identify impairments related to internal use software when management determines that the remaining carrying value of the software will not be realized through future use. We evaluate events or circumstances, including competition in the markets where we operate that would indicate the carrying value of theatre assets may not be fully recoverable. We evaluate theatres using historical and projected data of theatre level cash flow as our primary indicator of potential impairment and consider the seasonality of our business when making these evaluations. If an event or circumstance is identified indicating carrying value may not be recoverable, the sum of future undiscounted cash flows is compared to the carrying value. If carrying value exceeds the future undiscounted cash flows, the carrying value of the asset is reduced to fair value. Assets are evaluated for impairment on an individual theatre basis, which management believes is the lowest level for which there are identifiable cash flows. 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. 50 Table of Contents We recorded impairment charges primarily related to long-lived assets and definite lived intangible assets of$0 and$106.5 million during the six months endedJune 30, 2020 , respectively. There are a number of estimates and significant judgments that are made by management in performing these impairment evaluations. Such judgments and estimates include estimates of future attendance, revenues, rent relief, cost savings, cash flows, capital expenditures, and the cost of capital, among others. Attendance is expected to be significantly below historical levels for the first several months following reopening but is expected to increase as customers become more comfortable with the experience. We believe we have used reasonable and appropriate business judgments. 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. These estimates determine whether impairments have been incurred, and quantify the amount of any related impairment charge. Given the nature of our business and our recent history, future impairments are possible and they may be material, based upon business conditions that are constantly changing and the competitive business environment in which we operate. During the three and six months endedJune 30, 2020 , we recorded non-cash impairment of long-lived assets of$0 and$81.4 million on 57 theatres in theU.S. markets with 658 screens (inAlabama ,Arkansas ,California ,District of Columbia , Florida,Georgia ,Illinois ,Indiana ,Iowa ,Kentucky ,Michigan ,Minnesota ,Missouri ,Montana ,New Hampshire ,New Jersey , NewYork, North Carolina ,North Dakota ,Ohio ,Pennsylvania ,South Dakota ,Tennessee ,Texas ,Washington ,Wisconsin andWyoming ), respectively, and$0 and$9.9 million on 23 theatres in the International markets with 213 screens (inGermany ,Italy ,Spain ,UK andSweden ), respectively. During the three and six months endedJune 30, 2020 , we recorded impairment losses related to definite-lived intangible assets of$0 and$8.0 million , respectively. In addition, we recorded an impairment loss of$0 and$7.2 million within investment expense (income), related to equity interest investments without a readily determinable fair value accounted for under the cost method during the three and six months endedJune 30, 2020 , respectively. AtMarch 31, 2020 , we performed a quantitative impairment evaluation of our indefinite-lived intangible assets related to the AMC, Odeon and Nordic tradenames and recorded impairment charges of$0 and$5.9 million related to Odeon tradenames and$0 and$2.4 million related to Nordic for the three and six months endedJune 30, 2020 , respectively. To estimate fair value of our indefinite-lived trade names, we employed a derivation of the Income Approach known as the Royalty Savings Method. The Royalty Savings Method values an intangible asset by estimating the royalties saved through ownership of the asset. We applied royalty rates of 0.5% for AMC and Odeon tradenames and 1.0% for Nordic to the related theatre revenues on an after-tax basis using effective tax rates. Related cash flows were discounted at 12.5% for AMC and 14.0% for Odeon and Nordic.Goodwill . We evaluate the goodwill recorded at our two reporting units (Domestic Theatres andInternational Theatres ) for impairment annually as of the beginning of the fourth fiscal quarter or more frequently as specific events or circumstances dictate. Our market capitalization has been below carrying value sinceMay 24, 2019 . In performing the Step 1 quantitative goodwill impairment test as ofMarch 31, 2020 , we used an enterprise value approach to measure fair value of the reporting units. The enterprise fair values of theDomestic Theatres andInternational Theatres reporting units were less than their carrying values and a goodwill impairment charge of$1,124.9 million and$619.4 million was recorded as ofMarch 31, 2020 for ourDomestic Theatres andInternational Theatres reporting units, respectively. In accordance with ASC 350-20-35-30, we performed an assessment to determine whether there were any events or changes in circumstances that would warrant an interim ASC 350 impairment analysis as ofJune 30, 2020 . Given the temporary suspension of operations during the second quarter of 2020, we performed a qualitative impairment test to evaluate whether it is more likely than not that the fair value of our two reporting units is less than their respective carrying amounts as ofJune 30, 2020 . We compared key assumptions utilized in our quantitative analysis as ofMarch 31, 2020 to those that existed as of the second quarter. Our considerations included changes during the quarter due to macroeconomic, industry, and entity specific factors. We also observed the increase in the Company's common stock price and the fair value of corporate borrowings as ofJune 30, 2020 in comparison toMarch 31, 2020 noting that our estimated fair value of our corporate borrowings and finance lease obligations represents approximately 74% of our market enterprise value. In considering the totality of the aforementioned factors, we have concluded that it is not more likely than not that the fair value of our two reporting units has been reduced below their respective carrying amounts. As a result, we concluded that an interim quantitative impairment test as ofJune 30, 2020 was not required.
The quantitative goodwill impairment test performed as of
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fair value to our market enterprise value implied a premium of 22.7%.
We believe a significant reason for the difference in our market enterprise value as compared to our estimated enterprise fair value is due to a market participant acquisition premium. We believe a market participant acquisition premium is applicable and has been historically realized in our industry. In the event of an acquisition of control of our enterprise by another market participant, this premium for control would likely be realized in the form of increased revenue opportunities, lower costs, better working capital terms and lower cost of capital. We believe the uncertainty around the temporary suspension of our theatre operations during the COVID-19 pandemic and the behavior of the movie-going public after we resume operations is a significant reason for the difference in our market enterprise value as compared to our estimated enterprise fair value. Key assumptions used in the quantitative impairment test performed atMarch 31, 2020 were as follows: March 31, 2020 Domestic International Description Theatres Theatres Income approach: Weighted average cost of capital/discount rate 11.5% 13.0% Long-term growth rate 2.0% 2.0% While the fair values of our reporting units approximate their respective carrying values at the present time, the performance of the reporting units may require improvement in future periods to maintain this level. Declines in the operating performance of our Domestic andInternational Theatres , further declines in the fair value of our debt, further declines in the trading price of our Class A common stock, small changes in certain key input assumptions, and/or other events or circumstances could occur and could have a significant impact on the estimated fair values. Examples of adverse events or circumstances that could change include (i) the ultimate duration of the COVID-19 pandemic and the prolonged temporary suspension of our theatre operations as well as the behavior of the movie-going public after we resume operations; (ii) an adverse change in macroeconomic conditions; (iii) increased cost factors that have a negative effect on our earnings and cash flows; (iv) negative or overall declining financial performance compared with our actual and projected results of relevant prior periods; (v) further declines in the fair value of our debt, and (vi) a further sustained decrease in our share price. A future impairment could result for a portion of the goodwill, long-lived assets or intangible assets. Any impairment charges that we may take in the future could be material to our results of operations and financial condition.
Significant Event
Stock Buyback Program. On
Repurchases may be made at management's discretion from time to time through open-market transactions including block purchases, through privately negotiated transactions, or otherwise over the next three years in accordance with all applicable securities laws and regulations. The extent to which AMC repurchases its shares, and the timing of such repurchases, will depend upon a variety of factors, including liquidity, capital needs of the business, market conditions, regulatory requirements, and other corporate considerations, as determined by AMC's management team. Repurchases may or may not be made under a Rule 10b5-1 plan, which would permit common stock to be repurchased when our management might otherwise be precluded from doing so under insider trading laws. The repurchase program does not obligate us to repurchase any minimum dollar amount or number of shares and may be suspended for periods or discontinued at any time. SinceApril 24, 2020 , we are prohibited from making purchases under our recently authorized stock repurchase program in accordance with the covenant suspension conditions in our Senior Secured Credit Agreement. Exchange Offers. OnJuly 31, 2020 , we closed our previously announced exchange offer and reduced the principal amount of our senior subordinated notes by approximately$555 million . We raised$300 million in additional cash from incremental first lien financing, prior to deducting discounts and cash premiums based on contract assumptions and estimates of$36 million . Additionally, certain backstop purchasers in the first lien notes offering that participated in the exchange offer received 5 million Class A common shares. The closing
of the exchange offer also 52 Table of Contents allowed us to change maturities on approximately$1.7 billion of debt to 2026, most of which was maturing in 2024 and 2025 previously. Interest due for the coming 12 to 18 months on the Second Lien Notes due 2026 is expected to be paid all or in part on an in-kind basis, thereby generating a further near-term cash savings for us of between approximately$120 million and$180 million . See Note 14-Subsequent Events in the Notes to the Condensed Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q for further information. Under ASC 840-470-60, Troubled Debt Restructurings by Debtors, we believe the exchange of approximately$2,017.5 million principal amount of our senior subordinated notes for approximately$1,462.3 million principal amount of second lien secured debt will represent a troubled debt restructuring ("TDR") as we were experiencing financial difficulties and the lenders granted a concession. We do not expect the TDR will result in a gain recognition, a new effective interest rate will be established based on the carrying value of the senior subordinated notes and we expect new fees paid to third parties of approximately$29.7 million will be expensed. We are currently evaluating the impact on our consolidated financial statements. 53 Table of Contents Operating Results The following table sets forth our consolidated revenues, operating costs and expenses. Three Months Ended Six Months Ended
(In millions) June 30, 2020 June 30, 2019 % Change June 30, 2020 June 30, 2019 % Change Revenues Admissions $ 0.9 $ 895.5 (99.9) % $ 568.9$ 1,627.0 (65.0) % Food and beverage 0.4 492.5 (99.9) % 288.5 861.3 (66.5) % Other theatre 17.6 118.1 (85.1) % 103.0 218.2 (52.8) % Total revenues $ 18.9$ 1,506.1
(98.7) % $ 960.4
$ 0.2 $ 482.5
(100.0) % $ 271.9 $ 847.8 (67.9) % Food and beverage costs
4.5 76.4 (94.1) % 57.9 137.9 (58.0) % Operating expense, excluding depreciation and amortization below 114.8 437.4 (73.8) % 471.7 840.2 (43.9) % Rent 224.1 245.9 (8.9) % 461.9 487.9 (5.3) % General and administrative: Merger, acquisition and other costs 1.8 3.2 (43.8) % 2.0 6.5 (69.2) % Other, excluding depreciation and amortization below 25.4 43.2 (41.2) % 58.6 89.4 (34.5) % Depreciation and amortization 119.7 112.0 6.9 % 242.2 225.0 7.6 % Impairment of long-lived assets, indefinite-lived intangible assets and goodwill - - * % 1,851.9 - * % Operating costs and expenses 490.5 1,400.6 (65.0) % 3,418.1 2,634.7 29.7 % Operating income (loss) (471.6) 105.5 * % (2,457.7) 71.8 * % Other expense (income): Other expense (income): (6.6) (23.4) (71.8) % 20.3 6.4 * % Interest expense: Corporate borrowings 79.6 74.2 7.3 % 150.9 145.5 3.7 % Finance lease obligations 1.5 2.1 (28.6) % 3.1 4.2 (26.2) % Non-cash NCM exhibitor service agreement 10.1 10.1 - % 20.0 20.3 (1.5) % Equity in (earnings) loss of non-consolidated entities 12.4 (10.2) * % 15.3 (16.7) * % Investment expense (income) (1.3) (2.1) (38.1) % 8.1 (18.2) * % Total other expense, net 95.7 50.7 88.8 % 217.7 141.5 53.9 % Earnings (loss) before income taxes (567.3) 54.8 * % (2,675.4) (69.7) * % Income tax provision (benefit) (6.1) 5.4 * % 62.1 11.1 * % Net earnings (loss)$ (561.2) $ 49.4 * %$ (2,737.5) $ (80.8) * %
* Percentage change in excess of 100%
Three Months Ended Six Months Ended June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Operating Data: Screen additions - 16 13 37 Screen acquisitions - 64 - 64 Screen dispositions 140 36 214 104 Construction openings (closures), net - (3) (7) (52) Average screens (1) 60 10,675 4,467 10,679 Number of circuit screens 10,833 11,036 10,833 11,036 Number of circuit theatres 978 1,004 978 1,004 Screens per theatre 11.1 11.0 11.1 11.0 Attendance (in thousands) (1) 100 96,955 60,595 176,780 54 Table of Contents
Includes consolidated theatres only and excludes screens offline due to
(1) construction and temporary suspension of operations as consequence of the COVID-19 pandemic. 55 Table of Contents
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