EXHIBIT 99.2

 

As previously reported, on August 30, 2012, Dalian Wanda Group Co., Ltd. (“Wanda”) acquired AMC Entertainment Holdings, Inc. (“Parent”) through a merger between Parent and Wanda Film Exhibition Co. Ltd. (“Merger Subsidiary”), a wholly-owned indirect subsidiary of Wanda, whereby Merger Subsidiary merged with and into Parent with Parent continuing as the surviving corporation and as a wholly-owned indirect subsidiary of Wanda (the “Merger”). A change of control of AMC Entertainment Inc. occurred pursuant to the Merger. In connection with the change of control, our assets and liabilities were adjusted to fair value on the closing date of the Merger by application of “push down” accounting. As a result of the application of “push down” accounting in connection with the Merger, our financial statement presentations distinguish between a predecessor period, (“Predecessor”), for periods prior to the Merger and a successor period, (“Successor”), for periods subsequent to the Merger. The Successor applied “push down” accounting and its financial statements reflect a new basis of accounting that is based on the fair value of assets acquired and liabilities assumed as of the Merger date, August 30, 2012.  As a result of the application of “push down” accounting at the time of the Merger, the financial statements for the Predecessor period and for the Successor period are presented on different bases and are, therefore, not comparable.  As previously reported, on November 15, 2012, we announced that we changed our fiscal year so that it shall begin on January 1 and end on December 31 of each year.  Prior to the change, our fiscal year ended on the Thursday closest to the last day of March, with our most recent fiscal year having ended on March 29, 2012.

 

In order to present financial results in a way that offers investors a meaningful calendar period to period comparison, we have combined the current year Predecessor with current year Successor operating information, on an unaudited pro forma combined basis. The unaudited pro forma combined data consist of unaudited Predecessor information for the twenty-two weeks ended August 30, 2012 and unaudited Successor information for the period August 31, 2012 through December 31, 2012. The pro forma information for the period March 30, 2012 through December 31, 2012 does not purport to represent what our consolidated results of operations would have been if the Successor had actually been formed on March 30, 2012, nor have we made any attempt to either include or exclude expenses or income that would have resulted had the acquisition actually occurred on March 30, 2012.  The following schedules provide a reconciliation of our results for CY 2012 and CY 2011.

 

 

AMC Entertainment Inc.

Consolidated Statements of Operations (Unaudited)

								CY 2012									CY 2011			CY 2011 to
		13 weeks ended			3/30/2012 to			12/30/2011 to			13 weeks ended			39 weeks ended			52 weeks ended			CY 2012
(In thousands)		3/29/2012			12/31/2012			12/31/2012			3/31/2011			12/29/2011			12/29/2011			% Change
Revenues
Admissions		$	425,826		$	1,364,663		$	1,790,489		$	350,293		$	1,295,469		$	1,645,762		8.8	%
Concessions		171,599			571,869			743,468			143,864			518,081			661,945			12.3	%
Other theatre		39,018			81,032			120,050			15,304			71,984			87,288			37.5	%
Total Revenues		636,443			2,017,564			2,654,007			509,461			1,885,534			2,394,995			10.8	%
Operating costs and expenses
Film exhibition costs		221,191			728,100			949,291			176,544			694,863			871,407			8.9	%
Concession costs		22,620			77,871			100,491			18,305			70,961			89,266			12.6	%
Operating expense		171,352			527,762			699,114			212,600			525,431			738,031			-5.3	%
Rent		110,719			332,460			443,179			113,725			334,607			448,332			-1.1	%
General and administrative:
Merger, acquisition and transaction costs		1,443			3,538			4,981			914			1,179			2,093			*
Management fee		1,250			2,500			3,750			1,250			3,750			5,000			-25.0	%
Other		15,711			56,135			71,846			16,886			36,065			52,951			35.7	%
Depreciation and amortization		56,847			152,604			209,451			55,137			155,970			211,107			-0.8	%
Impairment of long-lived assets		285			—			285			12,779			—			12,779			-97.8	%
Operating costs and expenses		601,418			1,880,970			2,482,388			608,140			1,822,826			2,430,966			2.1	%
Operating income (loss)		35,025			136,594			171,619			(98,679		)	62,708			(35,971		)	*
Other expense (income)
Other expense		1,025			1,009			2,034			16,944			377			17,321			-88.3	%
Interest expense:
Corporate borrowings		41,380			112,873			154,253			42,710			120,265			162,975			-5.4	%
Capital and financing lease obligations		1,488			4,263			5,751			1,594			4,480			6,074			-5.3	%
Equity in (earnings) of non-consolidated entities		(10,695		)	(5,065		)	(15,760		)	(121		)	(1,864		)	(1,985		)	*
Investment expense (income)		(25		)	249			224			(76		)	17,666			17,590			-98.7	%
Gain on NCM transactions		—			—			—			207			—			207			-100.0	%
Total other expense		33,173			113,329			146,502			61,258			140,924			202,182			-27.5	%
Earnings (loss) from continuing operations before income taxes		1,852			23,265			25,117			(159,937		)	(78,216		)	(238,153		)	*
Income tax provision (benefit)		505			480			985			(600		)	1,510			910			8.2	%
Earnings (loss) from continuing operations		1,347			22,785			24,132			(159,337		)	(79,726		)	(239,063		)	*
Earnings (loss) from discontinued operations, net of income taxes		(620		)	34,465			33,845			(393		)	(2,989		)	(3,382		)	*
Net earnings (loss)		$	727		$	57,250		$	57,977		$	(159,730	)	$	(82,715	)	$	(242,445	)	*

 

* Percentage change in excess of 100%

 

 

AMC Entertainment Inc.

Reconciliation of Adjusted EBITDA (Unaudited)

								CY 2012									CY 2011
		13 weeks ended			3/30/2012 to			12/30/2011 to			13 weeks ended			39 weeks ended			52 weeks ended
In thousands		3/29/2012			12/31/2012			12/31/2012			3/31/2011			12/29/2011			12/29/2011
Earnings (loss) from continuing operations		$	1,347		$	22,785		$	24,132		$	(159,337	)	$	(79,726	)	$	(239,063	)
Plus:
Income tax provision		505			480			985			(600		)	1,510			910
Interest expense		42,868			117,136			160,004			44,304			124,745			169,049
Depreciation and amortization		56,847			152,604			209,451			55,137			155,970			211,107
Impairment of long-lived assets		285			—			285			12,779			—			12,779
Certain operating expenses (2)		3,163			13,533			16,696			57,210			13,112			70,322
Equity in earnings from non-consolidated entities		(10,695		)	(5,065		)	(15,760		)	(121		)	(1,864		)	(1,985		)
Cash distributions from non-consolidated entities		12,517			17,277			29,794			14,489			20,595			35,084
Gain on NCM transactions		—			—			—			207			—			207
Investment expense (income)		(25		)	249			224			(76		)	17,666			17,590
Other expense		1,025			1,346			2,371			16,944			389			17,333
General and administrative expense-unallocated:
Merger, acquisition and transaction costs		1,443			3,538			4,981			914			1,179			2,093
Management fee		1,250			2,500			3,750			1,250			3,750			5,000
Stock-based compensation expense		491			830			1,321			506			1,471			1,977
Adjusted EBITDA (1)		$	111,021		$	327,213		$	438,234		$	43,606		$	258,797		$	302,403

 

(1)We present Adjusted EBITDA as a supplemental measure of our performance that is commonly used in our industry. We define Adjusted EBITDA as earnings (loss) from continuing operations plus (i) income tax provisions (benefit), (ii) interest expense and (iii) depreciation and amortization, as further adjusted to eliminate the impact of certain items that we do not consider indicative of our ongoing operating performance and to include any cash distributions of earnings from our equity method investees. These further adjustments are itemized in the table above. You are encouraged to evaluate these adjustments and the reasons we consider them appropriate for supplemental analysis. In evaluating Adjusted EBITDA, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in this presentation. Our presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.  Adjusted EBITDA is a non-GAAP financial measure commonly used in our industry and should not be construed as an alternative to net earnings (loss) as an indicator of operating performance or as an alternative to cash flow provided by operating activities as a measure of liquidity (as determined in accordance with GAAP). Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies. We have included Adjusted EBITDA because we believe it provides management and investors with additional information to measure our performance and liquidity, estimate our value and evaluate our ability to service debt.

 

Adjusted EBITDA has important limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for analysis of our results as reported under U.S. GAAP. For example, Adjusted EBITDA:

 

·              does not reflect our capital expenditures, future requirements for capital expenditures or contractual commitments;

 

·              does not reflect changes in, or cash requirements for, our working capital needs;

 

·              does not reflect the significant interest expenses, or the cash requirements necessary to service interest or principal payments, on our debt;

 

·              excludes income tax payments that represent a reduction in cash available to us;

 

·              does not reflect any cash requirements for the assets being depreciated and amortized that may have to be replaced in the future; and

 

·              does not reflect management fees that were paid to our former sponsors

 

(2) Certain operating expenses
Preopening expense		$	577		$	4,588		$	5,165		$	1,258		$	3,474		$	4,732
Theatre and other closure expense		1,762			6,572			8,334			55,382			5,687			61,069
Deferred digital equipment rent expense		957			3,617			4,574			570			2,525			3,095
Disposition of assets		(133		)	(1,244		)	(1,377		)	—			1,426			1,426
		$	3,163		$	13,533		$	16,696		$	57,210		$	13,112		$	70,322