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OPERATING SEGMENT (Tables)
 12 Months Ended
Dec. 31, 2018
OPERATING SEGMENTS  
Schedule of financial information by reportable operating segment

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended

Revenues (In millions)

    

December 31, 2018

    

December 31, 2017

    

December 31, 2016

U.S. markets

 

$

4,013.2

 

$

3,723.5

 

$

3,117.0

International markets

 

 

1,447.6

 

 

1,355.7

 

 

118.9

Total revenues

 

$

5,460.8

 

$

5,079.2

 

$

3,235.9

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended

Adjusted EBITDA (1) (In millions)

    

December 31, 2018

    

December 31, 2017

    

December 31, 2016

U.S. markets (2)

 

$

700.5

 

$

610.0

 

$

573.6

International markets

 

 

228.7

 

 

212.5

 

 

28.4

Total Adjusted EBITDA

 

$

929.2

 

$

822.5

 

$

602.0

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended

Capital Expenditures (In millions)

    

December 31, 2018

    

December 31, 2017

    

December 31, 2016

U.S. markets

 

$

395.6

 

$

543.7

 

$

412.7

International markets

 

 

180.7

 

 

83.1

 

 

9.0

Total capital expenditures

 

$

576.3

 

$

626.8

 

$

421.7

(1)

The Company presents Adjusted EBITDA as a supplemental measure of its performance. The Company defines Adjusted EBITDA as net earnings (loss) plus (i) income tax provision, (ii) interest expense and (iii) depreciation and amortization, as further adjusted to eliminate the impact of certain items that the Company does not consider indicative of the Company’s ongoing operating performance and to include attributable EBITDA from equity investments in theatre operations in international markets and any cash distributions of earnings from its other equity method investees. The measure of segment profit and loss the Company uses to evaluate performance and allocate its resources is Adjusted EBITDA, which is consistent with how Adjusted EBITDA is defined in the Company’s debt indentures.

 

(2)

Distributions from NCM are reported entirely within the U.S. markets segment.
Schedule of information about the Company's revenues from continuing operations and assets by geographic area

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended

Revenues (In millions)

 

December 31, 2018

 

December 31, 2017

 

December 31, 2016

United States

 

$

4,013.2

 

$

3,723.5

 

$

3,117.0

United Kingdom

 

 

513.5

 

 

509.8

 

 

56.9

Spain

 

 

193.9

 

 

187.1

 

 

20.0

Sweden

 

 

192.1

 

 

154.2

 

 

 —

Italy

 

 

178.5

 

 

185.5

 

 

21.0

Germany

 

 

114.3

 

 

129.7

 

 

14.1

Finland

 

 

101.7

 

 

77.3

 

 

 —

Ireland

 

 

40.7

 

 

38.5

 

 

3.2

Other foreign countries

 

 

112.9

 

 

73.6

 

 

3.7

Total

 

$

5,460.8

 

$

5,079.2

 

$

3,235.9

 

 

 

 

 

 

 

 

 

 

As of

 

As of

Long-term assets, net (In millions)

 

December 31, 2018

 

December 31, 2017

United States

 

$

5,826.5

 

$

5,866.8

International

 

 

2,888.0

 

 

3,066.7

Total long-term assets (1)

 

$

8,714.5

 

$

8,933.5

(1)

Long-term assets are comprised of property, intangible assets, goodwill, deferred income tax assets and other long-term assets.
Schedule of reconciliation of net earnings to Adjusted EBITDA

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended

(In millions)

 

December 31, 2018

    

December 31, 2017

    

December 31, 2016

Net earnings (loss)

 

$

110.1

 

$

(487.2)

 

$

111.7

Plus:

 

 

 

 

 

 

 

 

 

Income tax provision (benefit)

 

 

13.6

 

 

154.1

 

 

38.0

Interest expense

 

 

342.3

 

 

274.0

 

 

121.5

Depreciation and amortization

 

 

537.8

 

 

538.6

 

 

268.2

Impairment of long-lived assets

 

 

13.8

 

 

43.6

 

 

5.5

Certain operating expenses (1)

 

 

24.0

 

 

20.6

 

 

20.2

Equity in (earnings) loss of non-consolidated entities (2)

 

 

(86.7)

 

 

185.2

 

 

(47.7)

Cash distributions from non-consolidated entities (3)

 

 

35.2

 

 

45.4

 

 

40.1

Attributable EBITDA (4)

 

 

7.3

 

 

3.4

 

 

 —

Investment income

 

 

(6.2)

 

 

(22.6)

 

 

(10.2)

Other expense (income) (5)

 

 

(108.2)

 

 

(1.3)

 

 

 —

General and administrative — unallocated:

 

 

 

 

 

 

 

 

 

Merger, acquisition and transaction costs (6)

 

 

31.3

 

 

63.0

 

 

47.9

Stock-based compensation expense (7)

 

 

14.9

 

 

5.7

 

 

6.8

Adjusted EBITDA

 

$

929.2

 

$

822.5

 

$

602.0

(1)

Amounts represent preopening expense related to temporarily closed screens under renovation, theatre and other closure expense for the permanent closure of screens including the related accretion of interest, non-cash deferred digital equipment rent expense, and disposition of assets and other non-operating gains or losses included in operating expenses. The Company has excluded these items as they are non-cash in nature, include components of interest cost for the time value of money or are non-operating in nature.

 

(2)

During the year ended December 31, 2018, the Company recorded equity in earnings related to AMC’s sale of all remaining NCM units of $28.9 million and a gain of $30.1 million related to the Screenvision merger. Equity in earnings of non-consolidated entities also includes loss on the surrender (disposition) of a portion of AMC’s investment in NCM of $1.1 million during the year ended December 31, 2018. Equity in (earnings) loss of non-consolidated entities includes a lower of carrying value or fair value impairment loss of the held-for sale portion of our investment in NCM of $16.0 million for the year ended December 31, 2018.  Equity in (earnings) loss of non-consolidated entities includes an other-than-temporary impairment charge of $208.0 million to reduce the carrying value of the Company’s investment in NCM to Level 1 fair value during the year ended December 31, 2017. An other-than-temporary impairment charge of $204.5 million was recorded on the Company’s units and shares at the publicly quoted per share price on June 30, 2017, of $7.42 and an other-than-temporary impairment charge of $3.5 million was recorded on the Company’s units and shares at the publicly quoted per share price on December 31, 2017 of $6.86, based on the Company’s determination that the decline in the price per share during the respective quarters was other than temporary. Equity in (earnings) loss of non-consolidated entities includes loss on the sale of a portion of the Company’s investment in NCM of $22.2 million during the year ended December 31, 2017.

 

(3)

Includes U.S. non-theatre distributions from equity method investments and International non-theatre distributions from equity method investments to the extent received. The Company believes including cash distributions is an appropriate reflection of the contribution of these investments to the Company’s operations.

 

(4)

Attributable EBITDA includes the EBITDA from minority equity investments in theatre operators in certain international markets. See below for a reconciliation of the Company’s equity earnings of non-consolidated entities to attributable EBITDA. Because these equity investments are in theatre operators in regions where the Company holds a significant market share, the Company believes attributable EBITDA is more indicative of the performance of these equity investments and management uses this measure to monitor and evaluate these equity investments. The Company also provides services to these theatre operators including information technology systems, certain on-screen advertising services and our gift card and package ticket program. As these investments relate only to the Company’s Nordic acquisition, the second quarter of 2017 represents the first time the Company has made this adjustment and does not impact prior historical presentations of Adjusted EBITDA.

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended

(In millions)

 

December 31, 2018

    

December 31, 2017

    

December 31, 2016

Equity in (earnings) loss of non-consolidated entities

 

$

(86.7)

 

$

185.2

 

$

(47.7)

Less:

 

 

 

 

 

 

 

 

 

Equity in (earnings) loss of non-consolidated entities excluding international theatre JV's

 

 

(81.9)

 

 

187.0

 

 

(47.7)

Equity in earnings (loss) of International theatre JV's

 

 

4.8

 

 

1.8

 

 

 —

Income tax provision

 

 

0.4

 

 

 —

 

 

 —

Investment income

 

 

(0.5)

 

 

 —

 

 

 —

Depreciation and amortization

 

 

2.6

 

 

1.6

 

 

 —

Attributable EBITDA

 

$

7.3

 

$

3.4

 

$

 —

 

(5)

Other expense (income) for the year ended December 31, 2018 includes financing losses and financing related foreign currency transaction losses. During the year ended December 31, 2018, the Company recorded a gain of $111.4 million as a result of a decrease in fair value of our derivative liability and an increase in fair value of our derivative asset for the Convertible Notes due 2024. Other income for the year ended December 31, 2017 includes $3.0 million financing related foreign currency transaction gains, partially offset by $1.3 million in fees relating to third-party fees related to the Third Amendment to the Company’s Senior Secured Credit Agreement, and a $0.4 million loss on the redemption of the Bridge Loan Facility.

 

(6)

Merger, acquisition and transition costs are excluded as they are non-operating in nature.

 

(7)

Non-cash or non-recurring expense included in general and administrative: other