MERGER (Tables) (AMC Entertainment, Inc., Merger Subsidiary)

9 Months Ended

Dec. 31, 2012

AMC Entertainment, Inc. | Merger Subsidiary

Merger

Summary of the final allocation of the Merger consideration

(In thousands)	Total
Cash	$	101,641
Receivables, net		29,775
Other current assets		34,840
Property, net(1)		1,063,028
Intangible assets, net(2)		246,507
Goodwill(3)		2,172,272
Other long-term assets(4)		342,533
Accounts payable		(134,186	)
Accrued expenses and other liabilities		(138,535	)
Credit card, package tickets, and loyalty program liability(5)		(117,841	)
Corporate borrowings(6)		(2,086,926	)
Capital and financing lease obligations		(60,922	)
Deferred revenues—for exhibitor services agreement(7)		(322,620	)
Other long-term liabilities(8)		(427,755	)
Total Merger consideration	$	701,811
Corporate borrowings		2,086,926
Capital and financing lease obligations		60,922
Less: cash		(101,641	)
Total transaction value	$	2,748,018

(1)

Property, net consists of real estate, leasehold improvements and furniture, fixtures and equipment recorded at fair value.

(2)

Intangible assets consist of a trademark and trade names, a non-compete agreement, management contracts, a contract with an equity method investee, and favorable leases. See Note 6—Goodwill and Other Intangible Assets for further information.

(3)

Goodwill represents the excess of the Merger consideration over the net assets recognized and represents the future expected economic benefits arising from other assets acquired that could not be individually identified and separately recognized. Amounts recorded for goodwill are not subject to amortization and are not expected to be deductible for tax purposes.

(4)

Other long-term assets include equity method investments, real estate and marketable equity securities recorded at fair value. Other long-term assets include net deferred tax assets resulting from temporary differences that arose as a result of the allocation of the Merger consideration and valuation allowance established at the Merger date for those deferred tax assets that management believes are not "more likely than not" of being realized. In determining the valuation allowance, management evaluated the expected future reversal of deferred tax assets and liabilities, and available tax planning strategies that are prudent and feasible.

(5)

Represents a liability related to the sales of gift cards, packaged tickets and AMC Stubs memberships and rewards outstanding at August 30, 2012 recorded at fair value.

(6)

Corporate borrowings include borrowings under the Senior Secured Credit Facility-Term Loan due 2016, the Senior Secured Credit Facility-Term Loan due 2018, the 8.75% Senior Fixed Rate Notes due 2019 and the 9.75% Senior Subordinated Notes due 2020 recorded at fair value.

(7)

Deferred revenues for Exhibitor Services Agreement reflect the Company's obligation pursuant to an arrangement with NCM to provide advertising services on terms favorable to NCM.

(8)

Other long-term liabilities consist of certain theatre leases that have been identified as unfavorable, adjustments to reset deferred rent related to future escalations of minimum rentals to zero, adjustments for pension and postretirement medical plan liabilities and deferred RealD Inc. lease incentive recorded at fair value. Other long-term liabilities include deferred tax liabilities resulting from indefinite temporary differences that arose primarily from the application of "push down" accounting.

Summary of unaudited pro forma financial information related to statements of operations

(In thousands)	Pro forma March 30, 2012 through December 31, 2012			Pro forma 39 Weeks Ended December 29, 2011
	(unaudited)			(unaudited)
Revenues
Admissions	$	1,364,663		$	1,295,469
Concessions		571,869			518,081
Other theatre		72,574			54,436
Total revenues		2,009,106			1,867,986
Operating Costs and Expenses
Film exhibition costs		728,100			694,863
Concession costs		77,871			70,961
Operating expense		529,235			528,404
Rent		331,397			332,210
General and administrative:
Merger, acquisition and transaction costs		3,538			1,179
Management fee		—			—
Other		55,596			36,710
Depreciation and amortization		150,234			150,976
Operating costs and expenses		1,875,971			1,815,303
Operating income		133,135			52,683
Other expense (income)
Other expense		1,009			377
Interest expense
Corporate borrowings		103,429			106,351
Capital and financing lease obligations		4,263			4,480
Equity in earnings of non-consolidated entities		(7,499	)		(56	)
Investment expense		578			17,799
Total other expense		101,780			128,951
Earnings (loss) from continuing operations before income taxes		31,355			(76,268	)
Income tax provision		3,480			2,210
Earnings (loss) from continuing operations		27,875			(78,478	)
Earnings (loss) from discontinued operations		34,465			(2,989	)
Net earnings (loss)	$	62,340		$	(81,467	)

Summary of the contingent costs

(in thousands)
Financial advisor fees	$	18,129	(a	)
Management transaction bonuses		6,000	(b	)
Bond amendment fees		3,946	(c	)
Unrecognized stock compensation expense		3,177	(d	)
Other contingent transaction costs		210
	$	31,462

(a)

These represent non-exclusive arrangements made with multi-parties to provide advice and assistance related to the sale of AMC. Payment terms were contingent upon consummation of a sale. Each agreement was entered into by Predecessor entities when the Company was under previous ownership.

(b)

Management bonuses were approved by the Predecessor entities and previous ownership group to help incent key AMCE management team members to use their best efforts to help facilitate the sale of the Company. Payments were contingent on the consummation of a transaction.

(c)

Consent fees were paid pursuant to a consent solicitation to amend indentures relating to our outstanding notes and permit the sale of the Company without triggering change of control payments. The payments were only made upon closing the Wanda transaction.

(d)

Unrecognized stock compensation for previously existing awards that became payable due to change of control provisions and only upon consummation of a sale transaction.