| REVENUE RECOGNITION |
NOTE 3—REVENUE RECOGNITION Disaggregation of Revenue. Revenue is disaggregated in the following tables by major revenue types and by timing of revenue recognition: | | | | | | | | | | | | | | | Three Months Ended | | Six Months Ended | (In millions) | | June 30, 2025 | | June 30, 2024 | | June 30, 2025 | | June 30, 2024 | Major revenue types | | | | | | | | | | | Admissions | | $ | 762.6 | | $ | 564.4 | | $ | 1,236.1 | | $ | 1,094.9 | Food and beverage | | | 499.6 | | | 367.1 | | | 783.0 | | | 688.3 | Other theatre: | | | | | | | | | | | | | Screen advertising | | | 37.8 | | | 30.2 | | | 68.4 | | | 60.5 | Other | | | 97.9 | | | 68.9 | | | 172.9 | | | 138.3 | Other theatre | | | 135.7 | | | 99.1 | | | 241.3 | | | 198.8 | Total revenues | | $ | 1,397.9 | | $ | 1,030.6 | | $ | 2,260.4 | | $ | 1,982.0 |
| | | | | | | | | | | | | | | Three Months Ended | | Six Months Ended | (In millions) | | June 30, 2025 | | June 30, 2024 | | June 30, 2025 | | June 30, 2024 | Timing of revenue recognition | | | | | | | | | Products and services transferred at a point in time | | $ | 1,282.8 | | $ | 932.9 | | $ | 2,042.1 | | $ | 1,791.4 | Products and services transferred over time (1) | | | 115.1 | | | 97.7 | | | 218.3 | | | 190.6 | Total revenues | | $ | 1,397.9 | | $ | 1,030.6 | | $ | 2,260.4 | | $ | 1,982.0 |
| (1) | Amounts primarily include subscription and advertising revenues. |
The following tables provide the balances of receivables, net and deferred revenues and income as of June 30, 2025, and December 31, 2024: | | | | | | | (In millions) | | June 30, 2025 | | December 31, 2024 | Current assets | | | | | | | Receivables related to contracts with customers | | $ | 50.4 | | $ | 86.0 | Miscellaneous receivables | | | 73.2 | | | 82.1 | Receivables, net | | $ | 123.6 | | $ | 168.1 |
| | | | | | | (In millions) | | June 30, 2025 | | December 31, 2024 | Current liabilities | | | | | | | Deferred revenues related to contracts with customers | | $ | 415.4 | | $ | 425.6 | Miscellaneous deferred income | | | 7.7 | | | 6.8 | Deferred revenues and income | | $ | 423.1 | | $ | 432.4 |
The significant changes in contract liabilities with customers included in deferred revenues and income are as follows: | | | | | | Deferred Revenues | | | Related to Contracts | (In millions) | | with Customers | Balance December 31, 2024 | | $ | 425.6 | Cash received in advance (1) | | | 178.7 | Customer loyalty rewards accumulated, net of expirations: | | | | Admission revenues (2) | | | 9.4 | Food and beverage (2) | | | 26.4 | Reclassification to revenue as the result of performance obligations satisfied: | | | | Admission revenues (3) | | | (142.2) | Food and beverage (3) | | | (43.5) | Other theatre (4) | | | (43.1) | Foreign currency translation adjustment | | | 4.1 | Balance June 30, 2025 | | $ | 415.4 |
| (1) | Includes movie tickets, food and beverage, gift cards, exchange tickets, subscription membership fees, and other loyalty membership fees. |
| (2) | Amount of rewards accumulated, net of expirations, that are attributed to loyalty programs. |
| (3) | Amount of revenue recognized from redemptions of gift cards, exchange tickets, movie tickets, and rewards related to loyalty programs. |
| (4) | Amounts relate to income from non-redeemed or partially redeemed gift cards, non-redeemed exchange tickets, subscription membership fees, and loyalty program membership fees. |
The significant changes to contract liabilities included in the exhibitor services agreement in the condensed consolidated balance sheets, are as follows: | | | | | | Exhibitor Services | (In millions) | | Agreement (1) | Balance December 31, 2024 | | $ | 464.0 | Contract modification consideration (1) | | | 5.3 | Reclassification to other theatre revenue, as the result of performance obligations satisfied | | | (7.4) | Balance June 30, 2025 | | $ | 461.9 |
| (1) | The exhibitor services agreement contract liability relates to National CineMedia, LLC (“NCM”) common units that were previously received under the exhibitor services agreement dated February 13, 2007 and amended and restated as of December 13, 2013. On April 17, 2025, NCM entered into the Second Amended and Restated Exhibitor Services Agreement (the “Amended ESA”) with the Company. 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 to account 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. |
NCM Bankruptcy. On April 11, 2023, NCM filed a petition under Chapter 11 of the U.S. Bankruptcy Code in the Southern District of Texas. The Chapter 11 plan of reorganization became effective on August 7, 2023 (the “Plan”). The Company appealed certain terms of the Plan and rulings of the bankruptcy court with the United States District Court for the Southern District of Texas, which affirmed the rulings of the bankruptcy court, and subsequently with the United States Court of Appeals for the Fifth Circuit. On April 17, 2025, concurrently with entering into the Amended ESA, NCM and the Company reached an agreement to, among other things, dismiss with prejudice the ongoing litigation between the parties. Gift Cards and Exchange Tickets. The total amount of non-redeemed gift cards and exchange tickets included in deferred revenues and income in the condensed consolidated balance sheet as of June 30, 2025 was $293.8 million. The deferred revenues will be recognized as revenues once the gift cards and exchange tickets are redeemed. In the case of non-redeemed gift card and exchange tickets, the deferred revenues will be recognized in other theatre revenues in proportion to the pattern of actual redemptions, which is estimated to occur over the next 24 months. In the International markets, certain gift card and exchange tickets are subject to expiration dates, which may trigger further adjustments to non-redemption revenue in other theatre revenues. Loyalty Programs. As of June 30, 2025, the amount of deferred revenues allocated to the loyalty programs included in deferred revenues and income in the condensed consolidated balance sheet was $90.8 million. The earned points will be recognized as revenue as the points are redeemed, which is estimated to occur over the next 24 months. Subscription membership fees and loyalty membership fees are recognized ratably over their respective membership periods. The Company applies the practical expedient in ASC 606-10-50-14 and does not disclose information about remaining performance obligations that have original expected durations of one year or less.
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