| SEGMENT REPORTING |
NOTE 9—SEGMENT REPORTING The Company reports information about operating segments in accordance with ASC 280-10, Segment Reporting, which requires financial information to be reported based on the way management organizes segments within a company for making operating decisions and evaluating performance. Management has organized the Company around differences in geographic areas. The Company has identified two reportable segments for its theatrical exhibition operations, U.S. markets and International markets. The International markets reportable segment has operations in, or partial interest, in theatres in the United Kingdom, Germany, Spain, Italy, Ireland, Portugal, Sweden, Finland, Norway, and Denmark. The measure of segment profit and loss the Company’s chief operating decision maker uses to evaluate performance and allocate resources is Adjusted EBITDA. The Company defines Adjusted EBITDA as net earnings (loss) plus (i) income tax provision (benefit), (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. The Company does not report asset information by segment because that information is not used to evaluate the performance of or allocate resources between segments. During the first quarter of 2026, the Company changed its definition of Adjusted EBITDA to adjust for net periodic pension cost. Net periodic pension cost is a recurring expense that includes several components such as service cost, interest cost, expected return on plan assets, amortization of prior service cost, and amortization of actuarial gains/losses. Additionally, the Company also includes infrequent gains and losses from benefit curtailments and settlements of pension obligations in net periodic pension cost. The Company no longer believes that net periodic pension cost should be included in Adjusted EBITDA as the pension plans are frozen, service cost is zero, and the remaining components are not indicative of ongoing operating performance as they are not driven by current operating decisions and largely depend on actuarial assumptions. While not the basis for this change, the revised definition further aligns the Company’s definition of Adjusted EBITDA with the definition used in the Company’s debt agreements. The adjustment for net periodic pension cost is included in the caption titled “other expense (income)” in the condensed consolidated statement of operations and in the reconciliation of net loss to Adjusted EBITDA further below. See the components of other expense (income) table in Note 1—Basis of Presentation for net periodic pension cost recorded in each period presented. All comparative period information for Adjusted EBITDA has been re-cast to conform with the current definition. The impact of this change on previously reported Adjusted EBITDA for the three and six months ended June 30, 2025 was an improvement of $0.3 million and $0.6 million, respectively. The following tables below provide reconciliation of segment revenues to Adjusted EBITDA: | | | | | | | | | | | | Three Months Ended | | | June 30, 2026 | (In millions) | | U.S. Markets | | International Markets | | Consolidated | Revenues (1) | | $ | 1,258.6 | | $ | 338.1 | | $ | 1,596.7 | Less: | | | | | | | | | | Film exhibition costs | | | 362.0 | | | 78.3 | | | 440.3 | Food and beverage costs | | | 79.7 | | | 28.0 | | | 107.7 | Operating expense, excluding depreciation and amortization (2) | | | 343.7 | | | 112.4 | | | 456.1 | Rent | | | 161.6 | | | 62.2 | | | 223.8 | General and administrative expense - other, excluding depreciation and amortization (3) | | | 26.0 | | | 22.7 | | | 48.7 | Other segment items (4) | | | — | | | (1.3) | | | (1.3) | Adjusted EBITDA | | $ | 285.6 | | $ | 35.8 | | $ | 321.4 |
| | | | | | | | | | | | Three Months Ended | | | June 30, 2025 | (In millions) | | U.S. Markets | | International Markets | | Consolidated | Revenues (1) | | $ | 1,114.2 | | $ | 283.7 | | $ | 1,397.9 | Less: | | | | | | | | | | Film exhibition costs | | | 325.6 | | | 66.5 | | | 392.1 | Food and beverage costs | | | 72.8 | | | 23.3 | | | 96.1 | Operating expense, excluding depreciation and amortization (2) | | | 342.3 | | | 113.5 | | | 455.8 | Rent | | | 162.7 | | | 59.9 | | | 222.6 | General and administrative expense - other, excluding depreciation and amortization (3) | | | 29.5 | | | 22.7 | | | 52.2 | Other segment items (4) | | | — | | | (10.4) | | | (10.4) | Adjusted EBITDA | | $ | 181.3 | | $ | 8.2 | | $ | 189.5 |
| | | | | | | | | | | | Six Months Ended | | | June 30, 2026 | (In millions) | | U.S. Markets | | International Markets | | Consolidated | Revenues (1) | | $ | 1,999.4 | | $ | 642.7 | | $ | 2,642.1 | Less: | | | | | | | | | | Film exhibition costs | | | 548.6 | | | 147.3 | | | 695.9 | Food and beverage costs | | | 124.0 | | | 50.1 | | | 174.1 | Operating expense, excluding depreciation and amortization (2) | | | 637.0 | | | 226.7 | | | 863.7 | Rent | | | 324.0 | | | 123.9 | | | 447.9 | General and administrative expense - other, excluding depreciation and amortization (3) | | | 58.3 | | | 44.0 | | | 102.3 | Other segment items (4) | | | — | | | (1.5) | | | (1.5) | Adjusted EBITDA | | $ | 307.5 | | $ | 52.2 | | $ | 359.7 |
| | | | | | | | | | | | Six Months Ended | | | June 30, 2025 | (In millions) | | U.S. Markets | | International Markets | | Consolidated | Revenues (1) | | $ | 1,731.2 | | $ | 529.2 | | $ | 2,260.4 | Less: | | | | | | | | | | Film exhibition costs | | | 476.8 | | | 120.1 | | | 596.9 | Food and beverage costs | | | 113.8 | | | 39.5 | | | 153.3 | Operating expense, excluding depreciation and amortization (2) | | | 629.4 | | | 216.8 | | | 846.2 | Rent | | | 325.3 | | | 115.4 | | | 440.7 | General and administrative expense - other, excluding depreciation and amortization (3) | | | 61.7 | | | 40.8 | | | 102.5 | Other segment items (4) | | | — | | | (11.0) | | | (11.0) | Adjusted EBITDA | | $ | 124.2 | | $ | 7.6 | | $ | 131.8 |
| (1) | All segment revenues are comprised of revenues from external customers. |
| (2) | Operating expense, excluding depreciation and amortization excludes certain expenses as further defined in the reconciliation of net loss to Adjusted EBITDA below. |
| (3) | General and administrative expense—other, excluding depreciation and amortization excludes stock compensation expense. |
| (4) | Other segment items include government assistance, business interruption insurance recoveries, and attributable EBITDA from International theatre joint ventures. |
Other segment disclosures: | | | | | | | | | | | | Three Months Ended | | | June 30, 2026 | (In millions) | | U.S. Markets | | International Markets | | Consolidated | Depreciation and amortization | | $ | 57.3 | | $ | 18.8 | | $ | 76.1 | Income tax provision | | | 1.7 | | | 1.7 | | | 3.4 | Other expense | | | 84.7 | | | 28.9 | | | 113.6 | Other significant noncash items: | | | | | | | | | | Stock-based compensation expense | | | 2.9 | | | 0.4 | | | 3.3 | Equity in earnings of non-consolidated entities | | | (3.4) | | | (0.6) | | | (4.0) | Capital expenditures | | | 39.8 | | | 5.5 | | | 45.3 |
| | | | | | | | | | | | Three Months Ended | | | June 30, 2025 | (In millions) | | U.S. Markets | | International Markets | | Consolidated | Depreciation and amortization | | $ | 59.1 | | $ | 18.7 | | $ | 77.8 | Income tax provision | | | 0.5 | | | 0.7 | | | 1.2 | Other expense (income) | | | 4.3 | | | (34.3) | | | (30.0) | Other significant noncash items: | | | | | | | | | | Stock-based compensation expense | | | 5.4 | | | 0.6 | | | 6.0 | Equity in earnings of non-consolidated entities | | | (2.0) | | | (0.1) | | | (2.1) | Capital expenditures | | | 34.0 | | | 15.5 | | | 49.5 |
| | | | | | | | | | | | Six Months Ended | | | June 30, 2026 | (In millions) | | U.S. Markets | | International Markets | | Consolidated | Depreciation and amortization | | $ | 114.4 | | $ | 37.4 | | $ | 151.8 | Income tax provision | | | 2.2 | | | 3.4 | | | 5.6 | Other expense | | | 25.8 | | | 38.1 | | | 63.9 | Other significant noncash items: | | | | | | | | | | Stock-based compensation expense | | | 9.5 | | | 1.1 | | | 10.6 | Equity in earnings of non-consolidated entities | | | (6.0) | | | (0.7) | | | (6.7) | Capital expenditures | | | 74.5 | | | 17.0 | | | 91.5 |
| | | | | | | | | | | | Six Months Ended | | | June 30, 2025 | (In millions) | | U.S. Markets | | International Markets | | Consolidated | Depreciation and amortization | | $ | 117.9 | | $ | 36.0 | | $ | 153.9 | Income tax provision | | | 1.4 | | | 1.4 | | | 2.8 | Other income | | | (40.4) | | | (47.6) | | | (88.0) | Other significant noncash items: | | | | | | | | | | Stock-based compensation expense | | | 10.9 | | | 0.8 | | | 11.7 | Equity in earnings of non-consolidated entities | | | (2.7) | | | (0.2) | | | (2.9) | Capital expenditures | | | 65.8 | | | 30.7 | | | 96.5 |
The following table sets forth a reconciliation of net loss to Adjusted EBITDA: | | | | | | | | | | | | | | | Three Months Ended | | Six Months Ended | (In millions) | | June 30, 2026 | | June 30, 2025 | | June 30, 2026 | | June 30, 2025 | Net loss | | $ | (11.4) | | $ | (4.7) | | $ | (128.5) | | $ | (206.8) | Plus: | | | | | | | | | | | | | Income tax provision (1) | | | 3.4 | | | 1.2 | | | 5.6 | | | 2.8 | Interest expense | | | 136.0 | | | 129.6 | | | 275.9 | | | 248.7 | Depreciation and amortization | | | 76.1 | | | 77.8 | | | 151.8 | | | 153.9 | Certain operating expense (2) | | | 2.3 | | | 2.6 | | | 2.0 | | | 5.4 | Equity in earnings of non-consolidated entities (3) | | | (4.0) | | | (2.1) | | | (6.7) | | | (2.9) | Attributable EBITDA (4) | | | 0.6 | | | 0.1 | | | 0.8 | | | 0.5 | Investment expense (income) (5) | | | 0.5 | | | (1.4) | | | (17.8) | | | (7.1) | Other expense (income) (6) | | | 114.3 | | | (19.7) | | | 64.6 | | | (77.5) | Merger, acquisition and other costs (7) | | | 0.3 | | | 0.1 | | | 1.4 | | | 3.1 | Stock-based compensation expense (8) | | | 3.3 | | | 6.0 | | | 10.6 | | | 11.7 | Adjusted EBITDA | | $ | 321.4 | | $ | 189.5 | | $ | 359.7 | | $ | 131.8 |
| (1) | For information regarding the income tax provision, see Note 7—Income Taxes. |
| (2) | Amounts represent preopening expense related to temporarily closed screens under renovation, theatre and other closure expense for the permanent closure of screens, 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 or related to theatres that are not open. |
| (3) | Equity in earnings of non-consolidated entities during the three months ended June 30, 2026 primarily consisted of equity in earnings from AC JV, LLC (“AC JV”) of $(3.3) million. Equity in earnings of non-consolidated entities during the three months ended June 30, 2025 primarily consisted of equity in earnings from AC JV of $(1.8) million. |
Equity in earnings of non-consolidated entities during the six months ended June 30, 2026 primarily consisted of equity in earnings from AC JV of $(5.7) million. Equity in earnings of non-consolidated entities during the six months ended June 30, 2025 primarily consisted of equity in earnings from AC JV of $(2.6) million. | (4) | Attributable EBITDA includes the EBITDA from equity investments in theatre operators in certain International markets. See below for a reconciliation of the Company’s equity in (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. |
| | | | | | | | | | | | | | | Three Months Ended | | Six Months Ended | (In millions) | | June 30, 2026 | | June 30, 2025 | | June 30, 2026 | | June 30, 2025 | Equity in (earnings) of non-consolidated entities | | $ | (4.0) | | $ | (2.1) | | $ | (6.7) | | $ | (2.9) | Less: | | | | | | | | | | | | | Equity in (earnings) of non-consolidated entities excluding International theatre joint ventures | | | (3.5) | | | (2.2) | | | (6.2) | | | (3.0) | Equity in earnings (loss) of International theatre joint ventures | | | 0.5 | | | (0.1) | | | 0.5 | | | (0.1) | Income tax benefit | | | — | | | (0.1) | | | — | | | (0.1) | Investment income | | | (0.1) | | | — | | | (0.1) | | | — | Interest expense | | | — | | | 0.1 | | | — | | | 0.1 | Depreciation and amortization | | | 0.2 | | | 0.2 | | | 0.4 | | | 0.6 | Attributable EBITDA | | $ | 0.6 | | $ | 0.1 | | $ | 0.8 | | $ | 0.5 |
| (5) | Investment expense during the three months ended June 30, 2026 includes unrealized losses on the |
| | Company’s investment in Hycroft of $1.5 million, partially offset by interest income of $(1.0) million. Investment income during the three months ended June 30, 2025 included interest income of $(1.7) million, partially offset by unrealized losses on the Company’s investments in Hycroft of $0.3 million. |
Investment income during the six months ended June 30, 2026 includes realized and unrealized gains on the Company’s investments in Hycroft of $(16.5) million and interest income of $(1.3) million. Investment income during the six months ended June 30, 2025 included interest income of $(4.6) million and unrealized gains on the Company’s investments in Hycroft of $(2.5) million. | (6) | Other expense during the three months ended June 30, 2026 includes the increase in the fair value of the bifurcated embedded derivative in the New Exchangeable Notes of $41.3 million, the loss on extinguishment of the New Exchangeable Notes of $33.0 million, the loss on extinguishment of the Odeon Notes due 2027 of $30.1 million, the increase in the fair value of the bifurcated embedded derivative in the Existing Exchangeable Notes of $9.8 million, and net periodic pension cost of $0.5 million, partially offset by foreign currency transaction gains of $(0.4) million. Other income during the three months ended June 30, 2025 included foreign currency transaction gains of $(23.9) million, partially offset by an increase in the fair value of the bifurcated embedded derivative in the Existing Exchangeable Notes of $3.9 million and $0.3 million of net periodic pension cost. |
Other expense during the six months ended June 30, 2026 includes the loss on extinguishment of the New Exchangeable Notes of $33.0 million, the loss on extinguishment of the Odeon Notes due 2027 of $30.1 million, foreign currency transaction losses of $8.6 million, the increase in the fair value of the bifurcated embedded derivative in the Existing Exchangeable Notes of $2.7 million, net periodic pension cost of $1.0 million and debt modification third party fees of $0.3 million, partially offset by the decrease in the fair value of the bifurcated embedded derivative in the New Exchangeable Notes of $(11.1) million. Other income during the six months ended June 30, 2025 included a decrease in the fair value of the bifurcated embedded derivative in the Existing Exchangeable Notes of $(41.2) million and foreign currency transaction gains of $(36.9) million, partially offset by $0.6 million of net periodic pension cost. | (7) | Merger, acquisition and other costs are excluded as they are non-operating in nature. |
| (8) | Non-cash expense included in general and administrative: other. |
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