AMC Entertainment Holdings, Inc.

Greetings and welcome to the AMC Entertainment first quarter 2021 earnings conference call. During the presentation, all participants will be in a listen-only mode. Afterwards, we'll conduct a question and answer session. At that time, if you have a question, please press the 1 followed by the 4 on your telephone. Should you require operator assistance at any time, please press star 0. As a reminder, this call is being recorded today, Thursday, May 6, 2021. I'd now like to turn the call over to John Merriweather. Vice President, Investor Relations.

Thank you. Good afternoon. I'd like to welcome everyone to AMC's first quarter 2021 earnings webcast. With me this afternoon is Adam Aaron, our President and Chief Executive Officer, and Sean Goodman, our Chief Financial Officer. Before I turn the webcast over to Adam, let me remind everyone that some of the comments made by management today during this webcast may contain forward-looking statements that are based on management's current expectations. Numerous risks, uncertainties, and other factors may cause actual results to differ materially from those that might be expressed today. Many of these risks and uncertainties are discussed in our most recent public filings, including our most recently filed 10Q. Several of the factors that will determine the company's future results are beyond the ability of the company to control or predict. In light of the uncertainties inherent in any forward-looking statements, listeners are cautioned to not place undue reliance on these statements. The company undertakes no obligation to revise or update any forward-looking statements, whether as a result of new information or future events. On this webcast, we may reference measures such as adjusted EBITDA, free cash flow, adjusted free cash flow, and constant currency, among others, which are non-GAAP financial measures. For a full reconciliation of our non-GAAP measures to GAAP results, please see our earnings release posted in the investor relations section of our website earlier today. After our prepared remarks, there will be a question and answer session. This afternoon's webcast is being recorded and a replay will be available in the investor relations section of our website at amctheaters.com later today. With that, I'll turn the call over to Adam.

Thank you, John. And good afternoon, everyone. Thank you for joining us today. For the last year, I've started all our AMC earnings webcasts and all our internal employee meetings by expressing my sincere wishes that you and your families, along with your colleagues and friends, all have been and are now still in good health in these challenging COVID times. Today is no different. I so do hope that you all are well. But with 250 million vaccination doses already in arm in the United States and more than 1.2 billion doses of the vaccine having been administered globally. And given that millions of more vaccine injections are taking place every single day, both at home and abroad, this just may be the last time, or close to the last time, that we feel the need to do a preamble on these calls about your health. Isn't that a glorious thing to contemplate? I watch those vaccination statistics closely. all the time because, let's say what it is, vaccination is our way out of all of this. Count me among the many who continue to marvel. And by the way, that's little m marvel, as in being amazed, not capital M Marvel, through which Disney is going to be releasing some extraordinary movies theatrically this year. Anyway, I truly marvel that every one of us talking or listening today on this webcast are now in our 14th or 15th month of living through this real-life horror show repeat of the Spanish flu epidemic of 1918 and 1919. I doubt that anyone, anyone on this call really expected that ever in our lifetimes But we have to deal with something this bad, which is so disruptive to what we think of as normal living, and to do that for so long. Before I leave the vaccination issue, though, which is so critical to AMC's recovery for obvious reasons, I said a few months back that Albert Bourla, the CEO of Pfizer, might just be the most important human in directing the comeback and the immediate future of the entire cinema industry. I meant that then. And I mean that still today, although he may have to share some credit with Moderna and others in pharma, as well as with those of the Trump administration who made a daring commitment to operation warp speed. But today we also are so incredibly grateful to the new Biden administration for getting the vaccine rolled out and in arm. to so many Americans so quickly. The US is conquering a mind-numbing logistical challenge. And the country doing so is a major reason why I am truly and absolutely optimistic, hopeful, and confident in AMC's recovery. Turning more directly to AMC. As I look back on the odyssey of the past year for AMC, there's just no other way to say it than this. It is simply and utterly astonishing what AMC has accomplished since March of 2020. Astonishing. It should take your breath away. It certainly did mine. And I say that not trying to have any sense of braggadocio. It's just the truth. And even as we say that, when we look back at what we've accomplished in such challenging times, we're not wearing rose-colored glasses. We're not sugarcoating our reality. We know that AMC is losing money today, not making money today. And we know, too, and are so very well aware that there is enormous work ahead for us to steer AMC through to a recovery. But what gives us the confidence that recovery is finally in our reach and that going forward we will maneuver our way to get AMC through these waters is this. Just look at what this management team already has pulled off in these unparalleled times. At AMC, we were within months or weeks of running out of cash five different times between April of 2020 and January of 21. There are a lot of smart people on this call, and many of you were certain that AMC would collapse. Why? To use a billiards metaphor, because to succeed, we would have had to run the table about 10 times in a row. We would have had to execute flawlessly on so many different dimensions. But that's the thing here. At AMC, that's precisely what we did. My goodness, the strength and circumstances of AMC are so much radically different and radically improved on May 6th than they were just months ago on November 6th or December 6th or on January 6th. Six months ago, in this very quarterly earnings call forum, I was quoting Winston Churchill's famous, we will fight on the beaches speech to discuss the wartime mentality that we had at AMC to successfully tackle our seemingly to many insurmountable challenges. Well, we know with the benefit of hindsight that Sir Winston won his war, and we have every confidence in looking ahead that AMC will win ours. We certainly are well on our way. Here is where we've ended up coming out of Q1 and moving into Q2 in calendar year 2021. As of March 31, 2021, we are strong. Almost all of our U.S. theaters are now open. And ever so importantly, our theaters in New York and Los Angeles are open, where in both markets, AMC is the number one player and which together represent about a third of our total U.S. business activity. And our market share in the United States has soared, increasing by about 25% compared to pre-pandemic levels. AMC's U.S. market share was about 26%, 27% a year back. Recently, we've enjoyed a share that is more around the 33% level. We've taken share from those who stayed closed or those who have gone bankrupt or those whose marketing prowess is not as imaginative as that of AMC or from those whose theaters are not as nice as ours given our substantial reinvestment in them over the past many years. And even as others finally reopen, we believe we will permanently keep some, not all, but some of that increased market share that we've been capturing of late now that more and more people are discovering and experiencing AMC for themselves firsthand. Our Middle Eastern theaters, too, are all open. Our theaters in Spain and Portugal are open. And much more of our European estate, most notably in the United Kingdom, comes back up in a big way just two weeks from now. And crucially, big new titles are starting to come out too, as you know. And people are coming to our theaters again. Our business for the opening of Godzilla vs. Kong was five times that big. of the average first quarter attendance. The Mortal Kombat Demon Slayer weekend two weeks ago was our biggest attended weekend at AMC since March of 2020, 13 months ago. Watch TV now, as I did last night. You'll see trailer after trailer before your eyes, starting to create the hype for all the big movies being released to theaters in May, June, July, and beyond. And critically important too, critically important, for AMC at the end of Q1, AMC had more than $1 billion of immediately available liquidity. That is the highest quarter-end liquidity that AMC has ever had in our entire 101-year history. In our new equity raise announced just last week, we had already brought in another $153 million at an average share price of $9.85 per share as of yesterday in just five trading days. That number is now $172 million in the door for AMC as of market close today. This takes our total amount raised to approximately $2.9 billion in fresh equity and debt capital over the last year including the conversion of $600 million of convertible notes into equity at a price of $13.51 per share. And wait until you hear this. Literally tomorrow, Friday, May 7, we will cross the $2 billion mark of cash raised through equity or debt, about four-fifths of that being equity rather than debt, since December 14, 2020, only five months ago. $2 billion in the door, boosting our liquidity since December 14. And that's in addition to all that we did from a capital perspective between April and November of 2020, which was about another $2 billion in addition, as spelled out in more detail in our press release today. Taking step after step, this was the AMC to-do list over the past year. Closing theaters and reopening them, closing them again and reopening them again, gut-wrenchingly having to furlough our entire U.S. workforce, and then bringing our workforce back and dealing with all the extremely important and sensitive issues associated with all that. Designing our AMC safe and clean protocols with Clorox and Harvard School of Public Health faculty at our side joined at the hip with us to prove that we could reopen responsibly. Navigating with studios, both with Carrot and Stick, in defending theatrical exhibition and defending AMC, but also understanding and accommodating their desire to creatively address windows, and simultaneously beef up their streaming platforms. Prepare for hyper-aggressive and innovative marketing activity when new major titles come to our theater in quantity, as they are starting to do now. Professionally handle a change of control from Wanda, who was a terrific partner for us for many years and who remains still our single largest shareholder to a shareholder base primarily individual shareholders, about 3 million strong, most of whom live in North America and Europe. And above all else, build up liquidity, bolster cash, cut spending, defer obligations, renegotiate theater leases from our landlord community, who I might tangentially add, heroically really had our back in 2020. and to whom we are ever so grateful now and will be perpetually grateful to as we return to our former self. But the list continues. We had to raise equity in debt, all the while deleveraging to the tune of some $1,255,000,000 in debt that was either forgiven by our lenders or converted instead to equity. Why am I sharing all of that with you now today? Well, some of it's new information for many of you, and some of it you already know. But in a simple summary, here's the point that I've been trying to make. When you look at it all as one interwoven tapestry, our dedicated, experienced AMC management team and employees coupled with the biggest and best collection of theater assets in our industry, both in the U.S. and globally, had enormous challenges to deal with in 2020, and we performed beyond all expectations over the past year. Of course, it's clear that challenges anew are still out there aplenty for AMC to deal with. A recovery in the movie theater industry has not yet started. It's just about to start. You can feel it. You can taste it. You can see it just over the horizon. But it hasn't actually started yet. And literally, no one knows what the pace, fast or slow, of that recovery will be. It's clear to us. that there'll be much more flawless execution needed at AMC and by AMC to energize this recovery and to benefit from this recovery. But think about all of this. The passion, the energy, the drive, the creativity, the work ethic, the smarts, and the sheer will that AMC displayed in 2020 to make it through this pandemic. That is precisely what we're going to display again at AMC in 2021 and again in 2022. No resting on recent laurels here. No taking a year sabbatical. No coasting. No mailing it in. We all know this is a what have you done for me lately world. And we will give it our all to make people as impressed with AMC's accomplishments this year in 2021 and next year in 2022 as they were with the strides AMC made in 2020. In November of 1942, two and a half years before World War II ended in Europe, my favorite Winston Churchill said in yet another of his famous speeches, quote, now this is not the end. It's not even the beginning of the end. But it is, perhaps, the end of the beginning. It took him another 2 and 1 half years, but Sir Winston won his titanic fight. Indeed, it's going to take us a while, too. But hear me now and write it down and hold us to it. As you think about COVID, its aftermath, and the structural changes in our industry that may come our way, I believe that AMC will win our war too. I'm now going to turn the call over to Sean to update you on where we are financially. And then we're going to head pretty quickly after that to Q&A. Sean?