Use these links to rapidly review the documentTABLE OF CONTENTS PART IV

Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549



FORM 10-K

(Mark One)ý

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended March 31, 2011ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period
from                                   to


Commission file number 1-8747



AMC ENTERTAINMENT INC.(Exact name of registrant as specified in its charter)

Delaware(State or other jurisdiction of
incorporation or organization)

43-1304369(I.R.S. Employer
Identification No.)920 MainKansas City, Missouri

64105(Address of principal executive offices)

(Zip Code)


Registrant's
telephone number, including area code:(816) 221-4000



Securities
registered pursuant to Section 12(b) of the Act:None



Securities
registered pursuant to Section 12(g) of the Act:None.

Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities
Act. Yes o    No ý

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the
Act. Yes o    No ý

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the
past 90 days. Yes ý    No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulations S-T (§229.405 of this chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit such files). Yes o    No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter)
is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. ý

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting
company. See definitions of "large accelerated filer," "accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o

Accelerated filer o

Non-accelerated filer ý (Do not check if a
smaller reporting company)

Smaller reporting company o


Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Act). Yes o    No ý

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at
which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant's most recently completed second fiscal quarter.

No
voting stock of AMC Entertainment Inc. is held by non-affiliates of AMC Entertainment Inc.

Title of each class of common stock

Number of shares
Outstanding as of June 1, 2011Common Stock, 1¢ par value

1


DOCUMENTS INCORPORATED BY REFERENCENone



---





Table of Contents



AMC ENTERTAINMENT INC.

FORM 10-K
FOR THE FISCAL YEAR ENDED MARCH 31, 2011

INDEX



PagePART IItem 1.

Business


3Item 1A.

Risk Factors


21Item 1B.

Unresolved Staff Comments


28Item 2.

Properties


28Item 3.

Legal Proceedings


29Item 4.

[Removed and Reserved]


29PART IIItem 5.

Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities


29Item 6.

Selected Financial Data


30Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations


31Item 7A.

Quantitative and Qualitative Disclosures about Market Risk


53Item 8.

Financial Statements and Supplementary Data


55Item 9.

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure


136Item 9A.

Controls and Procedures


136Item 9B.

Other Information


136PART IIIItem 10.

Directors, Executive Officers and Corporate Governance


136Item 11.

Executive Compensation


142Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters


163Item 13.

Certain Relationships and Related Transactions, and Director Independence


167Item 14.

Principal Accounting Fees and Services


171PART IVItem 15.

Exhibits, Financial Statement Schedules


173


1

---





Table of Contents

Forward Looking Statements

In addition to historical information, this Annual Report on Form 10-K contains "forward-looking statements" within
the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. The
words "forecast," "estimate," "project," "intend," "expect," "should," "believe" and similar expressions are intended to identify forward-looking statements. These forward-looking statements involve
known and unknown risks, uncertainties, assumptions and other factors, including those discussed in "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of
Operations of AMC Entertainment Inc.," which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed
or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to, the following:



This
list of factors that may affect future performance and the accuracy of forward-looking statements is illustrative but not exhaustive. In addition, new risks and uncertainties may
arise from time to time. Accordingly, all forward-looking statements should be evaluated with an understanding of their inherent uncertainty.

Except
as required by law, we assume no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ
materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

2

---





Table of Contents

PART I

Item 1.    Business

(a)   General Development of Business

AMC Entertainment Inc. ("AMC Entertainment," "AMCE," or the "Company") is organized as an intermediate holding company. Our principal directly owned
subsidiaries are American
Multi-Cinema, Inc. ("AMC") and AMC Entertainment International, Inc. ("AMCEI"). We conduct our theatrical exhibition business through AMC and its subsidiaries and AMCEI.

AMCE
is a wholly owned subsidiary of AMC Entertainment Holdings, Inc. ("Parent"), an investment vehicle owned by J.P. Morgan Partners, LLC ("JPMP"), Apollo
Management, L.P. and certain related investment funds ("Apollo"), affiliates of Bain Capital Partners ("Bain"), The Carlyle Group ("Carlyle") and Spectrum Equity Investors ("Spectrum")
(collectively the "Sponsors").

We
were founded in Kansas City, Missouri in 1920. AMCE was incorporated under the laws of the state of Delaware on June 13, 1983. We maintain our principal executive offices at
920 Main Street, Kansas City, Missouri 64105. Our telephone number at such address is (816) 221-4000. Our Internet address is www.amctheatres.com. Our Annual Reports on
Form 10-K, Quarterly Reports on Form 10-Q and current reports on Form 8-K, and amendments to these Reports are available free of charge on our
Internet website under the heading "Investor Relations" as soon as practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission.

(b)   Financial Information about Segments

In fiscal 2011, 2010 and 2009, we identified one reportable segment for our theatrical exhibition operations. Previously, we had three operating segments which
consisted of United States and Canada Theatrical Exhibition, International Theatrical Exhibition, and Other. The reduction in the number of operating segments was a result of the disposition of
Cinemex in December 2008. Cinemex was previously reported in the International Theatrical Exhibition operating segment and accounted for a substantial majority of that segment. In addition, in fiscal
2009, we consolidated the Other operating segment with the United States and Canada Theatrical Exhibition operating segment due to a previous contribution of advertising net assets to National
CineMedia, LLC ("NCM"). In fiscal 2009, the United States and Canada Theatrical Exhibition operating segment was renamed the Theatrical Exhibition operating segment.

For
information about our operating segment, see Note 16Operating Segment to the Consolidated Financial Statements under Part II Item 8 of this Annual
Report on Form 10-K.

(c)   Narrative Description of Business

We are one of the world's leading theatrical exhibition companies. As of March 31, 2011, we owned, operated or held interests in 360 movie theatres with a
total of 5,128 screens, approximately 99% of
which were located in the United States and Canada. Our theatres are primarily located in major metropolitan markets, which we believe offer strategic, operational and financial advantages. We also
have a modern, highly productive theatre circuit that leads the theatrical exhibition industry in key asset quality and performance metrics, such as revenues per head and per theatre productivity
measures. Our industry leading performance is largely driven by the quality of our theatre sites, our operating practices, which focus on delivering the best customer experience through consumer
focused innovation, and, most recently, our implementation of premium sight and sound formats, which we believe will be key components of the future movie-going experience. As of March 31,
2011, we are the largest IMAX exhibitor in the world with a 45% market share in the United States and nearly twice the screen count of the second largest U.S. IMAX exhibitor, and each of our local
IMAX installations is protected by geographic exclusivity.

3

---



Table of Contents

Approximately
200 million consumers have attended our theatres each year for the past five years. We offer these consumers a fully immersive out-of-home
entertainment experience by featuring a wide array of entertainment alternatives, including popular movies, throughout the day and at different price points. This broad range of entertainment
alternatives appeals to a wide variety of consumers across different age, gender, and socioeconomic demographics. For example, in addition to traditional film programming, we offer more diversified
programming that includes independent and foreign films, performing arts, music and sports. We also offer food and beverage alternatives beyond traditional concession items, including
made-to-order meals, customized coffee, healthy snacks and dine-in theatre options, all designed to create further service and selection for our consumers. We
believe there is potential for us to further increase our annual attendance as we gain market share from other in-home and out-of-home entertainment options.

Our
large annual attendance has made us an important partner to content providers who want access and distribution to consumers. We currently generate 16% more estimated unique visitors
per year (33.3 million) than HBO's subscribers (28.6 million) and 67% more than Netflix's subscribers (20.0 million) according to the October 14, 2010 Hollywood Reporter, the
December 31, 2010 Netflix Form 10-K and the Theatrical Market Statistics 2010 report from the Motion
Picture Association of America. Further underscoring our importance to content providers, we represent approximately 17% to 20%, on average, of each of the 6 largest grossing studios' U.S. box office
revenues. Average annual film rental payments to each of these studios ranged from approximately $100 million to $160 million.

For
the fiscal year ended March 31, 2011, the fiscal year ended April 1, 2010 and the fiscal year ended April 2, 2009, we generated revenues of approximately
$2.4 billion, $2.4 billion and $2.3 billion, respectively, Adjusted EBITDA (as defined on page 43) of $277.5 million, $328.3 million and
$294.9 million, respectively, and earnings (loss) from continuing operations of $(123.4) million, $77.3 million and $(90.9) million, respectively.

The
following table provides detail with respect to digital delivery, 3D enabled projection, large screen formats, such as IMAX and our proprietary ETX, and deployment of our enhanced
food and beverage offerings as deployed throughout our circuit on March 31, 2011.

Format

Theatres

Screens

Planned Deployed
Screens
FYE 2012Digital


314


2,301


3,8913D enabled


314


1,603


2,250IMAX (3D enabled)


107


107


129ETX (3D enabled)


14


14


17Dine-in theatres


7


61


110 - 130


4

---



Table of Contents

The
following table provides detail with respect to the geographic location of our Theatrical Exhibition circuit as of March 31, 2011:

Theatrical Exhibition

Theatres(1)

Screens(1)California


44


649Illinois


45


504Texas


21


413Florida


20


366New Jersey


23


304New York


24


266Indiana


22


262Michigan


10


184Colorado


13


173Georgia


11


167Arizona


9


160Missouri


12


140Washington


11


137Massachusetts


10


129Maryland


12


127Pennsylvania


10


126Virginia


7


113Minnesota


7


111Ohio


6


94Louisiana


5


68Wisconsin


4


63North Carolina


3


60Oklahoma


3


60Kansas


2


48Connecticut


2


36Iowa


2


31Nebraska


1


24District of Columbia


3


22Kentucky


1


20Arkansas


1


16South Carolina


1


14Nevada


1


10Utah


1


9Canada


8


167China (Hong Kong)(2)


2


13France


1


14United Kingdom


2


28Total Theatrical Exhibition


360


5,128


(1)Included
in the above table are 8 theatres and 96 screens that we manage or in which we have a partial interest. We manage 3 theatres where we receive a fee
from the owner and where we do not own any economic interest in the theatre. We manage and own 50% economic interests in 3 theatres accounted for following the equity method and own a 50% economic
interest in 1 IMAX screen accounted for following the equity method.(2)In
Hong Kong, we maintain a partial interest represented by a license agreement for use of our trademark.


5

---



Table of Contents

We
were founded in 1920 and since then have pioneered many of the theatrical exhibition industry's most important innovations, including the multiplex theatre format in
the early 1960s and the North American megaplex theatre format in the mid-1990s. In addition, we have acquired some of the most respected companies in the theatrical exhibition industry,
including Loews, General Cinema and, more recently, Kerasotes. Our historic growth has been driven by a combination of organic growth and acquisition strategies, in addition to strategic alliances and
partnerships that highlight our ability to capture innovation and value beyond the traditional exhibition space. For example:



Consistent
with our history and culture of innovation, we believe we have pioneered a new way of thinking about theatrical exhibition: as a consumer entertainment provider. This vision,
which introduces a strategic and marketing overlay to traditional theatrical exhibition, has been instrumental in driving and redirecting our future strategy.

The
following table sets forth our historical information, on a continuing operations basis, concerning new builds (including expansions), acquisitions and dispositions and
end-of-period operated theatres and screens through March 31, 2011:

New Builds

Acquisitions

Closures/Dispositions

Total TheatresFiscal Year

Number of
Theatres

Number of
Screens

Number of
Theatres

Number of
Screens

Number of
Theatres

Number of
Screens

Number of
Theatres

Number of
Screens2006


7


106


116


1,363


7


60


335


4,7702007


7


107


2


32


26


243


318


4,6662008


9


136








18


196


309


4,6062009


6


83








8


77


307


4,6122010


1


6








11


105


297


4,5132011


4


55


95


960


36


400


360


5,12834


493


213


2,355


106


1,081


6

---



Table of Contents

We
have also created and invested in a number of allied businesses and strategic initiatives that have created differentiated viewing formats and experiences, greater variety in food and
beverage options and value appreciation for our company. We believe these initiatives will continue to generate incremental value for our company in the future. For example:



7

---





Table of Contents



Disposition of International Theatrical Exhibition Operating Segment

From fiscal 2006 to fiscal 2009 we disposed of the theatres owned and operated by us in Japan, Hong Kong, Spain, Portugal and Mexico,
as well as all joint venture ownership interests in international theatres in Argentina, Brazil, Chile, Uruguay and Spain. The operations and cash flows of these theatres have been eliminated from our
ongoing operations as a result of the dispositions. We do not have any significant continuing involvement in these theatres. The results of operations of those theatres owned and operated by us have
been classified as discontinued operations for all periods presented.

Theatre and Other Closures

During the fourth quarter of our fiscal year ending March 31, 2011, we evaluated excess capacity and vacant and under-utilized
retail space throughout our theatre circuit. On March 28, 2011, management decided to permanently close 73 underperforming screens and auditoriums in six theatre locations in the United States
and Canada while continuing to operate 89 screens at these locations. The permanently closed screens are physically segregated from the screens that will remain in operation and access to the closed
space is restricted. Additionally, management decided to discontinue development of and cease use of (including for storage) certain vacant and under-utilized retail space at four other theatres in
the United States and the United Kingdom. As a result of closing the screens and auditoriums and discontinuing the development and use of the other spaces, we recorded a charge of $55 million
for theatre and other closure expense during the fiscal year ending March 31, 2011. The charge to theatre and other closure expense reflects the discounted contractual amounts of the existing
lease obligations for the remaining 7 to 13 year terms of the leases as well as expenses incurred for related asset removal and shutdown costs. A significant portion of each of the affected
properties will be closed and no longer used. The charges to theatre and other closure expense do not result in any new, increased or accelerated obligations for cash payments related to the
underlying long-term operating lease agreements. We expect that the estimated future savings in rent expense and variable operating expenses as a result of our exit plan and from operating
these ten theatres in a more efficient manner will exceed the estimated loss in attendance and revenues that we may experience related to the closed auditoriums.

Mergers and Acquisitions

On May 24, 2010, we completed the acquisition of 92 theatres and 928 screens from Kerasotes (the "Kerasotes Acquisition").
Kerasotes operated 95 theatres and 972 screens in mid-sized, suburban and metropolitan markets, primarily in the Midwest. More than three quarters of the Kerasotes theatres feature stadium
seating and almost 90% have been built since 1994. The purchase price for the Kerasotes theatres paid in cash at closing was $276.8 million, net of cash acquired, and was subject to working
capital and other purchase price adjustments. We paid working capital and other purchase price adjustments of $3.8 million during the second quarter of fiscal 2011, based on the final closing

8

---



Table of Contents

date
working capital and deferred revenue amounts and have included this amount as part of the total purchase price. The acquisition of Kerasotes significantly increased our size. For additional
information about the Kerasotes Acquisition, see the notes to our audited Consolidated Financial Statements for the fiscal year ended March 31, 2011 included elsewhere in this Annual Report on
Form 10-K.

On
March 31, 2011, Marquee Holdings Inc. ("Holdings"), a direct, wholly-owned subsidiary of Parent and a holding company, the sole asset of which consisted of the capital stock of
AMCE, was merged with and into Parent, with Parent continuing as the surviving entity (the "Holdings Merger"). As a result of the merger, AMCE became a direct subsidiary of Parent.

Original Notes Offering, Cash Tender Offers and Redemptions

On December 15, 2010, we issued $600.0 million aggregate principal amount of the original notes pursuant to an indenture,
dated as of December 15, 2010, among the Issuer, the guarantors named therein and U.S. Bank National Association, as trustee (the "Indenture"). The Indenture provides that the notes are general
unsecured senior subordinated obligations of the Company and are fully and unconditionally guaranteed on a joint and several senior subordinated unsecured basis by all of our existing and future
domestic restricted subsidiaries that guarantee our other indebtedness.

Concurrently
with the initial notes offering, we launched a cash tender offer and consent solicitation for any and all of our currently outstanding 11% Senior Subordinated Notes due 2016
(the "2016 Senior Subordinated Notes") at a purchase price of $1,031.00 plus a $30.00 consent fee for each $1,000.00 of principal amount of currently outstanding 2016 Subordinated Notes validly
tendered and accepted by us
on or before the early tender date, and Holdings launched a tender offer for its 12% Senior Discount Notes due 2014 (the "Discount Notes due 2014") at a purchase price of $797.00 plus a $30.00 consent
fee for each $1,000.00 face amount (or $792.09 accreted value) of currently outstanding Discount Notes due 2014 validly tendered and accepted by Holdings on or before the early tender date (the "Cash
Tender Offers"). As of December 29, 2010, we had purchased $95.1 million principal amount of our 2016 Senior Subordinated Notes for a total consideration of $104.8 million, and
Holdings had purchased $215.5 million principal amount at face value (or $170.7 million accreted value) of the Discount Notes due 2014 for a total consideration of $185.0 million.
We recorded a loss on extinguishment for the 2016 Senior Subordinated Notes and our Senior Secured Credit Facility Amendment of approximately $11.0 million and Holdings recorded a loss on
extinguishment for the Discount Notes due 2014 of approximately $10.7 million.

We
used a portion of the net proceeds from the issuance of the original notes to pay the consideration for the 2016 Senior Subordinated Notes Cash Tender Offer plus any accrued and
unpaid interest and distributed proceeds to Holdings to be applied to the Holdings Discount Notes due 2014 Cash Tender Offer. On January 3, 2011, Holdings redeemed $88.5 million
principal amount at face value (or $70.1 million accreted value) of the Discount Notes due 2014 that remained outstanding after the closing of the Cash Tender Offer at a price of $823.77 per
$1,000.00 face amount (or $792.09 accreted value) of Discount Notes due 2014 for a total consideration of $76.1 million in accordance with the terms of the indenture governing the Discount
Notes due 2014, as amended pursuant to the consent solicitation. Holdings recorded an additional loss on extinguishment related to the Discount Notes due 2014 of approximately $4.1 million. On
December 30, 2010, we issued an irrevocable notice of redemption in respect of the $229.9 million principal amount of 2016 Senior Subordinated Notes that remained outstanding after the
closing of the Cash Tender Offers, and we redeemed the remaining 2016 Senior Subordinated Notes at a price of $1,055.00 per $1,000.00 principal amount of 2016 Senior Subordinated Notes on
February 1, 2011 for a total consideration of $255.2 million in accordance with the terms of the indenture governing the 2016 Senior Subordinated Notes. We recognized an additional loss
on extinguishment of approximately $16.7 million in the fourth quarter of fiscal 2011.

9

---



Table of Contents

Senior Secured Credit Facility Amendment

On December 15, 2010, we amended our senior secured credit facility dated January 26, 2006. The amendments, among other
things,: (i) replaced the existing revolving facility with a new five year revolving facility (with higher interest rates than the existing revolving facility); (ii) extended the
maturity of term loans held by term lenders who consented to such extension; (iii) increased the interest rates payable to holders of extended term loans; and (iv) included certain other
modifications to the senior secured credit facility in connection with the foregoing.

Dividend

During December of 2010 and January and March of 2011, AMC Entertainment Inc. ("AMC Entertainment" or "AMCE") made dividend
payments to Holdings, totaling $263.1 million. Holdings used the available funds to pay the consideration for the Discount Notes due 2014 Cash Tender Offer and the redemption of all of Discount
Notes due 2014 that remained outstanding after the closing of the Cash Tender Offer and pay corporate overhead expenses incurred in the ordinary course of business.

During
September of 2010, AMCE made dividend payments to Holdings of $15.2 million, and Holdings made dividend payments to Parent, totaling $669,000. Holdings and Parent used the
available funds to make a cash interest payment on the Discount Notes due 2014 and pay corporate overhead expenses incurred in the ordinary course of business.

NCM Transactions

All of our National CineMedia, LLC ("NCM") membership units are redeemable for, at the option of NCM, cash or shares of common
stock of National CineMedia, Inc. ("NCM, Inc.") on a share-for-share basis. On August 18, 2010, we sold 6.5 million shares of common stock of
NCM, Inc., in an underwritten public offering for $16.00 per share and reduced our related investment in NCM by $36.7 million, the average carrying amount of all shares owned. Net
proceeds received on this sale were $99.8 million, after deducting related underwriting fees and professional and consulting costs of $4.2 million, resulting in a gain on sale of
$63.1 million. In addition, on September 8, 2010, we sold 155,193 shares of NCM, Inc. to the underwriters to cover over allotments for $16.00 per share and reduced our
related investment in NCM by $867,000, the average carrying amount of all shares owned. Net proceeds received on this sale were $2.4 million, after deducting related underwriting fees and
professional and consulting costs of $99,000, resulting in a gain on sale of $1.5 million.

On
March 17, 2011, NCM, Inc., as sole manager of NCM, disclosed the changes in ownership interest in NCM pursuant to the Common Unit Adjustment Agreement dated as of
February 13, 2007 ("2010 Common Unit Adjustment"). This agreement provides for a mechanism for adjusting membership units based on increases or decreases in attendance associated with theatre
additions and dispositions. Prior to the 2010 Common Unit Adjustment, we held 18,803,420 units, or a 16.98% ownership interest, in NCM as of December 30, 2010. As a result of theatre closings
and dispositions and a related decline in attendance, we elected to surrender 1,479,638 common membership units to satisfy the 2010 Common Unit Adjustment, leaving us with 17,323,782 units, or
a 15.66% ownership interest, in NCM as of March 31, 2011. We recorded the surrendered common units as a reduction to deferred revenues for exhibitor services agreement at fair value of
$25.4 million, based on a price per share of NCM, Inc. of
$17.14 on March 17, 2011, and recorded the reduction of our NCM investment at weighted average cost for Tranche 2 Investments of $25.6 million, resulting in a loss on the
surrender of the units of $207,000. The gain from the NCM, Inc. stock sales and the loss from the surrendered NCM common units are reported as Gain from NCM transactions on the Consolidated
Statements of Operations.

10

---



Table of Contents

Our Competitive Strengths

We believe our leadership in major metropolitan markets, superior asset quality and continuous focus on innovation and the guest
experience have positioned us well to capitalize disproportionately on trends providing momentum to the theatrical exhibition industry as a whole, particularly the mass adoption of digital and 3D
technologies. We believe we can gain additional share of wallet from the consumer by broadening our offerings to them and increasing our engagement with them. We can then enable marketers and
partners, such as NCM, to engage with our guests, deriving further financial value and benefit. We believe our management team is uniquely equipped to execute our strategy to realize these
opportunities, making us a particularly effective competitor in our industry and positioning us well for future growth. Our competitive strengths include:

Broad National Reach.Thirty-nine percent (39%) of Americans (or approximately 120 million consumers) live within 10 miles
of an
AMC theatre. This proximity and convenience, along with the affordability and diversity of our film product, drive approximately 200 million consumers into our theatres each year, or
approximately 33.3 million unique visitors annually. We believe our ability to serve a broad consumer base across numerous entertainment occasions, such as teenage socializing, romantic dates
and group events, is a competitive advantage. Our consumer reach, operating scale, access to diverse content and marketing platforms are valuable to content providers and marketers who want to access
this broad and diverse audience.

Major Market Leader.We maintain the leading market share within our markets. As of March 31, 2011, we operated in 24 of
the top
25 Designated Market Areas as defined by Nielsen Media Research ("DMAs") and had the number one or two market share in each of the top 15 DMAs, including New York City, Los
Angeles, Chicago, Philadelphia, San Francisco, Boston and Dallas. In addition, 75% of our screens were located in the top 25 DMAs and 89% were located in the top 50 DMAs. Population
growth from 2010 through 2015 is projected by Nielsen Claritas to be 4.5% in the top 25 DMAs and 4.5% in the top 50 DMAs, compared to only 3.2% in all other DMAs. Our strong presence in
the top
DMAs makes our theatres more visible and therefore strategically more important to content providers who rely on these markets for a disproportionately large share of box office receipts. According to
Rentrak, during the 52 weeks ended March 31, 2011, 59% of all U.S. box office receipts were derived from the top 25 DMAs and 75% were derived from the top 50 DMAs. In
certain of our densely populated major metropolitan markets, we believe a scarcity of attractive retail real estate opportunities enhances the strategic value of our existing theatres. We also believe
the complexity inherent in operating in these major metropolitan markets is a deterrent to other less sophisticated competitors, protecting our market share position.

We
believe that customers in our major metropolitan markets are generally more affluent and culturally diverse than those in smaller markets. Traditionally, our strong presence in these
markets has created a greater opportunity to exhibit a broad array of programming and premium formats, which we believe drives higher levels of attendance at our theatres. This has allowed us
to generate higher per screen and per theatre operating metrics. For example, our average ticket price in the United States was $8.73 for our 52 weeks ended March 31, 2011, as compared
to $7.87 for the industry as a whole for the 12 months ended March 31, 2011.

Modern, Highly Productive Theatre Circuit.We believe the combination of our strong major market presence, focus on a superior
guest experience and
core operating strategies enables us to deliver industry-leading theatre level operating metrics. For the 52 weeks ended March 31, 2011, on a pro forma basis for Kerasotes, our
theatre exhibition circuit generated attendance per average theatre of 538,000 (higher than any of our peers) revenues per average theatre of $6.7 million and operating cash flows before rent
(defined as Adjusted EBITDA before rent and G&A-Other) per average theatre of $2.2 million. Over the past five fiscal years, we invested an average of $132.4 million per year
to

11

---



Table of Contents

improve
and expand our theatre circuit, contributing to the modern portfolio of theatres we operate today.

Leader in Deployment of Premium Formats.We also believe our strong major market presence and our highly productive theatre
circuit allow us to take
greater advantage of incremental revenue-generating opportunities associated with the premium services that will define the future of the theatrical business, including digital delivery, 3D
projection, large screen formats, such as IMAX and our proprietary ETX offering, and alternative programming. As the industry's digital conversion accelerates, we believe we have established a
differentiated leadership position in premium formats. For example, we are the world's largest IMAX exhibitor with 107 screens as of March 31, 2011, all of which are 3D enabled, and we expect
to increase our IMAX screen count to 129 by the end of fiscal year 2012. We are able to charge a premium price for the IMAX experience, which, in combination with higher attendance levels, produces
average weekly box office per print that is 300% greater than standard 2D versions of the same movie. The availability of IMAX and 3D content has increased significantly from calendar year
2005 to 2010. During this period, available 3D content increased from 3 titles to 26 titles while available IMAX content increased from 5 titles to 14 titles. Industry film grosses for available 3D
products increased from $191.0 million to approximately $3.0 billion, while industry film grosses for available IMAX products increased from $864.0 million to approximately
$3.0 billion over this time period. This favorable trend continues in calendar year 2011 with 37 3D titles and 19 IMAX titles slated to open, including highly successful franchise installments
such asPirates of the Caribbean: On Stranger Tides, Kung Fu Panda: The Kaboom of D, Transformers: Dark of the Moon, Harry Potter and the Deathly Hallows,
Part 2andMission Impossible-Ghost Protocal.As reported in the May 1, 2011 issue of Movieline International, the film
release schedule for calendar year 2012 is beginning to solidify with 24 3D titles and 2 IMAX titles already
announced, including sequels of high profile franchises such as Spiderman, Men in Black, James Bond, Bourne Legacy, Batman and a 3D version ofStar
Wars.We expect that additional 3D and IMAX titles will be announced as the beginning of 2012 approaches.

Innovative Growth Initiatives in Food and Beverage.We believe our theatre circuit is better positioned than our peer
competitors' to generate
additional revenue from broader and more diverse food and beverage offerings, in part due to our markets' larger, more diverse and more affluent customer base and our management's extensive experience
in guest services, specifically within the food and beverage industry. Our annual food and beverage sales exceed the domestic food service sales generated from 18 of the top 75 ranked restaurants
chains in the U.S., while representing only approximately 27% of our total revenue. To capitalize on this opportunity, we have introduced proprietary food and beverage offerings in 138 theatres as of
March 31, 2011, and we intend to deploy these offerings across our theatre circuit based on the needs and specific circumstances of each theatre. Our wide range of food and beverage offerings
feature expanded menus, enhanced concession formats and unique dine-in theatre options, which we believe appeals to a larger cross section of potential customers. For example, in fiscal
2009 we converted a small, six-screen theatre in Atlanta, Georgia to a dine-in theatre facility with full kitchen facilities, seat side services and with a separate bar and
lounge area. From fiscal 2008 to fiscal 2011, this theatre's attendance increased over 60%, revenues more than doubled, and operating cash flow and margins increased significantly. We plan to continue
to invest in one or more enhanced food and beverage offerings across 125 to 150 theatres over the next three years.

Our
current food and beverage initiatives include:



12

---



Table of Contents



Strong Cash Flow Generation.We believe that our major market focus and highly productive theatre circuit have enabled us to
generate significant
cash flow provided by operating activities. For the 52 weeks ended March 31, 2011, on a pro forma basis for Kerasotes, our net cash provided by operating activities totaled
$97.0 million. For the fiscal year ended April 1, 2010, on a pro forma basis for Kerasotes, our net cash provided by operating activities totaled $295.3 million. This
strong cash flow will enable us to continue our deployment of premium formats and services and to finance planned capital expenditures without relying on the capital markets for funding. In addition,
in future years, we expect to continue to generate cash flow sufficient to allow us to grow our revenues, maintain our facilities, service our indebtedness and make dividend payments to our
stockholder.

Management Team Uniquely Positioned to Execute.Our management team has a unique combination of industry experiences and
skill-sets,
equipping them to effectively execute our strategies. Our CEO's broad experience in a number of consumer packaged goods and entertainment-related businesses expands our growth perspectives beyond
traditional theatrical exhibition and has increased our focus on providing more value to our guests. Recent additions, including a Chief Marketing Officer, heads of Food and Beverage, Programming and
Development/Real Estate and a Senior Vice President for Strategy and Strategic Partnerships, augment our deep bench of industry experience. The
expanded breadth of our management team complements the established team that is focused on operational excellence, innovation and successful industry consolidation.

Our Strategy

Our strategy is to leverage our modern theatre circuit and major market position to lead the industry in consumer-focused innovation
and financial operating metrics. The use of emerging premium formats and our focus on the guest experience give us a unique opportunity to leverage our theatre circuit and major market position across
our platform. Our primary goal is to maintain our company's and the industry's social relevance and to offer consumers distinctive, affordable and compelling out-of-home
entertainment alternatives that capture a greater share of their personal time and spend. We have a two-pronged strategy to accomplish this goal: first, drive consumer-related growth and
second, focus on operational excellence.



Capitalize on Premium Formats.Technical innovation has allowed us to enhance the consumer experience through premium formats
such as IMAX and 3D.
Our customers are willing to pay a premium price for this differentiated entertainment experience. When combined with our major markets' customer base, the operating flexibility of digital technology
will enhance our capacity utilization and dynamic pricing capabilities. This will enable us to achieve higher ticket prices for premium formats, and provide incremental revenue from the exhibition of
alternative content such as live concerts, sporting events, Broadway shows, opera and other non-traditional programming. We have already seen success from the Metropolitan Opera, with
respect to which, during fiscal 2011, we programmed 37 performances in over 100 theatres and charged an average ticket price of $18. Within each of our major markets, we are able to charge a premium
for these services relative to our smaller

13

---



Table of Contents

markets.
We will continue to broaden our content offerings through the installation of additional IMAX, ETX and RealD systems and the presentation of attractive alternative content. For
example:



Broaden and Enhance Food and Beverage Offerings.To address consumer trends, we are expanding our menu of premium food and
beverage products to
include made-to-order meals, customized coffee, healthy snacks, alcohol and other gourmet products. We plan to invest across
a spectrum of enhanced food and beverage formats, from simple, less capital-intensive concession design improvements to the development of new dine-in theatre options. We have successfully
implemented our dine-in theatre offerings to rejuvenate theatres approaching the end of their useful lives as traditional movie theatres and, in some of our larger theatres to more
efficiently leverage their additional capacity. The costs of these conversions in some cases are partially covered by investments from the theatre landlord. We plan to continue to invest in one or
more enhanced food and beverage offerings across 125 to 150 theatres over the next three years.

Maximize Guest Engagement and Loyalty.In addition to differentiating the AMC Entertainment movie-going experience by deploying
new sight and sound
formats, as well as food and beverage offerings, we are also focused on creating differentiation through guest marketing. We are already the most recognized theatre exhibition brand, with almost 60%
brand awareness in the United States. We are actively marketing our own "AMC experience" message to our customers, focusing on every aspect of a customer's engagement with AMC, from the moment a guest
visits our website or purchases a

14

---



Table of Contents

ticket
to the moment he leaves our theatre. We have also refocused our marketing to drive active engagement with our customers through a redesigned website, Facebook, Twitter and push email campaigns.
As of May 17, 2011, we had approximately 1.1 million "likes" on Facebook, and we engaged directly with our guests via close to 32 million emails in fiscal 2011. We have launched
our new fee-based guest frequency program,AMC Stubs, in late March 2011. This new program replacesMoviewatcher
Rewards, which ended the year with 1.5 million active members, many of which are converting over toAMC Stubs. Additional
marketing initiatives include:





Disciplined Approach to Theatre Portfolio Management.We evaluate the potential for new theatres and, where appropriate, replace
underperforming
theatres with newer, more modern theatres that offer amenities consistent with our portfolio. We also intend to selectively pursue acquisitions where the characteristics of the location, overall
market and facilities further enhance the quality of our theatre portfolio. We presently have no current plans, proposals or understandings regarding any such acquisitions. Historically, we have
demonstrated a successful track record of integrating acquisitions such as Loews, General Cinema and Kerasotes. For example, our January 2006 acquisition of Loews combined two leading theatrical
exhibition companies, each with a long history of operating in the industry, thereby increasing the number of screens we operated by 47%.

Continue to Achieve Operating Efficiencies.We believe that the size of our theatre circuit, our major market concentration and
the breadth of our
operations will allow us to continue to achieve economies of scale and further improve operating margins. Our operating strategies are focused on the following areas:



15

---







Table of Contents

Film Licensing

We predominantly license "first-run" motion pictures from distributors owned by major film production companies and from
independent distributors. We license films on a film-by-film and theatre-by-theatre basis. We obtain these licenses based on several factors, including
number of seats and screens available for a particular picture, revenue potential and the location and condition of our theatres. We pay rental fees on a negotiated basis.

During
the period from 1990 to 2010, the annual number of first-run motion pictures released by distributors in the United States ranged from a low of 370 in 1995 to a high
of 634 in 2008, according to the Motion Picture Association 2009 Theatrical Market Statistics.

North
American film distributors typically establish geographic film licensing zones and generally allocate available film to one theatre within each zone. Film zones generally encompass
a radius of three to five miles in metropolitan and suburban markets, depending primarily upon population density. In film zones where we are the sole exhibitor, we obtain film licenses by selecting a
film from among those offered and negotiating directly with the distributor. As of March 31, 2011, approximately 91% of
our screens in the United States and Canada were located in film licensing zones where we are the sole exhibitor.

Our
licenses typically state that rental fees are based on either aggregate terms established prior to the opening of the picture or on a mutually agreed settlement upon the conclusion
of the picture run. Under an aggregate terms formula, we pay the distributor a specified percentage of box office receipts or pay based on a scale of percentages tied to different amounts of box
office gross. The settlement process allows for negotiation based upon how a film actually performs.

There
are several distributors which provide a substantial portion of quality first-run motion pictures to the exhibition industry. These include Paramount Pictures,
Twentieth Century Fox, Warner Bros. Distribution, Buena Vista Pictures (Disney), Sony Pictures Releasing, and Universal Pictures. Films licensed from these distributors accounted for approximately 81%
of our U.S. and Canadian admissions revenues during fiscal 2011. Our revenues attributable to individual distributors may vary significantly from year to year depending upon the commercial success of
each distributor's motion pictures in any given year. In fiscal 2011, no single distributor accounted for more than 20% of our box office admissions.

Concessions

Concessions sales are our second largest source of revenue after box office admissions. Concessions items include popcorn, soft drinks,
candy, hot dogs, premium concession items, specialty drinks, healthy choice items and made to order hot foods including menu choices such as curly fries, chicken tenders and jalapeño
poppers. Different varieties of concession items are offered at our theatres based on preferences in that particular geographic region. We have also implemented dine-in theatre concepts at
7 locations, which feature full kitchen facilities, seat-side servers and a separate bar and lounge area. Our strategy emphasizes prominent and appealing concessions counters designed for
rapid service and efficiency, including a guest friendly grab and go experience. We design our megaplex theatres to have more concessions capacity to make it easier to serve larger numbers of
customers. Strategic placement of large concessions stands within theatres increases their visibility, aids in reducing the length of lines, allows flexibility to introduce new concepts and improves
traffic flow around the concessions stands.

We
negotiate prices for our concessions products and supplies directly with concessions vendors on a national or regional basis to obtain high volume discounts or bulk rates and
marketing incentives.

Our
entertainment and dining experience at certain theatres features casual and premium upscale dine-in theatre options as well as bar and lounge areas.

16

---



Table of Contents

Employees

As of March 31, 2011, we employed approximately 900 full-time and 17,000 part-time employees.
Approximately 40% of our U.S. theatre associates were paid the minimum wage.

Fewer
than 2% of our U.S. employees, consisting primarily of motion picture projectionists, are represented by a union, the International Alliance of Theatrical Stagehand Employees and
Motion Picture Machine Operators (and affiliated local unions). We believe that our relationship with this union is satisfactory. We consider our employee relations to be good.

Theatrical Exhibition Industry and Competition

Theatrical exhibition is the primary initial distribution channel for new motion picture releases, and we believe that the theatrical
success of a motion picture is often the most important factor in establishing the film's value in the other parts of the product life cycle (DVD, cable television and other ancillary markets).

Theatrical
exhibition has demonstrated long-term steady growth. U.S. and Canadian box office revenues increased from $5.0 billion in 1989 to $10.5 billion in
2010, driven by increases in both ticket prices and attendance. In calendar 2010, industry box office revenues for the United States and Canada were $10.5 billion, essentially unchanged from
2009.

The
following table represents information about the exhibition industry obtained from the National Association of Theatre Owners ("NATO") and Rentrak.

Calendar Year

Box Office
Revenues
(in millions)

Attendance
(in millions)

Average
Ticket
Price

Number of
Theatres

Indoor
Screens

Screens
Per
Theatre2010

$
10,515


1,334

$
7.88


5,773


38,892


6.72009


10,600


1,414


7.50


5,561


38,605


6.92008


9,634


1,341


7.18


5,403


38,934


7.22007


9,632


1,400


6.88


5,545


38,159


6.92006


9,170


1,401


6.55


5,543


37,776


6.82005


8,820


1,376


6.41


5,713


37,092


6.5


There
are approximately 949 companies competing in the North American theatrical exhibition industry, approximately 549 of which operate four or more screens. Industry participants vary
substantially in size, from small independent operators to large international chains. Based on information obtained from Rentrak, we believe that the four largest exhibitors (in terms of box office
revenue) generated approximately 59% of the box office revenues in 2010. This statistic is up from 33% in 2000 and is evidence that the theatrical exhibition business in the United States and Canada
has been consolidating. According to NATO, average screens per theatre have increased from 6.5 in 2005 to 6.7 in 2010, which we believe is indicative of the industry's development of megaplex
theatres.

Our
theatres are subject to varying degrees of competition in the geographic areas in which they operate. Competition is often intense with respect to attracting patrons, licensing
motion pictures and finding new theatre sites. Where real estate is readily available, there are few barriers preventing another company from opening a theatre near one of our theatres, which may
adversely affect operations at our theatre. However, in certain of our densely populated major metropolitan markets, we believe a scarcity of attractive retail real estate opportunities enhances the
strategic value of our existing theatres. We also believe the complexity inherent in operating in these major metropolitan markets is a deterrent to other less sophisticated competitors, protecting
our market share position.

The
theatrical exhibition industry faces competition from other forms of out-of-home entertainment, such as concerts, amusement parks and sporting events, and
from other distribution

17

---



Table of Contents

channels
for filmed entertainment, such as cable television, pay per view and home video systems, as well as from all other forms of entertainment.

Movie-going
is a compelling consumer out-of-home entertainment experience. Movie theatres currently garner a relatively small share of consumer entertainment time
and spend, leaving significant room for expansion and growth in the U.S. In addition, our industry benefits from available capacity to satisfy additional consumer demand without capital investment.

As
major studio releases have declined in recent years, we believe companies like Open Road Films could fill an important gap that exists in the market today for consumers, movie
producers and theatrical exhibitors by providing a broader availability of movies to consumers. Theatrical exhibitors are uniquely positioned to not only support, but also benefit from new
distribution companies and content providers. We believe the theatrical exhibition industry will continue to be attractive for a number of key reasons, including:

A Highly Popular and Affordable Out-of-Home Entertainment Experience.Going to the movies has been one of the most popular
and affordable out-of-home entertainment options for decades. The estimated average price of a movie ticket was $7.88 in calendar 2010, considerably less than other
out-of-home entertainment alternatives such as concerts and sporting events. In calendar 2010, attendance at indoor movie theatres in the United States and Canada was
1.3 billion. This contrasts to the 111.0 million combined annual attendance generated by professional baseball, basketball and football over the same period.

We
believe the theatrical exhibition industry will continue to be attractive for a number of key reasons, including:

Adoption of Digital Technology.The theatrical exhibition industry is well underway in its overall conversion from film-based to
digital
projection technology. This digital conversion will position the industry with lower distribution and exhibition expenses, efficient delivery of alternative content and niche programming, and premium
experiences for consumers. Digital projection also
results in a premium visual experience for patrons, and digital content gives the theatre operator greater flexibility in programming. The industry will benefit from the conversion to digital
delivery, alternative content, 3D formats and dynamic pricing models. As theatre exhibitors have adopted digital technology, the theatre circuits have shown enhanced productivity, profitability and
efficiency. Digital technology has increased attendance and average ticket prices. Digital technology also facilitates live and pre-recorded networked and single-site meetings
and corporate events in movie theatres and will allow for the distribution of live and pre-recorded entertainment content and the sale of associated sponsorships.

18

---



Table of Contents

Long History of Steady Growth.The theatrical exhibition industry has produced steady growth in revenues over the past several
decades. In recent
years, net new build activity has slowed, and screen count has rationalized and is expected to decline in the near term before stabilizing, thereby increasing revenue per screen for existing theatres.
The combination of the popularity of movie-going, its steady long-term growth characteristics and consolidation and the industry's relative maturity makes theatrical exhibition a high cash
flow generating business today. Box office revenues in the United States and Canada have increased from $5.0 billion in 1989 to $10.5 billion in 2010, driven by increases in both ticket
prices and attendance across multiple economic cycles. The industry has also demonstrated its resilience to economic downturns; during four of the last six recessions, attendance and box office
revenues grew an average of 8.1% and 12.3%, respectively. In 2009, 32 films grossed over $100.0 million, compared to 25 in the prior year, helping to establish a new industry box office record
for the year.

Importance to Content Providers.We believe that the theatrical success of a motion picture is often the key determinant in
establishing the film's
value in the other parts of the product life cycle, such as DVD, cable television, merchandising and other ancillary markets. For each $1.00 of theatrical box office receipts, an average of $1.33 of
additional revenue is generated in the remainder of a film's product life cycle. As a result, we believe motion picture studios will continue to work cooperatively with theatrical exhibitors to ensure
the continued value of the theatrical window.

Regulatory Environment

The distribution of motion pictures is, in large part, regulated by federal and state antitrust laws and has been the subject of
numerous antitrust cases. The consent decrees resulting from one of those cases, to which we were not a party, have a material impact on the industry and us. Those consent decrees bind certain major
motion picture distributors and require the motion pictures of such distributors to be offered and licensed to exhibitors, including us, on a film-by-film and
theatre-by-theatre basis. Consequently, we cannot assure ourselves of a supply of motion pictures by entering into long-term arrangements with major distributors,
but must compete for our licenses on a film-by-film and theatre-by-theatre basis.

Our
theatres must comply with Title III of the Americans with Disabilities Act, or ADA. Compliance with the ADA requires that public accommodations "reasonably accommodate" individuals
with disabilities and that new construction or alterations made to "commercial facilities" conform to accessibility guidelines unless "structurally impracticable" for new construction or technically
infeasible for alterations. Non-compliance with the ADA could result in the imposition of injunctive relief, fines, and awards of damages to private litigants or additional capital
expenditures to remedy such noncompliance. Although we believe that our theatres are in substantial compliance with the ADA, in January 1999 the Civil Rights Division of the Department of Justice, or
the Department, filed suit against us alleging that certain of our theatres with stadium-style seating violate the ADA. In separate rulings in 2002 and 2003, the Court ruled against us in the "line of
sight" and the "non-line of sight" aspects of this case. In 2003, the Court entered a consent order and final judgment about the non-line of sight aspects of this case. On
December 5, 2008, the Ninth Circuit Court of Appeals reversed the trial court as to the appropriate remedy and remanded the case back to the trial court for findings consistent with its
decision. The Company and the Department have reached a settlement regarding the extent of betterments related to the remaining remedies required for line-of-sight violations
which the parties believe are consistent with the Ninth Circuit's decision. The trial court approved the settlement on November 29, 2010. The improvements will likely be made over a five year
term. The company has recorded a liability of $37,500 for compensation to claimants and fines related to this matter.

As
an employer covered by the ADA, we must make reasonable accommodations to the limitations of employees and qualified applicants with disabilities, provided that such reasonable
accommodations do not pose an undue hardship on the operation of our business. In addition, many of our employees

19

---



Table of Contents

are
covered by various government employment regulations, including minimum wage, overtime and working conditions regulations.

Our
operations also are subject to federal, state and local laws regulating such matters as construction, renovation and operation of theatres as well as wages and working conditions,
citizenship, health and sanitation requirements and licensing. We believe our theatres are in material compliance with such requirements.

We
also own and operate theatres and other properties which may be subject to federal, state and local laws and regulations relating to environmental protection. Certain of these laws
and regulations may impose joint and several liability on certain statutory classes of persons for the costs of investigation or remediation of contamination, regardless of fault or the legality of
original disposal. We believe our theatres are in material compliance with such requirements.

Seasonality

Our revenues are dependent upon the timing of motion picture releases by distributors. The most marketable motion pictures are usually
released during the summer and the year-end holiday seasons. Therefore, our business is highly seasonal, with higher attendance and revenues generally occurring during the summer months
and holiday seasons. Our results of operations may vary significantly from quarter to quarter.

(d)   Financial Information About Geographic Areas

For information about the geographic areas in which we operate, see Note 16Operating Segment to the Consolidated Financial Statements under
Part II Item 8 of this Annual Report on Form 10-K. During fiscal 2011, revenues from our theatre operations outside the United States accounted for 4% of our total
revenues. There are significant differences between the theatrical exhibition industry in the United States and in these international markets.

(e)   Available Information.

We make available on our web site (www.amctheatres.com) under "Investor ResourcesSEC Filings" free of charge, and AMCE's annual reports on
Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports as soon as reasonably practicable after
we electronically file or furnish such material with the Securities and Exchange Commission. In addition, the public may read and copy any materials that we file with the Securities and Exchange
Commission at the Securities and Exchange Commission Public Reference Room at 100 F Street, NW, Washington,
DC 20549. The public may obtain information about the operation of the Public Reference Room by calling the Securities and Exchange Commission at 1-800-SEC-0330.

20

---



Table of Contents

Item 1A.

RISK FACTORS

Risks Related to Our Business

Our substantial debt could adversely affect our operations and prevent us from satisfying those debt obligations.

We have a significant amount of debt. As of March 31, 2011, we had outstanding $2,168.2 million of indebtedness, which
consisted of $615.9 million under our senior secured credit facility, $587.3 million of our senior notes ($600.0 million face amount), $899.4 million of our existing
subordinated notes and $65.7 million of existing capital and financing lease obligations, and $180.2 million would have been available for borrowing as additional senior debt under our
senior secured credit facility. As of March 31, 2011, we also had approximately $4.3 billion of undiscounted
rental payments under operating leases (with initial base terms of between 10 and 25 years). The amount of our indebtedness and lease and other financial obligations could have important
consequences to you. For example, it could:



If
we fail to make any required payment under our senior secured credit facility or to comply with any of the financial and operating covenants contained therein, we would be in default.
Lenders under our senior secured credit facility could then vote to accelerate the maturity of the indebtedness under the senior secured credit facility and foreclose upon the stock and personal
property of our subsidiaries that is pledged to secure the senior secured credit facility. Other creditors might then accelerate other indebtedness. If the lenders under the senior secured credit
facility accelerate the maturity of the indebtedness thereunder, we might not have sufficient assets to satisfy our obligations under the senior secured credit facility or our other indebtedness. Our
indebtedness under our senior secured credit facility bears interest at rates that fluctuate with changes in certain prevailing interest rates (although, subject to certain conditions, such rates may
be fixed for certain periods). If interest rates increase, we may be unable to meet our debt service obligations under our senior secured credit facility and other indebtedness.

21

---





Table of Contents

We have had significant financial losses in recent years.

Prior to fiscal 2007, we had reported net losses in each of the prior nine fiscal years totaling approximately $510.1 million.
For fiscal 2007, 2008, 2009, 2010 and 2011, we reported net earnings (losses) of $134.1 million, $43.4 million, $(81.2) million, $69.8 million and $(122.9) million.
If we experience losses in the future, we may be unable to meet our payment obligations while attempting to expand our theatre circuit and withstand competitive pressures or adverse economic
conditions.

We face significant competition for new theatre sites, and we may not be able to build or acquire theatres on terms favorable to us.

We anticipate significant competition from other exhibition companies and financial buyers when trying to acquire theatres, and there
can be no assurance that we will be able to acquire such theatres at reasonable prices or on favorable terms. Moreover, some of these possible buyers may be stronger financially than we are. In
addition, given our size and market share, as well as our recent experiences with the Antitrust Division of the United States Department of Justice in connection with the acquisition of Kerasotes and
prior acquisitions, we may be required to dispose of
theatres in connection with future acquisitions that we make. As a result of the foregoing, we may not succeed in acquiring theatres or may have to pay more than we would prefer to make an
acquisition.

Acquiring or expanding existing circuits and theatres may require additional financing, and we cannot be certain that we will be able to obtain new financing on favorable
terms, or at all.

Our net capital expenditures aggregated approximately $129.3 million for fiscal 2011. We estimate that our planned capital
expenditures will be between $140.0 million and $150.0 million in fiscal 2012 and will continue at approximately $120.0 million annually over the next three years. Actual capital
expenditures in fiscal 2012 may differ materially from our estimates. We may have to seek additional financing or issue additional securities to fully implement our growth strategy. We cannot be
certain that we will be able to obtain new financing on favorable terms, or at all. In addition, covenants under our existing indebtedness limit our ability to incur additional indebtedness, and the
performance of any additional theatres may not be sufficient to service the related indebtedness that we are permitted to incur.

We may be reviewed by antitrust authorities in connection with acquisition opportunities that would increase our number of theatres in markets where we have a leading market
share.

Given our size and market share, pursuit of acquisition opportunities that would increase the number of our theatres in markets where
we have a leading market share would likely result in significant review by the Antitrust Division of the United States Department of Justice, and we may be required to dispose of theatres in order to
complete such acquisition opportunities. For example, in connection with the acquisition of Kerasotes, we were required to dispose of 11 theatres located in various markets across the United States,
including Chicago, Denver and Indianapolis. As a result, we may not be able to succeed in acquiring other exhibition companies or we may have to dispose of a significant number of theatres in key
markets in order to complete such acquisitions.

The agreements governing our indebtedness contain covenants that may limit our ability to take advantage of certain business opportunities advantageous to us.

The agreements governing our indebtedness contain various covenants that limit our ability to, among other
things:



22

---



Table of Contents



These
restrictions could limit our ability to obtain future financing, make acquisitions or needed capital expenditures, withstand economic downturns in our business or the economy in
general, conduct operations or otherwise take advantage of business opportunities that may arise.

Although
the indentures for our notes contain a fixed charge coverage test that limits our ability to incur indebtedness, this limitation is subject to a number of significant exceptions
and qualifications. Moreover, the indentures do not impose any limitation on our incurrence of capital or finance lease obligations or liabilities that are not considered "Indebtedness" under the
indentures (such as operating leases), nor do they impose any limitation on the amount of liabilities incurred by subsidiaries, if any, that might be designated as "unrestricted subsidiaries," which
are subsidiaries that we designate, that are not subject to the restrictive covenants contained in the indentures governing our notes.

Furthermore,
there are no restrictions in the indentures on our ability to invest in other entities (including unaffiliated entities) and no restrictions on the ability of our
subsidiaries to enter into agreements restricting their ability to pay dividends or otherwise transfer funds to us. Also, although the indentures limit our ability to make restricted payments, these
restrictions are subject to significant exceptions and qualifications.

We may not generate sufficient cash flow from our theatre acquisitions to service our indebtedness.

In any acquisition, we expect to benefit from cost savings through, for example, the reduction of overhead and theatre level costs, and
from revenue enhancements resulting from the acquisition. However, there can be no assurance that we will be able to generate sufficient cash flow from these acquisitions to service any indebtedness
incurred to finance such acquisitions or realize any other anticipated benefits. Nor can there be any assurance that our profitability will be improved by any one or more acquisitions. Any acquisition
may involve operating risks, such as:



If our cash flows prove inadequate to service our debt and provide for our other obligations, we may be required to refinance all or a portion of our existing debt or future
debt at terms unfavorable to us.

Our ability to make payments on and refinance our debt and other financial obligations and to fund our capital expenditures and
acquisitions will depend on our ability to generate substantial

23

---



Table of Contents

operating
cash flow. This will depend on our future performance, which will be subject to prevailing economic conditions and to financial, business and other factors beyond our control.

In
addition, our notes require us to repay or refinance those notes when they come due. If our cash flows were to prove inadequate to meet our debt service, rental and other obligations
in the future, we may be required to refinance all or a portion of our existing or future debt, on or before maturity, to sell assets or to obtain additional financing. We cannot assure you that we
will be able to refinance any of our indebtedness, including our senior secured credit facility, sell any such assets or obtain additional financing on commercially reasonable terms or at all.

The
terms of the agreements governing our indebtedness restrict, but do not prohibit us from incurring additional indebtedness. If we are in compliance with the financial covenants set
forth in the senior secured credit facility and our other outstanding debt instruments, we may be able to incur substantial additional indebtedness. If we incur additional indebtedness, the related
risks that we face may intensify.

Optimizing our theatre circuit through new construction is subject to delay and unanticipated costs.

The availability of attractive site locations is subject to various factors that are beyond our control. These factors
include:



In
addition, we typically require 18 to 24 months in the United States and Canada from the time we identify a site to the opening of the theatre. We may also experience cost
overruns from delays or other unanticipated costs. Furthermore, these new sites may not perform to our expectations.

Our investment in and revenues from NCM may be negatively impacted by the competitive environment in which NCM operates.

We have maintained an investment in NCM. NCM's in-theatre advertising operations compete with other cinema advertising
companies and other advertising mediums including, most notably, television, newspaper, radio and the Internet. There can be no guarantee that in-theatre advertising will continue to
attract major advertisers or that NCM's in-theatre advertising format will be favorably received by the theatre-going public. If NCM is unable to generate expected sales of advertising, it
may not maintain the level of profitability we hope to achieve, its results of operations and cash flows may be adversely affected and our investment in and revenues and dividends from NCM may be
adversely impacted.

We may suffer future impairment losses and theatre and other closure charges.

The opening of large megaplexes by us and certain of our competitors has drawn audiences away from some of our older, multiplex
theatres. In addition, demographic changes and competitive pressures have caused some of our theatres to become unprofitable. As a result, we may have to close certain theatres or recognize impairment
losses related to the decrease in value of particular theatres. We review long-lived assets, including intangibles, for impairment as part of our annual budgeting process and whenever
events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. We recognized non-cash impairment losses in 1996 and in each fiscal year
thereafter except for 2005. Our impairment losses of long-lived assets from continuing operations over this period aggregated to $297.8 million. Beginning fiscal 1999 through March 31,
2011, we also incurred theatre and other closure expenses, including theatre lease termination charges aggregating approximately $117.0 million. Deterioration in the performance of our theatres
could

24

---



Table of Contents

require
us to recognize additional impairment losses and close additional theatres, which could have an adverse effect on the results of our operations. We continually monitor the performance of our
theatres, and factors such as changing consumer preferences for filmed entertainment in international markets and our inability to sublease vacant retail space could negatively impact operating
results and result in future closures, sales, dispositions and significant theatre and other closure charges prior to expiration of underlying lease agreements.

We must comply with the ADA, which could entail significant cost.

Our theatres must comply with Title III of the Americans with Disabilities Act of 1990, or ADA. Compliance with the ADA requires that
public accommodations "reasonably accommodate" individuals with disabilities and that new construction or alterations made to "commercial facilities" conform to accessibility guidelines unless
"structurally impracticable" for new construction or technically infeasible for alterations. Non-compliance with the ADA could result in the imposition of injunctive relief, fines, and an
award of damages to private litigants or additional capital expenditures to remedy such noncompliance.

On
January 29, 1999, the Civil Rights Division of the Department of Justice, or the Department, filed suit alleging that AMC Entertainment's stadium-style theatres violated the
ADA and related regulations. On December 5, 2003, the trial court entered a consent order and final judgment on non-line-of-sight issues under which AMC
Entertainment agreed to remedy certain violations at its stadium-style theatres and at certain theatres it may open in the future. Currently we estimate that betterments are required at approximately
40 stadium-style theatres. We estimate that the unpaid cost of these betterments will be approximately $13.2 million. The estimate is based on actual costs incurred on remediation work
completed to date. As to
line-of-sight matters, the trial court approved a settlement on November 29, 2010 requiring us to make settlements over a five year term at an estimated cost of
$5.0 million. The actual costs of betterments may vary based on the results of surveys of the remaining theatres. See Note 13Commitments and Contingencies to our
Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K.

We may be subject to liability under environmental laws and regulations.

We own and operate facilities throughout the United States and manage or own facilities in several foreign countries and are subject to
the environmental laws and regulations of those jurisdictions, particularly laws governing the cleanup of hazardous materials and the management of properties. We might in the future be required to
participate in the cleanup of a property that we own or lease, or at which we have been alleged to have disposed of hazardous materials from one of our facilities. In certain circumstances, we might
be solely responsible for any such liability under environmental laws, and such claims could be material.

We may not be able to generate additional ancillary revenues.

We intend to continue to pursue ancillary revenue opportunities such as advertising, promotions and alternative uses of our theatres
during non-peak hours. Our ability to achieve our business objectives may depend in part on our success in increasing these revenue streams. Some of our U.S. and Canadian competitors have
stated that they intend to make significant capital investments in digital advertising delivery, and the success of this delivery system could make it more difficult for us to compete for advertising
revenue. In addition, in March 2005 we contributed our cinema screen advertising business to NCM. As such, although we retain board seats and an ownership interest in NCM, we do not control this
business, and therefore do not control our revenues attributable to cinema screen advertising. We cannot assure you that we will be able to effectively generate additional ancillary revenue and our
inability to do so could have an adverse effect on our business and results of operations.

25

---



Table of Contents

We depend on key personnel for our current and future performance.

Our current and future performance depends to a significant degree upon the retention of our senior management team and other key
personnel. The loss or unavailability to us
of any member of our senior management team or a key employee could have a material adverse effect on our business, financial condition and results of operations. We cannot assure you that we would be
able to locate or employ qualified replacements for senior management or key employees on acceptable terms.

Risks Related to Our Industry

We have no control over distributors of the films and our business may be adversely affected if our access to motion pictures is limited or delayed.

We rely on distributors of motion pictures, over whom we have no control, for the films that we exhibit. Major motion picture
distributors are required by law to offer and license film to exhibitors, including us, on a film-by-film and theatre-by-theatre basis. Consequently, we
cannot assure ourselves of a supply of motion pictures by entering into long-term arrangements with major distributors, but must compete for our licenses on a
film-by-film and theatre-by-theatre basis. Our business depends on maintaining good relations with these distributors, as this affects our ability to
negotiate commercially favorable licensing terms for first-run films or to obtain licenses at all. Our business may be adversely affected if our access to motion pictures is limited or
delayed because of deterioration in our relationships with one or more distributors or for some other reason. To the extent that we are unable to license a popular film for exhibition in our theatres,
our operating results may be adversely affected.

We depend on motion picture production and performance.

Our ability to operate successfully depends upon the availability, diversity and appeal of motion pictures, our ability to license
motion pictures and the performance of such motion pictures in our markets. We license first-run motion pictures, the success of which has increasingly depended on the marketing efforts of
the major motion picture studios. Poor performance of, or any disruption in the production of these motion pictures (including by reason of a strike or lack of adequate financing), or a reduction in
the marketing efforts of the major motion picture studios, could hurt our business and results of operations. Conversely, the successful performance of these motion pictures, particularly the
sustained success of any one motion picture, or an increase in effective marketing efforts of the major motion picture studios, may generate positive results for our business and operations in a
specific fiscal quarter or year that may not necessarily be indicative of, or comparable to, future results of operations. In addition, a change in the type and
breadth of movies offered by motion picture studios may adversely affect the demographic base of moviegoers.

We are subject, at times, to intense competition.

Our theatres are subject to varying degrees of competition in the geographic areas in which we operate. Competitors may be national
circuits, regional circuits or smaller independent exhibitors. Competition among theatre exhibition companies is often intense with respect to the following factors:



26

---



Table of Contents



The
theatrical exhibition industry also faces competition from other forms of out-of-home entertainment, such as concerts, amusement parks and
sporting events and from other distribution channels for filmed entertainment, such as cable television, pay per view and home video systems and from other forms of in-home entertainment.

Industry-wide screen growth has affected and may continue to affect the performance of some of our theatres.

In recent years, theatrical exhibition companies have emphasized the development of large megaplexes, some of which have as many as 30
screens in a single theatre. The industry-wide strategy of aggressively building megaplexes generated significant competition and rendered many older, multiplex theatres obsolete more
rapidly than expected. Many of these theatres are under long-term lease commitments that make closing them financially burdensome, and some companies have elected to continue operating
them notwithstanding their lack of profitability. In other instances, because theatres are typically limited use design facilities, or for other reasons, landlords have been willing to make rent
concessions to keep them open. In recent years many older theatres that had closed are being reopened by small theatre operators and in some instances by sole proprietors that are able to negotiate
significant rent and other concessions from landlords. As a result, there was growth in the number of screens in the U.S. and Canadian exhibition industry from 2005 to 2008. This has affected and may
continue to affect the performance of some of our theatres. The number of screens in the U.S. and Canadian exhibition industry slightly declined from 2008 to 2010.

An increase in the use of alternative film delivery methods or other forms of entertainment may drive down our attendance and limit our ticket prices.

We compete with other film delivery methods, including network, syndicated cable and satellite television, DVDs and video cassettes, as
well as video-on-demand, pay-per-view services and downloads via the Internet. We also compete for the public's leisure time and disposable income with
other forms of entertainment, including sporting events, amusement parks, live music concerts, live theatre and restaurants. An increase in the popularity of these alternative film delivery methods
and other forms of entertainment could reduce attendance at our theatres, limit the prices we can charge for admission and materially adversely affect our business and results of operations.

Our results of operations may be impacted by shrinking video release windows.

Over the last decade, the average video release window, which represents the time that elapses from the date of a film's theatrical
release to the date a film is available on DVD, an important downstream market, has decreased from approximately six months to approximately three to four months. If patrons choose to wait for a DVD
release rather than attend a theatre for viewing the film, it may adversely impact our business and results of operations, financial condition and cash flows. Several major film studios are currently
testing a premium video on demand product released in homes approximately 60 days after a movie's theatrical debut, which could cause the release window to shrink further. We cannot assure you
that this release window, which is determined by the film studios, will not shrink further or be eliminated altogether, which could have an adverse impact on our business and results of operations.

27

---



Table of Contents

Development of digital technology may increase our capital expenses.

The industry is in the process of converting film-based media to digital-based media. We, along with some of our
competitors, have commenced a roll-out of digital equipment for exhibiting feature films and plan to continue the roll-out through our joint venture DCIP. However, significant
obstacles exist that impact such a roll-out plan, including the cost of digital projectors and the supply of projectors by manufacturers. During fiscal 2010, DCIP completed its formation
and $660.0 million funding to facilitate the financing and deployment of digital technology in our theatres. During March of 2011, DCIP completed additional financing of $220.0 million,
which we believe will allow us to complete our planned digital deployments.

General political, social and economic conditions can reduce our attendance.

Our success depends on general political, social and economic conditions and the willingness of consumers to spend money at movie
theatres. If going to motion pictures becomes less popular or consumers spend less on concessions, which accounted for 27% of our revenues in fiscal 2011, our operations could be adversely affected.
In addition, our operations could be adversely affected if consumers' discretionary income falls as a result of an economic downturn. Political events, such as terrorist attacks, could cause people to
avoid our theatres or other public places where large crowds are in attendance.

Item 1B.    Unresolved Staff Comments.

None.

Item 2.    Properties.

The following table sets forth the general character and ownership classification of our theatre circuit, excluding unconsolidated
joint ventures and managed theatres, as of March 31, 2011:

Property Holding Classification

Theatres

ScreensOwned


25


193Leased pursuant to ground leases


6


73Leased pursuant to building leases


321


4,766Total


352


5,032


Our
theatre leases generally have initial terms ranging from 15 to 20 years, with options to extend the lease for up to 20 additional years. The leases typically require
escalating minimum annual rent payments and additional rent payments based on a percentage of the leased theatre's revenue above a base amount and require us to pay for property taxes, maintenance,
insurance and certain other property-related expenses. In some instances our escalating minimum annual rent payments are contingent upon increases in the consumer price index. In some cases, our
rights as tenant are subject and subordinate to the mortgage loans of lenders to our lessors, so that if a mortgage were to be foreclosed, we could lose our lease. Historically, this has never
occurred.

We
lease our corporate headquarters in Kansas City, Missouri.

Currently,
the majority of the concessions, 35 mm projectors, seating and other equipment required for each of our theatres are owned. The majority of our digital projection equipment is
leased from DCIP.

Please
refer to page 5 for the geographic locations of our Theatrical Exhibition circuit as of March 31, 2011. See Note 4Property to the audited Consolidated
Financial Statements included elsewhere in this Annual Report on Form 10-K.

28

---



Table of Contents

Item 3.    Legal Proceedings.

Pursuant to General Instruction G(2) to Form 10-K and Rule 12b-23 under the Securities
Exchange Act of 1934, as amended, the information required to be furnished by us under this Part I, Item 3 (Legal Proceedings) is incorporated by reference to the information contained
in Note 13Commitments and Contingencies to the Consolidated Financial Statements included in Part II, Item 8 on this Annual Form 10-K.

Item 4.    [Removed and Reserved.]

PART II

Item 5.    Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Our common equity consists of Common Stock. There is currently no established public trading market for our Common Stock.

Common Stock

On June 1, 2011, there was one stockholder of record of our Common Stock, AMC Entertainment Holdings, Inc.

On
October 2, 2008 and March 24, 2009, AMCE used cash on hand to pay dividend distributions to its stockholder, Holdings, in aggregate amounts of $18,420,000 and
$17,569,000, respectively. Holdings and Parent used the available funds to make cash interest payments on the Senior Discount Notes due 2014, repurchase treasury stock and make payments related to
liability classified options, and pay corporate expenses incurred in the ordinary course of business.

During
April and May of 2009, AMCE made dividend payments to its stockholder, Holdings, and Holdings made dividend payments to its stockholder, Parent, totaling $300,000,000, which were
treated as a reduction of additional paid-in capital. Parent made payments to purchase term loans and reduced the principal balance of its Parent Term Loan Facility from $466,936,000 to
$193,290,000 with a portion of the dividend proceeds.

During
September of 2009 and March of 2010, AMCE used cash on hand to pay a dividend distribution to Holdings in an aggregate amount of $15,351,000 and $14,630,000, respectively.
Holdings and Parent used the available funds to make a cash interest payment on the Holdco Notes and pay corporate overhead expenses incurred in the ordinary course of business.

During
September of 2010, AMCE used cash on hand to pay a dividend distribution to Holdings in an aggregate amount of $15,184,000. Holdings and Parent used the available funds to make a
cash interest payment on the 12% Senior Discount Notes due 2014 and pay corporate overhead expenses incurred in the ordinary course of business.

During
December of 2010 and January 2011, AMCE used cash on hand to pay a dividend distribution to Holdings in an aggregate amount of $185,034,000 and $76,141,000, respectively. Holdings
used the available funds to make a cash payment related to a tender offer for the 12% Senior Discount Notes due 2014.

During
March of 2011, AMCE used cash on hand to pay a dividend distribution to Holdings in an aggregate amount of $1,899,000. Holdings and Parent used the available funds to pay
corporate overhead expenses incurred in the ordinary course of business.

Issuer Purchase of Equity Securities

There were no repurchases of AMCE Common Stock during the thirteen weeks ended March 31, 2011.

29

---





Table of Contents

Item 6.    Selected Financial Data.

Years Ended(1)(3)(In thousands, except operating data)

52 Weeks
Ended
March 31,
2011

52 Weeks
Ended
April 1,
2010

52 Weeks
Ended
April 2,
2009

53 Weeks
Ended
April 3,
2008

52 Weeks
Ended
March 29,
2007Statement of Operations Data:Revenues:Admissions

$
1,697,858

$
1,711,853

$
1,580,328

$
1,615,606

$
1,576,924Concessions


664,108


646,716


626,251


648,330


631,924Other theatre


61,002


59,170


58,908


69,108


94,374Total revenues


2,422,968


2,417,739


2,265,487


2,333,044


2,303,222Operating Costs and Expenses:Film exhibition costs


887,758


928,632


842,656


860,241


838,386Concession costs


83,187


72,854


67,779


69,597


66,614Operating expense(7)


713,846


610,774


576,022


572,740


564,206Rent


475,810


440,664


448,803


439,389


428,044General and administrative:Merger, acquisition and transactions costs


14,085


2,280


650


3,739


9,996Management fee


5,000


5,000


5,000


5,000


5,000Other


58,136


57,858


53,628


39,102


45,860Depreciation and amortization


212,413


188,342


201,413


222,111


228,437Impairment of long-lived assets


12,779


3,765


73,547


8,933


10,686Operating costs and expenses


2,463,014


2,310,169


2,269,498


2,220,852


2,197,229Operating income (loss)


(40,046
)

107,570


(4,011
)

112,192


105,993Other expense (income)


13,716


(2,559
)

(14,139
)

(12,932
)

(10,267
)Interest expense:Corporate borrowings


143,522


126,458


115,757


131,157


188,809Capital and financing lease obligations


6,198


5,652


5,990


6,505


4,669Equity in earnings of non-consolidated entities(5)


(17,178
)

(30,300
)

(24,823
)

(43,019
)

(233,704
)Gain on NCM transactions


(64,441
)










Investment income(6)


(391
)

(205
)

(1,696
)

(23,782
)

(17,385
)Earnings (loss) from continuing operations before income taxes


(121,472
)

8,524


(85,100
)

54,263


173,871Income tax provision (benefit)


1,950


(68,800
)

5,800


12,620


39,046Earnings (loss) from continuing operations


(123,422
)

77,324


(90,900
)

41,643


134,825Earnings (loss) from discontinued operations, net of income tax provision(2)


569


(7,534
)

9,728


1,802


(746
)Net earnings (loss)

$
(122,853
)
$
69,790

$
(81,172
)
$
43,445

$
134,079Balance Sheet Data (at period end):Cash and equivalents

$
301,158

$
495,343

$
534,009

$
106,181

$
317,163Corporate borrowings


2,102,540


1,832,854


1,687,941


1,615,672


1,634,265Other long-term liabilities


432,439


309,591


308,701


351,310


366,813Capital and financing lease obligations


65,675


57,286


60,709


69,983


53,125Stockholder's equity


360,159


760,559


1,039,603


1,133,495


1,391,880Total assets


3,740,245


3,653,177


3,725,597


3,847,282


4,104,260Operating Data:Net cash provided by operating activities

$
92,072

$
258,015

$
200,701

$
220,208

$
417,751Capital expenditures


(129,347
)

(97,011
)

(121,456
)

(171,100
)

(142,969
)Proceeds from sale/leasebacks


4,905


6,570








Screen additions


55


6


83


136


107Screen acquisitions


960











32Screen dispositions


400


105


77


196


243Average screenscontinuing operations(4)


5,086


4,485


4,545


4,561


4,627Number of screens operated


5,128


4,513


4,612


4,606


4,666Number of theatres operated


360


297


307


309


318Screens per theatre


14.2


15.2


15.0


14.9


14.7Attendance (in thousands)continuing operations(4)


194,412


200,285


196,184


207,603


213,041


(1)Cash
dividends declared on common stock for fiscal 2011, 2010, 2009 and 2008 were $278,258,000, $329,981,000, $35,989,000 and $296,830,000, respectively.


30

---



Table of Contents

(2)All
fiscal years presented includes earnings and losses from discontinued operations related to 44 theatres in Mexico that were sold during fiscal 2009.
Fiscal 2007 includes losses from discontinued operations related to five theatres in Japan that were sold during fiscal 2006 and five theatres in Iberia that were sold during fiscal 2007.(3)Fiscal
2008 includes 53 weeks. All other years have 52 weeks.(4)Includes
consolidated theatres only.(5)During
fiscal 2011, fiscal 2010, fiscal 2009 and fiscal 2008, equity in earnings, including cash distributions from NCM, were $32,851,000, $34,436,000,
$27,654,000 and $22,175,000, respectively. During fiscal 2008, equity in (earnings) losses of non-consolidated entities includes a gain of $18,751,000 from the sale of Hoyts General Cinema
South America and during fiscal 2007 a gain of $238,810,000 related to the NCM, Inc. initial public offering.(6)Includes
gain of $15,977,000 for the 53 weeks ended April 3, 2008 from the sale of our investment in Fandango, Inc. Includes interest
income on temporary cash investments of $17,258,000 for the 52 weeks ended March 29, 2007.(7)Includes
theatre and other closure expense (income) for fiscal 2011, 2010, 2009, 2008 and 2007 of $60,763,000, $2,573,000, $(2,262,000), $(20,970,000) and
$9,011,000, respectively. In the fourth quarter of fiscal 2011, the Company permanently closed 73 underperforming screens in six theatre locations while continuing to operate 89 screens at these
locations, and discontinued development of and ceased use of certain vacant and under-utilized retail space at four other theatres, resulting in a charge of $55,015,000 for theatre and other closure
expense.


Item 7.   Management's Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion relates to the audited financial statements of AMC Entertainment Inc., included elsewhere in this
Form 10-K. This discussion contains forward-looking statements. Please see "Forward-Looking Statements" for a discussion of the risks, uncertainties and assumptions relating to
these statements.

Overview

We are one of the world's leading theatrical exhibition companies. As of March 31, 2011, we owned, operated or had interests in
360 theatres and 5,128 screens with 99%, or 5,073, of our screens in the U.S. and Canada, and 1%, or 55 of our screens in China (Hong Kong), France and the United Kingdom.

During
the fifty-two weeks ended March 31, 2011, we acquired 92 theatres with 928 screens from Kerasotes in the U.S. In connection with the acquisition of Kerasotes,
we divested of 11 theatres with 142 screens as required by the Antitrust Division of the United States Department of Justice and acquired two theatres with 26 screens that were received in exchange
for three of the divested theatres above with 43 screens. We also permanently closed 22 theatres with 144 screens in the U.S. and temporarily closed and reopened 41 screens at four theatres in the
U.S. as part of a remodeling project to allow for dine-in theatres at these locations. We permanently closed 73 underperforming screens at 6 theatre locations in the U.S and Canada and
continue to operate 89 screens at these locations. We opened one new managed theatre with 14 screens in the U.S. and acquired one theatre with 6 screens in the U.S. in the ordinary course of business.

Our
Theatrical Exhibition revenues are generated primarily from box office admissions and theatre concession sales. The balance of our revenues are generated from ancillary sources,
including on-screen advertising, rental of theatre auditoriums, fees and other revenues generated from the sale of gift cards and packaged tickets, on-line ticket fees and
arcade games located in theatre lobbies.

Box
office admissions are our largest source of revenue. We predominantly license "first-run" motion pictures from distributors owned by major film production companies and
from independent distributors. We license films on a film-by-film and theatre-by-theatre basis. Film exhibition costs are accrued based on the
applicable admissions revenues and estimates of the final settlement pursuant to our film licenses. Licenses that we enter into typically state that rental fees are based on either aggregate terms
established prior to the opening of the picture or on a mutually agreed settlement upon the conclusion of the picture run. Under an aggregate terms formula, we pay the distributor a specified
percentage of box office gross or pay based on a scale of percentages tied to different

31

---



Table of Contents

amounts
of box office gross. The settlement process allows for negotiation based upon how a film actually performs.

Concessions
sales are our second largest source of revenue after box office admissions. Concessions items include popcorn, soft drinks, candy, hot dogs, premium concession items,
specialty drinks, healthy choice items and made to order hot foods including menu choices such as curly fries, chicken tenders and jalapeño poppers. Different varieties of concession
items are offered at our theatres based on preferences in that particular geographic region. We have also implemented dine-in theatre concepts at 7 locations, which feature full kitchen
facilities, seat-side servers and a separate bar and lounge area. Our strategy emphasizes prominent and appealing concessions counters designed for rapid service and efficiency including a
guest friendly grab and go experience. We design our theatres to have more concessions capacity to make it easier to serve larger numbers of customers. Strategic placement of large concessions stands
within theatres increases their visibility, aids in reducing the length of lines, allows flexibility to introduce new concepts and improves traffic flow around the concessions stands.

Our
revenues are dependent upon the timing and popularity of motion picture releases by distributors. The most marketable motion pictures are usually released during the summer and the
year-end holiday seasons. Therefore, our business is highly seasonal, with higher attendance and revenues generally occurring during the summer months and holiday seasons. Our results of
operations will vary significantly from quarter to quarter.

We
have a guest frequency program,AMC Stubs, which allows members to earn $10 for each $100 purchase completed at our theatres. Amounts
earned are redeemable by members on future purchases at our theatres. The value of amounts earned are included in deferred revenues and income and recorded as a reduction in admissions and concessions
revenues at the time the amounts are earned, based on the selling price of awards that are projected to be redeemed. Earned awards must be redeemed no later than 90 days from the date of
issuance. We account for membership fee revenue for our guest frequency program on a deferred basis, net of estimated refunds, whereby revenue is recognized ratably over the one-year
membership period.

During
fiscal 2011, films licensed from our six largest distributors based on revenues accounted for approximately 81% of our U.S. and Canada admissions revenues. Our revenues
attributable to individual distributors may vary significantly from year to year depending upon the commercial success of each distributor's motion pictures in any given year.

During
the period from 1990 to 2010, the annual number of first-run motion pictures released by distributors in the United States ranged from a low of 370 in 1995 to a high
of 634 in 2008, according to the Motion Picture Association of America 2010 MPAA Theatrical Market Statistics. The number of digital 3D films released annually increased to a high of 25 in 2010 from a
low of 0 during this same time period.

We
continually upgrade the quality of our theatre circuit by adding new screens through new builds (including expansions) and acquisitions and by disposing of older screens through
closures and sales. We are an industry leader in the development and operation of theatres, typically our theatres have 12 or more screens and offer amenities to enhance the movie-going experience,
such as stadium seating providing unobstructed viewing, digital sound and enhanced seat design. We have increased our 3D
enabled screens by 1,128 to 1,603 screens and our IMAX screens by 26 to 107 screens during the fifty-two weeks ended March 31, 2011; and as of March 31, 2011,
approximately 33.6% of our screens were 3D enabled screens and approximately 2.1% of our screens were IMAX 3D enabled screens.

32

---



Table of Contents

Stock-Based Compensation

We account for stock-based employee compensation arrangements using the fair value method. The fair value of each stock option was
estimated on the grant date using the Black-Scholes option pricing model based on assumptions regarding the following: common stock value on the grant date, risk-free interest rate,
expected term, expected volatility, and dividend yield. We have elected to use the simplified method for estimating the expected term of "plain vanilla" share option grants as we do not have enough
historical experience to provide a reasonable estimate. Compensation cost is calculated on the date of the grant and then amortized over the vesting period.

We
granted 38,876.72873 options on December 23, 2004, 600 options on January 26, 2006, 15,980.45 options on March 6, 2009, and 4,786 options on May 28, 2009
to employees to acquire our common stock. The fair value of these options on their respective grant dates was $22,373,000, $138,000, $2,069,000 and $650,000, respectively. All of these options
currently outstanding are equity classified.

During
fiscal 2011, we granted 6,507 options and 6,856 shares of restricted stock. The fair value of these options and restricted shares on their respective grant dates was approximately
$1,919,000 and $5,156,000, respectively. All of these options currently outstanding are equity classified.

The
common stock value used to estimate the fair value of each option on the March 6, 2009 grant date was based upon a contemporaneous valuation reflecting market conditions as of
January 1, 2009, a purchase of 2,542 shares by Parent for $323.95 per share from our former Chief Executive Officer pursuant to his Separation and General Release Agreement dated
February 23, 2009 and a sale of 385.862 shares by Parent to our current Chief Executive Officer pursuant to his Employment Agreement dated February 23, 2009 for $323.95 per share.

The
common stock value of $339.59 per share used to estimate the fair value of each option on the May 28, 2009 grant date was based upon a valuation prepared by management on
behalf of the
Compensation Committee of the Board of Directors. Management chose not to obtain a contemporaneous valuation performed by an unrelated valuation specialist as management believed that the valuation
obtained at January 1, 2009 and the subsequent stock sales and purchases were recent and could easily be updated and rolled forward without engaging a third party and incurring additional
costs. Additionally, management considered that the number of options granted generated a relatively low amount of annual expense over 5 years ($130,100) and that any differences in other
estimates of fair value would not be expected to materially impact the related annual expense. The common stock value was estimated based on current estimates of annual operating cash flows multiplied
by the current average peer group multiple for similar publicly traded competitors of 6.7x less net indebtedness, plus the current fair value of our investment in NCM. Management compared the
estimated stock value of $339.59 per share with the $323.95 value per share discussed above related to the March 6, 2009 option grant and noted the overall increase in value was due the
following:

March 6, 2009 grant value per share

$
323.95Decline in net indebtedness


20.15Increase in value of investment in NCM


37.10Increase due to peer group multiple


47.89Decrease in annual operating cash flows


(89.50
)May 28, 2009 grant value per share

$
339.59


The
common stock value of $752 per share used to estimate the fair value of each option and restricted share on July 8, 2010 was based upon a contemporaneous
valuation reflecting market conditions. The total estimated grant date fair value for 5,484 shares of restricted stock (time vesting) and 1,372 shares of restricted stock (performance vesting, where
the performance targets were

33

---



Table of Contents

established
at the grant date following ASC 718-10-55-95) was based on $752 per share and was $4,124,000 and $1,032,000, respectively. The estimated grant date fair
value of the options granted on 5,484 shares under the 2010 Equity Incentive Plan was $293.72 per share, or $1,611,000, and was determined using the Black-Sholes option-pricing model. The estimated
grant date fair value of the options granted on 1,023 shares under the 2004 Stock Option Plan was $300.91 per share, or $308,000, and was determined using the Black-Sholes option-pricing model. The
option exercise price for these grants were $752 per share, and the estimated fair value of the shares were $752, resulting in $0 intrinsic value for the option grants. As of March 31, 2011,
there was approximately $6,379,000 of total estimated unrecognized compensation cost related to nonvested stock-based compensation arrangements under both the 2010 Equity Incentive Plan and the 2004
Stock Option Plan.

Significant Events

On March 31, 2011, Marquee Holdings Inc., a direct, wholly-owned subsidiary of Parent and a holding company, the sole
asset of which consisted of the capital stock of AMCE, was merged with and into Parent, with Parent continuing as the surviving entity. As a result of the merger, AMCE became a direct subsidiary of
Parent.

During
the fourth quarter of our fiscal year ending March 31, 2011, we evaluated excess capacity and vacant and under-utilized retail space throughout our theatre circuit. On
March 28, 2011, management decided to permanently close 73 underperforming screens and auditoriums in six theatre locations in the United States and Canada while continuing to operate 89
screens at these locations. The permanently closed screens are physically segregated from the screens that will remain in operation and access to the closed space is restricted. Additionally,
management decided to discontinue development of and cease use of (including for storage) certain vacant and under-utilized retail space at four other theatres in the United States and the United
Kingdom. As a result of closing the screens and auditoriums and discontinuing the development and use of the other spaces, we recorded a charge of $55,015,000 for theatre and other closure expense,
which is included in operating expense in the Consolidated Statements of Operations during the fiscal year ending March 31, 2011. The charge to theatre and other closure expense reflects the
discounted contractual amounts of the existing lease obligations of $53,561,000 for the remaining 7 to 13 year terms of the leases as well as expenses incurred for related asset removal and
shutdown costs of $1,454,000. A significant portion of each of the affected properties will be closed and no longer used. The charges to theatre and other closure expense do not result in any new,
increased or accelerated obligations for cash payments related to the underlying long-term operating lease agreements. We expect that the estimated future savings in rent expense and
variable operating expenses as a result of our exit plan and from operating these ten theatres in a more efficient manner will exceed the estimated loss in attendance and revenues that we may
experience related to the closed auditoriums.

In
addition to the auditorium closures, we permanently closed 22 theatres with 144 screens in the U.S. during the fifty-two weeks ended March 31, 2011. We recorded
$5,748,000 for theatre and other closure expense, which is included in operating expense in the Consolidated Statements of Operations, due primarily to the remaining lease terms of 5 theatre closures
and accretion of the closure liability related to theatres closed during prior periods. Of the theatre closures in fiscal 2011, 9 theatres with 35 screens are owned properties with no related lease
obligation; 7 theatres with 67 screens had leases that were allowed to expire; a single screen theatre with a management agreement was allowed to expire; and 5 theatres with 41 screens were closed
with remaining lease terms in excess of one month. Reserves for leases that have not been terminated are recorded at the present value of the future contractual commitments for the base rents, taxes
and common area maintenance.

34

---



Table of Contents

On December 15, 2010, we completed the offering of $600,000,000 aggregate principal amount of our 9.75% Senior Subordinated Notes due 2020 (the "Notes due
2020"). Concurrently with the initial Notes due 2020 offering, we launched a cash tender offer and consent solicitation for any and all of our then outstanding $325,000,000 aggregate principal amount
11% Senior Subordinated Notes due 2016 ("Notes due 2016") at a purchase price of $1,031 plus a $30 consent fee for each $1,000 of principal amount of currently outstanding Notes due 2016 validly
tendered and accepted by us on or before the early tender date (the "Cash Tender Offer"). We used the net proceeds from the issuance of the Notes due 2020 to pay the consideration for the Cash Tender
Offer plus accrued and unpaid interest on $95,098,000 principal amount of Notes due 2016 validly tendered. We recorded a loss on extinguishment related to the Cash Tender Offer of $7,631,000 in Other
expense during the fifty-two weeks ended March 31, 2011, which included previously capitalized deferred financing fees of $1,681,000, a tender offer and consent fee paid to the
holders of $5,801,000 and other expenses of $149,000. We redeemed the remaining $229,902,000 aggregate principal amount outstanding Notes due 2016 at a price of $1,055 per $1,000 principal amount on
February 1, 2011 in accordance with the terms of the indenture. We recorded a loss on extinguishment related to the Cash Tender Offer of $16,701,000 in Other expense during the
fifty-two weeks ended March 31, 2011, which included previously capitalized deferred financing fees of $3,958,000, a tender offer and consent fee paid to the holders of $12,644,000
and other expenses of $99,000.

Concurrently
with the Notes due 2020 offering on December 15, 2010, Holdings launched a cash tender offer and consent solicitation for any and all of its outstanding $240,795,000
aggregate principal amount (accreted value) of its 12% Senior Discount Notes due 2014 ("Discount Notes due 2014") at a purchase price of $797 plus a $30 consent fee for each $1,000 face amount (or
$792.09 accreted value) of currently outstanding Discount Notes due 2014 validly tendered and accepted by Holdings. We used
cash on hand to make a dividend payment of $185,034,000 on December 15, 2010 to our stockholder, Holdings, which was treated as a reduction of additional paid-in capital. Holdings
used the funds received from us to pay the consideration for the Discount Notes due 2014 cash tender offer plus accrued and unpaid interest on $170,684,000 principal amount (accreted value) of the
Discount Notes due 2014 validly tendered. Holdings redeemed the remaining $70,111,000 (accreted value) outstanding Discount Notes due 2014 at a price of $823.77 per $1,000 face amount (or $792.09
accreted value) on January 3, 2011 using funds from an additional dividend received from us of $76,141,000.

On
December 15, 2010, we entered into a third amendment to our Senior Secured Credit Agreement dated as of January 26, 2006 to, among other things: (i) extend the
maturity of the term loans held by accepting lenders of $476,597,000 aggregate principal amount of term loans from January 26, 2013 to December 15, 2016 and to increase the interest rate
with respect to such term loans, (ii) replace our existing revolving credit facility with a new five-year revolving credit facility (with higher interest rates and a longer maturity
than the existing revolving credit facility), and (iii) amend certain of our existing covenants therein. We recorded a loss on the modification of our Senior Secured Credit Agreement of
$3,656,000 in Other expense during the fifty-two weeks ended March 31, 2011, which included third party modification fees and other expenses of $3,289,000 and previously capitalized
deferred financing fees related to the revolving credit facility of $367,000.

All
of our NCM membership units are redeemable for, at the option of NCM, cash or shares of common stock of NCM, Inc. on a share-for-share basis. On
August 18, 2010, we sold 6,500,000 shares of common stock of NCM, Inc., in an underwritten public offering for $16.00 per share and reduced our related investment in NCM by
$36,709,000, the average carrying amount of all shares owned. Net proceeds received on this sale were $99,840,000, after deducting related underwriting fees and professional and consulting costs of
$4,160,000, resulting in a gain on sale of $63,131,000. In addition, on September 8, 2010, we sold 155,193 shares of NCM, Inc. to the underwriters to cover over allotments for
$16.00 per share and reduced our related investment in NCM by $867,000, the average carrying amount of all shares owned. Net proceeds received on this sale were $2,384,000, after

35

---



Table of Contents

deducting
related underwriting fees and professional and consulting costs of $99,000, resulting in a gain on sale of $1,517,000.

On
March 17, 2011, NCM, Inc., as sole manager of NCM, disclosed the changes in ownership interest in NCM pursuant to the Common Unit Adjustment Agreement dated as of
February 13, 2007 ("2010 Common Unit Adjustment"). This agreement provides for a mechanism for adjusting membership units based on increases or decreases in attendance associated with theatre
additions and dispositions. Prior to the 2010 Common Unit Adjustment, we held 18,803,420 units, or a 16.98% ownership interest, in NCM as of December 30, 2010. As a result of theatre
closings and dispositions and a related decline in attendance, we elected to surrender 1,479,638 common membership units to satisfy the 2010 Common Unit Adjustment, leaving us with
17,323,782 units, or a 15.66% ownership interest, in NCM as of March 31, 2011. We recorded the surrendered common units as a reduction to deferred revenues for exhibitor services
agreement at fair value of $25,361,000, based on a price per share of NCM, Inc. of $17.14 on March 17, 2011 and recorded the reduction of the Company's NCM investment at weighted
average cost for Tranche 2 Investments of $25,568,000, resulting in a loss on the surrender of the units of $207,000. The gain from the NCM, Inc. stock sales and the loss from the
surrendered NCM common units are reported as Gain from NCM transactions on the Consolidated Statements of Operations.

On
May 24, 2010, we completed the acquisition of 92 theatres and 928 screens from Kerasotes Showplace Theatres, LLC ("Kerasotes"). Kerasotes operated 95
theatres and 972 screens in mid-sized, suburban and metropolitan markets, primarily in the Midwest. More than three quarters of the Kerasotes theatres feature stadium seating and almost
90 percent have been built since 1994. The purchase price for the Kerasotes theatres paid in cash at closing, was $276,798,000, net of cash acquired, and was subject to working capital and
other purchase price adjustments. We paid working capital and other purchase price adjustments of $3,808,000 during the second quarter of fiscal 2011, based on the final closing date working capital
and deferred revenue amounts, and have included this amount as part of the total purchase price. The acquisition of Kerasotes significantly increased our size. Accordingly, results of operations for
the fifty-two weeks ended March 31, 2011, which include forty-four weeks of operations of the theatres we acquired, are not comparable to our results for the
fifty-two weeks ended April 1, 2010. For additional information about the Kerasotes acquisition, see Note 2Acquisition to our Consolidated Financial Statements
under Part II Item 8. of this Annual Report on Form 10-K.

On
March 10, 2010, Digital Cinema Implementation Partners, LLC ("DCIP") completed its financing transactions for the deployment of digital projection systems to nearly
14,000 movie theatre screens across North America, including screens operated or managed by the Company, Regal Entertainment Group and Cinemark Holdings, Inc. At closing, we contributed 342
projection systems that we owned to DCIP, which we recorded at estimated fair value as part of an additional investment in DCIP of $21,768,000. We also made cash investments in DCIP of $840,000 at
closing and DCIP made a distribution of excess cash to us after the closing date and prior to fiscal 2010 year-end of $1,262,000. We recorded a loss on contribution of the 342
projection systems of $563,000, based on the difference between estimated fair value and our carrying value on the date of contribution. On March 26, 2010, we acquired 117 digital projectors
from third party lessors for $6,784,000 and sold them together with seven digital projectors that we owned to DCIP for $6,570,000. We recorded a loss on the sale of these 124 systems to DCIP of
$697,000. As of March 31, 2011, we operated 2,301 digital projection systems leased from DCIP pursuant to operating leases and anticipate that we will have deployed over 3,800 of these systems
in our existing theatres by the end fiscal 2012.

The
additional digital projection systems will allow us to add additional 3D enabled screens to our circuit where we are generally able to charge a higher admission price than 2D. The
digital projection systems leased from DCIP and its affiliates will replace most of our existing 35 millimeter projection systems in our U.S. theatres. We are examining the estimated depreciable lives
for our existing 35

36

---



Table of Contents

millimeter
projection systems, with a net book value of $5,700,000 as of March 31, 2011, and have adjusted the depreciable lives in order to accelerate the depreciation of the applicable
existing 35 millimeter projection systems, so that such systems are fully depreciated at the end of the digital projection system deployment timeframe. We currently estimate that the depreciation
expense related to these assets as a result of the acceleration will be $3,800,000, $1,500,000, and $400,000 in fiscal years
2012, 2013, and 2014. Upon full deployment of the digital projection systems, we expect the cash rent expense of such equipment to approximate $4,500,000, annually, and the deferred rent expense to
approximate $5,500,000, annually, which will be recognized in our Consolidated Statements of Operations as operating expense.

On
June 9, 2009, we completed the offering of $600,000,000 aggregate principal amount of our 8.75% Senior Notes due 2019 (the "Notes due 2019"). Concurrently with the notes
offering, we launched a cash tender offer and consent solicitation for any and all of our then outstanding $250,000,000 aggregate principal amount of 85/8% Senior Notes due 2012 (the
"Fixed Notes due 2012") at a purchase price of $1,000 plus a $30 consent fee for each $1,000 of principal amount of currently outstanding Fixed Notes due 2012 validly tendered and accepted by us on or
before the early tender date (the "Cash Tender Offer"). We used the net proceeds from the issuance of the Notes due 2019 to pay the consideration for the Cash Tender Offer plus accrued and unpaid
interest on the $238,065,000 principal amount of the Fixed Notes due 2012. We recorded a loss on extinguishment related to the Cash Tender Offer of $10,826,000 in Other expense during the
fifty-two weeks ended April 1, 2010, which included previously capitalized deferred financing fees of $3,312,000, consent fee paid to holders of $7,142,000, and other expenses of
$372,000. On August 15, 2009, we redeemed the remaining $11,935,000 of Fixed Notes due 2012 at a price of $1,021.56 per $1,000 principal in accordance with the terms of the indenture. We
recorded a loss of $450,000 in Other expense related to the extinguishment of the remaining Fixed Notes due 2012 principal during the fifty-two weeks ended April 1, 2010, which
included previously capitalized deferred financing fees of $157,000, a consent fee paid to the holder of $257,000 and other expenses of $36,000.

We
acquired Grupo Cinemex, S.A. de C.V. ("Cinemex"), in January 2006 as part of a larger acquisition of Loews Cineplex Entertainment Corporation. We do not operate any other
theatres in Mexico and have divested of the majority of our other investments in international theatres in Japan, Hong Kong, Spain, Portugal, Argentina, Brazil, Chile, and Uruguay over the past
several years as part of our overall business strategy.

On
December 29, 2008, we sold all of our interests in Cinemex, which then operated 44 theatres with 493 screens primarily in the Mexico City Metropolitan Area, to Entretenimiento
GM de Mexico S.A. de C.V. ("Entretenimiento"). The purchase price received at the date of the sale and in accordance with the Stock Purchase Agreement was $248,141,000. During the year ended
April 1, 2010, we received payments of $4,315,000 for purchase price related to tax payments and refunds, and a working capital calculation and post closing adjustments. During the year ended
March 31, 2011, we received payments, net of legal fees, of $1,840,000 of the purchase price related to tax payments and refunds. Additionally, we estimate that we are contractually entitled to
receive an additional $7,251,000 of the purchase price related to tax payments and refunds. While we believe we are entitled to these amounts from Cinemex, the collection will require litigation which
was initiated by us on April 30, 2010. Resolution could take place over a prolonged period. In fiscal 2010, as a result of the litigation, we established an allowance for doubtful accounts
related to this receivable and further directly charged off certain amounts as uncollectible with an offsetting charge of $8,861,000 recorded to loss on disposal included as a component of
discontinued operations.

The
operations and cash flows of the Cinemex theatres have been eliminated from our ongoing operations as a result of the disposal transaction. We do not have any significant continuing
involvement in the operations of the Cinemex theatres. The results of operations of the Cinemex theatres have been classified as discontinued operations for all periods presented.

37

---



Table of Contents

Critical Accounting Estimates

Our Consolidated Financial Statements are prepared in accordance with GAAP. In connection with the preparation of our financial
statements, we are required to make assumptions and estimates about future events, and apply judgments that affect the reported amounts of assets, liabilities, revenue, expenses and the related
disclosures. We base our assumptions, estimates, and judgments on historical experience, current trends and other factors that management believes to be relevant at the time our Consolidated Financial
Statements are prepared. On a regular basis, we review the accounting policies, assumptions, estimates, and judgments to ensure that our financial statements are presented fairly and in accordance
with GAAP. However, because future events and their effects cannot be determined with certainty, actual results could differ from our assumptions and estimates, and such differences could be material.

Our
significant accounting policies are discussed in Note 1 to our Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K for
further information. A listing of some of the more critical accounting estimates that we believe merit additional discussion and aid in better understanding and evaluating our reported financial
results are as follows.

Impairments.We evaluate goodwill and other indefinite lived intangible assets for impairment annually or more frequently as specific
events or
circumstances dictate. Impairment for other long lived assets (including finite lived intangibles) is done whenever events or changes in circumstances indicate that these assets may not be fully
recoverable. We have invested material amounts of capital in goodwill and other intangible assets in addition to other long lived assets. We operate in a very competitive business environment and our
revenues are highly dependent on movie content supplied by film producers. In addition, it is not uncommon for us to closely monitor certain locations where operating performance may not meet our
expectations. Because of these and other reasons, over the past three years we have recorded material impairment charges primarily related to long lived assets. For the last three years, impairment
charges were $21,604,000 in fiscal 2011, $3,765,000 in fiscal 2010, and $77,801,000 in fiscal 2009. There are a number of estimates and significant judgments that are made by management in performing
these impairment evaluations. Such judgments and estimates include estimates of future revenues, cash flows, capital expenditures, and the cost of capital, among others. We believe we have used
reasonable and appropriate business judgments. These estimates determine whether an
impairment has been incurred and also quantify the amount of any related impairment charge. Given the nature of our business and our recent history, future impairments are possible and they may be
material, based upon business conditions that are constantly changing. See Note 1The Company and Significant Accounting Policies included elsewhere in this Annual Report on Form
10-K for further information.

Our
recorded goodwill was $1,923,667,000 and $1,814,738,000 as of March 31, 2011 and April 1, 2010, respectively. We evaluate goodwill and our trademarks for impairment
annually during our fourth fiscal quarter and any time an event occurs or circumstances change that would more likely than not reduce the fair value for a reporting unit below its carrying amount. Our
goodwill is recorded in our Theatrical Exhibition operating segment, which is also the reporting unit for purposes of evaluating recorded goodwill for impairment. If the carrying value of the
reporting unit exceeds its fair value, we are required to reallocate the fair value of the reporting unit as if the reporting unit had been acquired in a business combination and the fair value of the
reporting unit was the price paid to acquire the reporting unit. We determine fair value by using an enterprise valuation methodology determined by applying multiples to cash flow estimates less net
indebtedness, which we believe is an appropriate method to determine fair value. There is considerable management judgment with respect to cash flow estimates and appropriate multiples and discount
rates to be used in determining fair value, and, accordingly, actual results could vary significantly from such estimates which fall under Level 3 within the fair value measurement hierarchy.

38

---



Table of Contents

We
evaluated our enterprise value in fiscal 2011 and fiscal 2010 based on contemporaneous valuations reflecting market conditions. Two valuation approaches were utilized; the income
approach and the market approach. The income approach provides an estimate of enterprise value by measuring estimated annual cash flows over a discrete projection period and applying a present value
rate to the cash flows. The present value of the cash flows is then added to the present value equivalent of the residual value of the business to arrive at an estimated fair value of the business.
The residual value represents the present value of the projected cash flows beyond the discrete projection period. The discount rate is determined using a rate of return deemed appropriate for the
risk of achieving the projected cash flows. The market approach used publicly traded peer companies and reported transactions in the industry. Due to conditions and the relatively few sale
transactions, the market approach was used to provide additional support for the value achieved in the income approach.

Key
rates used in the income approach for fiscal 2011 and 2010 follow:

Description

Fiscal 2011

Fiscal 2010Discount rate


9.0
%

9.0
%Market risk premium


5.5
%

6.0
%Hypothetical capital structure: Debt/Equity


40%/60
%

40%/60
%


The
discount rate is an estimate of the weighted average cost of debt and equity capital. The required return on common equity was estimated by adding the risk-free required
rate of return, the market risk premium (which is adjusted for the Company's estimated market volatility, or beta), and small stock premium.

The
results of our annual goodwill impairment analysis performed during the fourth quarter of fiscal 2011 indicated the estimated fair value of our Theatrical Exhibition reporting unit
exceeded its carrying value by approximately $500,000,000. While the fair value of our Theatrical Exhibition operations exceed the carrying value at the present time, small changes in certain
assumptions can have a significant impact on fair value. Facts and circumstances could change, including further deterioration of general economic conditions, the number of motion pictures released by
the studios, and the popularity of films supplied by our distributors. These and/or other factors could result in changes to the assumptions underlying the calculation of fair value which could result
in future impairment of our remaining goodwill.

The
aggregate annual cash flows were determined based on management projections on a theatre-by-theatre basis further adjusted by non-theatre cash
flows. The projections considered various factors including theatre lease terms, a reduction in attendance, and a reduction in capital investments in new theatres, given current market conditions and
the resulting difficulty with obtaining contracts for new-builds. Cash flow estimates included in the analysis reflect our best estimate of the impact of the roll-out of
digital projectors throughout our theatre circuit. Based on the seasonal nature of our business, fluctuations in attendance from period to period are expected and we do not believe that the results
would significantly decrease our projections or impact our conclusions regarding goodwill impairment. The anticipated acceleration of depreciation of the 35mm equipment described above under
"Significant Events" does not have an impact on our estimation of fair value as depreciation does not impact our projected available cash flow. The expected increases in rent expense upon full
deployment of the digital projection systems also described under "Significant Events" were included in the cash flow projections used to estimate our fair value as a part of our fiscal 2011 annual
goodwill impairment analysis, and had the impact of reducing the projected cash flows. Cash flows were projected through fiscal 2017 and assumed revenues would increase approximately 3.25% annually
primarily due to projected increases in ticket and concession pricing. Costs and expenses, as a percentage of revenue are projected to decrease from 85.5% to 85.1% through fiscal 2017. The residual
value is a function of the estimated cash flow for fiscal 2018 divided by a capitalization rate (discount rate less long-term growth rate of 2%), then discounted back to represent the
present value of the cash

39

---



Table of Contents

flows
beyond the discrete projection period. We utilized the foregoing assumptions about future revenues and costs and expenses for the limited purpose of performing our annual goodwill impairment
analysis. These assumptions should not be viewed as "projections" or as representations by us as to expected future performance or results of operations. See "Cautionary Statements Concerning
Forward-Looking Statements" included elsewhere in this Annual Report on Form 10-K.

As
the expectations of the average investor are not directly observable, the market risk premium must be inferred. One approach is to use the long-run historical arithmetic
average premiums that investors have historically earned over and above the returns on long-term Treasury bonds. The premium obtained using the historical approach is sensitive to the time
period over which one calculates the average. Depending on the time period chosen, the historical approach yields an average premium in a range of 5.0% to 8.0%.

There
was no goodwill impairment in fiscal 2011 or fiscal 2010.

Film Exhibition Costs.We have agreements with film companies who provide the content we make available to our customers. We are
required to
routinely make estimates and judgments about box office receipts for certain films and for films provided by specific film distributors in closing our books each period. These estimates are subject to
adjustments based upon final settlements and determinations of final amounts due to our content providers that are typically based on a film's box
office receipts and how well it performs. In certain instances this evaluation is done on a film by film basis or in the aggregate by film production suppliers. We rely upon our industry experience
and professional judgment in determining amounts to fairly record these obligations at any given point in time. The accrual made for film costs have historically been material and we expect they will
continue to be so into the future. During fiscal years 2011, 2010 and 2009 our film exhibition costs totaled $887,758,000, $928,632,000, and $842,656,000, respectively.

Income and operating taxes.Income and operating taxes are inherently difficult to estimate and record. This is due to the complex
nature of the U.S.
tax code and also because our returns are routinely subject to examination by government tax authorities, including federal, state and local officials. Most of these examinations take place a few
years after we have filed our tax returns. Our tax audits in many instances raise questions regarding our tax filing positions, the timing and amount of deductions claimed and the allocation of income
among various tax jurisdictions. Our federal and state tax operating loss carried forward of approximately $454,450,000 and $839,666,000, respectively at March 31, 2011, require us to estimate
the amount of carry forward losses that we can reasonably be expected to realize using feasible and prudent tax planning strategies that are available to us. Future changes in conditions and in the
tax code may change these strategies and thus change the amount of carry forward losses that we expect to realize and the amount of valuation allowances we have recorded. Accordingly future reported
results could be materially impacted by changes in tax matters, positions, rules and estimates and these changes could be material.

Theatre and Other Closure Expense (Income).Theatre and other closure expense (income) is primarily related to payments made or received
or expected
to be made or received to or from landlords to terminate leases on certain of our closed theatres, other vacant space and theatres where development has been discontinued. Theatre and other closure
expense (income) is recognized at the time the theatre or auditorium closes, space becomes vacant or development is discontinued. Expected payments to or from landlords are based on actual or
discounted contractual amounts. We estimate theatre closure expense (income) based on contractual lease terms and our estimates of taxes and utilities. The discount rate we use to estimate theatre and
other closure expense (income) is based on estimates of our borrowing costs at the time of closing. Our theatre and other closure liabilities have been measured using a discount rate of approximately
7.55% to 9.0%. During the fourth quarter of our fiscal year ending March 31, 2011, we permanently closed 73 underperforming screens and auditoriums in six theatre locations while continuing to
operate the remaining 89 screens, and discontinued the

40

---



Table of Contents

development
of and ceased use of certain vacant and under-utilized retail space at four other theatres. As a result of closing the screens and auditoriums and discontinuing the development and use of
the other spaces, we recorded a charge of $55,015,000 for theatre and other closure expense. We have recorded theatre and other closure (income) expense, which is included in operating expense in the
Consolidated Statements of Operations, of $60,763,000, $2,573,000, and $(2,262,000) during the fiscal years ended March 31, 2011, April 1, 2010, and April 2, 2009, respectively.

Gift card and packaged ticket revenues.As noted in our significant accounting policies for revenue we defer 100% of these items and
recognize these
amounts as they are redeemed by customers or when we estimate the likelihood of future redemption is remote based upon applicable laws and regulations. A vast majority of gift cards are used or
partially used. However a portion of the gift cards and packaged ticket sales we sell to our customers are not redeemed and not used in whole or in part. Non-redeemed or partially redeemed
cards or packaged tickets are known as "breakage" in our industry. We are required to estimate breakage and do so based upon our historical redemption patterns. Our history indicates that if a card or
packaged ticket is not used for 18 months or longer, its likelihood of being used past this 18 month period is remote. When it is determined that a future redemption is remote we record
income for unused cards and tickets. We changed our estimate on when packaged tickets would be considered remote in terms of future redemption in fiscal 2008 and changed our estimate of redemption
rates for packaged tickets in 2009. Prior to 2008, we had estimated that unused packaged tickets would not become remote in terms of future use until 24 months after they were issued. The
change we made to shorten this period from 24 to 18 months and align redemption patterns for packaged tickets with our gift card program represented our best judgment based on continued
development of specific historical redemption patterns in our gift cards at AMC. We believe this 18 month period continues to be appropriate and do not anticipate any changes to this policy
given our historical experience. We monitor redemptions and if we were to determine changes in our redemption statistics had taken place, we would be required to change the current 18 month
time period to a period that was determined to be more appropriate. This could cause us to either accelerate or lengthen the amount of time a gift card or packaged ticket is outstanding prior to being
remote in terms of any future redemption.

41

---





Table of Contents

Operating Results

The following table sets forth our revenues, costs and expenses attributable to our operations. Reference is made to
Note 16Operating Segment to the Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K for additional information therein.

(In thousands except operating data)

52 Weeks
Ended
March 31, 2011

52 Weeks
Ended
April 1, 2010

52 Weeks
Ended
April 2, 2009RevenuesTheatrical exhibitionAdmissions

$
1,697,858

$
1,711,853

$
1,580,328Concessions


664,108


646,716


626,251Other theatre


61,002


59,170


58,908Total revenues

$
2,422,968

$
2,417,739

$
2,265,487Operating Costs and ExpensesTheatrical exhibitionFilm exhibition costs

$
887,758

$
928,632

$
842,656Concession costs


83,187


72,854


67,779Operating expense


713,846


610,774


576,022Rent


475,810


440,664


448,803General and administrative expense:Merger, acquisition and transaction costs


14,085


2,280


650Management fee


5,000


5,000


5,000Other


58,136


57,858


53,628Depreciation and amortization


212,413


188,342


201,413Impairment of long-lived assets


12,779


3,765


73,547Operating costs and expenses

$
2,463,014

$
2,310,169

$
2,269,498Operating Data (at period end):New theatre screens


55


6


83Screens acquired


960





Screen dispositions


400


105


77Average screenscontinuing operations(1)


5,086


4,485


4,545Number of screens operated


5,128


4,513


4,612Number of theatres operated


360


297


307Screens per theatre


14.2


15.2


15.0Attendance (in thousands)continuing operations(1)


194,412


200,285


196,184


(1)Includes
consolidated theatres only.


We
present Adjusted EBITDA as a supplemental measure of our performance. We define Adjusted EBITDA as earnings (loss) from continuing operations plus (i) income tax provisions
(benefit), (ii) interest expense and (iii) depreciation and amortization, as further adjusted to eliminate the impact of certain items that we do not consider indicative of our ongoing
operating performance. These further adjustments are itemized below. You are encouraged to evaluate these adjustments and the reasons we consider them appropriate for supplemental analysis. In
evaluating Adjusted EBITDA, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in this presentation. Our presentation of Adjusted
EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.

42

---



Table of Contents

Reconciliation of Adjusted EBITDA  (unaudited)

(In thousands)

52 Weeks
Ended
March 31, 2011

52 Weeks
Ended
April 1, 2010

52 Weeks
Ended
April 2, 2009Earnings (loss) from continuing operations

$
(123,422
)
$
77,324

$
(90,900
)Plus:Income tax provision (benefit)


1,950


(68,800
)

5,800Interest expense


149,720


132,110


121,747Depreciation and amortization


212,413


188,342


201,413Impairment of long-lived assets


12,779


3,765


73,547Certain operating expenses(1)


57,421


6,099


1,517Equity in earnings of non-consolidated entities


(17,178
)

(30,300
)

(24,823
)Gain on NCM transactions


(64,441
)




Investment income


(391
)

(205
)

(1,696
)Other expense(2)


27,988


11,276


General and administrative expense:Merger, acquisition and transaction costs


14,085


2,280


650Management fee


5,000


5,000


5,000Stock-based compensation expense


1,526


1,384


2,622Adjusted EBITDA(3)

$
277,450

$
328,275

$
294,877


(1)Amounts
represent preopening expense, theatre and other closure expense (income), deferred digital equipment rent expense and disposition of assets and
other gains included in operating expenses. During the fourth quarter of fiscal 2011, we permanently closed 73 underperforming screens and auditoriums in six theatre locations while continuing to
operate the remaining 89 screens, and discontinued the development of and ceased use of certain vacant and under-utilized retail space at four other theatres, resulting in a charge of
$55,015,000 for theatre and other closure expense, which significantly increased our annual theatre and other closure expense.(2)Other
expense for fiscal 2011 is comprised of the loss on extinguishment of indebtedness related to the redemption of our 11% Senior Subordinated Notes due
2016 of $24,332,000 and expense related to the modification of the Senior Secured Credit Facility of $3,656,000. Other expense for fiscal 2010 is comprised of the loss on extinguishment of
indebtedness related to the redemption of our 85/8% Senior Notes due 2012.(3)The
acquisition of Kerasotes contributed approximately $31,600,000 in Adjusted EBITDA during the period of May 24, 2010 to March 31, 2011.


Adjusted
EBITDA is a non-GAAP financial measure commonly used in our industry and should not be construed as an alternative to net earnings (loss) as an indicator of
operating performance or as an alternative to cash flow provided by operating activities as a measure of liquidity (as determined in accordance with GAAP). Adjusted EBITDA may not be comparable to
similarly titled measures reported by other companies. We have included Adjusted EBITDA because we believe it provides management and investors with additional information to measure our performance
and liquidity, estimate our value and evaluate our ability to service debt. In addition, we use Adjusted EBITDA for incentive compensation purposes.

43

---



Table of Contents

Adjusted
EBITDA has important limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for analysis of our results as reported under
U.S. GAAP. For example, Adjusted EBITDA:



For the Year Ended March 31, 2011 and April 1, 2010

Revenues.Total revenues increased 0.2%, or $5,229,000, during the year ended March 31, 2011 compared to the year ended
April 1, 2010.
Total revenues included approximately $225,200,000 of additional revenues resulting from the acquisition of Kerasotes. Admissions revenues decreased 0.8%, or $13,995,000, during the year ended
March 31, 2011 compared to the year ended April 1, 2010, due to a 2.9% decrease in attendance, partially offset by a 2.1% increase in average ticket prices. Attendance was negatively
impacted by underperformance of film product during the year ended March 31, 2011 as compared to the year ended April 1, 2010. The increase in average ticket price was primarily due to
an increase in attendance from 3D film product for which we are able to charge more per ticket than for a standard 2D film, as well as increases in IMAX and 3D ticket prices. Admission revenues
included approximately $148,200,000 of additional revenues resulting from the acquisition of Kerasotes. Admissions revenues at comparable theatres (theatres opened on or before the first quarter of
fiscal 2010) decreased 8.2%, or $136,438,000, during the year ended March 31, 2011 from the comparable period last year. Concessions revenues increased 2.7%, or $17,392,000, during the year
ended March 31, 2011 compared to the year ended April 1, 2010, due to a 5.9% increase in average concessions per patron, partially offset by the decrease in attendance. The increase in
concessions per patron includes the impact of concession price and size increases placed in effect during the third quarter of fiscal 2010 and the second and third quarters of fiscal 2011, and a shift
in product mix to higher priced items. The increase in concession revenues includes approximately $73,300,000 from Kerasotes. Other theatre revenues increased 3.1%, or $1,832,000, during the year
ended March 31, 2011 compared to the year ended April 1, 2010, primarily due to increases in advertising revenues and theatre rentals, partially offset by a reduction in
on-line ticket fees. The increase in other theatre revenues includes $3,700,000 from Kerasotes.

Operating costs and expenses.Operating costs and expenses increased 6.6%, or $152,845,000 during the year ended March 31, 2011
compared to
the year ended April 1, 2010. The effect of the acquisition of Kerasotes was an increase in operating costs and expenses of approximately $237,500,000. Film exhibition costs decreased 4.4%, or
$40,874,000, during the year ended March 31, 2011 compared to the year ended April 1, 2010 due to the decrease in admissions revenues and the decrease in film exhibition costs as a
percentage of admissions revenues. As a percentage of admissions revenues, film exhibition costs were 52.3% in the current period and 54.2% in the prior year period, due to the underperformance of
film product during the current year. Concession costs increased 14.2%, or $10,333,000, during the year ended March 31, 2011 compared to the year ended April 1, 2010 due to an increase
in concession costs as a percentage of concessions revenues and the increase in concession revenues. As a percentage of concessions revenues, concession costs were 12.5% in the current period

44

---



Table of Contents

compared
with 11.3% in the prior period, primarily due to the concession price and size increases, a shift in product mix to items that generate higher sales but lower percentage margins, and
concession offers targeting attendance growth. As a percentage of revenues, operating expense was 29.5% in the current period as compared to 25.3% in the prior period. During the year ended
March 31, 2011, we evaluated excess capacity and vacant and under-utilized retail space throughout our theatre circuit and recorded charges to theatre and other closure expense of $60,763,000,
which caused our operating expense to increase. See Note 14Theatre and Other Closure and Disposition of Assets included elsewhere in this Annual Report on
Form 10-K for further information. Gains were recorded on disposition of assets during the year ended March 31, 2011 which reduced operating expenses by approximately
$9,719,000, primarily due to the sale of a divested AMC theatre in conjunction with the acquisition of Kerasotes. Rent expense increased 8.0%, or $35,146,000, during the year ended March 31,
2011 compared to the year ended April 1, 2010, primarily due to increased rent as a result of the acquisition of Kerasotes of approximately $42,900,000.

General and Administrative Expense:

Merger, acquisition and transaction costs.Merger, acquisition and transaction costs increased $11,805,000 during the year ended
March 31,
2011 compared to the year ended April 1, 2010. Current year costs primarily consist of costs related to the acquisition of Kerasotes.

Management fees.Management fees were unchanged during the year ended March 31, 2011. Management fees of $1,250,000 are paid
quarterly, in
advance, to our Sponsors in exchange for consulting and other services.

Other.Other general and administrative expense increased 0.5%, or $278,000, during the year ended March 31, 2011 compared to the
year ended
April 1, 2010 primarily due to increases in salaries expense, advertising and public relations, and estimated expense related to our complete withdrawals from a union-sponsored pension plans of
$3,040,000, partially offset by decreases in incentive compensation expense related to declines in operating performance. During the year ended April 1, 2010, we recorded $1,400,000 of expense
related to a complete withdrawal from a union-sponsored pension plan.

Depreciation and amortization.Depreciation and amortization increased 12.8%, or $24,071,000, compared to the prior year. Increases in
depreciation
and amortization expense during the year ended March 31, 2011 are the result of increased net book value of theatre assets primarily due to the acquisition of Kerasotes, which contributed
$30,900,000 of depreciation expense, partially offset by decreases in the declining net book value of AMC theatre assets.

Impairment of long-lived assets.During the year ended March 31, 2011, we recognized non-cash impairment losses of
$12,779,000. We recognized an impairment loss of $11,445,000 on seven theatres with 75 screens (in Arizona, California, Maryland, Missouri and New York) in property, net. In addition, we recognized an
impairment loss related to a favorable lease of $1,334,000 recorded in intangible assets, net. During the year ended April 1, 2010, we recognized non-cash impairment losses of
$3,765,000 related to theatre fixed assets and real estate recorded in other long-term assets. We recognized an impairment loss of $2,330,000 on five theatres with 41 screens (in Florida,
California, New York, Utah and Maryland). Of the theatre charge, $2,330,000 was related to property, net. We also adjusted the carrying value of undeveloped real estate assets based on a recent
appraisal which resulted in an impairment charge of $1,435,000.

Other expense (income).Other expense (income) includes $14,131,000 and $13,591,000 of income related to the derecognition of gift card
liabilities,
as to which we believe future redemption to be remote, during the year ended March 31, 2011 and April 1, 2010, respectively. Other expense (income) includes a loss on extinguishment of
indebtedness related to the redemption of our 11% Senior

45

---



Table of Contents

Subordinated
Notes due 2016 of $24,332,000 and expense related to the modification of our Senior Secured Credit Facility Term Loan due 2013 of $3,289,000, and Senior Secured Credit Facility Revolver
of $367,000 during the year ended March 31, 2011. Other expense (income) includes a loss of $11,276,000 related to the redemption of our 85/8% Senior Notes due 2012 during the
year ended April 1, 2010.

Interest expense.Interest expense increased 13.3%, or $17,610,000, primarily due to an increase in interest expense related to the
issuance of our
8.75% Senior Notes due 2019 (the "Notes due 2019") on June 9, 2009 and our 9.75% Senior Subordinated Notes due 2020 (the "Notes due 2020") on December 15, 2010 and modification of our
Senior Secured Credit Facility on December 15, 2010.

Equity in earnings of non-consolidated entities.Equity in earnings of non-consolidated entities was $17,178,000 in the
current year compared to $30,300,000 in the prior year. Equity in earnings related to our investment in National CineMedia, LLC were $32,851,000 and $34,436,000 for the year ended
March 31, 2011 and April 1, 2010, respectively. Equity in losses related to our investment in Digital Cinema Implementation Partners, LLC ("DCIP") were $5,231,000 and $4,155,000
for the year ended March 31, 2011 and April 1, 2010, respectively. We recognized an impairment loss of $8,825,000 related to an equity method investment through Midland Empire
Partners, LLC during the year ended March 31, 2011.

Gain on NCM transactions.The gain on NCM, Inc. shares of common stock sold during the year ended March 31, 2011 was
$64,648,000. We
also recorded a loss of $207,000 from the surrender of 1,479,638 ownership units in NCM as part of the 2010 Common Unit Adjustment. See Note 6Investments included elsewhere in this
Annual Report on Form 10-K for further information.

Investment income.Investment income was $391,000 for the year ended March 31, 2011 compared to $205,000 for the year ended
April 1,
2010.

Income tax provision (benefit).The income tax provision (benefit) from continuing operations was a provision of $1,950,000 for the
year ended
March 31, 2011 and a benefit of $68,800,000 for the year ended April 1, 2010. Our income tax benefit in fiscal 2010 includes the release of $71,765,000 of valuation allowance for
deferred tax assets. See Note 10Income Taxes to the Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K for our effective
income tax rate reconciliation.

Earnings (loss) from discontinued operations, Net.On December 29, 2008, we sold our operations in Mexico, including 44 theatres
and 493
screens. The results of operations of the Cinemex theatres have been classified as discontinued operations for all years presented and include bad debt expense related to amounts due from Cinemex of
$8,861,000 for the year ended April 1, 2010. See Note 3Discontinued Operations included elsewhere in this Annual Report on Form 10-K for the components of
the earnings from discontinued operations.

Net earnings (loss).Net earnings (loss) were $(122,853,000) and $69,790,000 for the year ended March 31, 2011 and April 1,
2010,
respectively. Net loss during the year ended March 31, 2011 was primarily due to theatre and other closure expense of $60,763,000, loss on extinguishment and modification of indebtedness of
$27,988,000, increased interest expense of $17,610,000, impairment charges of $21,604,000 in the current year, increased merger and acquisition costs of approximately $11,805,000 primarily due to the
acquisition of Kerasotes, and the decrease in attendance, partially offset by the gain on NCM transactions of $64,441,000 and a gain on disposition of assets of approximately $9,719,000. Net earnings
during the year ended April 1, 2010 were favorably impacted by a $71,765,000 reduction in the valuation allowance for deferred income tax assets, partially offset by an expense of $11,276,000
related to the redemption of our 85/8% Senior Notes due 2012 and losses of

46

---



Table of Contents

$8,861,000
related to the allowance for doubtful accounts and direct write-offs of amounts due from Cinemex included in discontinued operations.

For the Year Ended April 1, 2010 and April 2, 2009

Revenues.Total revenues increased 6.7%, or $152,252,000, during the year ended April 1, 2010 compared to the year ended
April 2, 2009.
Admissions revenues increased 8.3%, or $131,525,000, during the year ended April 1, 2010 compared to the year ended April 2, 2009, due to a 6.1% increase in average ticket prices and a
2.1% increase in attendance. Admissions revenues at comparable theatres (theatres opened on or before the first quarter of fiscal 2009) increased 8.5%, or $131,470,000, during the year ended
April 1, 2010 from the comparable period last year. The increase in average ticket price was primarily due to increases in attendance from IMAX and 3D film product where we are able to charge
more per ticket than for a standard 2D film, as well as our practice of periodically reviewing ticket prices and making selective adjustments based upon such factors as general inflationary trends and
conditions in local markets. Attendance was positively impacted by more favorable 3D and IMAX film product during the year ended April 1, 2010 as compared to the year ended April 2,
2009, as well as by an increase in the number of IMAX and 3D enabled screens that we operate. Concessions revenues increased 3.3%, or $20,465,000, during the year ended April 1, 2010 compared
to the year ended April 2, 2009, due primarily to the increase in attendance. Other theatre revenues increased 0.4%, or $262,000, during the year ended April 1, 2010 compared to the year
ended April 2, 2009, primarily due to increases in on-line ticket fees, partially offset by a reduction in theatre rentals.

Operating costs and expenses.Operating costs and expenses increased 1.8%, or $40,671,000 during the year ended April 1, 2010
compared to the
year ended April 2, 2009. Film exhibition costs increased 10.2%, or $85,976,000, during the year ended April 1, 2010 compared to the year ended April 2, 2009 due to the increase
in admissions revenues and the increase in film exhibition costs as a percentage of admissions revenues. As a percentage of admissions revenues, film exhibition costs were 54.2% in the current period
and 53.3% in the prior year period primarily due to an increase in admissions revenues on higher grossing films, which typically carry a higher film cost as a percentage of admissions revenues.
Concession costs increased 7.5%, or $5,075,000, during the year ended April 1, 2010 compared to the year ended April 2, 2009 due to an increase in concession costs as a percentage of
concessions revenues and the increase in concession revenues. As a percentage of concessions revenues, concession costs were 11.3% in the current period compared with 10.8% in the prior period. As a
percentage of revenues, operating expense was 25.3% in the current period as compared to 25.4% in the prior period. Rent expense decreased 1.8%, or $8,139,000, during the year ended April 1,
2010 compared to the year ended April 2, 2009 primarily due to rent reductions from landlords related to their failure to meet co-tenancy provisions in certain lease agreements and
renegotiations on more favorable terms. Rent reductions related to co-tenancy may not continue should our landlords meet the related co-tenancy provisions in the future.

General and Administrative Expense:

Merger, acquisition and transaction costs.Merger, acquisition and transaction costs increased $1,630,000 during the year ended
April 1, 2010
compared to the year ended April 2, 2009 primarily due to costs incurred related to the Kerasotes acquisition during the current year.

Management fees.Management fees were unchanged during the year ended April 1, 2010. Management fees of $1,250,000 are paid
quarterly, in
advance, to our Sponsors in exchange for consulting and other services.

Other.Other general and administrative expense increased 7.9%, or $4,230,000, during the year ended April 1, 2010 compared to the
year ended
April 2, 2009 due primarily to increases in annual incentive compensation of approximately $12,000,000 based on improved operating performance and

47

---



Table of Contents

increases
in net periodic pension expense of $4,654,000, partially offset by decreases in cash severance payments of $7,014,000 to our former Chief Executive Officer made in the prior year and a
decrease in expense related to a union-sponsored pension plan of $3,879,000. During the year ended April 2, 2009, we recorded $5,279,000 of expense related to our partial withdrawal liability
for a union-sponsored pension plan. During the year ended April 1, 2010, we recorded $1,400,000 of expense related to our estimated complete withdrawal from the union-sponsored pension plan.

Depreciation and amortization.Depreciation and amortization decreased 6.5%, or $13,071,000, compared to the prior year due primarily
to the
impairment of long-lived assets in fiscal 2009.

Impairment of long-lived assets.During the year ended April 1, 2010, we recognized non-cash impairment losses of
$3,765,000 related to theatre fixed assets and real estate recorded in other long-term assets. We recognized an impairment loss of $2,330,000 on five theatres with 41 screens (in Florida,
California, New York, Utah and Maryland). Of the theatre charge, $2,330,000 was related to property, net. We also adjusted the carrying value of undeveloped real estate assets based on a recent
appraisal which resulted in an impairment charge of $1,435,000. During the year ended April 2, 2009, we recognized non-cash impairment losses of $73,547,000 related to theatre fixed
assets, internal use software and assets held for sale. We recognized an impairment loss of $65,636,000 on 34 theatres with 520 screens (in Arizona, California, Canada, Florida, Georgia, Illinois,
Maryland, Massachusetts, Michigan, New York, North Carolina, Ohio, Texas, Virginia, Washington and Wisconsin). Of the theatre charge, $1,365,000 was related to intangible assets, net, and $64,271,000
was related to property, net. We recognized an impairment loss on abandonment of internal use software, recorded in other long-term assets of $7,125,000 when management determined that the
carrying value would not be realized through future use. We adjusted the carrying value of our assets held for sale to reflect the subsequent sales proceeds received in January 2009 and declines in
fair value, which resulted in impairment charges of $786,000.

Other expense (income).Other expense (income) includes $13,591,000 and $14,139,000 of income related to the derecognition of gift card
liabilities,
as to which we believe future redemption to be remote, during the year ended April 1, 2010 and April 2, 2009, respectively. Other (income) expense includes a loss on extinguishment of
indebtedness of $11,276,000 related to the Cash Tender Offer during the year ended April 1, 2010.

Interest expense.Interest expense increased 8.5%, or $10,363,000, primarily due to an increase in interest expense related to the
issuance of the
Notes due 2019, partially offset by a decrease in interest rates on the senior secured credit facility and extinguishment of debt from the Cash Tender Offer.

Equity in earnings of non-consolidated entities.Equity in earnings of non-consolidated entities was $30,300,000 in the
current year compared to $24,823,000 in the prior year. Equity in earnings related to our investment in National CineMedia, LLC were $34,436,000 and $27,654,000 for the year ended
April 1, 2010 and April 2, 2009, respectively. We recognized an impairment loss of $2,742,000 related to an equity method investment in one U.S. motion picture theatre during the year
ended April 2, 2009.

Investment income.Investment income was $205,000 for the year ended April 1, 2010 compared to $1,696,000 for the year ended
April 2,
2009. The year ended April 2, 2009 includes a gain of $2,383,000 from the May 2008 sale of our investment in Fandango, which was the result of receiving the final distribution from the general
claims escrow account. During the year ended April 2, 2009, we recognized
an impairment loss of $1,512,000 related to unrealized losses previously recorded in accumulated other comprehensive income on marketable securities related to one of our deferred compensation plans
when we determined the decline in fair value below historical cost to be other than temporary.

48

---





Table of Contents

Income tax provision (benefit).The income tax provision (benefit) from continuing operations was a benefit of $68,800,000 for the year
ended
April 1, 2010 and a provision of $5,800,000 for the year ended April 2, 2009. Our income tax benefit in fiscal 2010 includes the release of $71,765,000 of valuation allowance for
deferred tax assets. See Note 10Income Taxes to the Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K for our effective
income tax rate reconciliation.

Earnings (loss) from discontinued operations, net.On December 29, 2008, we sold our operations in Mexico, including 44 theatres
and 493
screens. The results of operations of the Cinemex theatres have been classified as discontinued operations for all years presented and includes bad debt expense related to amounts due from Cinemex of
$8,861,000 for the year ended April 1, 2010. See Note 3Discontinued Operations for the components of the earnings from discontinued operations.

Net earnings (loss).Net earnings (loss) were $69,790,000 and $(81,172,000) for the year ended April 1, 2010 and April 2, 2009,

respectively. Net earnings were favorably impacted by a $71,765,000 reduction in
the valuation allowance for deferred income tax assets. Net earnings during the year ended April 1, 2010 were negatively impacted by an expense of $11,276,000 related to the Cash Tender Offer
and by losses of $8,861,000 related to the allowance for doubtful accounts and direct write-offs of amounts due from Cinemex included in discontinued operations. Net loss for the year
ended April 2, 2009 was primarily due to impairment charges of $77,801,000.

Liquidity and Capital Resources

Our consolidated revenues are primarily collected in cash, principally through box office admissions and theatre concessions sales. We
have an operating "float" which partially finances our operations and which generally permits us to maintain a smaller amount of working capital capacity. This float exists because admissions revenues
are received in cash, while exhibition costs (primarily film rentals) are ordinarily paid to distributors from 20 to 45 days following receipt of box office admissions revenues. Film
distributors generally release the films which they anticipate will be the most successful during the summer and holiday seasons. Consequently, we typically generate higher revenues during such
periods.

We
have the ability to borrow against our senior secured credit facility to meet obligations as they come due (subject to limitations on the incurrence of indebtedness in our various
debt instruments) and had approximately $180,226,000 under our Senior Secured Revolving Credit Facility available to meet these obligations as of March 31, 2011. Reference is made to
Note 8Corporate Borrowings and Capital and Financing Lease Obligations to the Consolidated Financial Statements included elsewhere in this Annual Report on
Form 10-K for information about our outstanding indebtedness and outstanding indebtedness of Parent.

We
believe that cash generated from operations and existing cash and equivalents will be sufficient to fund operations and planned capital expenditures and acquisitions currently and for
at least the next 12 months and enable us to maintain compliance with covenants related to the Senior Secured Credit Facility and our 8% Senior Subordinated Notes due 2014 (the "Notes due
2014"), Notes due 2019, and Notes due 2020. We are considering various options with respect to the utilization of cash and equivalents on hand in excess of our anticipated operating needs. Such
options might include, but are not limited to, acquisitions of theatres or theatre companies, repayment of corporate borrowings of AMCE and Parent and payment of dividends.

49

---



Table of Contents

Cash Flows from Operating Activities

Cash flows provided by operating activities, as reflected in the Consolidated Statements of Cash Flows, were $92,072,000, $258,015,000
and $200,701,000 during the years ended March 31, 2011, April 1, 2010 and April 2, 2009, respectively. The decrease in operating cash flows provided by operating activities during
the year ended March 31, 2011 was primarily due to the decrease in net earnings and attendance and also lower amounts of accounts payables and accrued expenses and other liabilities associated
with lower levels of business volume and including payments of amounts acquired in the Kerasotes acquisition as well as payments made for merger, acquisition and transaction costs in connection with
the Kerasotes acquisition. The increase in operating cash flows during the year ended April 1, 2010 is primarily due to an increase in accrued expenses and other liabilities as a result of
increases in accrued interest and annual incentive compensation and the increase in attendance. We had working capital surplus (deficit) as of March 31, 2011 and April 1, 2010 of
$(39,596,000) and $143,172,000, respectively. Working capital includes $141,237,000 and $125,842,000 of deferred revenue as of March 31, 2011 and April 1, 2010, respectively.

Cash Flows from Investing Activities

Cash provided by (used in) investing activities, as reflected in the Consolidated Statement of Cash Flows, were $(250,037,000),
$(96,337,000) and $100,925,000 during the years ended March 31, 2011, April 1, 2010 and April 2, 2009, respectively. Cash outflows from investing activities include capital
expenditures during the years ended March 31, 2011, April 1, 2010, and April 2, 2009 of $129,347,000, $97,011,000 and $121,456,000, respectively. Our capital expenditures
primarily consisted of maintaining our theatre circuit, technology upgrades, strategic initiatives and remodels. We expect that our gross capital expenditures in fiscal 2012 will be approximately
$140,000,000 to $150,000,000.

During
the year ended March 31, 2011, we paid $280,606,000 for the purchase of Kerasotes theatres at closing, net of cash acquired. The purchase included working capital and other
purchase price adjustments as described in the Unit Purchase Agreement.

During
the year ended March 31, 2011, we received net proceeds of $102,224,000 from the sale of 6,655,193 shares of common stock of NCM, Inc. for $16.00 per share and
reduced our related investment in NCM by $37,576,000, the average carrying amount of the shares owned.

We
received $57,400,000 in cash proceeds from the sale of certain theatres required to be divested in connection with the Kerasotes acquisition during the year ended March 31,
2011 and received $991,000 for the sale of real estate acquired from Kerasotes.

On
March 26, 2010, we acquired 117 digital projection systems from third party lessors for $6,784,000 and sold these systems together with seven digital projectors that we owned
to DCIP for cash proceeds of $6,570,000 on the same day.

Cash
flows for the year ended April 2, 2009 include proceeds from the sale of Cinemex of $224,378,000 and proceeds from the sale of Fandango of $2,383,000. We have received an
additional $1,840,000 and $4,315,000 of purchase price from Cinemex related to tax payments and refunds and a working capital calculation and post closing adjustments during the years ended
March 31, 2011 and April 1, 2010, respectively.

We
fund the costs of constructing, maintaining and remodeling new theatres through existing cash balances, cash generated from operations or borrowed funds, as necessary. We generally
lease our theatres pursuant to long-term non-cancelable operating leases which may require the developer, who owns the property, to reimburse us for the construction costs. We
may decide to own the real estate assets of new theatres and, following construction, sell and leaseback the real estate assets pursuant to long-term non-cancelable operating
leases.

50

---



Table of Contents

Cash Flows from Financing Activities

Cash flows provided by (used in) financing activities, as reflected in the Consolidated Statement of Cash Flows, were $(35,122,000),
$(199,132,000), and $129,203,000 during the years ended March 31, 2011, April 1, 2010, and April 2, 2009, respectively.

Proceeds
from the issuance of the 9.75% Senior Subordinated Notes due 2020 were $600,000,000 and deferred financing costs paid related to the issuance of the 9.75% Senior Notes due 2020
were $12,699,000 during the year ended March 31, 2011. In addition, deferred financing costs paid related to the Senior Secured Credit Facility were $1,943,000. During the year ended
April 1, 2010, we issued $600,000,000 aggregate principal amount of 8.75% Senior Notes due 2019 ("Notes due 2019"). Proceeds from the issuance of the Notes due 2019 were $585,492,000 and
deferred financing costs paid related to the issuance of the 8.75% Senior Notes due 2019 were $16,259,000.

During
the year ended March 31, 2011, we made principal payments of $325,000,000 to repurchase our 11% Senior Subordinated Notes due 2016. In addition, we made payments for tender
offer and consent consideration of $18,446,000 for our Notes due 2016.

During
fiscal 2011, we used cash on hand to pay four dividend distributions to Holdings in an aggregate amount of $278,258,000. Holdings and Parent used the available funds to make cash
payments to extinguish the 12% Senior Discount Notes due 2014 and the related cash interest payments and to pay corporate overhead expenses incurred in the ordinary course of business and to pay a
dividend to Parent. During fiscal 2010, we used cash on hand to pay two dividend distributions to Holdings in an aggregate amount of $329,981,000. Holdings and Parent used the available funds to make
cash interest payments on its 12% Senior Discount Notes due 2014, to pay corporate overhead expenses incurred in the ordinary course of business and to pay a dividend to Parent. Parent made payments
to purchase term loans and reduced the principal balance of its Parent Term Loan Facility from $466,936,000 to $193,290,000 with a portion of the dividend proceeds. During fiscal 2009, we paid two
cash dividends totaling $35,989,000 to Holdings and borrowed $185,000,000 under our senior secured credit facility.

During
the fiscal year ended April 1, 2010, we made principal payments of $250,000,000 in connection with a cash tender offer and redemption of all of our then outstanding
85/8% Senior Notes due 2012, and we repaid $185,000,000 of revolving credit borrowings under our senior secured credit facility.

51

---



Table of Contents

Commitments and Contingencies

Minimum annual cash payments required under existing capital and financing lease obligations, maturities of corporate borrowings,
future minimum rental payments under existing operating leases, furniture, fixtures, and equipment and leasehold purchase provisions, ADA related betterments and pension funding that have initial or
remaining non-cancelable terms in excess of one year as of March 31, 2011 are as follows:

(In thousands)

Minimum
Capital and
Financing
Lease
Payments

Principal
Amount of
Corporate
Borrowings(1)

Interest
Payments on
Corporate
Borrowings(2)

Minimum
Operating
Lease
Payments

Capital
Related
Betterments(3)

Pension
Funding(4)

Total
Commitments2012

$
9,424

$
6,500

$
153,975

$
422,605

$
56,426

$
9,199

$
658,1292013


8,456


145,287


153,366


426,255


7,580





740,9442014


8,107


305,004


149,160


407,275


1,000





870,5462015


8,129


5,004


126,985


402,757


1,000





543,8752016


8,235


5,004


126,810


390,583


1,000





531,632Thereafter


72,699


1,649,076


454,717


2,240,031








4,416,523Total

$
115,050

$
2,115,875

$
1,165,013

$
4,289,506

$
67,006

$
9,199

$
7,761,649


(1)Represents
cash requirements for the payment of principal on corporate borrowings. Total amount does not equal carrying amount due to unamortized discounts
on issuance.(2)Interest
expense on the term loan portion of our senior secured credit facility was estimated at 1.75% for the Term Loan due 2013 and 3.50% for the Term
Loan due 2016 based upon the interest rate in effect as of March 31, 2011.(3)Includes
committed capital expenditures, investments, and betterments to our circuit including the estimated cost of ADA related betterments. Does not
include planned, but non-committed capital expenditures.(4)We
fund our pension plan such that the plan is in compliance with Employee Retirement Income Security Act ("ERISA") and the plan is not considered "at risk"
as defined by ERISA guidelines. The plan has been frozen effective December 31, 2006. Also included are payments due under a withdrawal liability for a union sponsored plan. The retiree health
plan is not funded.


As
discussed in Note 10Income Taxes to the Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K, we adopted
accounting for uncertainty in income taxes per the guidance in ASC 740,Income Taxes, ("ASC 740"). At March 31, 2011, our company has recognized
an obligation for unrecognized benefits of $28,200,000. There are currently unrecognized tax benefits which we anticipate will be resolved in the next 12 months; however, we are unable at this
time to estimate what the impact on our effective tax rate will be. Any amounts related to these items are not included in the table above.

Fee Agreement

In connection with the holdco merger, on June 11, 2007, Parent, Holdings, AMCE and the Sponsors entered into a Fee Agreement
(the "Management Fee Agreement"), which replaced the December 23, 2004 fee agreement among Holdings, AMCE and the Sponsors, as amended and restated on January 26, 2006 (the "original fee
agreement"). The Management Fee Agreement provides for an annual management fee of $5,000,000, payable quarterly and in advance to our Sponsors, on a pro rata basis, until the earlier of
(i) the twelfth anniversary from December 23, 2004, (ii) such time as the Sponsors own less than 20% in the aggregate of Parent. In addition, the Management Fee Agreement

52

---



Table of Contents

provides
for reimbursements by AMCE to the Sponsors for their out-of-pocket expenses, and by AMCE to Parent of up to $3,500,000 for fees payable by Parent in any single fiscal
year in order to maintain Parents' and AMCE's corporate existence, corporate overhead expenses and salaries or other compensation of certain employees.

Upon
the consummation of a change in control transaction or an IPO, the Sponsors will receive, in lieu of quarterly payments of the annual management fee, an automatic fee equal to the
net present value of the aggregate annual management fee that would have been payable to the Sponsors during the remainder of the term of the fee agreement (assuming a twelve year term from the date
of the original fee agreement), calculated using the treasury rate having a final maturity date that is closest to the twelfth anniversary of the date of the original fee agreement date. As of
March 31, 2011, we estimate this amount would be $25,835,000 should a change in control transaction or an IPO occur.

The
Management Fee Agreement also provides that AMCE will indemnify the Sponsors against all losses, claims, damages and liabilities arising in connection with the management services
provided by the Sponsors under the fee agreement.

Investment in NCM LLC

We hold an investment of 15.66% in NCM LLC accounted for following the equity method as of March 31, 2011. The fair
market value of these units is approximately $323,435,000 as of March 31, 2011, based upon the closing price of NCM, Inc. common stock. We have little tax basis in these units;
therefore, the sale of all these units would require us to report taxable income of approximately $472,305,000, including distributions received from NCM LLC that were
previously deferred. Our investment in NCM LLC is a source of liquidity for us and we expect that any sales we may make of NCM LLC units would be made in such a manner to most
efficiently manage any related tax liability. We have available net operating loss carryforwards which could reduce any related tax liability.

Impact of Inflation

Historically, the principal impact of inflation and changing prices upon us has been to increase the costs of the construction of new
theatres, the purchase of theatre equipment, rent and the utility and labor costs incurred in connection with continuing theatre operations. Film exhibition costs, our largest cost of operations, are
customarily paid as a percentage of admissions revenues and hence, while the film exhibition costs may increase on an absolute basis, the percentage of admissions revenues represented by such expense
is not directly affected by inflation. Except as set forth above, inflation and changing prices have not had a significant impact on our total revenues and results of operations.

Off-Balance Sheet Arrangements

Other than the operating leases detailed above in this Form 10-K, under the heading "Commitments and Contingencies," we have no other
off-balance sheet arrangements.

New Accounting Pronouncements

See Note 1The Company and Significant Accounting Policies to the Consolidated Financial Statements included
elsewhere in this Annual Report on Form 10-K for information regarding recently issued accounting standards.

Item 7A.    Quantitative and Qualitative Disclosures about Market Risk

We are exposed to various market risks including interest rate risk and foreign currency exchange rate risk.

53

---



Table of Contents

Market risk on variable-rate financial instruments.We maintain a Senior Secured Credit Facility comprised of a $192,500,000 revolving
credit facility and a $650,000,000 term loan facility, which permits borrowings at a rate equal to an applicable margin plus, at our option, either a base rate or LIBOR. Increases in market interest
rates would cause interest expense to increase and earnings before income taxes to decrease. The change in interest expense and earnings before income taxes would be dependent upon the weighted
average outstanding borrowings during the reporting period following an increase in market interest rates. We had no borrowings on our revolving credit facility as of March 31, 2011 and had
$615,875,000 outstanding under the term loan facility on March 31, 2011. A 100 basis point change in market interest rates would have increased or decreased interest expense on the senior
secured credit facility by $6,268,000 during the fifty-two weeks ended March 31, 2011.

Market risk on fixed-rate financial instruments.Included in long-term corporate borrowings are principal amounts of
$300,000,000 of our Notes due 2014, $600,000,000 of our Notes due 2019, and $600,000,000 of our Notes due 2020. Increases in market interest rates would generally cause a decrease in the fair value of
the Notes due 2014, Notes due 2019, and Notes due 2020 and a decrease in market interest rates would generally cause an increase in fair value of the Notes due 2014, Notes due 2019, and Notes due
2020.

Foreign currency exchange rates.We currently operate theatres in Canada, France and the United Kingdom. As a result of these
operations, we have
assets, liabilities, revenues and expenses denominated in foreign currencies. The strengthening of the U.S. dollar against the respective currencies causes a decrease in the carrying values of assets,
liabilities, revenues and expenses denominated in such foreign currencies and the weakening of the U.S. dollar against the respective currencies causes an increase in the carrying values of these
items. The increases and decreases in
assets, liabilities, revenues and expenses are included in accumulated other comprehensive loss. Changes in foreign currency exchange rates also impact the comparability of earnings in these countries
on a year-to-year basis. As the U.S. dollar strengthens, comparative translated earnings decrease, and as the U.S. dollar weakens comparative translated earnings from foreign
operations increase. A 10% increase in the value of the U.S. dollar against all foreign currencies of countries where we currently operate theatres would increase earnings before income taxes by
approximately $2,634,000 for the fifty-two weeks ended March 31, 2011 and decrease accumulated other comprehensive loss by approximately $10,390,000 as of March 31, 2011. A
10% decrease in the value of the U.S. dollar against all foreign currencies of countries where we currently operate theatres would increase earnings before income taxes by approximately $4,083,000 for
the fifty-two weeks ended March 31, 2011 and increase accumulated other comprehensive loss by approximately $12,699,000 as of March 31, 2011.

54

---





Table of Contents

Item 8.    Financial Statements and Supplementary Data

MANAGEMENT'S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

AMC Entertainment Inc.

TO THE STOCKHOLDER OF AMC ENTERTAINMENT INC.

Management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company as
defined in Rule 12a-15(f) of the Exchange Act. With our participation, an evaluation of the effectiveness of internal control over financial reporting was conducted as of
March 31, 2011, based on the framework and criteria established inInternal ControlIntegrated Frameworkissued by the Committee of
Sponsoring Organizations of the Treadway Commission. Based on this evaluation, our management has concluded that our internal control over financial reporting was effective as of March 31,
2011.

GRAPHIC

Chief Executive Officer and President

GRAPHIC

Executive Vice President and
Chief Financial Officer

55

---



Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The
Board of Directors and Stockholder
AMC Entertainment Inc.:

We
have audited the accompanying consolidated balance sheets of AMC Entertainment Inc. (and subsidiaries) as of March 31, 2011 and April 1, 2010, and the related
consolidated statements of operations, stockholder's equity, and cash flows for the 52-week periods then ended. These consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We
conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our opinions.

In
our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of AMC Entertainment Inc. (and
subsidiaries) as of March 31, 2011 and April 1, 2010, and the results of their operations and their cash flows for the 52-week periods then ended, in conformity with U.S. generally
accepted accounting principles.

As
discussed in Note 1 to the consolidated financial statements, the Company changed its accounting treatment for business combinations due to the adoption of new accounting
requirements issued by the FASB, as of April 3, 2009.



Kansas
City, Missouri
June 3, 2011

56

---



Table of Contents

Report of Independent Registered Public Accounting Firm

To
the Board of Directors and Stockholder of AMC Entertainment, Inc.:

In
our opinion, the accompanying consolidated statements of operations, of stockholder's equity and of cash flows present fairly, in all material respects, the results of operations and
cash flows of AMC Entertainment, Inc. and its subsidiaries (the "Company") for the 52 week period ended April 2, 2009 in conformity with accounting principles generally accepted
in the United States of America. These
financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit of these
statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit provides a reasonable
basis for our opinion.

/s/
PricewaterhouseCoopers LLP

Kansas
City, Missouri
May 21, 2009

57

---



Table of Contents



AMC Entertainment Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands)

52 Weeks
Ended
March 31, 2011

52 Weeks
Ended
April 1, 2010

52 Weeks
Ended
April 2, 2009RevenuesAdmissions

$
1,697,858

$
1,711,853

$
1,580,328Concessions


664,108


646,716


626,251Other theatre


61,002


59,170


58,908Total revenues


2,422,968


2,417,739


2,265,487Operating Costs and ExpensesFilm exhibition costs


887,758


928,632


842,656Concession costs


83,187


72,854


67,779Operating expense


713,846


610,774


576,022Rent


475,810


440,664


448,803General and administrative:Merger, acquisition and transaction costs


14,085


2,280


650Management fee


5,000


5,000


5,000Other


58,136


57,858


53,628Depreciation and amortization


212,413


188,342


201,413Impairment of long-lived assets


12,779


3,765


73,547Operating costs and expenses


2,463,014


2,310,169


2,269,498Operating income (loss)


(40,046
)

107,570


(4,011
)Other expense (income)Other expense (income)


13,716


(2,559
)

(14,139
)Interest expenseCorporate borrowings


143,522


126,458


115,757Capital and financing lease obligations


6,198


5,652


5,990Equity in earnings of non-consolidated entities


(17,178
)

(30,300
)

(24,823
)Gain on NCM transactions


(64,441
)




Investment income


(391
)

(205
)

(1,696
)Total other expense


81,426


99,046


81,089Earnings (loss) from continuing operations before income taxes


(121,472
)

8,524


(85,100
)Income tax provision (benefit)


1,950


(68,800
)

5,800Earnings (loss) from continuing operations


(123,422
)

77,324


(90,900
)Earnings (loss) from discontinued operations, net of income taxes


569


(7,534
)

9,728Net earnings (loss)

$
(122,853
)
$
69,790

$
(81,172
)


See
Notes to Consolidated Financial Statements.

58

---



Table of Contents



AMC Entertainment Inc.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

March 31,
2011

April 1,
2010AssetsCurrent assets:Cash and equivalents

$
301,158

$
495,343Receivables, net of allowance for doubtful accounts of $2,036 and $2,103


26,692


25,545Other current assets


88,149


73,312Total current assets


415,999


594,200Property, net


958,722


863,532Intangible assets, net


149,493


148,432Goodwill


1,923,667


1,814,738Other long-term assets


292,364


232,275Total assets

$
3,740,245

$
3,653,177Liabilities and Stockholder's EquityCurrent liabilities:Accounts payable

$
165,416

$
175,142Accrued expenses and other liabilities


138,987


139,581Deferred revenues and income


141,237


125,842Current maturities of corporate borrowings and capital and financing lease obligations


9,955


10,463Total current liabilities


455,595


451,028Corporate borrowings


2,096,040


1,826,354Capital and financing lease obligations


62,220


53,323Deferred revenues for exhibitor services agreement


333,792


252,322Other long-term liabilities


432,439


309,591Total liabilities


3,380,086


2,892,618Commitments and contingenciesStockholder's equity:Common Stock, 1 share issued with 1¢ par value





Additional paid-in capital


551,955


828,687Accumulated other comprehensive loss


(3,991
)

(3,176
)Accumulated deficit


(187,805
)

(64,952
)Total stockholder's equity


360,159


760,559Total liabilities and stockholder's equity

$
3,740,245

$
3,653,177


See
Notes to Consolidated Financial Statements.

59

---



Table of Contents



AMC Entertainment Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

52 Weeks Ended
March 31, 2011

52 Weeks Ended
April 1, 2010

52 Weeks Ended
April 2, 2009Cash flows from operating activities:Net earnings (loss)

$
(122,853
)
$
69,790

$
(81,172
)Adjustments to reconcile net earnings (loss) to cash provided by operating activities:Depreciation and amortization


212,413


188,342


222,483Impairment of long-lived assets


12,779


3,765


73,547Deferred income taxes





(66,500
)

400Loss on extinguishment and modification of debt


11,806


3,468


Gain on NCM transactions


(64,441
)




Theatre and other closure expense


60,763


2,573


(2,262
)Loss (gain) on disposition of Cinemex


(569
)

7,534


(14,772
)Loss (gain) on dispositions


(9,719
)

1,260


(2,265
)Equity in earnings and losses from non-consolidated entities, net of distributions


18,715


5,862


6,600Change in assets and liabilities, net of acquisition:Receivables


4,261


(2,136
)

9,010Other assets


671


2,323


(2,861
)Accounts payable


(30,487
)

13,383


20,423Accrued expenses and other liabilities


(538
)

38,030


(17,819
)Other, net


(729
)

(9,679
)

(10,611
)Net cash provided by operating activities


92,072


258,015


200,701Cash flows from investing activities:Capital expenditures


(129,347
)

(97,011
)

(121,456
)Acquisition of Kerasotes, net of cash acquired


(280,606
)




Proceeds from NCM, Inc. stock sale


102,224





Proceeds from disposition of long-term assets


58,391





Purchase of digital projection equipment for sale/leaseback





(6,784
)

Proceeds from sale/leaseback of digital projection equipment


4,905


6,570


Proceeds on disposition of Fandango








2,383Proceeds on disposition of Cinemex, net of cash disposed


1,840


4,315


224,378LCE screen integration





(81
)

(4,700
)Other, net


(7,444
)

(3,346
)

320Net cash provided by (used in) investing activities


(250,037
)

(96,337
)

100,925Cash flows from financing activities:Proceeds from issuance of Senior Subordinated Notes due 2020


600,000





Proceeds from issuance of Senior Fixed Rate Notes due 2019





585,492


Repurchase of Senior Fixed Rate Notes due 2012





(250,000
)

Repurchase of Senior Subordinated Notes due 2016


(325,000
)




Payment of tender offer and consent solicitation consideration on Senior Subordinated Notes due 2016


(5,801
)




Principal payments under Term Loan


(6,500
)

(6,500
)

(6,500
)Principal payments under capital and financing lease obligations


(4,194
)

(3,423
)

(3,452
)Deferred financing costs


(14,642
)

(16,434
)

(525
)Change in construction payables


(727
)

6,714


(9,331
)Borrowing (repayment) under Revolving Credit Facility





(185,000
)

185,000Dividends paid to Marquee Holdings Inc.


(278,258
)

(329,981
)

(35,989
)Net cash provided by (used in) financing activities


(35,122
)

(199,132
)

129,203Effect of exchange rate changes on cash and equivalents


(1,098
)

(1,212
)

(3,001
)Net increase (decrease) in cash and equivalents


(194,185
)

(38,666
)

427,828Cash and equivalents at beginning of year


495,343


534,009


106,181Cash and equivalents at end of year

$
301,158

$
495,343

$
534,009SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:Cash paid (refunded) during the period for:Interest (including amounts capitalized of $64, $14, and $415)

$
150,618

$
118,895

$
125,935Income taxes, net


729


(2,033
)

16,731Schedule of non-cash investing and financing activities:Investment in NCM (See Note 6Investments)

$
86,159

$
2,290

$
5,453Investment in DCIP (See Note 6Investments)





21,768


Investment in RealD Inc. (See Note 6Investments)


27,586





See Note 2Acquisition for non-cash activities related to acquisition.


See Notes to Consolidated Financial Statements.

60

---



Table of Contents



AMC Entertainment Inc.

CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY

Common Stock



Accumulated
Other
Comprehensive
Income (Loss)Additional
Paid-in
Capital

Accumulated
Deficit

Total
Stockholder's
Equity(In thousands, except share and per share data)

Shares

AmountApril 3, 2008 through March 31, 2011Balance, April 3, 2008


1

$


$
1,190,651

$
(3,668
)
$
(53,488
)
$
1,133,495Comprehensive loss:Net loss














(81,172
)

(81,172
)Foreign currency translation adjustment











25,558





25,558Change in fair value of cash flow hedges











(1,833
)




(1,833
)Losses on interest rate swaps reclassified to interest expense corporate borrowings











5,230





5,230Pension and other benefit adjustments











(8,117
)




(8,117
)Unrealized loss on marketable securities











(109
)




(109
)Comprehensive loss

















(60,443
)ASC 715 (formerly SFAS 158) adoption adjustment














(82
)

(82
)Stock-based compensationoptions








2,622








2,622Dividends to Marquee Holdings Inc.








(35,989
)







(35,989
)Balance April 2, 2009


1





1,157,284


17,061


(134,742
)

1,039,603Comprehensive earnings:Net earnings














69,790


69,790Foreign currency translation adjustment











(13,021
)




(13,021
)Change in fair value of cash flow hedges











(6
)




(6
)Losses on interest rate swaps reclassified to interest expense corporate borrowings











558





558Pension and other benefit adjustments











(8,499
)




(8,499
)Unrealized loss on marketable securities











731





731Comprehensive earnings

















49,553Stock-based compensationoptions








1,384








1,384Dividends to Marquee Holdings Inc.








(329,981
)







(329,981
)Balance April 1, 2010


1





828,687


(3,176
)

(64,952
)

760,559Comprehensive loss:Net loss














(122,853
)

(122,853
)Foreign currency translation adjustment











(5,678
)




(5,678
)Pension and other benefit adjustments











(1,109
)




(1,109
)Unrealized gain on marketable securities











5,972





5,972Comprehensive loss

















(123,668
)Stock-based compensation








1,526








1,526Dividends to Marquee Holdings Inc.








(278,258
)







(278,258
)Balance March 31, 2011


1

$


$
551,955

$
(3,991
)
$
(187,805
)
$
360,159


See Notes to Consolidated Financial Statements

61

---



Table of Contents



AMC Entertainment Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended March 31, 2011, April 1, 2010 and April 2, 2009

NOTE 1THE COMPANY AND SIGNIFICANT ACCOUNTING POLICIES

AMC Entertainment Inc. ("AMCE" or the "Company") is an intermediate holding company, which, through its direct and indirect subsidiaries, including American
Multi-Cinema, Inc. ("AMC") and its subsidiaries, and AMC Entertainment International, Inc. ("AMCEI") and its subsidiaries (collectively with AMCE, unless the context otherwise requires,
the "Company"), is principally involved in the theatrical exhibition business and owns, operates or has interests in theatres located in the United States, Canada, China (Hong Kong), France and the
United Kingdom. The Company discontinued its operations in Mexico during the third quarter of fiscal 2009. The Company's theatrical exhibition business is conducted through AMC and its subsidiaries
and AMCEI.

AMCE
is a wholly owned subsidiary of AMC Entertainment Holdings, Inc. ("Parent"), which is owned by J.P. Morgan Partners, LLC and certain related investment funds ("JPMP"),
Apollo Management, L.P. and certain related investment funds ("Apollo"), affiliates of Bain Capital Partners ("Bain"), The Carlyle Group ("Carlyle") and Spectrum Equity Investors ("Spectrum")
(collectively the "Sponsors").

On
March 31, 2011, Marquee Holdings Inc. ("Holdings"), a direct, wholly-owned subsidiary of Parent and a holding company, the sole asset of which consisted of the capital
stock of AMCE, was merged with and into Parent, with Parent continuing as the surviving entity. As a result of the merger, AMCE became a direct subsidiary of Parent.

Use of Estimates:The preparation of financial statements in conformity with generally accepted accounting principles requires
management to make
estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Significant estimates and assumptions are used for, but not limited to: (1) Impairments, (2) Film exhibition costs,
(3) Income and operating taxes, (4) Theatre and Other Closure Expense (Income), and (5) Gift card and packaged ticket revenues. Actual results could differ from those estimates.

Principles of Consolidation:The consolidated financial statements include the accounts of AMCE and all subsidiaries, as
discussed above. All
significant intercompany balances and transactions have been eliminated in consolidation. There are no noncontrolling (minority) interests in the Company's consolidated subsidiaries; consequently, all
of its stockholder's equity, net earnings (loss) and comprehensive earnings (loss) for the periods presented are attributable to controlling interests.

Fiscal Year:The Company has a 52/53 week fiscal year ending on the Thursday closest to the last day of March. Fiscal 2011,
fiscal 2010, and fiscal
2009 reflect 52 week periods.

Revenues:Revenues are recognized when admissions and concessions sales are received at the theatres. The Company defers 100% of
the revenue
associated with the sales of gift cards and packaged tickets until such time as the items are redeemed or management believes future redemption to be remote based upon applicable laws and regulations.
During fiscal 2009, management changed its estimate of redemption rates for packaged tickets. Management believes the 18 month estimate and revised redemption rates are supported by its
continued development of specific historical redemption patterns for gift cards and that they are reflective of management's current best estimate. These changes in estimate had the effect of
increasing other theatre revenues and earnings from continuing operations by approximately $2,600,000 and $1,600,000, respectively, during fiscal 2009. During the

62

---



Table of Contents

AMC Entertainment Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended March 31, 2011, April 1, 2010 and April 2, 2009

NOTE 1THE COMPANY AND SIGNIFICANT ACCOUNTING POLICIES (Continued)

fiscal
years ended March 31, 2011, April 1, 2010, and April 2, 2009, the Company recognized $14,131,000, $13,591,000, and $14,139,000 of income, respectively, related to the
derecognition of gift card liabilities where management believes future redemption to be remote which was recorded in other expense (income) in the Consolidated Statements of Operations.

Film Exhibition Costs:Film exhibition costs are accrued based on the applicable box office receipts and estimates of the final
settlement to the
film licenses. Film exhibition costs include certain advertising costs. As of March 31, 2011 and April 1, 2010, the Company recorded film payables of $62,598,000 and $78,499,000,
respectively, which is included in accounts payable in the accompanying Consolidated Balance Sheets.

Concession Costs:The Company records payments from vendors as a reduction of concession costs when earned unless it is
determined that the payment
was for the fair value of services provided to the vendor where the benefit to the vendor is sufficiently separable from the Company's purchase of the vendor's products. In the latter instance,
revenue is recorded when and if the consideration received is in excess of fair value, which excess is recorded as a reduction of concession costs. In addition, if the payment from the vendor is for a
reimbursement of expenses, then those expenses are offset.

Screen Advertising:On March 29, 2005, the Company and Regal Entertainment Group combined their respective cinema screen
advertising
businesses into a new joint venture company called National CineMedia, LLC ("NCM") and on July 15, 2005, Cinemark Holdings, Inc. ("Cinemark") joined NCM, as one of the founding
members. NCM engages in the marketing and sale of cinema advertising and promotions products; business communications and training services; and the distribution of digital alternative content. The
Company records its share of on-screen advertising revenues generated by NCM in other theatre revenues.

Guest Frequency Program:The Company has a guest frequency program,AMC Stubs,
which allows members
to earn $10 for each $100 purchase completed at its theatres. Amounts earned are redeemable by members on future purchases at the Company's theatres. The value of amounts earned are included in
deferred revenues and income and recorded as a reduction in admissions and concessions revenues at the time the amounts are earned, based on the selling price of awards that are projected to be
redeemed. Earned awards must be redeemed no later than 90 days from the date of issuance. The Company accounts for membership fee revenue for its guest frequency program on a deferred basis,
net of estimated refunds, whereby revenue is recognized ratably over the one-year membership period.

Advertising Costs:The Company expenses advertising costs as incurred and does not have any direct-response advertising recorded
as assets.
Advertising costs were $6,723,000, $9,103,000 and $18,121,000 for the periods ended March 31, 2011, April 1, 2010 and April 2, 2009, respectively, and are recorded in operating
expense in the accompanying Consolidated Statements of Operations.

Cash and Equivalents:Under the Company's cash management system, checks issued but not presented to banks frequently result in
book overdraft
balances for accounting purposes and are classified within accounts payable in the balance sheet. The change in book overdrafts are reported as a component of operating cash flows for accounts payable
as they do not represent bank overdrafts. The

63

---



Table of Contents

AMC Entertainment Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended March 31, 2011, April 1, 2010 and April 2, 2009

NOTE 1THE COMPANY AND SIGNIFICANT ACCOUNTING POLICIES (Continued)

amount
of these checks included in accounts payable as of March 31, 2011 and April 1, 2010 was $54,619,000 and $60,943,000, respectively. All highly liquid debt instruments and
investments purchased with an original maturity of three months or less are classified as cash equivalents.

Intangible Assets:Intangible assets are recorded at cost or fair value, in the case of intangible assets resulting from
acquisitions, and are
comprised of lease rights, amounts assigned to theatre leases acquired under favorable terms, customer relationship intangible assets, management contracts, trademarks and trade names each of which
are being amortized on a straight-line basis over the estimated remaining useful lives of the assets except for a customer relationship intangible asset, the AMC trademark and the
Kerasotes trade names. The customer relationship intangible asset is amortized over eight years based upon the pattern in which the economic benefits of the intangible asset are expected to be
consumed or otherwise used up. This pattern indicates that over 2/3rds of the cash flow generated from the asset is derived during the first five years. The AMC trademark and Kerasotes trade names are
considered indefinite lived intangible assets, and therefore are not amortized
but rather evaluated for impairment annually. In fiscal 2011, 2010 and 2009, the Company impaired favorable lease intangible assets in the amount of $1,334,000, $0 and $1,364,000, respectively.

Investments:The Company accounts for its investments in non-consolidated entities using either the cost or equity methods of
accounting
as appropriate, and has recorded the investments within other long-term assets in its Consolidated Balance Sheets and records equity in earnings and losses of those entities accounted for
following the equity method of accounting within equity in earnings of non-consolidated entities in its Consolidated Statements of Operations. The Company follows the guidance in ASC
323-30-35-3, which prescribes the use of the equity method for investments where the Company has significant influence. The Company classifies gains and losses on
sales of and changes of interest in equity method investments within equity in earnings of non-consolidated entities or in separate line items on the face of the Consolidated Statements of
Operations when material, and classifies gains and losses on sales of investments accounted for using the cost method in investment income. Gains and losses on cash sales are recorded using the
weighted average cost of all interests in the investments. Gains and losses related to non-cash negative common unit adjustments are recorded using the weighted average cost of those units accounted
for as Tranche 2 Investments in NCM which were received in connection with prior common unit adjustments. See Note 6Investments for further discussion of our investments in
NCM. As of March 31, 2011, the Company holds equity method investments comprised of a 15.66% interest in NCM, a joint venture that markets and sells cinema advertising and promotions; a 26.22%
interest in Movietickets.com, a joint venture that provides moviegoers with a way to buy movie tickets online, access local showtime information, view trailers and read reviews; a 29% interest in
Digital Cinema Implementation Partners LLC, a joint venture charged with implementing digital cinema in the Company's theatres; a 50% ownership interest in two U.S. motion picture theatres and
one IMAX screen; and a 50% interest in Midland Empire Partners, LLC, a joint venture developing live and film entertainment venues in the Power & Light District of Kansas City, Missouri.
During fiscal 2011, the Company formed a motion picture distribution company, Open Road Films and holds a 50% ownership interest. At March 31, 2011, the Company's recorded investments are less
than its proportional ownership of the underlying equity in these entities by approximately $8,307,000, excluding NCM. Included in equity in earnings of non-consolidated entities for the
52 weeks ended March 31, 2011 is an impairment charge of $8,825,000 related to a joint

64

---



Table of Contents

AMC Entertainment Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended March 31, 2011, April 1, 2010 and April 2, 2009

NOTE 1THE COMPANY AND SIGNIFICANT ACCOUNTING POLICIES (Continued)

venture
investment in Midland Empire Partners, LLC. The decline in the fair market value of the investment was considered other than temporary due to inadequate projected future cash flows.
Included in equity in earnings of non-consolidated entities for the 52 weeks ended April 2, 2009 is an impairment charge of $2,742,000 related to a theatre joint venture
investment. The decline in the fair market value of the investment was considered other than temporary due to competitive theatre builds.

The
Company's investment in RealD Inc. is an available-for-sale marketable equity security and is carried at fair value (Level 1). Unrealized gains
and losses on available-for-sale securities are included in the Company's Consolidated
Balance Sheets as a component of accumulated other comprehensive loss. See Note 6Investments for further discussion of our investment in RealD Inc.

Goodwill:Goodwill represents the excess of cost over fair value of net tangible and identifiable intangible assets related to
acquisitions. The
Company is not required to amortize goodwill as a charge to earnings; however, the Company is required to conduct an annual review of goodwill for impairment.

The
Company's recorded goodwill was $1,923,667,000 and $1,814,738,000 as of March 31, 2011 and April 1, 2010, respectively. The Company evaluates goodwill and its
trademarks for impairment annually as of the beginning of the fourth fiscal quarter or more frequently as specific events or circumstances dictate. The Company's goodwill is recorded in its Theatrical
Exhibition operating segment which is also the reporting unit for purposes of evaluating recorded goodwill for impairment. If the carrying value of the reporting unit exceeds its fair value the
Company is required to reallocate the fair value of the reporting unit as if the reporting unit had been acquired in a business combination and the fair value of the reporting unit was the price paid
to acquire the reporting unit. The Company determines fair value by using an enterprise valuation methodology determined by applying multiples to cash flow estimates less net indebtedness, which the
Company believes is an appropriate method to determine fair value. There is considerable management judgment with respect to cash flow estimates and appropriate multiples and discount rates to be used
in determining fair value and such management estimates fall under Level 3 within the fair value measurement hierarchy, see Note 15Fair Value Measurements.

The
Company performed its annual impairment analysis during the fourth quarter of fiscal 2011. The fair value of the Company's Theatrical Exhibition operations exceed the carrying value
by more than 10% and management does not believe that impairment is probable.

Other Long-term Assets:Other long-term assets are comprised principally of investments in partnerships and joint ventures,
costs incurred in connection with the issuance of debt securities, which are being amortized to interest expense over the respective lives of the issuances, and capitalized computer software, which is
amortized over the estimated useful life of the software.

Leases:The majority of the Company's operations are conducted in premises occupied under lease agreements with initial base
terms ranging generally
from 15 to 20 years, with certain leases containing options to extend the leases for up to an additional 20 years. The Company does not believe that exercise of the renewal options are
reasonably assured at the inception of the lease agreements and, therefore, considers the initial base term as the lease term. Lease terms vary but generally the leases provide for fixed and
escalating rentals, contingent escalating rentals based on the Consumer

65

---



Table of Contents

AMC Entertainment Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended March 31, 2011, April 1, 2010 and April 2, 2009

NOTE 1THE COMPANY AND SIGNIFICANT ACCOUNTING POLICIES (Continued)

Price
Index not to exceed certain specified amounts and contingent rentals based on revenues with a guaranteed minimum.

The
Company records rent expense for its operating leases on a straight-line basis over the base term of the lease agreements commencing with the date the Company has
"control and access" to the leased premises, which is generally a date prior to the "lease commencement date" in the lease agreement. Rent expense related to any "rent holiday" is recorded as
operating expense, until construction of the leased premises is complete and the premises are ready for their intended use. Rent charges upon completion of the leased premises subsequent to the
theatre opening date are expensed as a component of rent expense.

Occasionally,
the Company will receive amounts from developers in excess of the costs incurred related to the construction of the leased premises. The Company records the excess amounts
received from developers as deferred rent and amortizes the balance as a reduction to rent expense over the base term of the lease agreement.

The
Company evaluates the classification of its leases following the guidance in ASC 840-10-25. Leases that qualify as capital leases are recorded at the present
value of the future minimum rentals over the base term of the lease using the Company's incremental borrowing rate. Capital lease assets are assigned an estimated useful life at the inception of the
lease that generally corresponds with the base term of the lease.

Occasionally,
the Company is responsible for the construction of leased theatres and for paying project costs that are in excess of an agreed upon amount to be reimbursed from the
developer. ASC 840-40-05-5 requires the Company to be considered the owner (for accounting purposes) of these types of projects during the construction
period and therefore is required to account for these projects as sale and leaseback transactions. As a result, the Company has recorded $42,190,000 and $30,956,000 as financing lease obligations for
failed sale leaseback transactions on its Consolidated Balance Sheets related to these types of projects as of March 31, 2011 and April 1, 2010, respectively.

Sale and Leaseback Transactions:The Company accounts for the sale and leaseback of real estate assets in accordance with ASC
840-40.
Losses on sale leaseback transactions are recognized at the time of sale if the fair value of the property sold is less than the undepreciated cost of the property. Gains on sale and leaseback
transactions are deferred and amortized over the remaining base term of the lease.

Impairment of Long-lived Assets:The Company reviews long-lived assets, including definite-lived intangibles, investments in
non-consolidated subsidiaries accounted for under the equity method, marketable equity securities and internal use software for impairment whenever events or changes in circumstances
indicate that the carrying amount of the assets may not be fully recoverable. The Company identifies impairments related to internal use software when management determines that the remaining carrying
value of the software will not be realized through future use. The Company reviews internal management reports on a quarterly basis as well as monitors current and potential future competition in the
markets where it operates for indicators of triggering events or circumstances that indicate potential impairment of individual theatre assets. The Company evaluates theatres using historical and
projected data of theatre level cash flow as its primary indicator of potential impairment

66

---



Table of Contents

AMC Entertainment Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended March 31, 2011, April 1, 2010 and April 2, 2009

NOTE 1THE COMPANY AND SIGNIFICANT ACCOUNTING POLICIES (Continued)

and
considers the seasonality of its business when making these evaluations. The Company performs impairment analysis during the fourth quarter because Christmas and New Year's holiday results
comprise a significant portion of the Company's operating cash flow and the actual results from this period, which are available during the fourth quarter of each fiscal year, are an integral part of
the impairment analysis. Under these analyses, if the sum of the estimated future cash flows, undiscounted and without interest charges, are less than the carrying amount of the asset, an impairment
loss is recognized in the amount by which the carrying value of the asset exceeds its estimated fair value. Assets are evaluated for impairment on an individual theatre basis, which management
believes is the lowest level for which there are identifiable cash flows. The impairment evaluation is based on the estimated cash flows from continuing use until the expected disposal date for the
fair value of furniture, fixtures and equipment. The expected disposal date does not exceed the remaining lease period unless it is probable the lease period will be extended and may be less than the
remaining lease period when the Company does not expect to operate the theatre to the end of its lease term. The fair value of assets is determined as either the expected selling price less selling
costs (where appropriate) or the present value of the estimated future cash flows. The fair value of furniture, fixtures and equipment has been determined using similar asset sales and in some
instances with the assistance of third party valuation studies. The discount rate used in determining the present value of the estimated future cash flows was based on management's expected return on
assets during fiscal 2011.

There
is considerable management judgment necessary to determine the estimated future cash flows and fair values of our theatres and other long-lived assets, and,
accordingly, actual results could vary significantly from such estimates which fall under Level 3 within the fair value measurement hierarchy, see Note 15Fair Value
Measurements. During fiscal 2011, the Company recognized non-cash impairment losses of $21,604,000 related to
long-term assets. The Company recognized an impairment loss of $11,445,000 on seven theatres with 75 screens (in Arizona, California, Maryland, Missouri and New York), which was related to
property, net and $1,334,000 related to intangibles, net. The Company also adjusted the carrying value of a joint venture investment, Midland Empire Partners, LLC which resulted in an
impairment charge of $8,825,000.

Impairment
losses in the Consolidated Statements of Operations are included in the following captions:

(In thousands)

52 weeks
Ended
March 31, 2011

52 weeks
Ended
April 1, 2010

52 weeks
Ended
April 2, 2009Impairment of long-lived assets

$
12,779

$
3,765

$
73,547Equity in earnings of non-consolidated entities


8,825





2,742Investment income








1,512Total impairment losses

$
21,604

$
3,765

$
77,801


Foreign Currency Translation:Operations outside the United States are generally measured using the local currency as the
functional currency. Assets
and liabilities are translated at the rates of exchange at the balance sheet date. Income and expense items are translated at average rates of exchange. The resultant translation adjustments are
included in foreign currency translation adjustment, a separate component of accumulated other comprehensive loss. Gains and losses from foreign currency transactions, except those intercompany
transactions of a long-term investment nature, are included in net earnings (loss).

67

---



Table of Contents

AMC Entertainment Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended March 31, 2011, April 1, 2010 and April 2, 2009

NOTE 1THE COMPANY AND SIGNIFICANT ACCOUNTING POLICIES (Continued)

Stock-based Compensation:AMCE has no stock-based compensation arrangements of its own; however its parent, AMC Entertainment
Holdings, Inc.
has granted stock options and restricted stock awards. The options and restricted stock have been accounted for using the fair value method of accounting for stock-based compensation arrangements, and
the Company has valued the options using the Black-Scholes formula and has elected to use the simplified method for estimating the expected term of "plain vanilla" share option grants as it does not
have enough historical experience to provide a reasonable estimate. See Note 9Stockholder's Equity for further information.

Income and Operating Taxes:The Company accounts for income taxes in accordance with ASC 740-10. Under
ASC 740-10, deferred income tax effects of transactions reported in different periods for financial reporting and income tax return purposes are recorded by the asset and liability
method. This method gives consideration to the future tax consequences of deferred income or expense items and recognizes changes in income tax laws in the period of enactment. The statement of
operations effect is generally derived from changes in deferred income taxes on the balance sheet.

AMCE
entered into a tax sharing agreement with Parent under which AMCE agreed to make cash payments to Parent to enable it to pay any (i) federal, state or local income taxes to
the extent that such income taxes are directly attributable to AMCE or its subsidiaries' income and (ii) franchise taxes and other fees required to maintain Parent's legal existence.

Casualty Insurance:For fiscal 2011, the Company was self-insured for general liability up to $500,000 per occurrence and
carried a
$400,000 deductible limit per occurrence for workers compensation claims. Effective April 1, 2011, the Company is self-insured for general liability up to $1,000,000 per occurrence
and carries a $500,000 deductible limit per occurrence for workers compensation claims. The Company utilizes actuarial projections of its ultimate losses to calculate its reserves and expense. The
actuarial method includes an allowance for adverse developments on known claims and an allowance for claims which have been incurred but which have not yet been reported. As of March 31, 2011
and April 1, 2010, the Company had recorded casualty insurance reserves of $14,420,000 and $16,253,000, respectively, net of estimated insurance recoveries. The Company recorded expenses
related to general liability and workers compensation claims of $12,398,000, $11,363,000 and $10,537,000 for the periods ended March 31, 2011, April 1, 2010 and April 2, 2009,
respectively.

68

---



Table of Contents

AMC Entertainment Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended March 31, 2011, April 1, 2010 and April 2, 2009

NOTE 1THE COMPANY AND SIGNIFICANT ACCOUNTING POLICIES (Continued)

Other Expense (Income):The following table sets forth the components of other expense (income):

Fifty-two Weeks Ended(In thousands)

March 31,
2011

April 1,
2010

April 2,
2009Loss on redemption of 85/8% Senior Notes due 2012

$


$
11,276

$
Loss on redemption of 11% Senior Subordinated Notes due 2016


24,332





Loss on modification of Senior Secured Credit Facility Term Loan due 2013


3,289





Loss on modification of Senior Secured Credit Facility Revolver


367





Gift card redemptions considered to be remote


(14,131
)

(13,591
)

(14,139
)Other income


(141
)

(244
)

Other expense (income)

$
13,716

$
(2,559
)
$
(14,139
)


New Accounting Pronouncements:In January 2010, the Financial Accounting Standards Board ("FASB") issued Accounting Standards
Update ("ASU")
No. 2010-06,Fair Value Measurements and Disclosures (Topic 820)Improving Disclosures about Fair Value Measurements,
("ASU 2010-06"). This Update provides a greater level of disaggregated information and enhanced disclosures about valuation techniques and inputs to fair value measurements. ASU
2010-06 is effective for interim and annual reporting periods beginning after December 15, 2009 and is effective for the Company as of the end of fiscal 2010 except for the
disclosures about purchases, sales, issuances, and settlements in the roll forward of activity in Level 3 fair value measurements. Those disclosures are effective for fiscal years beginning
after December 15, 2010, and for interim periods within those fiscal years and was effective for the Company as of the beginning of fiscal 2011. See Note 12Employee Benefit
Plans and Note 15Fair Value Measurements for required disclosures.

In
October 2009, the FASB issued ASU No. 2009-13,Revenue Recognition (Topic 605)Multiple-Deliverable Revenue
ArrangementsA Consensus of the FASB Emerging Issues Task Force, ("ASU 2009-13"). This Update provides amendments to the criteria in Subtopic
605-25 that addresses how to separate multiple-deliverable arrangements and how to measure and allocate arrangement consideration to one or more units of accounting. In addition, this
amendment significantly expands the disclosure requirements related to multiple-deliverable revenue arrangements. ASU 2009-13 will be effective prospectively for revenue arrangements
entered into or materially modified in fiscal years beginning on or after June 15, 2010 and is effective for the Company as of the beginning of fiscal 2012. Early adoption is permitted. The
Company does not expect the adoption of ASU 2009-13 to have a material impact on the Company's consolidated financial position, cash flows, or results of operations.

In
December 2007, the FASB revised ASC 805,Business Combinations, which addresses the accounting and disclosure for identifiable assets
acquired, liabilities assumed, and noncontrolling interests in a business combination. This statement requires all business combinations completed after the effective date to be accounted for by
applying the acquisition method (previously referred to as the

69

---



Table of Contents

AMC Entertainment Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended March 31, 2011, April 1, 2010 and April 2, 2009

NOTE 1THE COMPANY AND SIGNIFICANT ACCOUNTING POLICIES (Continued)

purchase
method); expands the definition of transactions and events that qualify as business combinations; requires that the acquired assets and liabilities, including contingencies, be recorded at
the fair value determined on the acquisition date and changes thereafter reflected in income, not goodwill; changes the recognition timing for restructuring costs; and requires acquisition costs to be
expensed as incurred rather than being capitalized as part of the cost of acquisition. This standard became effective in the first quarter of fiscal 2010. The Company changed its accounting treatment
for business combinations on a prospective basis. In addition, the reversal of valuation allowance for deferred tax assets related to business combinations will flow through the Company's income tax
provision, on a prospective basis, as opposed to goodwill.

NOTE 2ACQUISITION

On May 24, 2010, the Company completed the acquisition of substantially all of the assets (92 theatres and 928 screens) of Kerasotes Showplace Theatres, LLC
("Kerasotes"). Kerasotes operated 95 theatres and 972 screens in mid-sized, suburban and metropolitan markets, primarily in the Midwest. More than three quarters of the Kerasotes
theatres feature stadium seating and almost 90 percent have been built since 1994. The Company acquired Kerasotes based on their highly complementary geographic presence in certain key markets.
Additionally, the Company expects to realize synergies and cost savings related to the Kerasotes acquisition as a result of moving to the Company's operating practices, decreasing costs for newspaper
advertising and concessions and general and administrative expense savings, particularly with respect to the consolidation of corporate related functions and elimination of redundancies. The purchase
price for the Kerasotes theatres paid in cash at closing was $276,798,000, net of cash acquired, and was subject to working capital and other purchase price adjustments as described in the Unit
Purchase Agreement. The Company paid working capital and other purchase price adjustments of $3,808,000 during the second quarter of fiscal 2011, based on the final closing date working capital and
deferred revenue amounts, and has included this amount as part of the total purchase price.

The
acquisition of Kerasotes is being treated as a purchase in accordance with Accounting Standards Codification, ("ASC") 805,Business
Combinations,which requires allocation of the purchase price to the estimated fair values of assets and liabilities acquired in the transaction. The allocation of purchase
price is based on management's judgment after evaluating several factors, including bid prices

70

---



Table of Contents

AMC Entertainment Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended March 31, 2011, April 1, 2010 and April 2, 2009

NOTE 2ACQUISITION (Continued)

from
potential buyers and a valuation assessment. The following is a summary of the final allocation of the purchase price:

(In thousands)

TotalCash

$
809Receivables, net(1)


3,832Other current assets


13,428Property, net


201,520Intangible assets, net(2)


17,387Goodwill(3)


119,874Other long-term assets


4,531Accounts payable


(13,538
)Accrued expenses and other liabilities


(12,439
)Deferred revenues and income


(1,806
)Capital and financing lease obligations


(12,583
)Other long-term liabilities(4)


(39,600
)Total purchase price

$
281,415


(1)Receivables
consist of trade receivables recorded at fair value. The Company did not acquire any other class of receivables as a result of the acquisition
of Kerasotes.(2)Intangible
assets consist of certain Kerasotes' trade names, a non-compete agreement, and favorable leases. See
Note 5Goodwill and Other Intangible Assets for further information.(3)Goodwill
arising from the acquisition consists largely of the synergies and economies of scale expected from combining the operations. Amounts recorded for
goodwill are not subject to amortization and are expected to be deductible for tax purposes.(4)Other
long-term liabilities consist of certain theatre and ground leases that have been identified as unfavorable.


During
the fifty-two weeks ended March 31, 2011, the Company incurred acquisition-related costs for Kerasotes of approximately $12,600,000, which are included in
general and administrative expense: merger, acquisition and transaction costs in the Consolidated Statements of Operations.

In
connection with the acquisition of Kerasotes, the Company divested of seven Kerasotes theatres with 85 screens as required by the Antitrust Division of the United States Department of
Justice. The Company also sold the Kerasotes digital projector systems, one vacant theatre that had previously been closed by Kerasotes, and closed another Kerasotes theatre. Proceeds from the
divested and closed theatres and other property exceeded the carrying amount by approximately $10,945,000, which was recorded as a reduction to goodwill.

The
Company was also required by the Antitrust Division of the United States Department of Justice to divest of four AMC theatres with 57 screens. The Company recorded a gain on
disposition of assets of $10,056,000 for one divested AMC theatre with 14 screens during the fifty-two weeks ended

71

---



Table of Contents

AMC Entertainment Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended March 31, 2011, April 1, 2010 and April 2, 2009

NOTE 2ACQUISITION (Continued)

March 31,
2011, which reduced operating expenses by approximately $10,056,000. Additionally, the Company acquired two theatres with 26 screens that were received in exchange for three of the
AMC theatres with 43 screens. The Company recorded revenues of approximately $225,200,000 from May 24, 2010 through March 31, 2011 resulting from the acquisition of Kerasotes, and
recorded operating costs and expenses of approximately $237,500,000, including $30,900,000 of depreciation and amortization and $12,600,000 of merger, acquisition and transaction costs. The Company
recorded $934,000 of other expense related to Kerasotes.

The
unaudited pro forma financial information presented below sets forth the Company's historical statements of operations for the periods indicated and gives effect to the acquisition
as if the business combination and required divestitures had occurred as of the beginning of fiscal 2010. Such information is presented for comparative purposes to the Consolidated Statements of
Operations only and does not purport to represent what the Company's results of operations would actually have been had these

72

---



Table of Contents

AMC Entertainment Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended March 31, 2011, April 1, 2010 and April 2, 2009

NOTE 2ACQUISITION (Continued)

transactions
occurred on the date indicated or to project its results of operations for any future period or date.

(In thousands)

52 Weeks Ended
Pro forma
March 31, 2011

52 Weeks Ended
Pro forma
April 1, 2010(unaudited)

(unaudited)RevenuesAdmissions

$
1,716,426

$
1,889,149Concessions


672,761


727,481Other theatre


61,790


67,125Total revenues


2,450,977


2,683,755Operating Costs and ExpensesFilm exhibition costs


897,590


1,021,725Concession costs


84,616


82,717Operating expense


729,833


680,638Rent


480,016


479,290General and administrative:Merger, acquisition and transaction costs*


14,085


2,280Management fee


5,000


5,000Other


59,787


74,825Depreciation and amortization


216,095


214,382Impairment of long-lived assets


12,779


3,765Operating costs and expenses


2,499,801


2,564,622Operating income (loss)


(48,824
)

119,133Other expense (income)Other expense (income)


13,716


(2,559
)Interest expenseCorporate borrowings


143,522


126,458Capital and financing lease obligations


6,370


6,768Equity in earnings of non-consolidated entities


(17,178
)

(30,300
)Gain on NCM transactions


(64,441
)

Investment income


(391
)

(7
)Total other expense


81,598


100,360Earnings (loss) from continuing operations before income taxes


(130,422
)

18,773Income tax provision (benefit)


(1,450
)

(65,000
)Earnings (loss) from continuing operations


(128,972
)

83,773Earnings (loss) from discontinued operations, net of income taxes


569


(7,534
)Net earnings (loss)

$
(128,403
)
$
76,239


*Primarily
represents non-recurring transaction costs for the acquisition and related transactions.


73

---



Table of Contents

AMC Entertainment Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended March 31, 2011, April 1, 2010 and April 2, 2009

NOTE 2ACQUISITION (Continued)






52 Weeks Ended
Pro forma
March 31, 2011

52 Weeks Ended
Pro forma
April 1, 2010(unaudited)

(unaudited)Average Screenscontinuing operations(1)


5,173


5,271


(1)Includes
consolidated theatres only.


NOTE 3DISCONTINUED OPERATIONS

On December 29, 2008, we sold all of our interests in Cinemex, which then operated 44 theatres with 493 screens primarily in the Mexico City Metropolitan Area, to Entretenimiento
GM de Mexico S.A. de C.V. ("Entretenimiento"). The purchase price received at the date of the sale and in accordance with the Stock Purchase Agreement was $248,141,000. During the year ended
April 1, 2010, we received payments of $4,315,000 for purchase price related to tax payments and refunds, and a working capital calculation and post closing adjustments. During the year ended
March 31, 2011, we received payments, net of legal fees, of $1,840,000 of the purchase price related to tax payments and refunds. Additionally as of March 31, 2011, we estimate that we
are contractually entitled to receive an additional $7,251,000 of the purchase price related to tax payments and refunds. While we believe we are entitled to these amounts from Cinemex, the collection
will require litigation which was initiated by us on April 30, 2010. Resolution could take place over a prolonged period. In fiscal 2010, as a result of the litigation, we established an
allowance for doubtful accounts related to this receivable and further directly charged off certain amounts as uncollectible with an offsetting charge of $8,861,000 recorded to loss on disposal
included as a component of discontinued operations. The Company does not have any significant continuing involvement in the operations of the Cinemex theatres after the disposition. The results of
operations of the Cinemex theatres have been classified as discontinued operations for all periods presented.

74

---



Table of Contents

AMC Entertainment Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended March 31, 2011, April 1, 2010 and April 2, 2009

NOTE 3DISCONTINUED OPERATIONS (Continued)

Components
of amounts reflected as earnings (loss) from discontinued operations in the Company's Consolidated Statements of Operations are presented in the following table:

Statements of operations data:

(In thousands)

52 Weeks
Ended
March 31, 2011

52 Weeks
Ended
April 1, 2010

52 Weeks
Ended
April 2, 2009RevenuesAdmissions

$


$


$
62,009Concessions








44,744Other theatre








21,755Total revenues








128,508Operating Costs and ExpensesFilm exhibition costs








27,338Concession costs








10,158Operating expense








32,699Rent








14,934General and administrativeother








8,880Depreciation and amortization








21,070Loss (gain) on disposal


(569
)

7,534


(14,772
)Operating costs and expenses


(569
)

7,534


100,307Operating income (loss)


569


(7,534
)

28,201Other Expense (Income)Other expense








416Interest expenseCorporate borrowings








7,299Capital and financing lease obligations








582Investment income








(1,124
)Total other expense








7,173Earnings (loss) before income taxes


569


(7,534
)

21,028Income tax provision








11,300Net earnings (loss) from discontinued operations

$
569

$
(7,534
)
$
9,728


75

---



Table of Contents

AMC Entertainment Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended March 31, 2011, April 1, 2010 and April 2, 2009

NOTE 4PROPERTY

A summary of property is as follows:

(In thousands)

March 31,
2011

April 1,
2010Property owned:Land

$
51,161

$
43,384Buildings and improvements


184,671


157,142Leasehold improvements


884,214


824,461Furniture, fixtures and equipment


1,338,915


1,243,3232,458,961


2,268,310Less-accumulated depreciation and amortization


1,515,466


1,421,367943,495


846,943Property leased under capital leases:Buildings and improvements


33,864


33,864Less-accumulated amortization


18,637


17,27515,227


16,589$
958,722

$
863,532


Property
is recorded at cost or fair value, in the case of property resulting from acquisitions. The Company uses the straight-line method in computing depreciation and
amortization for financial reporting purposes. The estimated useful lives for leasehold improvements reflect the shorter of the base terms of the corresponding lease agreements or the expected useful
lives of the assets. The estimated useful lives are as follows:

Buildings and improvements

5 to 40 yearsLeasehold improvements

1 to 20 yearsFurniture, fixtures and equipment

1 to 10 years


Expenditures
for additions (including interest during construction) and betterments are capitalized, and expenditures for maintenance and repairs are charged to expense as incurred. The
cost of assets retired or otherwise disposed of and the related accumulated depreciation and amortization are eliminated from the accounts in the year of disposal. Gains or losses resulting from
property disposals are included in operating expense in the accompanying Consolidated Statements of Operations.

Depreciation
expense was $182,939,000, $163,506,000, and $174,851,000 for the periods ended March 31, 2011, April 1, 2010, and April 2, 2009, respectively.

76

---



Table of Contents

AMC Entertainment Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended March 31, 2011, April 1, 2010 and April 2, 2009

NOTE 5GOODWILL AND OTHER INTANGIBLE ASSETS

Activity of goodwill is presented below.

(In thousands)Balance as of April 1, 2010 and April 2, 2009

$
1,814,738Acquisition of Kerasotes


119,874Goodwill allocated to sales(1)


(10,945
)Balance as of March 31, 2011

$
1,923,667


(1)Reduction
in goodwill for sales of eight Kerasotes theatres, digital projector systems and early closure of one theatre. Subsequent to the acquisition, the
Company was required to sell certain acquired theatres to comply with government requirements related to the sale. No gains or losses were recorded for these transactions.


Activity
of other intangible assets is presented below:

March 31, 2011

April 1, 2010(In thousands)

Remaining
Useful Life

Gross
Carrying
Amount

Accumulated
Amortization

Gross
Carrying
Amount

Accumulated
AmortizationAmortizable Intangible Assets:Favorable leases

2 to 10 years

$
110,231

$
(55,227
)
$
104,646

$
(44,127
)Guest frequency program

2 years


46,000


(41,906
)

46,000


(38,870
)Loews' trade name




2,300


(2,300
)

2,300


(1,920
)Loews' management contracts

12 to 20 years


35,400


(29,570
)

35,400


(29,209
)Non-compete agreement

4 years


6,406


(1,084
)




Other intangible assets

11 years


13,309


(13,122
)

13,309


(13,097
)Total, amortizable



$
213,646

$
(143,209
)
$
201,655

$
(127,223
)Unamortized Intangible Assets:AMC trademark



$
74,000




$
74,000Kerasotes trade names




5,056





Total, unamortizable



$
79,056




$
74,000


77

---



Table of Contents

AMC Entertainment Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended March 31, 2011, April 1, 2010 and April 2, 2009

NOTE 5GOODWILL AND OTHER INTANGIBLE ASSETS (Continued)

Additional
information for Kerasotes intangible assets acquired on May 24, 2010 is presented below:

(In thousands)

Weighted Average
Amortization
Period

Gross Carrying
AmountAcquired Intangible Assets:Amortizable Intangible Assets:Favorable leases

3.6 years

$
5,585Non-compete agreement

5 years


6,406Management agreement(1)




340Total, amortizable

4.3 years

$
12,331Unamortizable Intangible Assets:Kerasotes trade names



$
5,056


(1)The
management agreement intangible asset was disposed of as required by the Department of Justice.


Amortization
expense associated with the intangible assets noted above is as follows:

(In thousands)

52 Weeks Ended
March 31, 2011

52 Weeks Ended
April 1, 2010

52 Weeks Ended
April 2, 2009Recorded amortization

$
14,652

$
13,934

$
21,481


Estimated
amortization expense for the next five fiscal years for intangible assets is projected below:

(In thousands)

2012

2013

2014

2015

2016Projected amortization expense

$
13,782

$
12,350

$
9,284

$
8,427

$
7,061


NOTE 6INVESTMENTS

Investments in non-consolidated affiliates and certain other investments accounted for under the equity method generally include all entities in which the Company or its
subsidiaries have significant influence, but not more than 50% voting control. Investments in non-consolidated affiliates as of March 31, 2011, include a 15.66% interest in National
CineMedia, LLC ("NCM"), a 50% interest in two U.S. motion picture theatres and one IMAX screen, a 26.22% equity interest in Movietickets.com, Inc. ("MTC"), a 50% interest in Midland
Empire
Partners, LLC and a 29% interest in Digital Cinema Implementation Partners, LLC ("DCIP"). During fiscal 2011, the Company and Regal Entertainment Group ("Regal") formed a motion picture
distribution company, Open Road Films, and each holds a 50% ownership interest. Indebtedness held by equity method investees is non-recourse to the Company.

78

---



Table of Contents

AMC Entertainment Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended March 31, 2011, April 1, 2010 and April 2, 2009

NOTE 6INVESTMENTS (Continued)

RealD Inc. Common Stock

The Company holds an investment in RealD Inc. common stock, which is accounted for as an equity security, available for sale,
and is recorded in the Consolidated Balance Sheets in other long-term assets at fair value (Level 1). Under its RealD Inc. motion picture license agreement, the Company
received a ten-year option to purchase 1,222,780 shares of RealD Inc. common stock at approximately $0.00667 per share. The stock options vested in 3 tranches upon the achievement
of screen installation targets and were valued at the underlying stock price at the date of vesting. The fair market value of the RealD Inc. common stock is recorded in other
long-term assets with an offsetting entry recorded to other long-term liabilities. The aggregate deferred lease incentive recorded in other long-term liabilities
was $27,586,000 and is being amortized on a straight-line basis over the remaining terms of the license agreements, which range from approximately 8.6 years to approximately
9.9 years, to reduce RealD license expense recorded in the statement of operations under operating expense. As of March 31, 2011, the unamortized deferred lease incentive balance
included in other long-term liabilities was $26,678,000. Any fair value adjustments of RealD Inc. common stock will be recorded to other long-term assets with an
offsetting entry to accumulated other comprehensive loss.

DCIP Transactions

On March 10, 2010, DCIP completed its financing of $660.0 million for the deployment of digital projection systems to
nearly 14,000 movie theatre screens across North America, including screens operated or managed by the Company, Cinemark Holdings, Inc. ("Cinemark") and Regal. At closing the Company
contributed 342 projection systems that it owned to DCIP, which were recorded at estimated fair value as part of an additional investment in DCIP of $21,768,000. The Company also made cash investments
in DCIP of $840,000 at closing and DCIP made a distribution of excess cash to us after the closing date and prior to fiscal 2010 year-end of $1,262,000. The Company recorded a loss
on contribution of the 342 projection systems of $563,000, based on the difference between estimated fair value and the carrying value on the date of contribution. On
March 26, 2010 the Company acquired 117 digital projectors from third party lessors for $6,784,000 and sold them together with seven digital projectors that it owned to DCIP for $6,570,000. The
Company recorded a loss on the sale of these 124 systems to DCIP of $697,000. On September 20, 2010, the Company sold 29 digital projectors in a sale and lease back to DCIP from its Canadian
theatres for $1,655,000 and incurred a loss of $110,000. On October 29, 2010, the Company sold 57 digital projectors from Kerasotes theatres in a sale and leaseback to DCIP for $3,250,000, with
no gain or loss recorded on the projectors.

The
digital projection systems leased from DCIP and its affiliates will replace most of the Company's existing 35 millimeter projection systems in its U.S. theatres. The Company adjusted
its estimated depreciable lives for its existing equipment that will be replaced and has accelerated the depreciation of these existing 35 millimeter projection systems, based on the estimated digital
projection system deployment timeframe. The net book value of the equipment expected to be replaced as of March 31, 2011 is $5,700,000. The projected depreciation expense related to these
assets as a result of the acceleration related to our digital deployment plan is $3,800,000, $1,500,000, and $400,000 in fiscal years 2012, 2013, and 2014.

79

---



Table of Contents

AMC Entertainment Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended March 31, 2011, April 1, 2010 and April 2, 2009

NOTE 6INVESTMENTS (Continued)

NCM Transactions

On March 29, 2005, the Company along with Regal combined their screen advertising operations to form NCM. On July 15,
2005, Cinemark joined the NCM joint venture by contributing its screen advertising business. On February 13, 2007, National CineMedia, Inc. ("NCM, Inc."), a newly formed entity
that now serves as the sole manager of NCM, closed its initial public offering, or IPO, of 42,000,000 shares of its common stock at a price of $21.00 per share.

In
connection with the completion of NCM, Inc.'s IPO, on February 13, 2007, the Company entered into the Third Amended and Restated Limited Liability Company Operating
Agreement (the "NCM Operating Agreement") among the Company, Regal and Cinemark (the "Founding Members"). Pursuant to the NCM Operating Agreement, the members are granted a redemption right to
exchange common units of NCM for, at the option of NCM, Inc., NCM, Inc. shares of common stock on a one-for-one basis, or a cash payment equal to the market price
of one share of NCM, Inc.'s common stock. Upon execution of the NCM Operating Agreement, each existing preferred unit of NCM held by the Founding Members was redeemed in exchange for $13.7782
per unit, resulting in the cancellation of each preferred unit. NCM used the proceeds of a new $725,000,000 term loan facility and $59,800,000 of net proceeds from the NCM, Inc. IPO to redeem
the outstanding preferred units. The Company received approximately $259,347,000 in the aggregate for the redemption of all its preferred units in NCM. The Company received approximately $26,467,000
from
selling common units in NCM to NCM, Inc. in connection with the exercise of the underwriters' over-allotment option in the NCM, Inc. IPO.

Also
in connection with the completion of NCM, Inc.'s IPO, the Company agreed to modify NCM's payment obligations under the prior Exhibitor Services Agreement ("ESA") in exchange
for approximately $231,308,000. The ESA provides a term of 30 years for advertising and approximately five year terms (with automatic renewal provisions) for meeting event and digital
programming services, and provides NCM with a five year right of first refusal for the services beginning one year prior to the end of the term. The ESA also changed the basis upon which the Company
is paid by NCM from a percentage of revenues associated with advertising contracts entered into by NCM to a monthly theatre access fee. The theatre access fee is now composed of a fixed payment per
patron and a fixed payment per digital screen, which increases by 8% every five years starting at the end of fiscal 2011 for payments per patron and by 5% annually starting at the end of fiscal 2007
for payments per digital screen. The theatre access fee paid in the aggregate to the Founding Members will not be less than 12% of NCM's aggregate advertising revenue, or it will be adjusted upward to
meet this minimum payment. Additionally, the Company entered into the First Amended and Restated Loews Screen Integration Agreement with NCM on February 13, 2007, pursuant to which the Company
paid NCM an amount that approximated the EBITDA that NCM would have generated if it had been able to sell advertising in the Loews Cineplex Entertainment Corporation ("Loews") theatre chain on an
exclusive basis commencing upon the completion of NCM, Inc.'s IPO, and NCM issued to AMC common membership units in NCM, increasing the Company's ownership interest to approximately 33.7%; such
Loews payments were made quarterly until the former screen advertising agreements expired in fiscal 2009. The Loews Screen Integration payments totaling $15,982,000 have been paid in full in fiscal
2010. The Company is also required to purchase from NCM any on-screen advertising time provided to the Company's beverage concessionaire at a negotiated rate. In addition, the Company
expects to receive

80

---



Table of Contents

AMC Entertainment Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended March 31, 2011, April 1, 2010 and April 2, 2009

NOTE 6INVESTMENTS (Continued)

mandatory
quarterly distributions of excess cash from NCM. Immediately following the NCM, Inc. IPO, the Company held an 18.6% interest in NCM.

As
a result of NCM, Inc.'s IPO and debt financing, the Company recorded a change of interest gain of $132,622,000 and received distributions in excess of its investment in NCM
related to the redemption of preferred and common units of $106,188,000. The Company reduced its investment in NCM to zero and recognized the change of interest gain and the excess distribution in
earnings as it has not guaranteed any obligations of NCM and is not otherwise committed to provide further financial support for NCM.

Annual
adjustments to the common membership units are made pursuant to the Common Unit Adjustment Agreement dated as of February 13, 2007 between NCM, Inc. and the Founding
Members. The Common Unit Adjustment Agreement was created to account for changes in the number of theatre screens operated by each of the Founding Members. Prior to fiscal 2011, each of the Founding
Members has increased the number of screens it operates through acquisitions and newly built theatres. Since these incremental screens and increased attendance in turn provide for additional
advertising revenues to NCM, NCM agreed to compensate the Founding Members by issuing additional common
membership units to the Founding Members in consideration for their increased attendance and overall contribution to the joint venture. The Common Unit Adjustment Agreement also provides protection to
NCM in that the Founding Members may be required to transfer or surrender common units to NCM based on certain limited events, including declines in attendance and the number of screens operated. As a
result, each Founding Member's equity ownership interests are proportionately adjusted to reflect the risks and rewards relative to their contributions to the joint venture.

The
Common Unit Adjustment Agreement provides that transfers of common units are solely between the Founding Members and NCM. There are no transfers of units among the Founding Members.
In addition, there are no circumstances under which common units would be surrendered by the Company to NCM in the event of an acquisition by one of the Founding Members. However, adjustments to the
common units owned by one of the Founding Members will result in an adjustment to the Company's equity ownership interest percentage in NCM.

Pursuant
to our Common Unit Adjustment Agreement, from time to time, common units of NCM held by the Founding Members will be adjusted up or down through a formula ("Common Unit
Adjustment") primarily based on increases or decreases in the number of theatre screens operated and theatre attendance generated by each Founding Member. The common unit adjustment is computed
annually, except that an earlier common unit adjustment will occur for a Founding Member if its acquisition or disposition of theatres, in a single transaction or cumulatively since the most recent
common unit adjustment, will cause a change of 2% or more in the total annual attendance of all of the Founding Members. In the event that a common unit adjustment is determined to be a negative
number, the Founding Member shall cause, at its election, either (a) the transfer and surrender to NCM of a number of common units equal to all or part of such Founding Member's common unit
adjustment or (b) pay to NCM, an amount equal to such Founding Member's common unit adjustment calculated in accordance with the Common Unit Adjustment Agreement.

Effective
March 27, 2008, the Company received 939,853 common membership units of NCM as a result of the Common Unit Adjustment, increasing the Company's interest in NCM to 19.1%.
The

81

---



Table of Contents

AMC Entertainment Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended March 31, 2011, April 1, 2010 and April 2, 2009

NOTE 6INVESTMENTS (Continued)

Company
recorded the additional units received as a result of the Common Unit Adjustment at a fair value of $21,598,000, based on a price for shares of NCM, Inc. on March 26, 2008, of
$22.98 per share, and as a new investment (Tranche 2 Investment), with an offsetting adjustment to deferred revenue. Effective May 29, 2008, NCM issued 2,913,754 common membership units
to another Founding Member due to an acquisition, which caused a decrease in the Company's ownership share from 19.1% to 18.52%. Effective March 17, 2009, the Company received 406,371 common
membership units of NCM as a result of the Common Unit Adjustment, increasing the Company's interest in NCM to 18.53%. The Company recorded these additional units at a fair value of $5,453,000, based
on a price for shares of NCM, Inc. on March 17, 2009, of $13.42 per share, with an offsetting adjustment to deferred revenue. Effective March 17, 2010, the Company received
127,290 common membership units of NCM. As a result of the Common Unit Adjustment among the Founding Members, the Company's interest in NCM decreased to 18.23% as of April 1, 2010. The Company
recorded the additional units received at a fair value of $2,290,000, based on a price for shares of NCM, Inc. on March 17, 2010, of $17.99 per share, with an offsetting adjustment to
deferred revenue. Effective June 14, 2010 and with a settlement
date of June 28, 2010, the Company received 6,510,209 common membership units in NCM as a result of an Extraordinary Common Unit Adjustment in connection with the Company's acquisition of
Kerasotes. The Company recorded the additional units at a fair value of $111,520,000, based on a price for shares of NCM, Inc. on June 14, 2010, of $17.13 per share, with an offsetting
adjustment to deferred revenue. As a result of the Extraordinary Common Unit Adjustment, the Company's interest in NCM increased to 23.05%.

All
of the Company's NCM membership units are redeemable for, at the option of NCM, Inc., cash or shares of common stock of NCM, Inc. on a
share-for-share basis. On August 18, 2010, the Company sold 6,500,000 shares of common stock of NCM, Inc. in an underwritten public offering for $16.00 per share
and reduced the Company's related investment in NCM by $36,709,000, the average carrying amount of all shares owned. Net proceeds received on this sale were $99,840,000 after deducting related
underwriting fees and professional and consulting costs of $4,160,000, resulting in a gain on sale of $63,131,000. In addition, on September 8, 2010, the Company sold 155,193 shares of
NCM, Inc. to the underwriters to cover over-allotments for $16.00 per share and reduced the Company's related investment in NCM by $867,000, the average carrying amount of all
shares owned. Net proceeds received on this sale were $2,384,000 after deducting related underwriting fees and professional and consulting costs of $99,000, resulting in a gain on sale of $1,517,000.
As a result of the membership unit conversions and sales, the Company's ownership interest in NCM was reduced to 17.02% as of September 30, 2010.

Effective
March 17, 2011, the Company was notified by NCM that its Common Unit Adjustment Agreement was determined to be a negative number. The Company elected to surrender
1,479,638 common membership units to satisfy the Common Unit Adjustment, leaving it with 17,323,782 units, or a 15.66% ownership interest in NCM as of March 31, 2011. The Company
recorded the surrendered common units as a reduction to deferred revenues for exhibitor services agreement at fair value of $25,361,000, based on a price per share of NCM, Inc. of $17.14 on
March 17, 2011, and recorded the reduction of the Company's NCM investment at weighted average cost for Tranche 2 Investments of $25,568,000, resulting in a loss on the surrender of the
units of $207,000. The gain from the NCM, Inc. stock sales and the loss from the surrendered NCM common units are reported as Gain from NCM transactions on the Consolidated Statements of
Operations.

82

---



Table of Contents

AMC Entertainment Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended March 31, 2011, April 1, 2010 and April 2, 2009

NOTE 6INVESTMENTS (Continued)

The
NCM, Inc. IPO and related transactions have the effect of reducing the amounts NCM, Inc. would otherwise pay in the future to various tax authorities as a result of an
increase in its proportionate share of tax basis in NCM's tangible and intangible assets. On the IPO date, NCM, Inc. and the Founding Members entered into a tax receivable agreement. Under the
terms of this agreement, NCM, Inc. will make cash payments to the Founding Members in amounts equal to 90% of NCM, Inc.'s actual tax benefit realized from the tax amortization of the
intangible assets described above. For purposes of the tax receivable agreement, cash savings in income and franchise tax will be computed by comparing NCM, Inc.'s actual income and franchise
tax liability to the amount of such taxes that NCM, Inc. would have been required to pay had there been no increase in NCM Inc.'s proportionate
share of tax basis in NCM's tangible and intangible assets and had the tax receivable agreement not been entered into. The tax receivable agreement shall generally apply to NCM, Inc.'s taxable
years up to and including the 30th anniversary date of the NCM, Inc. IPO and related transactions. Pursuant to the terms of the tax receivable agreement, the Company
received payments of $3,796,000 from NCM, Inc. in fiscal year 2009 with respect to NCM, Inc.'s 2007 taxable year, and in fiscal year 2010, the Company received payments of $8,788,000
with respect to NCM, Inc.'s 2008 and 2009 taxable year. In fiscal 2011, the Company received $6,637,000 with respect to NCM, Inc.'s 2008 and 2010 taxable years. Distributions received
under the tax receivable agreement from NCM, Inc. were recorded as additional proceeds received related to the Company's Tranche 1 or 2 Investments and were recorded in earnings in a
similar fashion to the proceeds received from the NCM, Inc. IPO and the receipt of excess cash distributions.

As
of March 31, 2011, the Company owns 17,323,782 units or a 15.66% interest in NCM. As a founding member, the Company has the ability to exercise significant influence over the
governance of NCM, and, accordingly accounts for its investment following the equity method. The fair market value of the units in National CineMedia, LLC was approximately $323,435,000 based
on a price for shares of NCM, Inc. on March 31, 2011 of $18.67 per share.

Related Party Transactions

As of March 31, 2011 and April 1, 2010, the Company has recorded $1,708,000 and $1,462,000, respectively, of amounts due
from NCM related to on-screen advertising revenue. As of March 31, 2011 and April 1, 2010, the Company had recorded $1,355,000 and $1,502,000, respectively, of amounts due to
NCM related to the ESA. The Company recorded revenues for advertising from NCM of $22,408,000, $20,352,000 and $19,116,000 during the fiscal years ended March 31, 2011, April 1, 2010,
and April 2, 2009, respectively. The Company recorded expenses related to its beverage advertising agreement with NCM of $12,458,000, $12,107,000 and $15,118,000 during fiscal years 2011, 2010,
and 2009, respectively.

83

---



Table of Contents

AMC Entertainment Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended March 31, 2011, April 1, 2010 and April 2, 2009

NOTE 6INVESTMENTS (Continued)

As of March 31, 2011 and April 1, 2010, the Company has recorded $3,376,000 and $162,000, respectively, of amounts due from DCIP related to equipment purchases made on
behalf of DCIP for the installation of digital projection systems. The Company pays equipment rent monthly, in advance, to DCIP and has recorded prepaid rent of $275,000 and $43,000 as of
March 31, 2011 and April 1, 2010, respectively. The Company records the equipment rental expense on a straight-line basis including scheduled escalations of rent to commence
after six and one-half years from the initial deployment date. The difference between the cash rent and straight-line rent is recorded to deferred rent, in other
long-term liabilities. As of March 31, 2011 and April 1, 2010, the Company has recorded $1,471,000 and $43,000 of deferred rent, respectively. The Company recorded digital
equipment rental expense of $2,975,000 and $45,000 during the fifty-two weeks ended March 31, 2011 and April 1, 2010, respectively.

Summary Financial Information

Investments in non-consolidated affiliates accounted for under the equity method as of March 31, 2011, include a
15.66% interest in National CineMedia, LLC ("NCM"), a 50% interest in two U.S. motion picture theatres and one IMAX screen, a 26.22% equity interest in Movietickets.com, Inc. ("MTC"), a
50% interest in Midland Empire Partners, LLC, a 29% interest in Digital Cinema Implementation Partners, LLC ("DCIP"), and a 50% interest in Open Road Films.

Condensed
financial information of the Company's non-consolidated equity method investments is shown below. Amounts are presented under U.S. GAAP for the periods of
ownership by the Company.

Financial Condition:

March 31, 2011(In thousands)

NCM

Other

TotalCurrent assets

$
70,582

$
68,500

$
139,082Noncurrent assets


301,600


736,490


1,038,090Total assets


372,182


804,990


1,177,172Current liabilities


33,216


75,901


109,117Noncurrent liabilities


847,482


593,477


1,440,959Total liabilities


880,698


669,378


1,550,076Stockholders' equity (deficit)


(508,516
)

135,612


(372,904
)Liabilities and stockholders' deficit


372,182


804,990


1,177,172The Company's recorded investment(1)


74,551


28,084


102,635


84

---



Table of Contents

AMC Entertainment Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended March 31, 2011, April 1, 2010 and April 2, 2009

NOTE 6INVESTMENTS (Continued)



April 1, 2010(In thousands)

NCM

Other

TotalCurrent assets

$
88,906

$
56,113

$
145,019Noncurrent assets


212,398


174,432


386,830Total assets


301,304


230,545


531,849Current liabilities


32,094


6,427


38,521Noncurrent liabilities


869,335


91,330


960,665Total liabilities


901,429


97,757


999,186Stockholders' equity (deficit)


(600,125
)

132,788


(467,337
)Liabilities and stockholders' deficit


301,304


230,545


531,849The Company's recorded investment(1)


28,826


41,096


69,922


(1)Certain
differences in the Company's recorded investment, for one U.S. motion picture theatre where it has a 50% interest, and its proportional ownership
share resulting from the acquisition of the asset in a business combination where the investment was initially recorded at fair value, are amortized to equity in (earnings) or losses over the
estimated useful life of approximately 20 years for the underlying building.


Operating Results:

52 Weeks Ended(In thousands)
March 31, 2011

NCM

Other

TotalRevenues

$
413,639

$
85,539

$
499,178Operating costs and expenses


281,716


107,374


389,090Net earnings


131,923


(21,835
)

110,088The Company's recorded equity in earnings


32,851


(15,673
)

17,178




52 Weeks Ended(In thousands)
April 1, 2010

NCM

Other

TotalRevenues

$
391,815

$
40,736

$
432,551Operating costs and expenses


262,578


48,241


310,819Net earnings


129,237


(7,505
)

121,732The Company's recorded equity in earnings


34,436


(4,136
)

30,300




52 Weeks Ended(In thousands)
April 2, 2009

NCM

Other

TotalRevenues

$
380,382

$
39,019

$
419,401Operating costs and expenses


277,359


41,415


318,774Net earnings


103,023


(2,396
)

100,627The Company's recorded equity in earnings


27,654


(2,831
)

24,823


The
Company reviews investments in non-consolidated subsidiaries accounted for under the equity method for impairment whenever events or changes in circumstances indicate
that the carrying amount

85

---



Table of Contents

AMC Entertainment Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended March 31, 2011, April 1, 2010 and April 2, 2009

NOTE 6INVESTMENTS (Continued)

of
the investment may not be fully recoverable. The Company reviews unaudited financial statements on a quarterly basis and audited financial statements on an annual basis for indicators of triggering
events or circumstances that indicate the potential impairment of these investments as well as current equity prices for its investment in NCM LLC and discounted projections of cash flows for
certain of its other investees. Additionally, the Company has quarterly discussions with the management of significant investees to assist in the identification of any factors that might indicate the
potential for impairment. In order to determine whether the carrying value of investments may have experienced an
"other-than-temporary" decline in value necessitating the write-down of the recorded investment, the Company considers the period of time during which the fair
value of the investment remains substantially below the recorded amounts, the investees financial condition and quality of assets, the length of time the investee has been operating, the severity and
nature of losses sustained in current and prior years, a reduction or cessation in the investee's dividend payments, suspension of trading in the security, qualifications in accountant's reports due
to liquidity or going concern issues, investee announcement of adverse changes, downgrading of investee debt, regulatory actions, changes in reserves for product liability, loss of a principal
customer, negative operating cash flows or working capital deficiencies and the recording of an impairment charge by the investee for goodwill, intangible or long-lived assets. Once a
determination is made that an other-than-temporary impairment exists, the Company writes down its investment to fair value.

Included
in equity in earnings of non-consolidated entities for the fifty-two weeks ended March 31, 2011 is an impairment charge of $8,825,000 related to a
joint venture investment. The decline in the fair market value of the investment was considered other than temporary due to inadequate projected cash flows, the nature of losses sustained in current
and prior years, negative operating cash flows and the length of time the investee has been operating. Included in equity in earnings of non-consolidated entities for the
fifty-two weeks ended April 2, 2009 is an impairment charge of $2,742,000 related to a theatre joint venture investment. The decline in the fair market value of the investment was
considered other than temporary due to competitive theatre builds. The impairment charges related to joint venture investments are included with equity in earnings of non-consolidated
entities on the Consolidated Statements of Operations.

86

---



Table of Contents

AMC Entertainment Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended March 31, 2011, April 1, 2010 and April 2, 2009

NOTE 6INVESTMENTS (Continued)

The
Company recorded the following changes in the carrying amount of its investment in NCM and equity in earnings of NCM during the fifty-two weeks ended April 2,
2009, April 1, 2010, and March 31, 2011.

(In thousands)

Investment in
NCM(1)

Deferred
Revenue(2)

Due to
NCM(3)

Cash
Received
(Paid)

Equity in
(Earnings)
Losses

Advertising
(Revenue)

(Gain) Loss
on NCM
TransactionsEnding balance April 3, 2008

$
21,598

$
(250,312
)
$
(4,649
)
$


$


$


$
Receipt under Tax Receivable Agreement











3,796


(3,796
)




Receipt of Common Units


5,453


(5,453
)













Receipt of excess cash distributions


(1,241
)







24,308


(23,067
)




Payments on Loews' Screen Integration Agreement








4,700


(4,700
)







Increase Loews' Screen Integration Liability








(132
)




132





Change in interest loss(4)


(83
)










83





Amortization of deferred revenue





2,601











(2,601
)

Equity in earnings(5)


1,006











(1,006
)




Ending balance April 2, 2009

$
26,733

$
(253,164
)
$
(81
)
$
23,404

$
(27,654
)
$
(2,601
)
$
Receipt under Tax Receivable Agreement

$


$


$


$
8,788

$
(8,788
)
$


$
Receipt of Common Units


2,290


(2,290
)













Receipt of excess cash distributions


(1,847
)







25,827


(23,980
)




Payments on Loews' Screen Integration Agreement








81


(81
)







Receipt of tax credits


(1
)







18


(17
)




Change in interest loss(4)


(57
)










57





Amortization of deferred revenue





3,132











(3,132
)

Equity in earnings(5)


1,708











(1,708
)




Ending balance April 1, 2010

$
28,826

$
(252,322
)
$


$
34,552

$
(34,436
)
$
(3,132
)
$
Receipt of Common Units

$
111,520

$
(111,520
)
$


$


$


$


$
Exchange and sale of NCM stock(6)


(37,576
)







102,224








(64,648
)Surrender of Common Units(7)


(25,568
)

25,361














207Receipt of excess cash distributions


(8,592
)







28,843


(20,251
)




Receipt under Tax Receivable Agreement


(1,815
)







6,637


(4,822
)




Receipt of tax credits


(7
)







22


(15
)




Amortization of deferred revenue





4,689











(4,689
)

Equity in earnings(5)


7,763











(7,763
)




Ending balance March 31, 2011

$
74,551

$
(333,792
)
$


$
137,726

$
(32,851
)
$
(4,689
)
$
(64,441
)


(1)The
NCM common membership units held by the Company immediately following the NCM, Inc. IPO are carried at zero cost (Tranche 1 Investment).
As provided under the Common Unit Adjustment Agreement dated as of February 13, 2007, the Company received additional NCM common membership units in fiscal 2009, 2010, and 2011, valued at
$5,453,000, $2,290,000 and $111,520,000, respectively (Tranche 2 Investments).(2)Represents
the unamortized portion of the Exhibitors Services Agreement (ESA) modification payments received from NCM. Such amounts are being amortized to
"Other theatre revenues" over a 30 year period ending in 2036, using a units-of-revenue method, as described in ASC 470-10-35 (formerly
EITF 88-18,Sales of Future Revenues).(3)Represents
the amount due to NCM under the Loews Screen Integration Agreement that was fully paid in April 2009.(4)AMC's
ownership share decreased from 19.1% to 18.52% effective May 29, 2008 due to NCM's issuance of 2,913,754 common membership units to another
founding member due to an acquisition. In fiscal 2010, AMC's ownership share decreased to 18.23% due to the allocation of the annual Common Unit Adjustment.(5)Represents
equity in earnings on the Tranche 2 Investments only.


87

---



Table of Contents

AMC Entertainment Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended March 31, 2011, April 1, 2010 and April 2, 2009

NOTE 6INVESTMENTS (Continued)

(6)All
of the Company's NCM membership units are redeemable for, at the option of NCM, cash or shares of common stock of NCM, Inc. on a
share-for-share basis. On August 18, 2010, the Company sold 6,500,000 shares of common stock of NCM, Inc. in an underwritten public offering for $16.00 per share
and reduced the Company's related investment in NCM by $36,709,000, the average carrying amount of all shares owned. Net proceeds received on this sale were $99,840,000 after deducting related
underwriting fees and professional and consulting costs of $4,160,000, resulting in a gain on sale of $63,131,000. In addition, on September 8, 2010, the Company sold 155,193 shares of
NCM, Inc. to the underwriters to cover over-allotments for $16.00 per share and reduced the Company's related investment in NCM by $867,000, the average carrying amount of all
shares owned. Net proceeds received on this sale were $2,384,000 after deducting related underwriting fees and professional and consulting costs of $99,000, resulting in a gain on sale of $1,517,000.(7)As
a result of theatre dispositions and closings and a related decline in attendance, the NCM Common Unit Adjustment for calendar 2010 called for a
reduction in common units. The Company elected to surrender 1,479,638 common units effective March 17, 2011 at a fair value of $25,361,000 and a weighted average cost basis for Tranche 2
Investments of $25,568,000, resulting in a loss of $207,000. The fair value of the units surrendered reduced the deferred revenues for exhibitor services agreement available for amortization to
advertising income for future periods.


Equity Method Accounting for Tranche 1 and Tranche 2 Investments in NCM

Following the NCM IPO, the Company will not recognize undistributed equity in the earnings on the original NCM membership units
(Tranche 1 Investment) until NCM's future net earnings, less distributions received, surpass the amount of the excess distribution. The Company will recognize equity in earnings only to the
extent it receives cash distributions from NCM. The Company considers the excess distribution described above as an advance on NCM's future earnings and, accordingly, future earnings of NCM should not
be recognized through the application of equity method accounting until such time as the Company's share of NCM's future earnings, net of distributions received, exceeds the excess distribution. The
Company believes that the accounting model provided by ASC 323-10-35-22 for recognition of equity investee losses in excess of an investor's basis is
analogous to the accounting for equity income subsequent to recognizing an excess distribution.

The
Company has received 7,983,723 additional units in NCM subsequent to the IPO as a result of Common Unit Adjustments received from March 27, 2008 through June 14, 2010
(Tranche 2 Investments). The Company follows the guidance in ASC 323-10-35-29 (formerly EITF 02-18,Accounting for
Subsequent Investments in an Investee after Suspension of Equity Loss Recognition) by analogy, which also refers to AICPA Technical Practice Aid 2220.14. Both sets of
literature indicate that if a subsequent investment is made in an equity method investee that has experienced significant losses, the investor must determine if the subsequent investment constitutes
funding of prior losses. The Company concluded that the construction or acquisition of new theatres that has led to the Common Unit adjustments included in its Tranche 2 Investments equates to
making additional investments in NCM. The Company has evaluated the receipt of the additional common units in NCM and the assets exchanged for these additional units and has determined that the right
to use its incremental new screens would not be considered funding of prior losses. This determination was formed by considering that (i) NCM does not receive any additional funds from the
Tranche 2 Investments, (ii) both NCM and AMC record their respective increases to Members' Equity and Investment at the same amount (fair value of the units issued), (iii) the
additional investments result in additional ownership in NCM and (iv) the investments in additional common units are not subordinate to the other equity of NCM. As such, the additional common
units received would be accounted for as a Tranche 2 Investment separate from the Company's initial investment following the equity method. The Company's Tranche 2 Investments correspond
with the NCM Members' equity amounts in its capital account.

88

---



Table of Contents

AMC Entertainment Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended March 31, 2011, April 1, 2010 and April 2, 2009

NOTE 7SUPPLEMENTAL BALANCE SHEET INFORMATION

Other assets and liabilities consist of the following:

(In thousands)

March 31,
2011

April 1,
2010Other current assets:Prepaid rent

$
38,250

$
34,442Income taxes receivable


516


1,737Prepaid insurance and other


12,191


12,127Merchandise inventory


10,214


8,222Deferred tax asset


21,100


10,000Other


5,878


6,784$
88,149

$
73,312Other long-term assets:Investments in real estate

$
10,504

$
5,126Deferred financing costs


31,107


27,684Investments in equity method investees


102,635


69,922Computer software


26,049


28,817Deferred tax asset


83,400


94,500Investment in RealD Inc. common stock


33,455


Other


5,214


6,226$
292,364

$
232,275Accrued expenses and other liabilities:Taxes other than income

$
44,460

$
39,462Interest


37,231


26,018Payroll and vacation


9,516


8,327Current portion of casualty claims and premiums


6,043


6,005Accrued bonus


6,164


15,964Theatre and other closure


6,935


6,694Accrued licensing and percentage rent


8,058


17,926Current portion of pension and other benefits liabilities


1,292


1,423Other


19,288


17,762$
138,987

$
139,581Other long-term liabilities:Unfavorable lease obligations

$
143,426

$
128,027Deferred rent


112,762


98,034Pension and other benefits


41,198


42,545Deferred gain on sale and leaseback transactions


16,656


17,454Deferred lease incentive


26,678


Tax liability


7,000


7,000Casualty claims and premiums


10,299


12,250Theatre and other closure


66,917


Other


7,503


4,281$
432,439

$
309,591


89

---



Table of Contents

AMC Entertainment Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended March 31, 2011, April 1, 2010 and April 2, 2009

NOTE 8CORPORATE BORROWINGS AND CAPITAL AND FINANCING LEASE OBLIGATIONS

A summary of the carrying value of corporate borrowings and capital and financing lease obligations is as follows:

(In thousands)

March 31,
2011

April 1,
2010Senior Secured Credit Facility-Term Loan due 2013 (1.75% as of March 31, 2011)

$
141,779

$
622,375Senior Secured Credit Facility-Term Loan due 2016 (3.50% as of March 31, 2011)


474,096


Senior Secured Credit Facility-Revolver





8% Senior Subordinated Notes due 2014


299,402


299,22711% Senior Subordinated Notes due 2016





325,0008.75% Senior Fixed Rate Notes due 2019


587,263


586,2529.75% Senior Subordinated Notes due 2020


600,000


Capital and financing lease obligations, 9% - 11.5%


65,675


57,2862,168,215


1,890,140Less: current maturities


(9,955
)

(10,463
)$
2,158,260

$
1,879,677


Minimum
annual payments required under existing capital and financing lease obligations (net present value thereof) and maturities of corporate borrowings as of March 31, 2011 are
as follows:

Capital and Financing Lease ObligationsPrincipal
Amount of
Corporate
Borrowings(In thousands)

Minimum Lease
Payments

Less
Interest

Principal

Total2012

$
9,424

$
5,969

$
3,455

$
6,500

$
9,9552013


8,456


5,649


2,807


145,287


148,0942014


8,107


5,378


2,729


305,004


307,7332015


8,129


5,089


3,040


5,004


8,0442016


8,235


4,760


3,475


5,004


8,479Thereafter


72,699


22,530


50,169


1,649,076


1,699,245Total

$
115,050

$
49,375

$
65,675

$
2,115,875

$
2,181,550


Senior Secured Credit Facility

The senior secured credit facility is with a syndicate of banks and other financial institutions and, prior to the third amendment on
December 15, 2010, had provided AMC Entertainment financing of up to $850,000,000, consisting of a $650,000,000 term loan facility with a maturity date of January 26, 2013 and a
$200,000,000 revolving credit facility that matures in 2012. The revolving credit facility includes borrowing capacity available for letters of credit and for swingline borrowings on
same-day notice. On December 15, 2010, the Company entered into a third amendment to its Senior Secured Credit Agreement dated as of January 26, 2006 to, among other things:
(i) extend the maturity of the term loans held by accepting lenders and to increase the interest rate with respect to such term loans,

90

---



Table of Contents

AMC Entertainment Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended March 31, 2011, April 1, 2010 and April 2, 2009

NOTE 8CORPORATE BORROWINGS AND CAPITAL AND FINANCING LEASE OBLIGATIONS (Continued)

(ii) replace
the Company's existing revolving credit facility (with higher interest rates and a longer maturity than the existing revolving credit facility), and (iii) amend certain of
the existing covenants therein. The following are key terms of the amendment:



The
Company recorded a loss on the modification of the Senior Secured Credit Agreement of $3,656,000 in Other expense during the fifty-two weeks ended March 31, 2011,
which included third party modification fees and other expenses of $3,289,000 and previously capitalized financing fees related to the revolving credit facility of $367,000. The Company capitalized
deferred financing costs paid to creditors of $1,943,000 related to the modification of the Senior Secured Credit Agreement during the year ended March 31, 2011.

All
obligations under the senior secured credit facility are guaranteed by each of AMC Entertainment's wholly-owned domestic subsidiaries. All obligations under the senior secured credit
facility, and the guarantees of those obligations (as well as cash management obligations), are secured by substantially all of AMC Entertainment's assets as well as those of each subsidiary
guarantor.

The
senior secured credit facility contains a number of covenants that, among other things, restrict, subject to certain exceptions, AMC Entertainment's ability, and the ability of its
subsidiaries, to sell assets; incur additional indebtedness; prepay other indebtedness (including the notes); pay dividends

91

---



Table of Contents

AMC Entertainment Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended March 31, 2011, April 1, 2010 and April 2, 2009

NOTE 8CORPORATE BORROWINGS AND CAPITAL AND FINANCING LEASE OBLIGATIONS (Continued)

and
distributions or repurchase their capital stock; create liens on assets; make investments; make certain acquisitions; engage in mergers or consolidations; engage in certain transactions with
affiliates; amend certain charter documents and material agreements governing subordinated indebtedness, including the 8% Senior Subordinated Notes due 2014, the 8.75% Senior Notes due 2019, and the
9.75% Senior Subordinated Notes due 2020; change the business conducted by it and its subsidiaries; and enter into agreements that restrict dividends from subsidiaries.

In
addition, the senior secured credit facility requires, commencing with the fiscal quarter ended September 28, 2006, that AMC Entertainment and its subsidiaries maintain a
maximum net senior secured leverage ratio as long as the commitments under the revolving credit facility remain outstanding. The senior secured credit facility also contains certain customary
affirmative covenants and events of default.

AMCE
is restricted, in certain circumstances, from paying dividends to Parent by the terms of the indentures governing its outstanding senior and subordinated notes and its senior
secured credit facility. AMCE has not guaranteed the indebtedness of Parent nor pledged any of its assets as collateral to secure debt of Parent.

Notes Due 2014

On February 24, 2004, AMC Entertainment sold $300,000,000 aggregate principal amount of 8% Senior Subordinated Notes due 2014
(the "Notes due 2014"). AMC Entertainment applied the net proceeds from the sale of Notes due 2014, plus cash on hand, to redeem all outstanding $200,000,000 aggregate principal amount of its
91/2% Senior Subordinated Notes due 2009 and $83,406,000 aggregate principal amount of its Notes due 2011. The Notes due 2014 bear interest at the rate of 8% per annum, payable in March
and September. The Notes due 2014 are redeemable at the option of AMC Entertainment, in whole or in part, at any time on or after March 1, 2009 at 104% of the principal amount thereof,
declining ratably to 100% of the principal amount thereof on or after March 1, 2012, plus in each case interest accrued to the redemption date. The Notes due 2014 are unsecured senior
subordinated indebtedness and subordinated to all existing and future senior indebtedness of AMC Entertainment.

In
connection with the merger, in which the Company was acquired by Holdings in fiscal 2005, the carrying value of the Notes due 2014 was adjusted to fair value. As a result, a discount
of $1,500,000 was recorded and will be amortized to interest expense over the remaining term of the notes.

The
indenture relating to our Notes due 2014 allows us to incur all permitted indebtedness (as defined therein) without restriction, which includes all amounts borrowed under our senior
secured credit facility. The indenture also allows us to incur any amount of additional debt as long as we can satisfy the coverage ratio of each indenture, after giving effect to the event on a pro
forma basis (under the indenture for the Notes due 2014). Under the indenture for the Notes due 2014 (the Company's most restrictive indenture), we could borrow approximately $466,600,000 (assuming an
interest rate of 8.75% per annum on the additional indebtedness) in addition to specified permitted indebtedness. If we cannot satisfy the coverage ratios of the indentures, generally we can incur, in
addition to amounts borrowed under the senior secured credit facility, no more than $100,000,000 of new "permitted

92

---



Table of Contents

AMC Entertainment Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended March 31, 2011, April 1, 2010 and April 2, 2009

NOTE 8CORPORATE BORROWINGS AND CAPITAL AND FINANCING LEASE OBLIGATIONS (Continued)

indebtedness"
under the terms of the indentures relating to the Notes due 2014 and the Parent Term Loan Facility.

Notes Due 2016

Concurrently with the 9.75% Senior Subordinated Notes due 2020 ("Notes due 2020") offering, the Company launched a cash tender offer
and consent solicitation for any and all of its then outstanding $325,000,000 aggregate principal amount 11% Senior Subordinated Notes due 2016 (the "Notes due 2016") at a purchase price of $1,031
plus a $30 consent fee for each $1,000 of principal amount of outstanding Notes due 2016 validly tendered and accepted by the Company on or before the early tender date (the "Cash Tender Offer"). The
Company used the net proceeds from the issuance of the Notes due 2020 on December 15, 2010 to pay the consideration for the Cash Tender Offer plus accrued and unpaid interest on $95,098,000
principal amount of Notes due 2016 validly tendered. The Company recorded a loss on extinguishment related to the Cash Tender Offer of $7,631,000 in Other expense during the fifty-two
weeks ended March 31, 2011, which included previously capitalized deferred financing fees of $1,681,000, a tender offer and consent fee paid to the holders of $5,801,000 and other expenses of
$149,000. The Company redeemed the remaining $229,902,000 aggregate principal amount outstanding Notes due 2016 at a price of $1,055 per $1,000 principal amount on February 1, 2011 in
accordance with the terms of the indenture. The Company recorded a loss on extinguishment related to the Cash Tender Offer of $16,701,000 in Other expense during the fifty-two weeks ended
March 31, 2011, which included previously capitalized deferred financing fees of $3,958,000, a tender offer and consent fee paid to the holders of $12,644,000 and other expenses of $99,000.

Notes Due 2019

On June 9, 2009, AMC Entertainment issued $600,000,000 aggregate principal amount of 8.75% Senior Notes due 2019 (the "Notes due
2019") issued under an indenture (the "Indenture"), with U.S. Bank, National Association, as trustee. The Company applied the net proceeds from the sale of Notes due 2019 to redeem the then
outstanding $250,000,000 aggregate principal amount of its 85/8% Senior Notes due 2012 (the "Fixed Notes due 2012"). On June 9, 2009, the Company redeemed $238,065,000 principal
amount of the Fixed Notes due 2012 at a purchase price of $1,000 plus a $30 consent fee for each $1,000 of principal amount, plus accrued and unpaid interest, of the outstanding Fixed Notes due 2012
that were validly tendered and accepted by the Company on or before the early tender date (the "Cash Tender Offer"). The Company recorded a loss on extinguishment related to the Cash Tender Offer of
$10,826,000 in Other expense during the fifty-two weeks ended April 1, 2010, which included previously capitalized deferred financing fees of $3,312,000, a consent fee paid to the
holders of $7,142,000 and other expenses of $372,000. On August 15, 2009, the Company redeemed the remaining $11,935,000 of Fixed Notes due 2012 at a price of $1,021.56 per $1,000 principal in
accordance with the terms of the indenture. The Company recorded a loss of $450,000 in Other expense related to the extinguishment of the remaining Fixed Notes due 2012 during the
fifty-two weeks ended April 1, 2010, which included previously capitalized deferred financing fees of $157,000, consent fee paid to the holders of $257,000 and other expenses of
$36,000.

93

---



Table of Contents

AMC Entertainment Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended March 31, 2011, April 1, 2010 and April 2, 2009

NOTE 8CORPORATE BORROWINGS AND CAPITAL AND FINANCING LEASE OBLIGATIONS (Continued)

The
Notes due 2019 bear interest at a rate of 8.75% per annum, payable on June 1 and December 1 of each year (commencing on December 1, 2009), and have a maturity
date of June 1, 2019. The Notes due 2019 are redeemable at our option in whole or in part, at any time on or after June 1, 2014 at 104.375% of the principal amount thereof, declining
ratably to 100% of the principal amount thereof on or after June 1, 2017, plus accrued and unpaid interest to the redemption date. In addition, AMC Entertainment may redeem up to 35% of the
aggregate principal amount of the notes using net proceeds from certain equity offerings completed on or prior to June 1, 2012 at a redemption price of 108.75%. The Company capitalized deferred
financing costs of $16,259,000 related to the issuance of the Notes due 2019 during the year ended April 1, 2010.

The
Notes due 2019 are general unsecured senior obligations of AMC Entertainment, fully and unconditionally guaranteed, jointly and severally, on a senior basis by each of AMC
Entertainment's existing and future domestic restricted subsidiaries that guarantee AMC Entertainment's other indebtedness.

The
indenture governing the Notes due 2019 contains covenants limiting other indebtedness, dividends, purchases or redemptions of stock, transactions with affiliates and mergers and
sales of assets. It also contains provisions subordinating AMC Entertainment's obligations under the Notes due 2019 to AMC Entertainment's obligations under its senior secured credit facility and
other senior indebtedness. The Notes due 2019 were issued at a 2.418% discount which is amortized to interest expense following the interest method over the term of the notes.

Notes Due 2020

On December 15, 2010, the Company completed the offering of $600,000,000 aggregate principal amount of its 9.75% Senior
Subordinated Notes due 2020 (the "Notes due 2020"). The Notes due 2020 mature on December 1, 2020, pursuant to an indenture dated as of December 15, 2010, among the Company, the
Guarantors named therein and U.S. Bank National Association, as trustee (the "Indenture"). The Company will pay interest on the Notes due 2020 at 9.75% per annum, semi-annually in arrears
on June 1 and December 1, commencing on June 1, 2011. The Company may redeem some or all of the Notes due 2020 at any time on or after December 1, 2015 at 104.875% of the
principal amount thereof, declining ratably to 100% of the principal amount thereof on or after December 1, 2018, plus accrued and unpaid interest to the redemption date. In addition, the
Company may redeem up to 35% of the aggregate principal amount of the Notes due 2020 using net proceeds from certain equity offerings completed prior to December 1, 2013 at a redemption price
of 109.75%. The Company capitalized deferred financing costs of $12,699,000 related to the issuance of Notes due 2020 during the year ended March 31, 2011. The Notes due 2020 are unsecured
senior subordinated indebtedness and subordinated to all existing and future senior indebtedness of AMC Entertainment.

The
Indenture provides that the Notes due 2020 are general unsecured senior subordinated obligations of the Company and are fully and unconditionally guaranteed on a joint and several
senior subordinated unsecured basis by all of its existing and future domestic restricted subsidiaries that guarantee its other indebtedness.

94

---



Table of Contents

AMC Entertainment Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended March 31, 2011, April 1, 2010 and April 2, 2009

NOTE 8CORPORATE BORROWINGS AND CAPITAL AND FINANCING LEASE OBLIGATIONS (Continued)

The
indenture governing the Notes due 2020 contains covenants limiting other indebtedness, dividends, purchases or redemptions of stock, transactions with affiliates and mergers and
sales of assets.

As
of March 31, 2011, the Company was in compliance with all financial covenants relating to the Senior Secured Credit Facility, the Notes due 2014, the Notes due 2019, and the
Notes due 2020.

Change of Control

Upon a change of control (as defined in the indentures), AMCE would be required to make an offer to repurchase all of the outstanding
Notes due 2014, Notes due 2019, and Notes due 2020 at a price equal to 101% of the principal amount thereof plus accrued and unpaid interest to the date of repurchase. The Sponsors are considered
Permitted Holders as defined in each of the indentures and as such could create certain voting arrangements that would not constitute a change of control under the indentures.

Holdings Discount Notes Due 2014

To help finance the merger with Holdings, Holdings issued $304,000,000 aggregate principal amount at maturity of its 12% Senior
Discount Notes due 2014 ("Discount Notes due 2014") for gross proceeds of $169,917,760. Holdings was a holding company with no operations of its own and had no ability to service interest or principal
on the Discount Notes due 2014 other than through any dividends it received from AMCE. On any interest payment date prior to August 15, 2009, Holdings was permitted to commence paying cash
interest (from and after such interest payment date) in which case (i) Holdings would be obligated to pay cash interest on each subsequent interest payment date, (ii) the notes would
cease to accrete after such interest payment date and (iii) the outstanding principal amount at the maturity of each note would be equal to the accreted value of such notes as of such interest
payment date. Holdings commenced paying cash interest on August 16, 2007 and made its first semi-annual interest payment on February 15, 2008 at which time the principal
became fixed at $240,795,000.

Concurrently
with the Notes due 2020 offering on December 15, 2010, Holdings launched a cash tender offer and consent solicitation for any and all of its outstanding $240,795,000
aggregate principal amount (accreted value) of its Discount Notes due 2014 at a purchase price of $797 plus a $30 consent fee for each $1,000 face amount (or $792.09 accreted value) of the then
outstanding Discount Notes due 2014 validly tendered and accepted by Holdings. AMCE used cash on hand to make a dividend payment of $185,034,000 on December 15, 2010 to its stockholder,
Holdings, which was treated as a reduction of additional paid-in capital. Holdings used the funds received from AMCE to pay the consideration for the Discount Notes due 2014 cash tender
offer plus accrued and unpaid interest on $170,684,000 principal amount (accreted value) of the Discount Notes due 2014 validly tendered. Holdings redeemed the remaining $70,111,000 (accreted value)
outstanding Discount Notes due 2014 at a price of $823.77 per $1,000 face amount (or $792.09 accreted value) on January 3, 2011, using funds from an additional dividend received from AMCE of
$76,141,000.

95

---



Table of Contents

AMC Entertainment Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended March 31, 2011, April 1, 2010 and April 2, 2009

NOTE 8CORPORATE BORROWINGS AND CAPITAL AND FINANCING LEASE OBLIGATIONS (Continued)

Parent Term Loan Facility

To help finance the dividend paid by Parent to its stockholders discussed in Note 9Stockholder's Equity, Parent
entered into a $400,000,000 Credit Agreement dated as of June 13, 2007 ("Parent Term Loan Facility") for net proceeds of $396,000,000. Costs related to the issuance of the Parent Term Loan
Facility were capitalized and are charged to interest expense, following the interest method, over the life of the Parent Term Loan Facility. During fiscal 2010, Parent made payments to purchase term
loans and reduce the principal balance of its Parent Term Loan Facility from $466,936,000 to $193,290,000 with a portion of the dividend provided by the Company. As of March 31, 2011, the
principal balance of the Parent Term Loan Facility, including unpaid interest, was $209,954,000 and the interest rate on borrowings thereunder was approximately 5.30% per annum.

Parent
is a holding company with no operations of its own and has no ability to service interest or principal on the Parent Term Loan Facility other than through dividends it may receive
from AMCE. AMCE is restricted, in certain circumstances, from paying dividends to Parent by the terms of the indentures governing its Notes due 2014, Notes due 2019, Notes due 2020 and the senior
secured credit facility. AMCE has not guaranteed the indebtedness of Parent nor pledged any of its assets as collateral and the obligation is not reflected on AMCE's balance sheet.

Borrowings
under the Parent Term Loan Facility bear interest at a rate equal to an applicable margin plus, at the Parent's option, either a base rate or LIBOR. The initial applicable
margin for borrowings under the Parent Term Loan Facility is 4.00% with respect to base rate borrowings and 5.00% with respect to LIBOR borrowings. Interest on borrowings under the Parent Term Loan
Facility is payable on each March 15, June 15, September 15, and December 15, beginning September 15, 2007 by adding such interest for the applicable period to the
principal amount of the outstanding loans. Parent is required to pay an administrative agent fee to the lenders under the Parent Term Loan Facility of $100,000 annually.

Parent
may voluntarily repay outstanding loans under the Parent Term Loan Facility, in whole or in part, together with accrued interest to the date of such prepayment on the principal
amount prepaid at any time at 100% of principal. Unpaid principal and interest on outstanding loans under the Parent Term Loan Facility are required to be repaid upon maturity on June 13, 2012.

Upon
a change of control (as defined in the Parent Term Loan Facility), Lenders have the right to require Parent to prepay the Parent Term Loan Facility at a price equal to 101% of the
principal amount thereof plus accrued and unpaid interest. The Sponsors are considered Permitted Holders as defined in the Parent Term Loan Facility and as such could create certain voting
arrangements that would not constitute a change of control under the Parent Term Loan Facility. In the event of a qualified equity issuance offer as defined in the Parent Term Loan Facility, Parent
will, to the extent lawful, prepay the maximum principal amount of loans properly tendered that may be purchased out of any qualified equity issuance net proceeds at a prepayment price in cash equal
to 100% of the principal amount thereof plus accrued and unpaid interest, if any, to the date of prepayment.

The
Parent Term Loan Facility contains certain covenants that, among other things, may limit the ability of the Parent to incur additional indebtedness and pay dividends or make
distributions in respect of its capital stocks, and this obligation is not reflected on AMCE's balance sheet.

96

---



Table of Contents

AMC Entertainment Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended March 31, 2011, April 1, 2010 and April 2, 2009

NOTE 9STOCKHOLDER'S EQUITY

AMCE has one share of Common Stock issued as of March 31, 2011 which is owned by Parent.

On
June 20, 2005, Holdings entered into a merger agreement ("Merger Agreement") with LCE Holdings, Inc. ("LCE Holdings"), the parent of Loews Cineplex Entertainment
Corporation ("Loews"), pursuant to which LCE Holdings merged with and into Holdings, with Holdings continuing as the holding company for the merged businesses, and Loews merged with and into AMCE,
with AMCE continuing after the merger (the "Merger" and collectively, the "Mergers"). The transaction closed on January 26, 2006.

Pursuant
to the terms of the Merger Agreement, on January 26, 2006, in connection with the consummation of the Merger, Holdings issued 256,085.61252 voting shares of
Class L-1 Common Stock, par value $0.01 per share ("Class L-1 Common Stock"), 256,085.61252 voting shares of Class L-2 Common Stock, par value
$0.01 per share ("Class L-2 Common Stock" and, together with the Class L-1 Common Stock, the "Class L Common Stock"), 382,475 voting shares of
Class A-1 Common Stock, par value $0.01 per share (the "Class A-1 Common Stock"), 382,475 voting shares of Class A-2 Common Stock, par value
$0.01 per share (the "Class A-2 Common Stock" and, together with the Class A-1 Common Stock, the "Class A Common Stock"), and 5,128.77496 nonvoting shares
of Class N Common Stock, par value $0.01 per share (the Class N Common Stock"), such that (i) the former non-management stockholders of LCE Holdings, including the
Bain Investors, the Carlyle Investors and the Spectrum Investors (collectively, the "Former LCE Sponsors"), hold all of the outstanding shares of Class L Common Stock, (ii) the
pre-existing non-management stockholders of Holdings, including the JPMP Investors and the Apollo Investors (collectively, the "Pre-Existing Holdings Sponsors" and,
the Pre-Existing Holdings Sponsors together with the Former LCE Sponsors, the "Sponsors") and other co-investors (the "Coinvestors"), held all of the outstanding shares of
Class A Common Stock, and (iii) management stockholders of Holdings (the "Management Stockholders" and, together with the Sponsors and Coinvestors, the "Stockholders") hold all of the
non-voting Class N Common Stock.

The
Class L Common Stock, Class A Common Stock and Class N Common Stock will automatically convert on a one-for-one basis into shares of
Residual Common Stock, par value $0.01 per share, upon (i) written consent of each of the Sponsors or (ii) the completion of an initial public offering of capital stock of Parent,
Holdings or AMCE (an "IPO").

The
issuance of the equity securities was exempt from registration under the Securities Act of 1933 and the rules promulgated thereunder (the "Securities Act") in reliance on
Section 4(2) of the Securities Act, as transactions by an issuer not involving a public offering.

On
June 11, 2007, Marquee Merger Sub Inc. ("merger sub"), a wholly-owned subsidiary of Parent, merged with and into Holdings, with Holdings continuing as the surviving
corporation ("holdco merger"). As a result of the holdco merger, (i) Holdings became a wholly owned subsidiary of Parent, a newly formed entity controlled by the Sponsors, (ii) each
share of Holdings' common stock that was issued and outstanding immediately prior to the effective time of the holdco merger was automatically converted into a substantially identical share of common
stock of Parent, and (iii) as further described in this report, each of Holdings' governance agreements was superseded by a substantially identical governance agreement entered into by and
among Parent, the Sponsors and Holdings' other

97

---



Table of Contents

AMC Entertainment Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended March 31, 2011, April 1, 2010 and April 2, 2009

NOTE 9STOCKHOLDER'S EQUITY (Continued)

stockholders.
The holdco merger was effected by the Sponsors to facilitate a previously announced debt financing by Parent and a related dividend to its stockholders.

On
October 2, 2008 and March 24, 2009, AMCE used cash on hand to pay dividend distributions to its stockholder, Holdings, in aggregate amounts of $18,420,000 and
$17,569,000, respectively. Holdings and Parent used the available funds to make cash interest payments on the Senior Discount Notes due 2014, repurchase treasury stock and make payments related to
liability classified options, and pay corporate expenses incurred in the ordinary course of business.

During
April and May of 2009, AMCE made dividend payments to its stockholder, Holdings, and Holdings made dividend payments to its stockholder, Parent, totaling $300,000,000, which were
treated as a reduction of additional paid-in capital. Parent made payments to purchase term loans and reduced the principal balance of its Parent Term Loan Facility from $466,936,000 to
$193,290,000 with a portion of the dividend proceeds.

During
September of 2009 and March of 2010, AMCE used cash on hand to pay a dividend distribution to Holdings in an aggregate amount of $15,351,000 and $14,630,000, respectively.
Holdings and Parent used the available funds to make a cash interest payment on the Holdco Notes and pay corporate overhead expenses incurred in the ordinary course of business.

During
September of 2010, AMCE used cash on hand to pay a dividend distribution to Holdings in an aggregate amount of $15,184,000. Holdings and Parent used the available funds to make a
cash interest payment on the 12% Senior Discount Notes due 2014 and pay corporate overhead expenses incurred in the ordinary course of business.

During
December of 2010 and January 2011, AMCE used cash on hand to pay a dividend distribution to Holdings in an aggregate amount of $185,034,000 and $76,141,000, respectively. Holdings
used the available funds to make a cash payment related to a tender offer for the 12% Senior Discount Notes due 2014.

During
March of 2011, AMCE used cash on hand to pay a dividend distribution to Holdings in an aggregate amount of $1,899,000. Holdings and Parent used the available funds to pay
corporate overhead expenses incurred in the ordinary course of business.

Common Stock Rights and Privileges

Parent's Class A-1 voting Common Stock, Class A-2 voting Common Stock, Class N nonvoting
Common Stock, Class L-1 voting Common Stock and Class L-2 voting Common Stock entitle the holders thereof to the same rights and privileges, subject to the same
qualifications, limitations and restrictions with respect to dividends. Additionally, each share of Class A Common Stock, Class L Common Stock and Class N Common Stock shall
automatically convert into one share of Residual Common Stock on a one-for-one basis immediately prior to the consummation of an Initial Public Offering.

Stock-Based Compensation

The Company has no stock-based compensation arrangements of its own, but Parent has amended and restated its 2004 Stock Option Plan
("2004 Stock Option Plan") and the 2010 Equity Incentive

98

---



Table of Contents

AMC Entertainment Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended March 31, 2011, April 1, 2010 and April 2, 2009

NOTE 9STOCKHOLDER'S EQUITY (Continued)

Plan.
The Company has recorded stock-based compensation expense of $1,526,000, $1,384,000, and $2,622,000 within general and administrative: other during each of the fifty-two weeks ended
March 31, 2011, April 1, 2010, and April 2, 2009, respectively. Compensation expense for stock options and restricted stock are recognized on a straight-line basis
over the requisite service period, which is generally the vesting period of the award. The Company's financial statements reflect an increase to additional paid-in capital related to
stock-based compensation for awards and all outstanding options of $1,526,000 and $1,384,000 during fiscal 2011 and 2010, respectively.

As
of March 31, 2011, there was approximately $6,379,000 of total estimated unrecognized compensation cost related to nonvested stock-based compensation arrangements under both
the 2010 Equity Incentive Plan and the 2004 Stock Option Plan expected to be recognized over a weighted average 3.3 years.

2004 Stock Option Plan

Parent has adopted a stock-based compensation plan that permits a maximum of 49,107.44681 options to be issued on Parent's stock under
the 2004 Stock Option Plan. The stock options have a ten year term and generally step vest in equal amounts from one to three or five years from the date of the grant. Vesting may accelerate for a
certain participant if there is a change of control (as defined in the employee agreement). All outstanding options have been granted to employees of the Company.

The
Company accounts for stock options using the fair value method of accounting and has elected to use the simplified method for estimating the expected term of "plain vanilla" share
option grants, as it does not have enough historical experience to provide a reasonable estimate. The Company has valued the options granted during the fifty-two weeks ended
April 1, 2010 using the Black-Scholes option pricing model, which included a valuation prepared by management on behalf of the Compensation Committee of the Board of Directors of Parent. This
reflected market conditions as of May 28, 2009 which indicated a fair value price per share of the underlying shares of $339.59 per share, a purchase of 2,542 shares by Parent for $323.95 per
share from the Company's former Chief Executive Officer pursuant to his Separation and General Release Agreement dated February 23, 2009 and a sale of 385.862 shares by Parent to the Company's
current Chief Executive Officer pursuant to his Employment Agreement dated February 23, 2009 for $323.95 per share. See Assumptions Used to Estimate Option Values below for further information
regarding assumptions used in determining fair value.

On
July 8, 2010, the Board approved a grant of 1,023 non-qualified stock options to a certain employee of the Company under the amended and restated 2004 Stock Option
Plan. These options vest ratably over 5 years with an exercise price of $752 per share. Expense for this award will be recognized on a straight-line basis over the vesting period.
The estimated grant date fair value of the options granted on 1,023 shares was $300.91 per share, or $308,000, and was determined using the Black-Scholes option-pricing model. The option exercise
price was $752 per share, and the estimated fair value of the shares was $752, resulting in $0 intrinsic value for the option grant. See 2010 Equity Incentive Plan below for further information
regarding assumptions used in determining fair value.

99

---



Table of Contents

AMC Entertainment Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended March 31, 2011, April 1, 2010 and April 2, 2009

NOTE 9STOCKHOLDER'S EQUITY (Continued)

On
July 23, 2010, the Board of Directors of Parent (the "Board") determined that the Company would no longer grant any awards of shares of common stock of Parent under the 2004
Stock Option Plan.

2010 Equity Incentive Plan

On July 8, 2010, the Board and the stockholders of Parent approved the adoption of the AMC Entertainment Holdings, Inc.
2010 Equity Incentive Plan (the "Plan"). The Plan provides for grants of non-qualified stock options, incentive stock options, stock appreciation rights ("SARs"), restricted stock awards,
other stock-based awards or performance-based compensation awards.

Subject
to adjustment as provided for in the Plan, (i) the aggregate number of shares of common stock of Parent available for delivery pursuant to awards granted under the Plan is
39,312 shares, (ii) the number of shares available for granting incentive stock options under the Plan will not exceed 19,652 shares and (iii) the maximum number of shares that may be
granted to a participant each year is 7,862.

On
July 8, 2010, the Board approved the grants of 5,399 non-qualified stock options, 5,399 restricted stock (time vesting), and 5,404 restricted stock (performance
vesting) to certain of its employees. On February 1, 2011, the Board approved the grants of 137 non-qualified stock options, 137 restricted stock (time vesting), and 138
restricted stock (performance vesting) to certain of its employees. The estimated fair value of the stock at the grant date of July 8, 2010 was approximately $752 per share and was based upon a
contemporaneous valuation reflecting market conditions. The award agreements under the Plan generally have the following features, subject to discretionary approval by Parent's compensation
committee:



100

---



Table of Contents

AMC Entertainment Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended March 31, 2011, April 1, 2010 and April 2, 2009

NOTE 9STOCKHOLDER'S EQUITY (Continued)



Stock Option Activity

A summary of Parent's stock option activity under both the 2004 Option Plan and the 2010 Equity Incentive Plan is as follows:

March 31, 2011

April 1, 2010

April 2, 2009Number of
Shares

Weighted
Average
Exercise
Price Per
Share

Number of
Shares

Weighted
Average
Exercise
Price Per
Share

Number of
Shares

Weighted
Average
Exercise
Price Per
ShareOutstanding at beginning of year


31,597.1680905

$
383.58


26,811.1680905

$
391.43


36,521.356392

$
491.00Granted(1)


6,507.00000


752.00


4,786.00000


339.59


15,980.45000


323.95Forfeited


(1,615.40000
)

368.18








(25,690.6383015
)

491.00Exercised


(804.60000
)

452.57











Outstanding at end of year and expected to vest(1)(2)


35,684.1680905

$
449.93


31,597.1680905

$
383.58


26,811.1680905

$
391.43Exercisable at end of year(3)


17,238.4980902

$
423.70


14,026.8080901

$
452.94


8,784.574472

$
491.00Available for grant at end of year(4)


28,568.0000000





9,325.7042495





14,111.7042495


(1)The
weighted average remaining contractual life for outstanding options was 7.0 years, 7.6 years, and 8.3 years for fiscal 2011, 2010
and 2009, respectively. During fiscal 2011, 6,507 options were granted at an exercise price of $752. The options granted were based on an estimated fair value of $752 of common stock, resulting in an
intrinsic value for the options on the grant date of $0. During fiscal 2010, 4,786 options were granted on May 28, 2009 at an exercise price of $339.59, based on an estimated fair value of
$339.59 of common stock on May 28, 2009, resulting in an intrinsic value for the options on the grant date of $0. During fiscal 2009, 15,980.45 options were granted on March 6, 2009 at
an exercise price of $323.95, based on an estimated fair value of $323.95 of common stock on March 6, 2009, resulting in an intrinsic value for the options on the grant date of $0.


101

---



Table of Contents

AMC Entertainment Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended March 31, 2011, April 1, 2010 and April 2, 2009

NOTE 9STOCKHOLDER'S EQUITY (Continued)

(2)The
aggregate estimated intrinsic value for these options was approximately $10,800,000 as of March 31, 2011.(3)The
aggregate estimated intrinsic value for these options was approximately $5,700,000 as of March 31, 2011.(4)At
March 31, 2011, the shares available for grant were under the 2010 Equity Incentive Plan, and include all types of shares available for grant
under the 2010 Equity Incentive Plan. The shares available for grant at March 31, 2011 were reduced by 5,372 shares of unvested restricted stock (time vesting). Also, at March 31, 2011,
the shares available for grant do not include the awards approved by the Board that have not been granted, which includes 52 stock option shares, 52 shares of restricted stock (time vesting), and
4,170 shares of restricted stock (performance vesting).


For options exercised, intrinsic value is calculated as the difference between the market price on the date of exercise (determined using the most
recent contemporaneous valuation prior to the exercise) and the exercise price of the options. The total intrinsic value of options exercised was $241,000 during fiscal 2011 and there were no options
exercised during fiscal 2010 and 2009. Parent received outstanding shares, instead of cash, from the exercise of stock options during fiscal 2011 to satisfy the aggregate strike price of approximately
$364,000.

Assumptions Used To Estimate Option Values

The following table reflects the weighted average fair value per option granted during each year under the 2004 Option Plan and the
2010 Equity Incentive Plan, as well as the significant assumptions used in determining weighted average fair value using the Black-Scholes option-pricing model:

March 31, 2011

April 1, 2010

April 2, 20092010 Plan

2004 Plan

2004 Plan

2004 PlanWeighted average fair value of options on grant date

$
293.72

$
300.91

$
135.71

$
129.46Risk-free interest rate


2.50
%

2.58
%

2.6
%

2.6
%Expected life (years)


6.25


6.50


6.5


6.5Expected volatility(1)


35.0
%

35.0
%

35.0
%

35.0
%Expected dividend yield














(1)The
Company uses share values of its publicly traded competitor peer group for purposes of calculating volatility.


102

---



Table of Contents

AMC Entertainment Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended March 31, 2011, April 1, 2010 and April 2, 2009

NOTE 9STOCKHOLDER'S EQUITY (Continued)

Restricted Stock Activity

The following table represents the restricted stock activity:

Shares of
Restricted
Stock

Weighted
Average
Grant Date
Fair ValueUnvested at April 1, 2010




$
Granted


6,856


752.00Forfeited/canceled(1)


(1,484
)

752.00Unvested at March 31, 2011


5,372

$
752.00


(1)The
Company did not meet its pre-established annual performance target for fiscal 2011, and therefore, the restricted stock (performance
vesting) grant was canceled.


NOTE 10INCOME TAXES

Income tax provision reflected in the Consolidated Statements of Operations for the periods in the three years ended March 31, 2011 consists of the following components:

(In thousands)

March 31,
2011

April 1,
2010

April 2,
2009Current:Federal

$


$
(2,800
)
$
Foreign








13,200State


1,950


500


3,500Total current


1,950


(2,300
)

16,700Deferred:Federal





(66,500
)

Foreign








(1,900
)State








2,300Total deferred





(66,500
)

400Total provision (benefit)


1,950


(68,800
)

17,100Tax provision from discontinued operations








(11,300
)Total provision (benefit) from continuing operations

$
1,950

$
(68,800
)
$
5,800


AMCE
has recorded no alternative minimum taxes as the consolidated tax group for which AMCE is a member expects no alternative minimum tax liability and pursuant to the
tax sharing arrangement in place, AMCE has no liability.

103

---



Table of Contents

AMC Entertainment Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended March 31, 2011, April 1, 2010 and April 2, 2009

NOTE 10INCOME TAXES (Continued)

Pre-tax
income (losses) consisted of the following:

(In thousands)

March 31,
2011

April 1,
2010

April 2,
2009Domestic

$
(121,243
)
$
8,740

$
(71,080
)Foreign


340


(7,750
)

7,008Total

$
(120,903
)
$
990

$
(64,072
)


The
difference between the effective tax rate on earnings (loss) from continuing operations before income taxes and the U.S. federal income tax statutory rate is as follows:

(In thousands)

March 31,
2011

April 1,
2010

April 2,
2009Income tax expense (benefit) at the federal statutory rate

$
(42,515
)
$
2,983

$
(29,785
)Effect of:State income taxes


1,950


500


5,800Change in ASC 740 (formerly FIN 48) reserve


(300
)

200


(6,370
)Permanent items





(540
)

Change in ASC 740 (formerly APB 23) assertion








401Valuation allowance


42,815


(71,765
)

35,565Other, net





(178
)

189Income tax expense (benefit)

$
1,950

$
(68,800
)
$
5,800Effective income tax rate


(1.6
)%

(807.1
)%

(6.8
)%


104

---



Table of Contents

AMC Entertainment Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended March 31, 2011, April 1, 2010 and April 2, 2009

NOTE 10INCOME TAXES (Continued)

The
significant components of deferred income tax assets and liabilities as of March 31, 2011 and April 1, 2010 are as follows:

March 31, 2011

April 1, 2010Deferred Income Tax

Deferred Income Tax(In thousands)

Assets

Liabilities

Assets

LiabilitiesProperty

$
7,385

$


$


$
(1,948
)Investments in equity method investees





(77,522
)




(57,109
)Intangible assets





(26,266
)




(31,875
)Pension postretirement and deferred compensation


18,481





19,149


Accrued reserves and liabilities


48,954





21,588


Deferred revenue


158,354





113,667


Deferred rents


116,513





100,561


Alternative minimum tax and other credit carryovers


13,901





13,058


Charitable contributions


1,642





1,198


Net operating loss carryforward


172,279





189,243


Total

$
537,509

$
(103,788
)
$
458,464

$
(90,932
)Less: Valuation allowance


(329,221
)




(263,032
)

Total deferred income taxes(1)

$
208,288

$
(103,788
)
$
195,432

$
(90,932
)


(1)See
Note 7Supplemental Balance Sheet Information for additional disclosures about net current deferred tax assets and net
non-current deferred tax liabilities.


A
rollforward of the Company's valuation allowance for deferred tax assets is as follows:

(In thousands)

Balance at
Beginning of
Period

Additions
Charged
(Credited) to
Revenues,
Costs and
Expenses

Charged
(Credited)
to Goodwill

Charged
(Credited)
to Other
Accounts

Deductions
and
Write-offs

Balance at
End of
PeriodFiscal Year 2011Valuation Allowancedeferred income tax assets

$
263,032


42,815





23,374
(1)



$
329,221Fiscal Year 2010Valuation Allowancedeferred income tax assets

$
281,442


(71,765
)




53,355
(2)



$
263,032Fiscal Year 2009Valuation Allowancedeferred income tax assets

$
340,367


35,565


(31,515
)

(10,835)
(3)

(52,140)
(4)
$
281,442


(1)Primarily
relates to an increase in the valuation allowance related to the intercompany tax sharing agreement with Parent. Pursuant to this tax sharing
agreement, the separate company losses of Parent related to tax interest expense are available to offset taxable income generated by the


105

---



Table of Contents

AMC Entertainment Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended March 31, 2011, April 1, 2010 and April 2, 2009

NOTE 10INCOME TAXES (Continued)

Company.
During fiscal 2011 deferred tax assets and corresponding valuation allowance were contributed from Parent to the Company. (2)Primarily
relates to intercompany tax sharing agreement with Parent and Holdings and an increase in the valuation allowance, with a corresponding increase
in the related deferred tax asset, to present previously unrecognized state net operating loss carryforwards and their corresponding valuation allowance.(3)Primarily
relates to a reduction in the valuation allowance, with a corresponding reduction in the related deferred tax asset, to present net operating loss
carryforwards related to uncertain tax positions on a net basis.(4)Elimination
of Cinemex deferred tax asset and change in valuation allowance through discontinued operations.


The
Company's federal income tax loss carryforward of $454,450,000 will begin to expire in 2020 and will completely expire in 2030 and will be limited annually due to
certain change in ownership provisions of the Internal Revenue Code. The Company also has state income tax loss carryforwards of $839,666,000 which may be used over various periods ranging from 1 to
20 years.

Parent
completed the repurchase of certain term loans under the Parent term Loan Facility in fiscal 2010. Based upon the historical tax sharing arrangement, Parent should utilize the
Company's net operating losses in future years. During fiscal 2010, the Company reversed $1,500,000 of its valuation allowance through the income statement in anticipation of future utilization by
Parent. As of April 2, 2009, the Company reversed $31,000,000 of its valuation allowance through Goodwill in anticipation of future utilization by Parent.

During
fiscal 2010, management believed it was more likely than not that the Company had the ability to execute a feasible and prudent tax strategy that would provide for the realization
of net operating losses that expire through 2022 by converting certain limited partnership units into common stock. Management has reduced its overall valuation allowance by $65,000,000 in fiscal 2010
for the estimated amount of net operating losses that would be realized as a result of this potential action.

The
Company has recorded a valuation allowance against its remaining net deferred tax asset in U.S. and foreign jurisdictions of $329,221,000 as of March 31, 2011.

A
reconciliation of the change in the amount of unrecognized tax benefits during the year ended March 31, 2011 was as follows:

(In millions)

March 31,
2011

April 1,
2010

April 2,
2009Balance at Beginning of Period

$
28.5

$
28.3

$
34.4Gross IncreasesCurrent Period Tax Positions


0.7


0.7


0.7Gross DecreasesTax Position in Prior Periods





(0.5
)

(2.2
)Expired Attributes


(1.0
)




Lapse of Statute of Limitations








(4.6
)Balance at End of Period

$
28.2

$
28.5

$
28.3


106

---



Table of Contents

AMC Entertainment Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended March 31, 2011, April 1, 2010 and April 2, 2009

NOTE 10INCOME TAXES (Continued)

As
of March 31, 2011, the Company has recognized a $7,000,000 liability for uncertain tax positions and a $7,000,000 deferred tax asset for net operating losses on
the balance sheet. These uncertain positions were taken in tax years where the Company generated positive taxable income and they were previously netted against deferred tax assets on the balance
sheet.

The
Company's effective tax rate would not be significantly impacted by the ultimate resolution of the uncertain tax positions because of the retention of a valuation allowance against
most of its net operating loss carryforwards.

The
Company recognizes income tax-related interest expense and penalties as income tax expense and general and administrative expense, respectively. The liabilities for
interest and penalties increased by $187,000 and $101,000, as of March 31, 2011 and April 1, 2010, respectively.

There
are currently unrecognized tax benefits which the Company anticipates will be resolved in the next 12 months; however, the Company is unable at this time to estimate what
the impact on its unrecognized tax benefits will be.

The
Company or one of its subsidiaries files income tax returns in the U.S. federal jurisdiction, and various state and foreign jurisdictions. An IRS examination of the tax years
February 28, 2002 through December 31, 2003 of the former Loews Cineplex Entertainment Corporation and subsidiaries was concluded during fiscal 2007. An IRS examination for the tax years
ended March 31, 2005 and March 30, 2006 was completed during 2009. Generally, tax years beginning after March 28, 2002 are still open to examination by various taxing authorities.
Additionally, the Company has net operating loss ("NOL") carryforwards for tax years ended October 31, 2000 through March 28, 2002 in the U.S. and various state
jurisdictions which have carryforwards of varying lengths of time. These NOLs are subject to adjustment based on the statute of limitations of the return in which they are utilized, not the year in
which they are generated. Various state, local and foreign income tax returns are also under examination by taxing authorities. The Company does not believe that the outcome of any examination will
have a material impact on its financial statements.

NOTE 11LEASES

Beginning in fiscal 1998, the Company has completed numerous real estate lease agreements with Entertainment Properties Trust ("EPT") including transactions accounted for as sale and
leaseback transactions in accordance with Accounting Standards Codification No. 840,Leases. The leases are triple net leases that require the
Company to pay substantially all expenses associated with the operation of the theatres such as taxes and other charges, insurance, utilities, service, maintenance and any ground lease payments. As of
March 31, 2011, the Company leased from EPT 41 theatres with 849 screens located in the United States and Canada.

107

---



Table of Contents

AMC Entertainment Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended March 31, 2011, April 1, 2010 and April 2, 2009

NOTE 11LEASES (Continued)

Following
is a schedule, by year, of future minimum rental payments required under existing operating leases that have initial or remaining non-cancelable terms in excess of
one year as of March 31, 2011:

(In thousands)

Minimum operating
lease payments2012

$
422,6052013


426,2552014


407,2752015


402,7572016


390,583Thereafter


2,240,031Total minimum payments required

$
4,289,506


As
of March 31, 2011, the Company has a lease agreement for one theatre with 12 screens which is under construction and is expected to open in fiscal 2012. Included above are
digital projector equipment leases payable to DCIP.

Included
in other long-term liabilities as of March 31, 2011 and April 1, 2010 is $112,762,000 and $98,034,000, respectively, of deferred rent representing
future minimum rental payments for leases with scheduled rent increases, and $143,426,000 and $128,027,000, respectively, for unfavorable lease liabilities.

Rent
expense is summarized as follows:

(In thousands)

52 Weeks
Ended
March 31, 2011

52 Weeks
Ended
April 1, 2010

52 Weeks
Ended
April 2, 2009Minimum rentals

$
422,351

$
391,493

$
398,289Common area expenses


46,208


41,189


43,409Percentage rentals based on revenues


7,251


7,982


7,105Rent


475,810


440,664


448,803General and administrative and other


4,665


1,427


1,227Total

$
480,475

$
442,091

$
450,030


108

---



Table of Contents

AMC Entertainment Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended March 31, 2011, April 1, 2010 and April 2, 2009

NOTE 12EMPLOYEE BENEFIT PLANS

The Company sponsors frozen non-contributory qualified and non-qualified defined benefit pension plans generally covering all employees who, prior to the freeze,
were age 21 or older and had completed at least 1,000 hours of service in their first twelve months of employment, or in a calendar year ending thereafter, and who were not covered by a
collective bargaining agreement. The Company also offers eligible retirees the opportunity to participate in a health plan (medical and dental). Certain employees are eligible for subsidized
postretirement medical benefits. The eligibility for these benefits is based upon a participant's age and service as of January 1, 2009. The Company also sponsors a postretirement deferred
compensation plan.

In
the fourth quarter of fiscal 2009, the Company recorded a curtailment gain of $1,072,000 as a result of the retirement of its former chief executive officer on February 23,
2009. The curtailment gain relates to the Retirement Enhancement Plan which included only one active unvested participant and one retired vested participant. Because the former chief executive officer
had not vested in his eligible benefit, his retirement created a significant elimination of the accrual of deferred benefits for his future services.

On
May 2, 2008, the Company's Board of Directors approved revisions to the Company's Post Retirement Medical and Life Insurance Plan effective January 1, 2009 and on
July 3, 2008 the changes were communicated to the plan participants. As a result of these revisions, the Company recorded a negative prior service cost of $5,969,000 through other comprehensive
income to be amortized over eleven years starting in fiscal 2010, based on expected future service of the remaining participants.

Effective
March 29, 2007, the Company adopted the amended guidance for employers' accounting for defined benefit pension and other postretirement plans in ASC 715, CompensationRetirement Benefits,
("ASC 715"). ASC 715 requires that, effective for fiscal years ending after December 15, 2008 the
assumptions used to measure annual pension and retiree medical expense be determined as of the balance sheet date and all plan assets and liabilities be reported as of that date. Accordingly, as of
the beginning of fiscal 2009, the Company changed the measurement date for the annual pension and postretirement medical expense and all plan assets and liabilities by applying the transition option
under which a 15 month measurement was determined as of January 1, 2008, that covers the period to the Company's year-end balance sheet date. As a result of this change in
measurement date, the Company recorded an $82,000 loss to fiscal 2009 opening accumulated deficit and a $411,000 unrealized loss to other comprehensive income.

On
November 7, 2006, the Company's Board of Directors approved an amendment to freeze the Company's Defined Benefit Retirement Income Plan, Supplemental Executive Retirement Plan
and Retirement Enhancement Plan (the "Plans") as of December 31, 2006. On December 20, 2006 the Company amended and restated the Plans to implement the freeze as of December 31,
2006. As a result of the freeze there will be no further benefits accrued after December 31, 2006, but continued vesting for associates with less than five years of vesting service. The Company
will continue to fund existing benefit obligations and there will be no new participants in the future.

The
measurement date used to determine pension and other postretirement benefits is March 31, 2011.

109

---



Table of Contents

AMC Entertainment Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended March 31, 2011, April 1, 2010 and April 2, 2009

NOTE 12EMPLOYEE BENEFIT PLANS (Continued)

Net
periodic benefit cost for the plans consists of the following:

Pension Benefits

Other Benefits(In thousands)

52 Weeks
Ended
March 31,
2011

52 Weeks
Ended
April 1,
2010

52 Weeks
Ended
April 2,
2009

52 Weeks
Ended
March 31,
2011

52 Weeks
Ended
April 1,
2010

52 Weeks
Ended
April 2,
2009Components of net periodic benefit cost:Service cost

$
180

$
180

$
369

$
154

$
210

$
402Interest cost


4,612


4,403


4,468


1,275


1,296


1,111Expected return on plan assets


(3,986
)

(2,990
)

(5,098
)







Amortization of prior service credit











(865
)

(543
)

(407
)Amortization of net transition obligation








28








Amortization of net (gain) loss


137


134


(1,622
)




(278
)

(69
)Curtailment








(1,072
)







Net periodic benefit cost

$
943

$
1,727

$
(2,927
)
$
564

$
685

$
1,037


The
following table summarizes the changes in other comprehensive income:

Pension Benefits

Other Benefits(In thousands)

52 Weeks
Ended
March 31,
2011

52 Weeks
Ended
April 1,
2010

52 Weeks
Ended
March 31,
2011

52 Weeks
Ended
April 1,
2010Net (gain) loss

$
773

$
4,224

$
(109
)
$
7,315Net prior service credit








(283
)

(3,727
)Amortization of net gain (loss)


(137
)

(134
)




278Amortization of prior service credit








865


543Total recognized in other comprehensive income

$
636

$
4,090

$
473

$
4,409Net periodic benefit cost


943


1,727


564


685Total recognized in net periodic benefit cost and other comprehensive income

$
1,579

$
5,817

$
1,037

$
5,094


110

---



Table of Contents

AMC Entertainment Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended March 31, 2011, April 1, 2010 and April 2, 2009

NOTE 12EMPLOYEE BENEFIT PLANS (Continued)

The
following tables set forth the plan's change in benefit obligations and plan assets and the accrued liability for benefit costs included in the Consolidated Balance Sheets:

Pension Benefits

Other Benefits(In thousands)

52 Weeks
Ended
March 31,
2011

52 Weeks
Ended
April 1,
2010

52 Weeks
Ended
March 31,
2011

52 Weeks
Ended
April 1,
2010Change in benefit obligation:Benefit obligation at beginning of period

$
76,441

$
60,690

$
21,984

$
18,101Service cost


180


180


154


210Interest cost


4,612


4,403


1,275


1,296Plan participant's contributions








469


417Actuarial (gain) loss


3,271


13,694


(108
)

7,315Plan amendment








(288
)

(3,727
)Benefits paid


(4,154
)

(2,526
)

(1,570
)

(1,628
)Benefit obligation at end of period

$
80,350

$
76,441

$
21,916

$
21,984




Pension Benefits

Other Benefits(In thousands)

52 Weeks
Ended
March 31,
2011

52 Weeks
Ended
April 1,
2010

52 Weeks
Ended
March 31,
2011

52 Weeks
Ended
April 1,
2010Change in plan assets:Fair value of plan assets at beginning of period

$
54,457

$
39,600

$


$
Actual return on plan assets gain (loss)


6,446


12,461





Employer contribution


3,027


4,922


1,101


1,211Plan participant's contributions








469


417Benefits paid


(4,154
)

(2,526
)

(1,570
)

(1,628
)Fair value of plan assets at end of period

$
59,776

$
54,457

$


$
Net liability for benefit cost:Funded status

$
(20,574
)
$
(21,984
)
$
(21,916
)
$
(21,984
)




Pension Benefits

Other Benefits(In thousands)

March 31,
2011

April 1,
2010

March 31,
2011

April 1,
2010Amounts recognized in the Balance Sheet:Accrued expenses and other liabilities

$
(208
)
$
(192
)
$
(1,084
)
$
(1,231
)Other long-term liabilities


(20,366
)

(21,792
)

(20,832
)

(20,753
)Net liability recognized

$
(20,574
)
$
(21,984
)
$
(21,916
)
$
(21,984
)Aggregate accumulated benefit obligation

$
(80,350
)
$
(76,441
)
$
(21,916
)
$
(21,984
)


111

---



Table of Contents

AMC Entertainment Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended March 31, 2011, April 1, 2010 and April 2, 2009

NOTE 12EMPLOYEE BENEFIT PLANS (Continued)

The
following table summarizes pension plans with accumulated benefit obligations and projected benefit obligations in excess of plan assets:

Pension Benefits(In thousands)

March 31,
2011

April 1,
2010Aggregated accumulated benefit obligation

$
(80,350
)
$
(75,997
)Aggregated projected benefit obligation


(80,350
)

(75,997
)Aggregated fair value of plan assets


59,776


53,977


Amounts
recognized in accumulated other comprehensive income consist of the following:

Pension Benefits

Other Benefits(In thousands)

March 31,
2011

April 1,
2010

March 31,
2011

April 1,
2010Net actuarial (gain) loss

$
6,029

$
5,393

$
1,498

$
1,607Prior service credit








(8,164
)

(8,746
)


Amounts
in accumulated other comprehensive income (loss) expected to be recognized in components of net periodic pension cost in fiscal 2012 are as follows:

(In thousands)

Pension
Benefits

Other
BenefitsNet actuarial loss

$
5

$
Prior service credit





(890
)Total

$
5

$
(890
)


Actuarial Assumptions

The weighted-average assumptions used to determine benefit obligations are as follows:

Pension Benefits

Other BenefitsMarch 31,
2011

April 1,
2010

March 31,
2011

April 1,
2010Discount rate


5.86
%

6.16
%

5.51
%

5.97
%Rate of compensation increase


N/A


N/A


N/A


N/A


The
weighted-average assumptions used to determine net periodic benefit cost are as follows:

Pension Benefits

Other Benefits52 Weeks
Ended
March 31,
2011

52 Weeks
ended
April 1,
2010

52 Weeks
ended
April 2,
2009

52 Weeks
Ended
March 31,
2011

52 Weeks
ended
April 1,
2010

52 Weeks
ended
April 2,
2009Discount rate


6.16
%

7.43
%

6.25
%

5.97
%

7.42
%

6.25
%Expected long-term return on plan assets


8.00
%

8.00
%

8.25
%

N/A


N/A


N/ARate of compensation increase


N/A


N/A


N/A


N/A


N/A


5.00
%


112

---



Table of Contents

AMC Entertainment Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended March 31, 2011, April 1, 2010 and April 2, 2009

NOTE 12EMPLOYEE BENEFIT PLANS (Continued)

In developing the expected long-term rate of return on plan assets at each measurement date, the Company considers the plan assets' historical returns, asset allocations, and
the anticipated future economic environment and long-term performance of the asset classes. While appropriate consideration is given to recent and historical investment performance, the
assumption represents management's best estimate of the long-term prospective return.

For
measurement purposes, the annual rate of increase in the per capita cost of covered health care benefits assumed for 2011 was 9.0% for medical and 4.0% for dental and vision. The
rates were assumed to decrease gradually to 5.0% for medical in 2019 and remain at 4.0% for dental. The health care cost trend rate assumption has a significant effect on the amounts reported.
Increasing the assumed health care cost trend rates by one percentage point in each year would increase the accumulated postretirement benefit obligation as of March 31, 2011 by $2,190,000 and
the aggregate of the service and interest cost components of postretirement expense for fiscal 2012 by $139,000. Decreasing the assumed health care cost trend rates by one percentage point in each
year would decrease the accumulated postretirement obligation for fiscal 2012 by $1,866,000 and the aggregate service and interest cost components of postretirement expense for fiscal 2012 by
$119,000. The Company's retiree health plan provides a benefit to its retirees that is at least actuarially equivalent to the benefit provided by theMedicare Prescription
Drug, Improvement and Modernization Act of 2003("Medicare Part D").

Cash Flows

The Company expects to contribute $4,869,000 to the pension plans during fiscal 2012.

The
following table provides the benefits expected to be paid (inclusive of benefits attributable to estimated future employee service) in each of the next five fiscal years, and in the
aggregate for the five fiscal years thereafter:

(In thousands)

Pension
Benefits

Other Benefits
Net of Medicare
Part D Adjustments

Medicare Part D
Adjustments2012

$
2,340

$
1,084

$
732013


2,193


1,117


822014


2,763


1,154


912015


2,355


1,171


1012016


3,006


1,208


109Years 2017 - 2020


21,157


6,628


680


Pension Plan Assets

The Company's investment objectives for its defined benefit pension plan investments are: (1) to preserve the real value of its
principal; (2) to maximize a real long-term return with respect to the plan assets consistent with minimizing risk; (3) to achieve and maintain adequate asset coverage for
accrued benefits under the plan; and (4) to maintain sufficient liquidity for payment of the plan obligations and

113

---



Table of Contents

AMC Entertainment Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended March 31, 2011, April 1, 2010 and April 2, 2009

NOTE 12EMPLOYEE BENEFIT PLANS (Continued)

expenses.
The Company uses a diversified allocation of equity, debt, and real estate exposures that are customized to the Plan's cash flow benefit needs. The target allocations for plan assets are as
follows:

Asset Category

Target
AllocationFixed income(1)


26
%High yield bond fund


4
%Equity SecuritiesU.S. companies


33
%Equity SecuritiesInternational companies


16
%Collective trust fund


9
%Real Estate


7
%Commodities broad basket fund


5
%100
%


(1)Includes
U.S. Treasury Securities and Bond market fund


Valuation Techniques.The fair values classified within Level 1 of the valuation hierarchy were determined using quoted market
prices from
actively traded markets. Pooled separate accounts and collective trust funds were classified within Level 2 hierarchy, which were not publicly quoted, as the underlying assets have observable
Level 1 quoted pricing inputs which were used in determining the fair value of these investments.

The
fair value of the pension plan assets at March 31, 2011, by asset class are as follows:

Fair Value Measurements at March 31, 2011 Using(In thousands)

Total Carrying
Value at
March 31, 2011

Quoted prices in
active market
(Level 1)

Significant other
observable inputs
(Level 2)

Significant
unobservable inputs
(Level 3)Cash and cash equivalents

$
32

$
32

$


$
U.S. Treasury Securities


2,601


2,601





Equity securities:U.S. companies


19,149


2,880


16,269


International companies


9,648


9,648





Bond market fund


12,288


12,288





Collective trust fund


5,817





5,817


Commodities broad basket fund


3,608


3,608





High yield bond fund


2,733





2,733


Real estate(1)


3,900





3,900


Total assets at fair value

$
59,776

$
31,057

$
28,719

$



(1)This
pooled separate account invests mainly in commercial real estate and includes mortgage loans which are backed by the associated properties. These real
estate investments had a temporary withdrawal limitation related to past turmoil in the credit markets that resulted in a slowdown in the sale of commercial real estate assets. The temporary
withdrawal limitation restriction ended


114

---



Table of Contents

AMC Entertainment Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended March 31, 2011, April 1, 2010 and April 2, 2009

NOTE 12EMPLOYEE BENEFIT PLANS (Continued)

March 25,
2011, and therefore the assets were transferred out of Level 3 pricing inputs and into Level 2 pricing inputs.


The
fair value of the pension plan assets at April 1, 2010, by asset class are as follows:

Fair Value Measurements at April 1, 2010 Using(In thousands)

Total Carrying
Value at
April 1, 2010

Quoted prices in
active market
(Level 1)

Significant other
observable inputs
(Level 2)

Significant
unobservable inputs
(Level 3)Cash and cash equivalents

$
544

$
544

$


$
U.S. Treasury Securities


2,464


2,464





Equity securities:U.S. companies


21,734


3,595


18,139


International companies


8,686


8,686





Bond market fund


8,403


8,403





Collective trust fund


5,132





5,132


Commodities broad basket fund


1,443


1,443





High yield bond fund


2,387





2,387


Inflation-protected bond fund


788





788


Intermediate-term bond fund


1,057





1,057


Real estate(1)


1,819








1,819Total assets at fair value

$
54,457

$
25,135

$
27,503

$
1,819


(1)This
pooled separate account invests mainly in commercial real estate and includes mortgage loans which are backed by the associated properties. These
underlying real estate investments have unobservable Level 3 pricing inputs due to a restriction. The fair values have been estimated based on independent appraisals or cash flow projections.


Fair Value Measurements Using Significant Unobservable Inputs (Level 3)(In thousands)

Real EstateBalance at April 2, 2009

$
2,283Purchases, sales, issuances, and settlements, net


36Unrealized loss relating to instruments still held at end of year


(500
)Balance at April 1, 2010


1,819Purchases


1,593Unrealized gain relating to instruments still held at end of year


482Transfers out of Level 3


(3,894
)Balance at March 31, 2011

$



Defined Contribution Plan

The Company sponsors a voluntary 401(k) savings plan covering certain employees age 21 or older and who are not covered by a collective
bargaining agreement. Effective January 1, 2011, under the

115

---



Table of Contents

AMC Entertainment Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended March 31, 2011, April 1, 2010 and April 2, 2009

NOTE 12EMPLOYEE BENEFIT PLANS (Continued)

Company's
401(k) Savings Plan, the Company began to match 100% of each eligible employee's elective contributions up to 3% and 50% of contributions up to 5% of the employee's eligible compensation.
During fiscal 2010 and the first three quarters of fiscal 2011, the Company matched 50%
of each eligible employee's elective contributions up to 6% of the employee's eligible compensation. During fiscal 2009, the Company matched 100% of elective contributions up to 5% of employee
compensation. The Company's expense under the 401(k) savings plan was $1,650,000, $1,654,000, and $2,374,000 for the periods ended March 31, 2011, April 1, 2010 and April 2, 2009,
respectively.

Union-Sponsored Plans

Certain theatre employees are covered by union-sponsored pension and health and welfare plans. Company contributions into these plans
are determined in accordance with provisions of negotiated labor contracts. Contributions aggregated $380,000, $501,000, and $559,000, for the periods ended March 31, 2011, April 1, 2010
and April 2, 2009, respectively.

On
November 7, 2008, the Company received notice of a written demand for payment of a partial withdrawal liability assessment from a collectively bargained multiemployer pension
plan that covers certain of its unionized theatre employees. Based on a payment schedule that the Company received from this plan in December 2008, the Company began making quarterly payments on
January 1, 2009 related to the $5,279,000 in partial withdrawal liability. In the second quarter of fiscal 2010, the Company made a complete withdrawal from the plan which triggered an
additional liability of $1,422,000 which was assessed by the plan on April 19, 2010.

During
fiscal 2011, the Company recorded an estimated withdrawal liability of $3,040,000 related to three multiemployer pension plans where it had ceased making contributions. The plans
have not yet delivered an assessment of the withdrawal liability to the Company.

As
of March 31, 2011, the Company's liability related to these collectively bargained multiemployer pension plan withdrawals, net of quarterly payments, is $4,261,000. The Company
estimates its potential complete withdrawal liability from its other multiemployer pension plans is less than $100,000.

NOTE 13COMMITMENTS AND CONTINGENCIES

The Company, in the normal course of business, is party to various legal actions. Except as described below, management believes that the potential exposure, if any, from such matters
would not have a material adverse effect on the financial condition, cash flows or results of operations of the Company.

United States of America v. AMC Entertainment Inc. and American Multi-Cinema, Inc.(No. 99 01034 FMC (SHx), filed in
the U.S. District Court for the Central District of California). On January 29, 1999, the Department of Justice (the "Department") filed suit alleging that the Company's stadium style theatres
violated the ADA and related regulations. The Department alleged the Company had failed to provide persons in wheelchairs seating arrangements with lines-of-sight comparable to
the general public. The Department alleged various non-line-of-sight violations as well.

As
to line-of-sight matters, the trial court entered summary judgment in favor of the Department as to both liability and as to the appropriate remedy. On
December 5, 2008, the Ninth Circuit Court of

116

---



Table of Contents

AMC Entertainment Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended March 31, 2011, April 1, 2010 and April 2, 2009

NOTE 13COMMITMENTS AND CONTINGENCIES (Continued)

Appeals
reversed the trial court as to the appropriate remedy and remanded the case back to the trial court for findings consistent with its decision. The Company and the Department reached a
settlement regarding the extent of betterments and remedies required for line-of-sight violations which the parties believe are consistent with the Ninth Circuit's decision.
The trial court approved the settlement on November 29, 2010. The betterments will be made over a 5 year term and the Company estimates the unpaid cost of such betterments to be
approximately $5,000,000. The Company has recorded a liability of $37,500 for compensation to claimants pursuant to the settlement.

As
to the non-line-of-sight aspects of the case, on January 21, 2003, the trial court entered summary judgment in favor of the Department on
matters such as parking areas, signage, ramps, location of toilets, counter heights, ramp slopes, companion seating and the location and size of handrails. On December 5, 2003, the trial court
entered a consent order and final judgment on non-line-of-sight issues under which the Company agreed to remedy certain violations at its stadium-style theatres and
at certain theatres it may open in the future. Currently the Company estimates that remaining betterments are required at approximately 40 stadium-style theatres. The Company estimates that the unpaid
costs of these betterments will be approximately $13,160,000. The estimate is based on actual costs incurred on remediation work completed to date. The actual costs of betterments may vary based on
the results of surveys of the remaining theatres.

Michael Bateman v. American Multi-Cinema, Inc.(No. CV07-00171). In January 2007, a class action complaint was filed
against the Company in the Central District of the United States District Court of California (the "District Court") alleging violations of the Fair and Accurate Credit Transactions Act ("FACTA").
FACTA provides in part that neither expiration dates nor more than the last 5 numbers of a credit or debit card may be printed on receipts given to customers. FACTA imposes significant penalties upon
violators where the violation is deemed to have been willful. Otherwise damages are limited to actual losses incurred by the card holder. On March 21, 2011, the District Court granted
preliminary approval of the settlement, preliminarily certifying a class action for settlement purposes only. The settlement is not expected to have a material adverse impact to the Company's
financial condition.

On
May 14, 2009, Harout Jarchafjian filed a similar lawsuit alleging that the Company willfully violated FACTA and seeking statutory damages, but without alleging any actual
injury (Jarchafjian v. American Multi-Cinema, Inc.(C.D. Cal. Case No. CV09-03434). The parties have reached a tentative settlement,
subject to court approval, which is not expected to have a material adverse impact to the Company's financial condition.

In
addition to the cases noted above, the Company is also currently a party to various ordinary course claims from vendors (including concession suppliers and motion picture
distributors), landlords and other legal proceedings. If management believes that a loss arising from these actions is probable and can reasonably be estimated, the Company records the amount of the
loss, or the minimum estimated liability when the loss is estimated using a range and no point is more probable than another. As additional information becomes available, any potential liability
related to these actions is assessed and the estimates are revised, if necessary. Except as described above, management believes that the ultimate outcome of such other matters, individually and in
the aggregate, will not have a material adverse effect on the Company's financial position or overall trends in results of operations. However, litigation and claims are subject to inherent
uncertainties and unfavorable outcomes could occur. An

117

---



Table of Contents

AMC Entertainment Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended March 31, 2011, April 1, 2010 and April 2, 2009

NOTE 13COMMITMENTS AND CONTINGENCIES (Continued)

unfavorable
outcome could include monetary damages. If an unfavorable outcome were to occur, there exists the possibility of a material adverse impact on the results of operations in the period in
which the outcome occurs or in future periods.

NOTE 14THEATRE AND OTHER CLOSURE AND DISPOSITION OF ASSETS

The Company has provided reserves for estimated losses from theatres and screens which have been permanently closed and vacant space with no right to future use. As of March 31,
2011, the Company has reserved $73,852,000 for lease terminations which have either not been consummated or paid, related primarily to twelve theatres and vacant restaurant space. The Company is
obligated under long-term lease commitments with remaining terms of up to 17 years for theatres which have been closed. As of March 31, 2011, base rents aggregated
approximately $10,551,000 annually and $73,865,000 over the remaining terms of the leases.

A
rollforward of reserves for theatre and other closure is as follows:

Fifty-two
Week Period

Fifty-two
Week Period

Fifty-two
Week Period(In thousands)

March 31, 2011

April 1, 2010

April 2, 2009Beginning balance

$
6,694

$
7,386

$
10,844Theatre and other closure (income) expense


60,763


2,573


(2,262
)Transfer of property tax liability


550


715


63Transfer of deferred rent obligations


11,230


2,112


2,828Net book value of abandoned property


(1,819
)




Cash (payments) receipts, net


(3,566
)

(6,092
)

(4,087
)Ending balance

$
73,852

$
6,694

$
7,386


The
current portion of the ending balance is included with accrued expenses and other liabilities and the long-term portion of the ending balance is included with other
long-term liabilities in the accompanying Consolidated Balance Sheets.

During
the fourth quarter of fiscal year ending March 31, 2011, the Company evaluated excess capacity and vacant and under-utilized retail space throughout the theatre circuit. On
March 28, 2011, management decided to permanently close 73 underperforming screens and auditoriums in six theatre locations in the United States and Canada while continuing to operate 89
screens at these locations. The permanently closed screens are physically segregated from the screens that will remain in operation and access to the closed space is restricted. Additionally,
management decided to discontinue development of and cease use of (including for storage) certain vacant and under-utilized retail space at four other theatres in the United States and the United
Kingdom. As a result of closing the screens and auditoriums and discontinuing the development of and use of the other spaces, the Company recorded a charge of $55,015,000 for theatre and other closure
expense, which is included in operating expense in the Consolidated Statements of Operations during the fiscal year ending March 31, 2011. The charge to theatre and other closure expense
reflects the discounted contractual amounts of the existing lease obligations of $53,561,000 for the remaining 7 to 13 year terms of the leases as well as

118

---



Table of Contents

AMC Entertainment Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended March 31, 2011, April 1, 2010 and April 2, 2009

NOTE 14THEATRE AND OTHER CLOSURE AND DISPOSITION OF ASSETS (Continued)

expenses
incurred for related asset removal and shutdown costs of $1,454,000. A significant portion of each of the affected properties will be closed and no longer used. The charges to theatre and
other closure expense do not result in any new, increased or accelerated obligations for cash payments related to the underlying long-term operating lease agreements.

In
addition to the auditorium closures, the Company permanently closed 22 theatres with 144 screens in the U.S. during the fifty-two weeks ended March 31, 2011.
The Company recorded $5,748,000 for theatre and other closure expense, which is included in operating expense in the Consolidated Statements of Operations, due primarily to the remaining lease terms
of 5 theatre closures and accretion of the closure liability related to theatres closed during prior periods. Of the theatre closures in fiscal 2011, 9 theatres with 35 screens are owned properties
that will be marketed for sale; 7 theatres with 67 screens that had leases were allowed to expire; a single screen theatre with a management agreement was allowed to expire; and 5 theatres with
41 screens were closed with remaining lease terms in excess of one month.

During
the fifty-two weeks ended April 1, 2010, the Company recognized $2,573,000 of theatre and other closure expense due primarily to closure of one theatre and
accretion of the closure
liability related to theatres closed during prior periods. During the fifty-two weeks ended April 2, 2009, the Company recognized $2,262,000 of theatre and other closure income due
primarily to lease terminations negotiated on favorable terms for two theatres that were closed during this period. The Company did not receive cash payments in connection with the lease terminations,
but recognized income from the write-off of the unamortized deferred rent liability.

Theatre
and other closure reserves for leases that have not been terminated are recorded at the present value of the future contractual commitments for the base rents, taxes and
maintenance. As of March 31, 2011, the future lease obligations are discounted at annual rates ranging from 7.55% to 9.0%.

NOTE 15FAIR VALUE MEASUREMENTS

Fair value refers to the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the market in which the
entity transacts. The inputs used to develop these fair value measurements are established in a hierarchy, which ranks the quality and reliability of the information used to determine the fair values.
The fair value classification is based on levels of inputs. Assets and liabilities that are carried at fair value are classified and disclosed in one of the following categories:



119

---





Table of Contents

AMC Entertainment Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended March 31, 2011, April 1, 2010 and April 2, 2009

NOTE 15FAIR VALUE MEASUREMENTS

Recurring Fair Value Measurements.The following table summarizes the fair value hierarchy of the Company's financial assets and
liabilities carried
at fair value on a recurring basis as of March 31, 2011:

Fair Value Measurements at March 31, 2011 Using(In thousands)

Total Carrying
Value at
March 31, 2011

Quoted prices in
active market
(Level 1)

Significant other
observable inputs
(Level 2)

Significant
unobservable inputs
(Level 3)Cash and Equivalents:Money Market Mutual Funds

$
77

$
77

$


$
Restricted short-term investments


2,284


2,284





Other long-term assets:Equity securities, available-for-sale:RealD Inc. Common Stock


33,455


33,455





Mutual Fund Large U.S. Equity


2,532


2,532





Mutual Fund Small/Mid U.S. Equity


291


291





Mutual Fund International


121


121





Mutual Fund Broad U.S. Equity


26


26





Mutual Fund Balance


56


56





Mutual Fund Fixed Income


262


262





Total assets at fair value

$
39,104

$
39,104

$


$
Liabilities:











Total liabilities at fair value

$


$


$


$



120

---



Table of Contents

AMC Entertainment Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended March 31, 2011, April 1, 2010 and April 2, 2009

NOTE 15FAIR VALUE MEASUREMENTS (Continued)

The
following table summarizes the fair value hierarchy of the Company's financial assets and liabilities carried at fair value on a recurring basis as of April 1, 2010:

Fair Value Measurements at April 1, 2010 Using(In thousands)

Total Carrying
Value at
April 1, 2010

Quoted prices in
active market
(Level 1)

Significant other
observable inputs
(Level 2)

Significant
unobservable inputs
(Level 3)Cash and Equivalents:Money Market Mutual Funds

$
20,223

$
20,223

$


$
Other long-term assets:Equity securities, available-for-sale:Mutual Fund Large U.S. Equity


2,601


2,601





Mutual Fund Small/Mid U.S. Equity


187


187





Mutual Fund International


55


55





Mutual Fund Broad U.S. Equity


19


19





Mutual Fund Balance


41


41





Mutual Fund Fixed Income


283


283





Total assets at fair value

$
23,409

$
23,409

$


$
Liabilities:











Total liabilities at fair value

$


$


$


$



Valuation Techniques.The Company's money market mutual funds are invested in funds that seek to preserve principal, are highly liquid,
and therefore
are recorded on the balance sheet at the principal amounts deposited, which equals fair value. The restricted short-term investments are
liquid, overnight deposits which are held as collateral for the Company's letters of credits, and are measured at fair value using principal amounts deposited plus any interest paid. The equity
securities, available-for-sale, primarily consist of common stock and mutual funds invested in equity, fixed income, and international funds and are measured at fair value
using quoted market prices and are classified. The Company is no longer restricted from selling its RealD Inc. common stock shares acquired during fiscal 2011 and, as a result, during the
fourth quarter of fiscal 2011, transferred the fair value amounts in the hierarchy table from Level 2 to Level 1. The fair value of RealD Inc. common stock at March 31,
2011 was measured using quoted market prices. See Note 6Investments, for further information regarding RealD Inc. common stock. The unrecognized gain on the equity
securities recorded in accumulated other comprehensive loss as of March 31, 2011 was $6,436,000.

121

---



Table of Contents

AMC Entertainment Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended March 31, 2011, April 1, 2010 and April 2, 2009

NOTE 15FAIR VALUE MEASUREMENTS (Continued)

Nonrecurring Fair Value Measurements.The following table summarizes the fair value hierarchy of the Company's assets that were
measured at fair
value on a nonrecurring basis:

Fair Value Measurements at March 31, 2011 Using(In thousands)

Total Carrying
Value at
March 31, 2011

Quoted prices in
active market
(Level 1)

Significant
other
observable
inputs (Level 2)

Significant
unobservable
inputs
(Level 3)

Total LossesProperty, net:Property owned, net

$
10,351







$
10,351

$
11,445Intangible assets, net:Favorable lease, net














1,334Other long-term assets:Investment in a joint venture


236








236


8,825




Fair Value Measurements at April 1, 2010 Using(In thousands)

Total Carrying
Value at
April 1, 2010

Quoted prices in
active market
(Level 1)

Significant
other
observable
inputs (Level 2)

Significant
unobservable
inputs
(Level 3)

Total LossesProperty, net:Property owned, net

$
6,570

$


$


$
6,570

$
2,330Other long-term assets:Long-lived assets held and used


3,765








3,765


1,435


In
accordance with the provisions of the impairment of long-lived assets subsections of FASB Codification Subtopic 360-10, long-lived assets held and
used that were considered impaired were written down to their fair value at March 31, 2011 and April 1, 2010 of
$10,587,000 and $10,335,000, respectively. For the fifty-two weeks ending March 31, 2011, $12,779,000 was recorded as an impairment of long-lived assets and $8,825,000
was recorded as a charge to equity in earnings of non-consolidated entities. For the fifty-two weeks ending April 1, 2010, $3,765,000 was recorded as an impairment of
long-lived assets.

Other Fair Value Measurement Disclosures.The Company is required to disclose the fair value of financial instruments that are not
recognized in the
statement of financial position, for which it is practicable to estimate that value. At March 31, 2011, the carrying amount of the Company's liabilities for corporate borrowings was
$2,102,540,000 and the fair value was approximately $2,212,100,000. At April 1, 2010, the carrying amount of the corporate borrowings was $1,832,854,000 and the fair value was approximately
$1,891,002,000. Quoted market prices were used to value publicly held corporate borrowings. The carrying value of cash and equivalents approximates fair value because of the short duration of those
instruments.

122

---



Table of Contents

AMC Entertainment Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended March 31, 2011, April 1, 2010 and April 2, 2009

NOTE 16OPERATING SEGMENT

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. The Company has identified one
reportable segment for its theatrical exhibition operations. Prior to fiscal 2009, the Company had three operating segments which consisted of United States and Canada Theatrical Exhibition,
International Theatrical Exhibition, and Other. The reduction in the number of operating segments was a result of the disposition of Cinemex in December
2008. Cinemex was previously reported in the International Theatrical Exhibition operating segment and accounted for a substantial majority of that segment. In addition, in the second quarter of
fiscal 2009, the Company consolidated the Other operating segment with the United States and Canada Theatrical Exhibition operating segment due to a previous contribution of advertising net assets to
NCM. During fiscal 2009, the United States and Canada Theatrical Exhibition operating segment was renamed the Theatrical Exhibition operating segment.

Information
about the Company's revenues and assets by geographic area is as follows:

Revenues (In thousands)

52 Weeks
Ended
March 31, 2011

52 Weeks
Ended
April 1, 2010

52 Weeks
Ended
April 2, 2009United States

$
2,332,543

$
2,328,069

$
2,184,686Canada


71,654


70,260


61,830France


5,661


5,979


5,015United Kingdom


13,110


13,431


13,956Total revenues

$
2,422,968

$
2,417,739

$
2,265,487




Long-term assets, net (In thousands)

March 31, 2011

April 1, 2010United States

$
3,321,059

$
3,055,448Canada


2,434


2,891France


522


568United Kingdom


231


70Total long-term assets(1)

$
3,324,246

$
3,058,977


(1)Long-term
assets are comprised of property, intangible assets, goodwill and other long-term assets.


123

---



Table of Contents

AMC Entertainment Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended March 31, 2011, April 1, 2010 and April 2, 2009

NOTE 17CONDENSED CONSOLIDATING FINANCIAL INFORMATION

The accompanying condensed consolidating financial information has been prepared and presented pursuant to SEC Regulation S-X Rule 3-10, Financial statements of
guarantors and issuers of guaranteed securities registered or being registered. Each of the subsidiary guarantors are 100% owned
by AMCE. The subsidiary guarantees of AMCE's Notes due 2014, Notes due 2019, and Notes due 2020 are full and unconditional and joint and several. There are significant restrictions on the Company's
ability to obtain funds from any of its subsidiaries through dividends, loans or advances. The Company and its subsidiary guarantor's investments in its consolidated subsidiaries are presented under
the equity method of accounting.

Fifty-two weeks ended March 31, 2011:

(In thousands)

AMCE

Subsidiary
Guarantors

Subsidiary
Non-Guarantors

Consolidating
Adjustments

Consolidated AMC
Entertainment Inc.RevenuesAdmissions

$


$
1,684,903

$
12,955

$


$
1,697,858Concessions





659,500


4,608





664,108Other theatre





59,794


1,208





61,002Total revenues





2,404,197


18,771





2,422,968Costs and ExpensesFilm exhibition costs





882,053


5,705





887,758Concession costs





82,181


1,006





83,187Operating expense





691,777


22,069





713,846Rent





467,951


7,859





475,810General and administrative:Merger, acquisition and transaction costs





14,085








14,085Management fee





5,000








5,000Other





58,011


125





58,136Depreciation and amortization





212,132


281





212,413Impairment of long-lived assets





12,779








12,779Operating costs and expenses





2,425,969


37,045





2,463,014Operating loss





(21,772
)

(18,274
)




(40,046
)Other expense (income)Equity in (earnings) loss of consolidated subsidiaries


135,042


28,545





(163,587
)

Other expense


367


13,349








13,716Interest expenseCorporate borrowings


143,562


181,973





(182,013
)

143,522Capital and financing lease obligations





6,198








6,198Equity in (earnings) loss of non-consolidated entities


(490
)

(26,959
)

10,271





(17,178
)Gain on NCM transactions





(64,441
)







(64,441
)Investment income


(156,328
)

(26,076
)




182,013


(391
)Total other expense


122,153


112,589


10,271


(163,587
)

81,426Loss from continuing operations before income taxes


(122,153
)

(134,361
)

(28,545
)

163,587


(121,472
)Income tax provision


700


1,250








1,950Loss from continuing operations


(122,853
)

(135,611
)

(28,545
)

163,587


(123,422
)Earnings from discontinued operations, net of income taxes





569








569Net loss

$
(122,853
)
$
(135,042
)
$
(28,545
)
$
163,587

$
(122,853
)


124

---



Table of Contents

AMC Entertainment Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended March 31, 2011, April 1, 2010 and April 2, 2009

NOTE 17CONDENSED CONSOLIDATING FINANCIAL INFORMATION (Continued)

Fifty-two weeks ended April 1, 2010:

(In thousands)

AMCE

Subsidiary
Guarantors

Subsidiary
Non-Guarantors

Consolidating
Adjustments

Consolidated AMC
Entertainment Inc.RevenuesAdmissions

$


$
1,698,522

$
13,331

$


$
1,711,853Concessions





641,845


4,871





646,716Other theatre





57,962


1,208





59,170Total revenues





2,398,329


19,410





2,417,739Costs and ExpensesFilm exhibition costs





922,825


5,807





928,632Concession costs





71,883


971





72,854Operating expense





603,740


7,034





610,774Rent





433,108


7,556





440,664General and administrative:Merger, acquisition and transaction costs





2,280








2,280Management fee





5,000








5,000Other





57,755


103





57,858Depreciation and amortization





187,720


622





188,342Impairment of long-lived assets





3,765








3,765Operating costs and expenses





2,288,076


22,093





2,310,169Operating income (loss)





110,253


(2,683
)




107,570Other expense (income)Equity in (earnings) loss of consolidated subsidiaries


(28,844
)

6,799





22,045


Other income





(2,559
)







(2,559
)Interest expenseCorporate borrowings


126,085


159,923





(159,550
)

126,458Capital and financing lease obligations





5,652








5,652Equity in (earnings) loss of non-consolidated entities


(1,517
)

(32,915
)

4,132





(30,300
)Investment income


(137,914
)

(21,825
)

(16
)

159,550


(205
)Total other expense (income)


(42,190
)

115,075


4,116


22,045


99,046Earnings (loss) from continuing operations before income taxes


42,190


(4,822
)

(6,799
)

(22,045
)

8,524Income tax benefit


(27,600
)

(41,200
)







(68,800
)Earnings (loss) from continuing operations


69,790


36,378


(6,799
)

(22,045
)

77,324Loss from discontinued operations, net of income taxes





(7,534
)







(7,534
)Net earnings (loss)

$
69,790

$
28,844

$
(6,799
)
$
(22,045
)
$
69,790


125

---



Table of Contents

AMC Entertainment Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended March 31, 2011, April 1, 2010 and April 2, 2009

NOTE 17CONDENSED CONSOLIDATING FINANCIAL INFORMATION (Continued)

Fifty-two weeks ended April 2, 2009:

(In thousands)

AMCE

Subsidiary
Guarantors

Subsidiary
Non-Guarantors

Consolidating
Adjustments

Consolidated AMC
Entertainment Inc.RevenuesAdmissions

$


$
1,567,717

$
12,611

$


$
1,580,328Concessions





621,228


5,023





626,251Other theatre





57,572


1,336





58,908Total revenues





2,246,517


18,970





2,265,487Costs and ExpensesFilm exhibition costs





836,877


5,779





842,656Concession costs





66,650


1,129





67,779Operating expense





569,642


6,380





576,022Rent





440,823


7,980





448,803General and administrative:Merger, acquisition and transaction costs





650








650Management fee





5,000








5,000Other





53,496


132





53,628Depreciation and amortization





201,095


318





201,413Impairment of long-lived assets





73,547








73,547Operating costs and expenses





2,247,780


21,718





2,269,498Operating loss





(1,263
)

(2,748
)




(4,011
)Other expense (income)Equity in earnings (loss) of consolidated subsidiaries


95,497


2,079





(97,576
)

Other income





(14,139
)







(14,139
)Interest expenseCorporate borrowings


115,881


151,966





(152,090
)

115,757Capital and financing lease obligations





5,990








5,990Equity in (earnings) loss of non-consolidated entities


(1,280
)

(27,024
)

3,481





(24,823
)Investment income


(129,512
)

(23,838
)

(436
)

152,090


(1,696
)Total other expense (income)


80,586


95,034


3,045


(97,576
)

81,089Loss from continuing operations before income taxes


(80,586
)

(96,297
)

(5,793
)

97,576


(85,100
)Income tax provision


2,300


3,500








5,800Loss from continuing operations


(82,886
)

(99,797
)

(5,793
)

97,576


(90,900
)Earnings from discontinued operations, net of income taxes


1,714


4,300


3,714





9,728Net loss

$
(81,172
)
$
(95,497
)
$
(2,079
)
$
97,576

$
(81,172
)


126

---



Table of Contents

AMC Entertainment Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended March 31, 2011, April 1, 2010 and April 2, 2009

NOTE 17CONDENSED CONSOLIDATING FINANCIAL INFORMATION (Continued)

March 31, 2011:

(In thousands)

AMCE

Subsidiary
Guarantors

Subsidiary
Non-Guarantors

Consolidating
Adjustments

Consolidated AMC
Entertainment Inc.AssetsCurrent assets:Cash and equivalents

$


$
261,096

$
40,062

$


$
301,158Receivables, net


129


26,341


222





26,692Other current assets





85,987


2,162





88,149Total current assets


129


373,424


42,446





415,999Investment in equity of subsidiaries


(235,409
)

79,567





155,842


Property, net





957,738


984





958,722Intangible assets, net





149,493








149,493Intercompany advances


2,694,299


(2,775,489
)

81,190





Goodwill





1,923,667








1,923,667Other long-term assets


37,278


254,629


457





292,364Total assets

$
2,496,297

$
963,029

$
125,077

$
155,842

$
3,740,245Liabilities and Stockholder's EquityCurrent liabilities:Accounts payable

$


$
164,553

$
863

$


$
165,416Accrued expenses and other liabilities


33,598


104,519


870





138,987Deferred revenues and income





140,766


471





141,237Current maturities of corporate borrowings and capital and financing lease obligations


6,500


3,455








9,955Total current liabilities


40,098


413,293


2,204





455,595Corporate borrowings


2,096,040











2,096,040Capital and financing lease obligations





62,220








62,220Deferred revenues for exhibitor services agreement





333,792








333,792Other long-term liabilities





389,133


43,306





432,439Total liabilities


2,136,138


1,198,438


45,510





3,380,086Stockholder's equity (deficit)


360,159


(235,409
)

79,567


155,842


360,159Total liabilities and stockholder's equity

$
2,496,297

$
963,029

$
125,077

$
155,842

$
3,740,245


127

---



Table of Contents

AMC Entertainment Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended March 31, 2011, April 1, 2010 and April 2, 2009

NOTE 17CONDENSED CONSOLIDATING FINANCIAL INFORMATION (Continued)

April 1, 2010:

(In thousands)

AMCE

Subsidiary
Guarantors

Subsidiary
Non-Guarantors

Consolidating
Adjustments

Consolidated AMC
Entertainment Inc.AssetsCurrent assets:Cash and equivalents

$


$
455,242

$
40,101

$


$
495,343Receivables, net


13


24,448


1,084





25,545Other current assets





71,467


1,845





73,312Total current assets


13


551,157


43,030





594,200Investment in equity of subsidiaries


(161,239
)

106,304





54,935


Property, net





862,651


881





863,532Intangible assets, net





148,432








148,432Intercompany advances


2,743,747


(2,825,700
)

81,953





Goodwill





1,814,738








1,814,738Other long-term assets


33,367


189,428


9,480





232,275Total assets

$
2,615,888

$
847,010

$
135,344

$
54,935

$
3,653,177Liabilities and Stockholder's EquityCurrent liabilities:Accounts payable

$


$
174,251

$
891

$


$
175,142Accrued expenses and other liabilities


22,475


116,839


267





139,581Deferred revenues and income





125,376


466





125,842Current maturities of corporate borrowings and capital and financing lease obligations


6,500


3,963








10,463Total current liabilities


28,975


420,429


1,624





451,028Corporate borrowings


1,826,354











1,826,354Capital and financing lease obligations





53,323








53,323Deferred revenues for exhibitor services agreement





252,322








252,322Other long-term liabilities





282,175


27,416





309,591Total liabilities


1,855,329


1,008,249


29,040





2,892,618Stockholder's equity (deficit)


760,559


(161,239
)

106,304


54,935


760,559Total liabilities and stockholder's equity

$
2,615,888

$
847,010

$
135,344

$
54,935

$
3,653,177


128

---



Table of Contents

AMC Entertainment Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended March 31, 2011, April 1, 2010 and April 2, 2009

NOTE 17CONDENSED CONSOLIDATING FINANCIAL INFORMATION (Continued)

Fifty-two weeks ended March 31, 2011:

(In thousands)

AMCE

Subsidiary
Guarantors

Subsidiary
Non-Guarantors

Consolidating
Adjustments

Consolidated AMC
Entertainment Inc.Cash flows from operating activities:Net cash provided by operating activities

$
47,587

$
44,144

$
341

$


$
92,072Cash flows from investing activities:Capital expenditures





(128,952
)

(395
)




(129,347
)Acquisition of Kerasotes, net of cash acquired





(280,606
)







(280,606
)Proceeds from NCM, Inc. stock sale





102,224








102,224Proceeds from disposition of long-term assets





58,391








58,391Proceeds from sale/leaseback of digital projection equipment





4,905








4,905Proceeds from disposition of Cinemex





1,840








1,840Other, net





(7,644
)

200





(7,444
)Net cash used in investing activities





(249,842
)

(195
)




(250,037
)Cash flows from financing activities:Proceeds from issuance of Senior Subordinated Notes due 2020


600,000











600,000Repurchase of Senior Subordinated Notes due 2016


(325,000
)










(325,000
)Payment of tender offer and consent solicitation consideration on Senior Subordinated Notes due 2016


(5,801
)










(5,801
)Principal payments under Term Loan


(6,500
)










(6,500
)Principal payments under capital and financing lease obligations





(4,194
)







(4,194
)Deferred financing costs


(14,642
)










(14,642
)Change in construction payables





(727
)







(727
)Dividends paid to Marquee Holdings Inc.


(278,258
)










(278,258
)Change in intercompany advances


(17,386
)

16,623


763





Net cash provided by (used in) financing activities


(47,587
)

11,702


763





(35,122
)Effect of exchange rate changes on cash and equivalents





(150
)

(948
)




(1,098
)Net decrease in cash and equivalents





(194,146
)

(39
)




(194,185
)Cash and equivalents at beginning of period





455,242


40,101





495,343Cash and equivalents at end of period

$


$
261,096

$
40,062

$


$
301,158


129

---



Table of Contents

AMC Entertainment Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended March 31, 2011, April 1, 2010 and April 2, 2009

NOTE 17CONDENSED CONSOLIDATING FINANCIAL INFORMATION (Continued)

Fifty-two weeks ended April 1, 2010:

(In thousands)

AMCE

Subsidiary
Guarantors

Subsidiary
Non-Guarantors

Consolidating
Adjustments

Consolidated AMC
Entertainment Inc.Cash flows from operating activities:Net cash provided by operating activities

$
36,859

$
222,266

$
(1,110
)
$


$
258,015Cash flows from investing activities:Capital expenditures





(96,826
)

(185
)




(97,011
)Purchase of digital projection equipment for sale/leaseback





(6,784
)







(6,784
)Proceeds from sale/leaseback of digital projection equipment





6,570








6,570Proceeds from disposition of Cinemex





4,315








4,315LCE screen integration





(81
)







(81
)Other, net





2,654


(6,000
)




(3,346
)Net cash provided by investing activities





(90,152
)

(6,185
)




(96,337
)Cash flows from financing activities:Proceeds from issuance of Senior Notes due 2019


585,492











585,492Repurchase of Senior Fixed Rate Notes due 2012


(250,000
)










(250,000
)Principal payments under Term Loan


(6,500
)










(6,500
)Principal payments under capital and financing lease obligations





(3,423
)







(3,423
)Deferred financing costs


(16,434
)










(16,434
)Change in construction payables





6,714








6,714Repayment under Revolving Credit Facility


(185,000
)










(185,000
)Dividends paid to Marquee Holdings Inc.


(329,981
)










(329,981
)Change in intercompany advances


165,564


(168,963
)

3,399





Net cash provided by (used in) financing activities


(36,859
)

(165,672
)

3,399





(199,132
)Effect of exchange rate changes on cash and equivalents








(1,212
)




(1,212
)Net increase (decrease) in cash and equivalents





(33,558
)

(5,108
)




(38,666
)Cash and equivalents at beginning of period





488,800


45,209





534,009Cash and equivalents at end of period

$


$
455,242

$
40,101

$


$
495,343


130

---



Table of Contents

AMC Entertainment Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended March 31, 2011, April 1, 2010 and April 2, 2009

NOTE 17CONDENSED CONSOLIDATING FINANCIAL INFORMATION (Continued)

Fifty-two weeks ended April 2, 2009:

(In thousands)

AMCE

Subsidiary
Guarantors

Subsidiary
Non-Guarantors

Consolidating
Adjustments

Consolidated AMC
Entertainment Inc.Cash flows from operating activities:Net cash provided by operating activities

$
15,401

$
173,229

$
12,071

$


$
200,701Cash flows from investing activities:Capital expenditures





(107,718
)

(13,738
)




(121,456
)Proceeds from disposition of Fandango





2,383








2,383Proceeds from disposition of Cinemex, net of cash disposed


244,095





(19,717
)




224,378LCE screen integration





(4,700
)







(4,700
)Other, net





262


58





320Net cash provided by investing activities


244,095


(109,773
)

(33,397
)




100,925Cash flows from financing activities:Principal payments on Term Loan


(6,500
)










(6,500
)Principal payments under capital and financing lease obligations





(3,048
)

(404
)




(3,452
)Deferred financing costs





(525
)







(525
)Change in construction payables





(9,331
)







(9,331
)Borrowing under Revolver Credit Facility


185,000











185,000Dividends paid to Marquee Holdings Inc.


(35,989
)










(35,989
)Change in intercompany advances


(402,007
)

402,936


(929
)




Net cash provided by financing activities


(259,496
)

390,032


(1,333
)




129,203Effect of exchange rate changes on cash and equivalents








(3,001
)




(3,001
)Net increase (decrease) in cash and equivalents





453,488


(25,660
)




427,828Cash and equivalents at beginning of period





35,312


70,869





106,181Cash and equivalents at end of period

$


$
488,800

$
45,209

$


$
534,009


131

---



Table of Contents

AMC Entertainment Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended March 31, 2011, April 1, 2010 and April 2, 2009

NOTE 18RELATED PARTY TRANSACTIONS

Governance Agreements

Agreements entered into by AMC Entertainment Holdings, Inc., the Sponsors and Holdings' other stockholders (collectively, the
"Governance Agreements"), provide that the Board of Directors for Parent consist of up to nine directors, two of whom are designated by JPMP, two of whom are designated by Apollo, one of whom is the
Chief Executive Officer of Parent, one of whom is designated by Carlyle, one of whom is designated by Bain, one of whom is designated by Spectrum and one of whom is designated by Bain, Carlyle and
Spectrum, voting together, so long as such designee was consented to by each of Bain and Carlyle. Each of the directors respectively designated by JPMP, Apollo, Carlyle, Bain and Spectrum have three
votes on all matters placed before the Board of Directors of Holdings and AMCE and the Chief Executive Officer of Parent and the director designated by Carlyle, Bain and Spectrum voting together have
one vote each. The number of directors respectively designated by the Sponsors is to be reduced upon a decrease in such Sponsors' ownership in Parent below certain thresholds.

The
Voting Agreement among Parent and the pre-existing stockholders of Holdings provides that, until the fifth anniversary of the Mergers (the "Blockout Period"), the former
continuing stockholders of Holdings (other than Apollo and JPMP) would generally vote their voting shares of capital stock of Parent in favor of any matter in proportion to the shares of capital stock
of Apollo and JPMP voted in favor of such matter, except in certain specified instances. The Voting Agreement among Parent and the former stockholders of LCE Holdings further provides that during the
Blockout Period, the former LCE Holdings stockholders would generally vote their voting shares of capital stock of Parent on any matter as directed by any two of Carlyle, Bain and Spectrum, except in
certain specified instances. In addition, certain actions of Parent, including, but not limited to, change in control transactions, acquisition or disposition transactions with a value in excess of
$10,000,000, the settlement of claims or litigation in excess of $2,500,000, an initial public offering of Parent, hiring or firing a chief executive officer, chief financial officer or chief
operating officer, incurring or refinancing indebtedness in excess of $5,000,000 or engaging in new lines of business, require the approval of either (i) any three of JPMP, Apollo, Carlyle or
Bain or (ii) Spectrum and (a) either JPMP or Apollo and (b) either Carlyle or Bain (the "Requisite Stockholder Majority") if at such time the Sponsors collectively held at least a
majority of Parent's voting shares.

Prior
to the earlier of the end of the Blockout Period and the completion of an initial public offering of the capital stock of Parent, Holdings or AMCE, the Governance Agreements
prohibit the Sponsors and the other pre-existing stockholders of Holdings from transferring any of their interests in Parent, other than (i) certain permitted transfers to
affiliates or to persons approved of by the Sponsors and (ii) transfers after the Blockout Period subject to the rights described below.

The
Governance Agreements set forth additional transfer provisions for the Sponsors and the other pre-existing stockholders of Holdings with respect to the interests in
Parent, including the following:

Right of first offer.After the Blockout Date and prior to an initial public offering, Parent and, in the event Parent does not
exercise its right of
first offer, each of the Sponsors and the other preexisting stockholders of Holdings, have a right of first offer to purchase (on a pro rata basis in the case of the stockholders) all or any portion
of the shares of Parent that a Sponsor or other former continuing

132

---



Table of Contents

AMC Entertainment Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended March 31, 2011, April 1, 2010 and April 2, 2009

NOTE 18RELATED PARTY TRANSACTIONS (Continued)

stockholder
of Holdings was proposing to sell to a third party at the price and on the terms and conditions offered by such third party.

Drag-along rights.If, prior to an initial public offering, Sponsors constituting a Requisite Stockholder Majority propose to transfer
shares of Parent to an independent third party in a bona fide arm's-length transaction or series of transactions that resulted in a sale of all or substantially all of Parent, such Sponsors may have
elected to require each of the other stockholders of Holdings to transfer to such third party all of its shares at the purchase price and upon the other terms and subject to the conditions of the
sale.

Tag-along rights.Subject to the right of first offer described above, if any Sponsor or other former continuing stockholder of Holdings
proposes to transfer shares of Parent held by it, then such stockholder would give notice to each other stockholder, who would each have the right to participate on a pro rata basis in the proposed
transfer on the terms and conditions offered by the proposed purchaser.

Participant rights.On or prior to an initial public offering, the Sponsors and the other pre-existing stockholders of Holdings have
the
pro rata right to subscribe to any issuance by Parent or any subsidiary of shares of its capital stock or any securities exercisable, convertible or exchangeable for shares of its capital stock,
subject to certain exceptions.

The
Governance Agreements also provide for certain registration rights in the event of an initial public offering of Parent, including the following:

Demand rights.Subject to the consent of at least two of any of JPMP, Apollo, Carlyle and Bain during the first two years following an
initial public
offering, each Sponsor has the right at any time following an initial public offering to make a written request to Parent for registration under the Securities Act of part or all of the registrable
equity interests held by such stockholders at Parent's expense, subject to certain limitations. Subject to the same consent requirement, the other pre-existing stockholders of Holdings as
a group have the right at any time following an initial public offering to make one written request to Parent for registration under the Securities Act of part or all of the registrable equity
interests held by such stockholders with an aggregate offering price to the public of at least $200,000,000.

Piggyback rights.If Parent at any time proposes to register under the Securities Act any equity interests on a form and in a manner
which would
permit registration of the registrable equity interests held by stockholders of Parent for sale to the public under the Securities Act, Parent must give written notice of the proposed registration to
each stockholder, who then have the right to request that any part of its registrable equity interests be included in such registration, subject to certain limitations.

Holdback agreements.Each stockholder agrees that it would not offer for public sale any equity interests during a period not to exceed
90 days (180 days in the case of an initial public offering) after the effective date of any registration statement filed by Parent in connection with an underwritten public offering
(except as part of such underwritten registration or as otherwise permitted by such underwriters), subject to certain limitations.

133

---



Table of Contents

AMC Entertainment Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended March 31, 2011, April 1, 2010 and April 2, 2009

NOTE 18RELATED PARTY TRANSACTIONS (Continued)

Amended and Restated Fee Agreement

In connection with the merger with LCE Holdings Inc., Holdings, AMCE and the Sponsors entered into an Amended and Restated Fee
Agreement, which provided for an
annual management fee of $5,000,000, payable quarterly and in advance to each Sponsor, on a pro rata basis, until the earliest of (i) the twelfth anniversary from December 23, 2004, and
(ii) such time as the sponsors own less than 20% in the aggregate of Parent. In addition, the fee agreement provided for reimbursements by AMCE to the Sponsors for their
out-of-pocket expenses and to Holdings of up to $3,500,000 for fees payable by Holdings in any single fiscal year in order to maintain AMCE's and its corporate existence,
corporate overhead expenses and salaries or other compensation of certain employees. The Amended and Restated Fee Agreement terminated on June 11, 2007, the date of the holdco merger, and was
superseded by a substantially identical agreement entered into by AMC Entertainment Holdings, Inc., Holdings, AMCE, the Sponsors and Holdings' other stockholders.

Upon
the consummation of a change in control transaction or an initial public offering, each of the Sponsors will receive, in lieu of quarterly payments of the annual management fee, a
fee equal to the net present value of the aggregate annual management fee that would have been payable to the Sponsors during the remainder of the term of the fee agreement (assuming a twelve year
term from the date of the original fee agreement), calculated using the treasury rate having a final maturity date that is closest to the twelfth anniversary of the date of the original fee agreement
date. As of March 31, 2011, the Company estimates this amount would be $25,835,000. The Company expects to record any lump sum payment to the Sponsors as a dividend.

The
fee agreement also provides that AMCE will indemnify the Sponsors against all losses, claims, damages and liabilities arising in connection with the management services provided by
the Sponsors under the fee agreement.

Parent
is owned by the Sponsors, other co-investors and by certain members of management as follows: JPMP (20.834%); Apollo (20.834%); Bain Capital Partners (15.126%); The
Carlyle Group (15.126%); Spectrum Equity Investors (9.788%); Weston Presidio Capital IV, L.P. and WPC Entrepreneur Fund II, L.P. (3.909%); Co-Investment Partners, L.P.
(3.909%); Caisse de Depot et Placement du Quebec (3.127%); AlpInvest Partners CS Investments 2003 C.V., AlpInvest Partners Later Stage Co-Investments Custodian II B.V. and AlpInvest
Partners Later Stage Co-Investments Custodian IIA B.V. (2.736%); SSB Capital Partners (Master Fund) I, L.P. (1.955%); CSFB Strategic Partners Holdings II, L.P., CSFB
Strategic Partners Parallel Holdings II, L.P., and GSO Credit Opportunities Fund (Helios), L.P. (1.564%); Credit Suisse Anlagestiftung, Pearl Holding Limited, Vega Invest (Guernsey)
Limited and Partners Group Private Equity Performance Holding Limited (0.782%); Screen Investors 2004, LLC (0.152%); and current and former members of management (0.158%)(1).

---

Control Arrangement

The Sponsors have the ability to control the Company's affairs and policies and the election of directors and appointment of
management.

134

---



Table of Contents

AMC Entertainment Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended March 31, 2011, April 1, 2010 and April 2, 2009

NOTE 18RELATED PARTY TRANSACTIONS (Continued)

DCIP

In February 2007, Mr. Travis Reid was hired as the chief executive officer of DCIP, a joint venture between AMCE, Cinemark and
Regal formed to explore the possibility of implementing digital cinema in our theatres and to create a financing model and establish agreements with major motion picture studios for the implementation
of digital cinema. Mr. Reid was a member of the Company's Board of Directors until October 15, 2010. See Note 6Investments, for a discussion of transactions with
DCIP.

Market Making Transactions

On June 9, 2009, AMCE sold $600,000,000 in aggregate principal amount of its Senior Notes due 2019. On December 15, 2010,
AMCE sold $600,000,000 in aggregate principal amount of its 9.75% Senior Subordinated Notes due 2020. J.P. Morgan Securities LLC, an affiliate of J.P. Morgan Partners, LLC, which owns
approximately 20.8% of Parent, and Credit Suisse Securities (USA) LLC, whose affiliates own approximately 1.62% of Parent, were initial purchasers of the Notes due 2019 and Notes due 2020.

135

---





Table of Contents

Item 9.    Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

None

Item 9A.    Controls and Procedures

(a)   Evaluation
of disclosure controls and procedures.

The
Company maintains a set of disclosure controls and procedures designed to provide reasonable assurance that material information required to be disclosed in its filings under the
Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms and that material
information is accumulated and communicated to the Company's management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required
disclosure. The Company's Chief Executive Officer and Chief Financial Officer have evaluated these disclosure controls and procedures as of the end of the period covered by this Annual Report on
Form 10-K and have determined that such disclosure controls and procedures were effective.

(b)   Management's
annual report on internal control over financial reporting.

Management
is responsible for establishing and maintaining adequate internal control over financial reporting for the Company as defined in Rule 12a-15(f) of the
Exchange Act. With our participation, an evaluation of the effectiveness of internal control over financial reporting was conducted as of March 31, 2011, based on the framework and criteria
established inInternal ControlIntegrated Frameworkissued by the Committee of Sponsoring Organizations of the Treadway Commission. Based
on this evaluation, our management has concluded that our internal control over financial reporting was effective as of March 31, 2011.

(c)   Changes
in internal control over financial reporting.

There
has been no change in our internal control over financial reporting during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially
affect, our internal control over financial reporting.

Item 9B.    Other Information

None

Item 10.    Directors, Executive Officers and Corporate Governance

136

---



Table of Contents

MANAGEMENT

Our business and affairs are managed by our board of directors, currently consisting of eight members. Gerardo I. Lopez, our Chief
Executive Officer, is a director of Parent. Aaron J. Stone is our Chairman of the Board and a non-employee director. The role of Chairman of the Board is held by Mr. Stone to
represent the interest of shareholders.

The
following table sets forth certain information regarding our directors, executive officers and key employees as of June 1, 2011:

Name

Age

Position(s) HeldAaron J. Stone

38

Chairman of the Board, Director (Parent and AMCE)Gerardo I. Lopez

51

Chief Executive Officer, President and Director (Parent, AMCE and American Multi-Cinema, Inc.)Dana B. Ardi

63

Director (Parent and AMCE)Stephen P. Murray

48

Director (Parent and AMCE)Stan Parker

35

Director (Parent and AMCE)Phillip H. Loughlin

43

Director (Parent and AMCE)Eliot P. S. Merrill

40

Director (Parent and AMCE)Kevin Maroni

48

Director (Parent and AMCE)Craig R. Ramsey

59

Executive Vice President and Chief Financial Officer (Parent, AMCE and American Multi-Cinema, Inc.); Director (American Multi-Cinema, Inc.)John D. McDonald

54

Executive Vice President, U.S. Operations (Parent, AMCE and American Multi-Cinema, Inc.); Director (American Multi-Cinema, Inc.)Mark A. McDonald

52

Executive Vice President, Global Development (Parent, AMCE and American Multi-Cinema, Inc.)Stephen A. Colanero

44

Executive Vice President and Chief Marketing Officer (Parent, AMCE and American Multi-Cinema, Inc.)Robert J. Lenihan

57

President, Programming (Parent, AMCE and American Multi-Cinema, Inc.)Samuel D. Gourley

60

President, AMC Film Programming (Parent, AMCE and American Multi-Cinema, Inc.)Kevin M. Connor

48

Senior Vice President, General Counsel and Secretary (Parent, AMCE and American Multi-Cinema, Inc.)Michael W. Zwonitzer

46

Senior Vice President Finance (Parent, AMCE and American Multi-Cinema, Inc.)Chris A. Cox

45

Senior Vice President and Chief Accounting Officer (Parent, AMCE and American Multi-Cinema, Inc.)Terry W. Crawford

54

Senior Vice President and Treasurer (Parent, AMCE and American Multi-Cinema, Inc.)George Patterson

57

Senior Vice President, Food and Beverage (American Multi-Cinema, Inc.)Elizabeth Frank

42

Senior Vice President, Strategy and Strategic Partnerships (AMCE)


All
our current executive officers hold their offices at the pleasure of our board of directors, subject to rights under their respective employment agreements in some
cases. There are no family relationships between or among any directors and executive officers, except that Messrs. John D. McDonald and Mark A. McDonald are brothers.

137

---



Table of Contents

Mr. Aaron J. Stonehas served as Chairman of the Board of Parent and AMCE since February 2009. Mr. Stone has served as a
Director of Parent since June 2007, and has served as a Director of AMCE since December 2004. Mr. Stone is a Senior Partner of Apollo Management, L.P., where he has been employed since
1997 and which, together with its affiliates, acts as manager of Apollo and related private securities investment funds. Mr. Stone also serves on the boards of directors of Connections
Academy, LLC, Hughes Communications, Inc., Hughes Network Systems, LLC, Hughes Telematics, Inc., and Parallel Petroleum. Mr. Stone currently serves on the
compensation committee of Hughes Communications, Inc. and the audit committee of Hughes Network Systems, LLC. Mr. Stone has also served on the boards of directors of
Educate Inc.; Intelstat, Ltd.; and Skyterra Communications Inc., among others. Mr. Stone served on the audit committees of Educate Inc. and Intelstat, Ltd.
Prior to joining Apollo, Mr. Stone was a member of the Mergers and Acquisition Group at Smith Barney, Inc. Mr. Stone graduated cum laude with an A.B. degree from Harvard College.
Mr. Stone has over 15 years of experience in analyzing and investing in public and private companies and led the diligence of Apollo's investment in AMC, and he provides our board with
insight into strategic and financial matters of interest to AMC's management and shareholders.

Mr. Gerardo I. Lopezhas served as Chief Executive Officer, President and a Director of Parent and AMCE since March 2009. Prior to
joining the Company, Mr. Lopez served as Executive Vice President of Starbucks Coffee Company and President of its Global Consumer Products, Seattle's Best Coffee and Foodservice divisions from
September 2004 to March 2009. Prior thereto, Mr. Lopez served as President of the Handleman Entertainment Resources division of Handleman Company from November 2001 to September 2004.
Mr. Lopez also serves on the boards of directors of SilkRoute Global, NCM LLC, DCIP and Midland Partners, LLC. Mr. Lopez holds a B.S. degree in Marketing from George
Washington University and a M.B.A. in Finance from Harvard Business School. Mr. Lopez has over 24 years of experience in marketing, sales and operations and management in public and
private companies. His prior experience includes management of multi-billion-dollar operations and groups of over 2,500 associates.

Dr. Dana B. Ardihas served as a Director of Parent and AMCE since April 2009. Dr. Ardi serves as Managing Director and
Founder of Corporate Anthropology Advisors LLC, a human capital advisory firm that provides consulting and restructuring services to companies across diverse industry sectors. Prior to founding
Corporate Anthropology Advisors LLC in 2009, Dr. Ardi served as a Managing Director at CCMP Capital Advisors, LLC from August 2006 through January 2009, as a Partner at J.P.
Morgan Partners, LLC from June 2001 to July 2006, as a Partner at Flatiron Partners, LLC from 1999 to June 2001, as Co-chair of the Global Communications, Entertainment and
Technology practice of TMP Worldwide from 1995 to 1999 and prior thereto, Dr. Ardi served as Senior Vice President of New Media at R.R. Donnelley & Sons Company. Dr. Ardi also
serves on the board of directors of New Yorkers for Parks and the board of trustees of Chancellor University's Jack Welch Management Institute. Dr. Ardi provides our board of directors with
insight and perspective on organizational design, succession planning, leadership training, executive search and tactical human
resources matters. Dr. Ardi holds a B.S. degree from the State University of New York at Buffalo and M.S. and Ph.D. degrees in Education from Boston College.

Mr. Stephen P. Murrayhas served as a Director of Parent since June 2007, and has served as a Director of AMCE since December 2004.
Since March 2007 Mr. Murray has served as President and Chief Executive Officer of CCMP Capital Advisors, LLC, a private equity firm formed in August 2006 by the former buyout and growth
equity investment team of J.P. Morgan Partners, LLC, a private equity division of JPMorgan Chase & Co. From August 2006 to March 2007, Mr. Murray served as President and
Chief Operating Officer of CCMP Capital Advisors, LLC. From 1989 through July 2006, Mr. Murray was employed by J.P. Morgan Partners and its predecessor entities, and became a Partner in
1994. Prior to joining J.P. Morgan Partners, LLC in 1989, Mr. Murray served as a Vice President with the Middle-Market Lending Division of Manufacturers Hanover. Mr. Murray
focuses on investments in Consumer, Retail and Services, and Healthcare Infrastructure. Mr. Murray also serves

138

---



Table of Contents

on
the boards of directors of ARAMARK Holdings Corporation, Caremore Medical Enterprises, Generac Power Systems, Hanley Wood, Crestcom, Jetro Holdings, Inc., LHP Hospital Group, Noble
Environmental Power, Octagon Credit Investors, Quiznos Subs, Strongwood Insurance and Warner Chilcott. Mr. Murray holds a B.A. degree from Boston College and a M.B.A. from Columbia Business
School. Mr. Murray has over 20 years of experience as a private equity investment professional and provides our board with insight and perspective on general investment and financial
matters.

Mr. Stan Parkerhas served as a Director of Parent since June 2007, and has served as a Director of AMCE since December 2004.
Mr. Parker has been affiliated with Apollo and its related investment advisors and investment managers since 2000 and has been a Partner since 2005. Prior to joining Apollo in 2000,
Mr. Parker was employed by Salomon Smith Barney, Inc. Mr. Parker also serves on the boards of directors of Affinion, CEVA Group Plc, Charter Communications and Momentive
Performance Materials. Mr. Parker holds a B.S. degree in Economics from The Wharton School of Business at the University of Pennsylvania. Mr. Parker has over 12 years of
experience in analyzing and investing in public and private companies. Mr. Parker participated in the diligence of Apollo's investment in AMC and provides our board with insight into strategic
and financial matters of interest to AMC's management and shareholders.

Mr. Philip H. Loughlinhas served as a Director of Parent, Holdings and AMCE since January 2009. Mr. Loughlin joined Bain
Capital in 1996 and has been a Managing Director since 2003. Prior to joining Bain Capital, Mr. Loughlin was a Consultant at Bain & Company and also served in operating roles at Eagle
Snacks, Inc. and Norton Company. Mr. Loughlin also serves on the boards of directors of OSI Restaurant Partners, Inc., Ariel Holdings, Ltd., Applied Systems, Inc.
and Ship (WorldPay) Luxco. Mr. Loughlin serves on the audit committee of OSI Restaurant Partners. Mr. Loughlin previously served on the boards of directors of Burger King Corporation,
Loews Cineplex Entertainment, Brenntag A.G., Professional Services Industries, Inc. and Cinemex and on the audit committees of Burger King Corporation and Loews Cineplex Entertainment.
Mr. Loughlin received a M.B.A. from Harvard Business School where he was a Baker Scholar and graduated cum laude with an A.B. degree from Dartmouth College. Mr. Loughlin has
14 years of experience as a private equity investor, participated in
the evaluation of Bain Capital's original investment in Loews and has significant experience in serving on boards of directors.

Mr. Eliot P. S. Merrillhas served as a Director of Parent and AMCE since January 2008. Mr. Merrill is a Managing Director
of The Carlyle Group focusing on buyout opportunities in the media and telecommunications sectors. Prior to joining Carlyle in 2001, Mr. Merrill was a Principal at Freeman
Spogli & Co., a buyout fund with offices in New York and Los Angeles. From 1995 to 1997, Mr. Merrill worked at Dillon Read & Co. Inc. Prior thereto,
Mr. Merrill worked at Doyle Sailmakers, Inc. Mr. Merrill also serves as a director of The Nielsen Company B.V. Mr. Merrill holds an A.B. degree from Harvard College.
Mr. Merrill has over 13 years of experience in the private equity industry and has focused on the analysis, assessment and capitalization of new acquisitions and existing portfolio
companies. Prior to the Loews Mergers, Mr. Merrill served on the audit committee of Loews Cineplex Entertainment Corporation.

Mr. Kevin J. Maronihas served as a Director of Parent and AMCE since April 2008. Mr. Maroni serves as Senior Managing
Director of Spectrum Equity Investors ("Spectrum"), an investment firm with offices in Boston and Menlo Park. Mr. Maroni has served on the boards of directors of numerous public and private
companies, including most recently Consolidated Communications, Inc. from 2002 - 2005; NEP Broadcasting, L.P. from 2004-2007; and Classic
Media, L.P. from 2006-2007. Prior to joining Spectrum at inception in 1994, Mr. Maroni worked at Time Warner, Inc. and Harvard Management Company's private equity
affiliate. Mr. Maroni has also served as a trustee of numerous non-profit institutions, which currently include National Geographic Ventures; the John F. Kennedy Library Foundation
and the Park School. Mr. Maroni holds a B.A. degree from the University of Michigan and a M.B.A. from Harvard University. Mr. Maroni has over 20 years of experience as a

139

---



Table of Contents

private
equity investor and has experience in serving on a number of public and private company boards of directors.

Mr. Craig R. Ramseyhas served as Executive Vice President and Chief Financial Officer of Parent since June 2007. Mr. Ramsey
has served as Executive Vice President and Chief Financial Officer of AMCE and American Multi-Cinema, Inc. since April 2003. Previously, Mr. Ramsey served as Executive Vice President,
Chief Financial Officer and Secretary of AMCE and American Multi-Cinema, Inc. since April 2002. Mr. Ramsey served as Senior Vice President, Finance, Chief Financial Officer and Chief
Accounting Officer, of AMCE and American Multi-Cinema, Inc. from August 1998 until May 2002. Mr. Ramsey has served as a Director of American Multi-Cinema, Inc. since September
1999. Mr. Ramsey was elected Chief Accounting Officer of AMCE and American Multi-Cinema, Inc. in February 2000. Mr. Ramsey served as Vice President, Finance from January 1997 to
October 1999 and prior thereto, Mr. Ramsey served as Director of Information Systems and Director of Financial Reporting since joining American Multi-Cinema, Inc. in February 1995.
Mr. Ramsey currently serves as a member of the board of directors of Movietickets.com and has previously served on the board of directors of Bank Midwest. Mr. Ramsey holds a B.S. degree
in Accounting and Business Administration from the University of Kansas.

Mr. John D. McDonaldhas served as Executive Vice President, U.S. Operations of Parent and AMCE since July 2009.
Mr. McDonald has served as Director of American Multi-Cinema, Inc. since November 2007 and has served as Executive Vice President, U.S. Operations of American Multi-Cinema, Inc.
since July 2009. Prior to July 2009, Mr. McDonald served as Executive Vice President, U.S. and Canada Operations of American Multi-Cinema, Inc. effective October 1998.
Mr. McDonald served as Senior Vice President, Corporate Operations from November 1995 to October 1998. Mr. McDonald is a member of the National Association of Theatre Owners Advisory
board of directors. Mr. McDonald has successfully managed the integration for the Gulf States, General Cinema, and Loews mergers and acquisitions. Mr. McDonald attended California State
Polytechnic University where he studied economics and history.

Mr. Mark A. McDonaldhas served as Executive Vice President, Global Development since July 2009 of Parent and AMCE. Prior thereto,
Mr. McDonald served as Executive Vice President, International Operations of Parent, Holdings and AMCE from October 2008 to July 2009. Mr. McDonald has served as Executive Vice
President, International Operations of American Multi-Cinema, Inc., and AMC Entertainment International, Inc. ("AMCEI"), a subsidiary of American Multi-Cinema, Inc., since March
2007 and December 1998, respectively. Prior thereto, Mr. McDonald served as Senior Vice President, Asia Operations from November 1995 until his appointment as Executive Vice President,
International Operations and Film in December 1998. Mr. McDonald served on the board of directors of AMCEI from March 2007 to May 2010. Mr. McDonald holds a B.A. degree from the
University of Southern California and a M.B.A. from the Anderson School at University of California Los Angeles.

Mr. Stephen A. Colanerohas served as Executive Vice President and Chief Marketing Officer of Parent and AMCE since December 2009.
Prior to joining AMC, Mr. Colanero served as Vice President of Marketing for RadioShack Corporation from April 2008 to December 2009. Mr. Colanero also served as Senior Vice President of
Retail Marketing for Washington Mutual Inc. from February 2006 to August 2007 and as Senior Vice President, Strategic Marketing for Blockbuster Inc. from November 1994 to January 2006.
Mr. Colanero holds a B.S. degree in Accounting from Villanova University and a M.B.A. in Marketing and Strategic Management from The Wharton School at the University of Pennsylvania.

Mr. Robert J. Lenihanhas served as President, Programming, of Parent and AMCE since April 2009. Prior to joining AMC,
Mr. Lenihan served as Executive Vice President for Loews Cineplex Entertainment Corp from August 1998 to February 2002. Mr. Lenihan was appointed Senior Vice President and Head Film
Buyer at Mann Theatres in 1985 and served in that capacity at Act III

140

---



Table of Contents

Theatres,
Century Theatres, Sundance Cinemas and most recently at Village Roadshow. Mr. Lenihan holds a B.S. degree from Rowan University.

Mr. Samuel D. "Sonny" Gourleyhas served as President of AMC Film Programming of Parent and AMCE since December 2009.
Mr. Gourley has served as President of AMC Film Programming a Division of AMC since November 2005. Prior thereto, Mr. Gourley served as Executive Vice President, National Film from
November 2002 to November 2005 and Executive Vice President, East Film from
November 1999 to November 2002. Mr. Gourley currently serves on the advisory board of Tent 25 VarietyThe Children's Charity located in Los Angeles, as well as serving on the board
of the local Tent 8 VarietyThe Children's Charity in Kansas City. Mr. Gourley holds a B.A. degree in English from Miami University in Oxford, Ohio.

Mr. Kevin M. Connorhas served as Senior Vice President, General Counsel and Secretary of Parent since June 2007. Mr. Connor
has served as Senior Vice President, General Counsel and Secretary of AMCE and American Multi-Cinema, Inc. since April 2003. Prior to April 2003, Mr. Connor served as Senior Vice
President, Legal of AMCE and American Multi-Cinema, Inc. beginning November 2002. Prior thereto, Mr. Connor was in private practice in Kansas City, Missouri as a partner with the firm
Seigfreid, Bingham, Levy, Selzer and Gee from October 1995. Mr. Connor holds a Bachelor of Arts degree in English and History from Vanderbilt University, a Juris Doctorate degree from the
University of Kansas School of Law and a LLM in Taxation from the University of MissouriKansas City.

Mr. Michael W. Zwonitzerhas served as Senior Vice President, Finance of Parent and AMCE since July 2009. Prior thereto,
Mr. Zwonitzer served as Vice President, Finance of Parent and Holdings since June 2007 and December 2004, respectively. Mr. Zwonitzer has served as Vice President, Finance of AMCE and
American Multi-Cinema, Inc. since September 2004 and prior thereto, Mr. Zwonitzer served as Director of Finance from December 2002 to September 2004 and Manager of Financial Analysis
from November 2000 to December 2002. Mr. Zwonitzer joined AMC in June 1998. Mr. Zwonitzer holds a B.S. degree in Accounting from the University of Missouri.

Mr. Chris A. Coxhas served as Senior Vice President and Chief Accounting Officer of Parent since June 2010. Prior thereto
Mr. Cox served as Vice President and Chief Accounting Officer of Parent and Holdings since June 2007 and December 2004, respectively. Mr. Cox has served as Vice President and Chief
Accounting Officer of AMCE and American Multi-Cinema, Inc. since May 2002. Prior to May 2002, Mr. Cox served as Vice President and Controller of American Multi-Cinema, Inc. since
November 2000. Previously, Mr. Cox served as Director of Corporate Accounting for the Dial Corporation from December 1999 until November 2000. Mr. Cox holds a Bachelor's of Business
Administration in Accounting and Finance degree from the University of Iowa.

Mr. Terry W. Crawfordhas served as Senior Vice President and Treasurer of Parent since June 2010. Previously, Mr. Crawford
served as Vice President and Treasurer of Parent since June 2007 and of Holdings, AMCE and American Multi-Cinema, Inc. since April 2005. Prior thereto, Mr. Crawford served as Vice
President and Assistant Treasurer of Holdings, AMCE and American Multi-Cinema, Inc. from December 2004 until April 2005. Previously, Mr. Crawford served as Vice President, Assistant
Treasurer and Assistant Secretary of AMCE from May 2002 until December 2004 and American Multi-Cinema, Inc. from January 2000 until December 2004. Mr. Crawford served as Assistant
Treasurer and Assistant Secretary of AMCE from September 2001 until May 2002 and AMC from November 1999 until December 2004. Mr. Crawford served as Assistant Secretary of AMCE from March 1997
until September 2001 and American Multi-Cinema, Inc. from March 1997 until November 1999. Prior to joining AMC, Mr. Crawford served as Vice President and Treasurer for Metmor
Financial, Inc., a wholly-owned subsidiary of Metropolitan Life Insurance Company. Mr. Crawford holds a B.S. degree in Business from Emporia State University and a M.B.A. from the
University of MissouriKansas City.

Mr. George Pattersonhas served as Senior Vice President of Food and Beverage of American Multi-Cinema, Inc. since February
2010. Prior thereto, Mr. Patterson served as Director of Asset Strategy and Multibrand Execution for YUM Brands from 2002 to 2010. Prior to joining YUM Brands,

141

---



Table of Contents

Mr. Patterson
was Co-founder and COO of Cool Mountain Creamery and Café from 1997 to 2002. Prior to developing Cool Mountain Creamery and Café,
Mr. Patterson was Regional Vice President for Wendy's International restaurants. Mr. Patterson holds a B.A. degree from the University of Florida.

Elizabeth Frankhas served as Senior Vice President of Strategy and Strategic Partnerships for AMCE since July 2010. Prior to joining
AMCE, Ms. Frank served as Senior Vice President of Global Programs for AmeriCares. Prior to AmeriCares, Ms. Frank served as Vice President of Corporate Strategic Planning for Time
Warner Inc. Prior to Time Warner Inc., Ms. Frank was a partner at McKinsey & Company for nine years. Ms. Frank currently serves on the Board of Directors for the
Global Health Council. Ms. Frank holds a Bachelor of Business Administration degree from Lehigh University and a Masters of Business Administration from Harvard University.

Audit Committee

The Board of Directors is satisfied that the members of our audit committee each have sufficient expertise and business and financial
experience necessary to perform their duties as the Company's audit committee effectively. As such, no one member of our audit committee has been named by our Board of Directors as an "audit committee
financial expert" as that term is defined in Item 407(d)(5) of Regulation S-K.

Audit
Committee of the Board of Directors

Eliot
P.S. Merrill (Chairman)
Stan Parker
Kevin Maroni

Code of Business Conduct and Ethics

We have a Code of Business Conduct and Ethics that applies to all of our associates, including our principal executive officer,
principal financial officer and principal accounting officer, or persons performing similar functions. These standards are designed to deter wrongdoing and to promote honest and ethical conduct. The
Code of Business Conduct and Ethics, which address the subject areas covered by the SEC's rules, may be obtained free of charge through our website: www.amctheatres.com under "Investor
RelationsCorporate Governance." Any substantive amendment to, or waiver from, any provision of the Code of Business Conduct and Ethics with respect to any senior executive or financial
officer shall be posted on this website. The information contained on our website is not part of this Annual Report on Form 10-K.

Item 11.    Executive Compensation.

COMPENSATION DISCUSSION AND ANALYSIS

This section discusses the material elements of compensation awarded to, earned by or paid to our principal executive officer, our
principal financial officer, our three other most highly compensated executive officers as well as an additional executive officer whose compensation otherwise would have been subject to reporting had
there not been any equity grants and a retention bonus award in fiscal 2011. These individuals are referred to as the "Named Executive Officers."

Our
executive compensation programs are determined and approved by our Compensation Committee. None of the Named Executive Officers are members of the Compensation Committee or otherwise
had any role in determining the compensation of other Named Executive Officers, although the Compensation Committee does consider the recommendations of our Chief Executive Officer in setting
compensation levels for our executive officers other than the Chief Executive Officer.

Executive Compensation Program Objectives and Overview

The goals of the Compensation Committee with respect to executive compensation are to attract, retain, motivate and reward talented
executives, to tie annual and long-term compensation incentives to the achievement of specified performance objectives, and to achieve long-term creation of value for our

142

---



Table of Contents

stockholders
by aligning the interests of these executives with those of our stockholders. To achieve these goals, we endeavor to maintain compensation plans that are intended to tie a substantial
portion of executives' overall compensation to key strategic, operational and financial goals such as achievement of budgeted levels of adjusted EBITDA or revenue, and other non-financial
goals that the Compensation Committee deems important. From time to time, the Compensation Committee evaluates individual executive performance with a goal of setting compensation at levels they
believe, based on industry comparables and their general business and industry knowledge and experience, are comparable with executives in other companies of similar size and stage of development
operating in the theatrical exhibition industry and similar retail type businesses, while taking into account our relative performance and our own strategic goals.

We
conduct a periodic review of the aggregate level of our executive compensation as part of the annual budget review and annual performance review processes, which includes determining
the operating metrics and non-financial elements used to measure our performance and to compensate our executive officers. This review is based on our knowledge of how other theatrical
exhibition industry and similar retail type businesses measure their executive performance and on the key operating metrics that are critical in our effort to increase the value of our company.

Current Executive Compensation Program Elements

Our executive compensation program consists of the elements described in the following sections. The Compensation Committee determines
the portion of compensation allocated to each element for each individual Named Executive Officer. Our Compensation Committee expects to continue these policies in the short term but will reevaluate
the current policies and practices as it considers advisable.

The
Compensation Committee believes, based on general business and industry experience and knowledge of its members, that the use of the combination of base salary, annual performance
bonuses, and long-term incentives (including stock option or other stock-based awards) offers the
best approach to achieving our compensation goals, including attracting and retaining talented and capable executives and motivating our executives and other officers to expend maximum effort to
improve the business results, earnings and overall value of our business.

Base Salaries

Base salaries for our Named Executive Officers are established based on the scope of their responsibilities, taking into account
competitive market compensation for similar positions, as well as seniority of the individual, our ability to replace the individual and other primarily judgmental factors deemed relevant by the
Compensation Committee. Generally, we believe that executive base salaries should be targeted near the median of the range of salaries for executives in similar positions with similar responsibilities
at comparable companies, in line with our compensation philosophy, but we do not make any determinations or changes in compensation in reaction to market data alone. The Compensation Committee's goal
is to provide total compensation packages that are competitive with prevailing practices in our industry and in the geographic markets in which we conduct business. However, the Compensation Committee
retains flexibility within the compensation program to respond to and adjust for specific circumstances and our evolving business environment. Periodically, the Company obtains information regarding
the salaries of employees at comparable companies, including approximately 150 multi-unit businesses in the retail, entertainment and food service industries. Base salaries for our Named
Executive Officers are reviewed from time to time by the Compensation Committee and may be increased pursuant to such review and/or in accordance with guidelines contained in the various employment
agreements in order to realign salaries with market levels after taking into account individual responsibilities, performance and experience. Base salaries for our Named Executive Officers increased
between 3.0% and 6.0% from fiscal 2010 to fiscal 2011.

143

---



Table of Contents

Annual Performance Bonus

The Compensation Committee has the authority to award annual performance bonuses to our Named Executive Officers. Under the current
employment agreements, each Named Executive Officer is eligible for an annual bonus based on our annual incentive compensation program as it may exist from time to time. We believe that annual bonuses
based on performance serve to align the interests of management and stockholders, and our annual bonus program is primarily designed to reward increases in adjusted EBITDA. Individual bonuses are
performance based and, as such, can be highly variable from year to year. The annual incentive bonuses for our Named Executive Officers are determined by our Compensation Committee and, except with
respect to his own bonus, our chief executive officer, based on our annual incentive compensation program as it may exist from time to time. For fiscal 2011, the annual incentive compensation program
was based on a company component and an individual component. The company component was based on attainment of an adjusted EBITDA target of $387,800,000. The plan guideline was that no company
performance component of the bonus would be paid below attainment of 90% of targeted adjusted EBITDA and that upon attainment of 100% of targeted adjusted EBITDA, each Named Executive Officer would
receive 100% of his assigned bonus target. Upon attainment of 110% of targeted adjusted EBITDA, each Named Executive Officer would receive a maximum of 200% of his assigned bonus target. The
individual component of the bonus does not have an adjusted EBITDA threshold but is based on achievement of key performance measures and overall performance and contribution to our strategic and
financial goals. Under the annual incentive compensation program, our Compensation Committee and, except with respect to his own bonus, chief executive officer, retain discretion to
decrease or increase bonuses relative to the guidelines based on qualitative or other objective factors deemed relevant by the Compensation Committee.

The
following table summarizes the company component upon attainment of 100% of targeted adjusted EBITDA and the individual component of the annual performance bonus plan for fiscal
2011:

Company
Component at
100% Target

Individual
ComponentGerardo I. Lopez

$
407,700

$
101,900Craig R. Ramsey


212,200


53,050John D. McDonald


212,200


53,050Robert J. Lenihan


126,700


84,450Kevin M. Connor


120,500


80,350Stephen A. Colanero


140,600


93,750


Our
annual bonuses have historically been paid in cash and traditionally have been paid in a single installment in the first quarter following the completion of a given fiscal year
following issuance of our annual audit report. Pursuant to current employment agreements, each Named Executive officer is eligible for an annual bonus pursuant to the annual incentive plan in place at
the time. The Compensation Committee has discretion to increase the annual bonus paid to our Named Executive Officers using its judgment if the Company exceeds certain financial goals, or to reward
for achievement of individual annual performance objectives. No company component bonuses were earned for fiscal 2011 under the annual incentive compensation program because the Company did not meet
the minimum 90% of targeted adjusted EBITDA threshold as established by the Compensation Committee. The individual component of the bonus, which was subject to the approval by the Compensation
Committee and the Board of Directors, was determined following a review of each Named Executive Officer's individual performance and contribution to our strategic and financial goals. The individual
performance review has been conducted during the first quarter of fiscal 2012 and the individual component bonuses were finalized and approved by the Compensation Committee and the Board of Directors.

144

---



Table of Contents

Special Incentive Bonus

Pursuant to his employment agreement, Mr. Gerardo Lopez is entitled to a one-time special incentive bonus of
$2,000,000 that vests at the rate of $400,000 per year over five years, effective March 2009, provided that he remains employed on each vesting date. The first three installments of the special
incentive bonus are payable on the third anniversary and the fourth and fifth installments are payable upon vesting. The special incentive bonus of $2,000,000 shall immediately vest in full upon
Mr. Lopez's involuntary termination within twelve months after a change of control, as defined in the employment agreement. As of March 31, 2011, Mr. Lopez has vested in
two-fifths, or $800,000, of this special incentive bonus to be paid on his third anniversary.

Long Term Incentive Equity Awards

On June 11, 2007, Marquee Merger Sub Inc., a wholly-owned subsidiary of Parent, merged with and into Holdings, with
Holdings continuing as the surviving corporation (the "holdco merger"). As a result of the holdco merger, Holdings became a wholly owned subsidiary of Parent, a newly formed entity controlled by the
Sponsors. In connection with the holdco merger, on
June 11, 2007, Parent amended and restated its 2004 Stock Option Plan ("2004 Stock Option Plan"), which provides for the grant of incentive stock options (within the meaning of
Section 422 of the Internal Revenue Code) and non-qualified stock options to acquire Parent common stock to eligible employees and consultants of Parent and its subsidiaries and
non-employee directors of Parent. Options granted under the plan vest in equal installments over three to five years from the grant date, subject to the optionee's continued service with
Parent or one of its subsidiaries. The Compensation Committee approved stock option grants to Mr. Stephen Colanero under the 2004 Stock Option Plan on July 8, 2010. On July 23,
2010, the Board determined that the Company would no longer grant any additional awards of shares of common stock of the Company under the 2004 Stock Option Plan.

On
July 8, 2010, the Board of Directors of Parent and the stockholders of Parent approved the adoption of the AMC Entertainment Holdings, Inc. 2010 Equity Incentive Plan
("2010 Equity Incentive Plan"). The 2010 Equity Incentive Plan provides for grants of non-qualified stock options, incentive stock options, stock appreciation rights, restricted stock
awards, other stock-based awards and performance-based compensation awards. During fiscal 2011, the Compensation Committee approved grants of stock options, restricted stock (time vesting), and
restricted stock (performance vesting) to the named executive officers. The options granted under the plan vest in equal installments over four years from the grant date, subject to the optionee's
continued service with the Company. The restricted share (time vesting) grants vest on the fourth anniversary of the date of grant, subject to the Named Executive Officer's continued service with the
Company. The award agreements for the restricted shares (performance vesting) generally provide that 25% of the restricted shares awarded will become vested in each year over a four-year
period upon the Company meeting certain pre-established annual performance targets. Because each annual performance target is set at the start of each respective single-fiscal year
performance period, only twenty-five percent of the total restricted shares (performance vesting) awarded are deemed granted each year over the four-year period in accordance
with Accounting Standards Codification 718-10-55-95. The grant date fair value for the first year's performance period, fiscal 2011, is included in the Summary
Compensation Table. The restricted share (performance vesting) grants for fiscal 2011 have a vesting term of approximately one year upon the Company meeting a pre-established annual
adjusted EBITDA target of $387,800,000. The Named Executive Officers did not vest in the restricted share (performance vesting) grants for fiscal 2011 as the Company did not meet the adjusted EBITDA
target threshold established by the Compensation Committee. Further discussion of the 2010 Equity Incentive Plan compensation for the Named Executive Officers can be found in the Potential Payments Upon Termination or Change
in Controlsection.

145

---



Table of Contents

Retirement Benefits

We provide retirement benefits to the Named Executive Officers under both qualified and non-qualified defined-benefit and
defined-contribution retirement plans. The Defined Benefit Retirement Income Plan for Certain Employees of American Multi-Cinema, Inc. ("AMC Defined Benefit Retirement Income Plan") and the AMC
401(k) Savings Plan are both tax-qualified retirement plans in which the Named Executive Officers participate on substantially the same terms as our other participating employees. However,
due to maximum limitations imposed by the Employee Retirement Income Security Act of 1974 ("ERISA") and the Internal Revenue Code on the annual amount of a pension which may be paid under a qualified
defined-benefit plan and on the maximum amount that may be contributed to a qualified defined-contribution plan, the benefits that would otherwise be payable to the Named Executive Officers under the
Defined Benefit Retirement Income Plan are limited. Because we did not believe that it was appropriate for the Named Executive Officers' retirement benefits to be reduced because of limits under ERISA
and the Internal Revenue Code, we had established non-qualified supplemental defined-benefit plans that permit the Named Executive Officers to receive the same benefit that would be paid
under our qualified defined-benefit plan up to the old IRS limit, as indexed, as if the Omnibus Budget Reconciliation Act of 1993 had not been in effect. On November 7, 2006, our Board of
Directors approved a proposal to freeze the AMC Defined Benefit Retirement Income Plan and the AMC Supplemental Executive Retirement Plan, effective as of December 31, 2006. The Compensation
Committee determined that this type of plan is not as effective as other elements of compensation in aligning executives' interests with the interests of stockholders. As a result, the Compensation
Committee determined to freeze these plans. Benefits no longer accrue under the AMC Defined Benefit Retirement Income Plan or the AMC Supplemental Executive Retirement Plan for our Named Executive
Officers or for other participants.

Effective
January 1, 2011, under the Company's 401(k) Savings Plan, the Company began to match 100% of each eligible employee's elective contributions up to 3% and 50% of
contributions up to 5% of the employee's eligible compensation. During fiscal 2010 and the first three quarters of fiscal 2011, the Company matched 50% of each eligible employee's elective
contributions up to 6% of the employee's eligible compensation. During fiscal 2009, the Company matched 100% of elective contributions up to 5% of employee compensation.

The
"Pension Benefits" table and related narrative section "Pension and Other Retirement Plans" below describes our qualified and non-qualified defined-benefit plans in which
our Named Executive Officers participate.

Non-Qualified Deferred Compensation Program

Named Executive Officers are permitted to elect to defer base salaries and their annual bonuses under the AMC Non-Qualified
Deferred Compensation Plan. We believe that providing the Named Executive Officers with deferred compensation opportunities is a cost-effective way to permit officers to receive the tax
benefits associated with delaying the income tax event on the compensation deferred, even though the related deduction for the Companies is also deferred.

The
"Non-Qualified Deferred Compensation" table and related narrative section "Non-Qualified Deferred Compensation Plan" below describe the
non-qualified deferred compensation plan and the benefits thereunder.

Severance and Other Benefits Upon Termination of Employment

We believe that severance protections, particularly in the context of a change in control transaction, can play a valuable role in
attracting and retaining key executive officers. Accordingly, we provide such protections for each of the Named Executive Officers and for other of our senior officers in their respective employment
agreements. The Compensation Committee evaluates the level of

146

---



Table of Contents

severance
benefits provided to Named Executive Officers on a case-by-case basis. We consider these severance protections consistent with competitive practices.

As
described in more detail below under "Potential Payments Upon Termination or Change in Control" pursuant to their employment agreements, each of the Named Executive Officers would be
entitled to severance benefits in the event of termination of employment by AMCE without cause and certain Named Executive Officers would be entitled to severance benefits due to death or disability.
In the case of Mr. Lopez, resignation for good reason would also entitle the employee to severance benefits. We have determined that it is appropriate to provide these executives with severance
benefits under these circumstances in light of their positions with AMCE and as part of their overall compensation package.

We
believe that the occurrence, or potential occurrence, of a change in control transaction will create uncertainty regarding the continued employment of our executive officers. This
uncertainty results from the fact that many change in control transactions result in significant organizational changes, particularly at the senior executive level. In order to encourage certain of
our executive officers to remain employed with us during an important time when their prospects for continued employment following the transaction are often uncertain, we provide the executives with
severance benefits if they terminate their employment within a certain number of days following specified changes in their compensation, responsibilities or benefits following a change in control. No
claim for severance due to a change in control has been made by an executive who is a party to an employment agreement providing for such severance benefits since the Marquee Transactions (then a
change in control for purposes of the agreements). The severance benefits for these executives are generally determined as if they continued to remain employed by us for two years following their
actual termination date.

All Other Compensation

The other compensation provided to each Named Executive Officer is reported in the All Other Compensation column of the "Summary
Compensation Table" below, and is further described in footnote (8) to that table. All other compensation for fiscal 2011 consists of Company matching contributions under our 401(k) savings
plan, which is a qualified defined contribution plan, life insurance premiums, relocation expenses, and on-site parking. All other compensation is benchmarked and reviewed, revised and
approved by the Compensation Committee every year.

Policy with Respect to Section 162(m)

Section 162(m) of the Internal Revenue Code generally disallows public companies a tax deduction for compensation in excess of
$1,000,000 paid to their chief executive officers and the four other most highly compensated executive officers unless certain performance and other requirements are met. Our intent generally is to
design and administer executive compensation programs in a manner that will preserve the deductibility of compensation paid to our executive officers, and we believe that a substantial portion of our
current executive compensation program (including the stock options and other awards that may be granted to our Named Executive Officers as described above) satisfies the requirements for exemption
from the $1,000,000 deduction limitation. However, we reserve the right to design programs that recognize a full range of performance criteria important to our success, even where the compensation
paid under such programs may not be deductible. The Compensation Committee will continue to monitor the tax and other consequences of our executive compensation program as part of its primary
objective of ensuring that compensation paid to our executive officers is reasonable, performance-based and consistent with the goals of AMCE and its stockholders.

147

---



Table of Contents

Compensation Committee Report on Executive Compensation

The Compensation Committee has certain duties and powers as described in its charter. The Compensation Committee is currently composed
of the four non-employee directors named at the end of this report. The Compensation Committee has reviewed and discussed with management the disclosures contained in the above
Compensation Discussion and Analysis. Based upon this review and discussion, the Compensation Committee recommended to our Board of Directors that the Compensation Discussion and Analysis section be
included in our Annual Report on Form 10-K.

Compensation
Committee of the Board of Directors

Stephen P. Murray (Chairman)
Aaron J. Stone
Eliot P.S. Merrill
Philip Loughlin

148

---





Table of Contents

Summary Compensation Table

The following table presents information regarding compensation of our principal executive officer, our principal financial officer,
our three other most highly compensated executive officers for services rendered during fiscal 2011 as well as an additional executive officer whose compensation otherwise would have been subject to
reporting had there not been any equity grants and a retention bonus award in fiscal 2011. These individuals are referred to as "Named Executive Officers."

Name and Principal Position(1)

Year

Salary
($)

Bonus
($)(2)

Stock
Awards
($)(3)

Option
Awards
($)(4)

Non-Equity
Incentive
Plan
Compensation
($)(5)

Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
($)(6)(7)

All Other
Compensation
($)(8)

Total
($)Gerardo I. Lopez


2011

$
728,000

$
400,000

$
985,845

$
307,819

$
203,800

$


$
1,794

$
2,627,258Chief Executive Officer, President


2010


700,003


400,000








674,240





66,220


1,840,463and Director (Parent, AMCE and


2009


64,615








2,068,847








16,570


2,150,032American Multi-Cinema, Inc.)Craig R. Ramsey


2011


408,100





591,582


184,750


106,100


45,696


14,662


1,350,890Executive Vice President and


2010


385,000











346,847


83,470


6,656


821,973Chief Financial Officer (Parent,


2009


383,508

















16,634


400,142AMCE and American Multi-Cinema, Inc.)John D. McDonald


2011


408,100





591,582


184,750


66,313


85,763


14,536


1,351,044Executive Vice President North


2010


385,000











344,344


134,080


9,419


872,843American Operations (Parent,


2009


383,508

















21,626


405,134AMCE and American Multi-Cinema, Inc.)Robert J. Lenihan


2011


422,300





197,320


61,681


63,338





10,311


754,950President, Film Programming


2010


376,885








138,833


252,838





48,762


817,318(Parent, AMCE and AmericanMulti-Cinema, Inc.)Kevin M. Connor


2011


334,750





197,320


61,681


80,350


7,016


9,632


690,749Senior Vice President, General


2010


325,000











260,520


12,201


8,205


605,926Counsel and Secretary (Parent,


2009


323,658

















16,123


339,781AMCE and American Multi-Cinema, Inc.)Stephen A. Colanero


2011


360,500


100,000


197,320


369,512


117,188





28,139


1,172,659Executive Vice President, and Chief Marketing Officer (Parent, AMCE and American Multi-Cinema, Inc.)


(1)The
principal positions shown are at March 31, 2011. Compensation for Mr. Robert Lenihan and Mr. Stephen Colanero is provided for years
where they were Named Executive Officers only.(2)The
bonus activity for Mr. Lopez reflects the vested portion of his Special Incentive Bonus. Mr. Colanero received a retention bonus on the
first anniversary of his employment. The employment agreement for Mr. Colanero entitled him to receive a retention bonus after one year of service.(3)As
required by SEC Rules, amounts shown in the column, "Stock Awards," presents the aggregate grant date fair value of restricted stock awards granted in
the fiscal year in accordance with accounting rules ASC 718,CompensationStock Compensation. The number and grant date fair value of
restricted stock (time vesting) and restricted stock (performance vesting) awarded each Named Executive Officer appear in the Grants of Plan-Based Awards table. The estimated fair value of
the stock at the grant date was approximately $752 per share and was based upon a contemporaneous valuation reflecting market conditions. The valuation assumptions used for the restricted stock awards
are provided in Note 9Stockholder's Equity to the Company's Consolidated Financial Statements contained elsewhere in this Annual Report on Form 10-K. The
restricted share (time vesting) grants vest on the fourth anniversary of the date of grant, subject to the Named Executive Officer's continued service with the Company. Of the total restricted share
(performance vesting) awards approved by the Compensation Committee, approximately twenty-five percent of the total awards will be granted each year over a four-year period in
accordance with ASC 718-10-55-95. Only the restricted share (performance vesting) awards that have been granted (twenty-five percent in fiscal
2011) have been included in the Summary Compensation Table. The restricted share (performance vesting) grants for fiscal 2011 have a vesting term of approximately one year upon the Company meeting a
pre-established annual adjusted EBITDA target of $387,800,000. The Named Executive


149

---



Table of Contents

Officers
did not vest in the restricted share (performance vesting) grants for fiscal 2011 as the Company did not meet the adjusted EBITDA target threshold established by the Compensation Committee. (4)As
required by SEC Rules, amounts shown in the column, "Option Awards," presents the aggregate grant date fair value of option awards granted in the fiscal
year in accordance with accounting rules ASC 718,CompensationStock Compensation. These amounts reflect the Company's cumulative accounting
expense over the vesting period and do not correspond to the actual value that will be realized by the Named Executive Officers. Options are to acquire shares of Parent common stock. The valuation
assumptions used for the stock option awards are provided in Note 9Stockholder's Equity to the Company's Consolidated Financial Statements contained elsewhere in this Annual Report
on Form 10-K.
In
July 2010, the Named Executive Officers received a grant of non-qualified stock options under the 2010 Equity Incentive Plan. The number and grant date fair value of options awarded to
each Named Executive Officer appear in theGrants of Plan-Based Awardstable. The options vest in four equal annual installments, subject to
continued employment. The stock options expire after ten years from the date of the grant. The estimated grant date fair value of the options was $293.72 per share and was determined using the
Black-Scholes option-pricing model. The option exercise price was $752 per share. Also, in July 2010, Mr. Colanero received a grant of 1,023 non-qualified stock options under the
2004 Stock Option Plan. These options vest ratably over 5 years, subject to continued employment, with an exercise price of $752 per share. The estimated grant date fair value of the options
was $300.91 per share and was determined using the Black-Scholes option-pricing model.

In
May 2009, Mr. Robert Lenihan received a stock option grant under the 2004 stock option plan to purchase 1,023 common shares of Parent at a price equal to $339.59 per share. The options will
vest in five equal annual installments, subject to continued employment. The options shall expire after ten years from the date of the grant.

In
March 2009, Mr. Gerardo Lopez received a stock option grant under the 2004 stock option plan to purchase 15,980.45 common shares of Parent at a price equal to $323.95 per share. The options
will vest in five equal annual installments, subject to Mr. Lopez's continued employment. The options shall expire after ten years from the date of the grant.

No
option awards granted to Named Executive Officers in the above table were forfeited in fiscal 2011, fiscal 2010 or fiscal 2009.(5)For
fiscal 2011, the individual component bonus of the annual incentive compensation plan was approved during the first quarter of fiscal 2012 following a
review of each Named Executive Officer's individual performance and contribution to the Company's strategic and financial goals. No company component bonuses were earned for fiscal 2011 under the
annual incentive compensation program because the Company did not meet the minimum 90% of targeted adjusted EBITDA threshold. For fiscal 2010, bonus amounts were approved for both the company
component bonus and the individual component bonus of the annual incentive compensation plan. The Company attained an adjusted EBITDA of 104% of target, which is equivalent to an approximate 142%
payout of the assigned bonus target for the company component. No bonuses were earned in fiscal 2009 under the annual incentive bonus program as the Company did not meet the minimum targeted adjusted
EBITDA threshold established by the Compensation Committee. Further discussion on the annual incentive bonus program for the Named Executive Officers can be found in the Compensation Discussion and AnalysisAnnual Performance Bonussection.(6)The
following table represents the aggregate increases and decreases in actuarial present value of each officer's accumulated benefit amounts. The aggregate
decreases in actuarial present value amounts have been omitted from the Summary Compensation Table:


Defined
Benefit Plan

Supplemental
Executive
Retirement
PlanCraig R. Ramsey


2011

$
17,441

$
9,0432010


42,764


22,1732009


(2,109
)

(1,094
)John D. McDonald


2011


44,869


23,2642010


87,134


45,1792009


(35,248
)

(18,276
)Kevin M. Connor


2011


4,966


2,0502010


8,635


3,5662009


(4,394
)

(1,814
)


For
fiscal 2009, in accordance with the amended guidance for employers' accounting for defined benefit pension and other postretirement plans in Accounting Standards Codification
715, CompensationRetirement Benefits,the measurement date used to measure the aggregate
change in actuarial present value of accumulated benefit amounts was changed from a measurement date of January 1 to the Company's fiscal year end date, ending on April 2, 2009. See
Note 12Employee Benefit Plans to the Company's Consolidated Financial Statements contained elsewhere in this Annual Report on Form 10-K for more information. (7)This
column includes the nonqualified deferred compensation above market earnings for the difference between market interest rates determined pursuant to
SEC rules and the interest contingently credited by the Company on salary deferred by the Named Executive Officers. For fiscal 2011, above market earnings of 17.6% to 23.8% for Mr. Ramsey and
Mr. McDonald were $19,212 and $17,630, respectively. For fiscal 2010, above market earnings of 19.7% to 21.6% for Mr. Ramsey and Mr. McDonald were $18,533 and $1,767,
respectively. There were no above market earnings under the nonqualified deferred compensation plan for the Named Executive Officers for fiscal 2009. Further discussion on the nonqualified deferred
compensation for the Named Executive Officers can be found in theCompensation Discussion and AnalysisNonqualified Deferred Compensation
section.


150

---



Table of Contents

(8)All
Other Compensation is comprised of Company matching contributions under our 401(k) savings plan which is a qualified defined contribution plan, life
insurance premiums, relocation expenses, and on-site parking. The following table summarizes "All Other Compensation" provided to the Named Executive Officers for fiscal 2011:


Relocation
Expenses

Reimbursement for
Taxes
Related to
Relocation

On-Site
Parking

Company
Matching
Contributions to
401(k) Plan

Life
Insurance
Premiums

TotalGerardo I. Lopez

$


$


$


$


$
1,794

$
1,794Craig R. Ramsey











10,825


3,837


14,662John D. McDonald











12,742


1,794


14,536Robert J. Lenihan








736


6,221


3,354


10,311Kevin M. Connor











8,542


1,090


9,632Stephen A. Colanero


16,830


9,315





1,109


885


28,139


Infrequently,
family of Named Executive Officers ride along on the Company aircraft when the aircraft is already going to a specific destination for a business purpose. The Company does not allocate
any incremental cost to the executive for the family member's use.


Compensation of Named Executive Officers

The Summary Compensation Table above quantifies the value of the different forms of compensation earned by or awarded to our Named
Executive Officers in fiscal 2011. The primary elements of each Named Executive Officer's total compensation reported in the table are base salary and annual bonus.

The
Summary Compensation Table should be read in conjunction with the tables and narrative descriptions that follow. A description of the material terms of each Named Executive Officer's
base salary and annual bonus is provided below.

The
"Pension Benefits" table and related description of the material terms of our pension plans describe each Named Executive Officer's retirement benefits under the Companies'
defined-benefit pension plans to provide context to the amounts listed in the Summary Compensation Table. The "Grant of Plan-based Awards" table and related footnotes provides material
terms of the Company's 2010 Equity Incentive Plan and the 2004 Stock Option Plan. The discussion in the section "Potential Payments Upon Termination or Change in Control" explains the potential future
payments that may become payable to our Named Executive Officers.

Description of Employment AgreementsSalary and Bonus Amounts

We have entered into employment agreements with each of Messrs. Lopez, Ramsey, McDonald, Lenihan, Connor, and Colanero.
Provisions of these agreements relating to outstanding equity incentive awards and post-termination of employment benefits are discussed below.

Gerardo I. Lopez.On February 23, 2009, AMC Entertainment entered into an employment agreement with Gerardo I. Lopez to serve as
its Chief
Executive Officer. The term of the agreement is for three years, with automatic one-year extensions each year. The agreement provides that Mr. Lopez will receive an initial
annualized base salary of $700,000. The Board of Directors or Compensation Committee, based on its review, has discretion to increase (but not reduce) the base salary each year. Mr. Lopez's
target incentive bonus for fiscal 2011 was equal to 70% of his annual base salary. In addition, Mr. Lopez is receiving a one-time special incentive bonus that vests at the rate of
$400,000 per year over five years, effective March 2009, provided he remains employed on each vesting date. The first three installments of the special incentive bonus are payable on the third
anniversary and the fourth and fifth installments are payable upon vesting. In making its determination with respect to salary and bonus levels, the Compensation Committee considers the factors
discussed in the "Current Executive Compensation Program Elements" of the Compensation Discussion and Analysis above. The agreement also provides that Mr. Lopez will be eligible for benefits
offered by the Company to other executive officers and will be entitled to reimbursements for expenses reasonably incurred in connection with related business expenses and travel. Change in control,
severance arrangements and restrictive

151

---



Table of Contents

covenants
in Mr. Lopez's employment agreement are discussed in detail below in the narrative section "Potential Payments Upon Termination or Change in Control."

Craig R. Ramsey.On July 1, 2001, AMC and AMCE entered into an employment agreement with Craig R. Ramsey, who serves as the
Executive Vice
President and Chief Financial Officer of the Company and reports directly to AMCE's Chairman of the Board, President and Chief Executive Officer. The term of the agreement is for two years, with
automatic one-year extensions each year. The agreement provides that Mr. Ramsey will receive an initial annualized base salary of $275,000. Subject to their review, the Chairman of
the Board, President and Chief Executive Officer of AMCE and, if applicable, the Compensation Committee have discretion to increase the base salary each year. The agreement also provides for annual
bonuses for Mr. Ramsey based on the applicable incentive compensation program of the company and consistent with the determination of the Chairman of the Board, President and Chief Executive
Officer of AMCE and, if applicable, the Compensation Committee. In making its determination with respect to salary and bonus levels, the Compensation Committee considers the factors discussed in the
"Current Executive Compensation Program Elements" of the Compensation Discussion and Analysis above. In addition, the agreement provides that Mr. Ramsey will be eligible for benefits offered by
the Company to other executive officers and will be entitled to reimbursements for expenses reasonably incurred in connection with business travel and entertainment. Change in control and severance
arrangements in Mr. Ramsey's employment agreement are discussed in detail below in the narrative section "Potential Payments Upon Termination or Change in Control."

John D. McDonald.On July 1, 2001, AMC and AMC Entertainment entered into an employment agreement with John D. McDonald, who
serves as an
Executive Vice President, North America Operations. Mr. McDonald reports directly to AMC's President and Chief Operating Officer or such officer's designee. The term of the agreement is for two
years, with automatic one-year extensions each year. The agreement provides that Mr. McDonald will receive an initial annualized base salary of $275,000. Subject to their review,
the President and Chief Operating Officer of AMC with the approval of AMC Entertainment's Chairman of the Board, President and Chief Executive Officer and, if applicable, the Compensation Committee
have discretion to increase the base salary each year. The agreement also provides for annual bonuses for Mr. McDonald based on the applicable incentive compensation program of the Company and
consistent with the determination of the President and Chief Operating Officer of AMC with the approval of AMC Entertainment's Chairman of the Board, President and Chief Executive Officer and, if
applicable, the Compensation Committee. In making its determination with respect to salary and bonus levels, the Compensation Committee considers the factors discussed in the "Current Executive
Compensation Program Elements" of the Compensation Discussion and Analysis above. In addition, the agreement provides that Mr. McDonald will be eligible for benefits offered by the Company to
other executive officers and will be entitled to reimbursements for expenses reasonably incurred in connection with business travel and entertainment. Change in control and severance arrangements in
Mr. McDonalds' employment agreements are discussed in detail below in the narrative section "Potential Payments Upon Termination or Change in Control."

Robert J. Lenihan.On April 7, 2009, AMC Entertainment entered into an employment agreement with Robert J. Lenihan who serves as
the President
of Film Programming. The term of the agreement is for two years, with automatic one-year extensions each year. The agreement provides that Mr. Lenihan will receive an initial
annualized base salary of $410,000. Subject to their review, the Board or the Compensation Committee have discretion to increase (but not reduce) the base salary each year. The agreement also provides
for annual bonuses for Mr. Lenihan and the target incentive for a particular fiscal year of the Company shall be determined by the Board of Directors or the Compensation Committee, in its sole
discretion, based on performance objectives. The target incentive bonus for each fiscal year during the period of employment shall equal 50% of the base salary. In making its determination with
respect to salary and bonus levels, the Committee considers the factors

152

---



Table of Contents

discussed
in the "Current Executive Compensation Program Elements" of the Compensation Discussion and Analysis above. In addition, the agreement provides that Mr. Lenihan will be eligible for
benefits offered by the Company to other executive officers and will be entitled to reimbursements for expenses reasonably incurred in connection with carrying out the Executive's duties for the
Company. Change in control and severance arrangements in Mr. Lenihan's employment agreement are discussed in detail below in the narrative section "Potential Payments Upon Termination or Change
in Control."

Kevin M. Connor.On November 6, 2002, AMC and AMC Entertainment entered into an employment agreement with Kevin M. Connor who
serves as the
Senior Vice President, General Counsel and Secretary of the Company. The term of the agreement is for two years, with automatic one-year extensions each year. The agreement provides that
Mr. Connor will receive an initial annualized base salary of $225,000. Subject to their review, the Chairman of the Board, President and Chief Executive Officer of AMCE and, if applicable, the
Compensation Committee have discretion to increase the base salary each year. The agreement also provides for annual bonuses for Mr. Connor based on the applicable incentive compensation
program of the Company and consistent with the determination of the Chairman of the Board, President and Chief Executive Officer of AMCE and, if applicable, the Compensation Committee. In making its
determination with respect to salary and bonus levels, the Committee considers the factors discussed in the "Current Executive Compensation Program Elements" of the Compensation Discussion and
Analysis above. In addition, the agreement provides that Mr. Connor will be eligible for benefits offered by the Company to other executive officers and will be entitled to reimbursements for
expenses reasonably incurred in connection with business travel and entertainment. Change in control and severance arrangements in Mr. Connor's employment agreement are discussed in detail
below in the narrative section "Potential Payments Upon Termination or Change in Control."

Stephen A. Colanero.On November 24, 2009, AMC Entertainment entered into an employment agreement with Stephen A. Colanero who
serves as the
Executive Vice President and Chief Marketing Officer. The term of the agreement is for two years, with automatic one-year extensions
each year. The agreement provides that Mr. Colanero will receive an initial annualized base salary of $350,000. The base salary will be reviewed by the Board of Directors or the Compensation
Committee on an annual basis and may, in its discretion, increase (but not decrease) the rate then in effect. The agreement also provides for annual bonuses for Mr. Colanero determined by the
Board of Directors or the Compensation Committee in its sole discretion, based on performance objectives established with respect to that particular fiscal year. The target incentive bonus for each
fiscal year during the period of employment shall equal 65% of the base salary. In making its determination with respect to salary and bonus levels, the Committee considers the factors discussed in
the "Current Executive Compensation Program Elements" of the Compensation Discussion and Analysis above. In addition, the agreement provides that Mr. Colanero will be eligible for benefits
offered by the Company to other executive officers and will be entitled to reimbursements for expenses reasonably incurred while carrying out his duties for the Company, subject to the Company's
expense reimbursement policies. Severance arrangements in Mr. Colanero's employment agreement are discussed in detail below in the narrative section "Potential Payments Upon Termination or
Change in Control."

153

---





Table of Contents

Grants of Plan-based AwardsFiscal 2011

The following table summarizes plan-based awards granted to named executive officers during fiscal 2011:

All Other
Stock
Awards:
Number of
Shares of
Stock or
Units
(#)

All Other
Option
Awards:
Number of
Securities
Underlying
Options
(#)



Grant
Date
Fair
Value of
Stock
and
Option
AwardsEstimated Possible
Payouts Under Non-Equity
Incentive Plan Awards

Estimated Possible Payouts
Under Equity Incentive
Plan Awards

Exercise
Or Base
Price of
Option
Awards
($/Sh)Name

Grant Date

Approval
Date

Threshold
($)

Target
($)

Maximum
($)

Threshold
(#)

Target
(#)

Maximum
(#)Gerardo I. LopezAIPCompany(1)

N/A

N/A

$


$
407,700

$
815,400
















$


$
AIPIndividual(2)

N/A

N/A





101,900


203,800




















2010 Plan-Performance(3)

07/19/2010

07/08/2010














262.25


262.25











197,3202010 Plan-Time(4)

07/19/2010

07/08/2010














1,048.00


1,048.00











788,5252010 Plan-Option(5)

07/19/2010

07/08/2010














1,048.00


1,048.00








752.00


307,819Craig R. RamseyAIPCompany(1)

N/A

N/A





212,200


424,400




















AIPIndividual(2)

N/A

N/A





53,050


106,100




















2010 Plan-Performance(3)

07/19/2010

07/08/2010














157.25


157.25











118,3162010 Plan-Time(4)

07/19/2010

07/08/2010














629.00


629.00











473,2662010 Plan-Option(5)

07/19/2010

07/08/2010














629.00


629.00








752.00


184,750John D. McDonaldAIPCompany(1)

N/A

N/A





212,200


424,400




















AIPIndividual(2)

N/A

N/A





53,050


79,575




















2010 Plan-Performance(3)

07/19/2010

07/08/2010














157.25


157.25











118,3162010 Plan-Time(4)

07/19/2010

07/08/2010














629.00


629.00











473,2662010 Plan-Option(5)

07/19/2010

07/08/2010














629.00


629.00








752.00


184,750Robert J. LenihanAIPCompany(1)

N/A

N/A





126,700


253,400




















AIPIndividual(2)

N/A

N/A





84,450


126,675




















2010 Plan-Performance(3)

07/19/2010

07/08/2010














52.25


52.25











39,3142010 Plan-Time(4)

07/19/2010

07/08/2010














210.00


210.00











158,0062010 Plan-Option(5)

07/19/2010

07/08/2010














210.00


210.00








752.00


61,681Kevin M. ConnorAIPCompany(1)

N/A

N/A





120,500


241,000




















AIPIndividual(2)

N/A

N/A





80,350


120,525




















2010 Plan-Performance(3)

07/19/2010

07/08/2010














52.25


52.25











39,3142010 Plan-Time(4)

07/19/2010

07/08/2010














210.00


210.00











158,0062010 Plan-Option(5)

07/19/2010

07/08/2010














210.00


210.00








752.00


61,681Stephen A. ColaneroAIPCompany(1)

N/A

N/A





140,600


281,200




















AIPIndividual(2)

N/A

N/A





93,750


140,625




















2010 Plan-Performance(3)

07/19/2010

07/08/2010














52.25


52.25











39,3142010 Plan-Time(4)

07/19/2010

07/08/2010














210.00


210.00











158,0062010 Plan-Option(5)

07/19/2010

07/08/2010














210.00


210.00








752.00


61,6812004 Plan-Option(6)

07/12/2010

07/08/2010














1,023.00


1,023.00








752.00


307,831


(1)The
company component bonus of the annual incentive compensation program ("AIP") was based primarily on attainment of an adjusted EBITDA target of
$387,800,000. The plan guideline was that no company performance component of the bonus would be paid below attainment of 90% of targeted adjusted EBITDA and that upon attainment of 100% of targeted
adjusted EBITDA, each Named Executive Officer would receive 100% of his assigned bonus target. Upon attainment of 110% of targeted adjusted EBITDA, each Named Executive Officer would receive a maximum
of 200% of his assigned bonus target. No company component bonuses were earned for fiscal 2011 under the annual incentive compensation program because the Company did not meet the minimum 90% of
targeted adjusted EBITDA threshold.(2)The
individual component bonus of the annual incentive compensation plan ("AIP") for fiscal 2011 was determined during the first quarter of fiscal 2012
following a review of each Named Executive Officer's individual performance and contribution to the Company's strategic and financial goals.(3)The
amounts shown in this row presents the number and aggregate grant date fair value of restricted stock (performance vesting) awards granted in July 2010
in accordance with accounting rules ASC 718,CompensationStock Compensation. Of the total restricted share (performance vesting) awards
approved by the Compensation Committee, approximately twenty-five percent of the total awards will be granted each year over a four-year period in accordance with ASC
718-10-55-95. Only the restricted share (performance vesting) awards that have been granted (twenty-five percent in fiscal 2011) have been included in
the Grants of Plan-based Awards Table. The restricted share (performance vesting) grants for fiscal 2011 have a vesting term of approximately one year upon the Company meeting a
pre-established annual adjusted EBITDA target of $387,800,000. The estimated fair value of the stock at the grant date was approximately $752 per share and was based upon a contemporaneous
valuation reflecting market conditions. The Named Executive Officers did not vest in the restricted share (performance vesting) grants for fiscal 2011 as the Company did not meet the adjusted EBITDA
target threshold established by the Compensation Committee.(4)The
amounts shown in this row presents the number and aggregate grant date fair value of restricted stock (time vesting) awards granted in July 2010 in
accordance with accounting rules ASC 718,CompensationStock Compensation. The restricted share (time vesting) grants vest on the fourth
anniversary of the date of grant, subject to the Named Executive Officer's continued service with the Company. The estimated fair value of the stock at the grant date was approximately $752 per share
and was based upon a contemporaneous valuation reflecting market conditions.(5)In
July 2010, the Named Executive Officers received a grant of non-qualified stock options under the 2010 Equity Incentive Plan. The options
vest in four equal annual installments, subject to continued employment. The stock options expire after ten years from the date of the grant. The estimated grant date fair value of the options was
$293.72 per share and was determined using the Black-Scholes option-pricing model. The option exercise price was $752 per share.


154

---



Table of Contents

(6)In
July 2010, Mr. Colanero received a grant of 1,023 non-qualified stock options under the 2004 Stock Option Plan. These options vest
ratably over 5 years, subject to continued employment, with an exercise price of $752 per share. The estimated grant date fair value of the options was $300.91 per share and was determined
using the Black-Scholes option-pricing model.


The valuation assumptions used for the stock option and restricted stock awards are provided in Note 9Stockholder's Equity to
the Company's Consolidated Financial Statements contained elsewhere in this Annual Report on Form 10-K.

Outstanding Equity Awards at end of Fiscal 2011

The following table presents information regarding the outstanding equity awards of Parent common stock held by each of our Named
Executive Officers as of March 31, 2011, including the vesting dates for the portions of these awards that had not vested as of that date:

Option Awards

Stock AwardsName

Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable

Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable

Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#)

Option
Exercise
Price
($)

Option
Expiration
Date

Number of
Shares or
Units of
Stock
That Have
Not Vested
(#)

Market
Value of
Shares or
Units of
Stock
That Have
Not Vested
(#)

Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units or
Other
Rights That
Have Not
Vested
(#)

Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares,
Units or
Other
Rights That
Have Not
Vested
($)Gerardo I. Lopez2004 Plan-Option(1)


6,392.18000


9,588.27000




$
323.95


03/06/2019










$
2010 Plan-Option(5)





1,048.00000





752.00


07/19/2020











2010 Plan-Time(6)























1,048.00


788,525.00Craig R. Ramsey2004 Plan-Option(2)


4,092.28723








491.00


12/23/2014











2010 Plan-Option(5)





629.00000





752.00


07/19/2020











2010 Plan-Time(6)























629.00


473,266.00John D. McDonald2004 Plan-Option(2)


2,046.14362








491.00


12/23/2014











2010 Plan-Option(5)





629.00000





752.00


07/19/2020











2010 Plan-Time(6)























629.00


473,266.00Robert J. Lenihan2004 Plan-Option(3)


204.60000


818.40000





339.59


05/28/2019











2010 Plan-Option(5)





210.00000





752.00


07/19/2020











2010 Plan-Time(6)























210.00


158,006.00Kevin M. Connor2004 Plan-Option(2)


2,046.14362








491.00


12/23/2014











2010 Plan-Option(5)





210.00000





752.00


07/19/2020











2010 Plan-Time(6)























210.00


158,006.00Stephen A. Colanero2004 Plan-Option(4)





1,023.00000





752.00


07/12/2020











2010 Plan-Option(5)





210.00000





752.00


07/19/2020











2010 Plan-Time(6)























210.00


158,006.00


---

The restricted share (performance vesting) grants did not vest in fiscal 2011 and were not included in the "Outstanding Equity Awards at the end
of Fiscal 2011" table. Of the total restricted share (performance vesting) awards approved by the Compensation Committee, approximately twenty-five

155

---



Table of Contents

percent
of the total awards will be granted each year, starting in fiscal 2011, over a four-year period in accordance with ASC 718-10-55-95. The
restricted share (performance vesting) grants have a vesting term of approximately one year upon the Company meeting a pre-established target determined by the Compensation Committee.
Seventy-five percent of the total restricted share (performance vesting) awards approved
have not been granted as of March 31, 2011 pursuant to ASC 718-10-55-95.

Option Exercises and Stock VestedFiscal 2011

None of our Named Executive Officers exercised options or held any outstanding vested stock awards during fiscal 2011.

Pension Benefits

The following table presents information regarding the present value of accumulated benefits that may become payable to the Named
Executive Officers under our qualified and nonqualified defined-benefit pension plans.

Name

Plan Name

Number of
Years Credited
Service
(#)

Present Value of
Accumulated
Benefit(1)
($)

Payments
During Last
Fiscal Year
($)Gerardo I. Lopez






$


$
Craig R. Ramsey

Defined Benefit Retirement Income Plan


12.00


197,290


Supplemental Executive Retirement Plan


12.00


102,293


John D. McDonald

Defined Benefit Retirement Income Plan


31.05


362,740


Supplemental Executive Retirement Plan


31.05


188,078


Robert J. Lenihan










Kevin M. Connor

Defined Benefit Retirement Income Plan


4.00


32,562


Supplemental Executive Retirement Plan


4.00


13,446


Stephen A. Colanero













(1)The
accumulated benefit is based on service and earnings considered by the plans for the period through March 31, 2011. It includes the value of
contributions made by the Named Executive Officers throughout their careers. The present value has been calculated assuming the Named Executive Officers will remain in service until age 65, the age at
which retirement may occur without any reduction in benefits, and that the benefit is payable under the available forms of annuity consistent with the plans. The interest assumption is 5.86%. The
post-retirement mortality assumption is based on the 2011 IRS Prescribed Mortality-Static Annuitant, male and female mortality table. See Note 12Employee Benefit Plans
to the Company's Consolidated Financial Statements contained elsewhere in this Annual Report on Form 10-K for more information.


Pension and Other Retirement Plans

We provide retirement benefits to the Named Executive Officers under the terms of qualified and non-qualified
defined-benefit plans. The AMC Defined Benefit Retirement Income Plan is a tax-qualified retirement plan in which the Named Executive Officers participate on substantially the same terms
as our other participating employees. However, due to maximum limitations imposed by ERISA and the Internal Revenue Code on the annual amount of a pension which may be paid under a qualified
defined-benefit plan, the benefits that would otherwise be payable to the Named Executive Officers under the Defined Benefit Retirement Income Plan are limited. Because we did not believe that it was
appropriate for the Named Executive Officers' retirement benefits to be reduced because of limits under ERISA and the Internal Revenue Code, we have non-qualified supplemental
defined-benefit plans that permit the Named Executive Officers to receive the same benefit that would be paid under our qualified defined-benefit plan up to the old IRS limit, as indexed, as if the
Omnibus Budget

156

---



Table of Contents

Reconciliation
Act of 1993 had not been in effect. On November 7, 2006, our Board of Directors approved a proposal to freeze the AMC Defined Benefit Retirement Income Plan and the AMC
Supplemental Executive Retirement Plan, effective as of December 31, 2006. As amended, benefits do not accrue after December 31, 2006, but vesting continues for associates with less than
five years of vesting service. The material terms of the AMC Defined Benefit Retirement Income Plan and the AMC Supplemental Executive Retirement Plan are described below.

AMC Defined Benefit Retirement Income Plan.The AMC Defined Benefit Retirement Income Plan is a non-contributory defined-benefit pension
plan subject to the provisions of ERISA. As mentioned above, the plan was frozen effective December 31, 2006.

The
plan provides benefits to certain of our employees based upon years of credited service and the highest consecutive five-year average annual remuneration for each
participant. For purposes of calculating benefits, average annual compensation is limited by Section 401(a)(17) of the Internal Revenue Code, and is based upon wages, salaries and other amounts
paid to the employee for
personal services, excluding certain special compensation. Under the defined benefit plan, a participant earns a vested right to an accrued benefit upon completion of five years of vesting service.

AMC Supplemental Executive Retirement Plan.AMC also sponsors a Supplemental Executive Retirement Plan to provide the same level of
retirement
benefits that would have been provided under the retirement plan had the federal tax law not been changed in the Omnibus Budget Reconciliation Act of 1993 to reduce the amount of compensation which
can be taken into account in a qualified retirement plan. The plan was frozen, effective December 31, 2006, and no new participants can enter the plan and no additional benefits can accrue
thereafter.

Subject
to the forgoing, any individual who is eligible to receive a benefit from the AMC Defined Benefit Retirement Income Plan after qualifying for early, normal or late retirement
benefits thereunder, the amount of which is reduced by application of the maximum limitations imposed by the Internal Revenue Code, is eligible to participate in the Supplemental Executive Retirement
Plan.

The
benefit payable to a participant equals the monthly amount the participant would receive under the AMC Defined Benefit Retirement Income Plan without giving effect to the maximum
recognizable compensation for qualified retirement plan purposes imposed by the Internal Revenue Code, as amended by Omnibus Budget Reconciliation Act of 1993, less the monthly amount of the
retirement benefit actually payable to the participant under the AMC Defined Benefit Retirement Income Plan, each as calculated as of December 31, 2006. The benefit is an amount equal to the
actuarial equivalent of his/her benefit, computed by the formula above, payable in either a lump sum (in certain limited circumstances, specified in the plan) or equal semi-annual
installments over a period of two to ten years, with such form, and, if applicable, period, having been irrevocably elected by the participant.

If
a participant's employment with AMC terminates for any reason (or no reason) before the earliest date he/she qualifies for early, normal or late retirement benefits under the AMC
Defined Benefit Retirement Income Plan, no benefit is payable under the Supplemental Executive Retirement Plan.

157

---





Table of Contents

Nonqualified Deferred Compensation

The following table presents information regarding the contributions to and earnings on the Named Executive Officers' deferred
compensation balances during fiscal 2011, and also shows the total deferred amounts for the Named Executive Officers at the end of fiscal 2011:

Name

Executive
Contributions
in Last FY
($)

Registrant
Contributions
in Last FY
($)(1)

Aggregate
Earnings in
Last FY
($)

Aggregate
Withdrawals/
Distributions
($)

Aggregate
Balance at
Last FYE
($)Gerardo I. Lopez

$


$
400,000

$


$


$
800,000Craig R. Ramsey


16,288





27,183





181,358John D. McDonald


80,152





22,531





117,319Robert J. Lenihan














Kevin M. Connor














Stephen A. Colanero

















(1)The
activity for Mr. Lopez reflects the vested portion of his Special Incentive Bonus.


Non-Qualified Deferred Compensation Plan

AMC permits the Named Executive Officers and other key employees to elect to receive a portion of their compensation reported in the
Summary Compensation Table on a deferred basis. Deferrals of compensation during fiscal 2011 and in recent years have been made under the AMC Non-Qualified Deferred Compensation Plan.
Participants of the plan are able to defer annual salary and bonus (excluding commissions, expense reimbursement or allowances, cash and non-cash fringe benefits and any stock-based
incentive compensation). Amounts deferred under the plans are credited with an investment return determined as if the participant's account were invested in one or more investment funds made available
by the Committee and selected by the participant. AMC may, but need not, credit the deferred compensation account of any participant with a discretionary or profit sharing credit as determined by AMC.
The deferred compensation account will be distributed either in a lump sum payment or in equal annual installments over a term not to exceed 10 years as elected by the participant and may be
distributed pursuant to in-service withdrawals pursuant to certain circumstances. Any such payment shall commence upon the date of a "Qualifying Distribution Event" (as such term is
defined in the Non-Qualified Deferred Compensation Plan). The Qualifying Distribution Events are designed to be compliant with Section 409A of the Internal Revenue Code.

Pursuant
to his employment agreement, Mr. Gerardo Lopez is entitled to a one-time special incentive bonus of $2,000,000 that vests at the rate of $400,000 per year
over five years, effective March 2009, provided that he remains employed on each vesting date. The first three installments of the special incentive bonus are payable on the third anniversary and the
fourth and fifth installments are payable upon vesting. The special incentive bonus of $2,000,000 shall immediately vest in full upon Mr. Lopez's involuntary termination within twelve months
after a change of control, as defined in the employment agreement. As of March 31, 2011, Mr. Lopez has vested in two-fifths, or $800,000, of this special incentive bonus to
be paid on his third anniversary.

Potential Payments Upon Termination or Change in Control

The following section describes the benefits that may become payable to certain Named Executive Officers in connection with a
termination of their employment with Parent and/or a change in control of Parent, changes in responsibilities, salary or benefits. In addition to the benefits described below, outstanding equity-based
awards held by our Named Executive Officers may also be subject to accelerated vesting in connection with a change in control under the terms of our 2010 Equity Incentive Plan. Outstanding option
awards held by Mr. Lopez under the 2004 Stock Option Plan, may

158

---



Table of Contents

also
be subject to accelerated vesting in connection with a change in control pursuant to the terms of his employment agreement.

Assumptions.As prescribed by the SEC's disclosure rules, in calculating the amount of any potential payments to the Named Executive
Officers under
the arrangements described below, we have assumed that the applicable triggering event (i.e., termination of employment and/or change in control) occurred on the last business day of fiscal
2011.

Gerardo I. Lopez

Mr. Lopez's employment agreement, described above under "Employment AgreementsSalary and Bonus Payments," provides
for certain benefits to be paid to Mr. Lopez in connection with a termination of his employment with AMC Entertainment Inc. under the circumstances described below.

Severance Benefits.In the event Mr. Lopez's employment is terminated as a result of an involuntary termination during the
employment term by
AMC Entertainment without cause (other than termination due to death or "Disability"), or by Mr. Lopez pursuant to a termination for "Good Reason" or after a "Change of Control" (as those terms
are defined in the employment agreement), Mr. Lopez will be entitled to severance pay equal to two times the sum of his base salary plus the average of each Annual Incentive Plan bonus paid to
the Executive during the 24 months preceding the severance date. In addition, upon such a qualifying termination, the stock options granted pursuant to
the employment agreement and under the 2004 Stock Option Plan and the stock options and restricted stock granted pursuant to the 2010 Equity Incentive Plan shall vest in full. The special incentive
bonus equal to $2,000,000, which vests in equal annual installments over five years, shall immediately vest and be paid in full upon the involuntary termination of employment within twelve months
after a change of control.

If
Mr. Lopez had terminated employment with us on March 31, 2011 pursuant to his employment agreement under the circumstances described in the preceding paragraph, we
estimate that he would have been entitled to a cash payment equal to $1,456,000. This amount is derived by multiplying two by the sum of $728,000, which represents Mr. Lopez's annualized base
salary rate in effect on March 31, 2011. Mr. Lopez would have been entitled to a cash payment equal to the average of each Annual Incentive Plan bonus paid during the past
24 months. Mr. Lopez received an Annual Incentive Plan bonus in fiscal 2011 and 2010 of $203,800 and $674,240, respectively, which would entitle him to receive an average Annual
Incentive Plan cash payment of $439,020. Additionally, Mr. Lopez would have been entitled to accelerated vesting of unvested stock options granted pursuant to the employment agreement with a
grant date fair value of $1,241,297 (options were valued based on a Black-Sholes option pricing model as of March 2009) and accelerated vesting of unvested stock options and restricted stock (time
vesting and performance vesting) granted pursuant to the 2010 Equity Incentive Plan with a grant date fair value of $1,688,303 (options were valued based on a Black-Sholes option pricing model as of
July 2010 and the restricted stock fair value was based upon a contemporaneous valuation reflecting market conditions). We estimated the grant date fair value for seventy-five percent of
the total restricted stock (performance vesting) award under the 2010 Equity Incentive Plan, as only the first year or twenty-five percent of the award, which has been granted according to
Accounting Standards Codification 718-10-55-95, did not vest and has been forfeited. The special incentive bonus of $2,000,000 shall immediately vest and be paid in
full upon Mr. Lopez's involuntary termination within twelve months after a change of control.

Other Named Executive Officers

The employment agreements for each of the other Named Executive Officers, described above under "Employment
AgreementsSalary and Bonus Payments," provide for certain benefits to be paid

159

---



Table of Contents

to
the executive in connection with a termination of his employment with AMC or AMC Entertainment under the circumstances described below and/or a change in control of AMC or AMC Entertainment.

Severance Benefits.In the event the executive's employment is terminated during the employment term
as a result of the executive's death or "Disability" or by AMC or AMC Entertainment pursuant to a "Termination Without Cause" or by the executive following certain changes in his responsibilities,
annual base salary or benefits, the executive (or his personal representative) will be entitled to a lump cash severance payment equal to two years of his base salary then in effect.
Mr. Lenihan and Mr. Colanero will be entitled to receive cash severance payments equal to two years of their individual base salary in equal installments over a period of
twenty-four consecutive months and, pursuant to their employment agreements, are not entitled to severance benefits for an employment termination resulting from death or "Disability".

Upon
a termination of employment with us on March 31, 2011 under the circumstances described in the preceding paragraph, we estimate that each Named Executive Officer (other than
Mr. Lopez) would have been entitled to a lump sum cash payment as follows: Mr. Craig Ramsey$816,200; Mr. John McDonald$816,200; Mr. Robert
Lenihan$844,600; Mr. Kevin Connor$669,500; and Mr. Stephen Colanero$721,000. These amounts are derived by multiplying the respective executive's
annualized base salary rate in effect on March 31, 2011 by two.

Pursuant
to the 2010 Equity Incentive Plan, if within one year following a Change of Control, the Named Executive Officer's service is terminated by the Company without cause, the
unvested stock options and restricted stock shall vest in full. Upon such a qualifying termination, we estimate that each Named Executive Officer (other than Mr. Lopez) would have been entitled
to accelerated vesting of unvested stock options and restricted stock (time vesting and performance vesting) with a grant date fair value as follows: Mr. Craig Ramsey$1,012,965;
Mr. John McDonald$1,012,965; Mr. Robert Lenihan$337,628; Mr. Kevin Connor$337,628; and Mr. Stephen Colanero$337,628.
(Options were valued based on a Black-Sholes option pricing model as of July 2010 and the restricted stock fair value was based upon a contemporaneous valuation reflecting market conditions). We
estimated the grant date fair value for seventy-five percent of the total restricted stock (performance vesting) award under the 2010 Equity Incentive Plan, as only the first year or
twenty-five percent of the award, which has been granted according to Accounting Standards Codification 718-10-55-95, did not vest and has been
forfeited.

Restrictive Covenants.Pursuant to each Named Executive Officer's employment agreement, the executive has agreed not to disclose any
confidential
information of AMC or AMC Entertainment at any time during or after his employment with AMC/AMC Entertainment.

Director CompensationFiscal 2011

The following section presents information regarding the compensation paid during fiscal 2011 to members of our Board of Directors who
are not also our employees
(referred to herein as "Non-Employee Directors"). The compensation paid to Mr. Gerardo I. Lopez, who is also an employee, is presented above in the Summary Compensation Table and
the related explanatory tables. Mr. Lopez did not receive additional compensation for his service as a director.

Non-Employee Directors

We paid our directors an annual cash retainer of $50,000, plus $1,500 for each meeting of the board of directors they attended in
person or by phone, plus $1,000 for each committee meeting they attended. We also reimbursed all directors for any out-of-pocket expenses incurred by them in connection with
their services provided in such capacity.

160

---



Table of Contents

The
following table presents information regarding the compensation of our non-employee Directors in fiscal 2011:

Name

Fees
earned
or paid
in cash
($)

Stock
Awards
($)

Option
Awards
($)

Non-equity
Incentive
Plan
Compensation
($)

Changes in
Pension
Value and
Nonqualified
Deferred
Compensation
($)

All other
Compensation
($)

Total
($)Aaron J. Stone

$
57,000

$


$


$


$


$


$
57,000Dr. Dana B. Ardi

$
56,000
















$
56,000Stephen P. Murray

$
55,500
















$
55,500Stan Parker

$
56,000
















$
56,000Philip H. Loughlin

$
55,500
















$
55,500Eliot P. S. Merrill

$
61,000
















$
61,000Kevin Maroni

$
60,000
















$
60,000Travis Reid(1)

$
5,000
















$
5,000


(1)On
October 15, 2010, Travis Reid resigned from his position as a member of the Company's Board of Directors.


Compensation Committee Interlocks and Insider Participation

The Compensation Committee members whose names appear on the Compensation Committee Report were committee members during all of fiscal
2011, except for Mr. Travis Reid who resigned on October 15, 2010. No member of the Compensation Committee is or has been a former or current executive officer of the Company or has had
any relationships requiring disclosure by the Company under the SEC's rules requiring disclosure of certain relationships and related-party transactions. None of the Company's executive officers
served as a director or a member of a compensation committee (or other committee serving an equivalent function) of any other entity
that has one or more executive officers serving on our Board of Directors or on the Compensation Committee during the fiscal year ended March 31, 2011.

Risk Oversight

The Board executes its oversight responsibility for risk management directly and through its Committees, as follows:

The
Audit Committee has primary responsibility for overseeing the Company's Enterprise Risk Management, or "ERM", program. The Company's Director of Reporting and Control, who reports to
the Committee quarterly, facilitates the ERM program with consideration given to our Annual Operating Plan and with direct input obtained from the Senior Leadership Team, or "SLT", the heads of our
principal business and corporate functions, and their direct reports, under the executive sponsorship of our Executive Vice President and Chief Financial Officer, our Senior Vice President of Strategy
and Strategic Partnerships and our Senior Vice President and Chief Accounting Officer. The Committee's meeting agendas include discussions of individual risk areas throughout the year, as well as an
annual summary of the ERM process.

The
Board's other Committeesoversee risks associated with their respective areas of responsibility. For example, the Compensation Committee considers the risks associated
with our compensation policies and practices, with respect to both executive compensation and compensation generally. The Board of Directors is kept abreast of its Committees' risk oversight and other
activities via reports of the Committee Chairmen to the full Board. These reports are presented at every regular

161

---



Table of Contents

Board
meeting and include discussions of Committee agenda topics, including matters involving risk oversight.

The
Board considers specific risk topics, including risks associated with our Annual Operating Plan and our capital structure. In addition, the Board receives detailed regular reports
from the members of our SLT that include discussions of the risks and exposures involved in their respective areas of responsibility. Further, the Board is routinely informed of developments that
could affect our risk profile or other aspects of our business.

Policies and Practices as They Relate to Risk Management

The Compensation Committee believes the elements of the Company's executive compensation program effectively link performance-based
compensation to financial goals and stockholders' interests without encouraging executives to take unnecessary or excessive risks in the pursuit of those objectives. The Compensation Committee
believes that the overall mix of compensation elements is appropriately balanced and does not encourage the taking of short-term risks at the expense of long-term results.
Long-term incentives for our executives are awarded in the form of equity instruments reflecting, or valued by reference to, our common stock. Long-term incentive awards are
generally made on an annual basis and are subject to a multi-year vesting schedule which helps ensure that award recipients always have significant value tied to long-term
stock price performance. The Compensation Committee believes that the combination of granting the majority of long-term incentives in the form of option awards, together with the Company
stock actually owned by our executives, appropriately links the long-term interests of executives and stockholders, and balances the short-term nature of annual incentive cash
bonuses and any incentives for undue risk-taking in our other compensation arrangements.

162

---





Table of Contents

Item 12.    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

All of the issued and outstanding capital stock of AMCE is owned by Parent. Parent has common stock issued and outstanding. The table
below sets forth certain information regarding beneficial ownership of the common stock of Parent held as of June 1, 2011 by (i) each of its directors and our Named Executive Officers,
(ii) all directors and executive officers of Parent as a group and (iii) each person known by Parent to own beneficially more than 5% of Parent common stock. Parent believes that each
individual or entity named has sole investment and voting power with respect to shares of common stock of Parent as beneficially owned by them, except as otherwise noted.

Name and Address

Shares of
Class A-1
Common
Stock

Shares of
Class A-2
Common
Stock

Shares of
Class N
Common
Stock

Shares of
Class L-1
Common
Stock

Shares of
Class L-2
Common
Stock

Percentage
of
OwnershipJ.P. Morgan Partners (BHCA), L.P. and Related Funds(1)(2)


249,225.00
(2)

249,225.00
(2)










38.97
%Apollo Investment Fund V, L.P. and Related Funds(3)(4)


249,225.00
(4)

249,225.00
(4)










38.97
%Bain Capital Investors, LLC and Related Funds(5)(6)











96,743.45


96,743.45


15.13
%The Carlyle Group Partners III Loews, L.P. and Related Funds(7)(8)











96,743.45


96,743.45


15.13
%Spectrum Equity Investors IV. L.P. and Related Funds(9)(10)











62,598.71


62,598.71


9.79
%Gerardo I. Lopez(11)(12)








7,040.04200








*Craig R. Ramsey(11)(13)








4,402.53723








*John D. McDonald(11)(14)








2,330.39362








*Robert J. Lenihan(11)(15)








461.70000








*Kevin M. Connor(11)(16)








2,149.64362








*Stephen A. Colanero(11)(17)








257.10000








*Dr. Dana B. Ardi(1)

















*Stephen P. Murray(1)

















*Stan Parker(18)

















*Aaron J. Stone(18)

















*Philip H. Loughlin(5)(6)

















*Eliot P. S. Merrill(7)

















*Kevin Maroni(9)(10)

















*All directors and executive officers as a group (20 persons)








19,247.31009








*


*less
than 2%(1)Represents
18,012.61 shares of Class A-1 common stock and 18,012.61 shares of Class A-2 common stock
owned by J.P. Morgan Partners Global Investors, L.P., 7,712.95 shares of Class A-1 common stock and 7,712.95 shares of Class A-2 common stock
owned by J.P. Morgan Partners Global Investors Cayman, L.P., 1,011.31 shares of Class A-1 common stock and 1,011.31 shares of Class A-2
common stock owned by J.P. Morgan Partners Global Investors Cayman II, L.P., 2,767.70 shares of Class A-1 common stock and 2,767.70 shares of
Class A-2 common stock owned by AMCE (Ginger), L.P., 1,330.19 shares of Class A-1 common stock and 1,330.19 shares of Class A-2
common stock owned by AMCE (Luke), L.P., 2,881.66 shares of Class A-1 common stock and 2,881.66 shares of Class A-2 common stock owned by
J.P. Morgan Partners Global Investors (Selldown), L.P., 3,217.09 shares of Class A-1 common stock and 3,217.09 shares of Class A-2 common
stock owned by AMCE (Scarlett), L.P., 12,661.15 shares of Class A-1 common stock and 12,661.15 shares of Class A-2 common stock owned by
J.P. Morgan Partners Global Investors (Selldown) II, L.P., 1,253.55 shares of Class A-1 common stock and 1,253.55 shares of Class A-2 common
stock owned by


163

---



Table of Contents

J.P. Morgan
Partners Global Fund/AMC/Selldown II, L.P., 7,260.06 shares of Class A-1 common stock and 7,260.06 shares of Class A-2
common stock owned by J.P. Morgan Partners Global Investors (Selldown) II-C, L.P., (collectively, the "Global Investor Funds") and 75,141.71 shares of
Class A-1 common stock and 75,141.71 shares of Class A-2 common stock owned by J.P. Morgan Partners (BHCA), L.P. ("JPMP BHCA"). The general partner
of the Global Investor Funds is JPMP Global Investors, L.P. ("JPMP Global"). The general partner of JPMP BHCA is JPMP Master Fund Manager, L.P. ("JPMP MFM"). The general partner of JPMP Global and
JPMP MFM is JPMP Capital Corp. ("JPMP Capital"), a wholly owned subsidiary of JPMorgan Chase & Co., a publicly traded company ("JPM Chase"). Each of JPMP Global, JPMP MFM and JPMP Capital may
be deemed, pursuant to Rule 13d-3 under the Exchange Act, to beneficially own the shares held by the Global Investor Funds and JPMP BHCA. Each of JPMP Global, JPMP MFM and JPMP
Capital disclaims beneficial ownership of such shares. Voting and investment control over the shares held by the Global Investor Funds and JPMP BHCA is exercised by an investment committee of JPMP
Capital. Members of this committee are Ina Drew, John Wilmot and Ana Capella Gomez-Acebo, each of whom disclaims beneficial ownership of such shares.

Mr. Stephen P.
Murray is a Managing Director and Managing Director, President and Chief Executive Officer, respectively, of CCMP Capital Advisors, LLC a private equity firm comprised of
the former buyout/growth equity professionals of J.P. Morgan Partners who separated from JPM Chase to form an independent private equity platform. Dr. Dana B. Ardi is the Managing
Director and Founder of Corporate Anthropology Advisors, LLC, a consulting company that provides human capital advisory and innovative solutions that build value through organizational design and
people development. Through her company, Dr. Ardi has taken the role of Executive Advisor to CCMP Capital Advisors, LLC, a private equity firm formed in August 2006 by the former buyout/growth
equity investment team of J.P. Morgan Partners, LLC, a private equity division of JPMorgan Chase & Co. Each of Dr. Ardi and Mr. Murray disclaims any beneficial ownership of
any shares beneficially owned by the J.P. Morgan Partners entities, except to the extent of his pecuniary interest therein. JPMP Capital exercises voting and dispositive power over the
securities held by the Global Investor Funds and JPMP BHCA. Voting and disposition decisions at JPMP Capital are made by three or more of its officers, and therefore no individual officer of JPMP
Capital is the beneficial owner of the securities. The address of Dr. Ardi is 211 Central Park West, New York, New York 10024. The address of Mr. Murray is c/o CCMP Capital
Advisors, LLC, 245 Park Avenue, New York, New York 10167, and the address of each of the JPMorgan Partners entities is c/o J.P. Morgan Partners, LLC, 270 Park
Avenue, New York, New York 10017, except that the address of each Cayman entity is c/o Walkers SPV Limited, PO Box 908 GT, Walker House, George Town, Grand Cayman,
Cayman Islands. Each of the Global Investor Funds, JPMP BHCA, JPMP Global, JPMP MFM and JPMP Capital are part of the J.P. Morgan Partners private equity business unit of JPM Chase.
J.P. Morgan Partners is one of our Sponsors. (2)Includes
115,975 shares of Class A-1 common stock and 115,975 shares of Class A-2 common stock of
certain co-investors, which, pursuant to a voting agreement, must be voted by such co-investors to elect JPMP designees for Parent's board of directors.(3)Represents
shares owned by the following group of investment funds: (i) 114,328.50 shares of Class A-1 common stock and
114,328.50 shares of Class A-2 common stock owned by Apollo Investment Fund V, L.P.; (ii) 14,997.29 shares of Class A-1 common stock
and 14,997.29 shares of Class A-2 common stock owned by Apollo Overseas Partners V, L.P.; (iii) 1,572.35 shares of Class A-1 common
stock and 1,572.35 shares of Class A-2 common stock owned by Apollo Netherlands Partners V(A), L.P.; (iv) 1,108.64 shares of Class A-1
common stock and 1,108.64 shares of Class A-2 common stock owned by Apollo Netherlands Partners V(B), L.P.; and (v) 1,243.22 shares of
Class A-1 common stock and 1,243.22 shares of Class A-2 common stock owned by Apollo German Partners V GmbH & Co. KG (collectively, the
"Apollo Funds"). Apollo Advisors V, L.P. ("Advisors V") is the general partner or the managing general partner of each of the Apollo Funds. Apollo Capital Management V, Inc.
("ACM V") is the general partner of Advisors V. Apollo Management V, L.P. ("Management V") serves as the day-to-day manager of each of the Apollo
Funds. AIF V Management, LLC ("AIF V LLC") is the general partner of Management V and Apollo Management, L.P. ("Apollo Management") is the sole member and manager of AIF V
LLC. Each of Advisors V, ACM V, Management V, AIF V LLC and Apollo Management disclaim beneficial ownership of all shares of common stock owned by the Apollo Funds. The
address of the Apollo Funds, Advisors V, Management V, AIF V LLC and Apollo Management is c/o Apollo Management, L.P., Two Manhattanville Road, Suite 203, Purchase,
New York 10017.


164

---



Table of Contents

Leon
Black, Joshua Harris and Marc Rowan effectively have the power to exercise voting and investment control over ACM V, with respect to the shares held by the Apollo Funds. Each of
Messrs. Black, Harris and Rowan disclaim beneficial ownership of such shares. (4)Includes
115,975 shares of Class A-1 common stock and 115,975 shares of Class A-2 common stock of
certain co-investors, which, pursuant to a voting agreement, must be voted by such co-investors to elect Apollo designees to Parent's board of directors.(5)Represents
shares owned by the following group of investment funds associated with Bain: (i) 64,255.29 shares of Class L-1
common stock and 64,255.29 shares of Class L-2 common stock owned by Bain Capital (Loews) I Partnership, whose administrative member is Bain Capital (Loews) L, L.L.C., whose
general partners are Bain Capital (Loews) A Partnership, Bain Capital (Loews) L Partnership and Bain Capital (Loews) P Partnership, each of whose general partners are (x) Bain Capital Holdings
(Loews) I, L.P., whose general partner is Bain Capital Partners VII, L.P., whose general partner is Bain Capital Investors, LLC ("BCI") and (y) Bain Capital AIV (Loews) II, L.P., whose
general partner is Bain Capital Partners VIII, L.P., whose general partner is BCI and (ii) 32,488.16 shares of Class L-1 common stock and
32,488.16 shares of Class L-2 common stock owned by Bain Capital AIV (Loews) II, L.P., whose general partner is Bain Capital Partners VIII, L.P., whose general partner
is BCI. The address of Mr. Connaughton and each of the Bain entities is c/o Bain Capital Partners, LLC, 111 Huntington Avenue, Boston, Massachusetts 02199.
BCI,
by virtue of the relationships described above, may be deemed to have voting or investment control with respect to the shares held by each of the Bain entities. BCI disclaims beneficial ownership
of such shares.(6)Voting
and investment control over the shares held by Bain Capital (Loews) I Partnership and Bain Capital AIV (Loews) II, L.P. is exercised by the
investment committee of BCI. Members of the investment committee are Andrew B. Balson, Steven W. Barnes, Joshua Bekenstein, Edward W. Conard, John P. Connaughton,
Paul B. Edgerley, Jordan Hitch, Matthew S. Levin, Ian K. Loring, Philip Loughlin, Mark E. Nunnelly, Stephen G. Pagliuca, Michael Ward and Stephen M. Zide,
each of whom disclaims beneficial ownership of the shares.(7)Represents
shares owned by the following group of investment funds affiliated with Carlyle: (i) 91,610.60 shares of
Class L-1 common stock and 91,610.60 shares of Class L-2 common stock owned by Carlyle Partners III Loews, L.P., whose general partner is
TC Group III, L.P., whose general partners is TC Group III, L.L.C., whose sole managing member is TC Group, L.L.C., whose sole managing member is TCG Holdings,
L.L.C. and (ii) 5,132.86 shares of Class L-1 common stock and 5,132.86 shares of Class L-2 common stock owned by CP III Coinvestment,
L.P., whose general partner is TC Group III, L.P., whose general partner is TC Group III, L.L.C., whose sole managing member is TC Group, L.L.C., whose sole managing member
is TCG Holdings, L.L.C. Mr. Merrill is a Managing Director of the Carlyle Group, and in such capacity, may be deemed to share beneficial ownership of the shares of common stock held by
investment funds associated with or designated by the Carlyle Group. Mr. Merrill expressly disclaims beneficial ownership of the shares held by the investment funds associated with or
designated by the Carlyle Group. The address of Mr. Merrill and the Carlyle Group is c/o The Carlyle Group, 520 Madison Avenue, 42nd floor, New York, New York 10022.(8)Voting
and investment control over the shares held by Carlyle Partners III Loews, L.P. and CP III Coinvestment, L.P. is exercised by the
three-person managing board of TCG Holdings, L.L.C. Members of this managing board are William E. Conway, Jr., Daniel A. D'Aniello and David M. Rubenstein, each of whom disclaims
beneficial ownership of the shares.(9)Represents
shares owned by the following group of investment funds affiliated with Spectrum: (i) 61,503.23 shares of
Class L-1 common stock and 61,503.23 shares of Class L-2 common stock owned by Spectrum Equity Investors IV, L.P., whose general partner is Spectrum
Equity Associates IV, L.P., (ii) 363.07 shares of Class L-1 common stock and 363.07 shares of Class L-2 common stock owned by Spectrum
Equity Investors Parallel IV, L.P. whose general partner is Spectrum Equity Associates IV, L.P., and (iii) 732.40 shares of Class L-1 common stock and
732.40 shares of Class L-2 common stock owned by Spectrum IV Investment Managers' Fund, L.P. Kevin Maroni is a Senior Managing Director of Spectrum and disclaims beneficial
ownership of any shares beneficially owned by Spectrum. The address of Mr. Maroni and Spectrum Equity Investors is c/o Spectrum Equity Investors, One International Place, 29th
Floor, Boston, Massachusetts 02110.


165

---



Table of Contents

SpectrumEquity
Associates IV, L.P., by virtue of the relationships described above, may be deemed to have voting or investment control with respect to the shares held by Spectrum Equity
Investors IV, L.P. and Spectrum Equity Investors Parallel IV, L.P. Spectrum Equity Associates IV, L.P. disclaims beneficial ownership of such shares. (10)Voting
and investment control over the shares held by the Spectrum entities is exercised by the investment committees of Spectrum Equity
Associates IV, L.P. and Spectrum IV Investment Managers' Fund, L.P. Members of each of these investment committees are Brion B. Applegate, William P. Collatos,
Benjamin M. Coughlin, Randy J. Henderson, Michael J. Kennealy, Kevin J. Maroni, Christopher T. Mitchell and Victor E. Parker, each of whom disclaims
beneficial ownership of the shares.(11)The
address of such person is c/o AMC Entertainment Holdings, Inc., 920 Main Street, Kansas City, Missouri 64105.(12)Includes
6,654.18000 shares underlying vested options or options vesting within 60 days.(13)Includes
4,249.53723 shares underlying vested options or options vesting within 60 days.(14)Includes
2,203.39362 shares underlying vested options or options vesting within 60 days.(15)Includes
461.70000 shares underlying vested options or options vesting within 60 days.(16)Includes
2,098.64362 shares underlying vested options or options vesting within 60 days.(17)Includes
257.10000 shares underlying vested options or options vesting within 60 days.(18)Although
each of Messrs. Parker and Stone may be deemed a beneficial owner of shares of Parent beneficially owned by Apollo due to his affiliation
with Apollo and its related investment managers and advisors, each such person disclaims beneficial ownership of any such shares. The address of Messers, Parker and Stone is c/o Apollo Management,
L.P., 9 West 57th Street, New York, New York 10019.


Equity Compensation Plan Information

The following is a summary of securities authorized for issuance under Parent's equity compensation plans as of March 31, 2011.

Number of shares to be
issued upon exercise of
outstanding options,
warrants and rights

Weighted average of exercise
price of outstanding
options, warrants and rights

Number of securities
remaining available for
future issuance under equity
compensation plans(2)Equity compensation plans approved by security holders(1)


35,684.168095

$
449.93


28,568.0000000Equity compensation plans not approved by security holders








Total


35,684.168095

$
449.93


28,568.0000000


(1)Includes
both the 2004 Stock Option Plan and the 2010 Equity Incentive Plan of Parent.(2)The
2010 Equity Incentive Plan is the only equity compensation plan under which Parent currently issues equity awards. The Equity Incentive Plan provides
for grants of non-qualified stock options, incentive stock options, stock appreciation rights, restricted stock awards, other stock-based awards and performance-based compensation awards.
The maximum number of shares available for issuance to participants under the 2010 Equity Incentive Plan is 39,312 shares of common stock, of which the number of shares available for granting
incentive stock options shall not exceed 19,656 shares. The shares available for grant at March 31, 2011 were reduced by 5,372 shares of unvested restricted stock (time vesting) that, if
and when vested, will be settled in shares of common stock of Parent. Also, the shares available for grant do not include the awards approved by the Board of Directors of Parent that have not been
granted as of March 31, 2011, which includes 52 stock option shares, 52 shares of restricted stock (time vesting), and 4,170 shares of restricted stock (performance vesting). As
of July 23, 2010, the company would no longer grant any awards of shares of common stock of Parent under the 2004 Stock Option Plan.


166

---



Table of Contents

Item 13.    Certain Relationships and Related Transactions and Director Independence.

The Company seeks to ensure that all transactions with related parties are fair, reasonable and in their best interest. In this regard,
generally the board of directors or one of the committees reviews material transactions between the Company and related parties to determine that, in their best business judgment, such transactions
meet that standard. The Company believes that each of these transactions was on terms at least as favorable to it as could have been obtained from an unaffiliated third party. Set forth below is a
description of certain transactions which have occurred since March 29, 2007 or which involve obligations that remain outstanding as of March 31, 2011.

Parent
is owned by the Sponsors, other co-investors and by certain members of management as follows: JPMP (20.834%); Apollo (20.834%); Bain Capital Partners (15.126%); The
Carlyle Group (15.126%); Spectrum Equity Investors (9.788%); Weston Presidio Capital IV, L.P. and WPC Entrepreneur Fund II, L.P. (3.909%); Co-Investment Partners, L.P.
(3.909%); Caisse de Depot et Placement du Quebec (3.127%); AlpInvest Partners CS Investments 2003 C.V., AlpInvest Partners Later Stage Co-Investments Custodian II B.V. and AlpInvest
Partners Later Stage Co-Investments Custodian IIA B.V. (2.736%); SSB Capital Partners (Master Fund) I, L.P. (1.955%); CSFB Strategic Partners Holdings II, L.P., CSFB
Strategic Partners Parallel Holdings II, L.P., and GSO Credit Opportunities Fund (Helios), L.P. (1.564%); Credit Suisse Anlagestiftung, Pearl Holding Limited, Vega Invest (Guernsey) Limited and
Partners Group Private Equity Performance Holding Limited (0.782%); Screen Investors 2004, LLC (0.152%); and current and former members of management (0.158%)(1).

---

For
a description of certain employment agreements between us and Messrs. Gerardo I. Lopez, John D. McDonald, Craig R. Ramsey, and Kevin M. Connor, see
Item 11Executive Compensation.

Governance Agreements

In connection with the holdco merger, Parent, Holdings, the Sponsors and the other former continuing stockholders of Holdings, as
applicable, entered into various agreements defining the rights of Parent's stockholders with respect to voting, governance and ownership and transfer of the stock of Parent, including an Amended and
Restated Certificate of Incorporation of Parent, a Stockholders Agreement, a Voting Agreement among Parent and the former continuing stockholders of Holdings, a Voting Agreement among Parent and the
BCS Investors and a Management Stockholders Agreement among Parent and certain members of management of Parent who are stockholders of Parent (collectively, the "Governance Agreements").

The
Governance Agreements provide that the Board of Directors for Parent, Holdings and the Company will consist of up to nine directors, two of whom shall be designated by JPMP, two of
whom shall be designated by Apollo, one of whom shall be the Chief Executive Officer of Parent, one of
whom shall be designated by The Carlyle Group, one of whom shall be designated by Bain Capital Partners, one of whom shall be designated by Spectrum Equity Investors and one of whom shall be
designated by Bain Capital Partners, The Carlyle Group and Spectrum Equity Investors, voting together, so long as such designee is consented to by each of Bain Capital Partners and The Carlyle Group.
Each of the directors respectively designated by JPMP, Apollo, The Carlyle Group, Bain Capital Partners and Spectrum Equity Investors shall have three votes on all matters placed before the Board of
Directors of Parent, Holdings and AMCE and each other director will have one vote each. The number of directors respectively designated by the Sponsors will be reduced upon transfers by such Sponsors
of ownership in Holdings below certain thresholds.

The
Voting Agreement among Parent and the pre-existing stockholders of Holdings provides that, until the fifth anniversary of the holdco merger ("Blockout Period"), the
pre-existing stockholders of Holdings (other than Apollo and JPMP) will generally vote their voting shares of capital stock of

167

---



Table of Contents

Parent
in favor of any matter in proportion to the shares of capital stock of Apollo and JPMP voted in favor of such matter, except in certain specified instances. The Voting Agreement among Parent
and the BCS Investors further provide that during the Blockout Period, the BCS Investors will generally vote their voting shares of capital stocks of Parent on any matter as directed by any two of The
Carlyle Group, Bain Capital Partners and Spectrum Equity Investors, except in certain specified instances. In addition, certain actions of Parent, Holdings and/or actions of ours, including, but not
limited to, change in control transactions, acquisition or disposition transactions with a value in excess of $10,000,000, the settlement of claims or litigation in excess of $2,500,000, an initial
public offering of Parent, hiring or firing a chief executive officer, chief financial officer or chief operating officer, incurring or refinancing indebtedness in excess of $5,000,000 or engaging in
new lines of business, require the approval of either (i) any three of JPMP, Apollo, The Carlyle Group or Bain Capital Partners or (ii) Spectrum Equity Investors and (a) either
JPMP or Apollo and (b) either The Carlyle Group or Bain Capital Partners (the "Requisite Stockholder Majority") if at such time they hold at least a majority of Parent's voting shares.

Prior
to the earlier of the end of the Blockout Period and the completion of an initial public offering of the capital stock of Parent or AMCE (an "IPO"), the Governance Agreements
prohibit the Sponsors and the other former stockholders of Parent from transferring any of their interests in Parent, other than certain permitted transfers to affiliates or to persons approved of by
the Sponsors. Following the end of the Blockout Period, the Sponsors may transfer their shares subject to the rights described below.

The
Governance Agreements set forth additional transfer provisions for the Sponsors and the other former stockholders of Holdings with respect to the interests in Parent, including the
following:

Right of first offer.After the Blockout Date and prior to an IPO, Parent and, in the event Parent does not exercise its right of first
offer, each
of its stockholders, has a right of first offer to purchase (on a pro rata basis in the case of the stockholders) all or any portion of the shares of Parent that a stockholder is proposing to sell to
a third party at the price and on the terms and conditions offered by such third party.

Drag-along rights.If, prior to an IPO, Sponsors constituting a Requisite Stockholder Majority propose to transfer shares of Parent to
an
independent third party in a bona fide arm's-length transaction or series of transactions that results in a sale of all or substantially all of Parent or us, such Sponsors may elect to require each of
the other stockholders of Parent to transfer to such third party all of its shares at the purchase price and upon the other terms and subject to the conditions of the sale.

Tag-along rights.Subject to the right of first offer described above, if any stockholder proposes to transfer shares of Parent held by
it, then such stockholder shall give notice to each other stockholder, who shall each have the right to participate on a pro rata basis in the proposed transfer on the terms and conditions offered by
the proposed purchaser.

Participant rights.On or prior to an IPO, the Sponsors have the pro rata right to subscribe to any issuance by Parent or any
subsidiary of shares of
its capital stock or any securities exercisable, convertible or exchangeable for shares of its capital stock, subject to certain exceptions.

The
Governance Agreements also provide for certain registration rights in the event of an initial public offering of Parent, including the following:

Demand rights.Subject to the consent of at least two of any of JPMP, Apollo, The Carlyle Group and Bain Capital Partners during the
first two years
following an IPO, each Sponsor has the right at any time following an IPO to make a written request to Parent for registration under the Securities Act of part or all of the registrable equity
interests held by such stockholders at Parent's expense, subject to

168

---



Table of Contents

certain
limitations. Subject to the same consent requirement, the non-Sponsor stockholders of Parent as a group shall have the right at any time following an IPO to make one
written request to Parent for registration under the Securities Act of part or all of the registrable equity interests held by such stockholders with an aggregate offering price to the public of at
least $200,000,000.

Piggyback rights.If Parent at any time proposes to register under the Securities Act any equity interests on a form and in a manner
which would
permit registration of the registrable equity interests held by stockholders of Parent for sale to the public under the Securities Act, Parent shall give written notice of the proposed registration to
each stockholder, who shall then have the right to request that any part of its registrable equity interests be included in such registration, subject to certain limitations.

Holdback agreements.Each stockholder has agreed that it will not offer for public sale any equity interests during a period not to
exceed
90 days (180 days in the case of the IPO) after the effective date of any registration statement filed by Parent in connection with an underwritten public offering (except as part of
such underwritten registration or as otherwise permitted by such underwriters), subject to certain limitations.

Amended and Restated Fee Agreement

In connection with the holdco merger, Parent, Holdings, AMCE and the Sponsors entered into a Fee Agreement, which provides for an
annual management fee of $5,000,000, payable quarterly and in advance to each Sponsor, on a pro rata basis, until the earlier of (i) the twelfth anniversary from December 23, 2004, and
(ii) such time as the Sponsors own less than 20% in the aggregate of Parent. In addition, the fee agreement provides for reimbursements by AMCE to the Sponsors for their
out-of-pocket expenses and to Parent of up to $3,500,000 for fees payable by Parent in any single fiscal year in order to maintain its corporate existence, corporate overhead
expenses and salaries or other compensation of certain employees.

Upon
the consummation of a change in control transaction or an initial public offering, each of the Sponsors will receive, in lieu of quarterly payments of the annual management fee, a
fee equal to the net present value of the aggregate annual management fee that would have been payable to the Sponsors during the remainder of the term of the fee agreement (assuming a twelve year
term from the date of the original fee agreement), calculated using the treasury rate having a final maturity date that is closest to the twelfth anniversary of the date of the original fee agreement
date. As of March 31, 2011, the Company estimates this amount would be $25,835,000 should a change in control transaction or an IPO occur.

The
fee agreement also provides that AMCE will indemnify the Sponsors against all losses, claims, damages and liabilities arising in connection with the management services provided by
the Sponsors under the fee agreement.

DCIP

In February 2007, Mr. Travis Reid was hired as the chief executive officer of DCIP, a joint venture between AMCE, Cinemark USA
and Regal formed to implement digital cinema in our theatres and to create a financing model and establish agreements with major motion picture studios for the implementation of digital cinema.
Mr. Reid was a member of the Company's Board of Directors until October 15, 2010.

On
March 10, 2010, DCIP completed its financing transactions for the deployment of digital projection systems to nearly 14,000 movie theatre screens across North America,
including screens operated or managed by AMC Entertainment Inc., Cinemark Holdings, Inc. and Regal Entertainment Group. At closing the Company contributed 342 projection systems that it
owned to DCIP, which were recorded at estimated fair value as part of an additional investment in DCIP of $21,768,000. The

169

---



Table of Contents

Company
also made cash investments in DCIP of $840,000 at closing and DCIP made a distribution of excess cash to us after the closing date and prior to fiscal 2010 year-end of
$1,262,000. The Company recorded a loss on contribution of the 342 projection systems of $563,000, based on the difference between estimated fair value and its carrying value on the date of
contribution. On March 26, 2010 the Company acquired 117 digital projectors from third party lessors for $6,784,000 and sold them together with seven digital projectors that it owned to DCIP
for $6,570,000. The Company recorded a loss on the sale of these 124 systems to DCIP of $697,000. On September 20, 2010, the Company sold 29 digital projectors in a sale and lease back to DCIP
from its Canadian theatres for $1,655,000 and incurred a loss of $110,000. On October 29, 2010, the Company sold 57 digital projectors from Kerasotes theatres in a sale and leaseback to DCIP
for $3,250,000, with no gain or loss recorded on the projectors. During March of 2011, DCIP completed additional financing of $220,000,000, which the Company believes will allow it to complete its
planned digital deployment. As of March 31, 2011, the Company operated approximately 2,300 digital projection systems leased from DCIP pursuant to operating leases and anticipates that it will
have deployed over 3,800 of these systems in its existing theatres by the end of fiscal 2012. The additional digital projection systems will allow the Company to add additional 3D enabled screens to
its circuit where the Company is generally able to charge a higher admission price than 2D.

Market Making Transactions

On August 18, 2004, Holdings sold $304,000,000 in aggregate principal amount at maturity of its Discount Notes due 2014. On
June 9, 2009, AMCE sold $600,000,000 in aggregate principal amount of its Senior Notes due 2019. On January 26, 2006, AMCE sold $325,000,000 in aggregate principal amount of its Notes
due 2016. JP Morgan Securities Inc., an affiliate of J.P. Morgan Partners, LLC which owned approximately 20.8% of Holdings prior to the Holdings Merger, was an initial purchaser of these
notes. Credit Suisse Securities (USA) LLC, whose affiliates own approximately 1.6% of Parent, was also an initial purchaser of these notes.

On
December 15, 2010, we sold $600.0 million in aggregate principal amount of our 9.75% Senior Subordinated Notes due 2020. J.P. Morgan Securities LLC, an affiliate
of J.P. Morgan Partners, LLC which owned approximately 20.8% of Holdings prior to the Holdings Merger, was an initial purchaser of the 2020 Notes.

AMCE Dividend to Holdings

During April and May of 2009, AMCE made dividend payments to its stockholder, Holdings, and Holdings made dividend payments to its
stockholder, Parent, totaling $300,000,000, which were treated as a reduction of additional paid-in capital. Parent made payments to purchase term loans and reduced the principal balance
of its Parent Term Loan Facility from $466,936,000 to $193,290,000 with a portion of the dividend proceeds.

During
September of 2009 and March of 2010, AMCE used cash on hand to pay a dividend distribution to Holdings in an aggregate amount of $15,351,000 and $14,630,000, respectively.
Holdings and Parent used the available funds to make a cash interest payment on the Holdco Notes and pay corporate overhead expenses incurred in the ordinary course of business.

During
September of 2010, AMCE used cash on hand to pay a dividend distribution to Holdings in an aggregate amount of $15,184,000. Holdings and Parent used the available funds to make a
cash interest payment on the 12% Senior Discount Notes due 2014 and pay corporate overhead expenses incurred in the ordinary course of business.

During
December of 2010 and January 2011, AMCE used cash on hand to pay a dividend distribution to Holdings in an aggregate amount of $185,034,000 and $76,141,000, respectively. Holdings

170

---



Table of Contents

used
the available funds to make a cash payment related to a tender offer for the 12% Senior Discount Notes due 2014.

During
March of 2011, AMCE used cash on hand to pay a dividend distribution to Holdings in an aggregate amount of $1,899,000. Holdings and Parent used the available funds to pay
corporate overhead expenses incurred in the ordinary course of business.

Director Independence

As of June 1, 2011, our Board of Directors was comprised of Dana B. Ardi, Gerardo I. Lopez, Phillip H.
Loughlin, Kevin Maroni, Eliot P. S. Merrill, Stephen P. Murray, Stan Parker, and Aaron J. Stone. We have no securities listed for trading on a national securities exchange
or in an automated inter-dealer quotation system of a national securities association which has requirements that a majority of our board of directors be independent. For purposes of complying with
the disclosure requirements of the Securities and Exchange Commission, we have adopted the definition of independence used by the New York Stock Exchange. Under the New York Stock
Exchange's definition of independence, none of our directors are independent.

Item 14.    Principal Accounting Fees and Services

Audit and Certain Other Fees Paid To Accountants

The following table shows the fees that AMC Entertainment was billed for the audit and other services provided by KPMG LLP for
both fiscal years 2011 and 2010. The Audit Committee has considered whether the provision of such services is compatible with maintaining the
independence of KPMG LLP and determined they were compatible. The Audit Committee has the sole right to engage and terminate the Company's independent registered public accounting firm, to
pre-approve their performance of audit services and permitted non-audit services, and to approve all audit and non-audit fees.

Type of Fee

2011

2010Audit Fees

$
880,137

$
580,500Audit-Related Fees





117,190Tax Fees


234,004


168,639All Other Fees





Total

$
1,114,141

$
866,329


The
Audit Committee has adopted policies and procedures for the pre-approval of audit services and permitted non-audit services to be performed by its independent
registered public accounting firm in order to assure that the provision of such services does not impair the independent registered public accounting firm's independence. The policies provide general
pre-approval for certain types of services, as well as approved costs for those services. The term of any general pre-approval is 12 months from the date of
pre-approval unless the Audit Committee specifies otherwise. Any costs or services that are not given general pre-approval require specific pre-approval by the
Audit Committee. The policy directs that, if management must make a judgment as to whether a proposed service is a pre-approved service, management should seek approval of the Audit
Committee before such service is performed.

Requests
to provide services that require specific approval by the Audit Committee must be submitted to the Audit Committee by both the independent auditor and management, and must
include a joint statement as to whether, in their view, the request or application is consistent with the SEC's rules on auditor independence.

171

---



Table of Contents

The
policies provide thatde minimisservices, consisting of audit-related, tax and other services, which were not recognized by the
Company to be non-audit services at the time the outside auditor was engaged to perform them are permitted. However, the aggregate amount of all such services may not exceed more than the
lesser of 5% of annual fees paid to the outside auditor or $50,000 for a particular engagement. Thesede minimisservices may be performed without
pre-approval, provided that they are approved by the Audit Committee or delegated member prior to completion of the engagement and are otherwise provided in accordance with regulations
issued pursuant to the Sarbanes-Oxley Act of 2002.

Audit Fees

This category includes the audit of the Company's annual financial statements, review of financial statements included in the Company's
Quarterly Reports on Form 10-Q and services that are normally provided by the independent registered public accounting firm in connection with statutory and regulatory filings or
engagements for the fiscal years.

Audit-Related Fees

This category consists of assurance and related services by KPMG LLP that are reasonably related to the performance of the audit
or review of the Company's financial statements and are not reported above under "Audit Fees." The services for the fees disclosed under
this category include other accounting, consulting, including due diligence services, and employee benefit plan audits.

Tax Fees

This category consists of professional services rendered by KPMG LLP for tax preparation and tax compliance.

All Other Fees

None.

172

---





Table of Contents

PART IV

Item 15.    Exhibits, Financial Statement Schedules

(a)(1)  The
following financial statements are included in Part II Item 8.:



PageReports of Independent Registered Public Accounting Firms


56Consolidated Statements of OperationsPeriods ended March 31, 2011, April 1, 2010 and
April 2, 2009


58Consolidated Balance SheetsMarch 31, 2011 and April 1, 2010


59Consolidated Statements of Cash FlowsFiscal years ended March 31, 2011, April 1, 2010 and
April 2, 2009


60Consolidated Statements of Stockholder's Equity (Deficit)Fiscal years ended March 31, 2011,
April 1, 2010 and April 2, 2009


61Notes to Consolidated Financial StatementsFiscal years ended March 31, 2011, April 1,
2010 and April 2, 2009


62


(a)(2)  Financial
Statement SchedulesAll schedules have been omitted because the necessary information is included in the Notes to the Consolidated Financial
Statements.

(b)   Exhibits

A
list of exhibits required to be filed as part of this report on Form 10-K is set forth in the Exhibit Index, which immediately precedes such exhibits.

(c)   Separate
Financial Statements of Subsidiaries Not Consolidated

The
following financial statements of National CineMedia, LLC are as follows:



PageReport of Independent Registered Public Accounting Firm


174Balance SheetsDecember 30, 2010 and December 31, 2009


175Statements of OperationsPeriods ended December 30, 2010, December 31, 2009 and
January 1, 2009


176Statements of Changes in Members' EquityPeriods ended December 30, 2010, December 31, 2009
and January 1, 2009


177Statements of Cash FlowsPeriods ended December 31, 2010, December 31, 2009 and January 1,
 2009


178Notes to Financial StatementsAs of and for the periods ended December 31, 2010,
December 31, 2009 and January 1, 2009


179


173

---





Table of Contents

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To
the Board of Directors and Members of
National CineMedia, LLC
Centennial, Colorado

We
have audited the accompanying balance sheets of National CineMedia, LLC (the "Company") as of December 30, 2010 and December 31, 2009, and the related statements
of operations, members' equity (deficit), and cash flows for the years ended December 30, 2010, December 31, 2009 and January 1, 2009. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We
conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In
our opinion, such financial statements present fairly, in all material respects, the financial position of the Company as of December 30, 2010 and December 31, 2009, and
the results of its operations and its cash flows for the years ended December 30, 2010, December 31, 2009 and January 1, 2009, in conformity with accounting principles generally
accepted in the United States of America.

/s/
Deloitte & Touche LLP

Denver,
Colorado
February 24, 2011

174

---



Table of Contents



NATIONAL CINEMEDIA, LLC

BALANCE SHEETS

(In millions)

December 30,
2010

December 31,
2009ASSETSCURRENT ASSETS:Cash and cash equivalents

$
13.8

$
37.8Receivables, net of allowance of $3.7 and $3.6 million, respectively


100.1


89.0Prepaid expenses


1.7


1.5Prepaid management fees to managing member


0.8


0.6Total current assets


116.4


128.9PROPERTY AND EQUIPMENT, net of accumulated depreciation of $46.4 and $39.3 million, respectively


19.8


23.7INTANGIBLE ASSETS, net of accumulated amortization of $10.8 and $4.4 million, respectively


275.2


134.2OTHER ASSETS:Debt issuance costs, net


7.3


9.2Other investment


6.7


7.4Other long-term assets


0.6


1.0Total other assets


14.6


17.6TOTAL

$
426.0

$
304.4LIABILITIES AND MEMBERS' EQUITY/(DEFICIT)CURRENT LIABILITIES:Amounts due to founding members


25.2


29.8Amounts due to managing member


28.2


22.9Accrued expenses


8.6


12.4Current portion of long-term debt


1.2


4.3Current portion of interest rate swap agreements


25.3


24.4Accrued payroll and related expenses


9.3


6.6Accounts payable


10.5


11.3Deferred revenue and other current liabilities


3.8


2.8Total current liabilities


112.1


114.5NON-CURRENT LIABILITIES:Borrowings


775.0


799.0Interest rate swap agreements


45.5


30.2Other long-term liabilities


0.0


0.3Total non-current liabilities


820.5


829.5Total liabilities


932.6


944.0COMMITMENTS AND CONTINGENCIES (NOTE 11)MEMBERS' EQUITY/(DEFICIT)


(506.6
)

(639.6
)TOTAL

$
426.0

$
304.4


See
accompanying notes to financial statements.

175

---



Table of Contents



NATIONAL CINEMEDIA, LLC

STATEMENTS OF OPERATIONS

(In millions)

Year Ended
December 30,
2010

Year Ended
December 31,
2009

Year Ended
January 1,
2009REVENUE:Advertising (including revenue from founding members of $38.5, $38.2 and $45.6 million, respectively)

$
379.4

$
335.1

$
330.3Fathom Events


48.0


45.5


38.9Other


0.1


0.1


0.3Total


427.5


380.7


369.5OPERATING EXPENSES:Advertising operating costs


21.7


20.0


18.7Fathom Events operating costs (including costs to founding members of $7.3, $6.7, and $6.0 million, respectively)


32.4


29.1


25.1Network costs


20.0


18.6


17.0Theatre access feesfounding members


52.6


52.7


49.8Selling and marketing costs


57.9


50.2


47.9Administrative costs


17.9


14.8


14.5Administrative feemanaging member


16.6


10.8


9.7Severance plan costs


0.0


0.0


0.5Depreciation and amortization


17.8


15.6


12.4Other costs


0.0


0.7


0.7Total


236.9


212.5


196.3OPERATING INCOME


190.6


168.2


173.2Interest Expense and Other, Net:Borrowings


44.4


47.1


51.8Change in derivative fair value


5.3


(7.0
)

14.2Interest income and other


0.2


(2.0
)

(0.2
)Total


49.9


38.1


65.8Impairment and related loss


0.0


0.0


11.5INCOME BEFORE INCOME TAXES


140.7


130.1


95.9Provision for Income Taxes


0.5


0.8


0.6Equity loss from investment, net


0.7


0.8


0.0NET INCOME

$
139.5

$
128.5

$
95.3


See
accompanying notes to financial statements.

176

---



Table of Contents



NATIONAL CINEMEDIA, LLC

STATEMENTS OF MEMBERS' EQUITY/(DEFICIT)

(In millions)

BalanceDecember 27, 2007

$
(713.8
)Contribution of severance plan payments


0.5Capital contribution from managing member


0.6Capital contribution from founding members


4.7Distribution to managing member


(55.5
)Distribution to founding members


(75.5
)Units issued for purchase of intangible asset


116.1Comprehensive Income:Unrealized (loss) on cash flow hedge


(59.1
)Net income


95.3Total Comprehensive Income


36.2Share-based compensation expense


1.1BalanceJanuary 1, 2009

$
(685.6
)Capital contribution from founding members


0.1Distribution to managing member


(57.8
)Distribution to founding members


(81.5
)Units issued for purchase of intangible asset


28.5Comprehensive Income:Unrealized (loss) on cash flow hedge


26.1Net income


128.5Total Comprehensive Income


154.6Share-based compensation expense


2.1BalanceDecember 31, 2009

$
(639.6
)Capital contribution from managing member


3.5Distribution to managing member


(71.0
)Distribution to founding members


(85.1
)Units issued for purchase of intangible asset


151.3Comprehensive Income:Unrealized (loss) on cash flow hedge


(10.9
)Net income


139.5Total Comprehensive Income


128.6Share-based compensation expense


5.7BalanceDecember 30, 2010

$
(506.6
)


See
accompanying notes to financial statements.

177

---



Table of Contents



NATIONAL CINEMEDIA, LLC

STATEMENTS OF CASH FLOWS

(In millions)

Year Ended
December 30,
2010

Year Ended
December 31,
2009

Year Ended
January 1,
2009CASH FLOWS FROM OPERATING ACTIVITIES:Net income

$
139.5

$
128.5

$
95.3Adjustments to reconcile net income to net cash provided by operating activities:Depreciation and amortization


17.8


15.6


12.4Non-cash severance and share-based compensation


5.6


2.0


1.5Non-cash impairment and related loss


0.0


0.0


11.5Net unrealized loss (gain) on hedging transactions


5.3


(7.0
)

14.2Equity loss from investment


0.7


0.8


0.0Amortization of debt issuance costs


1.9


1.9


1.9Other non-cash operating activities


0.6


0.0


0.0Changes in operating assets and liabilities:Receivablesnet


(11.1
)

3.0


(0.4
)Accounts payable and accrued expenses


(1.6
)

6.9


(0.7
)Amounts due to founding members and managing member


4.1


1.2


0.4Other operating


0.8


(3.5
)

0.1Net cash provided by operating activities


163.6


149.4


136.2CASH FLOWS FROM INVESTING ACTIVITIES:Purchases of property and equipment


(10.1
)

(8.4
)

(16.6
)Proceeds from sale of property and equipment to founding member


3.0


0.0


0.0Increase in investment in affiliate


0.0


(2.0
)

0.0Net cash used in investing activities


(7.1
)

(10.4
)

(16.6
)CASH FLOWS FROM FINANCING ACTIVITIES:Proceeds from borrowings


124.3


0.0


139.0Repayments of borrowings


(152.5
)

(3.0
)

(124.0
)Founding members and managing member integration payments


3.9


3.6


10.3Distributions to founding members and managing member


(159.6
)

(135.9
)

(118.3
)Unit settlement for share-based compensation


3.4


0.0


0.0Net cash used in financing activities


(180.5
)

(135.3
)

(93.0
)CHANGE IN CASH AND CASH EQUIVALENTS


(24.0
)

3.7


26.6CASH AND CASH EQUIVALENTS:Beginning of period


37.8


34.1


7.5End of period

$
13.8

$
37.8

$
34.1Supplemental disclosure of non-cash financing and investing activity:Contribution for severance plan payments

$
0.0

$
0.0

$
0.5Purchase of an intangible asset with subsidiary equity

$
151.3

$
28.5

$
116.1Settlement of put liability by issuance of debt

$
0.0

$
7.0

$
0.0Assets acquired in settlement of put liability

$
0.0

$
2.5

$
0.0Supplemental disclosure of cash flow information:Cash paid for interest

$
49.8

$
38.8

$
48.3Cash paid for income taxes

$
0.5

$
0.8

$
0.6


See accompanying notes to financial statements.

178

---



Table of Contents



1. THE COMPANY



National CineMedia, LLC ("NCM LLC" or "the Company") commenced operations on April 1, 2005 and operates the
largest digital in-theatre network in North America, allowing NCM LLC to distribute advertising, Fathom entertainment programming events and corporate events under
long-term exhibitor services agreements ("ESAs") with American Multi-Cinema, Inc. ("AMC"), a wholly owned subsidiary of AMC Entertainment, Inc. ("AMCE"), Regal
Cinemas, Inc., a wholly owned subsidiary of Regal Entertainment Group ("Regal"), and Cinemark USA, Inc. ("Cinemark USA"), a wholly owned subsidiary of Cinemark Holdings, Inc.
("Cinemark"). AMC, Regal and Cinemark and their affiliates are referred to in this document as "founding members". NCM LLC also provides such services to certain third-party theatre circuits
under "network affiliate" agreements, which expire at various dates.

At
December 30, 2010, NCM LLC had 110,752,192 common membership units outstanding, of which 53,549,477 (48.3%) were owned by NCM, Inc., 21,452,792 (19.4%) were owned
by Regal, 18,803,420 (17.0%) were owned by AMC, and 16,946,503 (15.3%) were owned by Cinemark. The membership units held by the founding members are exchangeable into NCM, Inc. common stock on
a one-for-one basis. During the third quarter of 2010, AMC and Regal completed a common unit membership redemption and an underwritten public offering of an aggregate
10,955,471 shares of National CineMedia, Inc.'s ("NCM, Inc." or "managing member"), common stock (see Note 7).



The Company has prepared its financial statements and related notes in accordance with accounting principles generally accepted in the
United States of America ("GAAP") and the rules and regulations of the Securities and Exchange Commission ("SEC").

On
February 13, 2007, NCM, Inc., a Company formed by NCM LLC and incorporated in the State of Delaware with the sole purpose of becoming a member and sole manager of
NCM LLC, completed its initial public offering ("IPO"). The Company's business is seasonal and for this and other reasons operating results for interim periods may not be indicative of the
Company's full year results or future performance. As a result of the various related-party agreements discussed in Note 7, the operating results as presented are not necessarily indicative of
the results that might have occurred if all agreements were with non-related third parties.

EstimatesThe preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the
reporting period. Significant estimates include those related to the reserve for uncollectible accounts receivable, and equity-based compensation. Actual results could differ from those estimates.

ReclassificationsCertain reclassifications of previously reported amounts within operating activities in the statement of cash flows have been
made
to conform to the current year presentation.

2. SIGNIFICANT ACCOUNTING POLICIES

Accounting PeriodThe Company operates on a 52-week fiscal year, with the fiscal year ending on the first Thursday after
December 25, which, in certain years, results in a 53-week year, as was the case for fiscal year 2008.

Segment ReportingSegments are accounted for under ASC 280Segment Reporting. Refer to
Note 14.

179

---



Table of Contents

2. SIGNIFICANT ACCOUNTING POLICIES (Continued)

Revenue RecognitionAdvertising revenue is recognized in the period in which an advertising contract is fulfilled against the contracted theatre
attendees. Advertising revenue is recorded net of make-good provisions to account for delivered attendance that is less than contracted attendance. When remaining delivered attendance is
provided in subsequent periods, that portion of the revenue earned is recognized in that period. Deferred revenue refers to the unearned portion of advertising contracts. All deferred revenue is
classified as a current liability. Fathom Events revenue is recognized in the period in which the event is held.

Barter TransactionsThe Company enters into barter transactions that exchange advertising program time for products and services used principally
for
selling and marketing activities. The Company records barter transactions at the estimated fair value of the advertising exchanged based on fair value received for similar advertising from cash paying
customers. Revenues for advertising barter transactions are recognized when advertising is provided, and products and services received are charged to expense when used. The Company limits the use of
such barter transactions to items and services for which it would otherwise have paid cash. Any timing differences between the delivery of the bartered revenue and the use of the bartered expense
products and services are recorded through deferred revenue. Revenue and expense from barter transactions for the year ended December 30, 2010 were $1.5 million and $1.1 million,
respectively and were not material to the Company's statement of operations for the years ended December 31, 2009 and January 1, 2009.

Operating CostsAdvertising related operating costs primarily include personnel and other costs related to advertising fulfillment, and to a
lesser
degree, production costs of non-digital advertising, and payments due to unaffiliated theatre circuits under the network affiliate agreements.

Fathom
Events operating costs include equipment rental, catering, movie tickets acquired primarily from the founding members, revenue share under the amended and restated ESAs and other
direct costs of the meeting or event.

Payment
to the founding members of a theatre access fee is comprised of a payment per theatre attendee and a payment per digital screen, both of which escalate over time.

Network
costs include personnel, satellite bandwidth, repairs, and other costs of maintaining and operating the digital network and preparing advertising and other content for
transmission across the digital network. These costs are not specifically allocable between the advertising business and the Fathom Events business.

LeasesThe Company leases various office facilities under operating leases with terms ranging from 3 to 15 years. The Company calculates
straight-line rent expense over the initial lease term and renewals that are reasonably assured.

Advertising CostsCosts related to advertising and other promotional expenditures are expensed as incurred. Due to the nature of the business, the
Company has an insignificant amount of advertising costs included in selling and marketing costs on the statement of operations.

Cash and Cash EquivalentsAll highly liquid debt instruments and investments purchased with an original maturity of three months or less are
classified as cash equivalents and are considered available for sale securities. There are cash balances in a bank in excess of the federally insured limits or in the form of a money market demand
account with a major financial institution.

Restricted CashAt December 30, 2010 and December 31, 2009, other non-current assets included restricted cash of
$0.3 million, which secures a letter of credit used as a lease deposit on NCM LLC's New York office.

180

---



Table of Contents

2. SIGNIFICANT ACCOUNTING POLICIES (Continued)

ReceivablesBad debts are provided for using the allowance for doubtful accounts method based on historical experience and management's evaluation
of
outstanding receivables at the end of the period. Receivables are written off when management determines amounts are uncollectible. Trade accounts receivable are uncollateralized and represent a large
number of geographically dispersed
debtors. At December 30, 2010, there was two advertising agency groups through which the Company sources national advertising revenue representing approximately 17% and 21%, of the Company's
outstanding gross receivable balance, respectively; however, none of the individual contracts related to the advertising agencies were more than 10% of advertising revenue. At December 31, 2009
there was one advertising agency group through which the Company sources national advertising revenue representing approximately 19% of the Company's outstanding gross receivable balance; however,
none of the individual contracts related to the advertising agency were more than 10% of advertising revenue. The collectability risk is reduced by dealing with large, national advertising agencies
who have strong reputations in the advertising industry and clients with stable financial positions.

Receivables
consisted of the following, in millions:

As of December 30,
2010

As of December 31,
2009Trade accounts

$
100.9

$
91.6Other


2.9


1.0Less allowance for doubtful accounts


(3.7
)

(3.6
)Total

$
100.1

$
89.0


Allowance
for doubtful accounts consisted of the following, in millions:

Years EndedDecember 30,
2010

December 31,
2009

January 1,
2009Balance at beginning of period

$
3.6

$
2.6

$
1.5Provision for bad debt


2.3


2.4


2.3Write-offs, net


(2.2
)

(1.4
)

(1.2
)Balance at end of period

$
3.7

$
3.6

$
2.6


Long-lived AssetsProperty and equipment is stated at cost, net of accumulated depreciation or amortization. Refer to Note 4. Major
renewals and improvements are capitalized, while replacements, maintenance, and repairs that do not improve or extend the lives of the respective assets are expensed currently. In general, the
equipment associated with the digital network that is located within the theatre is owned by the founding members, while equipment outside the theatre is owned by the Company. The Company records
depreciation and amortization using the straight-line method over the following estimated useful lives:

Equipment

4 - 10 yearsComputer hardware and software

3 - 5 yearsLeasehold improvements

Lesser of lease term or asset life


Software
and web site development costs developed or obtained for internal use are accounted for in accordance with ASC Subtopic 350-40Internal Use
Softwareand ASC Subtopic 350-50Website Development Costs. The subtopics require the capitalization of certain
costs incurred in developing or obtaining software for internal use. The majority of software costs and web site development costs,

181

---



Table of Contents

2. SIGNIFICANT ACCOUNTING POLICIES (Continued)

which
are included in equipment, are depreciated over three to five years. As of December 30, 2010 and December 31, 2009, the Company had a net book value of $9.2 million and
$11.0 million, respectively, of capitalized software and web site development costs. Approximately $6.5 million, $6.7 million and $4.9 million was recorded for the years
ended December 30, 2010, December 31, 2009 and January 1, 2009, respectively, in depreciation expense. For the years ended December 30, 2010, December 31, 2009 and
January 1, 2009 the Company recorded $1.2 million, $1.6 million and $1.2 million in research and development expense, respectively.

Construction
in progress includes costs relating to installations of equipment into affiliate theatres. Assets under construction are not depreciated until placed into service.

The
Company assesses impairment of long-lived assets pursuant with ASC 360Property, Plant and Equipmentannually. This
includes determining if certain triggering events have occurred that could affect the value of an asset. Thus far, we have recorded no impairment charges related to long-lived assets.

Intangible assetsIntangible assets consist of contractual rights and are stated at cost, net of accumulated amortization. Refer to Note 5.
The
Company records amortization using the straight-line method over the estimated useful life of the intangibles, corresponding to the term of the ESAs. During the year ended
December 30, 2010, NCM LLC recorded an intangible asset of $111.5 million, which is amortized over a weighted average amortization period of 26.7 years, and a second
addition of $39.8 million, which is amortized over a weighted average amortization period
of 27.0 years. As of December 30, 2010, the gross carrying amount of the intangible assets is $286.0 million, with a remaining weighted average amortization period of
27.0 years.

Amounts Due to Founding MembersAmounts due to founding members in the 2010 and 2009 periods include amounts due for the theatre access fee,
offset by
a receivable for advertising time purchased by the founding members, as well as revenue share earned for Fathom Events plus any amounts outstanding under other contractually obligated payments.
Payments to or received from the founding members against outstanding balances are made monthly.

Amounts Due to Managing MemberAmounts due to the managing member include amounts due under the NCM LLC Operating Agreement and other
contractually obligated payments. Payments to or received from the managing member against outstanding balances are made periodically.

Income TaxesAs a limited liability company, NCM LLC's taxable income or loss is allocated to the founding members and managing member and,
therefore, the only provision for income taxes included in the financial statements is for income-based state and local taxes.

Accumulated Other Comprehensive LossAccumulated other comprehensive loss is composed of the following (in millions):

Year Ended
December 30,
2010

Year Ended
December 31,
2009

Year Ended
January 1,
2009Beginning Balance

$
(47.4
)
$
(73.5
)
$
(14.4
)Change in fair value on cash flow hedge


(12.2
)

24.8


(59.5
)Reclassifications into earnings


1.3


1.3


0.4Ending Balance

$
(58.3
)
$
(47.4
)
$
(73.5
)


182

---



Table of Contents

2. SIGNIFICANT ACCOUNTING POLICIES (Continued)

Debt Issuance CostsIn relation to the issuance of long-term debt discussed in Note 8, there is a balance of $7.3 million
and $9.2 million in deferred financing costs as of December 30, 2010 and December 31, 2009, respectively. These debt issuance costs are being amortized
over the terms of the underlying obligation and are included in interest expense. For each of the years ended December 30, 2010, December 31, 2009, and January 1, 2009 we
amortized $1.9 million.

Other InvestmentThrough March 15, 2010, the Company accounted for its investment in RMG Networks, Inc., ("RMG") (formerly
Danoo, Inc.) under the equity method of accounting as required by ASC 323-10InvestmentsEquity Method and Joint Ventures("ASC 323-10") because we exerted "significant influence" over, but did not control, the policy and decisions of RMG, due to ownership of approximately 24% of the issued and outstanding
preferred and common stock of RMG. During the first quarter of 2010, RMG sold additional common stock to other third party investors for cash, which reduced the Company's ownership in RMG resulting in
cost method accounting. At December 30, 2010, the Company's ownership in RMG was approximately 19% of the issued and outstanding preferred and common stock of RMG. The investment in RMG and the
Company's share of its operating results through December 30, 2010 are not material to the Company's financial position or results of operations and as a result summarized financial information
is not presented. Refer to Note 11 and 12 for additional discussion .

Share-Based CompensationStock-based employee compensation is accounted for at fair value under ASC 718 CompensationStock Compensation. Refer to Note 9.

Derivative InstrumentsDerivative Instruments are accounted for under ASC 815Derivatives and Hedging.
Refer to Note 13.

Current LiabilitiesFor the year ended December 31, 2009, the Company presented the liability for interest rate swap agreements in a single
line on its Balance Sheet in other non-current liabilities. However, after further review, the Company determined that the current portion of the liability should be reclassified and
presented with total current liabilities. As a result, the Company has restated its Balance Sheet to reflect this classification. The correction has no effect on total assets, total liabilities, total
equity/(deficit), the Statements of Operations, or the Cash Flows from Operations.

The
following is a summary of the effects of the restatement on our Balance Sheet as of December 31, 2009:

BALANCE SHEET
As of
December 31, 2009As
Previously
Reported

As
RestatedCurrent portion of interest rate swap agreements


0.0

$
24.4Total current liabilities

$
90.1

$
114.5Interest rate swap agreements

$
54.6

$
30.2Total non-current liabilities

$
853.9

$
829.5


3. RECENT ACCOUNTING PRONOUNCEMENTS

In October 2009, the FASB issued ASU 2009-13,Multiple-Deliverable Revenue Arrangements,which revises the existing
multiple-element revenue arrangements guidance and changes the determination of when the individual deliverables included in a multiple-element revenue arrangement may be treated as separate units of
accounting, modifies the manner in which the transaction consideration is allocated

183

---



Table of Contents

3. RECENT ACCOUNTING PRONOUNCEMENTS (Continued)

across
the separately identified deliverables and expands the disclosures required for multiple-element revenue arrangements. The pronouncement is effective for revenue arrangements entered into or
materially modified in fiscal years beginning after June 15, 2010. The Company does not expect the pronouncement to have a material effect on its financial statements.

In
January 2010, the FASB issued ASU 2010-06,Improving Disclosures about Fair Value Measurements, which requires additional
disclosures about (1) the different classes of assets and liabilities measured at fair value, (2) the valuation techniques and inputs used, (3) the activity in Level 3 fair
value measurements, and (4) the transfers between Levels 1, 2 and 3. The Company adopted this pronouncement effective January 1, 2010 with no impact on its financial statements.

The
Company has considered all other recently issued accounting pronouncements and does not believe the adoption of such pronouncements will have a material impact on its financial
statements.

4. PROPERTY AND EQUIPMENT

As of
December 30,
2010

As of
December 31,
2009(in millions)Equipment, computer hardware and software

$
63.3

$
60.6Leasehold Improvements


1.7


1.6Less accumulated depreciation


(46.4
)

(39.3
)Subtotal


18.6


22.9Construction in Progress


1.2


0.8Total property and equipment

$
19.8

$
23.7


For
the years ended December 30, 2010, December 31, 2009, and January 1, 2009, the Company recorded depreciation of $11.4 million, $12.5 million, and
$10.2 million, respectively.

5. INTANGIBLE ASSETS

During the second quarter of 2010, NCM LLC issued 6,510,209 common membership units to a subsidiary of AMCE as a result of that subsidiary's acquisition of Kerasotes Showplace
Theatres, LLC (the "AMC Kerasotes Acquisition"). Such issuance provided NCM LLC with exclusive access, in accordance with the ESA, to the net new theatre screens and attendees added by
AMCE to NCM LLC's network since the date of the last annual common unit adjustment through the date of the AMC Kerasotes Acquisition. As a result, NCM LLC recorded an intangible asset at
the market value of the common membership units equal to $111.5 million. During the first quarter of 2010, NCM LLC issued 2,212,219 common membership units to its founding members in
exchange for the rights to exclusive access, in accordance with the ESA, to net new theatre screens and projected attendees added by the founding members to NCM LLC's network during 2009. As a
result, NCM LLC recorded an intangible asset at the market value of the common membership units equal to $39.8 million. During the first quarter of 2009, NCM LLC issued 2,126,104
common membership units to its founding members in exchange for the rights to exclusive access to net new theatre screens and projected attendees added by the founding members to NCM LLC's
network. The Company recorded an intangible asset at the market value of the common membership units equal to $28.5 million. The Company based the fair value of the intangible assets on the
market value of the common membership units issued on the date of grants, which are freely convertible into the Company's common stock.

184

---



Table of Contents

5. INTANGIBLE ASSETS (Continued)

Pursuant to ASC 350-10IntangiblesGoodwill and Other, the intangible assets have a finite useful life and the
Company amortizes the assets over the remaining useful life corresponding with the ESAs. Amortization of the asset related to Regal Consolidated Theatres will not begin until after 2011 since the
Company will not have access to on-screen advertising in the Regal Consolidated Theatres until the run-out of their existing on-screen advertising agreement.

As of
December 30,
2010

As of
December 31,
2009(in millions)Beginning balance

$
134.2

$
111.8Purchase of intangible asset subject to amortization


151.3


28.5Less integration payments(1)


(3.9
)

(3.2
)Less amortization expense


(6.4
)

(2.9
)Total intangible assets

$
275.2

$
134.2


(1)See
Note 7 for further information on integration payments.


For
the years ended December 30, 2010, December 31, 2009 and January 1, 2009 the Company recorded amortization of $6.4 million, $2.9 million and
$1.5 million, respectively.

The
estimated aggregate amortization expense for each of the five succeeding years is as follows (in millions):

2011

$
9.92012


10.52013


10.52014


10.52015


10.5


6. ACCRUED EXPENSES

As of
December 30,
2010

As of
December 31,
2009(in millions)Make-good reserve

$
2.8

$
0.3Accrued interest


2.1


9.8Other accrued expenses


3.7


2.3Total accrued expenses

$
8.6

$
12.4


7. RELATED-PARTY TRANSACTIONS

Pursuant to the ESAs, the Company makes monthly theatre access fee payments to the founding members, comprised of a payment per theatre attendee and a payment per digital screen with
respect to the founding member theatres included in our network. The total theatre access fee to the founding
members for the years ended December 30, 2010, December 31, 2009 and January 1, 2009 was $52.6 million, $52.7 million and $49.8 million, respectively.

Under
the ESAs, for the years ended December 30, 2010 and December 31, 2009, the founding members purchased 60 seconds of on-screen advertising time (with a
right to purchase up to

185

---



Table of Contents

7. RELATED-PARTY TRANSACTIONS (Continued)

90 seconds)
from NCM LLC to satisfy their obligations under their beverage concessionaire agreements at a specified 30 second equivalent cost per thousand ("CPM") impressions. For the
year ended January 1, 2009, two of the founding members purchased 90 seconds and one purchased 60 seconds of on-screen advertising time under their beverage concessionaire
agreement. The total revenue related to the beverage concessionaire agreements for the years ended December 30, 2010, December 31, 2009 and January 1, 2009 was
$37.2 million, $36.3 million and $43.3 million, respectively. In addition, the Company made payments to the founding members for use of their screens and theatres for its Fathom
Events businesses. These payments are at rates (percentage of event revenue) included in the ESAs based on the nature of the event. Payments to the founding members for these events totaled
$7.3 million, $6.7 million, and $6.0 million for the years ended December 30, 2010, December 31, 2009 and January 1, 2009, respectively.

Also,
pursuant to the terms of the NCM LLC Operating Agreement in place since the completion of the IPO, NCM LLC is required to make mandatory distributions on a
proportionate basis to its members of available cash, as defined in the NCM LLC Operating Agreement, on a quarterly basis in arrears. Distributions for the years ended December 30, 2010,
December 31, 2009, and January 1, 2009 are as follows (in millions):

2010

2009

2008AMC

$
28.8

$
25.8

$
24.3Cinemark


24.0


20.8


18.5Regal


32.3


34.9


32.7NCM, Inc.


71.0


57.8


55.6Total

$
156.1

$
139.3

$
131.1


The
available cash payment by NCM LLC to its founding members for the quarter ended December 30, 2010 of $25.7 million was included in amounts due to founding
members at December 30, 2010 and will be made in the first quarter of 2011. The available cash payment by NCM LLC to its managing member for the quarter ended December 30, 2010 of
$24.1 million was included in amounts due to managing member as of December 30, 2010 and will be made in the first quarter of 2011.

On
January 26, 2006, AMC acquired the Loews Cineplex Entertainment Inc. ("AMC Loews") theatre circuit. The Loews screen integration agreement, effective as of
January 5, 2007 and amended and restated as of February 13, 2007, between NCM LLC and AMC, committed AMC to cause substantially all of the theatres it acquired as part of the
Loews theatre circuit to be included in the NCM digital
network in accordance with the ESAs on June 1, 2008. In accordance with the Loews screen integration agreement, prior to June 1, 2008 AMC paid the Company amounts based on an
agreed-upon calculation to reflect cash amounts that approximated what NCM LLC would have generated if the Company sold on-screen advertising in the Loews theatre chain
on an exclusive basis. These AMC Loews payments were made on a quarterly basis in arrears through May 31, 2008, with the exception of Star Theatres, which were paid through February 2009 in
accordance with certain run-out provisions. For the years ended December 31, 2009 and January 1, 2009, the AMC Loews payment was $0.1 million and $4.7 million,
respectively. The AMC Loews payment was recorded directly to NCM LLC's members' equity account.

On
April 30, 2008, Regal acquired Consolidated Theatres and NCM issued common membership units to Regal upon the closing of its acquisition in exchange for the right to exclusive
access to the theatres. The Consolidated Theatres had a pre-existing advertising agreement and, as a result, Regal

186

---



Table of Contents

7. RELATED-PARTY TRANSACTIONS (Continued)

must
make "integration" payments pursuant to the ESAs on a quarterly basis in arrears through mid-2011 in accordance with certain run-out provisions. For the years ended
December 30, 2010, December 31, 2009 and January 1, 2009, the Consolidated Theatres payment was $3.9 million, $3.2 million and $2.8 million, respectively and
represents a cash element of the consideration received for the common membership units issued. The Consolidated Theatres payment of $1.2 million for the quarter ended December 30, 2010
was included in amounts due from founding members at December 30, 2010 and will be received in the first quarter of 2011.

In
connection with AMC's acquisition of Kerasotes, AMC reimbursed NCM LLC approximately $3.0 million for the net book value of NCM LLC capital expenditures invested
in digital network technology within the acquired Kerasotes theatres prior to the acquisition date.

Amounts
due to founding members at December 30, 2010 were comprised of the following (in millions):

AMC

Cinemark

Regal

TotalTheatre access fees, net of beverage revenues

$
0.5

$
0.4

$
0.5

$
1.4Cost and other reimbursement


(0.2
)

(0.5
)

(0.0
)

(0.7
)Distributions payable, net


8.5


7.6


8.4


24.5Total

$
8.8

$
7.5

$
8.9

$
25.2


Amounts
due to founding members at December 31, 2009 were comprised of the following (in millions):

AMC

Cinemark

Regal

TotalTheatre access fees, net of beverage revenues

$
0.5

$
0.4

$
0.5

$
1.4Cost and other reimbursement


(0.5
)

(0.5
)

(0.5
)

(1.5
)Distributions payable, net


9.9


7.9


12.1


29.9Total

$
9.9

$
7.8

$
12.1

$
29.8




During the years ended December 30, 2010, December 31, 2009 and January 1, 2009, AMC, Cinemark and Regal purchased
$1.3 million, $1.9 million and $2.3 million respectively, of NCM LLC's advertising inventory for their own use. The value of such purchases are calculated by reference to
NCM LLC's advertising rate card and included in advertising revenue.

Included
in selling and marketing costs and Fathom Events operating costs is $2.5 million, $2.1 million and $2.7 million for the years ended December 30,
2010, December 31, 2009 and January 1, 2009 respectively, related to purchases of movie tickets and concession products from the founding members primarily for marketing to
NCM LLC's advertising clients and marketing resale to Fathom Business customers.



During 2009, NCM LLC entered into a digital content agreement and a Fathom agreement with LA Live Cinemas LLC ("LA
Live"), an affiliate of Regal, for NCM LLC to provide in-theatre advertising and Fathom Events services to LA Live in its theatre complex. The affiliate agreement was entered into
at terms that are similar to those of our other advertising affiliates. LA Live joined the NCM LLC advertising network during the fourth quarter of 2009. Included in advertising operating

187

---



Table of Contents

7. RELATED-PARTY TRANSACTIONS (Continued)

costs
and Fathom Events operating costs is $0.1 million for the year ended December 30, 2010, for payments made to the affiliate under the agreement. As of December 30, 2010
approximately $0.1 million is included in accounts payable for amounts due to LA Live under the agreement.

During
2009, NCM LLC entered into a network affiliate agreement with Starplex Operating L.P. ("Starplex"), an affiliate of Cinemark, for NCM LLC to provide
in-theatre advertising services to Starplex in its theatre locations. The affiliate agreement was entered into at terms that are similar to those of our other advertising affiliates.
Starplex joined the NCM LLC advertising network in the first quarter of 2010. Included in advertising operating costs is $1.3 million for the year ended December 30, 2010, for
payments made to the affiliate under the agreement. As of December 30, 2010, approximately $0.5 million is included in accounts payable for amounts due to Starplex under the agreement.



The NCM LLC Operating Agreement provides a redemption right of the founding members to exchange common membership units of
NCM LLC for shares of the Company's common stock on a one-for-one basis, or at the Company's option, a cash payment equal to the market price of one share of
NCM, Inc. common stock. During the third quarter of 2010, AMC and Regal exercised the redemption right of an aggregate 10,955,471 common membership units, whereby AMC and Regal surrendered
6,655,193 and 4,300,278 common membership units to NCM LLC for cancellation, respectively. The Company contributed an aggregate 10,955,471 shares of its common stock to NCM LLC in
exchange for a like number of newly issued common membership units. NCM LLC then distributed the shares of common stock to AMC and Regal to complete the redemptions. Such redemptions took place
immediately prior to the closing of the underwritten public offering and the subsequent closing of the overallotment option; in each case the NCM, Inc. common stock was sold at a price to the
public of $16.00 per share by AMC and Regal. NCM, Inc. did not receive any proceeds from the sale of its common stock by AMC and Regal. Pursuant to ASC 810-10-45, the
Company accounted for the change in its ownership interest in NCM LLC as an equity transaction and no gain or loss was recognized in net income.



Pursuant to the NCM LLC Operating Agreement, as the sole manager of NCM LLC, NCM, Inc. provides certain specific
management services to NCM LLC, including those services of the positions of president and chief executive officer, president of sales and chief marketing officer, executive vice president and
chief financial officer, executive vice president and chief operations officer and executive vice president and general counsel. In exchange for the services, NCM LLC reimburses
NCM, Inc. for compensation and other expenses of the officers and for certain out-of-pocket costs. During the years ended December 30, 2010, December 31,
2009 and January 1, 2009, NCM LLC paid NCM, Inc. $16.6 million, $10.8 million and $9.7 million, respectively, for these services and expenses. The payments
for estimated management services related to employment are made one month in advance. At December 30, 2010 and December 31, 2009, $0.8 million and $0.6 million,
respectively, has been paid in advance and is reflected as prepaid management fees to managing member in the accompanying financial statements. NCM LLC also provides administrative and support
services to NCM, Inc. such as office facilities, equipment, supplies, payroll and accounting and financial reporting at no charge. Based on the limited activities of NCM, Inc. as a
standalone entity, the Company does not believe such unreimbursed costs are significant. The management services agreement also provides that NCM LLC employees may participate in the
NCM, Inc. equity incentive plan (see Note 9).

188

---



Table of Contents

7. RELATED-PARTY TRANSACTIONS (Continued)

Amounts
due to/from managing member were comprised of the following (in millions):

As of
December 30,
2010

As of
December 31,
2009Distributions payable

$
24.1

$
22.0Cost and other reimbursement


4.1


0.9Total

$
28.2

$
22.9


8. BORROWINGS

On February 13, 2007, concurrently with the closing of the IPO of NCM, Inc., NCM LLC entered into a senior secured credit facility with a group of lenders. The
facility consists of a six-year $80.0 million revolving credit facility and an eight-year, $725.0 million term loan facility. The revolving credit facility
portion is available, subject to certain conditions, for general corporate purposes of the Company in the ordinary course of business and for other transactions permitted under the credit agreement,
and a portion is available for letters of credit.

The
outstanding balance of the term loan facility at December 30, 2010 and December 31, 2009 was $725.0 million. The outstanding balance under the revolving credit
facility at December 30, 2010 and December 31, 2009 was $50.0 million and $74.0 million, respectively. As of December 30, 2010, the effective rate on the term loan
was 5.61% including the effect of the interest rate swaps (both those accounted for as hedges and those that are not). The interest rate swaps hedged $550.0 million of the $725.0 million
term loan at a fixed interest rate of 6.734% while the unhedged portion was at an interest rate of 2.06%. The weighted-average interest rate on the unhedged revolver was 2.01%. Commencing with the
fourth fiscal quarter in fiscal year 2009, the applicable margin for the revolving credit facility is determined quarterly and is subject to adjustment based upon a net senior secured leverage ratio
for NCM LLC and its subsidiaries (the ratio of secured funded debt less unrestricted cash and cash equivalents, over a non-GAAP measure defined in the credit agreement). The senior
secured credit facility also contains a number of covenants and financial ratio requirements, with which the Company was in compliance at December 30, 2010, including the net senior secured
leverage ratio. There are no distribution restrictions as long as the Company is in compliance with its debt covenants. As of December 30, 2010, its net senior secured leverage ratio was 3.5
times the covenant. The debt covenants also require 50% of the term loan, or $362.5 million to be hedged at a fixed rate. As of December 30, 2010, the Company had approximately
$550 million or 76% hedged. Of the $550.0 million that is hedged, $137.5 million was transferred from Lehman Brothers Special Financing ("LBSF") to Barclays Bank PLC
("Barclays") in February 2010. See Note 13 for an additional discussion of the interest rate swaps.

NCM LLC,
Lehman Brothers Holdings Inc. ("Lehman") and Barclays entered into an agreement in March 2010 whereby Lehman resigned its agency function and restructured its
outstanding $14.0 million revolving credit loan. NCM LLC and the remaining revolving credit lenders consented to the appointment of Barclays as successor administrative agent and swing
line lender under the credit agreement. Additionally, the revolving credit commitments of Lehman were reduced to zero and the aggregate revolving credit commitments were reduced to
$66.0 million. The $14.0 million outstanding principal of the revolving credit loans held by Lehman will not be repaid in connection with any future prepayments of revolving credit
loans, but rather Lehman's share of the revolving credit facility will be paid in full by NCM LLC, along with any accrued and unpaid fees and interest, on the revolving credit termination date,
February 13, 2013.

189

---



Table of Contents

8. BORROWINGS (Continued)

On
March 19, 2009, the Company gave an $8.5 million note payable to Credit Suisse, Cayman Islands Branch ("Credit Suisse") with no stated interest to settle the
$10.0 million contingent put obligation and to acquire the $20.7 million outstanding principal balance of debt of IdeaCast, Inc. ("IdeaCast") (together with all accrued interest
and other lender costs required to be reimbursed by IdeaCast). Quarterly payments to Credit Suisse began on April 15, 2009 and will continue through January 15, 2011. At issuance the
Company recorded the note at a present value of $7.0 million. At December 30, 2010 and December 31, 2009, $1.2 million and $4.3 million, respectively, of the balance
was recorded in current liabilities. Interest on the note is accreted at the Company's estimated incremental cost of debt based on then current market indicators over the term of the loan to interest
expense. The amount of interest expense recognized on the note for the years ended December 30, 2010 and December 31, 2009 was $0.5 million and $0.7 million, respectively.



The scheduled annual maturities on the credit facility for the next five years as of December 30, 2010 are as follows (in
millions):

2011

$
1.22012


0.02013


50.02014


0.02015


725.0Total

$
776.2


9. SHARE-BASED COMPENSATION

At the date of the IPO, the Company adopted the NCM, Inc. 2007 Equity Incentive Plan. As of December 30, 2010, there were 7,076,000 shares of common stock available for
issuance or delivery under the Equity Incentive Plan of which 1,690,186 remain available for grants as of December 30, 2010. Options awarded under the Equity Incentive Plan are granted with an
exercise price equal to the market price of NCM, Inc. common stock on the date of the grant. Upon vesting of the awards, NCM LLC will issue common membership units to the Company equal
to the number of shares of the Company's common stock represented by such awards. Under the fair value recognition provisions of ASC 718, the Company recognizes stock-based compensation net of an
estimated forfeiture rate, and therefore only recognizes stock-based compensation cost for those shares expected to vest over the requisite service period of the award. Options and
non-vested restricted stock vest annually over a three or five-year period and options have either 10-year or 15-year contractual terms. A forfeiture
rate of 5% was estimated to reflect the potential separation of employees.

The
recognized expense, including equity based compensation costs of NCM, Inc. employees, is included in the operating results of NCM LLC. The Company recognized
$7.0 million, $3.1 million and $2.1 million for the years ended December 30, 2010, December 31, 2009 and January 1, 2009, respectively, of share-based
compensation expense for these options and $0.1 million were capitalized during each of the years ended December 30, 2010, December 31, 2009 and January 1, 2009,
respectively. As of December 30, 2010, unrecognized compensation cost related to nonvested options was approximately $9.1 million, which will be recognized over a weighted average
remaining period of 1.70 years.

The
weighted average grant date fair value of granted options was $4.84, $2.17 and $3.77 for the years ended December 30, 2010, December 31, 2009 and January 1,
2009, respectively. The intrinsic

190

---



Table of Contents

9. SHARE-BASED COMPENSATION (Continued)

value
of options exercised during the year was $2.2 million, $0.2 million and $0.2 million for the years ended December 30, 2010, December 31, 2009, and
January 1, 2009, respectively. During the year ended December 30, 2010 there was $4.9 million of cash received on options exercised and an immaterial
amount for the year December 31, 2009. The total fair value of awards vested during the years ended December 30, 2010 and December 31, 2009 was $3.2 million and
$0.3 million, respectively.

The
fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model, which requires that the Company make estimates of various factors. The
following assumptions were used in the valuation of the options:

Fiscal 2010

Fiscal 2009

Fiscal 2008Expected life of options

6.0 years

6.5 years

6.5 yearsRisk free interest rate

1.38% to 3.76%

2.23% to 3.70%

3.74% to 4.09%Expected volatility

39%

30%

30%Dividend yield

3.8% to 4.0%

3%

3%


Activity
in the Equity Incentive Plan, as converted, is as follows:

Shares

Weighted
Average
Exercise
Price

Weighted
Average
Remaining
Contractual Life
(in years)

Aggregate
Intrinsic
Value
(in millions)Outstanding at December 31, 2009


3,126,560

$
14.51Granted


1,186,507


17.62Exercised


(388,302
)

12.64Forfeited


(48,541
)

13.36Outstanding at December 30, 2010


3,876,224

$
15.55


9.0

$
18.1Exercisable at December 30, 2010


1,030,120


16.45


9.1

$
4.2Vested and Expected to Vest at December 30, 2010


3,839,382


15.55


9.0

$
18.0


The
following table summarizes information about the stock options at December 30, 2010, including the weighted average remaining contractual life and weighted average exercise
price:

Options Outstanding

Options ExercisableRange of Exercise Price

Number
Outstanding as of
Dec. 30, 2010

Weighted
Average
Remaining Life
(in years)

Weighted
Average
Exercise
Price

Number
Exercisable as of
Dec. 30, 2010

Weighted
Average
Exercise
Price$5.35   - $10.41


908,640


8.0

$
9.06


175,554

$
9.02$10.42 - $16.66


1,250,143


10.0


16.09


578,485


16.20$16.67 - $16.97


973,996


9.0


16.97


0


0.0$16.98 - $19.43


383,079


9.2


18.79


73,330


18.70$19.44 - $29.05


360,366


7.5


22.74


202,751


22.783,876,224


9.0

$
15.55


1,030,120

$
16.45


191

---



Table of Contents

9. SHARE-BASED COMPENSATION (Continued)

Non-vested (Restricted) StockNCM, Inc. has a non-vested stock program as part of the Equity Incentive Plan. The plan
provides for non-vested stock awards to officers, board members and other key employees, including employees of NCM LLC. Under the non-vested stock program, common stock
of NCM, Inc. may be granted at no
cost to officers, board members and key employees, subject to a continued employment restriction and as such restrictions lapse, the award vests in that proportion. The participants are entitled to
cash dividends from NCM, Inc. and to vote their respective shares, although the sale and transfer of such shares is prohibited and the shares are subject to forfeiture during the restricted
period. Additionally the accrued cash dividends for the 2009 and 2010 grants are subject to forfeiture during the restricted period. The shares are also subject to the terms and provisions of the
Equity Incentive Plan. Non-vested stock awards granted in 2010 include performance vesting conditions, which permit vesting to the extent that NCM, Inc. achieves specified
non-GAAP targets at the end of the three-year period. Non-vested stock granted to non-employee directors vest after one year. Compensation cost is
valued based on the market price on the grant date and is expensed over the vesting period.

The
following table represents the shares of non-vested stock:

Shares

Weighted
Average Grant-
Date Fair ValueNon-vested as of December 31, 2009


590,374

$
13.15Granted


429,585


17.24Forfeited


(8,011
)

15.84Vested


(96,364
)

16.18Non-vested as of December 30, 2010


915,584

$
16.77


The
recognized expense, including the equity based compensation costs of NCM, Inc. employees, is included in the operating results of NCM LLC. The Company recorded
$7.0 million, $2.4 million and $1.3 million in compensation expense related to such outstanding non-vested shares during the years ended December 30, 2010,
December 31, 2009 and January 1, 2009. Of the $7.0 million in compensation expense for the year ended December 30, 2010, $1.6 million was related to
NCM, Inc.'s expected over performance of the specified non-GAAP targets for the 2009 and 2010 grants. During the year ended December 30, 2010 there was $0.1 million
capitalized and an immaterial amount for the years ended December 31, 2009 and January 1, 2009. As of December 30, 2010, unrecognized compensation cost related to
non-vested stock was approximately $11.2 million, which will be recognized over a weighted average remaining period of 1.82 years. The weighted average grant date fair value
of non-vested stock was $17.24, $9.50 and $18.97 for the years ended December 30, 2010, December 31, 2009 and January 1, 2009, respectively. The total fair value of
awards vested was $1.6 million, $0.3 million and $2.1 million during the years ended December 30, 2010, December 31, 2009 and January 1, 2009.

10. EMPLOYEE BENEFIT PLANS

NCM LLC sponsors the NCM 401(k) Profit Sharing Plan (the "Plan") under Section 401(k) of the Internal Revenue Code of 1986, as amended, for the benefit of substantially all
full-time employees. The Plan provides that participants may contribute up to 20% of their compensation, subject to Internal Revenue Service limitations. Employee contributions are
invested in various investment funds based upon election made by the employee. The recognized expense, including the discretionary contributions of NCM, Inc. employees, is included in the
operating results of NCM LLC. The Company

192

---



Table of Contents

10. EMPLOYEE BENEFIT PLANS (Continued)

made
discretionary contributions of $0.9 million, $0.8 million and $0.8 million during the years ended December 30, 2010, December 31, 2009 and January 1,
2009, respectively.

11. COMMITMENTS AND CONTINGENCIES



The Company is subject to claims and legal actions in the ordinary course of business. The Company believes such claims will not have a
material adverse effect on its financial position or results of operations.



The Company leases office facilities for its headquarters in Centennial, Colorado and also in various cities for its sales and
marketing personnel as sales offices. The Company has no capital lease obligations. Total lease expense for the years ended December 30, 2010, December 31, 2009 and January 1,
2009, was $2.2 million, $2.3 million and $2.0 million, respectively.

Future
minimum lease payments under noncancelable operating leases as of December 30, 2010 are as follows (in millions):

2011

$
1.62012


2.22013


2.22014


2.22015


2.1Thereafter


9.1Total

$
19.4




On April 29, 2008, NCM LLC, IdeaCast, the IdeaCast lender and certain of its stockholders agreed to a financial
restructuring of IdeaCast. Among other things, the restructuring resulted in the lender being granted an option to "put," or require NCM LLC to purchase, up to $10 million of the funded
convertible debt at par, on or after December 31, 2010 through March 31, 2011. The put was accounted for under ASC 460-10 Guarantees. During the fourth quarter of 2008, the Company determined
that the initial investment and call right in IdeaCast were
other-than-temporarily impaired due to IdeaCast's defaults on its senior debt and liquidity issues and that the put obligation was probable. The Company estimated a liability
at January 1, 2009 of $4.5 million, which represented the excess of the estimated probable loss on the put (net of estimated recoveries from the net assets of IdeaCast that serve as
collateral for the convertible debt) obligation over the unamortized ASC 460-10 liability. The total amount of the impairment and related loss recorded in the fourth quarter of 2008 was
$11.5 million.

On
March 19, 2009, NCM LLC, IdeaCast and IdeaCast's lender agreed to certain transactions with respect to the IdeaCast Credit Agreement. Among other things, these
agreements resulted in (i) the termination of the Put and the Call; (ii) the transfer, sale and assignment by IdeaCast's lender to NCM LLC of all of its right, title and interest
under the Credit Agreement, including without limitation the loans outstanding under the Credit Agreement; (iii) the resignation of IdeaCast's lender, and the appointment of NCM LLC, as
administrative agent and collateral agent under the Credit Agreement; and (iv) the delivery by NCM LLC to IdeaCast's lender of a non-interest bearing promissory note in

193

---



Table of Contents

11. COMMITMENTS AND CONTINGENCIES (Continued)

the
amount of $8.5 million payable through January 2011. On June 16, 2009, NCM LLC's interest in the Credit Agreement was assigned to NCM
Out-Of-Home, LLC ("OOH"), which was a wholly-owned subsidiary of NCM LLC. OOH was also appointed as administrative agent and collateral agent under the Credit
Agreement. On June 16, 2009, OOH, as IdeaCast's senior secured lender, foreclosed on substantially all of the assets of IdeaCast, consisting of certain tangible and intangible assets (primarily
equipment, business processes and contracts with health clubs and programming partners). The assets were valued at approximately $8.2 million. On June 29, 2009, NCM LLC
transferred its ownership interest in OOH to RMG, a digital advertising company, in exchange for approximately 24% of the equity (excluding out-of-the-money
warrants) of RMG on a fully diluted basis through a combination of convertible preferred stock, common stock and common stock warrants (refer to Note 2Other Investment). The
Company's investment in RMG was valued at the fair value of the assets contributed.



As part of the network affiliate agreements entered in the ordinary course of business under which the Company sells advertising for
display in various theatre chains other than those of the founding members of NCM LLC, the Company has agreed to certain minimum revenue guarantees. If an affiliate achieves the attendance set
forth in their respective agreement, the Company has guaranteed minimum revenue for the network affiliate per attendee if such amount paid under the revenue share arrangement is less than its
guaranteed amount. The amount and term varies for each network affiliate, but initial terms range from two to five years, prior to any renewal periods. The maximum potential amount of future payments
the Company could be required to make pursuant to the minimum revenue guarantees is $14.0 million over the remaining terms of the network affiliate agreements. As of December 30, 2010
and December 31, 2009 the Company had no liabilities recorded for these obligations as such guarantees are less than the expected share of revenue paid to the affiliate.

12. FAIR VALUE MEASUREMENTS



The carrying amounts of cash and cash equivalents and other notes payable as reported in the Company's balance sheets approximate their
fair value due to their short maturity. The carrying amount of the revolving credit facility is considered a reasonable estimate of fair value due to its floating-rate terms. The carrying
amounts and fair values of interest rate swap agreements are the same since the Company accounts for these instruments at fair value. The Company has estimated the fair value of its term loan based on
an average of three non-binding broker quotes and the Company's analysis to be $713.3 million and $688.8 million at December 30, 2010 and December 31, 2009,
respectively. The carrying value of the term loan was $725.0 million as of December 30, 2010 and December 31, 2009.

The
fair value of the investment in RMG networks has not been estimated at December 30, 2010 as there were no monetary equity events or changes in circumstances that may have a
significant adverse effect on the fair value of the investment, and as it is not practicable to do so because RMG is not a publicly traded company. The carrying amount of the Company's investment was
$6.7 million and $7.4 million as of December 30, 2010 and December 31, 2009, respectively. Refer to Note 2Other Investment.

194

---



Table of Contents

12. FAIR VALUE MEASUREMENTS (Continued)

Recurring MeasurementsThe fair values of the Company's assets and liabilities measured on a recurring basis pursuant to ASC 820-10 Fair Value Measurements and Disclosuresare as follows (in millions):

Fair Value Measurements at
Reporting Date UsingAs of
December 30,
2010

Quoted Prices in
Active Markets
for Identical
Assets (Level 1)

Significant
Other
Observable
Inputs
(Level 2)

Significant
Unobservable
Inputs
(Level 3)LIABILITIES:Current Portion of Interest Rate Swap Agreements(1)


(25.3
)

0.0


(25.3
)

0.0Interest Rate Swap Agreements(1)


(45.5
)

0.0


(45.5
)

0.0$
(70.8
)
$
0.0

$
(70.8
)
$
0.0


(1)Interest
Rate Swap AgreementsRefer to Note 13.


13. DERIVATIVE INSTRUMENTS

NCM LLC has interest rate swap agreements with four counterparties that, at their inception, qualified for and were designated as cash flow hedges against interest rate exposure
on $550.0 million of the variable rate debt obligations under the senior secured credit facility. The interest rate swap agreements have the effect of converting a portion of the Company's
variable rate debt to a fixed rate of 6.734%. All interest rate swaps were entered into for risk management purposes. The Company has no derivatives for other purposes.

Effective
February 8, 2010, NCM LLC entered into a novation agreement with LBSF and Barclays whereby LBSF transferred to Barclays all the rights, liabilities, duties and
obligations of NCM LLC's interest rate swap agreement with LBSF with identical terms. NCM LLC accepted Barclays as its sole counterparty with respect to the new agreement. The term runs
until February 13, 2015, subject to earlier termination upon the occurrence of certain specified events. Subject to the terms of the new agreement, NCM LLC or Barclays will make payments
at specified intervals based on the variance between LIBOR and a fixed rate of 4.984% on a notional amount of $137.5 million. NCM LLC effectively pays a rate of 6.734% on this notional
amount inclusive of the 1.75% margin currently required by NCM LLC's credit agreement. The agreement with Barclays is secured by the assets of NCM LLC on a pari passu basis with the
credit agreement and the other interest rates swaps that were entered into by NCM LLC. In consideration of LBSF entering into the transfer, NCM LLC agreed to pay to LBSF the full amount
of interest rate swap payments withheld since LBSF's default, aggregating $7.0 million, and an immaterial amount of penalty interest.

Cash
flow hedge accounting was discontinued on September 15, 2008 due to the event of default created by the bankruptcy of Lehman and the inability of the Company to continue to
demonstrate the swap would be effective. The Company did not elect cash flow hedge accounting and the interest rate swap with Barclays is recorded at fair value with any change in the fair value
recorded in the statement of operations. There was a $4.0 million increase, $8.3 million decrease and $13.8 million increase in the fair value of the liability for the years ended
December 30, 2010, December 31, 2009 and January 1, 2009, respectively, which the Company recorded as a component of interest expense and other, net.

195

---



Table of Contents

13. DERIVATIVE INSTRUMENTS (Continued)

In
accordance with ASC 815Derivatives and Hedging, the net derivative loss as of September 14, 2008 related to the discontinued
cash flow hedge with LBSF shall continue to be reported in accumulated other comprehensive income unless it is probable that the forecasted transaction will not occur by the end of the originally
specified time period. Accordingly, the net derivative loss is being amortized to interest expense over the remaining term of the interest rate swap through February 13, 2015. The amount
amortized during the years ended December 30, 2010, December 31, 2009 and January 1, 2009 were $1.3 million, $1.3 million and $0.4 million, respectively. The
Company estimates approximately $1.3 million will be amortized to interest expense and other, net in the next 12 months.

Both
at inception and on an on-going basis the Company performs an effectiveness test using the hypothetical derivative method. The fair values of the interest rate swaps
with the counterparties other than Barclays (representing notional amounts of $412.5 million associated with a like amount of the variable rate debt) are recorded on the Company's balance sheet
as a liability with the change in fair value recorded in other comprehensive income since the instruments were determined to be perfectly effective at December 30, 2010 and December 31,
2009. There were no amounts reclassified into current earnings due to ineffectiveness during the periods presented other than as described herein.

The
fair value of the Company's interest rate swap is based on dealer quotes, and represents an estimate of the amount the Company would receive or pay to terminate the agreements taking
into consideration various factors, including current interest rates and the forward yield curve for 3-month LIBOR.

As
of December 30, 2010 and December 31, 2009, the estimated fair value and line item caption of derivative instruments recorded were as follows (in millions):

Liability DerivativesAs of December 30, 2010

As of December 31, 2009Balance Sheet
Location

Fair
Value

Balance Sheet
Location

Fair
ValueDerivatives designated as hedging instruments in cash flow hedges:Current portion of interest rate swap agreements

Current Liabilities

$
19.0

Current Liabilities

$
18.3Interest Rate Swaps

Other Liabilities

$
34.1

Other Liabilities

$
22.6Derivatives not designated as hedging instruments:Current portion of interest rate swap agreements

Current Liabilities

$
6.3

Current Liabilities

$
6.1Interest Rate Swaps

Other Liabilities

$
11.4

Other Liabilities

$
7.6Total derivatives



$
70.8



$
54.6


196

---



Table of Contents

13. DERIVATIVE INSTRUMENTS (Continued)

The
effect of derivative instruments in cash flow hedge relationships on the financial statements for the years ended December 30, 2010, December 31, 2009 and
January 1, 2009 were as follows (in millions):

Unrealized Gain (Loss)
Recognized in NCM LLC's
OCI (Pre-tax)

Realized Gain (Loss)
Recognized in Interest
Expense (Pre-tax)Year
Ended
Dec. 30,
2010

Year
Ended
Dec. 31,
2009

Year
Ended
Jan. 1,
2009

Year
Ended
Dec. 30,
2010

Year
Ended
Dec. 31,
2009

Year
Ended
Jan. 1,
2009Interest Rate Swaps

$
(30.3
)
$
9.3

$
(67.9
)
$
(19.4
)
$
(16.7
)
$
(8.8
)


There
was $1.3 million, $1.3 million and $0.4 million of ineffectiveness recognized for the years ended December 30, 2010, December 31, 2009 and
January 1, 2009, respectively.

The
effect of derivatives not designated as hedging instruments under ASC 815 on the financial statements for the years ended December 30, 2010, December 31, 2009 and
January 1, 2009 were as follows (in millions):

Gain or (Loss) Recognized in Interest
Expense and Other, Net (Pre-tax) for
the Years EndedDecember 30,
2010

December 31,
2009

January 1,
2009Borrowings

$
(6.2
)
$
(6.2
)
$
(1.0
)Change in derivative fair value


(5.3
)

7.0


(14.2
)Total

$
(11.5
)
$
0.8

$
(15.2
)


14. SEGMENT REPORTING

Advertising is the principal business activity of the Company and is the Company's reportable segment
under the requirements of ASC 280,Segment Reporting. Advertising revenue accounts for 88.7%, 88.0% and 89.4%, of revenue for the years ended
December 30, 2010, December 31, 2009 and January 1, 2009, respectively. Fathom Consumer Events and Fathom Business Events are operating segments under ASC 280, but do not meet the
quantitative thresholds for segment reporting. The following table presents revenues less directly identifiable expenses to arrive at operating income net of direct expenses for the advertising
reportable segment, the combined Fathom Events operating segments, and network, administrative and unallocated costs. Management does not evaluate its segments on a fully allocated cost basis.
Therefore, the measure of segment operating income net of direct expenses shown below is not prepared on the same basis as operating income in the statement of operations and the results below are not
indicative of what segment results of operations would have been had it been operated on a fully allocated cost basis. Management cautions that it would be inappropriate to assume that unallocated
operating costs are incurred proportional to segment revenue or any directly identifiable segment expenses. Unallocated operating costs consist primarily of network costs, general and administrative
costs and other unallocated costs including depreciation and amortization. Management does not track segment assets and, therefore, segment asset information is not presented.

197

---



Table of Contents

14. SEGMENT REPORTING (Continued)

Year Ended December 30, 2010 (in millions)Advertising

Fathom Events
and Other

Network,
Administrative
and
Unallocated
Costs

TotalRevenue

$
379.4

$
48.0

$
0.1

$
427.5Operating costs


74.3


32.4





106.7Selling and marketing costs


46.5


8.1


3.3


57.9Other costs


3.2


0.8





4.0Operating income, net of direct expenses

$
255.4

$
6.7Network, administrative and other costs








68.3


68.3Total Operating Income










$
190.6




Year Ended December 31, 2009 (in millions)Advertising

Fathom Events
and Other

Network,
Administrative
and
Unallocated
Costs

TotalRevenue

$
335.1

$
45.5

$
0.1

$
380.7Operating costs


72.7


29.1





101.8Selling and marketing costs


40.6


8.6


1.0


50.2Other costs


2.8


0.9





3.7Operating income, net of direct expenses

$
219.0

$
6.9Network, administrative and other costs








56.8


56.8Total Operating Income










$
168.2




Year Ended January 1, 2009 (in millions)Advertising

Fathom Events
and Other

Network,
Administrative
and
Unallocated
Costs

TotalRevenue

$
330.3

$
38.9

$
0.3

$
369.5Operating costs


68.5


25.1





93.6Selling and marketing costs


38.5


8.3


1.1


47.9Other costs


2.8


0.8





3.6Operating income, net of direct expenses

$
220.5

$
4.7Network, administrative and other costs








51.2


51.2Total Operating Income










$
173.2


198

---



Table of Contents

14. SEGMENT REPORTING (Continued)

The
following is a summary of revenues by category (in millions):

Years EndedDecember 30,
2010

December 31,
2009

January 1,
2009National Advertising Revenue

$
271.9

$
236.8

$
223.1Founding Member Advertising Revenue


37.2


36.3


43.3Regional Advertising Revenue


70.3


62.0


63.9Fathom Consumer Revenue


31.5


28.6


20.2Fathom Business Revenue


16.5


16.9


18.7Other Revenue


0.1


0.1


0.3Total Revenues

$
427.5

$
380.7

$
369.5


15. SUBSEQUENT EVENTS

ASC Topic 855-10,Subsequent Events(formerly SFAS No. 165,Subsequent
Events) requires the Company to disclose the date through which subsequent events have been evaluated, as well as whether that date is the date the financial statements were
issued. For the year ended December 30, 2010, the Company evaluated, for potential recognition and disclosure, events that occurred prior to the inclusion of the Company's financial statements
in NCM, Inc.'s Annual Report on Form 10-K for the year ended December 30, 2010 on February 25, 2011.

199

---





Table of Contents

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized.

AMC ENTERTAINMENT INC.By:

/s/ CHRIS A. COX Chris A. Cox Senior Vice President and
Chief Accounting OfficerDate: June 3, 2011


Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on
the dates indicated.

/s/ AARON J. STONE Aaron J. Stone

Chairman of the Board

June 3, 2011/s/ GERARDO I. LOPEZ Gerardo I. Lopez

Chief Executive Officer, Director and President

June 3, 2011/s/ DR. DANA B. ARDI Dr. Dana B. Ardi

Director

June 3, 2011/s/ STEPHEN P. MURRAY Stephen P. Murray

Director

June 3, 2011/s/ STAN PARKER Stan Parker

Director

June 3, 2011/s/ PHILIP H. LOUGHLIN Philip H. Loughlin

Director

June 3, 2011/s/ ELIOT P. S. MERRILL Eliot P. S. Merrill

Director

June 3, 2011/s/ KEVIN MARONI Kevin Maroni

Director

June 3, 2011/s/ CRAIG R. RAMSEY Craig R. Ramsey

Executive Vice President and Chief Financial Officer

June 3, 2011/s/ KEVIN M. CONNOR Kevin M. Connor

Senior Vice President, General Counsel and Secretary

June 3, 2011/s/ CHRIS A. COX Chris A. Cox

Senior Vice President and Chief Accounting Officer

June 3, 2011


200

---





Table of Contents

EXHIBIT INDEX

Exhibit Number

Description2.1

Agreement and Plan of Merger, dated June 20, 2005, by and among Marquee Holdings Inc. and LCE Holdings, Inc. (incorporated by reference from Exhibit 2.1 to the Company's Current Report on Form 8-K
(File No. 1-8747) filed on June 24, 2005).2.2

Purchase and Sale Agreement, dated as of March 9, 2002, by and among G.S. Theaters, L.L.C., a Louisiana limited liability Company, Westbank Theatres, L.L.C., a Louisiana limited liability company,
Clearview Theatres, L.L.C., a Louisiana limited liability company, Houma Theater, L.L.C., a Louisiana limited liability company, Hammond Theatres, L.L.C., a Louisiana limited liability company, and American Multi-Cinema, Inc. together with
Form of Indemnification Agreement (Appendix J) (incorporated by reference from Exhibit 2.1 to the Company's Current Report on Form 8-K (File No. 1-8747) filed March 13, 2002).2.3

Agreement and Plan of Merger, dated as of July 22, 2004 by and among Marquee Holdings Inc., Marquee Inc. and AMC Entertainment Inc. (incorporated by reference from Exhibit 2.1 to the Company's
Current Report on Form 8-K (File No. 1-8747) filed July 23, 2004).2.4

Unit Purchase Agreement among Kerasotes Showplace Theatres Holdings, LLC, Kerasotes Showplace Theatres, LLC, ShowPlace Theatres Holding Company, LLC, AMC Showplace Theatres, Inc. and American
Multi-Cinema, Inc. (incorporated by reference from Exhibit 10.1 to the Company's Current Report on Form 8-K (File No. 1-8747) filed on May 25, 2010)3.1

Restated and Amended Certificate of Incorporation of AMC Entertainment Inc. (as amended on December 2, 1997 and September 18, 2001 and December 23, 2004) (incorporated by reference from
Exhibit 3.1 to the Company's Current Report on Form 8-K (File No. 1-8747) filed December 27, 2004).3.2

Amended and Restated Bylaws of AMC Entertainment Inc. (incorporated by Reference from Exhibit 3.2 to the Company's Current Report on Form 8-K (File No. 1-8747) filed December 27,
2004).Certificates of Incorporation or corresponding instrument, with amendments, of the following additional registrants:3.3.1

Loews Citywalk Theatre Corporation (incorporated by reference from Exhibit 3.3.1 to the Company's Registration Statement on Form S-4 (File No. 333-133574) filed April 27, 2006).3.3.2

LCE Mexican Holdings, Inc. (incorporated by reference from Exhibit 3.3.9 to the Company's Registration Statement on Form S-4 (File No. 333-133574) filed April 27, 2006).3.3.5

AMC Card Processing Services, Inc. (incorporated by reference from Exhibit 3.3.93 to the Company's Registration Statement on Form S-4 (File No. 333-133574) filed April 27, 2006).3.3.6

AMC Entertainment International, Inc. (incorporated by reference from Exhibit 3.3.94 to the Company's Registration Statement on Form S-4 (File No. 333-133574) filed April 27,
2006).3.3.7

American Multi-Cinema, Inc. (incorporated by reference from Exhibit 3.3.10 to the Company's Form 10-Q (File No. 1-8747) filed February 8, 2008).


201

---



Table of Contents

Exhibit Number

Description3.3.8

Club Cinema of Mazza, Inc. (incorporated by reference from Exhibit 3.3.97 to the Company's Registration Statement on Form S-4 (File No. 333-133574) filed April 27, 2006).3.3.9

AMC ShowPlace Theatres, Inc. (incorporated by reference from Exhibit 3.3.8 to AMCE's Form 10-Q (File No. 1-8747) filed on August 10, 2010).3.3.10

AMC ITD, Inc. (incorporated by reference from Exhibit 3.3.10 to AMCE's Registration Statement on Form S-4 (File No. 333-171819) filed on January 21, 2011).3.4

By-laws of the following Additional Registrants: (incorporated by reference from Exhibit 3.4 to the Company's Registration Statement on Form S-4 (File No. 333-133574) filed April 27,
2006):Loews Citywalk Theatre Corporation3.5

By-laws of LCE Mexican Holdings, Inc. (incorporated by reference from Exhibit 3.5 to the Company's Registration Statement on Form S-4 (File No. 333-133574) filed April 27, 2006).3.6

By-laws of AMC Card Processing Services, Inc. (incorporated by reference from Exhibit 3.20 to the Company's Registration Statement on Form S-4 (File No. 333-133574) filed April 27,
2006).3.7

By-laws of AMC Entertainment International, Inc. (incorporated by reference from Exhibit 3.21 to the Company's Registration Statement on Form S-4 (File No. 333-133574) filed April 27,
2006).3.8

By-laws of American Multi-Cinema, Inc. (incorporated by reference from Exhibit 3.9 to the Company's Form 10-Q (File No. 1-8747) filed February 8, 2008).3.9

By-laws of Club Cinema of Mazza, Inc. (incorporated by reference from Exhibit 3.24 to the Company's Registration Statement on Form S-4 (File No. 333-133574) filed April 27, 2006).3.10

By-laws of AMC ShowPlace Theatres, Inc. (incorporated by reference from Exhibit 3.10 to AMCE's Form 10-Q (File No. 1-8747) filed on August 10, 2010).3.11

By-laws of AMC ITD, Inc. (incorporated by reference from Exhibit 3.11 to AMCE's Registration Statement on Form S-4 (File No. 333-171819) filed on January 21, 2011).4.1(a)

Credit Agreement, dated January 26, 2006 among AMC Entertainment Inc., Grupo Cinemex, S.A. de C.V., Cadena Mexicana de Exhibicion, S.A. de C.V., the Lenders and the Issuers named therein, Citicorp
U.S. and Canada, Inc. and Banco Nacional de Mexico, S.A., Integrante del Groupo Financiero Banamex. (incorporated by reference from Exhibit 10.4 to the Company's Form 8-K (File No. 1-8747) filed January 31,
2006).4.1(b)

Guaranty, dated January 26, 2006 by AMC Entertainment Inc. and each of the other Guarantors party thereto, in favor of the Guaranteed Parties named therein (incorporated by reference from Exhibit 10.5
to the Company's Form 8-K (File No. 1-8747) filed January 31, 2006).4.1(c)

Pledge and Security Agreement, dated January 26, 2006, by AMC Entertainment Inc. and each of the other Grantors party thereto in favor of Citicorp U.S. and Canada, Inc., as agent for the Secured Parties
(incorporated by reference from Exhibit 10.9 to the Company's Current Report on Form 8-K (File No. 1-8747) filed January 31, 2006).4.1(d)

Consent and Release, dated as of April 17, 2006, by and between AMC Entertainment Inc. and Citicorp U.S. and Canada, Inc. (incorporated by reference from Exhibit 4.1(d) to the Company's
Registration Statement on Form S-4 (File No. 333-133574) filed April 27, 2006).


202

---



Table of Contents

Exhibit Number

Description4.1(e)

Amendment No. 1 to Credit Agreement, dated as of February 14, 2007, between AMC Entertainment Inc., and Citicorp North America, as Administrative Agent (incorporated by reference from Exhibit 10.4 to
the Company's Current Report on Form 8-K (File No. 1-8747) filed February 20, 2007).4.1(f)

Amendment No. 2 to Credit Agreement, dated as of March 13, 2007, between AMC Entertainment Inc., and Citicorp North America, as Administrative Agent (incorporated by reference from Exhibit 10.1 to
the Company's Current Report on Form 8-K (File No. 1-8747) filed March 15, 2007).4.1(g)

Amendment No. 3 to Credit Agreement, dated December 15, 2010 among AMC Entertainment Inc., Citibank, N.A. as issuer and Citicorp North America, Inc., as swing lender and as administrative agent
(incorporated by reference from Exhibit 10.1 to AMCE's Current Report on Form 8-K (File No. 1-8747) filed on December 17, 2010).4.2(a)

Indenture, dated February 24, 2004, respecting AMC Entertainment Inc.'s 8% Senior Subordinated Notes due 2014. (incorporated by reference from Exhibit 4.7 to the Company's Registration Statement on
Form S-4 (File No. 333-113911) filed on March 24, 2004).4.2(b)

First Supplemental Indenture, dated December 23, 2004, respecting AMC Entertainment Inc.'s 8% Senior Subordinated Notes due 2014 (incorporated by reference from Exhibit 4.5(b) to the Company's
Registration Statement on Form S-4 (File No. 333-122376) filed on January 28, 2005).4.2(c)

Second Supplemental Indenture, dated January 26, 2006, respecting AMC Entertainment Inc.'s 8% Senior Subordinated Notes due 2014 (incorporated by reference from Exhibit 4.6(c) to the Company's
Form 10-Q (File No. 1-8747) filed on February 13, 2006).4.2(d)

Third Supplemental Indenture dated April 20, 2006, respecting AMC Entertainment Inc.'s 8% Senior Subordinated Notes due 2014 (incorporated by reference from Exhibit 4.6(d) to the Company's Form S-4
(File No. 333-133574) filed April 27, 2006).4.2(e)

Fourth Supplemental Indenture, dated June 24, 2010, respecting AMC Entertainment Inc.'s 8% Senior Subordinated Notes due 2014 (incorporated by reference from Exhibit 4.1 to AMCE's Form 10-Q (File
No. 1-8747) filed on August 10, 2010).4.2(f)

Fifth Supplemental Indenture, dated November 30, 2010, respecting AMC Entertainment Inc.'s 8% Senior Subordinated Notes due 2014, pursuant to which AMC ITD, Inc. guaranteed the 8% Senior
Subordinated Notes due 2014 (incorporated by reference from Exhibit 4.3 to AMCE's Current Report on Form 8-K (File No. 1-8747) filed on December 17, 2010).4.3

Registration Rights Agreement, dated February 24, 2004, respecting AMC Entertainment Inc.'s 8% senior subordinated notes due 2014. (incorporated by reference from Exhibit 4.8 to the Company's
Registration Statement on Form S-4 (File No. 333-113911) filed on March 24, 2004).4.4(a)

Indenture, dated as of June 9, 2009, respecting AMCE's 8.75% Senior Notes due 2019, by and among AMCE, a Delaware corporation, the Guarantors party thereto from time to time and U.S. Bank National Association, as
Trustee (incorporated by reference from Exhibit 4.1 to the Company's Current Report on Form 8-K (File No. 1-8747) filed on June 9, 2009).


203

---



Table of Contents

Exhibit Number

Description4.4(b)

First Supplemental Indenture, dated June 24, 2010, respecting AMC Entertainment Inc.'s 8.75% Senior Notes due 2019 (incorporated by reference from Exhibit 4.3 to AMCE's Form 10-Q (File No. 1-8747)
filed on August 10, 2010).4.4(c)

Second Supplemental Indenture, dated November 30, 2010, respecting AMC Entertainment Inc.'s 8.75% Senior Notes due 2019, pursuant to which AMC ITD, Inc. guaranteed the 8.75% Senior Notes due 2019
(incorporated by reference from Exhibit 4.4 to AMCE's Current Report on Form 8-K (File No. 1-8747) filed on December 17, 2010).4.5

Registration Rights Agreement, dated as of June 9, 2009, respecting AMCE's 8.75% Senior Notes due 2019, by and among AMCE, the Guarantors party thereto from time to time, Credit Suisse Securities (USA) LLC,
for itself and on behalf of the other Initial Purchasers, and J.P. Morgan Securities Inc., as Market Maker (incorporated by reference from Exhibit 4.2 to the Company's Current Report on Form 8-K (File No. 1-8747) filed on
June 9, 2009).4.6

Indenture, dated as of December 15, 2010, respecting AMC Entertainment Inc.'s 9.75% Senior Subordinated Notes due 2020, among AMC Entertainment Inc., the Guarantors named therein and U.S. Bank National
Association, as trustee (incorporated by reference from Exhibit 4.1 to AMCE's Current Report on Form 8-K (File No. 1-8747) filed on December 17, 2010).4.7

Registration Rights Agreement, dated December 15, 2010, respecting AMC Entertainment Inc.'s 9.75% Senior Subordinated Notes due 2020, among Goldman, Sachs & Co., J.P. Morgan Securities LLC,
 Barclays Capital Inc., Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc. and Foros Securities LLC, as representatives of the initial purchasers of the 2020 Senior Subordinated
Notes and J.P. Morgan Securities LLC, as market maker (incorporated by reference from Exhibit 4.2 to AMCE's Current Report on Form 8-K (File No. 1-8747) filed on December 17, 2010).10.1

Consent Decree, dated December 21, 2005, by and among Marquee Holdings Inc., LCE Holdings, Inc. and the State of Washington (incorporated by reference from Exhibit 10.1 to the Company's
Current Report on Form 8-K (File No. 1-8747) filed on December 27, 2005).10.2

Hold Separate Stipulation and Order, dated December 21, 2005, by and among Marquee Holdings Inc., LCE Holdings, Inc. and the State of Washington (incorporated by reference from Exhibit 10.2 to the
Company's Current Report on Form 8-K (File No. 1-8747) filed on December 27, 2005).10.3

Final Judgment, dated December 20, 2005, by and among Marquee Holdings Inc., LCE Holdings, Inc. and the Antitrust Division of the United States Department of Justice (incorporated by reference from
Exhibit 10.3 to the Company's Current Report on Form 8-K (File No. 1-8747) filed on December 27, 2005).10.4

Hold Separate Stipulation and Order, dated December 20, 2005, by and among Marquee Holdings Inc., LCE Holdings and the Antitrust Division of the United States Department of Justice (incorporated by reference
from Exhibit 10.4 to the Company's Current Report on Form 8-K (File No. 1-8747) filed on December 27, 2005).


204

---



Table of Contents

Exhibit Number

Description10.5

District of Columbia Final Judgment, dated December 21, 2005, by and among Marquee Holdings Inc., LCE Holdings, Inc. and the District of Columbia (incorporated by reference from Exhibit 10.5 to the
Company's Current Report on Form 8-K (File No. 1-8747) filed on December 27, 2005).10.6

Stipulation for Entry into Final Judgment, dated December 20, 2005, by and among Marquee Holdings Inc., LCE Holdings, Inc. and the State of California (incorporated by reference from Exhibit 10.6
to the Company's Current Report on Form 8-K (File No. 1-8747) filed on December 27, 2005).10.7

Stipulated Final Judgment, dated December 20, 2005, by and among Marquee Holdings Inc., LCE Holdings, Inc. and the State of California (incorporated by reference from Exhibit 10.7 to the Company's
Current Report on Form 8-K (File No. 1-8747) filed on December 27, 2005).10.8

Amended and Restated Certificate of Incorporation of AMC Entertainment Holdings, Inc. (incorporated by reference from Exhibit 10.1 to the Company's Current Report on Form 8-K (File No. 1-8747)
filed on June 13, 2007)10.9

Stockholders Agreement of AMC Entertainment Holdings, Inc., dated June 11, 2007, among AMC Entertainment Holdings, Inc. and the stockholders of AMC Entertainment Holdings, Inc. party thereto.
(incorporated by reference from Exhibit 10.3 to the Company's Current Report on Form 8-K (File No. 1-8747) filed on June 13, 2007)10.10

Management Stockholders Agreement of AMC Entertainment Holdings, Inc., dated June 11, 2007, among AMC Entertainment Holdings, Inc. and the stockholders of AMC Entertainment Holdings, Inc. party
thereto. (incorporated by reference from Exhibit 10.4 to the Company's Current Report on Form 8-K (File No. 1-8747) filed on June 13, 2007)10.11

Continuing Service Agreement, dated January 26, 2006, among AMC Entertainment Inc. (as successor to Loews Cineplex Entertainment Corporation) and Travis Reid, and, solely for the purposes of its repurchase
obligations under Section 7 thereto, Marquee Holding Inc. (incorporated by reference from Exhibit 10.4 to the Company's Form 8-K (File No. 1-8747) filed on January 31, 2006).10.12

Non-Qualified Stock Option Agreement, dated January 26, 2006, between Marquee Holdings Inc. and Travis Reid (incorporated by reference from Exhibit 10.5 to the Company's Current Report on Form 8-K
(File No. 1-8747) filed on January 31, 2006).10.13

Fee Agreement, dated June 11, 2007, by and among AMC Entertainment Holdings, Inc., Marquee Holdings Inc., AMC Entertainment Inc., J.P. Morgan Partners (BHCA), L.P., Apollo Management V,
 L.P., Apollo Investment Fund V, L.P., Apollo Overseas Partners V, L.P., Apollo Netherlands Partners V(A), L.P., Apollo Netherlands partners V(B), L.P., Apollo German Partners V GmbH & Co KG, Bain
Capital Partners, LLC, TC Group, L.L.C., a Delaware limited liability company and Applegate and Collatos, Inc. (incorporated by reference from Exhibit 10.7 to the Company's Current Report on Form 8-K
(File No. 1-8747) filed on June 13, 2007).10.14

American Multi-Cinema, Inc. Savings Plan, a defined contribution 401(k) plan, restated January 1, 1989, as amended (incorporated by reference from Exhibit 10.6 to AMCE's Form S-1 (File
No. 33-48586) filed June 12, 1992, as amended).


205

---



Table of Contents

Exhibit Number

Description10.15(a)

Defined Benefit Retirement Income Plan for Certain Employees of American Multi-Cinema, Inc., as Amended and Restated, effective December 31, 2006, and as Frozen, effective December 31, 2006 (incorporated by
reference from Exhibit 10.15(a) to AMC Entertainment Inc.'s Form 10-K (File No. 1-8747) filed June 18, 2007).10.15(b)

AMC Supplemental Executive Retirement Plan, as Amended and Restated, generally effective January 1, 2006, and as Frozen, effective December 31, 2006 (incorporated by reference from Exhibit 10.15(b) to
AMC Entertainment Inc.'s Form 10-K (File No. 1-8747) filed June 18, 2007).10.16

Division Operations Incentive Program (incorporated by reference from Exhibit 10.15 to AMCE's Form S-1 (File No. 33-48586) filed June 12, 1992, as amended).10.17

Summary of American Multi-Cinema, Inc. Executive Incentive Program (Incorporated by reference from Exhibit 10.36 to AMCE's Registration Statement on Form S-2 (File No. 33-51693) filed
December 23, 1993).10.18

American Multi-Cinema, Inc. Retirement Enhancement Plan, as Amended and Restated, effective January 1, 2006, and as Frozen, effective December 31, 2006 (incorporated by reference from Exhibit 10.20
to AMC Entertainment Inc.'s Form 10-K (File No. 1-8747) filed June 18, 2007).10.19

AMC Non-Qualified Deferred Compensation Plan, as Amended and Restated, effective January 1, 2005 (incorporated by reference from Exhibit 10.22 to AMC Entertainment's Form 10-K (File No. 1-8747)
filed on June 18, 2007).10.20

American Multi-Cinema, Inc. Executive Savings Plan (incorporated by reference from Exhibit 10.28 to AMCE's Registration Statement on Form S-4 (File No. 333-25755) filed April 24,
1997).10.21

Agreement of Sale and Purchase dated November 21, 1997 among American Multi-Cinema, Inc. and AMC Realty, Inc., as Seller, and Entertainment Properties Trust, as Purchaser (incorporated by reference from
Exhibit 10.1 of the Company's Current Report on Form 8-K (File No. 1-8747) filed December 9, 1997).10.22

Option Agreement dated November 21, 1997 among American Multi-Cinema, Inc. and AMC Realty, Inc., as Seller, and Entertainment Properties Trust, as Purchaser (incorporated by reference from
Exhibit 10.2 of the Company's Current Report on Form 8-K (File No. 1-8747) filed December 9, 1997).10.23

Right to Purchase Agreement dated November 21, 1997, between AMC Entertainment Inc., as Grantor, and Entertainment Properties Trust as Offeree (incorporated by reference from Exhibit 10.3 of the
Company's Current Report on Form 8-K (File No. 1-8747) filed December 9, 1997.)


206

---



Table of Contents

Exhibit Number

Description10.24

Lease dated November 21, 1997 between Entertainment Properties Trust, as Landlord, and American Multi-Cinema, Inc., as Tenant (incorporated by reference from Exhibit 10.4 of the Company's Current Report on
Form 8-K (File No. 1-8747) filed December 9, 1997). (Similar leases have been entered into with respect to the following theatres: Mission Valley 20, Promenade 16, Ontario Mills 30, Lennox 24, West Olive 16, Studio 30 (Houston),
Huebner Oaks 24, First Colony 24, Oak View 24, Leawood Town Center 20, South Barrington 30, Gulf Pointe 30, Cantera 30, Mesquite 30, Hampton Town Center 24, Palm Promenade 24, Westminster Promenade 24, Hoffman Center 22, Elmwood Palace 20,
Westbank Palace 16, Clearview Palace 12, Hammond Palace 10, Houma Palace 10, Livonia 20, Forum 30, Studio 29 (Olathe), Hamilton 24, Deer Valley 30, Mesa Grand 24 and Burbank 16.)10.25

Guaranty of Lease dated November 21, 1997 between AMC Entertainment Inc., as Guarantor, and Entertainment Properties Trust, as Owner (incorporated by reference from Exhibit 10.5 of the Company's Current
Report on Form 8-K (File No. 1-8747) filed December 9, 1997, (Similar guaranties have been entered into with respect to the following theatres: Mission Valley 20, Promenade 16, Ontario Mills 30, Lennox 24, West Olive 16, Studio 30
(Houston), Huebner Oaks 24, First Colony 24, Oak View 24, Leawood Town Center 20, South Barrington 30, Gulf Pointe 30, Cantera 30, Mesquite 30, Hampton Town Center 24, Palm Promenade 24, Westminster Promenade 24, Hoffman Center 22, Elmwood Palace 20,
Westbank Palace 16, Clearview Palace 12, Hammond Palace 10, Houma Palace 10, Livonia 20, Forum 30, Studio 29 (Olathe), Hamilton 24, Deer Valley 30, Mesa Grand 24 and Burbank 16.)10.26

Employment agreement between AMC Entertainment Inc., American Multi-Cinema, Inc. and John D. McDonald which commenced July 1, 2001. (incorporated by reference from Exhibit 10.29 to Amendment
No. 1 to the Company's Form 10-K (File No. 1-8747) filed on July 27, 2001).10.27

Employment agreement between AMC Entertainment Inc., American Multi-Cinema, Inc. and Craig R. Ramsey which commenced on July 1, 2001. (incorporated by reference from Exhibit 10.36 to the Company's
Form 10-Q filed on August 12, 2002).10.28

Form of Indemnification Agreement dated September 18, 2003 between the Company and Peter C. Brown, Charles S. Sosland, Charles J. Egan, Jr., Michael N. Garin, Marc J. Rowan, Paul E. Vardeman, Leon D. Black and
Laurence M. Berg (incorporated by reference from Exhibit 10.1 to the Company's Form 10-Q (File No. 1-8747) filed on February 5, 2004).10.29

2003 AMC Entertainment Inc. Long-Term Incentive Plan (incorporated by reference from Exhibit 10.2 to the Company's Form 10-Q (File No. 1-8747) filed on November 5, 2003).10.30

Description of 2004 Grant under the 2003 AMC Entertainment Inc. Long-Term Incentive Plan (incorporated by reference from Exhibit 10.3 to the Company's Form 10-Q (File No. 1-8747) filed on
November 5, 2003).10.31

AMC Entertainment Holdings, Inc. Amended and Restated 2004 Stock Option Plan. (incorporated by reference from Exhibit 10.9 to the Company's Current Report on Form 8-K (File No. 1-8747) filed on
June 13, 2007).10.32

Form of Non-Qualified Stock Option Agreement (incorporated by reference from Exhibit 10.32(b) to AMCE's Registration Statement on Form S-4 (File No. 333-122376) filed on January 28,
2005).


207

---



Table of Contents

Exhibit Number

Description10.33

Form of Incentive Stock Option Agreement (incorporated by reference from Exhibit 10.32(c) to AMCE's Registration Statement on Form S-4 (File No. 333-122376) filed on January 28, 2005).10.34

Contribution and Unit Holders Agreement, dated as of March 29, 2005, among National Cinema Network, Inc., Regal CineMedia Corporation and National CineMedia, LLC (incorporated by reference from
Exhibit 10.1 to the Company's Current Report on Form 8-K (File No. 1-8747) filed April 4, 2005).10.35

Exhibitor Services Agreement, dated February 13, 2007 between National CineMedia, LLC and American Multi-Cinema, Inc. (filed as Exhibit 10.2 to the Current Report on Form 8-K (File
No. 001-33296) of National CineMedia, Inc., filed on February 16, 2007, and incorporated herein by reference).10.36

First Amended and Restated Loews Screen Integration Agreement, dated February 13, 2007 between National CineMedia, LLC and American Multi-Cinema, Inc. (filed as Exhibit 10.8 to the Current Report
on Form 8-K (File No. 001-33296) of National CineMedia, Inc., filed on February 16, 2007, and incorporated herein by reference).10.37

Third Amended and Restated Limited Liability Company Operating Agreement, dated February 13, 2007 between American Multi-Cinema, Inc., Cinemark Media, Inc., Regal CineMedia Holdings, LLC and
National CineMedia, Inc. (incorporated by reference from Exhibit 10.3 to the Company's Current Report on Form 8-K (File No. 1-8747) filed February 20, 2007).10.38

Employment Agreement, dated as of November 6, 2002, by and among Kevin M. Connor, AMC Entertainment Inc. and American Multi-Cinema, Inc. (incorporated by reference from Exhibit 10.49 to the
Company's Form 10-K (File No. 1-8747) filed on June 18, 2007).10.39

Voting and Irrevocable Proxy Agreement, dated June 11, 2007, among AMC Entertainment Holdings, Inc., Carlyle Partners III Loews, L.P., CP III Coinvestment, L.P., Bain Capital Holdings (Loews) I,
 L.P., Bain Capital AIV (Loews) II, L.P., Spectrum Equity Investors IV, L.P., Spectrum Equity Investors Parallel IV, L.P. and Spectrum IV Investment Managers' Fund, L.P. (incorporated by reference from Exhibit 10.6
to the Company's Current Report on Form 8-K (File No. 1-8747) filed on June 13, 2007)10.40

Voting and Irrevocable Proxy Agreement, dated June 11, 2007, among AMC Entertainment Holdings, Inc., J.P. Morgan Partners (BHCA), L.P., J.P. Morgan Partners Global Investors, L.P., J.P. Morgan
Partners Global Investors (Cayman), L.P., J.P. Morgan Partners Global Investors (Cayman) II, L.P., J.P. Morgan Partners Global Investors (Selldown), L.P., J.P. Morgan Partners Global Investors (Selldown) II, L.P., JPMP Global
Fund/AMC/Selldown II, L.P., J.P. Morgan Partners Global Investors (Selldown) II-C, L.P., AMCE (Ginger), L.P., AMCE (Luke), L.P., AMCE (Scarlett), L.P., Apollo Investment Fund V, L.P., Apollo Overseas Partners V,
 L.P., Apollo Netherlands Partners V(A), L.P., Apollo Netherlands Partners V(B), L.P., Apollo German Partners V GmbH & Co KG and other co-investors. (incorporated by reference from Exhibit 10.5 to the Company's
Current Report on Form 8-K (File No. 1-8747) filed on June 13, 2007)10.42

Amendment to Stock Purchase Agreement dated as of November 5, 2008 among Entretenimiento GM de Mexico S.A. de C.V., as Buyer, and AMC Netherlands HoldCo B.V., LCE Mexican Holdings, Inc., and AMC
Europe S.A., as sellers (incorporated by reference from Exhibit 10.2 to the Company's Current Report on Form 8-K (File No. 1-8747) filed January 5, 2009).


208

---



Table of Contents

Exhibit Number

Description10.43

Stock Purchase Agreement dated as of November 5, 2008 among Entretenimiento GM de Mexico S.A. de C.V., as Buyer, and AMC Netherlands HoldCo B.V., LCE Mexican Holdings, Inc., and AMC Europe S.A.,
as sellers (incorporated by reference from Exhibit 10.1 to the Company's Form 10-Q (File No. 1-8747) filed on November 17, 2008).10.44

Amendment to Exhibitor Services Agreement dated as of November 5, 2008, by and between National CineMedia, LLC and American Multi-Cinema, Inc. (filed as Exhibit 10.1 to the Current Report on
Form 8-K (File No. 1-33296) of National CineMedia, Inc., filed on February 6, 2008, and incorporated herein by reference)10.45

Separation and General Release Agreement, dated as of February 23, 2009, by and between Peter C. Brown, AMC Entertainment Holdings, Inc., Marquee Holdings Inc. and AMC Entertainment Inc.
(incorporated by reference from Exhibit 10.1 to the Company's Current Report on Form 8-K (File No. 1-8747) filed on February 24, 2009)10.46

Employment Agreement, dated as of February 23, 2009, by and between Gerardo I. Lopez and AMC Entertainment Inc. (incorporated by reference from Exhibit 10.2 to the Company's Current Report on
Form 8-K (File No. 1-8747) filed on February 24, 2009)10.47

Employment Agreement, dated as of April 17, 2009, by and between Robert J. Lenihan and AMC Entertainment Inc. (incorporated by reference from Exhibit 10.51 to AMCE's Form 10-K
(File No. 1-8747) filed on June 15, 2010)*10.48

Employment Agreement, dated as of November 24, 2009, by and between Stephen A. Colanero and AMC Entertainment Inc.10.49

Second Amendment to the Third Amended and Restated Limited Liability Company Operating Agreement dated as of August 6, 2010, by and between National CineMedia, LLC and American Multi-Cinema, Inc. (filed
as Exhibit 10.1 to the Current Report on Form 8-K (File No. 1-33296) of National CineMedia, Inc., filed on August 10, 2010, and incorporated herein by reference).10.50

AMC Entertainment Holdings, Inc. 2010 Equity Incentive Plan (incorporated by reference from Exhibit 10.1 to AMCE's Current Report on Form 8-K (File No. 1-8747) filed on July 14,
2010).10.51

AMC Entertainment Holdings, Inc. Nonqualified Stock Option Award Agreement (incorporated by reference from Exhibit 10.2 to AMCE's Current Report on Form 8-K (File No. 1-8747) filed on
July 14, 2010).10.52

AMC Entertainment Holdings, Inc. Restricted Stock Award Agreement (Time Vesting) (incorporated by reference from Exhibit 10.3 to AMCE's Current Report on Form 8-K (File No. 1-8747) filed on
July 14, 2010).10.53

AMC Entertainment Holdings, Inc. Restricted Stock Award Agreement (Performance Vesting) (incorporated by reference from Exhibit 10.4 to AMCE's Current Report on Form 8-K (File No. 1-8747) filed on
July 14, 2010).10.60

Investment Agreement entered into April 19, 2001 by and among AMC Entertainment Inc. and Apollo Investment Fund IV, L.P., Apollo Overseas Partners IV, L.P., Apollo Investment Fund V, L.P.,
Apollo Overseas Partners V, L.P., Apollo Management IV, L.P. and Apollo Management V, L.P. (incorporated by reference from Exhibit 4.7 to AMCE's Current Report on Form 8-K (File No. 1-8747) filed on April 20,
2001).


209

---



Table of Contents

Exhibit Number

Description10.61

Standstill Agreement by and among AMC Entertainment Inc., and Apollo Investment Fund IV, L.P., Apollo Overseas Partners IV, L.P., Apollo Investment Fund V, L.P., Apollo Overseas Partners V, L.P.,
Apollo Management IV, L.P. and Apollo Management V, L.P., dated as of April 19, 2001. (incorporated by reference from Exhibit 4.8 to AMCE's Current Report on Form 8-K (File No. 1-8747) filed on April 20,
2001).10.62

Registration Rights Agreement dated April 19, 2001 by and among AMC Entertainment Inc. and Apollo Investment Fund IV, L.P., Apollo Overseas Partners IV, L.P., Apollo Investment Fund V, L.P.,
Apollo Overseas Partners V, L.P. (incorporated by reference from Exhibit 4.9 to AMCE's Current Report on Form 8-K (File No. 1-8747) filed on April 20, 2001).10.63

Securities Purchase Agreement dated June 29, 2001 by and among Apollo Investment Fund IV, L.P., Apollo Overseas Partners IV, L.P., Apollo Investment Fund V, L.P., Apollo Overseas Partners V,
L.P., Apollo Management IV, L.P., Apollo Management V, L.P., AMC Entertainment Inc., Sandler Capital Partners V, L.P., Sandler Capital Partners V FTE, L.P. and Sandler Capital Partners V Germany, L.P. (incorporated by
reference from Exhibit 4.6 to AMCE's Form 10-Q (File No. 1-8747) filed on August 10, 2001).14

Code of Ethics (incorporated by reference from Exhibit 14 to AMCE's Form 10-K (File No. 1-8747) filed on June 23, 2004)16

Letter from PricewaterhouseCoopers LLP to the Securities and Exchange Commission dated October 2, 2009 (filed as Exhibit 16.1 to the Company's Current Report on Form 8-K (File No. 1-8747)
filed on October 2, 2009).*21

Subsidiaries of AMC Entertainment Inc.*31.1

Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Acts of 2002.*31.2

Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Acts of 2002.*32.1

Section 906 Certifications of Gerardo I. Lopez (Chief Executive Officer) and Craig R. Ramsey (Chief Financial Officer) furnished in accordance with Securities Act Release 33-8212.


*Filed
herewith.


210

---