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

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FORM 10-K

|(Mark One)                                                    |                                                                                         
|------------------------------------------------------------- | ----------------------------------------------------------------------------------------
|ý                                                             | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934    
|For the fiscal year ended April 3, 2008                      
|OR                                                           
|o                                                             | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|For the transition period
from                             to

Commission file number 1-8747

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MARQUEE HOLDINGS INC.(Exact name of registrant as specified in its charter)

|Delaware(State or other jurisdiction of
incorporation or organization) |  | 77-0642885(I.R.S. Employer
Identification No.)
|---------------------------------------------------------------------- |  | ----------------------------------------------
|920 Main
Kansas City, Missouri(Address of principal executive offices) |  | 64105(Zip Code)                               

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

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

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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 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 definition 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 May 30, 2008Common Stock, 1¢ par value

1


DOCUMENTS INCORPORATED BY REFERENCE

None



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MARQUEE HOLDINGS INC.        FORM 10-K        FOR THE FISCAL YEAR ENDED APRIL 3, 2008        INDEX

|            |  |                                                                                                              |  | Page
|----------- |  | ------------------------------------------------------------------------------------------------------------ |  | ----
|            |  | PART I                                                                                                       |  |     
|Item 1.     |  | Business                                                                                                     |  | 4   
|Item 1A.    |  | Risk Factors                                                                                                 |  | 20  
|Item 1B.    |  | Unresolved Staff Comments                                                                                    |  | 30  
|Item 2.     |  | Properties                                                                                                   |  | 30  
|Item 3.     |  | Legal Proceedings                                                                                            |  | 30  
|Item 4.     |  | Submission of Matters to a Vote of Security Holders                                                          |  | 31  
|            |  | PART II                                                                                                      |  |     
|Item 5.     |  | Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |  | 32  
|Item 6.     |  | Selected Financial Data                                                                                      |  | 32  
|Item 7.     |  | Management's Discussion and Analysis of Financial Condition and Results of Operations                        |  | 35  
|Item 7A.    |  | Quantitative and Qualitative Disclosures about Market Risk                                                   |  | 63  
|Item 8.     |  | Financial Statements and Supplementary Data                                                                  |  | 65  
|Item 9.     |  | Changes in and Disagreements With Accountants on Accounting and Financial Disclosure                         |  | 140 
|Item 9A(T). |  | Controls and Procedures                                                                                      |  | 140 
|Item 9B.    |  | Other Information                                                                                            |  | 140 
|            |  | PART III                                                                                                     |  |     
|Item 10.    |  | Directors, Executive Officers and Corporate Governance                                                       |  | 141 
|Item 11.    |  | Executive Compensation                                                                                       |  | 144 
|Item 12.    |  | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters               |  | 161 
|Item 13.    |  | Certain Relationships and Related Transactions, and Director Independence                                    |  | 165 
|Item 14.    |  | Principal Accountant Fees and Services                                                                       |  | 169 
|            |  | PART IV                                                                                                      |  |     
|Item 15.    |  | Exhibits and Financial Statement Schedules                                                                   |  | 171 

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

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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.

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PART I

Item 1.    Business

(a)  General Development of Business

Marquee Holdings Inc. ("Holdings") is organized as a holding company with no operations of its own. Holdings was incorporated on July 16, 2004. We
conduct our business through our subsidiaries including AMC Entertainment Inc. (AMC Entertainment", "AMCE", or the "Company"). AMCE's principal directly owned subsidiaries are American
Multi-Cinema, Inc. ("AMC"), Grupo Cinemex, S.A. de C.V. ("Cinemex") and AMC Entertainment International, Inc. ("AMCEI"). We conduct our U.S. and Canada theatrical exhibition
business through AMC and its subsidiaries and AMCEI. We are operating theatres outside the United States through Grupo Cinemex, S.A. de C.V. and its subsidiaries and AMCEI and its subsidiaries.

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.

In
December 2003, we sold our only theatre in Sweden and incurred a loss on sale of approximately $5,600,000, which included a payment of approximately $5,300,000 to the purchaser. The
results of operations of the Sweden theatre have been classified as discontinued operations, and information
presented for all periods reflects this classification. The operations of the Sweden theatre were previously reported in our International theatrical exhibition operating segment.

In
December 2003, we acquired certain of the operations and related assets of MegaStar Cinemas, LLC ("MegaStar") for a cash purchase price of approximately $15,000,000. The
acquisition included three theatres with 48 screens in the Minneapolis, Minnesota and Atlanta, Georgia areas. Operating results of the acquired theatres are included in our consolidated
statements of operations from December 19, 2003.

In
December 2004, we completed a merger in which AMC Entertainment was acquired by Marquee Holdings Inc., ("Holdings"), a newly created investment vehicle owned by
J.P. Morgan Partners (BHCA) L.P. and certain other affiliated funds managed by J.P. Morgan Partners, LLC (collectively, "JPMP") and Apollo Investment Fund V, L.P.
and certain related investment funds (collectively, "Apollo" and together with JPMP, the "Marquee Sponsors") and certain other co-investors. Marquee Inc. ("Marquee"), a wholly-owned
subsidiary of Holdings, merged with and into AMC Entertainment, with AMC Entertainment as the surviving entity. Pursuant to the terms of the merger, each issued and outstanding share of AMC
Entertainment's common stock and Class B stock was converted into the right to receive $19.50 in cash and each issued and outstanding share of AMC Entertainment's preferred stock was converted
into the right to receive $2,727.27 in cash. The total amount of consideration paid in the merger was approximately $1,670,000,000. Marquee was a company formed on July 16, 2004. AMC
Entertainment is treated for accounting purposes as the "Predecessor" for periods prior to the merger. Upon the consummation of the merger, AMC Entertainment and its parent Holdings were the surviving
reporting entities (collectively the "Successor"). The merger was treated as a purchase with Marquee being the "accounting acquiror" in accordance with Statement of Financial Accounting Standards
No. 141,Business Combinations. As a result, the Successor applied the purchase method of accounting to the separable assets, including goodwill,
and liabilities of the accounting acquiree and Predecessor, AMC Entertainment, as of December 23, 2004, the merger date. The consolidated financial statements presented herein are those of the
accounting acquiror from its inception on July 16, 2004 through April 3, 2008.

In
March 2005, we commenced an organizational restructuring related to functions at our home office in Kansas City, Missouri and our film office in Los Angeles, California. Our new
organizational system flattened management structure and aligned systems, resources and areas of expertise to

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promote
faster communication. The primary goal of the restructuring was to create a simplified organizational structure to enable us to position ourselves in a manner we believe will best serve our
existing guests while setting the stage to handle growth with improved infrastructure.

We
recorded $4,900,000 and $3,980,000 of expenses related to one-time termination benefits and other costs related to the displacement of approximately 200 associates as part
of the organizational restructuring and the contribution of assets by us to National CineMedia, LLC during fiscal 2005 and fiscal 2006, respectively.

In
June 2005, AMCEI sold four of its five theatres in Japan for a sales price of approximately $44,774,000 and, on September 1, 2005, sold its remaining Japan theatre for a sales
price of approximately $8,559,000. The results of operations of the Japan theatres have been classified as discontinued operations, and information presented for all periods reflects this
classification. The operations of the Japan theatres were previously reported in our International theatrical exhibition operating segment.

We
disposed of our only theatre in Hong Kong on January 5, 2006 and entered into a license agreement with the purchaser for continued use of our trademark. This operation did not
meet the criteria for classification as discontinued operations.

In
January 2006, Holdings merged with LCE Holdings Inc. ("LCE Holdings"), the parent of Loews Cineplex Entertainment Corporation ("Loews"), with Holdings continuing as the holding
company for the merged businesses, and Loews merged with and into AMC Entertainment, with AMCE continuing after the merger ("the Merger," and collectively, the "Mergers"). LCE Holdings, a company
formed by investment funds affiliated with Bain Capital Partners, LLC, or Bain Capital Partners, The Carlyle Group, and Spectrum Equity Investors, acquired 100% of the capital stock of Loews
and, indirectly, Cinemex, for an aggregate purchase price of approximately $1,500,000,000 in July 2004. The previous stockholders of Holdings, including affiliates of J.P. Morgan
Partners, LLC and Apollo Management, L.P., held approximately 60% of Holdings' outstanding capital stock immediately prior to the Merger, and the previous stockholders of LCE Holdings,
including affiliates of Bain Capital Partners, The Carlyle Group and Spectrum Equity Investors (collectively, the "BCS Investors," and together with J.P. Morgan Partners, LLC and Apollo
Management, L.P., the "Sponsors"), held approximately 40% of Holdings' outstanding capital stock immediately prior to the Merger. Operating results of the acquired theatres are included in our
consolidated statements of operations from January 26, 2006.

In
conjunction with the Merger, we entered into a Final Judgment with the Antitrust Division of the United States Department of Justice and judgments and consent decrees with various
States. These judgments and decrees required us to hold separate and divest ourselves of 10 specified theatres. As a result, we classified the assets and liabilities of these theatres as held for sale.We sold six of these theatres during fiscal 2007 for cash, exchanged two of these theatres with another theatrical exhibitor for two
theatres from that exhibitor in different markets, and closed one of the remaining theatres during the third quarter of fiscal 2007. One theatre continues to be held by consent of the relevant state
attorney general. Proceeds from the sales were $64,302,000. These theatres were part of our U.S. and Canada theatrical exhibition operating segment. We recorded a loss on the sales of these theatres
of $1,946,000 during fiscal 2007.

In
May 2006, AMCEI and its subsidiary AMC Entertainment International Limited sold its interests in AMC Entertainment España S.A., which owned and operated
4 theatres with 86 screens in Spain, and Actividades Multi-Cinemas E Espectáculos, LDA, which owned and operated 1 theatre with 20 screens in Portugal, for a sales
price of approximately $35,446,000. At the date of the sale these operations did not meet the criteria for discontinued operations because of continuing involvement in the region through an equity
method investment in Yelmo. In December 2006, we disposed of our investment in Yelmo, which owned and operated 27 theatres with 310 screens in Spain, for proceeds of

5

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approximately
$52,137,000. There was no gain or loss recorded on the sale of Yelmo. We no longer have continuing involvement in the region as a result of the sale of Yelmo and the results of the
operations in Iberia have been classified as discontinued operations as we no longer have operations or significant cash flows from the Iberia component.

In
March 2005, we formed National CineMedia, LLC ("NCM") with Regal Entertainment Group ("Regal") to combine our screen advertising businesses. In July 2005, Cinemark
Holdings, Inc. ("Cinemark") joined the NCM joint venture by contributing its screen advertising business. NCM is a cinema screen advertising venture representing approximately 13,000 North
American theatre screens (of which approximately 11,000 are equipped with digital projection capabilities) and reaching over 500,000,000 movie guests annually. As of April 3, 2008, we had a
19.1% interest in NCM, which we accounted for using the equity method.

In
February 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, we entered into the Third Amended and Restated Limited Liability
Company Operating Agreement (the "NCM Operating Agreement") among American Multi-Cinema, Inc., Regal and Cinemark. Pursuant to the NCM Operating Agreement, the members were granted a redemption
right to exchange common units of NCM for NCM, Inc. shares of common stock on a one-for-one basis, or at the option of NCM, Inc., 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 American Multi-Cinema, Inc., Regal and
Cinemark 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. We received approximately $259,347,000 in the aggregate for the redemption of all our preferred units in NCM.

In
connection with the completion of NCM, Inc.'s IPO, we also entered into an Exhibitor Services Agreement ("ESA") with NCM whereby, in exchange for approximately $231,308,000, we
agreed to modify NCM's payment obligations under the prior Exhibitor Services Agreement. We have recorded the payment received for modification of the ESA as deferred revenues in our consolidated
financial statements. 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 we are 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 American Multi-Cinema, Inc., Regal and Cinemark will not be less than 12% of NCM's aggregate advertising revenue, or it will be
adjusted upward to meet this minimum payment. Additionally, we entered into the First Amended and Restated Loews Screen Integration Agreement with NCM pursuant to which we will pay NCM an amount that
approximates the EBITDA that NCM would generate if it were able to sell advertising in the Loews theatre chain on an exclusive basis commencing upon the completion of NCM, Inc.'s IPO, and NCM
issued to us common membership units in NCM, increasing our ownership interest to approximately 33.7%; such Loews payments will be made quarterly until May 2008 and are expected to approximate
$15,850,000 in the aggregate. Also, with respect to any on-screen advertising time provided to our beverage concessionaire, we are required to purchase such time from NCM at a negotiated
rate. In addition, we expect to receive mandatory quarterly distributions of excess cash from NCM pursuant to contractual obligations entered into in connection with the NCM, Inc. IPO. We
recorded a change of interest gain of $132,622,000 and

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received
distributions in excess of our investment in NCM related to the redemption of preferred and common units of $106,188,000 as components of equity in earnings of non-consolidated
entities during fiscal 2007.

We
used the proceeds from the preferred unit redemption and the ESA modification payment described above, as well as approximately $26,467,000 we received by selling common units in NCM
to NCM, Inc. in connection with the exercise of the underwriter's option to purchase additional shares in the NCM, Inc. IPO and cash on hand to redeem AMCE's 91/2% senior
subordinated notes due 2011, AMCE's senior floating rate notes due 2010 and AMCE's 97/8% senior subordinated notes due 2012. We redeemed AMCE's 91/2% senior subordinated
notes due 2011 on March 19, 2007, and AMCE's senior floating rate notes due 2010 and AMCE's 97/8% senior subordinated notes due 2012 on March 23, 2007. We refer to the
redemption of AMCE's 91/2% senior subordinated notes due 2011, AMCE's senior floating rate notes due 2010 and AMCE's 97/8% senior subordinated notes due 2012 in this
Form 10-K as the "Bond Redemptions" and we refer to the NCM, Inc. IPO and the other related transactions described above, including the Bond Redemptions, as the "NCM
Transactions."

Also
in February 2007, we, along with Cinemark and Regal entered into a joint venture known as Digital Cinema Implementation Partners LLC, a Delaware limited liability company
("DCIP"), 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. Each of AMCE, Cinemark and Regal has an equal ownership interest in DCIP. Travis Reid, one of our
current directors and former president and chief executive officer of Loews, is the chief executive officer of DCIP, and DCIP has engaged J.P. Morgan Securities Inc. to assist with the
review of a business plan for digital cinema and with identifying and evaluating potential financing and capital structure alternatives. Future digital cinema developments will be managed by DCIP,
subject to the approval of us, Cinemark and Regal.

In
March 2007, the board of directors of Fandango, Inc. ("Fandango"), an online movie ticketing company in which we owned approximately 8.4% of the outstanding common stock on an
as converted basis as of March 29, 2007, approved an Agreement and Plan of Merger (the "Fandango Merger Agreement"), which was adopted and approved by its stockholders. Pursuant to the Fandango
Merger Agreement, we and the other existing stockholders sold our interests in Fandango to Comcast Corporation. The transaction closed in the first quarter of fiscal 2008. In connection with the
transaction, we received an equity earn up which raised our interest in Fandango to approximately 10.4% of the outstanding common stock on an as converted basis immediately prior to the sale of our
shares. Pursuant to the terms of the Fandango Merger Agreement and subject to certain closing adjustments, we estimate that we will receive approximately $20,000,000 in cash consideration in
connection with the sale of our interest in Fandango, of which $17,977,000 was received in fiscal 2008. We have recorded a gain on the sale of Fandango of $15,977,000 which is included in investment
income in fiscal 2008.

On
June 11, 2007, Marquee Merger Sub Inc. ("merger sub"), a wholly-owned subsidiary of AMC Entertainment Holdings, Inc. ("Parent"), merged with and into Holdings,
with Holdings continuing as the surviving corporation (the "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 the right to receive 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 our other stockholders. The holdco merger was effected by the Sponsors to facilitate a previously
announced debt financing by Parent and a related dividend to Holdings' stockholders.

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In
July 2007 we disposed of our investment in Hoyt's General Cinema South America ("HGCSA") for total proceeds of $28,682,000 and have recorded a gain on the sale in equity in earnings
of non-consolidated entities of $18,751,000. Prior to the sale, we held a 50% interest in HGCSA, an operator of 17 theatres with 160 screens in Argentina, Brazil, Chile and
Uruguay.

On
December 7, 2007, AMC Entertainment announced a joint-venture agreement to install 100 IMAX MPX digital projection systems at our locations in 34 major U.S. markets. The
theatres will feature IMAX's digital projection system, which is being developed for the IMAX MPX theatre design. The
agreement is expected to accelerate our transition to digital projection technology in our theatres. The rollout of the first 50 IMAX digital projection systems is expected to begin in July 2008 at
our locations in 24 selected markets, with an additional 25 scheduled for rollout in 2009 and 25 more in 2010. The IMAX projection systems are slated to be installed in many of our
top-performing locations in major U.S. markets, including theatres in Chicago, Dallas, Houston, Los Angeles, New York, Philadelphia, San Francisco and Washington D.C.

(b)  Financial Information about Segments

For information about our operating segments, see Note 18 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 based on a number of measures, including total revenues, total number of screens and annual
attendance. For the fiscal year ended April 3, 2008, we had revenues of $2,504,327,000 and earnings from continuing operations of $22,733,000. As of April 3, 2008, we owned, operated or
held interests in 353 theatres with a total of 5,094 screens, approximately 89% of which were located in the United States and Canada. Our theatres are primarily located in large urban
markets in which we have a strong market position relative to our competition. We believe that we operate a modern and highly productive theatre circuit. Our average screen per theatre count in the
United States and Canada of 15.0 and our annual attendance per theatre of more than 675,000 patrons substantially exceed industry averages. Historically, these favorable attributes have enabled
us to generate significant cash provided by operating activities.

In
the United States and Canada, as of April 3, 2008, we operated 304 theatres with 4,551 screens in 30 states, the District of Columbia and two Canadian
provinces. We have a significant presence in most major urban "Designated Market Areas," or "DMA's" (television areas as defined by Nielsen Media Research). Our U.S. and Canada theatre circuit
represented 92.3% of our revenues for the fiscal year ended April 3, 2008.

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The
following table provides detail with respect to the geographic location of our U.S. and Canada theatre circuit as of April 3, 2008:

United States and Canada

Theatres(1)

Screens(1)California

40

625Texas

22

437Florida

23

392New Jersey

25

318New York

27

279Illinois

18

271Michigan

13

214Arizona

9

183Georgia

11

177Pennsylvania

13

150Washington

14

141Maryland

13

136Massachusetts

10

129Missouri

8

117Virginia

7

113Ohio

6

93Minnesota

5

78Louisiana

5

68Colorado

3

62North Carolina

3

60Oklahoma

3

60Kansas

2

49Indiana

3

42Connecticut

2

36South Carolina

3

28Nebraska

1

24District of Columbia

3

22Kentucky

1

20Wisconsin

1

18Arkansas

1

16Utah

1

9Total United States

296

4,367Canada

8

184Total United States and Canada

304

4,551




As
of April 3, 2008, our international circuit of 49 theatres with 543 screens consisted principally of wholly-owned theatres in Mexico, where we operated
44 theatres with 488 screens primarily located in the Mexico City Metropolitan Area, or MCMA, through Grupo Cinemex, S.A. de C.V. and its subsidiaries ("Cinemex"). We believe that
we have the number one market share in the MCMA with an estimated 47% of MCMA attendance through March 31, 2008. Our wholly-owned international circuit represented 7.7% of our revenues for the
fiscal year ended April 3, 2008.

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The
following table provides detail with respect to the geographic location of our international theatre circuit as of April 3, 2008:

International

Theatres(1)

Screens(1)Mexico

44

488China (Hong Kong)(2)

2

13France

1

14United Kingdom

2

28Total International

49

543




We
have improved 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. As of April 3, 2008, 3,401, or approximately 75%, of our screens in the United States and Canada were located in megaplex theatres. The average number of screens per theatre in the
United States and Canada as of April 3, 2008 was 15.0, which was more than twice the National Association of Theatre Owners average of 6.9 for calendar year 2007 and higher than any of our
competitors.

The
following table sets forth historical and pro forma information of AMC Entertainment and Loews, on a combined basis, concerning new builds (including expansions), acquisitions and dispositions
(including Loews Dispositions and our Portugal and Spain dispositions) and end of period theatres and screens through April 3, 2008:

|     |  | New Builds |  | Acquisitions |  | Closures/Dispositions |  | Total Theatres(1)
|---- |  | ---------- |  | ------------ |  | --------------------- |  | -----------------
|
|1996 |  | 9          |  | 177          |  |                      |  |                 
|1997 |  | 20         |  | 368          |  |                      |  |                 
|1998 |  | 28         |  | 674          |  |                      |  |                 
|1999 |  | 33         |  | 547          |  | 314                   |  | 1,736            
|2000 |  | 33         |  | 650          |  |                      |  |                 
|2001 |  | 16         |  | 262          |  |                      |  |                 
|2002 |  | 15         |  | 255          |  | 5                     |  | 68               
|2003 |  | 7          |  | 123          |  | 109                   |  | 1,155            
|2004 |  | 9          |  | 133          |  | 3                     |  | 48               
|2005 |  | 7          |  | 89           |  |                      |  |                 
|2006 |  | 14         |  | 197          |  |                      |  |                 
|2007 |  | 8          |  | 122          |  |                      |  |                 
|2008 |  | 9          |  | 136          |  |                      |  |                 
|     |  |            |  |              |  |                       |  |                  
|     |  | 208        |  | 3,733        |  | 431                   |  | 3,007            
|     |  |            |  |              |  |                       |  |                  

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We
were founded in 1920 and since that time have pioneered many of the industry's most important innovations, including the multiplex theatre format in the early 1960s and the North

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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 and General
Cinema, and we have a demonstrated track record of successfully integrating those companies through timely conversion to AMC's operating procedures, headcount reductions, consolidation of corporate
functions and adoption of best practices. We have also created and invested in a number of allied businesses and strategic initiatives that have created value for our company and, we believe, will
continue to generate incremental value for our company. For example:



Our Competitive Strengths

There are several principal characteristics of our business that we believe make us a particularly effective competitor in our industry and position us well for
future growth. These include:



Major Market Position.We are one of the world's leading theatrical exhibition companies and enjoy
geographic market diversification and leadership in major markets worldwide. As of April 3, 2008, we operated in 23 of the top 25 DMA's and had the number one or two market share in 22
of those DMA's, including the number one market share in New York City, Chicago, Dallas and Washington, D.C. In certain of our densely populated urban markets, we believe there is scarcity of
attractive retail real estate opportunities due in part to zoning requirements. We believe our major market presence makes our theatres more important to content providers who rely on our markets for
a disproportionate share of box office receipts (as typically 55% of all U.S. box office receipts derive from the top 25 DMA's).

Traditionally,
the population densities, affluence and ethnic and cultural diversity of top DMA's create a greater opportunity to exhibit a broad array of film genres, which we
believe drives higher levels of attendance at our theatres as compared to theatres in less densely populated markets. Historically, this has produced the highest capacity utilization among the group
consisting of us and the companies that we view as our peer competitors, meaning Regal Entertainment Group and Cinemark Holdings, Inc. as measured by attendance per theatre. We believe our
strong presence in major markets positions us well relative to our peer competitors to take advantage of opportunities for incremental revenues associated with operating a digital theatre circuit,
given our patrons' interest in a broader array of content offerings.

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Modern, Highly Productive Theatre Circuit.We are an industry leader in the development and operation
of megaplex theatres, typically defined as a theatre having 14 or more screens and offering amenities to enhance the movie-going experience, such as stadium seating providing unobstructed viewing,
digital sound and enhanced seat design. From April 1995 through April 3, 2008, AMC Entertainment and Loews built 208 theatres with 3,733 new screens, acquired 431 theatres with
3,007 screens and disposed of 697 theatres with 4,295 screens. Of the total new build screens, 2,933 were added during the April 1995 through March 2002 period as we led the
industry in modernizing our circuit through development of megaplex theatres. As of April 3, 2008, 3,401, or approximately 75%, of our screens in the U.S. and Canada were located in megaplex
theatres, and the average number of screens per theatre was 15.0, which was more than twice the industry average of 6.9, according to the National Association of Theatre Owners ("NATO"), and higher
than any of our peer competitors. Over the past five years we invested over $850,000,000 to improve and expand our theatre circuit, contributing to the modern portfolio of theatres we operate today.

We
believe our high average number of screens per theatre and design of our megaplex theatres provide a more enjoyable entertainment experience and offer us operational benefits, as we
are able to offer a wider selection of content and show times. We believe this contributes to our generating the highest attendance and revenues per theatre among our peer competitors. For the fiscal
year ended April 3, 2008, we had the number one market share in New York City, Chicago, Dallas and Washington D.C., among others, and we operated 23 of the top 50 theatres in the
U.S. and Canada in terms of box office revenue, as measured by Rentrak. Our next closest competitor operated 10 of the top 50 theatres. For the fiscal year ended April 3, 2008, our
theatre circuit in the United States and Canada produced box office revenues per screen at rates approximately 21% higher than our closest peer competitor and 35% higher than the industry average, as
measured by Rentrak.

We
believe that our theatre circuit will be further enhanced with the installation of digital projection systems in our theatres, which began in newly opened theatres in the fourth
quarter of calendar 2007 and which we expect to take approximately 3.5 years to roll out to substantially all of our existing theatres. We believe operating a digital theatre circuit will
provide us with greater flexibility in exhibiting our content, which we expect will enhance our capacity utilization, enable us to achieve higher ticket prices for differentiated content formats such
as Digital 3D and IMAX, and provide incremental revenue from exhibition of alternative content such as live concerts, sporting events, Broadway shows and opera.

Strong Cash Flow Generation.The U.S. theatrical exhibition industry has a long-term
history of steady box office growth, even during times of economic downturn. When combined with our major market focus and highly productive theatre assets, we have been able to generate significant
and stable cash flow provided by operating activities. For the fiscal year ended April 3, 2008, our net cash provided by operating activities totaled $201,676,000. In future years, we expect to
continue to generate
cash flow to allow us to maintain our facilities, invest in our business, service our debt and pay dividends.

Proven Management Team.Our executive management team has an average of approximately 23 years
of experience in the theatrical exhibition industry. Our leadership team has guided our company through a number of economic and industry cycles, and has successfully integrated a number of strategic
acquisitions, including Loews and General Cinema, as well as delivered targeted cost savings and strong operating results.

Our Strategy

Our strategy is driven by the following three key elements:



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Growing Revenues by Broadening and Enhancing the Guest Experience.We intend to generate incremental
revenues in the future by broadening and enhancing the experience in our theatres through a number of initiatives. Specifically, we will continue to broaden our content offerings through the
installation of additional IMAX and Digital 3D systems, present attractive alternative content and enhance our food and beverage offerings. We also will continue to create new strategic
marketing and loyalty programs aimed at increasing attendance. Initiatives we have implemented in the past and that we will continue to pursue to grow revenues and enhance the experience include the
following:



We
currently have IMAX systems in place at seven of our theatres. We recently announced an agreement with IMAX to install 100 MPX digital projection systems at our theatres in 34 major
U.S. markets. Deployment of these systems will commence in July 2008 and extend through 2010, depending upon the achievement of specified financial measures. The agreement has an initial term of seven
years with one three-year renewal option and provides for a territorial exclusivity covenant that gives us the exclusive rights (subject to previously existing IMAX licensed locations) to
IMAX digital projection systems in the geographical areas surrounding 100 of our theatres; and a right of first refusal for installation of IMAX digital projection systems in additional IMAX locations
within certain geographical areas.

We
recently formed DCIP, a joint venture to facilitate the deployment of digital cinema systems. With digital technology deployed in our theatres we expect to realize a number of
benefits. This technology will provide consistent state-of-the-art presentation quality for our patrons. We will also be able to broaden the entertainment
experience in our theatres and improve capacity utilization by using screens for the exhibition of alternative content. We have experienced an increase in alternative content available to us as well
as a growing slate of Digital 3D and IMAX content. As directors and producers continue to embrace new technology in their productions, we expect new and innovative content generation to
continue. It will also facilitate the distribution of next generation Digital 3D content which we believe will drive incremental attendance and revenues.

Over
the past two years, Digital 3D versions of a movie have generated more than double the attendance of 2D versions of the same movie at an additional $1 to $3 more per ticket
for a Digital 3D film than for a standard 2D film. Additionally, digital technologies will enable us to create further operational and programming efficiencies in our theatres. For example, we
will be able to better address capacity utilization and meet demand in our theatres by making real-time decisions on the number and size of the auditoriums to program with content. Given
our major market positions, the overall diversity of our patron base and our high average screen per theatre count, we
believe the benefits associated with digital technologies will be significant for our theatre circuit and will provide us with the opportunity for incremental revenues.

The
costs of implementing digital projection in our theatres will be substantially funded by DCIP. DCIP and its members have yet to execute definitive agreements concerning the extent of
such funding, but based on current negotiations, we expect that with respect to our existing theatres, allowances from DCIP of $70,000 per screen will cover substantially all of the costs of
installing digital projection systems, and with respect to our new-build theatres, allowances from DCIP will cover $30,000 to

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$45,000
of such costs per screen, the estimated incremental cost of digital projection systems over conventional film projectors. We expect DCIP to fund allowances through virtual print fees ("VPFs")
from motion picture studios. We will bear maintenance costs with respect to digital projection systems in our theatres, which we expect to be similar to what we currently spend on our conventional
film projectors. We will also bear any incremental installation costs relating to Digital 3D or to enable the exhibition of alternative-content.

Our
ability to implement digital cinema systems in accordance with our plans will depend on the availability of equipment from third-party vendors and on the ongoing negotiation of
definitive agreements by DCIP for financing, payment of VPFs by motion picture studios and equipment use agreements with participating exhibitors. We believe that the supply of digital cinema
equipment will be sufficient for our needs and that such definitive agreements are likely to be executed during calendar 2008.

Maximizing Operating Efficiencies.We believe that the size of our circuit and the breadth of our
operations will allow us to continue to achieve economies of scale and drive continued improvement in operating margins. Since fiscal 2001, we have been able to increase our Segment Adjusted EBITDA(1)
margins from 14.5% to 17.8% for the fiscal year ended April 3, 2008. We have achieved this margin improvement through an ongoing review of all aspects of our operations and the implementation
of cost-saving initiatives, including at the theatre level, more effective scheduling of staff and concession gains. As a result, cost of operations as a percentage of total revenues
decreased from 67.4% in fiscal 2001 to 64.4% for the fiscal year ended April 3, 2008. Additionally, general and administrative expenses as a percentage of total revenue decreased from 2.7% in
fiscal 2001 to 2.1% for the fiscal year ended April 3, 2008.

Enhancing our Theatre Portfolio.Through a deliberate and focused internal review process, we have
closed or disposed of 697 older or obsolete theatres representing 4,295 screens on a combined basis since the end of fiscal 1995, 1,905 of which were owned by AMC Entertainment at the time of
disposal and 2,390 of which were owned by Loews. We believe that our efforts in disposing of theatres that are nearing the end of their productive life cycle has differentiated us from our peer
competitors and contributed to our overall portfolio quality. We have identified 39 theatres with 366 screens that we may close over the next one to three years due to expiration of
leases or early lease termination. We will continue to evaluate our theatre portfolio and, where appropriate, dispose of theatres through closures, lease terminations, lease buyouts, sales or
subleases.

In
addition to our disposition activity, we will evaluate the potential for new theatres and, where appropriate, intend to replace underperforming theatres with new, modern theatres that
offer amenities that are consistent with our portfolio. Currently, we have 12 theatres representing 151 screens committed for opening from fiscal 2009 through 2011. Actual number of
closures and new builds from fiscal 2009 through 2011 may differ materially from our estimates. Lastly, we intend to selectively pursue acquisitions where the characteristics of the location, overall
market and facilities further enhance the quality of our theatre portfolio. Historically we have demonstrated a successful track record of integrating acquisitions such as Loews and General Cinema.
Our acquisition of Loews on January 26, 2006 combined two leading theatrical exhibition companies, each with a long history of operating in the industry, and increased the number of screens we
operated by 47%.

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

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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 2008, 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 599 in 2006, according to the Motion Picture Association 2007 MPA Market Statistics.

North
American film distributors typically establish geographic film licensing zones and generally allocate available film to one theatre within that 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 April 3, 2008, approximately 87% of our screens in the United States were located in film licensing zones
where we are the sole exhibitor.

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 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 85%
of our U.S. and Canadian admissions revenues during fiscal 2008. 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 2008, no single distributor accounted for more than 15% of the motion pictures that we licensed or 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 and other
products. Different varieties of candy and soft drinks are offered at our theatres based on preferences in that particular geographic region. We have also implemented "combo-meals" for patrons which
offer a pre-selected assortment of concessions products and offer co-branded and private label products that are unique to us.

Our
strategy emphasizes prominent and appealing concessions counters designed for rapid service and efficiency. 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 heightens 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.

Theatre Management and Support

We use a centralized structure for policy development, strategic planning, asset management, marketing, human resources, finance, accounting and information
systems. These systems are managed at our corporate office located in Kansas City, Missouri.

We
staff our theatres with personnel capable of making day-to-day operating decisions. A portion of management's compensation at each theatre is linked to the
operating results of that theatre. All theatre level personnel complete formal training programs to maximize both customer service and the efficiency of our operations. Theatre managers receive
market-based training within their first 18 months with us which focuses on operations administration, marketing and information systems interpretation.

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Theatre staffing varies depending on the size and configuration of the theatre and levels of attendance. For example, a typical 10-screen movie theatre may have four managers
with 50 associates while a megaplex theatre may have eight managers and 125 associates. We are committed to developing the strongest possible management teams and seek college graduates for career
management positions.

Employees

As of April 3, 2008, we employed approximately 1,200 full-time and 19,000 part-time employees. Approximately 35.4% of our U.S.
theatre associates were paid the minimum wage.

Approximately
1.8% 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. Approximately 80% of our Cinemex employees are represented by
unions. 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 its 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 by a 4.2% Compound Annual Growth Rate ("CAGR") over the last
20 years, driven by increases in both ticket prices and attendance. Ticket prices have grown steadily over the past 20 years, growing at a 2.9% CAGR. In calendar 2007, industry box
office revenues were $9,629,000,000, an increase of 5.4%, compared to an increase of 3.5% in calendar year 2006.

The
following table represents information about the exhibition industry obtained from NATO.

Calendar Year

Box Office
Revenues
(in millions)

Attendance
(in millions)

Average
Ticket
Price

Number of
Theatres

Indoor
Screens

Screens
Per
Theatre2007

$
9,629

1,400

$
6.88

5,545

38,159

6.92006


9,138

1,395


6.55

5,543

37,776

6.82005


8,832

1,376


6.41

5,713

37,092

6.52004


9,215

1,484


6.21

5,629

36,012

6.42003


9,165

1,521


6.03

5,700

35,361

6.22002


9,272

1,599


5.80

5,712

35,170

6.22001


8,125

1,438


5.65

5,813

34,490

5.92000


7,468

1,383


5.39

6,550

35,567

5.41999


7,314

1,440


5.06

7,031

36,448

5.21998


6,760

1,438


4.69

6,894

33,418

4.81997


6,216

1,354


4.59

6,903

31,050

4.51996


5,817

1,319


4.42

7,215

28,905

4.01995


5,269

1,211


4.35

7,151

26,995

3.8


There are approximately 620 companies competing in the North American theatrical exhibition industry, approximately 360 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 the NATO 2007-08 Encyclopedia
of Exhibition, we believe that the ten largest exhibitors (in terms of number of screens) operated approximately 65% of the indoor screens in 2007. This statistic is up from 34% in 1999 and is
evidence that the theatrical exhibition business in the United States and Canada has been consolidating with the top four exhibitors accounting for

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approximately
56% of box office revenues in 2007 compared to 29% in 1995. During the period from 1995, when we first introduced the North American megaplex theatre, to 1999, U.S. and Canada screen
count grew at an 8% CAGR from 27,000 to approximately 36,500. Since then, screen counts have grown at a more moderate pace, resulting in a total screen count of 38,159 at the end of 2007. According to
NATO and the Motion Picture Association 2007 MPA Market Statistics, average screens per theatre have increased from 3.8 in 1995 to 6.9 in 2007, 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 effect operations at our theatre.

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

We
believe the theatrical exhibition industry is and 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 is one of the most popular and affordable
out-of-home entertainment options. In 2007, attendance at indoor movie theatres in the United States and Canada was 1,400,000,000. This contrasts to the 116,000,000 combined
annual attendance generated by professional baseball, basketball and football over the same time period. The estimated average price of a movie ticket was $6.88 in 2007, considerably less than other
out-of-home entertainment alternatives such as concerts and sporting events.

Long History of Steady Growth.The theatrical exhibition industry is a mature business which has,
over an extended period, produced steady growth in revenues. The combination of the popularity of moviegoing, its steady long-term growth characteristics, industry consolidation that has
resulted in more rational capital deployment and the relative maturity of the business makes theatrical exhibition a highly cash flow generative business today. Box office revenues in the United
States and Canada have increased at a 4.2% CAGR over the last 20 years, driven by increases in both ticket prices and attendance across multiple economic cycles. During this period, the
industry experienced short-term variability in attendance and resulting revenues which we believe were highly correlated to the quality of film product being exhibited. We believe that
these long-term trends will continue.

Importance to Content Providers.We believe that the theatrical success of a motion picture is often
the key determinant in establishing its value in the other parts of the product life cycle, such as DVD, cable television, merchandising and other ancillary markets. 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.

Adoption of Digital Technology.The theatrical exhibition industry is in the initial stages of
conversion from film-based to digital projection technology. Virtually all filmed entertainment content today can be exhibited digitally. Digital projection results in a premium visual
experience for patrons as there is no degradation of image over the life of a film. Digital content also gives the theatre operator greater flexibility in programming content. For example, theatre
operators are able to better address capacity utilization and meet demand in their theatres by making real-time decisions on the number and size of auditoriums to program with content.
Moreover, digital technology provides theatres with the opportunity for additional revenues through Digital 3D and alternative content offerings. Recent experience with digital has produced
increased attendance and average ticket prices. For example, theatres are able to charge $1 to $3 more per ticket for a Digital 3D film than for a standard 2D film.

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Furthermore,
Digital 3D screens have generated more than double the attendance of standard 2D versions of the same movie. 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.

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 of 1990 (the "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, 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 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 January 10, 2006, a federal judge in the United States District Court for the Central District of California ruled in favor of the Department of Justice with respect to a remedy in the
line of sight aspects of this case. We have appealed this portion of the court's order. See Part I Item 3.Legal Proceedings of this Annual Report on
Form 10-K.

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 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 can be seasonal, with higher attendance and revenues generally occurring

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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 18Operating Segments to the Consolidated Financial Statements under
Part II Item 8. of this Annual Report on Form 10-K. During fiscal 2008, revenues from our theatre operations outside the United States accounted for 10.0% of our total
revenues. Our U.S. and Canada operations include megaplexes in Canada as well. There are significant differences between the theatrical exhibition industry in the United States and in these
international markets. These include:



Additional
risks associated with our foreign operations include:



There
are also other risks that may limit or disrupt foreign motion picture exhibition and markets, restrict the movement of funds or result in the deprivation of contract rights or the
taking of property
by nationalization or appropriation without fair compensation. Such differences in industry structure and regulatory and trade practices may adversely affect our ability to operate successfully in
foreign markets.

(e) Available Information.

We make available on our web site (www.amctheatres.com) under "Investor ResourcesSEC Filings", free
of charge, Holdings' 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.

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Item 1A.

RISK FACTORS

Risks Related to Our Business

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

We have a significant amount of debt. As of April 3, 2008, we had $1,926,450,000 of outstanding indebtedness. In addition, as of April 3, 2008,
$185,947,000 was available for borrowing as additional senior debt under our senior secured credit facility. As of April 3, 2008, our subsidiaries had approximately $4,784,040,000 of
undiscounted rental payments under operating leases (with initial base terms of between 15 and 20 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. See
"Management's Discussion and Analysis of Financial Condition and Results of Operations of Marquee Holdings Inc.Liquidity and Capital Resources."

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.

We have had significant financial losses in recent years.

Prior to fiscal 2007, AMC Entertainment reported net losses in each of the last nine fiscal years totaling approximately $510,088,000. For fiscal 2007, AMCE
reported net earnings of $134,079,000 and for fiscal 2008, AMCE reported net earnings of $43,445,000. 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.

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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 Loews Acquisition 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 $151,676,000 for fiscal 2008. We estimate that our planned capital expenditures will be between $145,000,000
and $150,000,000 in fiscal 2009 and less than that in each of fiscal 2010 and 2011. Actual capital expenditures in fiscal 2009 and 2010 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 and in connection with DCIP.

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 Loews Dispositions, we were required to dispose of 10 theatres located in various markets across the United States, including New York
City, Chicago, Dallas and San Francisco. 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.

In
addition, as a cooperative venture among competitors for the purpose of joint purchasing, DCIP is potentially subject to restrictions under applicable antitrust law. While we believe
that DCIP has conducted and will conduct its operations in accordance with all applicable law, it is possible that antitrust authorities will choose to examine and place limitations on DCIP's
operations. Such limitations could include requiring that the venture be opened to include other independent competitors or striking down the joint purchasing arrangements altogether. If this were to
occur, we might not realize the cost benefits, competitive advantages and increased core and ancillary revenues that we expect to receive from DCIP.

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:



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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, which 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:



22

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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 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. As of August 16, 2007, Holdings began paying cash interest on its 12% senior discount notes due 2014 and made its first semi-annual cash interest payment on
February 15, 2008. Holdings' ability to service the 12% senior discount notes due 2014 is subject to the restrictions on distributions from AMCE contained in our Senior Secured Credit Facility
and the indentures governing AMCE's debt securities. The maximum amount AMC Entertainment was permitted to distribute to Holdings in compliance with its senior secured credit facility and the
indentures governing AMC Entertainment's debt securities was approximately $275,422,000 as of April 3, 2008.

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 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.

23

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We may suffer future impairment losses and lease termination 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. AMC
Entertainment's impairment losses from continuing operations over this period aggregated to $207,729,000. Loews' impairment losses aggregated approximately $4,000,000 in the period since it emerged
from bankruptcy in 2002. Beginning fiscal 1999 through April 3, 2008, AMC Entertainment also incurred lease termination charges aggregating approximately $55,906,000. Historically, Loews has
not incurred lease termination charges on its theatres that were disposed of or closed. Deterioration in the performance of our theatres could require us to recognize additional impairment losses and
close additional theatres, which could have an adverse effect on the results of our operations.

Our international and Canadian operations are subject to fluctuating currency values.

As of April 3, 2008, we owned, operated or held interests in megaplexes in Canada, Mexico, China (Hong Kong), France and the United Kingdom. Because the
results of operations and the financial position of Cinemex and our other foreign operations are reported in their respective local currencies and then translated into U.S. dollars at the applicable
exchange rates for inclusion in our consolidated financial statements, our financial results are impacted by currency fluctuations between the dollar and those local currencies. Revenues from our
theatre operations outside the United States accounted for 10% of our total revenues during the 53 weeks ended April 3, 2008. As a result of our international operations, we have risks
from fluctuating currency values. As of April 3, 2008, a 10% fluctuation in the value of the U.S. dollar against all foreign currencies of countries where we currently operate theatres would
either increase or decrease loss before income taxes and accumulated other comprehensive loss by approximately $3,568,000 and $38,285,000, respectively. We do not currently hedge against foreign
currency exchange rate risk.

Attendance levels at our international theatres depend on the market for local language films, and we sometimes have been unable to obtain the films we want for our theatres in
certain foreign markets.

Consumers in international markets may be less inclined to spend their leisure time attending movies than consumers in the United States and Canada. The fact that
a movie produced in the United States and targeted at U.S. audiences is successful in the United States does not necessarily mean that it will be successful internationally. In addition, there is
generally a smaller market for local language films, and the overall supply of these films may not be adequate to generate a sufficient attendance level at our international theatres. As a result of
such factors, attendance levels at some of our foreign theatres may not be sufficient to permit us to operate them on a positive cash flow basis. In addition, because of existing relationships between
distributors and other theatre owners, we sometimes have been unable to obtain the films we want for our theatres in certain foreign markets. As a result of these factors, attendance at some of our
international theatres may not be sufficient to permit us to operate them profitably.

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Our international theatres are subject to local industry structure and regulatory and trade practices, which may adversely affect our ability to operate at a profit.

Risks unique to local markets include:



Such
risks may limit or disrupt motion picture exhibition and markets, restrict the movement of funds or result in the deprivation of contract rights or the taking of property by
nationalization or appropriation without fair compensation and may adversely affect our ability to expand internationally.

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 Department of Justice, or the Department, filed suit alleging that AMC Entertainment's stadium-style theatres violate the ADA and related regulations. On
December 5, 2003, the trial court entered a consent order and final judgment under which AMC Entertainment agreed to remedy certain non-line of sight violations at twelve of its
stadium-style theatres and to survey and make required betterments for its patrons with disabilities at its stadium-style theatres and at certain theatres it may open in the future. On
January 10, 2006, the trial court ruled in favor of the Department regarding line of sight violations. Currently we estimate that betterments related to non-line of sight remedies
will be required at approximately 140 stadium-style theatres. AMC Entertainment estimates that the total cost of these betterments will be $53,300,000, which is expected to be incurred over the
remaining term of the consent order of twelve months or as extended by agreement between the parties prior to the end of the remaining term of the consent order. Through April 3, 2008 we have
incurred approximately $16,860,000 of these costs. AMCE has appealed these decisions, argued its case to the Ninth Circuit Court of Appeals on November 8, 2007 and anticipates a decision soon.
See Part 1 Item 3Legal Proceedings of this Annual Report on Form 10-K.

We will not be fully subject to the requirements of Section 404 of the Sarbanes-Oxley Act of 2002 until the end of our fiscal year 2009.

We are required to document and test our internal control procedures in order to satisfy the requirements of Section 404 of the Sarbanes-Oxley Act of 2002,
which requires annual management assessments and reports by an issuer's independent registered public accounting firm on the effectiveness of internal controls over financial reporting. We have
completed our Section 404 annual

25

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management
report and included the report in this Annual Report on Form 10-K. Our independent registered public accounting firm will not, however, need to include its attestation
report in our annual report for fiscal 2008. Under current rules, the attestation of our independent registered public accounting firm will be required beginning in our Annual Report on
Form 10-K for our fiscal 2009, which ends in April 2009, although the SEC has issued a proposed rule that, if adopted, would postpone the requirement until our fiscal 2010.

We are party to significant litigation.

We are subject to a number of legal proceedings and claims that arise in the ordinary course of our business. We cannot be assured that we will succeed in
defending any claims, that judgments will not be entered against us with respect to any litigation or that reserves we may set aside will be adequate to cover any such judgments. If any of these
actions or proceedings against us is successful, we may be subject to significant damages awards. For a description of our legal proceedings, see Part I Item 3Legal
Proceedings of 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 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.

Our loss of key management personnel or our inability to hire and retain skilled employees at our theatres could adversely affect our business.

Our success is dependent in part on the efforts of key members of our management team. In particular, Mr. Peter C. Brown, our chairman and chief
executive officer, has substantial experience and expertise in the theatrical exhibition industry and has made significant contributions to our growth and success. The loss of Mr. Brown's
services or the services of other key members of our management team could materially adversely affect our business, financial condition, results of operations or prospects.

In
addition, competition for skilled professionals is intense. The loss of any of these professionals or the inability to recruit these individuals in our markets could adversely affect
our ability to operate our business efficiently and profitably and could harm our ability to maintain our desired levels of service.

We may suffer material losses or damages, or be required to make material payments on existing lease and other guaranty obligations, concerning entities, businesses and assets
we no longer own as a result of the disposition by Loews of its Canadian and German film exhibition operations prior to the Loews Acquisition, and we may not be able to collect on indemnities from the
purchaser of our Canadian and German film exhibition operations in order to satisfy these losses, damages or payments.

We may suffer losses or damages as a result of claims asserted by third parties relating to the Canadian and German entities which Loews no longer owns as a
result of dispositions by Loews prior to the Loews Acquisition. While we cannot predict at this time what claims third parties may potentially assert against us, or the frequency or magnitude of such
claims, such claims may include matters related to Loews' former ownership and operation of the Canadian and German entities and their respective businesses or assets (including matters related to the
initial public offering of the

26

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Cineplex
Galaxy Income Fund in Canada). In addition, Loews has guaranteed certain real property leases for theatres located in Canada and in Germany which Loews no longer owns following the Loews
transactions. The Canadian leases are long-term leases and contain options for additional terms which, if exercised, could extend the leases for substantial additional periods.

Under
a purchase agreement for the Canadian transfer, Loews' former investors have indemnified Loews for certain potential liabilities in connection with the sale of its Canadian and
German entities, which indemnity is guaranteed by Cineplex Odeon Corporation, or COC, which was Loews' wholly-owned Canadian subsidiary, prior to its sale. It also contains provisions intended to
restrict the activities of the purchaser of Canadian operations and COC and to cause the indemnifying party and COC collectively to hold a specified amount of assets. However, there can be no
assurance that the assets available to satisfy these obligations will be sufficient. Accordingly, we may suffer damages or losses, or be required to make payments on outstanding guaranties, for which
we may not be made whole under
the indemnity. Such damages or losses, or required payments, may have a material adverse effect on our business, assets and results of operations.

We
also often remain secondarily obligated for lease payments in the event the acquiring entity does not perform under its obligations for theaters we are divesting of, including the
theatres required to be divested by us by the U.S. Department of Justice and state attorneys general, in conjunction with the Loews Acquisition.

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 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.

If we fail to maintain an effective system of internal controls, we may not be able to accurately report our financial results.

Effective internal controls are necessary for us to provide reliable financial reports and effectively prevent fraud. Because of inherent limitations, internal
control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. In the past, we have identified a material weakness in our internal
control over financial reporting and concluded that our disclosure controls and procedures were ineffective. In addition, we may in the future discover areas of our internal controls that need
improvement or that constitute material weaknesses. A material weakness is a control deficiency or combination of control deficiencies, that results in more than a remote likelihood that a material
misstatement of annual or interim financial statements will not be prevented or detected. Any failure to remediate any future material weaknesses in our internal control over financial reporting or to
implement and maintain effective internal controls, or difficulties encountered in their implementation, could cause us to fail to timely meet our reporting obligations, result in material
misstatements in our financial statements or could result in defaults under our senior credit facility, the indentures governing our debt securities or under any other debt instruments we may enter

27

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into
in the future. Deficiencies in our internal controls could also cause investors to lose confidence in our reported financial information.

Risks Related to Our Industry

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 mostly license first-run motion pictures, the success of which have increasingly depended on the marketing efforts of the major
studios. Poor performance of, or any disruption in the production of (including by reason of a strike) these motion pictures, or a reduction in the marketing efforts of the major studios, could hurt
our business and results of operations. In addition, a change in the type and breadth of movies offered by studios may adversely affect the demographic base of moviegoers.

The
master contracts between film producers and the screen actors unions are each scheduled to expire in July 2008. The smaller of the two screen actors' unions, The American
Federation of Television and Radio Artists, and the film producers have tentatively agreed to a three-year contract. If union members choose to strike or film producers choose to lock out
the union members, a disruption in the production of motion pictures could result.

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 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:



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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 has been growth in the number of screens in the U.S. and Canadian exhibition industry. This has affected and may continue to affect the performance of
some of our theatres.

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, 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, 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.

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 28% of our revenues in fiscal 2008, 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.

Industry-wide conversion to digital-based media may increase our costs.

The industry is in the early stages of conversion from film-based media to digital-based media. There are a variety of constituencies associated with
this anticipated change that may significantly impact industry participants, including content providers, distributors, equipment providers and venue operators. While content providers and
distributors have indicated they would bear substantially all of

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the
costs of this change, there can be no assurance that we will have access to adequate capital to finance the conversion costs associated with this potential change should the conversion process
rapidly accelerate or the content providers and distributors elect to not bear the related costs. Furthermore, it is impossible to accurately predict how the roles and allocation of costs between
various industry participants will change if the industry changes from film-based media to digital-based media.

Item 1B.    Unresolved Staff Comments.

Not applicable.

Item 2.    Properties.

The following table sets forth the general character and ownership classification of our theatre circuit, excluding unconsolidated joint ventures, as of
April 3, 2008:

Property Holding Classification

Theatres

ScreensOwned

12

121Leased pursuant to ground leases

8

93Leased pursuant to building leases

283

4,327Build to suit and ground leases (Cinemex)

43

476Total

346

5,017


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.

The
majority of the concessions, projection, seating and other equipment required for each of our theatres is owned.

Item 3.    Legal Proceedings.

In the normal course of business, we are 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 our financial condition, cash flows or results of operations.

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 AMC
Entertainment's stadium style theatres violate the ADA and related regulations. The Department alleged that AMC Entertainment 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. The Department sought declaratory and injunctive relief regarding
existing and future theatres with stadium style seating, compensatory damages in the approximate amount of $75,000 and a civil penalty of $110,000.

On
November 20, 2002 the trial court entered summary judgment in favor of the Justice Department on the line of sight aspects of this case and on January 10, 2006, the
trial court ruled in

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favor
of the Department regarding the appropriate remedy. In its decision, the court issued a comprehensive order regarding line of sight and other related remedies. AMC Entertainment estimates that
the cost of the betterments related to the remedies for line of sight violations of the ADA will be $22,000,000, which is expected to be incurred over a 4-5 year term. Through
April 3, 2008, AMC Entertainment has not incurred any of these costs. Additionally, the order calls for payments of $300,000 to the United States and individual complainants. AMCE has appealed
these decisions, argued its case to the Ninth Circuit Court of Appeals on November 8, 2007 and anticipates a decision soon.

As
a result of the January 10, 2006 order, AMC Entertainment estimates the range of the loss to be between $349,000 and $444,000. Accordingly, AMC Entertainment has recorded the
related liability of approximately $349,000.

On
January 21, 2003, the trial court entered summary judgment in favor of the Department on the non-line of sight aspects of the case, which involve such matters 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 existing 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 AMC Entertainment estimates that these betterments will be required at approximately 140 stadium-style theatres. AMC estimates that the total cost of
these betterments will be $53,300,000 which is expected to be incurred over the remaining term of the consent order of twelve months or as extended by agreement between the parties. Through
April 3, 2008 AMC Entertainment has incurred approximately $16,860,000 of these costs. 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 us 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. Plaintiff is seeking an order
certifying the case as a class action as well as statutory and punitive damages in an unspecified amount. On October 31, 2007, the District Court denied plaintiff's motion for class
certification without prejudice pending the Ninth Circuit's decision in an appeal from a denial of certification in a similar FACTA case. The parties have requested the District Court to stay all
proceedings in the case pending the outcome of the Ninth Circuit case. We believe the plaintiff's allegations, particularly those asserting willingness, are without merit.

We
are a party to various other legal proceedings in the ordinary course of business, none of which is expected to have a material adverse effect on us.

Item 4.    Submission of Matters to a Vote of Security Holders.

On April 3, 2008, the Requisite Stockholder Majority (as defined under the Stockholders' Agreement) of AMC Entertainment Holdings, Inc. unanimously
approved payment of a distribution from AMC Entertainment Inc. to Marquee Holdings Inc. in the amount of $21,830,000.

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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 May 30, 2008, there was one stockholder of record of Common Stock (AMC Entertainment Holdings, Inc.).

In
connection with the holdco merger, Holdings used cash received from AMCE to pay a dividend to Parent of $270,588,000.

Issuer Purchase of Equity Securities

There were no repurchases of Common Stock during the thirteen weeks ended April 3, 2008.

Item 6.    Selected Financial Data.

|                                           |                             | Years Ended(1)(3)(6)                       |        
|------------------------------------------ | --------------------------- | ------------------------------------------ | -------
|
|
|
|Statement of Operations Data:              |                             |                                            |        
|Revenues:                                  |                             |                                            |        
|                                           | Admissions                  |                                            | $      
|                                           | Concessions                 |                                            |        
|                                           | Other revenue               |                                            |        
|                                           |                             |                                            |        
|                                           |                             | Total revenues                             |        
|                                           |                             |                                            |        
|Costs and Expenses:                        |                             |                                            |        
|                                           | Film exhibition costs       |                                            |        
|                                           | Concession costs            |                                            |        
|                                           | Operating expense           |                                            |        
|                                           | Rent                        |                                            |        
|                                           | General and administrative: |                                            |        
|                                           |                             | Merger, acquisition and transactions costs |        
|                                           |                             | Management fee                             |        
|                                           |                             | Other(8)                                   |        
|Pre-opening expense                        |                             |                                            | 7,130  
|Theatre and other closure expense (income) |                             |                                            | (20,970
|Restructuring charge(9)                    |                             |                                            |       
|Depreciation and amortization              |                             |                                            | 251,194
|Impairment of long-lived assets            |                             |                                            | 8,933  
|Disposition of assets and other gains      |                             |                                            | (2,408 
|                                           |                             |                                            |        
|                                           | Total costs and expenses    |                                            |        
|                                           |                             |                                            |        

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|                                                             |                                                                            | Years Ended(1)(3)(6) |          
|------------------------------------------------------------ | -------------------------------------------------------------------------- | -------------------- | ---------
|
|
|
|Other expense (income)(5)                                    |                                                                            |                      | (12,431  
|Interest expense:                                            |                                                                            |                      |          
|                                                             | Corporate borrowings                                                       |                      |          
|                                                             | Capital and financing lease obligations                                    |                      |          
|Equity in (earnings) losses of non-consolidated entities(12) |                                                                            |                      | (43,019  
|Investment (income)(13)                                      |                                                                            |                      | (25,679  
|                                                             |                                                                            |                      |          
|                                                             | Earnings (loss) from continuing operations before income taxes             |                      |          
|                                                             | Income tax provision (benefit)                                             |                      |          
|                                                             |                                                                            |                      |          
|                                                             | Earnings (loss) from continuing operations                                 |                      |          
|                                                             | Earnings (loss) from discontinued operations, net of income tax benefit(2) |                      |          
|                                                             |                                                                            |                      |          
|                                                             | Net earnings (loss)                                                        |                      | $        
|                                                             |                                                                            |                      |          
|                                                             | Preferred dividends                                                        |                      |          
|                                                             |                                                                            |                      |          
|                                                             | Net earnings (loss) for shares of common stock                             |                      | $        
|                                                             |                                                                            |                      |          
|Balance Sheet Data (at period end):                          |                                                                            |                      |          
|Cash and equivalents                                         |                                                                            | $                    | 108,717  
|Corporate borrowings                                         |                                                                            |                      | 1,856,467
|Other long-term liabilities                                  |                                                                            |                      | 350,498  
|Capital and financing lease obligations                      |                                                                            |                      | 69,983   
|Stockholder's equity                                         |                                                                            |                      | 917,416  
|Total assets                                                 |                                                                            |                      | 3,879,007
|Other Data:                                                  |                                                                            |                      |          
|Net cash provided by (used in) operating activities(11)      |                                                                            | $                    | 201,676  
|Capital expenditures                                         |                                                                            |                      | (151,676 
|Proceeds from sale/leasebacks                                |                                                                            |                      |         
|Screen additions                                             |                                                                            |                      | 136      
|Screen acquisitions                                          |                                                                            |                      |         
|Screen dispositions                                          |                                                                            |                      | 356      
|Average screenscontinuing operations(10)                    |                                                                            |                      | 5,049    
|Number of screens operated                                   |                                                                            |                      | 5,094    
|Number of theatres operated                                  |                                                                            |                      | 353      
|Screens per theatre                                          |                                                                            |                      | 14.4     
|Attendance (in thousands)continuing operations(10)          |                                                                            |                      | 236,235  

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

The following discussion relates to the audited financial statements of Marquee Holdings 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 April 3, 2008, we owned, operated or had interests in 353 theatres and 5,094
screens with 89%, or 4,551 of our screens in the U.S. and Canada, and 11%, or 543 of our screens in Mexico, China (Hong Kong), France and the United Kingdom.

Our
principal directly owned subsidiaries are AMC Entertainment Inc., American Multi-Cinema, Inc. ("AMC"), Grupo Cinemex, S.A. de C.V. ("Cinemex") and AMC
Entertainment International, Inc. ("AMCEI"). We conduct our U.S. and Canada theatrical exhibition business through AMC and its subsidiaries and AMCEI and its subsidiaries. We are operating
theatres outside the United States primarily through Cinemex and AMCEI and its subsidiaries.

On
March 29, 2005, AMC Entertainment, along with Regal Entertainment Group ("Regal"), combined our respective cinema screen advertising businesses into a new joint venture company
called National CineMedia, LLC ("NCM"). The new company engages in the marketing and sale of cinema advertising and promotions products; business communications and training services; and the
distribution of digital alternative content. We record our share of on-screen advertising revenues generated by our advertising subsidiary, National Cinema Network, Inc. ("NCN") and
NCM in other theatre revenues. We contributed fixed assets and exhibitor agreements of our cinema screen advertising subsidiary NCN to NCM. We also included goodwill (recorded in connection with the
merger with Marquee) in the cost assigned to our investment in NCM. Additionally, we paid termination benefits related to the displacement of certain NCN associates. In consideration of the NCN
contributions
described above NCM issued a 37% interest in its Class A units to NCN. Since that date, our interest in NCM has declined to 19.1% due to the entry of new investors. On February 13, 2007,
NCM, Inc., a newly-formed entity that serves as the sole manager of NCM, announced the pricing of its initial public offering of 42,000,000 shares of common stock at a price of $21.00 per
share. Subsequent to the NCM, Inc. IPO, we held an 18.6% interest in NCM, and at April 3, 2008 we held a 19.1% interest. AMCE received net proceeds upon completion of the NCM initial
public offering of $517,122,000. We used the net proceeds from the NCM initial public offering, along with cash on hand, to redeem our 91/2% senior subordinated notes due 2011, our
senior floating rate notes due 2010 and our 97/8% senior subordinated notes due 2012. On March 19, 2007 we redeemed $212,811,000 aggregate principal amount of our
91/2% senior subordinated notes due 2011 at 100% of principal value, on March 23, 2007 we redeemed $205,000,000 aggregate principal amount of our senior floating rate notes due
2010 at 103% of principal value and on March 23, 2007 we redeemed $175,000,000 aggregate principal amount of our 97/8% senior subordinated notes due 2012 at 104.938% of principal
value. Our loss on redemption of these notes including call premiums and the write off of unamortized deferred charges and premiums was $3,488,000.

On
June 20, 2005, Holdings entered into a merger agreement with LCE Holdings, the parent of 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 AMC Entertainment, with AMC Entertainment continuing after the Mergers. The transactions closed on
January 26, 2006. Upon completion of the Mergers, JPMP, Apollo, JPMP's and Apollo's co-investors, Bain, Carlyle, Spectrum and management held 100% of Holdings' outstanding capital
stock.

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In
conjunction with the Mergers, we entered into a final judgment with the Antitrust Division of the United States Department of Justice and judgments and consent decrees with various
States. These judgments and decrees require us to hold separate and divest ourselves of certain theatres. We sold six of these theatres during the 52 weeks ended March 29, 2007 for an
aggregate sales price of $64,302,000, exchanged two of these theatres with another theatrical exhibitor for two theatres from that exhibitor in different markets, retained one of the theatres pursuant
to an agreement reached with the California Attorney General and closed one remaining theatre during fiscal 2007.

In
connection with the Mergers, on January 26, 2006, we entered into the following financing transactions:



The
proceeds of the financing transactions were used to repay amounts outstanding under the Loews Facility, to fund the tender offer, to pay related fees and expenses, and to pay fees
and expenses related to the Mergers.

In
connection with the Mergers, we acquired Loews on January 26, 2006, which significantly increased our size. In the Mergers, we acquired 112 theatres with 1,308 screens in the
United States (included in our U.S. and Canada operating segment) and 40 theatres with 443 screens in Mexico (included in our International operating segment) that are included in our consolidated
results of operations from January 26, 2006. Accordingly, results of operations for the fifty-three weeks ended April 3, 2008 and fifty-two weeks ended March 29, 2007,
which include fifty-three and fifty-two weeks, respectively, of operations of the businesses we acquired, are not comparable to our results of operations for the fifty-two
weeks ended March 30, 2006 which include nine weeks of operations of the businesses we acquired.

On
June 30, 2005, we sold one of our wholly-owned subsidiaries, Japan AMC Theatres Inc., including four of our five theatres in Japan. We sold our remaining Japan theatre
on September 1, 2005. The operations and cash flows of the Japan theatres have been eliminated from our ongoing operations as a result of the disposal transactions. We do not have any
significant continuing involvement in the operations of the Japan theatres. The results of operations of the Japan theatres have been classified as discontinued operations, and information presented
for all periods reflects the new classification. The operations of the Japan theatres were previously reported in our International theatrical exhibition operating segment.

We
disposed of our only theatre in Hong Kong on January 5, 2006 and entered into a license agreement with the purchaser for continued use of our trademark. These operations did
not meet the criteria for reporting as discontinued operations.

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In
May 2006, AMCEI and its subsidiary AMC Entertainment International Limited sold its interests in AMC Entertainment España S.A., which owned and operated 4
theatres with 86 screens in Spain, and Actividades Multi-Cinemas E Espectáculos, LDA, which owned and operated 1 theatre with 20 screens in Portugal. These operations have been
classified as discontinued operations as a result of our disposition of Yelmo Cineplex, S.L., or Yelmo, in December 2006 as we no longer have continuing involvement in the region.

In
December 2006, we disposed of our equity method investment in Yelmo, which owned and operated 27 theaters with 310 screens in Spain on the date of sale.

During
the fifty-three weeks ended April 3, 2008, we closed eighteen theatres with 196 screens in the U.S., opened nine new theatres with 136 screens in the U.S., and sold
seventeen theatres with 160 screens in Argentina, Brazil, Chile and Uruguay, resulting in a circuit total of 353 theatres and 5,094 screens.

On
November 7, 2006, our Board of Directors approved an amendment to freeze our Defined Benefit Retirement Income Plan, Supplemental Executive Retirement Plan and Retirement
Enhancement Plan (the "Plans") as of December 31, 2006. On December 20, 2006 we 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. We will continue to fund existing
benefit obligations and there will be no new participants in the future. As a result of amending and restating the Plans to implement the freeze, we recognized a curtailment gain of $10,983,000 in our
consolidated financial statements which reduced our pension expense for fiscal 2007.

For
financial reporting purposes we have three segments, (1) U.S. and Canada theatrical exhibition, (2) International theatrical exhibition and (3) Other, with the
most significant activity in "Other" related to on-screen advertising.

Our
U.S. and Canada and International 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 certificates and theatre tickets 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 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.

Concessions
sales are our second largest source of revenue after box office admissions. Concessions items include popcorn, soft drinks, candy, hot dogs and other products. 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
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 can be seasonal, with higher attendance and revenues

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generally
occurring during the summer months and holiday seasons. Our results of operations may vary significantly from quarter to quarter.

During
fiscal 2008, films licensed from our eleven largest distributors based on revenues accounted for approximately 95% 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 2007, 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 599 in 2006, according to Motion Picture Association 2007 MPA Market Statistics.

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 believe our introduction of the megaplex concept to North America in 1995 has led to the current industry replacement cycle, which has accelerated the obsolescence of older, smaller theatres by
setting new standards for moviegoers. From 1995 through April 3, 2008, AMC Entertainment and Loews added 208 theatres with 3,733 new screens, acquired 431 theatres with 3,007 screens and
disposed of 697 theatres with 4,295 screens. As of April 3, 2008, approximately 75% of our screens in the U.S. and Canada were located in megaplex theatres.

Stock-Based Compensation

We account for stock-based employee compensation arrangements in accordance with the provisions of SFAS No. 123(R), "Shared-Based Payment (Revised)" and
Staff Accounting Bulletins No. 107 and No. 110 "Share Based Payments". Under SFAS 123(R), compensation cost is calculated on the date of the grant and then amortized over the
vesting period. The fair value of each stock option was estimated on the grant date using the Black-Scholes option pricing model using the following assumptions: common stock value on the grant date,
risk-free interest rate, expected term, expected volatility, and dividend yield. Option awards which require classification as a liability under FAS 123(R) are revalued at each
subsequent reporting date using the Black-Scholes model.

We
granted 38,876.72873 options on December 23, 2004 and 600 options on January 26, 2006 to employees to acquire our common stock. The fair value of these options on their
respective grant dates was $22,373,000 and $138,000. All of these options are equity classified for Holdings, except for 7,684.57447 unexercised options granted on December 23, 2004, which are
classified as a liability.

The
holder of options which are classified as a liability by Holdings exercised options on 500 shares during the fiscal year 2008.

The
common stock value used to estimate the fair value of each option on the December 23, 2004 grant date was based upon a contemporaneous third party arms-length
transaction on December 23, 2004 in which we sold 769,350 shares of our common stock for $1,000 per share to unrelated parties.

For
the 7,684.57447 option awards classified as liabilities by Holdings, we revalued the options at each period end following the grant date using the Black-Scholes model. In valuing
this liability, Holdings used a fair value of common stock of $1,000 per share, which was based on a contemporaneous valuation reflecting market conditions as of April 3, 2008.

On
June 11, 2007, Marquee Merger Sub Inc. ("merger sub"), a wholly-owned subsidiary of AMC Entertainment Holdings, Inc. ("Parent"), merged with and into Holdings,
with Holdings continuing as the surviving corporation (the "holdco merger"). In connection with this, Parent adopted an amended and restated 2004 stock option plan (formerly known as the 2004 Stock
Option Plan of Marquee Holdings Inc.). The option exercise price per share of $1,000 was adjusted to $491 pursuant to the antidilution provisions of the 2004 Stock Option Plan to give effect to
the payment of a one time

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non-recurring
dividend paid by Parent on June 15, 2007 of $652,800,000 to the holders of its 1,282,750 shares of common stock. The Company applied the guidance in SFAS 123(R)
and determined that there was no incremental value transferred as a result of the modification and as a result, no additional compensation cost to recognize.

Our
Chairman of the Board, President and Chief Executive Officer, Peter C. Brown, has an amended and restated employment agreement that generally will revert to his prior agreement if an
initial public offering of Parent does not occur on or before December 31, 2008. In the event of an initial public offering on or before December 31, 2008, within 15 days after
such initial public offering, Mr. Brown shall receive a grant of restricted stock or restricted stock units having a value of $2,567,000 on the date of grant, based on the initial public
offering price. This grant was an inducement for Mr. Brown to enter into his amended and restated employment agreement, whereby the term of his employment would be shorter than in his current
employment agreement and he would be subject to certain restrictive covenants that did not exist in his prior employment agreement. Such grant shall vest in three equal annual installments on the
first three anniversaries of the grant date. We expect that we would incur annual stock-based compensation expense of $856,000 related to these awards for three years from the date of grant in the
event of an initial public offering on or before December 31, 2008.

On
November 14, 2007, we entered into an agreement with Richard T. Walsh (formerly executive vice president, AMC Entertainment Inc., and chairman, AMC Film Programming),
which extended the exercise period applicable to his outstanding vested stock options from 90 days following his departure on August 17, 2007 until 60 days after an initial public
offering of the common stock of AMC Entertainment Holdings, Inc., or in the event no initial public offering has occurred by June 16, 2008, until January 2, 2009. We have
accounted for the extension of the exercise term for vested options for Mr. Walsh as a modification under SFAS No. 123(R),Share Based
Payment.We measured the compensation cost for the modified award by comparing the fair value of the modified award and the fair value of the original award immediately before
it was modified, and we recognized a charge to expense and an offsetting increase to additional paid-in capital for the incremental fair value of the vested awards, which was determined to
be $32,326 as calculated using the Black-Scholes option pricing model, during fiscal year 2008. Because Mr. Walsh held no unvested awards and no unvested awards were modified, there is no
additional compensation cost to recognize in the future related to his awards.

Critical Accounting Estimates

The accounting estimates identified below are critical to our business operations and the understanding of our results of operations. The impact of, and any
associated risks related to, these estimates on our business operations are discussed throughout this Management's Discussion and Analysis of Financial Condition and Results of Operations where such
estimates affect our reported and expected financial results. For a detailed discussion on the application of these estimates and other accounting policies, see the notes to Holding's consolidated
financial statements included elsewhere in this Form 10-K. The methods and judgments we use in applying our accounting estimates have a significant impact on the results we report
in our financial statements. Some of our accounting estimates require us to make difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently
uncertain. Our most critical accounting estimates include the assessment of recoverability of long-lived assets, including intangibles, which impacts impairment of long-lived
assets when we impair assets or accelerate their depreciation; recoverability of goodwill, which creates the potential for write-offs of goodwill; recognition and measurement of current
and deferred income tax assets and liabilities, which impacts our tax provision; recognition and measurement of our remaining lease obligations to landlords on our closed theatres and other vacant
space, which impacts theatre and other closure expense (income); estimation of self-insurance reserves which impacts theatre operating and general and administrative expenses; recognition
and measurement

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of
net periodic benefit costs for our pension and other defined benefit programs, which impacts general and administrative expense; estimation of film settlement terms and measurement of film rental
fees which impacts film exhibition costs and estimation of the fair value of assets acquired, liabilities assumed and consideration paid for acquisitions, which impacts the measurement of assets
acquired (including goodwill) and liabilities assumed in a business combination. Below, we discuss these areas further, as well as the estimates and judgments involved.

Impairments.We review long-lived assets, including intangibles and investments in unconsolidated subsidiaries
accounted for under the equity method, 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 review internal management reports on a quarterly basis as well as monitor current and potential future competition in the markets where we operate for indicators of triggering
events or circumstances that indicate impairment of individual theatre assets. We evaluate theatres using historical and projected data of theatre level cash flow as our primary indicator of potential
impairment and consider the seasonality of our business when evaluating theatres for impairment. The Company performs its annual impairment analysis during the fourth quarter because Christmas and New
Year's holiday results comprise a significant portion of our operating cash flow, the actual results from this period, which are available during the fourth quarter of each fiscal year, are an
integral part of our impairment analysis. As a result of 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 we believe 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 or
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 we do 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 the assistance of third party valuation studies. The discount rate used in determining
the present value of the estimated future cash flows was 20% and was based on management's expected return on assets during fiscal 2008, 2007, and 2006. There is considerable management judgment
necessary to determine the future cash flows, fair value and the expected operating period of a theatre, and, accordingly, actual results could vary significantly from such estimates. We have recorded
impairments of long-lived assets of $8,933,000, $10,686,000, and $11,794,000 during fiscal 2008, 2007, and 2006, respectively.

Goodwill.Our recorded goodwill was $2,070,858 and $2,066,853,000 as of April 3, 2008 and March 29, 2007,
respectively. We evaluate goodwill for impairment annually as of the beginning of the fourth fiscal quarter and any time an event occurs or circumstances change that reduce the fair value for a
reporting unit below its carrying amount. Goodwill is recorded in our U.S. and Canada theatrical exhibition operating segment and in Cinemex, which are also our reporting units for purposes of
evaluating our 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 or by using assistance of third party valuation studies, 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 to be used in determining fair value.

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Income taxes.In determining income for financial statement purposes, we must make certain estimates and judgments. These
estimates and judgments occur in the calculation of certain tax liabilities and in the determination of the recoverability of certain of the deferred tax assets, which arise from temporary differences
between the tax and financial statement recognition of revenue and expense as well as operating loss and tax credit carryforwards. We must assess the likelihood that we will be able to recover our
deferred tax assets in each domestic and foreign tax jurisdiction in which we operate. If recovery is not more likely than not, we must record a valuation allowance for the deferred tax assets that we
estimate are more likely than not unrealizable. As of April 3, 2008, we had recorded approximately $730,000 of net deferred tax liabilities (net of valuation allowances of approximately
$366,889,000) related to the estimated future tax benefits and liabilities of temporary differences between the tax bases of assets and liabilities and amounts reported in the accompanying
consolidated balance sheets, as well as operating loss and tax credit carryforwards. The recoverability of these deferred income tax assets is dependent upon our ability to generate future taxable
income in the relevant taxing jurisdictions. Projections of future taxable income require considerable management judgment about future attendance levels, revenues and expenses.

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 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. As a result of the merger with Marquee, we have remeasured our liability for theatre closure at
a rate of 7.55%, our estimated borrowing cost on the date of this merger. Subsequent theatre closure liabilities have been measured using discount rates that ranged from 8.54% to 8.82%. We have
recorded theatre and other closure (income) expense of $(20,970,000), $9,011,000, and $601,000 during the fiscal years ended April 3, 2008, March 29, 2007, and March 30, 2006.

Casualty Insurance.We are self-insured for general liability up to $500,000 per occurrence and carry a $400,000
deductible limit per occurrence for workers compensation claims. We utilize actuarial projections of our estimated ultimate losses that we will be responsible for paying and as a result there is
considerable judgment necessary to determine our casualty insurance reserves. The actuarial method that we use includes an allowance for adverse developments on known claims and an allowance for
claims which have been incurred but which have not been reported. As of April 3, 2008 and March 29, 2007, we had recorded casualty insurance reserves of $23,254,000 and $25,675,000,
respectively. We have recorded expense related to general liability and workers compensation claims of $15,376,000, $14,644,000, and $10,936,000 during the periods ended April 3, 2008,
March 29, 2007, and March 30, 2006, respectively.

Pension and Postretirement Assumptions.Pension and postretirement benefit obligations and the related effects on operations
are calculated using actuarial models. Two critical assumptions, discount rate and expected return on assets, are important elements of plan expense and/or liability measurement. We evaluate these
critical assumptions at least annually. In addition, medical trend rates are an important assumption in projecting the medical claim levels for our postretirement benefit plan. Other assumptions
affecting our pension and postretirement obligations involve demographic factors such as retirement, expected increases in compensation, mortality and turnover. These assumptions are evaluated
periodically and are updated to reflect our experience. Actual results in any given year will often differ from actuarial assumptions because of economic and other factors.

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The
discount rate enables us to state expected future cash flows at a present value on the measurement date. We have little latitude in selecting this rate, as it is required to
represent the market rate for high-quality fixed income investments. A lower discount rate increases the present value of benefit obligations and increases pension and postretirement
expense. For our principal pension plans, a 50 basis point decrease in the discount rate would increase pension expense by approximately $1,327,000. For our postretirement plans, a 50 basis point
decrease in the discount rate would increase
postretirement expense by approximately $86,000. For fiscal 2008, we increased our discount rate to 6.25% from 5.75% for our pension plans and to 6.00% from 5.75% for our postretirement benefit plan.
On November 7, 2006, our Board of Directors approved an amendment to freeze our Defined Benefit Retirement Income Plan, Supplemental Executive Retirement Plan and Retirement Enhancement Plan
(the "Plans") as of December 31, 2006. On December 20, 2006 we 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. We will continue to fund existing benefit obligations
and there will be no new participants in the future. As a result of amending and restating the Plans to implement the freeze, we recognized a curtailment gain of $10,983,000 in our consolidated
financial statements which reduced our pension expense for fiscal 2007. In connection with a reorganization, there was a reduction in certain pension and postretirement plan participants, which
resulted in curtailment gains in fiscal 2006 for accounting purposes of $2,300,000. We have recorded net periodic benefit cost (income) for our pension and postretirement plans of $1,461,000,
$(4,454,000), and $4,706,000 during the periods ended April 3, 2008, March 29, 2007, and March 30, 2006, respectively.

To
determine the expected long-term rate of return on pension plan assets, we consider the current and expected asset allocations, as well as historical and expected returns
on various categories of plan assets obtained from our investment portfolio manager. A 50 basis point decrease in the expected return on assets of our qualified defined benefit pension plan would
increase pension expense on our principal plans by approximately $376,000 per year.

The
annual rate of increase in the per capita cost of covered health care benefits assumed for 2008 was 8.0% for medical and 3.5% for dental and vision. The rates were assumed to
decrease gradually to 5.0% for medical in 2010 and remain at 3.5% 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 April 3, 2008 by $3,911,000 and the aggregate of the service
and interest cost components of postretirement expense for fiscal 2008 by $455,000. Decreasing the assumed health care cost trend rates by one percentage point in each year would decrease the
accumulated postretirement obligation for fiscal 2008 by $3,238,000 and the aggregate service and interest cost components of postretirement expense for fiscal 2008 by $370,000.
Note 13Employee Benefit Plans to Marquee Holdings' consolidated financial statements included elsewhere in this Form 10-K includes disclosures of our pension
plan and postretirement plan assumptions and information about our pension plan assets.

Film Exhibition Costs.We predominantly license "first-run" motion pictures on a
film-by-film and theatre-by-theatre basis from distributors owned by major film production companies and from independent distributors. 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.

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 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.

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We
accrue film exhibition costs based on the applicable box office receipts and estimates of the final settlement pursuant to the film licenses entered into with our distributors.
Generally, less than one third of our quarterly film exhibition cost is estimated at period-end. The length of time until these costs are known with certainty depends on the ultimate
duration of the film play, but is typically "settled" within two to three months of a particular film's opening release. Upon settlement with our film distributors, film cost expense and the related
film cost payable are adjusted to the final film settlement. Such adjustments have been historically insignificant. However, actual film costs and film costs payable could differ materially from those
estimates. For fiscal years 2008, 2007, and 2006 there were no significant changes in our film cost estimation and settlement procedures.

As
of April 3, 2008 and March 29, 2007, we had recorded film payables of $49,730,000 and $72,070,000, respectively. We have recorded film exhibition costs of $879,076,000,
$855,804,000, and $595,353,000 during the periods ended April 3, 2008, March 29, 2007, and March 30, 2006.

Acquisitions.We account for our acquisitions of theatrical exhibition businesses using the purchase method. The purchase
method requires that we estimate the fair value of the individual assets and liabilities acquired as well as various forms of consideration given including cash, common stock, senior subordinated
notes and bankruptcy related claims. We have utilized valuation studies for certain of the assets and liabilities acquired to assist us in determining fair value. The estimation of the fair value of
the assets and liabilities acquired including deferred tax assets and liabilities related to such amounts and consideration given involves a number of judgments and estimates that could differ
materially from the actual amounts.

We
completed the Mergers on January 26, 2006. The acquisition was treated as a purchase in accordance with Statement of Financial Accounting Standards No. 141, Business Combinationsfor an
estimated purchase price of $537,171,000. Consideration was provided through a stock issuance by Holdings. The consolidated
financials include the results of Loews operations from the date of the Mergers.

Operating Results

The following table sets forth our revenues, costs and expenses attributable to our United States and Canada and International theatrical exhibition operations
and Other. Reference is made to Note 18Operating Segments to our consolidated financial statements included elsewhere in this Form 10-K for additional
information about our operations by operating segment.

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Fiscal year 2008 includes 53 weeks, and fiscal years 2007 and 2006 include 52 weeks.

|(In thousands)                        |                                                    | 53 Weeks
Ended
April 3, 2008 |           | 52 Weeks
Ended
March 29, 2007 |   | 52 Weeks
Ended
March 30, 2006 |          
|------------------------------------- | -------------------------------------------------- | ---------------------------- | --------- | ----------------------------- | - | ----------------------------- | ---------
|Revenues                              |                                                    |                              |           |                               |   |                               |          
|U.S. and Canada theatrical exhibition |                                                    |                              |           |                               |   |                               |          
|                                      | Admissions                                         |                              | $         | 1,601,126                     |   | $                             | 1,564,850
|                                      | Concessions                                        |                              |           | 642,368                       |   |                               | 627,179  
|                                      | Other theatre                                      |                              |           | 67,486                        |   |                               | 92,823   
|                                      |                                                    |                              |           |                               |   |                               |          
|                                      |                                                    |                              | 2,310,980 |                               |   | 2,284,852                     |          
|                                      |                                                    |                              |           |                               |   |                               |          
|International theatrical exhibition   |                                                    |                              |           |                               |   |                               |          
|                                      | Admissions                                         |                              |           | 101,949                       |   |                               | 95,089   
|                                      | Concessions                                        |                              |           | 66,418                        |   |                               | 59,139   
|                                      | Other theatre                                      |                              |           | 24,980                        |   |                               | 22,318   
|                                      |                                                    |                              |           |                               |   |                               |          
|                                      |                                                    |                              | 193,347   |                               |   | 176,546                       |          
|Other                                 |                                                    |                              |          |                               |   | 173                           |          
|                                      |                                                    |                              |           |                               |   |                               |          
|                                      | Total revenues                                     |                              | $         | 2,504,327                     |   | $                             | 2,461,571
|                                      |                                                    |                              |           |                               |   |                               |          
|Costs and Expenses                    |                                                    |                              |           |                               |   |                               |          
|U.S. and Canada theatrical exhibition |                                                    |                              |           |                               |   |                               |          
|                                      | Film exhibition costs                              |                              | $         | 834,863                       |   | $                             | 815,321  
|                                      | Concession costs                                   |                              |           | 68,494                        |   |                               | 65,567   
|                                      | Theatre operating expense                          |                              |           | 599,470                       |   |                               | 569,924  
|                                      | Rent                                               |                              |           | 429,694                       |   |                               | 419,443  
|                                      | Preopening expense                                 |                              |           | 7,130                         |   |                               | 4,776    
|                                      | Theatre and other closure expense (income)         |                              |           | (21,013                       | ) |                               | 8,966    
|                                      |                                                    |                              |           |                               |   |                               |          
|                                      |                                                    |                              | 1,918,638 |                               |   | 1,883,997                     |          
|                                      |                                                    |                              |           |                               |   |                               |          
|International theatrical exhibition   |                                                    |                              |           |                               |   |                               |          
|                                      | Film exhibition costs                              |                              |           | 44,213                        |   |                               | 40,483   
|                                      | Concession costs                                   |                              |           | 15,052                        |   |                               | 14,144   
|                                      | Theatre operating expense                          |                              |           | 50,162                        |   |                               | 47,363   
|                                      | Rent                                               |                              |           | 28,235                        |   |                               | 26,481   
|                                      | Pre-opening expense                                |                              |           |                              |   |                               | 1,793    
|                                      | Theatre and other closure expense (income)         |                              |           | 43                            |   |                               | 45       
|                                      |                                                    |                              |           |                               |   |                               |          
|                                      |                                                    |                              | 137,705   |                               |   | 130,309                       |          
|                                      |                                                    |                              |           |                               |   |                               |          
|Other                                 |                                                    |                              | 258       |                               |   | 1,789                         |          
|General and administrative expense:   |                                                    |                              |           |                               |   |                               |          
|                                      | Merger, Acquisition and Transaction Costs          |                              |           | 6,372                         |   |                               | 12,447   
|                                      | Management Fee                                     |                              |           | 5,000                         |   |                               | 5,000    
|                                      | Other                                              |                              |           | 49,897                        |   |                               | 55,875   
|Restructuring Charge                  |                                                    |                              |          |                               |   |                              |          
|Depreciation and amortization         |                                                    |                              | 251,194   |                               |   | 256,472                       |          
|Impairment of long-lived assets       |                                                    |                              | 8,933     |                               |   | 10,686                        |          
|Disposition of assets and other gains |                                                    |                              | (2,408    | )                             |   | (11,183                       | )        
|                                      |                                                    |                              |           |                               |   |                               |          
|                                      | Total costs and expenses                           |                              | $         | 2,375,589                     |   | $                             | 2,345,392
|                                      |                                                    |                              |           |                               |   |                               |          
|Operating Data (at period end):       |                                                    |                              |           |                               |   |                               |          
|                                      | Screen additions                                   |                              |           | 136                           |   |                               | 128      
|                                      | Screen acquisitions                                |                              |           |                              |   |                               | 32       
|                                      | Screen dispositions                                |                              |           | 356                           |   |                               | 675      
|                                      | Average screenscontinuing operations(1)           |                              |           | 5,049                         |   |                               | 5,105    
|                                      | Number of screens operated                         |                              |           | 5,094                         |   |                               | 5,314    
|                                      | Number of theatres operated                        |                              |           | 353                           |   |                               | 379      
|                                      | Screens per theatre                                |                              |           | 14.4                          |   |                               | 14.0     
|                                      | Attendance (in thousands)continuing operations(1) |                              |           | 236,235                       |   |                               | 241,437  

---

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For the Year Ended April 3, 2008 and March 29, 2007

Revenues.Total revenues increased 1.7%, or $42,756,000 during the year ended April 3, 2008 compared to the year ended
March 29, 2007.

U.S.
and Canada theatrical exhibition revenues increased 1.1%, or $26,128,000, during the year ended April 3, 2008 compared to the year ended March 29, 2007. Admissions
revenues increased 2.3%, or $36,276,000, during the year ended April 3, 2008 compared to the year ended March 29, 2007, due to a 5.1% increase in average ticket prices partially offset
by a 2.6% decrease in total attendance. Admissions revenues at comparable theatres (theatres opened on or before the first quarter of fiscal 2008) increased 1.2% during the year ended April 3,
2008 over the comparable period last year, primarily due to a 4.8% increase in average ticket price partially offset by a 3.5% decrease in attendance at comparable theatres. The increase in average
ticket price was primarily due to our practice of periodically reviewing ticket prices and the discounts we offer and making selective adjustments based upon such factors as general inflationary
trends and conditions in local markets. Based upon available industry sources, box office revenues of our comparable theatres performed similarly to overall performance of industry comparable theatres
in the markets where we operate. Concessions revenues increased 2.4%, or $15,189,000, during the year ended April 3, 2008 compared to
the year ended March 29, 2007 due to a 5.2% increase in average concessions per patron related primarily to price increases partially offset by the decrease in attendance. Other theatre
revenues decreased 27.3%, or $25,337,000, during the year ended April 3, 2008 compared to the year ended March 29, 2007. Included in other theatre revenues is our share of
on-screen advertising revenues generated by NCM. The decrease in other theatre revenues was primarily due to decreases in on-screen advertising revenues as a result of the new
Exhibitor Services Agreement with NCM. See Note 1Revenuesfor discussion of the change in estimate for revenues recorded during the
year ended April 3, 2008.

International
theatrical exhibition revenues increased 9.5%, or $16,801,000, during the year ended April 3, 2008 compared to the year ended March 29, 2007. Admissions
revenues increased 7.2%, or $6,860,000, due to a 5.9% increase in average ticket price and a 1.3% increase in attendance. Concessions revenues increased 12.3%, or $7,279,000, due to the increase in
attendance and a 10.9% increase in concessions per patron. Concessions per patron increased in Mexico due primarily to price increases and promotions designed to increase transaction size and
incidence of purchase. International revenues were positively impacted by a weaker U.S. dollar, although this did not contribute materially to our consolidated earnings from continuing operations.

Costs and expenses.Total costs and expenses increased 1.3%, or $30,197,000, during the year ended April 3, 2008
compared to the year ended March 29, 2007.

U.S.
and Canada theatrical exhibition costs and expenses increased 1.8%, or $34,632,000, during the year ended April 3, 2008 compared to the year ended March 29, 2007. Film
exhibition costs increased 2.4%, or $19,542,000, during the year ended April 3, 2008 compared to the year ended March 29, 2007 due to the increase in admissions revenues. As a percentage
of admissions revenues, film exhibition costs were 52.1% in both the current period and the prior period. Concession costs increased 4.5%, or $2,927,000, during the year ended April 3, 2008
compared to the year ended March 29, 2007 due to the increase in concessions revenues and an increase in concession costs as a percentage of concessions revenues. As a percentage of concessions
revenues, concession costs were 10.7% in the current period compared with 10.5% in the prior period. As a percentage of revenues, theatre operating expense increased to 25.9% in the current period
from 24.9% in the prior period due primarily to increases in advertising expenses as a result of the new Exhibitor Services Agreement with NCM. Rent expense increased 2.4%, or $10,251,000, during the
year ended April 3, 2008 compared to the year ended March 29, 2007. During the year ended April 3, 2008, we recognized $21,013,000 of theatre and other closure income due
primarily to lease terminations negotiated on favorable terms for

45

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seven
of our theatres that were closed during fiscal 2008 or where the lease was terminated during this period. During the year ended March 29, 2007, we recognized $8,966,000 of theatre and
other closure expense due primarily to the closure of 26 theatres with 253 screens and to accretion of the closure liability related to theatres closed during prior periods.

International
theatrical exhibition costs and expenses increased 5.7% or $7,396,000 during the year ended April 3, 2008 compared to the year ended March 29, 2007. Film
exhibition costs increased
$3,730,000 during the year ended April 3, 2008 compared to the year ended March 29, 2007 due to the increase in admissions revenues. Concession costs increased $908,000 during the year
ended April 3, 2008 compared to the year ended March 29, 2007 due to the increase in concession revenues, partially offset by a decrease in concession costs as a percentage of
concessions revenues. As a percentage of concessions revenues, concession costs were 22.7% in the current period compared to 23.9% in the prior period. As a percentage of revenues, theatre operating
expense was 25.9% in the current period compared to 26.8% in the prior period. Rent expense increased $1,754,000 during the year ended April 3, 2008 compared to the year ended March 29,
2007. International costs and expenses were negatively impacted by a weaker U.S. dollar, although this did not contribute materially to our consolidated earnings from continuing operations. We
continually monitor the performance of our international 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 theatre closure charges prior to expiration of underlying lease agreements.

General and Administrative Expense:

Merger, acquisition and transaction costs.Merger and acquisition costs decreased $6,075,000 from $12,447,000 to $6,372,000
during the year ended April 3, 2008 compared to the year ended March 29, 2007. Current year costs are primarily comprised of professional and consulting expenses related to proposed
initial public offering of common stock that was withdrawn on June 19, 2007 and preacquisition expenses for casualty insurance losses and payments for a union-sponsored pension plan related to
the merger with Loews. The decrease from prior year is primarily due to a reduction in expenses related to Loews.

Management fees.Management fees were unchanged during the year ended April 3, 2008 compared to the year ended
March 29, 2007. Management fees of $1,250,000 were paid quarterly, in advance, to our Sponsors in exchange for consulting and other services.

Other.Other general and administrative expense decreased 10.7%, or $5,978,000, during the year ended April 3, 2008
compared to the year ended March 29, 2007. The decrease in other general and administrative expenses is primarily due to a decrease in stock compensation expense of $10,361,000 during the year
ended April 3, 2008 compared to the year ended March 29, 2007 due to the accelerated vesting of certain options as a result of entry into a separation and general release agreement with
the holder of these options during the year ended March 29, 2007 and forfeitures during the year ended April 3, 2008. As a result of the accelerated vesting during the prior year and
forfeitures during the current year, there is no expense related to these options during the current year. Additionally, incentive compensation expense decreased by $3,297,000 related to declines in
operating performance compared to the annual target underlying our annual incentive plan. These declines in general and administrative expense were partially offset by a decrease in pension income of
$5,974,000 related to an amendment to freeze our Plans as of December 31, 2006 which resulted in the recording of a curtailment gain of $10,983,000 during fiscal 2007.

Impairment of Long-Lived Assets.During fiscal 2008 we recognized a non-cash impairment loss of
$8,933,000 that reduced property, net on 17 theatres with 176 screens (in New York, Maryland, Indiana, Illinois, Nebraska, Oklahoma, California, Arkansas, Pennsylvania, Washington, and the District

46

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of
Columbia). During fiscal 2007 we recognized a non-cash impairment loss of $10,686,000 on 10 theatres with 117 screens (in New York, Washington, Indiana, Illinois, Michigan, Texas,
Pennsylvania and Massachusetts). Of the charge, $1,404,000 was related to intangible assets, net and $9,282,000 was related to property, net. The estimated future cash flows of these theatres,
undiscounted and without interest charges, were less than the carrying value of the theatre assets. We continually evaluate the future plans for certain of our theatres, which may include selling
theatres or closing theatres and terminating the leases.

Depreciation and Amortization.Depreciation and amortization decreased 2.1%, or $5,278,000 compared to the prior period. The
prior year includes a cumulative adjustment to depreciation expense of approximately $2,200,000 related to adjustments to fair value for the Merger.

Disposition of Assets and Other Gains.Disposition of assets and other gains were $2,408,000 in the current period compared
to $11,183,000 in the prior period. The current and prior periods include $2,426,000 and $13,130,000, respectively, of settlements received related to fireproofing litigation recoveries at various
theatres. The prior year includes a loss on the disposition of theatres in the United States as required by and in connection with the Mergers of $1,946,000.

Other Income.Other income includes $11,289,000 and $10,992,000 of income related to the derecognition of stored value card
liabilities where we believe future redemption to be remote, during the year ended April 3, 2008 and March 29, 2007, respectively. During the year ended April 3, 2008, other
income includes insurance recoveries related to Hurricane Katrina of $1,246,000 for property losses in excess of property carrying cost and $397,000 for business interruption, partially offset by
expense of $501,000 related to ineffectiveness of the Cinemex interest rate swap. During the year ended March 29, 2007, other income includes insurance recoveries related to Hurricane Katrina
of $2,469,000 for property losses in excess of property carrying cost and $294,000 for business interruption, partially offset by a loss on redemption of debt as described below of $3,488,000.

Interest Expense.Interest expense decreased 22.8%, or $53,048,000, primarily due to decreased borrowings.

AMC
received net proceeds upon completion of the NCM initial public offering of $517,122,000. We used the net proceeds from the NCM initial public offering, along with cash on hand, to
redeem our 91/2% senior subordinated notes due 2011 (the "Notes due 2011"), our senior floating rate notes due
2010 (the "Floating Notes due 2010") and 97/8% senior subordinated notes due 2012 (the "Notes due 2012"). On March 19, 2007 we redeemed $212,811,000 aggregate principal amount of
our Notes due 2011 at 100% of principal value, on March 23, 2007 we redeemed $205,000,000 aggregate principal amount of our Floating Notes due 2010 at 103% of principal value and on
March 23, 2007 we redeemed $175,000,000 aggregate principal amount of our Notes due 2012 at 104.938% of principal value. Our loss on redemption of these notes including call premiums and the
write off of unamortized deferred charges and premiums was $3,488,000, which was recorded in Other Income in fiscal 2007.

On
January 26, 2006, we issued $325,000,000 of the Notes due 2016 and entered into the Senior Secured Credit Facility for $850,000,000, of which $635,375,000 is currently
outstanding as a variable rate term note. We also incurred interest expense related to debt held by Cinemex of $11,929,000 during fiscal 2008.

Equity in Earnings of Non-Consolidated Entities.Equity in earnings of non-consolidated entities were
$43,019,000 in the current period compared to earnings of $233,704,000 in the prior period. Equity in earnings related to our investment in HGCSA were $18,743,000 for the year ended April 3,
2008, and include the gain on disposition of HGCSA of $18,751,000. Equity in earnings related to our investment in National CineMedia, LLC were $22,175,000 and $234,213,000 for the years ended
April 3, 2008 and March 29, 2007, respectively. We received net proceeds upon completion of the NCM initial public offering of $517,122,000. We recorded deferred revenues of $231,308,000
for the proceeds

47

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we
received related to modification payments to our Exhibitor Services Agreement with National CineMedia, LLC. We recorded the $285,814,000 of remaining proceeds we received from the NCM IPO
for the redemption of our preferred and common units to first reduce our recorded equity method investment to $0 and second to reflect the remaining proceeds as equity in earnings of
non-consolidated entities. As a result we recorded a change of interest gain of $132,622,000 and received distributions in excess of our investment in National CineMedia, LLC
related to the redemption of preferred and common units of $106,188,000. See Note 6Investments for the components of equity in earnings related to National CineMedia, LLC.

Investment Income.Investment income was $25,679,000 for the year ended April 3, 2008 compared to $18,191,000 for the
year ended March 29, 2007. Current year investment income includes a gain on the sale of Fandango of $15,977,000. Interest income decreased $9,450,000 compared to prior year due primarily to
less cash and equivalents available for investment.

Income Tax Provision (Benefit).The provision for income taxes from continuing operations was $7,800,000 for the year ended
April 3, 2008 and $31,500,000 for the year ended March 29, 2007. See Note 11Income Taxes.

Loss from Discontinued Operations, Net.On May 11, 2006, we sold our operations in Iberia, including 4 theatres with
86 screens in Spain and 1 theatre with 20 screens in Portugal. At the date of the sale these operations did not meet the criteria for discontinued operations because of continuing involvement in the
region through an equity method investment in Yelmo. In December 2006, we disposed of our investment in Yelmo, including 27 theatres with 310 screens in Spain, and the results of the operations in
Iberia have now been classified as discontinued operations. On June 30, 2005, we sold Japan AMC Theatres, Inc., including four theatres in Japan with 63 screens, and classified its
operations as discontinued operations. The information presented for all fiscal 2008 and 2007 reflects the new classifications. See Note 3Discontinued Operations for the components
of the loss from discontinued operations.

Net Earnings (Loss).Net earnings were $22,733,000 and $116,907,000 for the year ended April 3, 2008 and
March 29, 2007, respectively.

For the Year Ended March 29, 2007 and March 30, 2006

Revenues.Total revenues increased 45.9%, or $774,693,000, during the year ended March 29, 2007 compared to the year
ended March 30, 2006. This increase included approximately $633,436,000 of additional admission and concessions revenues resulting from the Merger.

U.S.
and Canada theatrical exhibition revenues increased 40.1%, or $654,323,000, during the year ended March 29, 2007 compared to the year ended March 30, 2006. Admissions
revenues increased 40.9%, or $454,386,000, during the year ended March 29, 2007 compared to the year ended March 30, 2006, due to a 32.7% increase in total attendance, including the
increased attendance and admissions revenues of $375,953,000 due to the Merger, and a 6.2% increase in average ticket prices. Admissions revenues at comparable theatres (theatres opened on or before
the first quarter of fiscal 2006) increased 7.9% during the year ended March 29, 2007 over the comparable period last year, primarily due to a 5.0% increase in average ticket price and a 2.8%
increase in attendance at comparable theatres. The increase in average ticket price was primarily due to our practice of periodically reviewing ticket prices and the discounts we offer and making
selective adjustments based upon such factors as general inflationary trends and conditions in local markets. Based upon available industry sources, box office revenues of our comparable theatres
(including comparable theatres acquired in the Merger) performed in line with overall performance of industry comparable theatres in the markets where we operate. Concessions revenues increased 41.4%,
or $183,599,000, during the year ended March 29, 2007 compared to the year ended March 30, 2006 due to the increase in attendance and a 6.6% increase in

48

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average
concessions per patron related primarily to price increases. Concession revenues increased by $140,807,000 due to the Merger. Other theatre revenues increased 21.4%, or $16,338,000, during the
year ended March 29, 2007 compared to the year ended March 30, 2006. Included in other theatre revenues are our share of on-screen advertising revenues generated by NCN and
NCM. The increase in other theatre revenues was primarily due to increases in on-screen advertising revenues as a result of the Merger.

International
theatrical exhibition revenues increased $133,104,000 during the year ended March 29, 2007 compared to the year ended March 30, 2006. Admissions revenues
increased by $70,224,000 due to the theatres acquired in Mexico in the Merger. Overall, admissions revenues increased $67,519,000 during the year ended March 29, 2007 compared to the year ended
March 30, 2006. Concessions revenues increased $46,452,000 due to the theatres acquired in Mexico in the Merger. Overall, concession revenues increased $46,691,000 during the year ended
March 29, 2007 compared to the year ended March 30, 2006.

Revenues
from Other decreased 98.7%, or $12,734,000, during the year ended March 29, 2007 compared to the year ended March 30, 2006 due to the contribution of NCN's net
assets to NCM on March 29, 2005 and the related run-off of customer contracts. The revenues of NCN during fiscal 2006 and 2007 are comprised of customer contracts entered into prior
to March 29, 2005. Our share of advertising revenues generated by NCM are included in U.S. and Canada Other theatre revenues.

Costs and expenses.Total costs and expenses increased 40.6%, or $677,072,000, during the year ended March 29, 2007
compared to the year ended March 30, 2006. The effect of the Merger was an increase in total costs and expenses of approximately $565,751,000.

U.S.
and Canada theatrical exhibition costs and expenses increased 36.8%, or $506,522,000, during the year ended March 29, 2007 compared to the year ended March 30, 2006.
Film exhibition costs increased 39.7%, or $231,695,000, during the year ended March 29, 2007 compared to the year ended March 30, 2006 due to the increase in admissions revenues, offset
by a decrease in the percentage of admissions paid to film distributors. As a percentage of admissions revenues, film exhibition costs were 52.1% in the current period as compared with 52.6% in the
prior period due to more favorable film rental terms primarily from theatres acquired in the Merger. Concession costs increased 36.8%, or $17,645,000, during the year ended March 29, 2007
compared to the year ended March 30, 2006 due to the increase in concessions revenues, partially offset by a decrease in concession costs as a percentage of concessions revenues. As a
percentage of concessions revenues, concession costs were 10.5% in the current period compared with 10.8% in the prior period. As a percentage of revenues, theatre operating expense was 24.9% in the
current period as compared to 25.9% in the prior period. Rent expense increased 32.2%, or $102,262,000, during the year ended March 29, 2007 compared to the year ended March 30, 2006
primarily due to the Merger, which increased rent expense by approximately $84,523,000. During the year ended March 29, 2007, we recognized $8,966,000 of theatre and other closure expense due
primarily to the closure of 26 theatres with 253 screens and to accretion of the closure liability related to theatres closed during prior periods. During the year ended March 30, 2006, we
recognized $1,313,000 of theatre and other closure expense related primarily to accretion of the closure liability related to theatres closed during prior periods.

International
theatrical exhibition costs and expenses increased $88,211,000 during the year ended March 29, 2007 compared to the year ended March 30, 2006. Film exhibition
costs increased $28,756,000 during the year ended March 29, 2007 compared to the year ended March 30, 2006 due to the increase in admissions revenues. Overall, film exhibition costs
increased $30,042,000 during the year ended March 29, 2007 compared to the year ended March 30, 2006 due to the theatres acquired in Mexico. Concession costs increased $11,485,000 during
the year ended March 29, 2007 compared to the year ended March 30, 2006 due to the increase in concession revenues. Overall, concession costs increased $11,362,000 during the year ended
March 29, 2007 compared to the year ended March 30,

49

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2006
due to the theatres acquired in Mexico. As a percentage of revenues, theatre operating expense was 26.8% in the current period compared to 34.3% in the prior period. Theatre operating expense as
a percentage of revenues in Mexico were 25.2% in the current period. Rent expense increased $13,784,000 during the year ended March 29, 2007 compared to the year ended March 30, 2006
primarily as a result of the theatres acquired in Mexico. We continually monitor the performance of our international 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 theatre
closure charges prior to expiration of underlying lease agreements.

Costs
and expenses from Other decreased 88.0%, or $13,180,000, during the year ended March 29, 2007 compared to the year ended March 30, 2006 due to the contribution of net
assets by NCN to NCM and run-off of customer contracts.

General and Administrative Expense:

Merger, acquisition and transaction costs.Merger and acquisition costs decreased $76,000 from $12,523,000 to $12,447,000
during the year ended March 29, 2007 compared to the year ended March 30, 2006. Current year costs are primarily comprised of professional and consulting, repairs and maintenance to
update certain of the Loews theatres and salaries costs related to the Merger, a proposed initial public offering and other potential divestiture activities. Professional and consulting costs include
$2,451,000 of expenses related to proposed initial public offering of common stock that was withdrawn.

Management fees.Management fees increased $3,000,000 during the year ended March 29, 2007. For fiscal 2007,
management fees of $1,250,000 were paid quarterly, in advance, to our Sponsors in exchange for consulting and other services.

Other.Other general and administrative expense increased 38.8%, or $15,624,000, during the year ended March 29, 2007
compared to the year ended March 30, 2006. We incurred increased expense at Cinemex of $7,905,000, incentive-based compensation increased $2,412,000 due to improvements in operating results and
we experienced increases in other salaries of $7,179,000 and professional services and consulting of $1,648,000 primarily related to the Merger and a payment of $2,465,000 to one of our former
executive officers pursuant to his separation and general release agreement. Additionally, stock compensation expense increased $7,135,000 based on the increase in estimated fair value for outstanding
liability classified options and accelerated vesting of these options as a result of entry into a separation and general release agreement with the holder of these options (see
Note 10Stockholder's Equity). These increases were partially offset by a curtailment gain of $10,983,000 related to our defined benefit pension plan (see
Note 13Employee Benefit Plan).

Restructuring Charges.Restructuring charges were $0 during the year ended March 29, 2007 as compared to $3,980,000
during the year ended March 30, 2006. The prior period expenses are primarily related to one-time termination benefits and other costs related to the displacement of approximately
200 associates related to an organizational restructuring, which was completed to create a simplified organizational structure and contribution of assets by NCN to NCM.

Impairment of Long-Lived Assets.During fiscal 2007 we recognized a non-cash impairment loss of
$10,686,000 on 10 theatres with 117 screens (in New York, Washington, Indiana, Illinois, Michigan, Texas, Pennsylvania and Massachusetts). Of the charge, $1,404,000 was related to intangible assets,
net and $9,282,000 was related to property, net. During fiscal 2006 we recognized a non-cash impairment loss of $11,974,000 on four theatres with 66 screens (in Ohio, Illinois, New York
and New Jersey). The entire charge was related to property. The estimated future cash flows of these theatres, undiscounted and without interest charges,
were less than the carrying value of the theatre assets. We continually evaluate the future plans for certain of our theatres, which may include selling theatres or closing theatres and terminating
the leases.

50

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Depreciation and Amortization.Depreciation and amortization increased 56.3%, or $92,425,000 compared to the prior period,
due primarily to increased asset values recorded as a result of the Merger.

Disposition of Assets and Other Gains.Disposition of assets and other gains were $11,183,000 in the current period compared
to $997,000 in the prior period. The current and prior periods include $13,130,000 and $935,000, respectively, of settlements received related to fireproofing litigation recoveries at various theatres
(see Note 14Commitments and Contingencies). The current period includes a loss on the dispositions of theatres in the United States as required by and in connection with the
Mergers of $1,946,000.

Other Income.Other income includes $10,992,000 and $8,699,000 of income related to the derecognition of stored value card
liabilities where we believe future redemption to be remote, during the year ended March 29, 2007 and March 30, 2006, respectively. Other income includes insurance recoveries related to
Hurricane Katrina of $2,469,000 for property losses in excess of property carrying cost and $294,000 for business interruption during the year ended March 29, 2007. Other income also includes
insurance recoveries related to Hurricane Katrina of $3,032,000 for property losses related to Hurricane Katrina, net of disposition losses of $346,000 and $1,968,000 for business interruption during
the year ended March 30, 2006. During the year ended March 29, 2007 we recorded a loss on redemption of debt as described below of $3,488,000.

Interest Expense.Interest expense increased 62.4%, or $89,272,000, primarily due to increased borrowings.

On
January 26, 2006, we issued $325,000,000 of the Notes due 2016 and entered into the Senior Secured Credit Facility for $850,000,000, of which $643,500,000 is currently
outstanding as a variable rate term note. We also incurred interest expense related to debt held by Cinemex of $12,258,000 during fiscal 2007.

AMC
received net proceeds upon completion of AMCE's NCM initial public offering of $517,122,000. We used the net proceeds from the NCM initial public offering, along with cash on hand,
to redeem AMCE's 91/2% senior subordinated notes due 2011 (the "Notes due 2011"), AMCE's senior floating rate notes due 2010 (the "Floating Notes due 2010") and AMCE's
97/8% senior subordinated notes due 2012 (the "Notes due 2012"). On March 19, 2007 we redeemed $212,811,000 aggregate principal amount of
AMCE's Notes due 2011 at 100% of principal value, on March 23, 2007 we redeemed $205,000,000 aggregate principal amount of AMCE's Floating Notes due 2010 at 103% of principal value and on
March 23, 2007 we redeemed $175,000,000 aggregate principal amount of AMCE's Notes due 2012 at 104.938% of principal value. Our loss on redemption of these notes including call premiums and the
write off of unamortized deferred charges and premiums was $3,488,000.

Equity in (Earnings) Losses of Non-Consolidated Entities.Equity in earnings of non-consolidated
entities were $233,704,000 in the current period compared to losses of $7,807,000 in the prior period. Equity in (earnings) losses related to our investment in National CineMedia LLC were
$(234,213,000) and $5,478,000 for the year ended March 29, 2007 and March 30, 2006, respectively. We received net proceeds upon completion of the NCM initial public offering of
$517,122,000. We recorded deferred revenues of $231,308,000 for the proceeds we received related to modification payments to our Exhibitor Services Agreement with National CineMedia, LLC. We
recorded the $285,814,000 of remaining proceeds we received from the NCM IPO for the redemption of our preferred and common units to first reduce our recorded equity method investment to $0 and second
to reflect the remaining proceeds as equity in earnings of non-consolidated entities. As a result we recorded a change of interest gain of $132,622,000 and received distributions in excess
of our investment in National

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CineMedia, LLC
related to the redemption of preferred and common units of $106,188,000. See Note 6Investments for the components of equity in earnings related to National
CineMedia, LLC.

Investment Income.Investment income was $18,191,000 for the year ended March 29, 2007 compared to $3,409,000 for the
year ended March 28, 2006. Interest income increased $14,786,000 from the prior period due primarily to larger amounts of cash and equivalents available for investment.

Income Tax Provision.The provision for income taxes from continuing operations was $31,500,000 for the year ended
March 29, 2007 and $71,800,000 for the year ended March 30, 2006. See Note 11Income Taxes.

Loss from Discontinued Operations, Net.On May 11, 2006, we sold our operations in Iberia, including 4 theatres with
86 screens in Spain and 1 theatre with 20 screens in Portugal. At the date of the sale these operations did not meet the criteria for discontinued operations because of continuing involvement in the
region through an equity method investment in Yelmo. In December 2006, we disposed of our investment in Yelmo, including 27 theatres with 310 screens in Spain, and the results of the operations in
Iberia have now been classified as discontinued operations. On June 30, 2005, we sold Japan AMC Theatres, Inc., including four theatres in Japan with 63 screens, and classified its
operations as discontinued operations. The information presented for all fiscal 2007 and 2006 reflects the new classifications. See Note 3Discontinued Operations for the components
of the loss from discontinued operations.

Net Earnings (Loss).Net earnings (loss) was $116,907,000 and ($216,223,000) for the year ended March 29, 2007 and
March 30, 2006, respectively.

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.

Holding Company Status

Holdings is a holding company with no operations of its own and has no ability to service interest or principal on its indebtedness or pay dividends other than
through any dividends it may receive from its subsidiaries. Under certain circumstances, AMC Entertainment is restricted from paying dividends to Holdings by the terms of the indentures relating to
its notes and its Senior Secured Credit Facility. AMC Entertainment's Senior Secured Credit Facility and note indentures contain provisions which limit the amount of dividends and advances which it
may pay or make to Holdings. Under the most restrictive of these provisions, set forth in the note indenture for the 85/8% Senior Fixed Rate notes due 2012, (the "Fixed Notes due 2012")
the amount of loans and dividends which AMC Entertainment could make to Holdings may not exceed $275,422,000 in the aggregate as of April 3, 2008. Under the note indentures, a loan to Holdings
would have to be on terms no less favorable to AMC Entertainment than could be obtained in a comparable transaction on an arm's length basis with an unaffiliated third party and be in the best
interest of AMC Entertainment. Provided no event of default has occurred or would result, the Senior Secured Credit Facility also permits AMC Entertainment to pay cash dividends to Holdings for
specified purposes, including indemnification claims, taxes, up to $4,000,000 annually for operating expenses, repurchases of equity awards to satisfy tax withholding

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obligations,
specified management fees, fees and expenses of permitted equity and debt offerings and to pay for the repurchase of stock from employees, directors and consultants under benefit plans up
to specified amounts. Depending on the net senior secured leverage ratio, as defined in the senior secured credit facility, AMC Entertainment may also pay Holdings a portion of net cash proceeds from
specified assets sales.

Cash Flows from Operating Activities

Cash flows provided by operating activities, as reflected in the Consolidated Statements of Cash Flows, were $201,676,000, $417,870,000, and $25,694,000 during
the periods ended April 3, 2008, March 29, 2007, and March 30, 2006 respectively. The decrease in operating cash flows during the year ended April 3, 2008 is primarily due
to the one-time receipt of payments related to the Exhibitor Service Agreement with National CineMedia, LLC in fiscal 2007. The increase in operating cash flows during the year
ended March 29, 2007 is primarily due to an increase in deferred revenues of $231,308,000 for the proceeds we received related to modification payments to our Exhibitor Services Agreement with
National CineMedia, LLC, increases in attendance and improvement in operating results, including amounts relating to the Mergers.

We
had working capital deficits as of April 3, 2008 and March 29, 2007 of ($225,476,000) and ($40,370,000), respectively. Working capital includes $134,560,000 and
$127,334,000 of deferred revenues as of April 3, 2008 and March 29, 2007, respectively. We received litigation settlement checks related to fireproofing claims totaling $2,426,000 and
$13,130,000 during the years ended April 3, 2008 and March 29, 2007. We have the ability to borrow against our 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 $185,947,000 and $177,500,000 available on our credit facility to meet these obligations for the
periods ended April 3, 2008 and March 29, 2007, respectively.

During
the year ended April 3, 2008, we closed 18 theatres with 196 screens in the U.S., opened 9 new theatres with 136 screens in the U.S., and sold seventeen theatres with 160
screens in Argentina, Brazil, Chile, and Uruguay, resulting in a circuit total of 353 theatres and 5,094 screens.

Cash Flows from Investing Activities

Cash provided by (used in) investing activities, as reflected in the Consolidated Statement of Cash Flows were $(139,405,000), $283,969,000, and $107,538,000
during the periods ended April 3, 2008, March 29, 2007, and March 30, 2006 respectively. As of April 3, 2008, we had construction in progress of $21,649,000. We had 6 U.S.
theatres with a total of 72 screens under construction on April 3, 2008 that we expect to open in fiscal 2009. Cash outflows from investing activities include capital expenditures of
$151,676,000 during the year ended April 3, 2008. We expect that our gross capital expenditures in fiscal 2009 will be approximately $145,000,000 to $150,000,000.

Cash
flows for the period ended April 3, 2008 include proceeds from the disposal of HGCSA and Fandango of $28,682,000 and $17,977,000, respectively. Cash flows for the period
ended March 29, 2007 include proceeds from the NCM distribution of $285,814,000, proceeds from the sale of our theatres in Spain and Portugal of $35,446,000 and proceeds from our disposition of
Yelmo and of U.S. theatres as required by and in connection with the mergers of $116,439,000. Cash flows for the period ended
March 30, 2006 include cash acquired from the Mergers of $142,512,000, proceeds from the sale leaseback of two theatres of $35,010,000 and proceeds from the sale of the Japan theatres of
$53,456,000, partially offset by capital expenditures of $117,668,000. The cash acquired from the Mergers represented the cash held by Loews at the date of the Mergers. The Mergers were
non-cash, funded by the issuance of Holdings' common stock

In
December 2006, we disposed of our investment in Yelmo which owned and operated 27 theatres and 310 screens in Spain as of the date sold for proceeds of $52,137,000.

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In
May 2006, AMCEI and its subsidiary AMC Entertainment International Limited sold its interests in AMC Entertainment España S.A., which owned and operated 4
theatres with 86 screens in Spain, and Actividades Multi-Cinemas E Espectáculos, LDA, which owned and operated 1 theatre with 20 screens in Portugal for a net sales price of
approximately $35,446,000.

During
the fifty-two weeks ended March 29, 2007, we sold six theatres with 68 screens, exchanged two theatres with 32 screens, and closed one theatre with six screens
in the U.S. as required by and in connection with the approval of the Mergers for an aggregate sales price of $64,302,000.

On
February 13, 2007, NCM, Inc., completed its IPO of 42,000,000 shares of common stock at a price of $21.00 per share. Net proceeds from the NCM, Inc. IPO were used
to acquire newly issued equity interest from NCM, and NCM distributed the net proceeds to each of AMC, Cinemark and Regal on a pro rata basis in connection with modifying payment obligations for
access to our theatres pursuant to the Exhibitor Services Agreement. We also sold common units in NCM to NCM, Inc. in connection with the exercise of the underwriters' option to purchase
additional shares. In connection with the completion of the NCM, Inc. IPO, NCM entered into a $725,000,000 term loan facility the net proceeds of which were used to redeem preferred units held
by each of AMC, Cinemark and Regal on a pro rata basis pursuant to a recapitalization of NCM. AMC received net proceeds upon completion of such transactions of $517,122,000. We recorded $285,814,000
of the proceeds received from the NCM, Inc. IPO to first reduce our recorded equity method investment to $0 and second to reflect the remaining proceeds as equity in earnings of
non-consolidated entities. We used the proceeds from these transactions, together with cash on hand, to redeem AMCE's 91/2% senior subordinated notes due 2011, AMCE's senior
floating rate notes due 2010 and AMCE's 97/8% senior subordinated notes due 2012.

In
connection with the completion of the NCM, Inc. IPO, AMC amended and restated its existing services agreement with NCM whereby in exchange for our pro rata share of the
NCM, Inc. IPO proceeds, AMC agreed to a modification of NCM's payment obligation under the existing agreement. The modification extended the term of the agreement to 30 years, provided
NCM with a five year right
of first refusal beginning one year prior to the end of the term and changed the basis upon which AMC 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 would be composed of a fixed payment per patron and a fixed payment per digital screen, which would increase 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. Additionally, AMC entered into the Loews Screen Integration
Agreement with NCM pursuant to which AMC will pay NCM an amount that approximates the EBITDA that NCM would generate if it were able to sell advertising in the Loews theatre chain on an exclusive
basis commencing upon the completion of the NCM, Inc. IPO, and NCM issued to AMC common membership units in NCM increasing its ownership interest to approximately 33.7%; such Loews payments
will be made quarterly until May 2008 and are estimated to total approximately $15,850,000 in the aggregate. Also, with respect to any on-screen advertising time provided to our beverage
concessionaire, AMC would be required to purchase such time from NCM at a negotiated rate. In addition, after completion of the NCM, Inc. IPO, AMC expects to receive mandatory quarterly
distributions of excess cash from NCM.

We
currently own 18,414,743 units or a 19.1% interest in NCM accounted for using the equity method of accounting. As of April 3, 2008 the fair market value of the shares in
National CineMedia LLC was approximately $409,241,000 based on a price for shares of National CineMedia, Inc. on April 3, 2008 of $22.22 per share. Because we have little tax
basis in these units and because the sale of all these units would require us to report taxable income of $520,969,000 for distributions received from NCM that were previously tax deferred, we expect
that any sales of these units would be made ratably over a period of time to most efficiently manage any related tax liability. We have available net operating loss carryforwards which could reduce
any related tax liability.

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In
March 2007, the board of directors of Fandango, Inc. ("Fandango"), an online movie ticketing company in which we owned approximately 8.4% of the outstanding common stock on an
as converted basis as of March 29, 2007, approved an Agreement and Plan of Merger (the "Fandango Merger Agreement"), which was adopted and approved by its stockholders. Pursuant to the Fandango
Merger Agreement, we and the other existing stockholders sold our interests in Fandango to Comcast Corporation. The transaction closed in the first quarter of fiscal 2008. In connection with the
transaction, we received an equity earn up which raised our interest in Fandango to approximately 10.4% of the outstanding common stock on an as converted basis immediately prior to the sale of our
shares. Pursuant to the terms of the Fandango Merger Agreement and subject to certain closing adjustments, we estimate that we will have received approximately $20.0 million in cash
consideration in connection with the sale of our interest in Fandango of which $17,977,000 was received during fiscal 2008.

We
fund the costs of constructing 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. On
March 30, 2006, we sold the real estate assets associated with two theatres with 32 screens to Entertainment Properties Trust for proceeds of $35,010,000 and then leased the real estate
assets associated with the theatres pursuant to a non-cancelable operating lease with terms of approximately 15 and 17 years at an initial lease rate of 9.25% with options to extend
each for up to 15 additional years.

Cash Flows from Financing Activities

Cash flows provided by (used in) financing activities, as reflected in the Consolidated Statement of Cash Flows, were $(270,690,000), $(611,131,000), and
$21,434,000 during the periods ended April 3, 2008, March 29, 2007, and March 30, 2006, respectively. During fiscal 2008, we made principal payments of $26,295,000 on our
corporate borrowings, capital and financing lease obligation, and mortgage obligations. We also paid a dividend of $270,588,000 to our stockholder, AMC Entertainment Holdings, Inc. During
fiscal 2007, we made principal payments of $592,811,000 to redeem our debt. We used the net proceeds included in investing activities from the NCM, Inc. IPO of $517,122,000, along with cash on
hand, to redeem AMCE's 91/2% senior subordinated notes due 2011 (the "Notes due 2011"), AMCE's senior floating rate notes due 2010 (the "Floating Notes due 2010") and AMCE's
97/8% senior subordinated notes due 2012 (the "Notes due 2012"). On March 19, 2007 we redeemed $212,811,000 aggregate principal amount of AMCE's Notes due 2011 at 100% of
principal value, on March 23, 2007 we redeemed $205,000,000 aggregate principal amount of AMCE's Floating Notes due 2010 at 103% of principal value and on March 23, 2007 we redeemed
$175,000,000 aggregate principal amount of AMCE's Notes due 2012 at 104.938% of principal value. Our loss on redemption of these notes including call premiums and the write off of unamortized deferred
charges and premiums was $3,488,000. Cash flows from financing activities for the period ended March 30, 2006 primarily include proceeds of $325,000,000 from the issuance of the Notes due 2016
and $650,000,000 from the Term Loan B which were used to repurchase $939,363,000 of debt, as well as $24,895,000 paid for financing costs which will be deferred and amortized over the life of the
debt. On September 29, 2005 we received $6,661,000 additional construction allowance from our landlord Entertainment Properties Trust related to three of our Canada theatres which allowed for
sale leaseback accounting at these locations and reduced our financing lease obligations by approximately $31,292,000, reduced the net book value of building assets related to these locations by
approximately $15,839,000 and resulted in a deferred gain of $22,114,000. The deferred gain is amortized as a reduction of rent expense over the remaining terms of the leases.

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Concurrently with the closing of the Mergers, we entered into the following financing transactions: (1) our Senior Secured Credit Facility, consisting of a $650,000,0000 term loan
facility and a $200,000,000 revolving credit facility; (2) the issuance by AMCE of $325,000,000 in aggregate principal amount of the Notes due 2016; (3) the termination of AMC
Entertainment's existing senior secured credit facility, under which no amounts were outstanding, and the repayment of all outstanding amounts under Loews' existing senior secured credit facility and
the termination of all commitments thereunder; and (4) the completion of the tender offer and consent solicitation for all $315,000,000 aggregate principal amount of Loews' 9.0% senior
subordinated notes due 2014.

As
a result of the merger with Marquee, AMC Entertainment became the obligor of $250,000,000 in aggregate principal amount of the 85/8% Senior Fixed Rate Notes due 2012
(the "Fixed Notes due 2012") and $205,000,000 in aggregate principal amount of Floating Notes due 2010 that were previously issued by Marquee Inc. on August 18, 2004. AMCE redeemed the
Floating Notes due 2010 on March 23, 2007 with proceeds from the NCM transactions and cash on hand.

In
connection with the Marquee Transactions, Holdings issued $304,000,000 principal amount at maturity of its Discount Notes for gross proceeds of $169,917,760. The only operations of
Holdings prior to the merger with Marquee were related to this financing.

Concurrently
with the consummation of the merger with Marquee, AMC Entertainment entered into an amendment to its credit facility. We refer to this amended credit facility as the
"amended credit facility." The amended credit facility modified a previous Second Amended and Restated Credit Agreement dated as of March 26, 2004, which was superseded in connection with the
execution of the "amended credit facility," which was scheduled to mature on April 9, 2009. The amended credit facility was replaced with the Senior Secured Credit Facility on
January 26, 2006.

On
February 24, 2004, AMC Entertainment sold $300,000,000 aggregate principal amount of 8% Senior Subordinated Notes due 2014 (the "Notes due 2014"). We used the net proceeds
(approximately $294,000,000) to redeem our Notes due 2009 and a portion of our 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 our option, in whole or in part, at any time on or after March 1, 2009 at 104.000% 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 and are subordinated to all of AMC Entertainment's existing and
future senior indebtedness (as defined in the indenture governing the Notes due 2014). The Notes due 2014 rank equally with AMC Entertainment's Notes due 2016.

On
January 26, 2006, AMC Entertainment sold $325,000,000 aggregate principal amount of the Notes due 2016. Net proceeds from the issuance of the Notes due 2016 were used to fund a
portion of the Merger Transactions and to pay related fees and expenses. The Notes due 2016 bear interest at the rate of 11% per annum, payable February 1 and August 1 of each year. The
Notes due 2016 are redeemable at our option, in whole or in part, at any time on or after February 1, 2011 at 105.5% of the principal amount thereof, declining ratably to 100% of the principal
amount thereof on or after February 1, 2014, plus in each case interest accrued to the redemption date. The Notes due 2016 are unsecured and are subordinated to all of AMC Entertainment's
existing and future senior indebtedness (as defined in the indenture governing the Notes due 2016). The Notes due 2016 rank equally with its Notes due 2014.

The
indentures relating to our notes allow us to incur all permitted indebtedness (as defined therein) without restriction, which includes all amounts borrowed under our credit facility.
The indentures also allow us to incur any amount of additional debt as long as we can satisfy the coverage ratio of each indenture after giving effect thereto on a pro forma basis. Under the terms of
the Parent Term Loan Facility which is more restrictive than the AMCE and Holdings indentures and as a practical matter limits our ability to incur indebtedness, we could borrow approximately
$426,200,000 as

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of
April 3, 2008 in addition to permitted indebtedness (assuming an interest rate of 11% on the additional senior subordinated borrowings). If we cannot satisfy the coverage ratios of the
indentures, generally we can incur, in addition to amounts borrowed under the credit facility, no more than $100,000,000 of new "permitted indebtedness" under the terms of the indentures relating to
the Notes due 2014 and Notes due 2016.

The
indentures relating to the above-described notes also contain covenants limiting dividends, purchases or redemptions of stock, transactions with affiliates, and mergers and sales of
assets, and require us to make an offer to purchase the notes upon the occurrence of a change in control, as defined in the indentures. Upon a change of control (as defined in the indentures), we
would be required to make an offer to repurchase all of the outstanding notes at a price equal to 101% of the principal amount thereof plus accrued and unpaid interest to the date of repurchase.

As
of April 3, 2008, we were in compliance with all financial covenants relating to the Senior Secured Credit Facility, the Cinemex Credit Facility, the Notes due 2016, the Notes
due 2014 and the Fixed Notes due 2012.



The Senior Secured Credit Facility is with a syndicate of banks and other financial institutions and provides AMC Entertainment financing of up to $850,000,000,
consisting of a $650,000,000 term loan facility with a maturity of seven years and a $200,000,000 revolving credit facility with a maturity of six years. The revolving credit facility will include
borrowing capacity available for Mexican peso-denominated revolving loans, for letters of credit and for swingline borrowings on same-day notice. AMC Entertainment's
ability to borrow against the revolving credit facility is limited to approximately $185,947,000 as of April 3, 2008 due to $14,053,000 of outstanding letters of credit which reduce the
capacity of the revolving credit facility.

Borrowings
under the Senior Secured Credit Facility bear interest at a rate equal to an applicable margin plus, at our option, either a base rate or LIBOR. On March 13, 2007, the
Company amended the Senior Secured Credit Facility to, among other things, lower the interest rates related to its term loan, reduce its unused commitment fee and amend the change of control
definition so that an initial public offering and related transactions would not constitute a change of control. The current applicable margin for borrowings under the revolving credit facility is
0.75% with respect to base rate borrowings and 1.75% with respect to LIBOR borrowings, and the current applicable margin for borrowings under the term loan facility is 0.75% with respect to base rate
borrowings and 1.75% with respect to LIBOR borrowings. The applicable margin for such borrowings may be reduced, subject to AMC Entertainment attaining certain leverage ratios. In addition to paying
interest on outstanding principal under the Senior Secured Credit Facility, AMC Entertainment is required to pay a commitment fee to the lenders under the revolving credit facility in respect of the
unutilized commitments thereunder at a rate equal to 0.25%. It will also pay customary letter of credit fees. AMC Entertainment may voluntarily repay outstanding loans under the Senior Secured Credit
Facility at any time without premium or penalty, other than customary "breakage" costs with respect to LIBOR loans. AMC Entertainment is required to repay $1,625,000 of the term loan quarterly,
beginning March 30, 2006 through September 30, 2012, with any remaining balance due on January 26, 2013.

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 and any interest hedging or other swap agreements), are secured by substantially all of AMC Entertainment's
assets as well as those of each subsidiary guarantor. The Senior Secured Credit Facility is not guaranteed by Marquee Holdings nor is it secured by Marquee Holdings' assets.

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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 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 Existing Subordinated Notes; 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.

As
a result of the completion on February 13, 2007 of the NCM, Inc. IPO, we received proceeds of $517,122,000. Such proceeds along with approximately $100,000,000 of cash
on hand was used for the redemption of our Notes due 2011, Notes due 2012 and our Floating Notes due 2010. The redemption of the subordinated notes would constitute restricted payments under our
Senior Secured Credit Facility. Because our current restricted payment basket amount, after giving pro forma effect for an increase resulting from the NCM transaction, would be insufficient to
accommodate this debt repayment, we amended the Senior Secured Credit Facility on February 14, 2007 to allow for up to $600,000,000 in subordinated debt repayments to be carved out of the
restricted payments basket. This carve out was available for redemptions/repayments through April 30, 2007.



In August 2004, Cadena Mexicana de Exhibición S.A. de C.V., a wholly-owned subsidiary of Cinemex and an indirect wholly-owned subsidiary of
Loews, entered into a senior secured credit facility, which remains in place after the consummation of the Mergers. The initial amount drawn under the Cinemex senior secured credit facility was
1,026.4 million Mexican pesos (approximately $90,000,000 as of August 16, 2004). Cinemex drew 106.3 million Mexican pesos (approximately $10,000,000 in August 2005) under the
delayed draw feature of its senior secured credit facility. Approximately $106,382,000 was outstanding under the senior secured credit facility as of April 3, 2008. In December 2005, Cadena
Mexicana entered into an amended and restated senior secured revolving credit facility which provides for an available revolving credit line of the peso equivalent of $25,000,000 with Banco
Inbursa, S.A. and Scotiabank Inverlat, S.A. (the revolving credit facility is peso-denominated debt). During January and February of 2006 Cinemex drew 105.4 million
Mexican pesos under the revolving credit facility. There were no outstanding borrowings under the revolving credit facility as of April 3, 2008. All obligations of Cadena Mexicana under the
Cinemex senior secured credit facility and revolving credit facility are guaranteed by Cinemex and each existing and future operating subsidiary of Cadena Mexicana, except for specified excluded
subsidiaries.

The
Cinemex borrowings were non-recourse to Loews and thus, are non-recourse to AMCE. Interest on the Cinemex term loan is payable in arrears on a monthly basis
at the Interbank Equilibrium Interest Rate (Tasa de Interes Interbancaria de Equilibrio) for a period of 28 days (the TIIE rate), plus an applicable margin of 1.50% in years one and two, 1.75%
in year three and 2.00% in years four and five. The interest rate on the Cinemex term loan as of April 3, 2008 was 7.94%.

In
December 2006, Cinemex amended its senior secured revolving credit facility to extend it for an additional year, now maturing December 19, 2008. In December 2006, Cinemex also
modified the terms of its senior secured credit facility term loan. The Cinemex term loan will mature on August 16, 2011 and will amortize beginning on February 16, 2009 in installments
ranging from 10% to 30% of the

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principal
balance per annum over the remaining period. Additionally, the applicable margin for the rate of interest has been modified to be based on a ratio of Net Debt to EBITDA. The applicable
margin will now be 200 basis points for a ratio of 2.50 times to 3.00 times, 175 basis points for a ratio of 2.01 times to 2.50 times, 150 basis points for a ratio of 1.51 times to 2.00 times and 125
basis points for a ratio at or below 1.50 times.

The
Cinemex senior secured credit facilities contain customary affirmative and negative covenants with respect to Cadena Mexicana and each of the guarantors and, in certain instances,
Cadena Mexicana's subsidiaries that are not guarantors, as defined in the credit agreement. Affirmative covenants include the requirement to furnish periodic financial statements and ensure that the
obligations of Cadena Mexicana and the guarantors under the Cinemex senior secured credit facilities rank at leastpari passuwith all existing debt of
such parties. Negative covenants include limitations on disposition of assets, capital expenditures, dividends and additional indebtedness and liens. The senior secured credit facilities also include
certain financial covenants, including, without limitation, a maximum total leverage ratio, a maximum total net debt to equity ratio, a minimum interest coverage ratio, a maximum
true-lease adjusted leverage ratio and a minimum consolidated net worth requirement.

On
June 12, 2007, Holdings announced that it had completed a solicitation of consents from holders of its 12% Senior Discount Notes due 2014 (the "Discount Notes due 2014"), and
that it had received consents for $301,933,000 in aggregate principal amount at maturity of the Discount Notes due 2014, representing 99.32% of the outstanding Discount Notes due 2014. In connection
with the receipt of consents, Holdings paid an aggregate consent fee of approximately $4,360,000, representing a consent fee of $14.44 for each $1,000 in principal amount at maturity of Discount Notes
due 2014 to which consents were delivered. Accordingly, the requisite consents to adopt the proposed amendment (the "Amendment") to the indenture pursuant to which the Discount Notes due 2014 were
issued were received, and a supplemental indenture to effect the Amendment was executed by Holdings and the trustee under the indenture. The Amendment revised the restricted payments covenant to
permit Holdings to make restricted payments in an aggregate amount of $275,000,000 prior to making an election to pay cash interest on its senior discount notes. The Amendment also contained a
covenant by Holdings to make an election on August 15, 2007, the next semi-annual accretion date under the indenture, to pay cash interest on the senior discount notes. As a result,
Holdings made its first cash interest payment on the senior discount notes on February 15, 2008 in the amount of
$14,447,700. Holdings used cash on hand at AMCE to pay a dividend to Holdings' current stockholders in an aggregate amount of $275,000,000. Holdings is a holding company with no operations of its own
and has no ability to service interest or principal on the Discount Notes due 2014 other than through dividends it may receive from AMCE. AMCE's Senior Secured Credit Facility and note indentures
contain provisions which limit the amount of loans and dividends which AMCE could make to Holdings. Under the most restrictive of these provisions, set forth in the note Indenture for the Fixed Notes
due 2012, the amount of loans and dividends which AMCE could make to Holdings may not exceed $275,422,000 in the aggregate as of April 3, 2008.

Parent Term Loan Facility

To help finance the dividend paid by Parent to its stockholders discussed in Note 10 to our consolidated financial statements included elsewhere in this
Form 10-K, our Parent entered into the Parent Term Loan Facility for net proceeds of $396,000,000. The interest rate on borrowings under the Parent Term Loan Facility was 7.80% per
annum as of April 3, 2008. 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. Unpaid principal of $400,000,000 and interest on outstanding loans under
the

59

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Parent
Term Loan Facility are required to be repaid upon maturity on June 13, 2012. The Parent Term Loan Facility is neither guaranteed by, nor secured by the assets of, us or our subsidiaries.

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 Stock.

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, FF&E 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 April 3, 2008 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
Commitments
|-------------- |  | -------------------------------------------- | ------- | ------------------------------------------- | - | -------------------------------------------- |  | -------------------------------- | ------- | ------------------------------ | - | ------------------ |  | -----------------
|2009           |  | $                                            | 10,386  |                                             | $ | 17,138                                       |  | $                                | 148,112 |                                | $ | 415,643            |  | $                
|2010           |  |                                              | 10,425  |                                             |   | 33,096                                       |  |                                  | 146,966 |                                |   | 424,142            |  |                  
|2011           |  |                                              | 10,476  |                                             |   | 43,734                                       |  |                                  | 144,553 |                                |   | 415,881            |  |                  
|2012           |  |                                              | 8,808   |                                             |   | 38,414                                       |  |                                  | 139,712 |                                |   | 402,690            |  |                  
|2013           |  |                                              | 7,396   |                                             |   | 859,375                                      |  |                                  | 120,275 |                                |   | 389,275            |  |                  
|Thereafter     |  |                                              | 80,142  |                                             |   | 865,795                                      |  |                                  | 163,023 |                                |   | 2,736,409          |  |                  
|               |  |                                              |         |                                             |   |                                              |  |                                  |         |                                |   |                    |  |                  
|Total          |  | $                                            | 127,633 |                                             | $ | 1,857,552                                    |  | $                                | 862,641 |                                | $ | 4,784,040          |  | $                
|               |  |                                              |         |                                             |   |                                              |  |                                  |         |                                |   |                    |  |                  

---

As
discussed in Note 11Income Taxes, the Company adopted FASB Interpretation No. 48 "Accounting for Uncertainty in Income Taxesan interpretation of FASB
No. 109." April 3, 2008, the Company had a liability for unrecognized benefits for $38,700,000. 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 unrecognized tax benefits will be.

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 Marquee 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 each Sponsor, on a pro rata basis, until the twelfth anniversary from
December 23, 2004, as well as

60

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reimbursements
for each Sponsor's respective out-of-pocket expenses in connection with the management services provided under the Management Fee Agreement.

In
addition, the Management Fee Agreement 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
April 3, 2008, we estimate this amount would be $36,546,000 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

As discussed in Cash Flows From Investing Activities, we hold an investment in 19.1% of NCM accounted for following the equity method. The fair market value of
these shares is approximately $409,241,000 as of April 3, 2008. Because we have little tax basis in these units and because the sale of all these units would require us to report taxable income
of $520,969,000 including distributions received from NCM that were previously deferred, we expect that any sales of these units would be made ratably over a period of time to most efficiently manage
any related tax liability. We have available net operating loss carryforwards which could reduce any related tax liability.

Conclusion

We believe that cash generated from operations and existing cash and equivalents will be sufficient to fund operations and planned capital expenditures 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 the notes. We are considering various options with
respect to the utilization of cash and equivalents 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 and payment of dividends.

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.

New Accounting Pronouncements

In March 2008, the FASB released SFAS No. 161,Disclosures about Derivative Instruments and Hedging Activities, an amendment of
FASB Statement No. 133,("SFAS 161"), which expands the

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disclosure
requirements about an entity's derivative and hedging activities. SFAS 161 requires entities to provide enhanced disclosures about (1) how and why an entity uses derivative
instruments, (2) how derivative instruments and related hedged items are accounted for under Statement 133 and its related interpretations, and (3) how derivative instruments and related
hedged items affect an entity's financial position, financial performance, and cash flows. SFAS 161 is effective for fiscal years and interim periods beginning after November 15, 2008,
and is effective for us at the beginning of fiscal 2010. Early application is encouraged. We are currently evaluating the enhanced disclosure requirements of this pronouncement.

In
December 2007, the FASB issued SFAS No. 160,Noncontrolling Interests in Consolidated Financial Statementsan amendment of ARB
No.51,("SFAS 160"). SFAS 160 establishes accounting and reporting standards that require noncontrolling interest in a subsidiary to be reported as a component of
equity, changes in a parent's ownership interest while the parent retains its controlling interest to be accounted for as equity transactions, and any retained noncontrolling equity investment upon
the deconsolidation of a subsidiary to be initially measured at fair value. The Statement also establishes reporting requirements that clearly identify and distinguish between the interests of the
parent and the interests of the non-controlling owners. SFAS 160 is effective as of the beginning of the first fiscal year beginning on or after December 15, 2008, and is
effective for us at the beginning of fiscal 2010. Earlier adoption is prohibited. We have not determined the effect that the application of SFAS 160 will have on our consolidated financial
position.

In
December 2007, the FASB issued Statement No. 141 (revised 2007),Business Combinations,("SFAS 141(R)").
SFAS 141(R) establishes the principles and requirements for how an acquirer: 1) recognizes and measures in its financial statements the identifiable assets acquired, the liabilities
assumed, and any noncontrolling interest in the acquiree; 2) in a business combination achieved in stages, sometimes referred to as a step acquisition, recognize the identifiable assets and
liabilities, as well as the noncontrolling interest in the acquiree, at the full amounts of their fair values; 3) recognizes and measures the goodwill acquired in the business combination or a
gain from a bargain purchase. SFAS 141(R) establishes disclosure requirements to enable users of the financial statements to evaluate the nature and financial effects of the business
combination. This Statement is to be applied prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period on or after
December 15, 2008, and is effective for us at the beginning of fiscal 2010. Earlier adoption is prohibited. We are in the process of evaluating the impact SFAS 141(R) will have on our
financial statements.

In
December 2007, the Securities and Exchange Commission issued Staff Accounting Bulletin No. 110 ("SAB 110"). SAB 110 extends the opportunity to use the
"simplified" method beyond December 31,
2007, as was allowed by Staff Accounting Bulletin No. 107 ("SAB 107"). Under SAB 110 and 107, a company is able to use the "simplified" method in developing an estimate of
expected term based on the date of exercise of "plain vanilla" share options. SAB 110 allows companies which do not have sufficient historical experience to provide a reasonable estimate to
continue use of the "simplified" method for estimating the expected term of "plain vanilla" share option grants after December 31, 2007. We will continue to use the "simplified" method until
there is sufficient historical experience to provide a reasonable estimate of expected term in accordance with SAB 110. SAB 110 was effective for us on January 1, 2008.

In
February 2007, the FASB issued SFAS No. 159,The Fair Value Option for Financial Assets and Financial Liabilities, including an amendment of FASB
Statement No. 115, ("SFAS 159"). SFAS 159 permits entities to choose to measure many financial instruments and certain other items at fair value that are
not currently required to be measured at fair value. Unrealized gains and losses on items for which the fair value option has been elected are reported in earnings. SFAS 159 does not affect any
existing accounting literature that requires certain assets and liabilities to be carried at fair value. We will be required to adopt this standard in the first quarter of fiscal 2009. We are
currently evaluating

62

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the
requirements of SFAS 159 and have not yet determined the impact on our consolidated financial statements.

In
September 2006, the FASB released SFAS No. 157,Fair Value Measurements,which provides enhanced guidance for using fair value
to measure assets and liabilities. The standard applies whenever other standards require (or permit) assets or liabilities to be measured at fair value. It does not expand the use of fair value in any
new circumstances. Under the standard, 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 reporting entity transacts. It clarifies the principle that fair value should be based on the assumptions market participants would use when pricing the asset or liability.
SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years, and is effective for us the
first quarter of fiscal 2009. Early adoption is permitted. In February 2008, the FASB issued FASB Staff Position FAS 157-2,Partial Deferral of the Effective
Date of SFAS 157("FSP 157-2"), which delays the effective date for nonfinancial assets and liabilities, except for items that are recognized or disclosed at
fair value in the financial statements on a recurring basis. We are currently evaluating the requirements of SFAS 157 and have not yet determined the impact on our consolidated financial
statements.

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. All financial instruments are used solely for hedging
purposes and are not issued or held for speculative reasons.

Interest Rate Swaps.We periodically enter into interest rate swap agreements to manage the interest rate risk associated
with variable rate debt instruments. In October 2007, AMCE executed an interest rate swap agreement, scheduled to mature in April 2009, to hedge $200,000,000 of our variable rate debt obligation.
Under the terms of the agreement, we pay interest at a fixed rate of 4.707% and receive interest at a variable rate based on 1-month U.S. Dollar LIBOR-BBA. In addition, Grupo
Cinemex is party to an interest rate swap with notional amounts ranging between 283,932,000 and 907,146,000 Mexican pesos ($26,151,000 and $83,894,000). Under the terms of the agreement, we pay
interest at a fixed rate of 9.89% and receive interest at a variable rate based on 1-month MXN TIIE. The interest rate swap is scheduled to mature in August 2009. Based upon a sensitivity
analysis performed as of April 3, 2008, a decrease in the underlying interest rates of 100 basis points would increase the fair value of the interest rate swap liability by $2,634,000
and a 100 basis point increase in the underlying interest rates would decrease the fair value of the interest rate swap liability by $2,545,000.

Market risk on variable-rate financial instruments.We maintain a $850,000,000 Senior Secured Credit Facility,
comprised of a $200,000,000 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 new revolving credit facility as
of April 3, 2008 and had $635,375,000 outstanding under the term loan facility on April 3, 2008. Therefore, a 100 basis point increase in market interest rates would have increased or
decreased interest expense on the Senior Secured Credit Facility by $5,623,000 during the fifty-three weeks ended April 3, 2008.

Market risk on fixed-rate financial instruments.Included in long-term debt are $325,000,000 of our
Notes due 2016, $300,000,000 of our Notes due 2014, $250,000,000 of our Fixed Notes due 2012 and $240,795,000 of our Discount Notes due 2014. Increases in market interest rates would generally cause

63

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a
decrease in the fair value of the Notes due 2016, Notes due 2014 and Fixed Notes due 2012 and a decrease in market interest rates would generally cause an increase in fair value of the Notes due
2016, Notes due 2014 and Fixed Notes due 2012 and Discount Notes due 2014.

Foreign currency exchange rates.We currently operate theatres in Canada, Mexico, 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 income. 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. Although we do not currently hedge against foreign currency exchange rate risk, we do not intend to repatriate funds from the operations of our international theatres but
instead intend to use them to fund current and future operations. A 10% fluctuation in the value of the U.S. dollar against all foreign currencies of countries where we currently operate theatres
would either increase or decrease earnings before income taxes and accumulated other comprehensive income (loss) by approximately $3,568,000 or $38,285,000, respectively, as of April 3, 2008.

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Item 8.    Financial Statements and Supplementary Data

MANAGEMENT'S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
AMC Entertainment Inc.

TO THE STOCKHOLDER OF MARQUEE HOLDINGS 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 April 3, 2008,
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 April 3, 2008. This annual report does
not include an attestation report of the Company's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the
Company's registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management's report in this annual report.

|GRAPHIC                                                      |  |  | 
|------------------------------------------------------------ |  |  | 
|Chairman of the Board, Chief Executive Officer
and President |  |  | 
|GRAPHIC                                                      |  |  | 
|Executive Vice President and
Chief Financial Officer         |  |  | 

65

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

TO THE BOARD OF DIRECTORS AND STOCKHOLDER OF MARQUEE HOLDINGS INC.:

In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of operations, of stockholder's equity and of cash flows
present fairly, in all material respects, the financial position of Marquee Holdings Inc. and its subsidiary (the "Company"), at April 3, 2008 and March 29, 2007, and the results
of their operations and their cash flows for the 53 week period ended April 3, 2008, the 52 week period ended March 29, 2007 and the 52 week period ended
March 30, 2006, 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 audits. We conducted our audits 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 audits provide a reasonable basis for our opinion.

As
discussed on Note 11, the Company adopted FASB Interpretation No. 48,Accounting for Uncertainty in Income Taxesan interpretation of
FAS 109,in the first fiscal quarter of 2008.

/s/
PricewaterhouseCoopers LLP

Kansas
City, Missouri
June 16, 2008

66

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Marquee Holdings Inc.        CONSOLIDATED STATEMENTS OF OPERATIONS

|(In thousands)                                                    |                                                          | 53 Weeks
Ended
April 3, 2008              |        | 52 Weeks
Ended
March 29, 2007 |           | 52 Weeks
Ended
March 30, 2006 |          
|----------------------------------------------------------------- | -------------------------------------------------------- | ----------------------------------------- | ------ | ----------------------------- | --------- | ----------------------------- | ---------
|Revenues                                                          |                                                          |                                           |        |                               |           |                               |          
|                                                                  | Admissions                                               |                                           | $      | 1,703,075                     |           | $                             | 1,659,939
|                                                                  | Concessions                                              |                                           |        | 708,786                       |           |                               | 686,318  
|                                                                  | Other theatre                                            |                                           |        | 92,466                        |           |                               | 115,314  
|                                                                  |                                                          |                                           |        |                               |           |                               |          
|                                                                  |                                                          | Total revenues                            |        |                               | 2,504,327 |                               |          
|                                                                  |                                                          |                                           |        |                               |           |                               |          
|Costs and Expenses                                                |                                                          |                                           |        |                               |           |                               |          
|                                                                  | Film exhibition costs                                    |                                           |        | 879,076                       |           |                               | 855,804  
|                                                                  | Concession costs                                         |                                           |        | 83,546                        |           |                               | 79,711   
|                                                                  | Operating expense                                        |                                           |        | 649,890                       |           |                               | 619,076  
|                                                                  | Rent                                                     |                                           |        | 457,929                       |           |                               | 445,924  
|                                                                  | General and administrative:                              |                                           |        |                               |           |                               |          
|                                                                  |                                                          | Merger, acquisition and transaction costs |        |                               | 6,372     |                               |          
|                                                                  |                                                          | Management fee                            |        |                               | 5,000     |                               |          
|                                                                  |                                                          | Other                                     |        |                               | 49,897    |                               |          
|                                                                  | Preopening expense                                       |                                           |        | 7,130                         |           |                               | 6,569    
|                                                                  | Theatre and other closure expense (income)               |                                           |        | (20,970                       | )         |                               | 9,011    
|                                                                  | Restructuring charges                                    |                                           |        |                              |           |                               |         
|                                                                  | Depreciation and amortization                            |                                           |        | 251,194                       |           |                               | 256,472  
|                                                                  | Impairment of long-lived assets                          |                                           |        | 8,933                         |           |                               | 10,686   
|                                                                  | Disposition of assets and other gains                    |                                           |        | (2,408                        | )         |                               | (11,183  
|                                                                  |                                                          |                                           |        |                               |           |                               |          
|                                                                  |                                                          | Total costs and expenses                  |        |                               | 2,375,589 |                               |          
|                                                                  |                                                          |                                           |        |                               |           |                               |          
|Other expense (income)                                            |                                                          |                                           |        |                               |           |                               |          
|                                                                  | Other expense (income)                                   |                                           |        | (12,431                       | )         |                               | (10,267  
|                                                                  | Interest expense                                         |                                           |        |                               |           |                               |          
|                                                                  |                                                          | Corporate borrowings                      |        |                               | 172,184   |                               |          
|                                                                  |                                                          | Capital and financing lease obligations   |        |                               | 7,150     |                               |          
|                                                                  | Equity in (earnings) losses of non-consolidated entities |                                           |        | (43,019                       | )         |                               | (233,704 
|                                                                  | Investment income                                        |                                           |        | (25,679                       | )         |                               | (18,191  
|                                                                  |                                                          |                                           |        |                               |           |                               |          
|Total other expense (income)                                      |                                                          |                                           | 98,205 |                               |           | (29,780                       | )        
|                                                                  |                                                          |                                           |        |                               |           |                               |          
|Earnings (loss) from continuing operations before income taxes    |                                                          |                                           | 30,533 |                               |           | 145,959                       |          
|Income tax provision                                              |                                                          |                                           | 7,800  |                               |           | 31,500                        |          
|                                                                  |                                                          |                                           |        |                               |           |                               |          
|Earnings (loss) from continuing operations                        |                                                          |                                           | 22,733 |                               |           | 114,459                       |          
|Earnings (loss) from discontinued operations, net of income taxes |                                                          |                                           |       |                               |           | 2,448                         |          
|                                                                  |                                                          |                                           |        |                               |           |                               |          
|Net earnings (loss)                                               |                                                          | $                                         | 22,733 |                               | $         | 116,907                       |          
|                                                                  |                                                          |                                           |        |                               |           |                               |          

See
Notes to Consolidated Financial Statements.

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Marquee Holdings Inc.    CONSOLIDATED BALANCE SHEETS

|(In thousands, except share data)                                                                                             |                                                                                                                                                                                     | April 3, 2008                              |           | March 29, 2007 |          
|----------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | --------- | -------------- | ---------
|Assets                                                                                                                        |                                                                                                                                                                                     |                                            |           |                |          
|Current assets:                                                                                                               |                                                                                                                                                                                     |                                            |           |                |          
|Cash and equivalents                                                                                                          |                                                                                                                                                                                     | $                                          | 108,717   |                | $        
|Receivables, net of allowance for doubtful accounts of $1,597 and $1,221 as of April 3, 2008 and March 29, 2007, respectively |                                                                                                                                                                                     |                                            | 47,130    |                |          
|Other current assets                                                                                                          |                                                                                                                                                                                     |                                            | 73,761    |                |          
|                                                                                                                              |                                                                                                                                                                                     |                                            |           |                |          
|                                                                                                                              |                                                                                                                                                                                     | Total current assets                       |           |                | 229,608  
|Property, net                                                                                                                 |                                                                                                                                                                                     |                                            | 1,250,406 |                |          
|Intangible assets, net                                                                                                        |                                                                                                                                                                                     |                                            | 206,674   |                |          
|Goodwill                                                                                                                      |                                                                                                                                                                                     |                                            | 2,070,858 |                |          
|Other long-term assets                                                                                                        |                                                                                                                                                                                     |                                            | 119,161   |                |          
|Non-current assets held for sale                                                                                              |                                                                                                                                                                                     |                                            | 2,300     |                |          
|                                                                                                                              |                                                                                                                                                                                     |                                            |           |                |          
|                                                                                                                              |                                                                                                                                                                                     | Total assets                               |           | $              | 3,879,007
|                                                                                                                              |                                                                                                                                                                                     |                                            |           |                |          
|Liabilities and Stockholder's Equity                                                                                          |                                                                                                                                                                                     |                                            |           |                |          
|Current liabilities:                                                                                                          |                                                                                                                                                                                     |                                            |           |                |          
|                                                                                                                              | Accounts payable                                                                                                                                                                    |                                            | $         | 177,354        |          
|                                                                                                                              | Accrued expenses and other liabilities                                                                                                                                              |                                            |           | 122,417        |          
|                                                                                                                              | Deferred revenues and income                                                                                                                                                        |                                            |           | 134,560        |          
|                                                                                                                              | Current maturities of corporate borrowings and capital and financing lease obligations                                                                                              |                                            |           | 20,753         |          
|                                                                                                                              |                                                                                                                                                                                     |                                            |           |                |          
|                                                                                                                              |                                                                                                                                                                                     | Total current liabilities                  |           |                | 455,084  
|Corporate borrowings                                                                                                          |                                                                                                                                                                                     |                                            | 1,839,329 |                |          
|Capital and financing lease obligations                                                                                       |                                                                                                                                                                                     |                                            | 66,368    |                |          
|Deferred revenues for exhibitor services agreement                                                                            |                                                                                                                                                                                     |                                            | 250,312   |                |          
|Other long-term liabilities                                                                                                   |                                                                                                                                                                                     |                                            | 350,498   |                |          
|                                                                                                                              |                                                                                                                                                                                     |                                            |           |                |          
|                                                                                                                              |                                                                                                                                                                                     | Total liabilities                          |           |                | 2,961,591
|                                                                                                                              |                                                                                                                                                                                     |                                            |           |                |          
|Commitments and contingencies                                                                                                 |                                                                                                                                                                                     |                                            |           |                |          
|Stockholder's equity:                                                                                                         |                                                                                                                                                                                     |                                            |           |                |          
|                                                                                                                              | Common Stock, 1 and 0 shares issued as of April 3, 2008 and March 29, 2007, respectively, with 1¢ par value                                                                         |                                            |           |               |          
|                                                                                                                              | Class A-1 Common Stock voting ($.01 par value, 1,500,000 shares authorized; 0 and 382,475.00000 shares issued and outstanding as of April 3, 2008 and March 29, 2007, respectively) |                                            |           |               |          
|                                                                                                                              | Class A-2 Common Stock voting ($.01 par value, 1,500,000 shares authorized; 0 and 382,475.00000 shares issued and outstanding as of April 3, 2008 and March 29, 2007, respectively) |                                            |           |               |          
|                                                                                                                              | Class N Common Stock nonvoting ($.01 par value, 375,000 shares authorized; 0 and 5,128.77496 shares issued and outstanding as of April 3, 2008 and March 29, 2007, respectively)    |                                            |           |               |          
|                                                                                                                              | Class L-1 Common Stock voting ($.01 par value, 1,500,000 shares authorized; 0 and 256,085.61252 shares issued and outstanding as of April 3, 2008 and March 29, 2007, respectively) |                                            |           |               |          
|                                                                                                                              | Class L-2 Common Stock voting ($.01 par value, 1,500,000 shares authorized; 0 and 256,085.61252 shares issued and outstanding as of April 3, 2008 and March 29, 2007, respectively) |                                            |           |               |          
|                                                                                                                              | Additional paid-in capital                                                                                                                                                          |                                            |           | 1,047,430      |          
|                                                                                                                              | Accumulated other comprehensive loss                                                                                                                                                |                                            |           | (3,668         | )        
|                                                                                                                              | Accumulated deficit                                                                                                                                                                 |                                            |           | (126,346       | )        
|                                                                                                                              |                                                                                                                                                                                     |                                            |           |                |          
|                                                                                                                              |                                                                                                                                                                                     | Total stockholder's equity                 |           |                | 917,416  
|                                                                                                                              |                                                                                                                                                                                     |                                            |           |                |          
|                                                                                                                              |                                                                                                                                                                                     | Total liabilities and stockholder's equity |           | $              | 3,879,007
|                                                                                                                              |                                                                                                                                                                                     |                                            |           |                |          

See Notes to Consolidated Financial Statements.

68

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Marquee Holdings Inc.        CONSOLIDATED STATEMENTS OF CASH FLOWS

|(In thousands)                                           |                                                                                                                          | 53 Weeks
Ended
April 3, 2008           |          | 52 Weeks
Ended
March 29, 2007 |         | 52 Weeks
Ended
March 30, 2006 |         
|-------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------ | -------------------------------------- | -------- | ----------------------------- | ------- | ----------------------------- | --------
|INCREASE (DECREASE) IN CASH AND EQUIVALENTS              |                                                                                                                          |                                        |          |                               |         |                               |         
|Cash flows from operating activities:                    |                                                                                                                          |                                        |          |                               |         |                               |         
|                                                         | Net earnings (loss)                                                                                                      |                                        | $        | 22,733                        |         | $                             | 116,907 
|                                                         | Adjustments to reconcile net earnings (loss) to cash provided by operating activities:                                   |                                        |          |                               |         |                               |         
|                                                         | Depreciation and amortization                                                                                            |                                        |          | 251,194                       |         |                               | 257,017 
|                                                         | Amortization of discount on corporate borrowings                                                                         |                                        |          | 10,530                        |         |                               | 22,776  
|                                                         | Non-cash portion of stock-based compensation                                                                             |                                        |          | 207                           |         |                               | 10,568  
|                                                         | Non-cash portion of pension and postretirement (gain) expense                                                            |                                        |          | 1,461                         |         |                               | (4,454  
|                                                         | Impairment of long-lived assets                                                                                          |                                        |          | 8,933                         |         |                               | 10,686  
|                                                         | Deferred income taxes                                                                                                    |                                        |          | (2,800                        | )       |                               | 19,200  
|                                                         | Write-off of unamortized premium and issuance costs related to early extinguishment of debt                              |                                        |          |                              |         |                               | (11,304 
|                                                         | Increase in deferred revenues from NCM ESA                                                                               |                                        |          |                              |         |                               | 231,308 
|                                                         | Equity in (earnings) losses of non-consolidated entities, net of distributions                                           |                                        |          | (18,354                       | )       |                               | (233,704
|                                                         | Disposition of assets and other gains                                                                                    |                                        |          | (16,152                       | )       |                               | (729    
|                                                         | Change in assets and liabilities, net of effects from acquisitions:                                                      |                                        |          |                               |         |                               |         
|                                                         |                                                                                                                          | Receivables                            |          |                               | 10,128  |                               |         
|                                                         |                                                                                                                          | Other assets                           |          |                               | (40,379 | )                             |         
|                                                         |                                                                                                                          | Accounts payable                       |          |                               | 5,906   |                               |         
|                                                         |                                                                                                                          | Accrued expenses and other liabilities |          |                               | (23,166 | )                             |         
|                                                         | Other, net                                                                                                               |                                        |          | (8,565                        | )       |                               | 511     
|                                                         |                                                                                                                          |                                        |          |                               |         |                               |         
|                                                         | Net cash provided by operating activities                                                                                |                                        |          | 201,676                       |         |                               | 417,870 
|                                                         |                                                                                                                          |                                        |          |                               |         |                               |         
|Cash flows from investing activities:                    |                                                                                                                          |                                        |          |                               |         |                               |         
|                                                         | Capital expenditures                                                                                                     |                                        |          | (151,676                      | )       |                               | (138,739
|                                                         | Proceeds from sale/leasebacks                                                                                            |                                        |          |                              |         |                               |        
|                                                         | Construction project costs reimbursable by landlord                                                                      |                                        |          | (2,138                        | )       |                               | (9,726  
|                                                         | NCM Distribution                                                                                                         |                                        |          |                              |         |                               | 285,814 
|                                                         | Proceeds from restricted cash                                                                                            |                                        |          | 1,513                         |         |                               |        
|                                                         | Acquisition of Loews, net of cash acquired                                                                               |                                        |          |                              |         |                               |        
|                                                         | Proceeds on disposal of Fandango                                                                                         |                                        |          | 17,977                        |         |                               |        
|                                                         | Proceeds on disposal of HGCSA                                                                                            |                                        |          | 28,682                        |         |                               |        
|                                                         | Proceeds on disposaldiscontinued operations                                                                             |                                        |          |                              |         |                               | 35,446  
|                                                         | LCE Screen Integration payments                                                                                          |                                        |          | (11,201                       | )       |                               |        
|                                                         | Proceeds from disposition of long-term assets                                                                            |                                        |          | 175                           |         |                               | 116,439 
|                                                         | Software licensing and development                                                                                       |                                        |          | (19,424                       | )       |                               | (4,703  
|                                                         | Other, net                                                                                                               |                                        |          | (3,313                        | )       |                               | (562    
|                                                         |                                                                                                                          |                                        |          |                               |         |                               |         
|                                                         | Net cash provided by (used in) investing activities                                                                      |                                        |          | (139,405                      | )       |                               | 283,969 
|                                                         |                                                                                                                          |                                        |          |                               |         |                               |         
|Cash flows from financing activities:                    |                                                                                                                          |                                        |          |                               |         |                               |         
|                                                         | Repurchase of senior secured floating rate notes due 2010                                                                |                                        |          |                              |         |                               | (205,000
|                                                         | Repurchase of notes due 2011                                                                                             |                                        |          |                              |         |                               | (212,811
|                                                         | Repurchase of notes due 2012                                                                                             |                                        |          |                              |         |                               | (175,000
|                                                         | Payments on Term Loan B                                                                                                  |                                        |          | (8,125                        | )       |                               | (6,500  
|                                                         | Principal payments under mortgages and capital and financing lease obligations                                           |                                        |          | (6,070                        | )       |                               | (3,848  
|                                                         | Deferred financing costs                                                                                                 |                                        |          | (4,265                        | )       |                               | (2,606  
|                                                         | Change in construction payables                                                                                          |                                        |          | 13,586                        |         |                               | (7,466  
|                                                         | Proceeds from issuance of 11% Senior Subordinated Notes due 2016                                                         |                                        |          |                              |         |                               |        
|                                                         | Proceeds from issuance of Senior Secured Credit Facility                                                                 |                                        |          |                              |         |                               |        
|                                                         | Repayment of LCE credit facility                                                                                         |                                        |          |                              |         |                               |        
|                                                         | Repurchase of LCE 9% Senior Subordinated Notes due 2014                                                                  |                                        |          |                              |         |                               |        
|                                                         | (Repayment of) borrowing under Cinemex credit facility                                                                   |                                        |          | (12,100                       | )       |                               | 2,100   
|                                                         | Dividends paid to Parent.                                                                                                |                                        |          | (270,588                      | )       |                               |        
|                                                         | Proceeds from financing lease obligations                                                                                |                                        |          | 16,872                        |         |                               |        
|                                                         |                                                                                                                          |                                        |          |                               |         |                               |         
|                                                         | Net cash provided by (used in) financing activities                                                                      |                                        |          | (270,690                      | )       |                               | (611,131
|                                                         | Effect of exchange rate changes on cash and equivalents                                                                  |                                        |          | (2,397                        | )       |                               | (3,541  
|                                                         |                                                                                                                          |                                        |          |                               |         |                               |         
|Net increase (decrease) in cash and equivalents          |                                                                                                                          |                                        | (210,816 | )                             |         | 87,167                        |         
|Cash and equivalents at beginning of year                |                                                                                                                          |                                        | 319,533  |                               |         | 232,366                       |         
|                                                         |                                                                                                                          |                                        |          |                               |         |                               |         
|Cash and equivalents at end of year                      |                                                                                                                          | $                                      | 108,717  |                               | $       | 319,533                       |         
|                                                         |                                                                                                                          |                                        |          |                               |         |                               |         
|SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:       |                                                                                                                          |                                        |          |                               |         |                               |         
|Cash paid (refunded) during the period for:              |                                                                                                                          |                                        |          |                               |         |                               |         
|                                                         | Interest (including amounts capitalized of $1,114, $1,760, and $2,239 during periods 2008, 2007, and 2006, respectively) |                                        | $        | 161,303                       |         | $                             | 210,284 
|                                                         | Income taxes, net                                                                                                        |                                        |          | 17,064                        |         |                               | 897     
|Schedule of non-cash investing and financing activities: |                                                                                                                          |                                        |          |                               |         |                               |         
|                                                         | Assets capitalized under EITF 97-10                                                                                      |                                        | $        | 4,600                         |         | $                             | 8,199   
|                                                         | Investment in NCM (See Note 6Investments)                                                                               |                                        |          | 21,598                        |         |                               |        

Refer to Note 2Acquisitions for discussion of non-cash activities related to acquisitions.

See Notes to Consolidated Financial Statements.

69

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Marquee Holdings Inc.        CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY

|                                                                          |                                             |         |          |   |   | Class A-1
Voting
Common Stock |               | Class A-2
Voting
Common Stock |   | Class N
Nonvoting
Common Stock |   | Class L-1
Voting
Common Stock |               | Class L-2
Voting
Common Stock |   |   |             |             |   |   |   |               |              
|------------------------------------------------------------------------- | ------------------------------------------- | ------- | -------- | - | - | ----------------------------- | ------------- | ----------------------------- | - | ------------------------------ | - | ----------------------------- | ------------- | ----------------------------- | - | - | ----------- | ----------- | - | - | - | ------------- | -------------
|
|
|
|Balance, March 31, 2005                                                   |                                             | 769,350 |          | $ | 8 |                               |              |                               | $ |                               |   |                              |               | $                             |  |   |            |             | $ |  |   |              |              
|Comprehensive loss:                                                       |                                             |         |          |   |   |                               |               |                               |   |                                |   |                               |               |                               |   |   |             |             |   |   |   |               |              
|                                                                          | Net loss                                    |         |         |   |   |                              |               |                              |   |                                |  |                               |              |                               |   |  |             |            |   |   |  |               |             
|                                                                          | Foreign currency translation adjustment     |         |         |   |   |                              |               |                              |   |                                |  |                               |              |                               |   |  |             |            |   |   |  |               |             
|                                                                          | Additional minimum pension liability        |         |         |   |   |                              |               |                              |   |                                |  |                               |              |                               |   |  |             |            |   |   |  |               |             
|                                                                          | Unrealized gain on Cinemex swap agreements  |         |         |   |   |                              |               |                              |   |                                |  |                               |              |                               |   |  |             |            |   |   |  |               |             
|                                                                          | Unrealized loss on marketable securities    |         |         |   |   |                              |               |                              |   |                                |  |                               |              |                               |   |  |             |            |   |   |  |               |             
|                                                                          |                                             |         |          |   |   |                               |               |                               |   |                                |   |                               |               |                               |   |   |             |             |   |   |   |               |              
|                                                                          | Comprehensive loss                          |         |          |   |   |                               |               |                               |   |                                |   |                               |               |                               |   |   |             |             |   |   |   |               |              
|                                                                          | Stock-based compensationoptions            |         |         |   |   |                              |               |                              |   |                                |  |                               |              |                               |   |  |             |            |   |   |  |               |             
|                                                                          | Issuance of Common Stock for Merger         |         | (769,350 | ) |   | (8                            | )             | 382,475.00000                 |   |                                | 4 |                               | 382,475.00000 |                               |   | 4 |             | 5,128.77496 |   |   |   |               | 256,085.61252
|                                                                          |                                             |         |          |   |   |                               |               |                               |   |                                |   |                               |               |                               |   |   |             |             |   |   |   |               |              
|Balance, March 30, 2006                                                   |                                             |        |          |   |  |                               | 382,475.00000 |                               |   | 4                              |   | 382,475.00000                 |               |                               | 4 |   | 5,128.77496 |             |   |  |   | 256,085.61252 |              
|Comprehensive earnings:                                                   |                                             |         |          |   |   |                               |               |                               |   |                                |   |                               |               |                               |   |   |             |             |   |   |   |               |              
|                                                                          | Net earnings                                |         |         |   |   |                              |               |                              |   |                                |  |                               |              |                               |   |  |             |            |   |   |  |               |             
|                                                                          | Foreign currency translation adjustment     |         |         |   |   |                              |               |                              |   |                                |  |                               |              |                               |   |  |             |            |   |   |  |               |             
|                                                                          | Additional minimum pension liability        |         |         |   |   |                              |               |                              |   |                                |  |                               |              |                               |   |  |             |            |   |   |  |               |             
|                                                                          | Unrealized loss on Cinemex swap agreements  |         |         |   |   |                              |               |                              |   |                                |  |                               |              |                               |   |  |             |            |   |   |  |               |             
|                                                                          | Unrealized gain on Cinemex lease agreements |         |         |   |   |                              |               |                              |   |                                |  |                               |              |                               |   |  |             |            |   |   |  |               |             
|                                                                          | Unrealized gain on marketable securities    |         |         |   |   |                              |               |                              |   |                                |  |                               |              |                               |   |  |             |            |   |   |  |               |             
|                                                                          |                                             |         |          |   |   |                               |               |                               |   |                                |   |                               |               |                               |   |   |             |             |   |   |   |               |              
|                                                                          | Comprehensive earnings                      |         |          |   |   |                               |               |                               |   |                                |   |                               |               |                               |   |   |             |             |   |   |   |               |              
|Adjustment for adoption of SFAS No. 158                                   |                                             |        |          |   |  |                               |              |                               |   |                               |   |                              |               |                               |  |   |            |             |   |  |   |              |              
|Stock-based compensationoptions                                          |                                             |        |          |   |  |                               |              |                               |   |                               |   |                              |               |                               |  |   |            |             |   |  |   |              |              
|Purchase price adjustment of fair value of Common Stock issued for Merger |                                             |        |          |   |  |                               |              |                               |   |                               |   |                              |               |                               |  |   |            |             |   |  |   |              |              
|                                                                          |                                             |         |          |   |   |                               |               |                               |   |                                |   |                               |               |                               |   |   |             |             |   |   |   |               |              
|Balance March 29, 2007                                                    |                                             |        |          |   |  |                               | 382,475.00000 |                               |   | 4                              |   | 382,475.00000                 |               |                               | 4 |   | 5,128.77496 |             |   |  |   | 256,085.61252 |              

70

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Marquee Holdings Inc.        CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY (Continued)

|                                                                      |                                                                                     |   |   |   |   | Class A-1
Voting
Common Stock |                | Class A-2
Voting
Common Stock |   | Class N
Nonvoting
Common Stock |   | Class L-1
Voting
Common Stock |   | Class L-2
Voting
Common Stock |    |   |              |   |   |   |   |                |  
|--------------------------------------------------------------------- | ----------------------------------------------------------------------------------- | - | - | - | - | ----------------------------- | -------------- | ----------------------------- | - | ------------------------------ | - | ----------------------------- | - | ----------------------------- | -- | - | ------------ | - | - | - | - | -------------- | -
|
|
|
|Comprehensive earnings                                                |                                                                                     |   |   |   |   |                               |                |                               |   |                                |   |                               |   |                               |    |   |              |   |   |   |   |                |  
|                                                                      | Net earnings                                                                        |   |  |   |   |                              |                |                              |   |                                |  |                               |  |                               |    |  |              |  |   |   |  |                | 
|                                                                      | FIN 48 adoption adjustment                                                          |   |  |   |   |                              |                |                              |   |                                |  |                               |  |                               |    |  |              |  |   |   |  |                | 
|                                                                      | Foreign currency translation adjustment                                             |   |  |   |   |                              |                |                              |   |                                |  |                               |  |                               |    |  |              |  |   |   |  |                | 
|                                                                      | Change in fair value of cash flow hedges                                            |   |  |   |   |                              |                |                              |   |                                |  |                               |  |                               |    |  |              |  |   |   |  |                | 
|                                                                      | Losses on interest rate swaps reclassified to interest expense corporate borrowings |   |  |   |   |                              |                |                              |   |                                |  |                               |  |                               |    |  |              |  |   |   |  |                | 
|                                                                      | Pension and other benefit adjustments                                               |   |  |   |   |                              |                |                              |   |                                |  |                               |  |                               |    |  |              |  |   |   |  |                | 
|                                                                      | Unrealized loss on marketable equity securities                                     |   |  |   |   |                              |                |                              |   |                                |  |                               |  |                               |    |  |              |  |   |   |  |                | 
|                                                                      |                                                                                     |   |   |   |   |                               |                |                               |   |                                |   |                               |   |                               |    |   |              |   |   |   |   |                |  
|                                                                      | Comprehensive earnings                                                              |   |   |   |   |                               |                |                               |   |                                |   |                               |   |                               |    |   |              |   |   |   |   |                |  
|Stock-based compensation options                                      |                                                                                     |  |   |   |  |                               |               |                               |   |                               |   |                              |   |                               |   |   |             |   |   |  |   |               |  
|Dividends paid to AMC Entertainment Holdings, Inc.                    |                                                                                     |  |   |   |  |                               |               |                               |   |                               |   |                              |   |                               |   |   |             |   |   |  |   |                |  
|Conversion of stock upon creation of AMC Entertainment Holdings, Inc. |                                                                                     | 1 |   |   |  |                               | (382,475.00000 | )                             |   | (4                             | ) | (382,475.00000                | ) |                               | (4 | ) | (5,128.77496 | ) |   |  |   | (256,085.61252 | )
|                                                                      |                                                                                     |   |   |   |   |                               |                |                               |   |                                |   |                               |   |                               |    |   |              |   |   |   |   |                |  
|Balance April 3, 2008                                                 |                                                                                     | 1 |   | $ |  |                               |               |                               | $ |                               |   |                              |   | $                             |   |   |             |   | $ |  |   |               |  
|                                                                      |                                                                                     |   |   |   |   |                               |                |                               |   |                                |   |                               |   |                               |    |   |              |   |   |   |   |                |  

See Notes to Consolidated Financial Statements.

71

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Marquee Holdings Inc.        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS        Years Ended April 3, 2008, March 29, 2007 and March 30, 2006

NOTE 1THE COMPANY AND SIGNIFICANT ACCOUNTING POLICIES

Marquee Holdings Inc. ("Holdings") is an investment vehicle owned through AMC Entertainment Holdings, Inc. by J.P. Morgan
Partners, LLC Apollo Management, L.P. and certain related investment funds and affiliates of Bain Capital Partners, The Carlyle Group and Spectrum Equity Investors. Holdings was formed
for the purpose of acquiring AMC Entertainment Inc. ("AMCE") pursuant to a definitive merger agreement approved by AMCE's Board of Directors on July 22, 2004. Holdings is a holding
company with no operations of its own and it has one direct subsidiary, AMCE.

AMCE,
through its direct and indirect subsidiaries, including American Multi-Cinema, Inc. ("AMC") and its subsidiaries' Grupo Cinemex, S.A. de C.V. ("Cinemex") and AMC
Entertainment International, Inc. ("AMCEI") and its subsidiaries (collectively with Holdings and 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 and Canada ("U.S. and Canada") and in Mexico, China (Hong Kong), France and the United
Kingdom. The Company discontinued its operations in Japan during the first quarter of fiscal 2006 and discontinued its operations in Spain and Portugal during the third quarter of fiscal 2007. The
Company's U.S. and Canada theatrical exhibition business is conducted through AMC and AMCEI. The Company's International theatrical exhibition business is conducted primarily through Cinemex and
AMCEI. See Note 2 for a discussion of the merger with Loews on January 26, 2006.

Holdings
has no ability to service interest or principal on the Discount Notes due 2014 other than through any dividends it may receive from AMCE. AMCE is restricted, in certain
circumstances, from paying dividends to Holdings by the terms of the indentures governing the Fixed Notes due 2012, the Floating Notes due 2010 and the Existing Subordinated Notes and the amended
credit facility. AMCE has not guaranteed the indebtedness of Holdings nor pledged any of its assets as collateral.

On
June 11, 2007, Marquee Merger Sub Inc. ("merger sub"), a wholly-owned subsidiary of AMC Entertainment Holdings, Inc. ("Parent"), merged with and into Holdings,
with Holdings continuing as the surviving corporation (the "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 the right to receive 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 stockholders. The holdco merger was effected by the Sponsors to facilitate a previously
announced debt financing by Parent and a related dividend to
Holdings' stockholders. See Note 8Corporate Borrowings and Capital and Financing Lease Obligations and Note 10Stockholder's Equity.

Discontinued Operations:The results of operations for the Company's discontinued operations have
been eliminated from the Company's continuing operations and classified as discontinued operations for each period presented within the Company's Consolidated Statements of Operations. See
Note 3Discontinued Operations.

Assets held for Sale:In conjunction with the Loews Merger (see
Note 2Acquisitions), the Company entered into a Final Judgment with the Antitrust Division of the United States Department of Justice and judgments and consent decrees with various
States. These judgments and decrees

72

---



Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 3, 2008, March 29, 2007 and March 30, 2006

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

required
the Company to hold separate and divest itself of 10 certain theatres. As a result, the Company classified the assets and liabilities of these theatres as held for sale as of March 30,
2006. During fiscal 2007 the Company sold six of these theatres for cash, exchanged two of these theatres with another theatrical exhibitor for two theatres from that exhibitor in different markets,
and closed one of the remaining theatres. One theatre continues to be held by consent of the relevant state attorney general. Proceeds from the sales were $64,302,000. These proceeds have been
classified as Proceeds on disposalcontinuing operations in the Company's Cash Flows from investing activities. These theatres were part of the company's U.S. and Canada theatrical
exhibition operating segment. The Company recorded a loss on the sales of these theatres of $1,947,000 during fiscal 2007.

The
Company entered into an agreement to sell its consolidated operations in Spain and Portugal and as a result, the Company classified the assets and liabilities of these theatres as
held for sale as of March 30, 2006. These sales were subsequently consummated on May 11, 2006. See Note 3 for additional proceeds on disposaldiscontinued operations
and proceeds from disposition of long-term assets.

Additionally,
the Company has classified certain real estate as available for sale based on an active marketing program to sell the assets, which is recorded in noncurrent assets held
for sale.

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. Actual results could differ from those estimates.

Principles of Consolidation:The consolidated financial statements include the accounts of Marquee
Holdings and all subsidiaries, as discussed above. All significant intercompany balances and transactions have been eliminated.

Fiscal Year:The Company has a 52/53 week fiscal year ending on the Thursday closest to the last day
of March. Fiscal 2008 reflects a 53 week period, while fiscal 2007 and fiscal 2006 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 stored value cards and discounted theatre tickets (no revenue or income recognition for non-presentment) until such time
as the items are redeemed or management believes future redemption to be remote. During fiscal 2008, management changed its estimate of when it believes future redemption to be remote for discounted
theatre tickets from 24 months from the date of sale to 18 months from the date of sale. Management believes the 18 month estimate is supported by its continued development of
redemption history and that it is reflective of management's current best estimate. This change in estimate had the effect of increasing other revenues and earnings from continuing operations by
approximately $4,200,000 and $2,600,000, respectively, during fiscal 2008. The Company recognizes revenues related to on-screen advertising pursuant to the specific terms of its Exhibitor
Services Agreement with National CineMedia, LLC. During the periods ended April 3, 2008, March 29, 2007, and March 30, 2006, the Company recognized $11,289,000,
$10,992,000, and $8,699,000 of income, respectively, related to the

73

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Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 3, 2008, March 29, 2007 and March 30, 2006

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

derecognition
of stored value 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. As of April 3, 2008 and March 29, 2007, the Company recorded film payables of $49,730,000 and $72,070,000, respectively. The
Company recorded film exhibition costs of $879,076,000, $855,804,000, and $595,353,000 for the periods ended April 3, 2008, March 29, 2007 and March 30, 2006, respectively.

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, then the 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.

NCN and Other: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"). The company 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 NCN and NCM in other theatre revenues. The Company contributed fixed assets and exhibitor agreements of its cinema screen advertising subsidiary NCN to NCM. The Company also included
goodwill (recorded in connection with the merger with Marquee) in the cost assigned to its investment in NCM. Additionally, the Company paid termination benefits related to the displacement of certain
NCN associates. In consideration of the NCN contributions described above, NCM, issued a 37% interest in its Class A units to NCN. Since that date, the Company's interest in NCM has declined to
19.1% due to the entry of new investors.

Prior
to the contribution to NCM on March 29, 2005, the Company recognized revenues related to on-screen advertising over the period the related advertising was
delivered on-screen or in-theatre pursuant to the specific terms of its agreements with advertisers. Its on-screen advertising subsidiary (NCN) operated its
advertising program through agreements with other theatre circuits. These circuit agreements stipulated the amount of circuit payments a theatre would receive for running on-screen slides,
on-film programs and other related in-theatre products and services. The Company's circuit agreements have terms of 1 to 5 years, with an annual cancellation provision
included in select agreements. Certain circuits have agreements requiring an annual minimum exhibitor share payment. The Company recognizes the minimum exhibitor share payments as an expense on a
straight-line basis over the terms of the agreements and any excess minimum exhibitor share payments are recognized when earned.

Loyalty Program:The Company records the estimated incremental cost of providing free concession
items for awards under itsMoviewatcherloyalty program when the awards are earned. Historically, the costs of these awards have not been significant.

74

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Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 3, 2008, March 29, 2007 and March 30, 2006

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

Advertising Costs:The Company expenses advertising costs as incurred and does not have any direct-
response advertising recorded as assets. Advertising costs were $20,825,000, $21,385,000, and $22,679,000 during the 53 weeks ended April 3, 2008 and the fifty-two weeks
ended March 29, 2007 and March 30, 2006, respectively.

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 amount of these checks included in accounts payable as of April 3, 2008 and March 29, 2007 was
$55,246,000 and $21,101,000, respectively.

Property:Property is recorded at cost or fair value, in the case of property resulting from the
acquisitions. The Company uses the straight-line method in computing depreciation and amortization for financial reporting purposes and accelerated methods, with respect to certain assets,
for income tax purposes. The estimated useful lives for leasehold improvements reflect the shorter of the base terms of the corresponding lease agreements or the 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), major renewals 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 credited or charged to operations.

Intangible Assets:Intangible assets are recorded at cost or fair value, in the case of intangible
assets resulting from the acquisitions, and are comprised of lease rights, amounts assigned to theatre leases acquired under favorable terms, customer relationship intangible assets,
non-competition and consulting agreements and trademarks, 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 and the AMC and Cinemex Trademark intangible assets associated with the merger with Marquee. The customer relationship intangible asset is amortized
over eight years based upon the pattern in which the economic benefits of the intangible asset are 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 and Cinemex Trademark intangible assets are considered indefinite lived intangible assets, and therefore not amortized,
but rather evaluated for impairment annually. The Company did not impair any intangible assets during fiscal 2008.

Investments:The Company accounts for its investments in non-consolidated entities using
either the cost or equity methods of accounting as appropriate, 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) losses of

75

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Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 3, 2008, March 29, 2007 and March 30, 2006

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

non-consolidated
entities in its consolidated statements of operations. The Company follows the guidance in EITF 03-16Accounting for Investments
in Limited Liability Companieswhich prescribes the use of the equity method for investments that are not considered to be minor in Limited Liability Companies that maintain
specific ownership accounts. The Company classifies gains and losses on sales of and changes of interest in equity method investments within equity in (earnings) losses of non-consolidated
entities, and classifies gains and losses on sales of investments accounted for using the cost method in investment income. As of April 3, 2008, the Company holds a 19.1% interest in NCM, a
joint venture that markets and sells cinema advertising and promotions; a 26% interest in Movietickets.com, a joint venture that provides moviegoers with a convenient way to buy movie tickets online,
access local showtime information, view trailers and read reviews; a 331/3% interest in Digital Cinema Implementation Partners LLC, a joint venture to explore the possibility of
implementing digital cinema in the Company's theatres, a 50% interest in three theatres that are accounted for following the equity method of accounting 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. In February 2007, 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. Future equity in earnings from NCM
will not be recognized until cumulative earnings exceed the redemption gain or cash distributions of earnings are received. The Company's recorded investments exceed its proportional ownership of the
underlying equity in these entities by approximately $5,523,000, excluding NCM. These differences will be amortized to equity in earnings or losses over the estimated useful lives of the related
assets or evaluated for impairment. There was no impairment of the Company's investments as of April 3, 2008.

Acquisitions:The Company accounts for its acquisitions of theatrical exhibition businesses using the
purchase method. The purchase method requires that the Company estimate the fair value of the individual assets and liabilities acquired as well as various forms of consideration given including cash,
common stock, senior subordinated notes and bankruptcy related claims. The allocation of purchase price is based on management's judgment after evaluating several factors, including actuarial
estimates for pension liabilities, market prices of its indebtedness and valuation assessments.

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 $2,070,858,000 as of April 3, 2008 and $2,066,853,000 as of March 29, 2007. The Company evaluates goodwill for impairment as of the
beginning of the fourth fiscal quarter and any time an event occurs or circumstances change that would reduce the fair value for a reporting unit below its carrying amount. The Company's goodwill is
recorded in its U.S. and Canada theatrical exhibition operating segment and in Cinemex which are also the reporting units 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 considering multiples applied to cash flow estimates less net indebtedness
or contemporaneous valuations which it

76

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Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 3, 2008, March 29, 2007 and March 30, 2006

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

believes
are appropriate methods to determine fair value. There is considerable management judgment with respect to cash flow estimates and appropriate multiples to be used in determining fair value.
There was no goodwill impairment as of April 3, 2008.

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.

Preopening Expense:Preopening expense consists primarily of advertising and other
start-up costs incurred prior to the operation of new theatres and are expensed as incurred.

Theatre and Other Closure Expense (Income):Theatre and other closure expense (income) is primarily
related to payments made or expected to be made to landlords to terminate leases on certain of the Company's closed theatres, other vacant space or theatres where development has been discontinued.
Theatre and other closure expense (income) is recognized at the time the theatre closes, space becomes vacant or development is discontinued. Expected payments to landlords are based on actual or
discounted contractual amounts. Accretion expense relates to changes in the Company's theatre closure liability due to the passage of time where the Company has based its expected payments to
landlords on discounted amounts and is a component of theatre and other closure expense (income). The Company recorded theatre and other closure expense (income) of $(20,970,000), $9,011,000, and
$601,000 for the periods ended April 3, 2008, March 29, 2007 and March 30, 2006, respectively. The theatre and other closure income recognized in fiscal 2008 was primarly due to
lease terminations negotiated on favorable terms at seven theatre locations. Accrued theatre and other closure expense (income) is generally classified as current based upon management's intention to
negotiate termination of the related lease obligations within one year. See 15Theatre and Other Closure and Disposition of Assets.

Restructuring Charge:The Company recognizes restructuring charges based upon the nature of the costs
incurred. Costs resulting from one-time termination benefits where employees are not required to render future service to receive the benefits are recognized and a liability is recorded
when
management commits to a plan of termination which identifies the number of employees to be terminated, their job classifications, locations, expected termination dates and when the plan is
communicated to the employees and establishes the detailed terms of the benefits to be received by employees.

If
employees are required to render service until they are terminated in order to receive the termination benefits, the benefits are measured at the fair value of the costs and related
liabilities at the communication date and are recognized ratably over the future service period from the communication date.

On
March 24, 2005, the Company commenced an organizational restructuring related to functions at its Home Office and its Film Office. The Company's new organizational structure
flattens management structure and aligns systems, resources and areas of expertise to promote faster communication. The primary goal of the restructuring is to create a simplified organizational
structure.

77

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Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 3, 2008, March 29, 2007 and March 30, 2006

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

The Company recorded $4,926,000 of expenses, primarily at its home office and at its NCN and other operating segment, related to one-time termination
benefits and other costs for the displacement of approximately 200 associates in connection with the organizational restructuring and the contribution of assets by NCN to NCM during fiscal 2005. The
Company incurred an additional $3,139,000 in one-time termination benefits and approximately $841,000 related to closure of offices during fiscal 2006. The Company's restructuring
activities were complete as of March 30, 2006.

The
Company recorded a liability of $25,846,000 related to one-time termination benefits and other costs for the displacement of approximately 230 associates in connection
with the Merger with Loews as part of purchase accounting. The Company recorded an additional $3,932,000 liability related to closures of Loews' duplicate administrative facilities in connection with
the Merger with Loews as part of purchase accounting.

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 in its leases are reasonably assured at the inception of the lease agreements and therefore, considers the initial base term as the lease term under
Statement of Financial Accounting Standards No. 13,Accounting for Leases("SFAS 13"). The leases provide for fixed and escalating
rentals, contingent escalating rentals based on the Consumer Price Index not to exceed certain specified amounts and contingent rentals based on revenues with a guaranteed minimum.

The
Company has historically recorded rent expense for its operating leases with reasonably assured rent increases in accordance with FASB Technical Bulletin 85-3 Accounting for Operating Leases with Scheduled Rent
Increaseson a straight-line basis from the "lease commencement date" (the theatre
opening date) as specified in the lease agreement until the end of the base lease term. The Company has historically viewed "rent holidays" as an inducement contained in the lease agreement that
provides for a period of "free rent" during the lease term and believed that it did not have "rent holidays" in its lease agreements.

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" contained in the lease agreement. Rent expense related to the "rent holiday" is recorded as a component
of preopening 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. The estimated useful lives for leasehold improvements reflect the shorter of the base terms of the corresponding lease agreements or
the economic life of the leasehold improvements.

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.

78

---



Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 3, 2008, March 29, 2007 and March 30, 2006

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

The
Company evaluates the classification of its leases following the guidance in SFAS 13. 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
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. Emerging Issues Task Force (EITF) Issue No. 97-10,The Effect of Lessee Involvement in Asset Construction,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 $39,117,000 and $18,469,000 as financing lease obligations for failed sale leaseback transactions on its Consolidated Balance Sheets related to
these types of projects as of April 3, 2008 and March 29, 2007, respectively.

Sale and Leaseback Transactions:The Company accounts for the sale and leaseback of real estate
assets in accordance with Statement of Financial Accounting Standards No. 98,Accounting For Leases.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 lease term.

Impairment of Long-lived Assets:Management reviews long-lived assets,
including intangibles and investments in non-consolidated entities, for impairment as part of the Company's annual budgeting process and whenever events or changes in circumstances
indicate that the carrying amount of the assets may not be fully recoverable. Management reviews internal management reports on a quarterly basis as well as monitors current and potential future
competition in the markets where the Company operates for indicators of triggering events or circumstances that indicate potential impairment of individual theatre assets. Management evaluates its
theatres using historical and projected data of theatre level cash flow as its primary indicator of potential impairment and considers the seasonality of its business when evaluating theatres for
impairment. The Company performs its annual impairment analysis during the fourth quarter because the Christmas and New Years holiday results comprise a significant portion of the Company's operating
cash flow, the actual results from this period, which are available during the fourth quarter of each fiscal year, are an integral part of the Company's impairment analysis. As a result of 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 or the fair value of furniture, fixtures and
equipment. The expected disposal date does not exceed the remaining lease period unless it is possible the lease period will be extended and may be less than the remaining lease period when management
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. Fair value for furniture, fixtures and equipment has been determined using factors such as similar asset sales and in some instances

79

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Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 3, 2008, March 29, 2007 and March 30, 2006

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

third
party valuation studies. There is considerable management judgment necessary to determine the future cash flows, fair value and the expected operating period of a theatre, and accordingly,
actual results could vary significantly from such estimates.

If
theatres currently have sufficient estimated future cash flows to realize the related carrying amount of theatre assets, but management believes that it is not likely the theatre will
be operated to the end of its lease term, the estimated economic life of the theatre assets are revised to reflect management's best estimate of the economic life of the theatre assets for purposes of
recording depreciation. Impairment losses were recorded during fiscal 2008, 2007 and 2006 due to deterioration in cash flows at certain theatres.

Impairment
losses by operating segment are as follows:

Impairment of long-lived assets (In thousands)

53 weeks
Ended
April 3, 2008

52 weeks
Ended
March 29, 2007

52 weeks
Ended
March 30, 2006U.S. and Canada theatrical exhibition

$
8,933

$
10,686

$
11,974International theatrical exhibition








Total impairments of long-lived assets

$
8,933

$
10,686

$
11,974


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 income (loss). Gains and losses from
foreign currency transactions, except those intercompany transactions of a long-term investment nature, are included in net loss and have not been material.

Stock-based Compensation:Holdings has no stock-based compensation arrangements of its own; however
its ultimate parent, AMC Entertainment Holdings, Inc. granted options on 39,476.72872 shares to certain employees during the periods ended March 31, 2005 and March 30, 2006.
Because the employees to whom the options were granted are employed by AMCE and Holdings, Holdings has reflected the stock-based compensation expense associated with the options within its
consolidated statements of operations. The options have a ten year term and the options granted during fiscal 2005 step-vest in equal amounts over five years with the final vesting
occurring on December 23, 2009. The options granted during fiscal 2006 step vest in equal amounts over three years with final vesting occurring on December 23, 2008, but vesting may
accelerate for certain participants if there is a change of control (as defined in the plan). Holdings has recorded $207,000 of stock-based compensation expense during the year ended April 3,
2008, $10,568,000 of stock-based compensation
expense during the year ended March 29, 2007, and $3,433,000 of stock-based compensation expense during the year ended March 30, 2006.

The
options have been accounted for using the fair value method of accounting for stock-based compensation arrangements as prescribed by Statement of Financial Accounting Standards
No. 123 (R),Share-Based Payment("SFAS 123(R)") and Staff Accounting Bulletin ("SAB") No. 107 and 110, Share-

80

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Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 3, 2008, March 29, 2007 and March 30, 2006

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

Based Payment, and the Company has valued the options using the Black-Scholes formula. There is no cash impact related to the options included in the Company's Consolidated
Statements of Cash Flows.

One
of the holders of Holdings' stock options has written put rights deemed to be in the holder's control associated with his options whereby he can require Holdings to repurchase his
options. These liability-classified options are required to be remeasured during each reporting period. A liability of $4,684,000 and $7,130,000 is recorded within other long term liabilities in the
Consolidated Balance Sheets as of April 3, 2008 and March 29, 2007, respectively, for the options containing written put rights deemed to be in the holder's control.

The
following table reflects the weighted average fair value per option granted during each year, as well as the significant weighted average assumptions used in determining fair value
using the Black-Scholes option-pricing model:

April 3, 2008(1)

March 29, 2007(1)

March 30, 2006(2)Weighted average fair value on grant date

$


$


$
230.75Risk-free interest rate








4.5
%Expected life (years)








3Expected volatility(3)








25.8
%Expected dividend yield













Income Taxes:The Company accounts for income taxes in accordance with Statement of Financial
Accounting Standards No. 109 ("SFAS 109"),Accounting for Income Taxes. Under SFAS 109, deferred income tax effects of transactions
reported in different periods for financial reporting and income tax return purposes are recorded by the liability method. This method gives consideration to the future tax consequences of deferred
income or expense items and immediately recognizes changes in income tax laws upon enactment. The income statement effect is generally derived from changes in deferred income taxes on the balance
sheet.

The
Company adopted the new requirements of FASB Interpretation No. 48,Accounting for Unceratinty in Income TaxesAn Interpretation of FASB
Statement 109("FIN 48") in the first quarter of fiscal 2008. As a result of the adoption of FIN 48, the Company recorded a $5,373,000 increase in current
deferred tax assets, a $5,373,000 reduction of goodwill, a $5,373,000 current FIN 48 liability and a $5,373,000 charge to the beginning accumulated deficit that is reported as a cumulative
effect adjustment for a change in accounting principle to the opening balance sheet position of stockholder's accumulated deficit at March 30, 2007. See Note 11Income Taxes.

81

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Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 3, 2008, March 29, 2007 and March 30, 2006

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

AMCE
entered into a tax sharing agreement with Holdings under which AMCE agreed to make cash payments to Holdings 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 Holdings' legal existence.

Casualty Insurance:The Company is self-insured for general liability up to $500,000 per
occurrence and carries a $400,000 deductible limit per occurrence for workers compensation claims. The Company utilizes actuarial projections of its ultimate losses that it will be responsible for
paying 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 April 3, 2008 and March 29, 2007, the Company had recorded casualty insurance reserves of $23,254,000 and $25,675,000, respectively. The Company recorded
expenses related to general liability and workers compensation claims of $15,376,000, $14,644,000, and $10,936,000 for the periods ended April 3, 2008, March 29, 2007 and
March 30, 2006, respectively.

Derivative Instrument:.Derivative instruments are recognized as assets or liabilities on the
consolidated balance sheets at fair value. Changes in the fair value of derivatives are recorded each period in earnings or accumulated other comprehensive income, to the extent effective, depending
on whether the derivative is designated as a cash flow hedge and qualifies for hedge accounting under SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities. Changes in the
fair value of derivative instruments recorded to accumulated other comprehensive income are reclassified to earnings in the period affected by the underlying hedged item. Any portion of the change in
fair value of a derivative instrument determined to be ineffective under the rules is recognized in current earnings. The estimated fair value for interest rate swap derivatives are based on
prevailing market data that represents the theoretical cost the Company would have to pay to terminate the transactions. See Note 9Derivative Instruments to these consolidated
financial statements regarding the Company's derivative hedging activities.

New Accounting Pronouncements:In March 2008, the FASB released SFAS No. 161, Disclosures about
Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133,("SFAS 161"), which expands the
disclosure requirements about an entity's derivative and hedging activities. SFAS 161 requires entities to provide enhanced disclosures about (1) how and why an entity uses derivative
instruments, (2) how derivative instruments and related hedged items are accounted for under Statement 133 and its related interpretations, and (3) how derivative instruments and related
hedged items affect an entity's financial position, financial performance, and cash flows. SFAS 161 is effective for fiscal years and interim periods beginning after November 15, 2008,
and is effective for the Company at the beginning of fiscal 2010. Early application is encouraged. The Company is currently evaluating the enhanced disclosure requirements of this pronouncement.

In
December 2007, the FASB issued SFAS No. 160,Noncontrolling Interests in Consolidated Financial Statementsan amendment of ARB
No.51,("SFAS 160"). SFAS 160 establishes accounting and reporting standards that require noncontrolling interest in a subsidiary to be reported as a component of
equity, changes in a parent's ownership interest while the parent retains its controlling interest to be accounted for as equity transactions, and any retained noncontrolling equity investment upon
the deconsolidation of a subsidiary to be initially measured at fair value. The Statement also

82

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Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 3, 2008, March 29, 2007 and March 30, 2006

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

establishes
reporting requirements that clearly identify and distinguish between the interests of the parent and the interests of the non-controlling owners. SFAS 160 is effective
as of the beginning of the first fiscal year beginning on or after December 15, 2008, and is effective for the Company at the beginning of fiscal 2010. Earlier adoption is prohibited. The
Company has not determined the effect that the application of SFAS 160 will have on its consolidated financial position.

In
December 2007, the FASB issued Statement No. 141 (revised 2007),Business Combinations,("SFAS 141(R)").
SFAS 141(R) establishes the principles and requirements for how an acquirer: 1) recognizes and measures in its financial statements the identifiable assets acquired, the
liabilities assumed, and any noncontrolling interest in the acquiree; 2) in a business combination achieved in stages, sometimes referred to as a step acquisition, recognize the identifiable
assets and liabilities, as well as the noncontrolling interest in the acquiree, at the full amounts of their fair values; 3) recognizes and measures the goodwill acquired in the business
combination or a gain from a bargain purchase. SFAS 141(R) establishes disclosure requirements to enable users of the financial statements to evaluate the nature and financial effects of the
business combination. This Statement is to be applied prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period on or
after December 15, 2008, and is effective for the Company at the beginning of fiscal 2010. Earlier adoption is prohibited. The Company is in the process of evaluating the impact
SFAS 141(R) will have on its financial statements.

In
December 2007, the Securities and Exchange Commission issued Staff Accounting Bulletin No. 110 ("SAB 110"). SAB 110 extends the opportunity to use the
"simplified" method beyond December 31, 2007, as was allowed by Staff Accounting Bulletin No. 107 ("SAB 107"). Under SAB 110 and 107, a company is able to use the
"simplified" method in developing an estimate of expected term based on the date of exercise of "plain vanilla" share options. SAB 110 allows companies which do not have sufficient historical
experience to provide a reasonable estimate to continue use of the "simplified" method for estimating the expected term of "plain vanilla" share option grants after December 31, 2007. The
Company will continue to use the "simplified" method until there is sufficient historical experience to provide a reasonable estimate of expected term in accordance with SAB 110. SAB 110
is effective for the Company on January 1, 2008.

In
February 2007, the FASB issued SFAS No. 159,The Fair Value Option for Financial Assets and Financial Liabilities, including an amendment of FASB
Statement No. 115, ("SFAS 159"). SFAS 159 permits entities to choose to measure many financial instruments and certain other items at fair value that are
not currently required to be measured at fair value. Unrealized gains and losses on items for which the fair value option has been elected are reported in earnings. SFAS 159 does not affect any
existing accounting literature that requires certain assets and liabilities to be carried at fair value. The Company will be required to adopt this standard in the first quarter of fiscal 2009.
Management is currently
evaluating the requirements of SFAS 159 and has not yet determined the impact on the consolidated financial statements.

In
September 2006, the FASB released SFAS No. 157,Fair Value Measurements,which provides enhanced guidance for using fair value
to measure assets and liabilities. The standard applies whenever other standards require (or permit) assets or liabilities to be measured at fair value. It does not expand the use of fair value in any
new circumstances. Under the standard, 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

83

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Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 3, 2008, March 29, 2007 and March 30, 2006

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

market
participants in the market in which the reporting entity transacts. It clarifies the principle that fair value should be based on the assumptions market participants would use when pricing the
asset or liability. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years, or the
first quarter of fiscal 2009 for the Company. Early adoption is permitted. In February 2008, the FASB issued FASB Staff Position FAS 157-2,Partial Deferral of
the Effective Date of SFAS 157("FSP 157-2"), which delays the effective date for nonfinancial assets and liabilities, except for items that are recognized or
disclosed at fair value in the financial statements on a recurring basis. Management is currently evaluating the requirements of SFAS 157 and has not yet determined the impact on the
consolidated financial statements.

Presentation:Certain amounts have been reclassified from prior period consolidated financial
statements to conform with the current year presentation. As a result of the merger with Loews, the Company applied the purchase method of accounting to the separable assets, including goodwill, and
liabilities of the accounting acquiree, as of January 26, 2006. The purchase method of accounting requires that the assets and liabilities be recorded at their fair values on the date of the
purchase.

NOTE 2ACQUISITIONS

Merger with Loews

On June 20, 2005, Holdings entered into a 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. Upon completion of the Mergers, the stockholders of Holdings
immediately prior to the Mergers, including affiliates of J.P. Morgan Partners, LLC and Apollo Management, L.P., held approximately 60% of the outstanding capital stock of Holdings, and
the stockholders of LCE Holdings immediately prior to the Merger, including affiliates of Bain Capital Partners, LLC, The Carlyle Group and Spectrum Equity Investors, held approximately 40% of
the outstanding capital stock of Holdings.

The
Company has accounted for the Merger as a purchase in accordance with SFAS No. 141,Business Combinations, for an estimated
purchase price of $537,171,000. Results of operations of Loews are included in the Company's Consolidated Statements of Operations from January 26, 2006. The acquisition included 112 theatres
with 1,308 screens in the United States, 40 theatres with 443 screens in Mexico (Cinemex), 4 managed/joint venture theatres with 55 screens in the United States and a 50% interest in Yelmo Cineplex,
S.L. ("Yelmo"), which operated 27 theatres with 311 screens in Spain that was accounted for using the equity method until December 2006 when the Company disposed of its investment in Yelmo. The Merger
did not constitute a change in control.

The
following is a summary of the allocation of the purchase price to the assets and liabilities of LCE Holdings based on management's judgment after evaluating several factors,
including actuarial

84

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Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 3, 2008, March 29, 2007 and March 30, 2006

NOTE 2ACQUISITIONS (Continued)

estimates
for pension liabilities, estimates of fair value for issuance of common stock and a valuation assessment:

(In thousands)Cash and equivalents

$
142,512Current assets


41,102Property, net


726,993Intangible assets, net


107,269Goodwill


806,496Deferred income taxes


14,112Other long-term assets


73,902Current liabilities


(180,918
)Corporate borrowings


(1,054,192
)Capital and financing lease obligations


(32,524
)Other long-term liabilities


(107,581
)Total estimated purchase price

$
537,171


Amounts
recorded for goodwill were not subject to amortization, and were not considered deductible for income tax purposes. Goodwill in the amount of $602,035,000 and $204,461,000 was
recorded at the Company's U.S. and Canada theatrical exhibition operating segment and the International operating segment, respectively. During fiscal years 2007 and 2008, the Company has recorded
fair value adjustments to its preliminary allocation of purchase price, see Note 5Goodwill and Other Intangible Assets.

The
Merger included the acquisition of intangible assets including $43,133,000 related to favorable leases with a weighted average amortization period of 10 years, $2,300,000
related to Loews trademark and trade name with an amortization period of 5 years, $44,853,000 related to advertising contracts with a weighted average amortization period of 5 years,
$7,708,000 related to management contracts with a weighted average amortization period of 22 years, $1,940,000 related to Cinemex non-compete agreement with less than one year
remaining on the agreement, and $7,335,000 related to Cinemex trademark and trade name which is not amortized. The Cinemex trademark and trade name are indefinite-lived intangible assets which are not
subject to amortization but do require impairment evaluation during each reporting period to determine whether events and circumstances continue to support an indefinite useful life. Intangible assets
are more fully discussed in Note 5Goodwill and Other Intangible Assets.

Unaudited Pro Forma Effect of Loews Merger

The unaudited pro forma financial information presented below sets forth the Company's pro forma consolidated statement of operations for the
fifty-two weeks ended March 30, 2006 to give effect to the Merger and the related debt issuances as if the transaction occurred at the beginning of the fiscal year. Such information
is presented for comparative purposes only and does not purport to

85

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Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 3, 2008, March 29, 2007 and March 30, 2006

NOTE 2ACQUISITIONS (Continued)

represent
what the Company's results of operations would actually have been had these 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 30, 2006(Unaudited)RevenuesAdmissions

$
1,588,412Concessions


648,873Other revenues


131,866Total revenues


2,369,151Cost of operations


1,524,526Rent


429,439General and administrative:Merger, acquisition and transaction costs*


18,059Management fee


5,000Other


78,928Preopening expense


10,635Theatre and other closure expense


601Restructuring charge


3,980Depreciation and amortization


262,764Impairment of long-lived assets


11,974Disposition of assets and other gains


(1,300
)Total costs and expenses


2,344,606Other income


(9,818
)Interest expense


223,878Investment expense (income)


5,132Total other expense


219,192Earnings (loss) from continuing operations before income taxes


(194,647
)Income tax provision (benefit)


9,197Earnings (loss) from continuing operations


(203,844
)Income (loss) from discontinued operations, net of income tax benefit


(25,291
)Net loss

$
(229,135
)Operating data (at period end) (unaudited):Average screens**


5,080Number of screens operated


5,337Number of theatres operated


389Screens per theatre


13.7Attendance (in thousands)continuing operations**


240,229




86

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Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 3, 2008, March 29, 2007 and March 30, 2006

NOTE 3DISCONTINUED OPERATIONS

On May 11, 2006, the Company sold two of its wholly-owned subsidiaries, AMC Entertainment España S.A. and Actividades Multi-Cinemeas
E Espectáculos, LDA (collectively "Iberia"), which owned and operated 4 theatres with 86 screens in Spain and 1 theatre with 20 screens in Portugal, for a cash sales price of
$35,446,000. At the date of the sale these operations did not meet the criteria for discontinued operations because of continuing involvement in the region through an equity method investment in
Yelmo. In December 2006, the company disposed of its investment in Yelmo, which owned and operated 27 theatres with 310 screens in Spain, for proceeds of $52,137,000. There was no gain or loss
recorded on the sale of Yelmo. The investment in Yelmo was reported within other long-term assets at March 30, 2006. The Company no longer has continuing involvement in the region
as a result of the sale of Yelmo and the results of the operations in Iberia have been classified as discontinued operations as the Company no longer has operations or significant cash flows from the
Iberia component.

Information
presented for all periods reflects the discontinued classification. All affected amounts within the consolidated financial statements have been adjusted accordingly. The
results of operations of the Iberia theatres were previously reported in the Company's International theatrical exhibition operating segment. The Company has recorded a gain on sale of Iberia of
$2,658,000 during fiscal 2007 which is included in discontinued operations. Goodwill of $11,700,000 was allocated to the Iberia theatres in connection with the sale. The Iberia assets and liabilities
were classified as held for sale at March 30, 2006.

87

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Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 3, 2008, March 29, 2007 and March 30, 2006

NOTE 3DISCONTINUED OPERATIONS (Continued)

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

Statements of operations data:

(In thousands)

52 Weeks Ended
March 29, 2007

52 Weeks Ended
March 30, 2006RevenuesAdmissions

$
3,892

$
31,192Concessions


1,292


10,651Other revenue


172


1,729Total revenues


5,356


43,572Costs and ExpensesFilm exhibition costs


1,901


15,247Concession costs


255


2,003Operating expense


1,189


10,663Rent


1,410


11,423General and administrativeother


50


171Preopening expense





Depreciation and amortization


545


4,774Disposition of assets and other gains


(2,658
)

Total costs and expenses


2,692


44,281Interest expense


220


1,878Investment income


(4
)

(5
)Total other expense


216


1,873Earnings (loss) before income taxes


2,448


(2,582
)Income tax provision





300Earnings (loss) from discontinued operations

$
2,448

$
(2,882
)


On
June 30, 2005, the Company sold one of its wholly-owned subsidiaries, Japan AMC Theatres Inc., including four of its five theatres in Japan. The Company sold its
remaining Japanese theatre during the second fiscal quarter of 2006. The Company opened its first theatre in Japan during fiscal 1997 and since that time the Company has incurred cumulative
pre-tax losses of $38,689,000 including a $4,999,000 impairment charge in fiscal 2003.

The
operations and cash flows of the Japan theatres have been eliminated from the Company's ongoing operations as a result of the disposal transactions. The Company will not have any
significant continuing involvement in the operations of the Japan theatres after the disposal transactions. The results of operations of the Japan theatres have been classified as discontinued
operations, and information presented for all periods reflects the new classification. The operations of the Japan theatres were previously reported in the Company's International theatrical
exhibition operating

88

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Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 3, 2008, March 29, 2007 and March 30, 2006

NOTE 3DISCONTINUED OPERATIONS (Continued)

segment.
Components of amounts reflected as 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 30, 2006RevenuesAdmissions

$
11,293Concessions


2,134Other revenue


363Total revenues


13,790Costs and ExpensesFilm exhibition costs


6,076Concession costs


323Operating expense


3,243Rent


3,918General and administrativeother


1,833Depreciation and amortization


706Total costs and expenses


16,099Investment income


Earnings (loss) before income taxes


(2,309
)Income tax provision


20,100Earnings (loss) from discontinued operations

$
(22,409
)


Goodwill
of $44,774,000 was allocated to Japan AMC Theatres Inc. and goodwill of $6,599,000 was allocated to the Company's Japan branch and disposed of in connection with the
consummation of the sale of those entities and there was no gain or loss on the sales. The goodwill is not deductible for tax purposes and is discussed in Note 11. For the fifty-two
weeks ended March 30, 2006, the loss from discontinued operations includes $1,960,000 transferred from currency translation adjustments which increased the gain from discontinued operations
prior to allocation of goodwill.

89

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Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 3, 2008, March 29, 2007 and March 30, 2006

NOTE 4PROPERTY

A summary of property is as follows:

(In thousands)

April 3, 2008

March 29, 2007Property owned:Land

$
44,565

$
44,524Buildings and improvements


172,232


162,194Leasehold improvements


888,513


861,510Furniture, fixtures and equipment


1,334,117


1,228,6942,439,427


2,296,922Less-accumulated depreciation and amortization


1,208,332


1,018,7711,231,095


1,278,151Property leased under capital leases:Buildings and improvements


35,342


39,281Less-accumulated amortization


16,031


18,60919,311


20,672$
1,250,406

$
1,298,823


Included
in property is $21,649,000 and $29,147,000 of construction in progress as of April 3, 2008 and March 29, 2007, respectively. Also included is capitalized interest
of $1,114,000 and $1,760,000 as of April 3, 2008 and March 29, 2007, respectively.

NOTE 5GOODWILL AND OTHER INTANGIBLE ASSETS

Activity of goodwill by operating segment is presented below.

|(In thousands)                                       |  | U.S. and
Canada |           | International |   | Total   |  
|---------------------------------------------------- |  | --------------- | --------- | ------------- | - | ------- | -
|Balance as of March 30, 2006                         |  | $               | 1,893,716 |               | $ | 124,602 |  
|Currency translation adjustment                      |  |                 |          |               |   | (4,047  | )
|Fair value adjustments LCE(1)                        |  |                 | 3,252     |               |   | 75,300  |  
|Goodwill allocated to sale of divestitures(2)        |  |                 | (10,082   | )             |   |        |  
|Fair value adjustments AMCE(3)                       |  |                 | (15,888   | )             |   |        |  
|                                                     |  |                 |           |               |   |         |  
|Balance as of March 29, 2007                         |  | $               | 1,870,998 |               | $ | 195,855 |  
|Currency translation adjustment                      |  |                 |          |               |   | 7,565   |  
|Fair value deferred tax asset adjustments LCE(4)     |  |                 | (8,039    | )             |   |        |  
|Fair value change in fiscal 2007 APB 23 assertion(5) |  |                 | 6,220     |               |   |        |  
|Other fair value adjustments(6)                      |  |                 | (933      | )             |   | (808    | )
|                                                     |  |                 |           |               |   |         |  
|Balance as of April 3, 2008                          |  | $               | 1,868,246 |               | $ | 202,612 |  
|                                                     |  |                 |           |               |   |         |  

---

90

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Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 3, 2008, March 29, 2007 and March 30, 2006

NOTE 5GOODWILL AND OTHER INTANGIBLE ASSETS (Continued)



Activity
of other intangible assets is presented below:

|                            |                                                  |  |               | April 3, 2008 |   | March 29, 2007 | 
|--------------------------- | ------------------------------------------------ |  | ------------- | ------------- | - | -------------- | 
|
|Acquired Intangible Assets: |                                                  |  |               |               |   |                | 
|                            | Amortizable Intangible Assets:                   |  |               |               |   |                | 
|                            | Favorable leases                                 |  | 1 to 13 years |               | $ | 115,419        | 
|                            | Loyalty program                                  |  | 3 years       |               |   | 46,000         | 
|                            | LCE trade name                                   |  | 3 years       |               |   | 2,300          | 
|                            | LCE/Cinemex advertising and management contracts |  | 1 to 23 years |               |   | 52,147         | 
|                            | Other intangible assets                          |  | 1 to 14 years |               |   | 19,088         | 
|                            |                                                  |  |               |               |   |                | 
|                            | Total, amortizable                               |  |               |               | $ | 234,954        | 
|                            |                                                  |  |               |               |   |                | 
|                            | Unamortized Intangible Assets:                   |  |               |               |   |                | 
|                            | AMC trademark                                    |  |               |               | $ | 74,000         | 
|                            | Cinemex trademark                                |  |               |               |   | 7,194          | 
|                            |                                                  |  |               |               |   |                | 
|                            | Total, unamortized                               |  |               |               | $ | 81,194         | 
|                            |                                                  |  |               |               |   |                | 

91

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Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 3, 2008, March 29, 2007 and March 30, 2006

NOTE 5GOODWILL AND OTHER INTANGIBLE ASSETS (Continued)

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

53 Weeks Ended
April 3, 2008

52 Weeks Ended
March 29, 2007

52 Weeks Ended
March 30, 2006Recorded amortization

$
28,387

$
37,029

$
21,440


Estimated
amortization expense for the next five fiscal years for intangible assets owned as of April 3, 2008 is projected below:

(In thousands)

2009

2010

2011

2012

2013Projected amortization expense

$
22,306

$
16,581

$
14,627

$
13,504

$
12,634


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 April 3, 2008, include a 19.1%
interest in National CineMedia, LLC, a 50% interest in three domestic motion picture theatres, a 26% equity interest in Movietickets.com, Inc., a 50% interest in Midland Empire
Partners, LLC, and a 33.3% interest in Digital Cinema Implementation Partners, LLC. Investments as of March 29, 2007 include a 50% interest in Hoyts General Cinemas South America
("HGCSA"), an entity that operated 17 theatres in South America, which was disposed of in July 2007. Financial results for the fifty-two weeks ended March 29, 2007 include a
50% equity interest in Yelmo, which was disposed of in December 2006.

In
May 2007 the Company disposed of its investment in Fandango, accounted for using the cost method, for total expected proceeds of approximately $20,000,000, of which $17,977,000
has been received, and has recorded a gain on the sale included in investment income of approximately $15,977,000. In July 2007 the Company disposed of its investment in HGCSA for total
proceeds of $28,682,000 and has
recorded a gain on the sale included in equity in earnings of non-consolidated entities of approximately $18,751,000.



On March 29, 2005, the Company formed NCM with Regal Entertainment Group ("Regal") to combine its screen advertising business. On July 15, 2005,
Cinemark Holdings, Inc. ("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 American Multi-Cinema, Inc., 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 NCM, Inc. shares of common stock on a

92

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Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 3, 2008, March 29, 2007 and March 30, 2006

NOTE 6INVESTMENTS (Continued)

one-for-one
basis, or at the option of NCM, Inc., 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.

In
connection with the completion of NCM, Inc.'s IPO, the Company also entered into an Exhibitor Services Agreement ("ESA") with NCM on February 13, 2007, whereby in
exchange for approximately $231,308,000, the Company agreed to modify NCM's payment obligations under the prior Exhibitor Services Agreement. 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 will pay NCM an amount that
approximates the EBITDA that NCM would generate if it were able to sell advertising in the Loews theatre chain on an exclusive basis commencing upon the completion of NCM, Inc.'s IPO, and NCM
issued to us common membership units in NCM, increasing our ownership interest to approximately 33.7%; such Loews payments will be made quarterly until May 2008 and are expected to approximate
$15,850,000. Also, with respect to any on-screen advertising time provided to our beverage concessionaire, the Company is required to purchase such time from NCM at a negotiated rate. In
addition, the Company expects to receive mandatory quarterly distributions of excess cash from NCM. Immediately following the NCM, Inc. IPO, the Company held an 18.6% interest in 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 adjustments to common membership units reflect changes in the number of theatres operated and attendance. As a result of the 2007 Common Unit Adjustment, the Company's interest in NCM was
increased to 19.1%. The Company recorded the additional units received as a result of the 2007 Common Unit Adjustment at fair value and as a new investment with an offsetting adjustment to deferred
revenue.

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

93

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Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 3, 2008, March 29, 2007 and March 30, 2006

NOTE 6INVESTMENTS (Continued)

redemption
of preferred and common units of $106,188,000. The Company has recognized the change of interest gain and the excess distribution as a gain in equity in earnings of
non-consolidated entities as it has not guaranteed any obligations of NCM and is not otherwise committed to provided further financial support for NCM.

In
future periods, the Company will not recognize any undistributed equity in the earnings of NCM until NCM's future net earnings equal the amount of the excess distribution. In essence,
the Company considers the excess distribution 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 exceeds the excess distribution. The Company believes that the accounting model provided by paragraph 19(i) of
APB 18 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.

As
of April 3, 2008, the Company owns 18,414,743 units or a 19.1% interest in NCM accounted for using the equity method of accounting. The fair market value of the shares in
National CineMedia, LLC was approximately $409,241,000 based on a price for shares of National CineMedia, Inc. on April 3, 2008 of $22.22 per share. Because the Company has little
tax basis in these units and because the sale of these units would require it to report taxable income of $520,969,000 including distributions received from NCM that were previously deferred, the
Company estimates that the amount of current tax that it
would be required to pay as a result of realizing the fair value of these shares would be $208,388,000 that could be payable within 15 to 150 days of the sale.

As
of April 3, 2008 and March 29, 2007, the Company has recorded $1,255,000 and $900,000, respectively, of amounts due from National CineMedia, LLC related to
on-screen advertising revenue. As of April 3, 2008 and March 29, 2007, the Company had recorded $6,177,000 and $17,200,000, respectively, of amounts due to National
CineMedia, LLC related to the ESA and the Loews' Screen Integration Agreement. The Company recorded revenues for advertising from National CineMedia, LLC of $14,531,000, $38,600,000 and
$42,200,000 during fiscal years 2008, 2007, and 2006, respectively.

94

---



Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 3, 2008, March 29, 2007 and March 30, 2006

NOTE 6INVESTMENTS (Continued)

Summary Financial Information

Condensed financial information of our 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:

(In thousands)

April 3, 2008

March 29, 2007Current assets

$
72,848

$
107,709Noncurrent assets


131,751


87,210Total assets


204,599


194,919Current liabilities


29,485


80,088Noncurrent liabilities


822,832


786,272Total liabilities


852,317


866,360Stockholders' deficit


(647,718
)

(671,441
)Liabilities and stockholders' deficit


204,599


194,919The Company's recorded investment(1)

$
41,693

$
27,661




Operating
Results:

(In thousands)

53 Weeks Ended
April 3, 2008

52 Weeks Ended
March 29, 2007

52 Weeks Ended
March 30, 2006Revenues

$
322,536

$
403,455

$
198,846Operating costs & expenses


214,144


386,572


220,031Net (earnings) loss

$
(108,392
)
$
(16,883
)
$
21,185The Company's recorded equity in (earnings) loss

$
(43,019
)
$
(233,704
)
$
7,807


95

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Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 3, 2008, March 29, 2007 and March 30, 2006

NOTE 6INVESTMENTS (Continued)

The
Company recorded the following changes in the carrying amount of its investment in NCM and equity in (earnings) losses of NCM during the fifty-two week ended
March 29, 2007 and the fifty-three weeks ended April 3, 2008:

|(in thousands)                                  |  | Investment
in NCM |          | Deferred
Revenue |   | Cash     |   | Due to
NCM |         | Equity in
(Earnings)
Losses |   | Advertising
(Revenue) |  
|----------------------------------------------- |  | ----------------- | -------- | ---------------- | - | -------- | - | ---------- | ------- | --------------------------- | - | --------------------- | -
|Beginning balance March 30, 2006                |  | $                 | 35,751   |                  | $ |         |   | $          |        |                             | $ |                      |  
|Equity in losses                                |  |                   | (4,597   | )                |   |         |   |            |        |                             |   |                      |  
|Loews' Screen Integration Agreement             |  |                   | 15,850   |                  |   |         |   |            |        |                             |   | (15,850               | )
|Change of interest gain                         |  |                   | 132,622  |                  |   |         |   |            |        |                             |   |                      |  
|ESA Payment                                     |  |                   |         |                  |   | (231,308 | ) |            | 231,308 |                             |   |                      |  
|Amortization of deferred revenue                |  |                   |         |                  |   | 263      |   |            |        |                             |   |                      |  
|Preferred and common unit redemption            |  |                   | (179,626 | )                |   |         |   |            | 285,814 |                             |   |                      |  
|                                                |  |                   |          |                  |   |          |   |            |         |                             |   |                       |  
|Ending balance March 29, 2007                   |  | $                 |         |                  | $ | (231,045 | ) | $          | 517,122 |                             | $ | (15,850               | )
|                                                |  |                   |          |                  |   |          |   |            |         |                             |   |                       |  
|Receipt of excess cash distributions            |  |                   |         |                  |   |         |   |            | 22,175  |                             |   |                      |  
|Payments on Loews' Screen Integration Agreement |  |                   |         |                  |   |         |   |            | (11,201 | )                           |   | 11,201                |  
|2007 Common Unit Adjustment                     |  |                   | 21,598   |                  |   | (21,598  | ) |            |        |                             |   |                      |  
|Amortization of Deferred Revenue                |  |                   |         |                  |   | 2,331    |   |            |        |                             |   |                      |  
|                                                |  |                   |          |                  |   |          |   |            |         |                             |   |                       |  
|Ending Balance April 3, 2008                    |  | $                 | 21,598   |                  | $ | (250,312 | ) | $          | 528,096 |                             | $ | (4,649                | )
|                                                |  |                   |          |                  |   |          |   |            |         |                             |   |                       |  

NOTE 7SUPPLEMENTAL BALANCE SHEET INFORMATION

Other assets and liabilities consist of the following:

(In thousands)

April 3, 2008

March 29, 2007Other current assets:Prepaid rent

$
33,986

$
3,550Income taxes receivable


8,690


1,929Prepaid insurance and other


12,796


12,073Merchandise inventory


8,820


9,172Current deferred tax asset


2,980


Other


6,489


3,678$
73,761

$
30,402


96

---



Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 3, 2008, March 29, 2007 and March 30, 2006

NOTE 7SUPPLEMENTAL BALANCE SHEET INFORMATION (Continued)

Other long-term assets:Investments in real estate

$
7,100

$
7,100Deferred financing costs


32,181


33,921Investments in joint ventures


41,693


27,661EDP and other deferred charges


23,087


10,121Cinemex prepaid rent


6,894


9,190Pension assets


672


Other


7,534


10,790$
119,161

$
98,783Accrued expenses and other liabilities:Taxes other than income

$
43,360

$
44,758Income taxes payable





577Interest


16,946


14,350Payroll and vacation


8,142


12,004Current portion of casualty claims and premiums


9,984


10,472Accrued bonus


4,110


7,291Theatre and other closure


10,146


16,955Rent


10,130


10,167Current portion of pension liabilities


1,580


Other


18,019


21,719$
122,417

$
138,293Other long-term liabilities:Unfavorable lease obligations

$
184,743

$
209,526Deferred rent


71,443


46,550Pension and other benefits


37,138


49,847Deferred gain


21,086


20,051Deferred tax liability


3,710


Other


32,378


47,969$
350,498

$
373,943


97

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Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 3, 2008, March 29, 2007 and March 30, 2006

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)

April 3, 2008

March 29, 2007Senior Secured Credit Facility (4.356% as of April 3, 2008)

$
635,375

$
643,50085/8% Senior Fixed Rate Notes due 2012


250,000


250,0008% Senior Subordinated Notes due 2014


298,915


298,77512% Senior Discount Notes due 2014


240,795


230,40511% Senior Subordinated Notes due 2016


325,000


325,000Capital and financing lease obligations, 103/4%


69,983


53,125Cinemex Credit Facility


106,382


114,803Mortgage Payable





2,1871,926,450


1,917,795Less: current maturities


(20,753
)

(24,271
)$
1,905,697

$
1,893,524


Minimum
annual payments required under existing capital and financing lease obligations (net present value thereof) and maturities of corporate borrowings as of April 3, 2008 are
as follows:

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

Minimum Lease
Payments

Less Interest

Principal

Total2009

$
10,386

$
6,565

$
3,821

$
17,138

$
20,9592010


10,425


6,211


4,214


33,096


37,3102011


10,476


5,740


4,736


43,734


48,4702012


8,808


5,283


3,525


38,414


41,9392013


7,396


4,552


2,844


859,375


862,219Thereafter


80,142


29,299


50,843


865,795


916,638Total

$
127,633

$
57,650

$
69,983

$
1,857,552

$
1,927,535


Senior Secured Credit Facility

The Senior Secured Credit Facility is with a syndicate of banks and other financial institutions and provides AMC Entertainment financing of up to $850,000,000,
consisting of a $650,000,000 term loan facility with a maturity of seven years and a $200,000,000 revolving credit facility with a maturity of six years. The revolving credit facility includes
borrowing capacity available for Mexican peso-denominated revolving loans, for letters of credit and for swingline borrowings on same-day notice.

Borrowings
under the Senior Secured Credit Facility bear interest at a rate equal to an applicable margin plus, at our option, either a base rate or LIBOR. As described in Note 9,
the Company has hedged a portion of its borrowings to limit the interest rate variability. The initial applicable margin for borrowings under the revolving credit facility is 0.75% with respect to
base rate borrowings and 1.75% with respect to LIBOR borrowings, and the initial applicable margin for borrowings under the term

98

---



Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 3, 2008, March 29, 2007 and March 30, 2006

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

loan
facility is 0.75% with respect to base rate borrowings and 1.75% with respect to LIBOR borrowings. The applicable margin for such borrowings may be reduced, subject to AMC Entertainment attaining
certain leverage ratios. In addition to paying interest on outstanding principal under the Senior Secured Credit Facility, AMC Entertainment is required to pay a commitment fee to the lenders under
the revolving credit facility in respect of the unutilized commitments thereunder at a rate equal to 0.25%. It will also pay customary letter of credit fees. AMC Entertainment may voluntarily repay
outstanding loans under the Senior Secured Credit Facility at any time without premium or penalty, other than customary "breakage" costs with respect to LIBOR loans. AMC Entertainment is required to
repay $1,625,000 of the term loan on a calendar-quarter basis, beginning March 30, 2006 through September 30, 2012, with any remaining balance due on January 26, 2013.

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 and any interest hedging or other swap agreements), 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 our
subsidiaries, to sell assets; incur additional indebtedness; prepay other indebtedness (including the Notes); pay dividends 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 notes due 2011, 2012, 2014 and 2016; 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 March 30, 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.

Costs
related to the issuance of the New Senior Secured Credit Facility were capitalized and are charged to interest expense following the interest method, over the lives of the
facilities. Unamortized issuance costs were $10,883,000 as of April 3, 2008 and $13,327,000 as of March 29, 2007.

Cinemex Credit Facility

In August 2004, Cadena Mexicana de Exhibición S.A. de C.V., a wholly-owned subsidiary of Cinemex and an indirect wholly-owned
subsidiary of Loews, entered into a senior secured credit facility, which remains in place after the consummation of the Merger with Loews. The initial amount drawn under the Cinemex senior secured
credit facility was 1,026.4 million Mexican pesos (approximately $90,000,000 as of August 16, 2004). Cinemex drew 106.3 million Mexican pesos (approximately $10,000,000 in
August 2005) under the delayed draw feature of its senior secured credit facility. Approximately $106,382,000 was outstanding under the senior secured credit facility as of April 3,
2008. In December 2005, Cadena Mexicana entered into an amended and restated senior secured revolving

99

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Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 3, 2008, March 29, 2007 and March 30, 2006

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

credit
facility which provides for an available revolving credit line of the peso equivalent of $25,000,000 with Banco Inbursa, S.A. and Scotiabank Inverlat, S.A. (the revolving credit
facility is peso-denominated debt and expires in December 2008). During January and February of 2006 Cinemex drew 105.4 million Mexican pesos under the revolving credit
facility. There were no outstanding borrowings under the revolving credit facility as of April 3, 2008. All obligations of Cadena Mexicana under the Cinemex senior secured credit facility and
revolving credit facility are guaranteed by Cinemex and each existing and future operating subsidiary of Cadena Mexicana, except for specified excluded subsidiaries.

The
Cinemex borrowings are non-recourse to Loews, and thus are non-recourse to AMCE. Interest on the Cinemex term loan is payable in arrears on a monthly basis at
the Interbank Equilibrium Interest Rate (Tasa de Interes Interbancaria de Equilibrio) for a period of 28 days (the TIIE rate), plus an applicable margin of 1.50% in years one and two, 1.75% in
year three and 2.00% in years four and five. The interest rate on the Cinemex term loan as of April 3, 2008 was 7.94%. The Cinemex term loan matures on August 16, 2011 and commences
amortization beginning on February 16, 2009 in installments ranging from 10% to 30% per annum over this period. Costs related to the issuance of the credit facility were capitalized and are
charged to interest expense, following the interest method, over the life of the facility. Unamortized issuance costs were $515,000 as of April 3, 2008 and $917,000 as of March 29, 2007.

The
Cinemex senior secured credit facilities contain customary affirmative and negative covenants with respect to Cadena Mexicana and each of the guarantors and, in certain instances,
Cadena Mexicana's subsidiaries that are not guarantors, as defined in the credit agreement. Affirmative covenants include the requirement to furnish periodic financial statements and ensure that the
obligations of Cadena Mexicana and the guarantors under the Cinemex senior secured credit facilities rank at leastpari passuwith all existing debt of
such parties. Negative covenants include limitations on disposition of assets, capital expenditures, dividends and additional indebtedness and liens. The senior secured credit facilities also include
certain financial covenants, including, without limitation, a maximum total leverage ratio, a maximum total net debt to equity ratio, a minimum interest coverage ratio, a maximum
true-lease adjusted leverage ratio and a minimum consolidated net worth requirement.

Notes Due 2011, 2012 and Floating Notes due 2010

AMC received net proceeds upon completion of the NCM, Inc. initial public offering of $517,122,000. The Company used the net proceeds from the
NCM, Inc. initial public offering, along with cash on hand, to redeem its 91/2% senior subordinated notes due 2011, its senior floating rate notes due 2010 and its
97/8% senior subordinated notes due 2012. On March 19, 2007 the Company redeemed $212,811,000 aggregate principal amount of its 91/2% senior subordinated notes due
2011 at 100% of principal value, on March 23, 2007 the Company redeemed $205,000,000 aggregate principal amount of its senior floating rate notes due 2010 at 103% of principal value and on
March 23, 2007 the Company redeemed $175,000,000 aggregate principal amount of our 97/8% senior subordinated notes due 2012 at 104.938% of principal value. The Company's loss on
redemption of these notes including call premiums and the write off of unamortized deferred charges and premiums in fiscal 2007 was $3,488,000 and was included in Other (Income) Expense.

100

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Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 3, 2008, March 29, 2007 and March 30, 2006

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

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. Upon a change of control (as defined in the indenture governing the Notes due
2014), AMC Entertainment will be required to make an offer to repurchase each holder's notes at a price equal to 101% of the principal amount thereof plus accrued and unpaid interest to the date of
repurchase. The Notes due 2014 are subordinated to all existing and future senior indebtedness of AMC Entertainment. The Notes due 2014 are unsecured senior subordinated indebtedness of AMC
Entertainment ranking equally with AMC Entertainment's Notes due 2016.

The
indenture governing the Notes due 2014 contains certain covenants that, among other things, may limit the ability of AMC Entertainment and its subsidiaries to incur additional
indebtedness and pay dividends or make distributions in respect of their capital stock.

In
connection with the merger with Marquee 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 unamortized discount as of April 3, 2008 is $1,085,000 and $1,225,000 as of March 29, 2007. Unamortized issuance costs were
$0 as of both April 3, 2008 and March 29, 2007.

Fixed Notes due 2012

In connection with the merger with Marquee, AMC Entertainment became the obligor of $250,000,000 aggregate principal amount of 85/8% Senior Notes
due 2012 (the "Fixed Notes due 2012"), that were previously issued by Marquee on August 18, 2004. The Notes due 2012 (i) rank senior in right of payment to any of AMC Entertainment's
existing and future subordinated indebtedness, rank equally in right of payment with any of AMC Entertainment's existing and future senior indebtedness and are effectively subordinated in right of
payment to any of AMC Entertainment's secured senior indebtedness, including the amended credit facility, and (ii) are fully and unconditionally guaranteed on a joint and several, senior
unsecured basis by each of AMC Entertainment's existing and future 100% owned subsidiaries that is a guarantor or direct borrower under AMC Entertainment's other indebtedness. The Notes due 2012 are
structurally subordinated to all existing and future liabilities and preferred stock of AMC Entertainment's subsidiaries that do not guarantee the notes.

The
Fixed Notes due 2012 bear interest at the rate of 85/8% per annum, payable on February 15 and August 15 of each year, commencing February 15,
2005. The Fixed Notes due 2012 are redeemable at AMC Entertainment's option, in whole or in part, at any time on or after August 15, 2008 at 104.313% of the principal amount thereof, declining
ratably to 100% of the principal amount thereof

101

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Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 3, 2008, March 29, 2007 and March 30, 2006

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

on
or after August 15, 2010. Costs related to the issuance of the Fixed Notes due 2012 were capitalized and are charged to interest expense, following the interest method, over the life of the
notes. Unamortized issuance costs of $4,767,000 as of April 3, 2008 and $5,876,000 as of March 29, 2007, are included in other long-term assets.

Notes Due 2016

On January 26, 2006, AMC Entertainment issued $325,000,000 aggregate principal amount of 11% Senior Subordinated Notes (the "Notes due 2016") issued under
an indenture (the "Indenture"), with HSBC Bank USA, National Association, as trustee. The Notes due 2016 will bear interest at a rate of 11% per annum, payable on February 1 and August 1
of each year (commencing on August 1, 2006), and have a maturity date of February 1, 2016.

The
Notes due 2016 are general unsecured senior subordinated obligations of AMC Entertainment, fully and unconditionally guaranteed, jointly and severally, on a senior subordinated basis
by each of AMC Entertainment's existing and future domestic restricted subsidiaries that guarantee AMC Entertainment's other indebtedness.

AMC
Entertainment may redeem some or all of the Notes due 2016 at any time on or after February 1, 2011 at 105.5% of the principal amount thereof, declining ratably to 100% of the
principal amount thereof on or after February 1, 2014. 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 February 1, 2009. If AMC Entertainment experiences a change of control (as defined in the indenture governing the Notes due 2016), AMC Entertainment will be
required to make an offer to repurchase the Notes due 2016 at a price equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of purchase.

The
indenture governing the Notes due 2016 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 2016 to AMC Entertainment's obligations under its senior secured credit facility and
other senior indebtedness. Costs related to the issuance of the Notes due 2016 were capitalized and are charged to interest expense, following the interest method, over the life of the notes.
Unamortized issuance costs of $8,700,000 as of April 3, 2008 and $9,829,000 as of March 29, 2007, are included in other long-term assets.

As
of April 3, 2008, the Company was in compliance with all financial covenants relating to the Senior Secured Credit Facility, the Cinemex Credit Facility, the Notes due 2016,
the Notes due 2014 and the Fixed Notes due 2012.

Holdings Discount Notes Due 2014

To help finance the merger with Marquee, 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. The indenture governing the Discount Notes due 2014 contains certain covenants that, among other things, may limit the ability of the Company and
its subsidiaries to incur additional indebtedness and pay dividends or make distributions in respect of their capital stock.

102

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Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 3, 2008, March 29, 2007 and March 30, 2006

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

Holdings
is a holding company with no operations of its own and has no ability to service interest or principal on the Discount Notes due 2014 other than through any dividends it may
receive from AMCE. AMCE will be restricted, in certain circumstances, from paying dividends to Holdings by the terms of the indentures governing the Fixed Notes due 2012, the Notes due 2011, the Notes
due 2012, the Notes due 2014, the Notes due 2016 and the Senior Secured Credit Facility. AMCE has not guaranteed the indebtedness of Holdings nor pledged any of its assets as collateral.

On
any interest payment date prior to August 15, 2009, Holdings may elect to commence paying cash interest (from and after such interest payment date) in which case
(i) Holdings will be obligated to pay cash interest on each subsequent interest payment date, (ii) the notes will cease to accrete after such interest payment date and (iii) the
outstanding principal amount at the maturity of each note will 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.

Parent Term Loan Facility

To help finance the dividend paid by Parent to stockholders discussed in Note 10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.

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 Holdings and AMCE. Holdings and AMCE are restricted, in certain circumstances, from paying dividends to Parent by the terms of the indentures governing their Fixed Notes due 2012, Notes due 2014,
Notes due 2016, Discount Notes due 2014 and the new Senior Secured Credit Facility. Holdings, AMCE and its subsidiaries have not guaranteed the indebtedness of Parent nor pledged any of their assets
as collateral and this obligation is not reflected on AMCE's or Holding'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 on or before June 13, 2008 at 100% of principal, at any time after June 13, 2008 and on or prior to June 13, 2009 at 102% of principal, at any time after June 13,
2009 and on or prior to June 13, 2010 at 101% of principal and at 100% of principal thereafter. Unpaid principal and interest on outstanding loans under the Parent Term Loan Facility are
required to be repaid upon maturity on June 13, 2012.

103

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Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 3, 2008, March 29, 2007 and March 30, 2006

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

In the event of a change of control offer as defined in the Parent Term Loan Facility, Parent will, to the extent lawful, prepay all loans properly tendered
pursuant to the change of control offer at a prepayment price equal to 100% of the principal amount thereof if such change of control occurs on or prior to June 13, 2008 or 101% of the
principal amount thereof if such change of control occurs after June 13, 2008, in each case plus accrued and unpaid interest, if any, to the date of prepayment. 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 stock.

NOTE 9DERIVATIVE INSTRUMENTS

The Company enters into interest rate swap agreements with major banks and institutional lenders as part of its interest rate risk management strategy. The
objective for holding these derivative instruments is to reduce the exposure to variability in cash flows relating to interest payments on certain outstanding debt. All financial instruments are used
solely for hedging purposes and are not issued or held for speculative reasons.

The
interest rate swaps have been designated as cash flow hedges and have qualified for hedge accounting in accordance with SFAS No. 133,Accounting for
Derivative Instruments and Hedging Activities,(SFAS 133). The related mark-to-market gain or loss on qualifying hedges is deferred as a
component of accumulated other comprehensive income (loss), to the extent the cash flow hedges are effective, and is reclassified into interest expense corporate borrowings in the period during which
the hedged transaction affects earnings. Any ineffective portion of the hedges is recognized currently in the consolidated statements of operations in other income.

In
October 2007 AMCE executed an interest rate swap agreement, scheduled to mature in April 2009, to hedge $200,0000,000 of its variable rate debt obligation. Under the terms of the
agreement, the Company pays interest at a fixed rate of 4.707% and receives interest at a variable rate based on 1-month U.S. Dollar LIBOR-BBA.

In
August 2005 Grupo Cinemex entered into an interest rate swap with notional amounts ranging between 283,932,000 and 907,146,000 Mexican pesos ($26,151,000 and $83,894,000) to hedge its
variable rate debt obligation. Under the terms of the agreement, the Company pays interest at a fixed rate of 9.89% and receives interest at a variable rate based on 1-month MXN TIIE. In
November 2007 the Company redesignated the interest rate swap prospectively in a new cash flow hedging relationship. In addition, at the date of redesignation, the interest rate swap had an unrealized
gain of approximately $1,091,000 recorded in accumulated other comprehensive loss that will be reclassified against interest expense corporate borrowings over the remaining term of the hedged period,
through August 2009. The effective portion of the changes in fair value of the interest rate swap under the new hedging

104

---



Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 3, 2008, March 29, 2007 and March 30, 2006

NOTE 9DERIVATIVE INSTRUMENTS (Continued)

relationship
will be deferred in accumulated other comprehensive income (loss) and will be reclassified into interest expense corporate borrowings when the hedged forecasted transactions affect
earnings.

The
aggregate fair value of the interest rate swaps was a liability of approximately $6,511,000 and $2,937,000 as of April 3, 2008 and March 29, 2007, respectively, which
was recorded as a component of other long-term liabilities. The estimated fair value for the interest rate swap agreements was based on prevailing market data that represents the
theoretical cost the Company would have to pay to terminate the transactions. At April 3, 2008, the Company had a net unrealized loss of approximately $3,950,000 recorded in accumulated other
comprehensive loss with offsetting entries to other long-term liabilities. During the next 12 months the Company expects to reclassify approximately $4,197,000 of the net unrealized
loss in accumulated other comprehensive loss against interest expense corporate borrowings. During fiscal 2008, the Company recognized a loss of $501,000 in other income resulting from hedge
ineffectiveness.

The
Company is exposed to credit losses in the event of nonperformance by counterparties on interest rate swap agreements.

NOTE 10STOCKHOLDER'S EQUITY

Holdings has one share of Common Stock issued as of April 3, 2008 which is owned by Parent.

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"), hold 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 voting 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").

105

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Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 3, 2008, March 29, 2007 and March 30, 2006

NOTE 10STOCKHOLDER'S EQUITY (Continued)

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.

The
fair value of the shares issued by Holdings for LCE Holdings in connection with the Merger was $537,171,000.

On
June 11, 2007, merger sub, a wholly-owned subsidiary of Parent, merged with and into Holdings, with Holdings continuing as the surviving corporation. 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
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. Parent used cash derived from
AMCE and proceeds from the issuance of $400,000,000 Credit Agreement issued by Parent (See Note 8) to pay a dividend to its stockholders of $652,800,000 during fiscal year 2008.

On
June 12, 2007, Holdings announced that it had completed a solicitation of consents from holders of its Discount Notes due 2014, and that it had received consents for
$301,933,000 in aggregate principal amount at maturity of the Discount Notes due 2014, representing 99.32% of the outstanding Discount Notes due 2014. In connection with the receipt of consents,
Holdings paid an aggregate consent fee of approximately $4,360,000, representing a consent fee of $14.44 for each $1,000 in principal amount at maturity of Discount Notes due 2014 to which consents
were delivered. Accordingly, the requisite consents to adopt the proposed amendment (the "Amendment") to the indenture pursuant to which the Discount Notes due 2014 were issued were received, and a
supplemental indenture to effect the Amendment was executed by Holdings and the trustee under the indenture. The Amendment revised the restricted payments covenant to permit Holdings to make
restricted payments in an aggregate amount of $275,000,000 prior to making an election to pay cash interest on its senior discount notes. The Amendment also contained a covenant by Holdings to make an
election on August 15, 2007, the next semi-annual accretion date under the indenture to pay cash interest on the senior discount notes. As a result, Holdings made its first cash
interest payment on the senior discount notes on February 15, 2008. Holdings used cash on hand at AMCE to pay a dividend to Parent in an aggregate amount of $270,588,000.

As
discussed in Note 11Income Taxes, the Company adopted the provisions of FIN 48 on March 30, 2007. The cumulative effect of the change on adoption
charged to accumulated deficit was $5,373,000.

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

106

---



Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 3, 2008, March 29, 2007 and March 30, 2006

NOTE 10STOCKHOLDER'S EQUITY (Continued)

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 adopted a stock-based compensation plan that permits grants of up to
49,107.44681 options on Parent's stock and has granted options on 600.00000 and 38,876.72873 of its shares to certain employees during the periods ended March 30, 2006 and March 31,
2005, respectively. As of April 3, 2008, there was $5,335,000 of total estimated unrecognized compensation cost related to nonvested stock-based compensation arrangements under the Holdings
plan expected to be recognized over 1.75 years.

Since
the employees to whom the options were granted are employed by the Company, the Company is required to reflect the stock-based compensation expense associated with the options
within its consolidated statements of operations. The options have a ten year term, the options granted during fiscal 2005 step-vest in equal amounts over five years with the final vesting
occurring on December 23, 2009, the options granted during fiscal 2006 step vest in equal amounts over three years with final vesting occurring on December 23, 2008, but vesting may
accelerate for certain participants if there is a change of control (as defined in the plan). One of the holders of options fully vested during fiscal 2007 upon entry into his employment separation
and general release agreement on March 20, 2007. The Company has recorded $207,000, $10,568,000, and $3,433,000 of stock-based compensation expense related to these options within General and
Administrative: Other and has recognized an income tax benefit of $0 in its Consolidated Statements of Operations during each of the periods ended April 3, 2008, March 29, 2007 and
March 30, 2006, respectively. One of the holders of stock options has put rights associated with his options deemed to be within his control whereby he can require Holdings to repurchase his
options. These liability-classified options are required to be remeasured during each reporting period. A liability of $3,911,000 and $7,130,000 is recorded within current liabilities in the
Consolidated Balance Sheets as of April 3, 2008 and March 29, 2007, respectively, for all options containing written put rights. The Company accounts for stock options using the fair
value method of accounting as prescribed by SFAS 123 (R) and SAB 107 and 110 and has valued the options using the Black-Scholes formula including a contemporaneous valuation
reflecting market conditions as of April 3, 2008 which indicated a fair value price per share of the underlying shares of $1,000 per share. On
June 12, 2007, the holder of the liability classified options exercised options on 500 shares at an exercise price of $1,000 per share, which was paid to Parent. Holdings reclassified $412,000
of liabilityclassified options to additional paid-in capital in connection with the exercise. Holdings made adjustments to reduce the liability associated with the exercised
options and to reduce stock-based compensation expense by $23,000 during fiscal year 2008. Holdings made adjustments to reduce the liability associated with the unexercised liability-classified
options and to reduce stock-based compensation expense by $2,807,000 during fiscal year 2008, based on declines in the estimated fair value of the outstanding options. See
Note 1The Company and Significant Accounting Policies, Stock-based Compensation for more information regarding Parent's stock option plan.

As
a result of one of the Company's holders of options entry into his current employment agreement on December 17, 2007 and another holders entry into the employment separation
and

107

---



Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 3, 2008, March 29, 2007 and March 30, 2006

NOTE 10STOCKHOLDER'S EQUITY (Continued)

general
release agreement on March 20, 2007, the "put right" that allowed each of them to require the Company to repurchase any or all stock and vested stock options then held by each of them
under certain circumstances will be available to them if an initial public offering does not occur, in the case of one holder, prior to December 31, 2008, and, in the case of the other holder,
prior to December 16, 2007. As reinstated, the put option for one holder will be in effect for up to six months after December 16, 2007. On May 5, 2008, Holdings was notified of
this holder's intention to exercise the put option.

In
connection with the holdco merger, on June 11, 2007, Parent adopted an amended and restated 2004 stock option plan (f/k/a the 2004 Stock Option Plan of Marquee
Holdings Inc.), originally adopted by Holdings on December 22, 2004 and previously amended by Holdings on November 7, 2006. Because the employees to whom the options were granted
are employed by AMCE, AMCE continues to reflect the stock-based compensation expense associated with the options within its consolidated statement of operations. The option exercise price per share of
$1,000 was adjusted to $491 per share pursuant to the antidilution provisions of the 2004 Stock Option Plan to give effect to the payment of a one time non-recurring dividend paid by
Parent on June 15, 2007 of $652,800,000 to the holders of its 1,282,750 shares of common stock. The Company applied the guidance in SFAS 123(R) and determined that there was no
incremental value transferred as a result of the modification and as a result no additional compensation cost to recognize.

The
Company's Chairman of the Board, President and Chief Executive Officer, Peter C. Brown, has an amended and restated employment agreement that generally will revert to his prior
agreement in the event an initial public offering of Parent does not occur on or before December 31, 2008. In the event of an initial public offering on or before December 31, 2008,
within 15 days after such initial public offering, Mr. Brown shall receive a grant of restricted stock or restricted stock units having a value of $2,567,000 on the date of grant based
on the initial public offering price. This grant was an inducement for Mr. Brown to enter into his amended and restated employment agreement, whereby the term of his employment would be shorter
than in his prior employment agreement and he would be subject to certain restrictive covenants that did not exist in his current employment agreement. Such grant shall vest in three equal annual
installments on the first three anniversaries of the grant date.

On
November 14, 2007, the Company entered into an agreement with Richard T. Walsh (formerly executive vice president, AMC Entertainment Inc., and chairman, AMC film
programming), which extended the exercise period applicable to his outstanding vested stock options from 90 days following his departure on August 17, 2007 until 60 days after an
initial public offering of the common stock of AMC Entertainment Holdings, Inc., or in the event no initial public offering has occurred by June 16, 2008, until January 2, 2009.
The Company has accounted for the extension of the exercise term for vested options for Mr. Walsh as a modification under SFAS No. 123(R),Share Based
Payment. The Company measured the compensation cost for the modified award by comparing the fair value of the modified award and the fair value of the original award
immediately before it was modified, and recognized a charge to expense during fiscal 2008 and an offsetting increase to additional paid-in capital for the incremental fair value of the
vested awards, which was determined to be $32,326 as calculated using the Black-Scholes option pricing model. The unvested options of Mr. Walsh were forfeited at the end of his employment in
fiscal 2008 and $126,810 of related expense was reversed. Because Mr. Walsh held no unvested awards and no unvested awards were modified, there is no additional compensation cost to recognize
in the future related to his awards.

108

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Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 3, 2008, March 29, 2007 and March 30, 2006

NOTE 10STOCKHOLDER'S EQUITY (Continued)

A summary of stock option activity under all plans is as follows:

|                                                      |  | April 3, 2008 |   | March 29, 2007 |     | March 30, 2006
|----------------------------------------------------- |  | ------------- | - | -------------- | --- | --------------
|
|Outstanding at beginning of year                      |  | 39,476.72873  |   | $              | 491 |               
|Granted(1)                                            |  |              |   |                |     |               
|Forfeited                                             |  | (2,455.372338 | ) |                |     |               
|Exercised                                             |  | (500.00000    | ) |                |     |               
|                                                      |  |               |   |                |     |               
|Outstanding and expected to vest at end of year(1)(2) |  | 36,521.356392 |   | $              | 491 |               
|                                                      |  |               |   |                |     |               
|Exercisable at end of year(3)                         |  | 25,681.40958  |   | $              | 491 |               
|                                                      |  |               |   |                |     |               
|Available for grant at end of year                    |  | 12,086.090418 |   |                |     |               
|                                                      |  |               |   |                |     |               

---

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 $412,000 during fiscal 2008 and there were no options exercised during fiscal 2007 and 2006.
Parent received cash from the exercise of stock options during fiscal 2008 of $500,000 and a related tax deduction of $164,800.

109

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Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 3, 2008, March 29, 2007 and March 30, 2006

NOTE 11INCOME TAXES

Income tax provision reflected in the Consolidated Statements of Operations for the periods in the three years ended April 3, 2008 consists of the
following components:

(In thousands)

April 3, 2008

March 29, 2007

March 30, 2006Current:Federal

$
800

$
3,100

$
(232
)Foreign


6,200


3,500


562State


3,600


5,700


1,230Total current


10,600


12,300


1,560Deferred:Federal


(4,600
)

16,400


79,212Foreign


2,500





834State


(700
)

2,800


10,594Total deferred


(2,800
)

19,200


90,640Total provision


7,800


31,500


92,200Tax benefit (provision) of discontinued operations








(20,400
)Total provision (benefit) from continuing operations

$
7,800

$
31,500

$
71,800


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

(In thousands)

April 3, 2008

March 29, 2007

March 30, 2006Domestic

$
22,091

$
152,808

$
(107,492
)Foreign


8,442


(4,401
)

(16,531
)Total

$
30,533

$
148,407

$
(124,023
)


110

---



Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 3, 2008, March 29, 2007 and March 30, 2006

NOTE 11INCOME TAXES (Continued)

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

April 3, 2008

March 29, 2007

March 30, 2006Federal statutory rate

35.0
%
35.0
%
35.0
%State income taxes, net of federal tax benefit

9.5

5.7

4.9Foreign rate differential

13.5

(25.7
)
Change in FIN 48 reserve

(17.6
)


Foreign basis difference

(2.6
)


Change in foreign tax law

5.6



Fiscal 2007 change in APB 23 assertion

(20.4
)


Valuation allowance

(5.8
)
2.8

(96.5
)Non-deductible goodwill and other permanent items

6.0



(17.1
)Other, net

2.3

3.4

(0.6
)Effective tax rate

25.5
%
21.2
%
(74.3
)%


Non-deductible
goodwill relates to the goodwill disposed of in connection with the sale of the Japan theatres, which is discussed in Note 3.

The
fiscal 2007 change in APB 23 assertion relates to a resolution reached in fiscal 2008 on a pre-filing agreement with a taxing authority which resulted in
additional basis which was deducted on the 2007 tax return. The deduction was the result of a 2007 change in APB 23 assertion. As a result of the additional basis, the Company did not have to
utilize certain net operating loss carryforwards.

111

---



Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 3, 2008, March 29, 2007 and March 30, 2006

NOTE 11INCOME TAXES (Continued)

The
significant components of deferred income tax assets and liabilities as of April 3, 2008 and March 29, 2007 are as follows:

|                                                    |  | April 3, 2008 |          | March 29, 2007 |  
|--------------------------------------------------- |  | ------------- | -------- | -------------- | -
|
|
|
|Property                                            |  | $             | 37,784   |                | $
|Investments in joint ventures                       |  |               |         |                |  
|Intangible assets                                   |  |               |         |                |  
|Pension postretirement and deferred compensation    |  |               | 15,685   |                |  
|Accrued reserves and liabilities                    |  |               | 22,825   |                |  
|Deferred interest                                   |  |               | 25,660   |                |  
|Deferred revenue                                    |  |               | 116,561  |                |  
|Deferred rents                                      |  |               | 106,551  |                |  
|Alternative minimum tax and other credit carryovers |  |               | 15,318   |                |  
|Capital loss carryforward                           |  |               | 8,240    |                |  
|Net operating loss carryforward                     |  |               | 122,500  |                |  
|Other                                               |  |               |         |                |  
|                                                    |  |               |          |                |  
|Total                                               |  | $             | 471,124  |                | $
|Less: Valuation allowance                           |  |               | (366,889 | )              |  
|                                                    |  |               |          |                |  
|Total deferred income taxes(1)                      |  | $             | 104,235  |                | $
|                                                    |  |               |          |                |  

---

The
Company's federal income tax loss carryforward of $298,816,000 will begin to expire in 2020 and will completely expire in 2026 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 $337,407,000 which may be used over various periods ranging from 1 to 18 years.
During the current year, the Company recognized capital losses in excess of capital gains which may be carried forward for 5 years. The Company received certain proceeds after the close of the
current year which will be treated as capital gain and will allow for partial utilization of the capital loss carryforwards in the fiscal year 2009. Accordingly, the Company will record a deferred tax
asset in the U.S. jurisdiction of $1,785,000.

During
the fiscal year ended April 3, 2008 a new Mexican flat tax was signed into law. The tax was effective beginning January 1, 2008 and will replace Mexico's asset tax.
The tax is calculated differently than the prior asset tax, and has different deduction rules, which can effect the amount of deferred taxes the Company records. The Company recorded a deferred tax
liability and deferred income tax provision of $2,515,000 during the fiscal year ended April 3, 2008, primarily due to book and flat tax basis differences in property.

As
of April 3, 2008, management believed it was more likely than not that net deferred tax assets related to tax net operating loss carryforwards and deferred tax assets of
foreign subsidiaries would not be realized due to uncertainties as to the timing and amounts of future taxable income as a result of

112

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Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 3, 2008, March 29, 2007 and March 30, 2006

NOTE 11INCOME TAXES (Continued)

the
Mergers. The Company has recorded a valuation allowance against its remaining net deferred tax asset in U.S. and foreign jurisdictions of $366,889,000 as of April 3, 2008. The Company had a
valuation allowance of $366,889,000 and $383,808,000 as of April 3, 2008 and March 29, 2007, respectively.

Effective
March 30, 2007, the Company adopted FASB Interpretation No. 48,"Accounting for Uncertainty in Income Taxesan interpretation
of FASB No. 109"("FIN 48"). Relative to the implementation of FIN 48, the Company's financial statements did not include any tax contingencies, after
consideration of the full valuation allowance recorded against net deferred tax assets. As a result of the adoption of FIN 48, the Company recorded a $5,373,000 increase in current deferred tax
assets, a $5,373,000 reduction of goodwill, a $5,373,000 current FIN 48 liability and a $5,373,000 charge to the beginning accumulated deficit that is reported as a cumulative effect adjustment
for a change in accounting principle to the opening balance sheet position of stockholder's accumulated deficit at March 30, 2007. A reconciliation of the change in the amount of unrecognized
tax benefits during the year ended April 3, 2008 was as follows (in millions):

Balance at March 30, 2007

$
44.1Gross IncreasesCurrent Period Tax Positions


Gross IncreasesTax Position in Prior Periods


Favorable Resolutions with Authorities


(5.4
)Expired Attributes


Lapse of Statute of Limitations


Cash Settlements


Balance at April 3, 2008

$
38.7


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

During
December 2007, the IRS informed the Company of its acceptance of certain tax conclusions that the Company had taken on a transaction the Company entered into during the fiscal
year ended March 29, 2007 that were presented to the IRS in a Request for a Pre-Filing Agreement. As a result of the IRS accepting the Company's tax conclusions, the $5,373,000
reserve established with the adoption of FIN 48 was resolved and the tax benefit was recorded during the fiscal year ended April 3, 2008.

The
Company recognizes income tax-related interest expense and penalties as income tax expense and selling, general, and administrative expense, respectively. As of
March 30, 2007 the company did not have any interest or penalties accrued associated with unrecognized tax benefits. The liabilities for interest and penalties did not change as of
April 3, 2008.

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

113

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Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 3, 2008, March 29, 2007 and March 30, 2006

NOTE 11INCOME TAXES (Continued)

was
concluded during fiscal 2007. An IRS examination for the tax year ended March 31, 2005 began during 2007. As of April 3, 2008, the IRS has not proposed any adjustments, but has
notified the Company that it will begin examination of the tax period ended March 29, 2006. 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 12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 Statement of Financial Accounting Standards No. 98,Accounting for 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 governmental charges, insurance,
utilities, service, maintenance and any ground lease payments. As of April 3, 2008 the Company leases from EPT 41 theatres with 899 screens located in the United States and Canada.

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 April 3, 2008 (Cinemex operating lease totals include an inflationary factor in the annual minimum lease commitments for all applicable leases):

(In thousands)

Minimum operating
lease payments2009

$
415,6432010


424,1422011


415,8812012


402,6902013


389,275Thereafter


2,736,409Total minimum payments required

$
4,784,040


The
Company has also entered into agreements to lease space for the operation of 8 theatres with 101 screens not yet fully constructed. The future minimum rental payments required under
the terms of these leases included above total approximately $136,766,000. The Company records rent expense on a straight-line basis over the base term of the lease commencing with the
date the Company has "control and access" to the leased premises.

Included
in long-term liabilities as of April 3, 2008 and March 29, 2007 is $256,186,000 and $255,478,000, respectively, of deferred rent representing future
minimum rental payments for leases with scheduled rent increases and unfavorable lease liabilities including those related to the Merger transactions.

114

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Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 3, 2008, March 29, 2007 and March 30, 2006

NOTE 12LEASES (Continued)

Rent expense is summarized as follows:

(In thousands)

53 Weeks
Ended
April 3, 2008

52 Weeks
Ended
March 29, 2007

52 Weeks
Ended
March 30, 2006Minimum rentals

$
400,452

$
390,801

$
292,732Common area expenses


47,104


44,526


32,711Percentage rentals based on revenues


10,373


10,597


4,435Theatre rent


457,929


445,924


329,878General and administrative and other


1,834


1,843


1,559Total

$
459,763

$
447,767

$
331,437


NOTE 13EMPLOYEE BENEFIT PLANS

The Company sponsors a frozen non-contributory qualified defined benefit pension plan generally covering all employees who, as of January 1,
2007 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 are not covered by a
collective bargaining agreement. The Company also offers eligible retirees the opportunity to participate in a health plan (medical and dental) and a life insurance plan. Employees may become eligible
for these benefits at retirement provided the employee is at least age 55 and has at least 15 years of credited service after age 40. The Company also sponsors a postretirement deferred
compensation plan.

As
a result of the Merger, the Company acquired two pension plans in the U.S. and one in Mexico. One of the U.S. plans is a frozen cash balance plan and neither of the U.S. plans have
admitted new participants post-merger. The future existence of the U.S. plans will serve to pay benefits to the current participants under the requirements of the plan. In Mexico, a
Seniority Premium and Termination Indemnity for Retirement Plan (the "Mexico Plan") is provided to all eligible employees of Servicios Cinematograficos Especializados, S.A. de C.V. ("SCE") and
a Termination Indemnity Retirement Plan to all eligible employees of Servino, S.A. de C.V. ("Servino"). Both SCE and Servino are wholly owned subsidiaries of Cinemex. The Mexico Plan
establishes compensation upon retirement (pension and seniority premium) based on years of service rendered and the employee's age and salary at the date of retirement.

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. As a result of amending and restating the Plans to implement the freeze, the Company recognized
a curtailment gain of $10,983,000
in fiscal 2007 in its consolidated financial statements which was recorded within General and Administrative: Other. Additionally, the Company terminated the LCE post-retirement plan as of
December 31, 2006 and merged this plan into the AMCE post-retirement plan as of January 1, 2007.

115

---



Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 3, 2008, March 29, 2007 and March 30, 2006

NOTE 13EMPLOYEE BENEFIT PLANS (Continued)

The
Company's reorganization activities during fiscal 2005 and fiscal 2006 resulted in a partial curtailment of the Company's postretirement deferred compensation plan and, as such,
curtailment gains of $2,251,000 were recognized during fiscal 2006.

The
reorganization activities also prompted an amendment to the non-contributory nonqualified deferred compensation plan whereby participants who are terminated as a result
of reorganization activities and who have at least 15 years of service are eligible to receive benefits under the plan. Prior to this amendment, participants were required to have reached age
55 and have 15 years of service to be eligible for benefits.

The
measurement date used to determine pension and other postretirement benefits is January 1 of the fiscal year for which measurements are made. The assumptions to determine
benefit obligations and net periodic benefit cost are as follows:

|                                                                       |  |      |  
|---------------------------------------------------------------------- |  | ---- | -
|
|
|
|Weighted-average assumptions used to determine benefit obligations at: |  |      |  
|Discount rate                                                          |  | 6.25 | %
|Rate of compensation increase                                          |  | N/A  |  

|
|

|                                                                          |  |      |   |      |  
|------------------------------------------------------------------------- |  | ---- | - | ---- | -
|
|
|
|Weighted-average assumptions used to determine net periodic benefit cost: |  |      |   |      |  
|Discount rate                                                             |  | 5.50 | % | 5.50 | %
|Expected long-term return on plan assets                                  |  | 8.25 | % | 8.25 | %
|Rate of compensation increase                                             |  | N/A  |   | N/A  |  

Effective March 29, 2007, the Company adopted SFAS 158, which required the recognition in pension obligations and accumulated other
comprehensive income of actuarial gains or losses, prior service costs or credits and transition assets or obligations that had previously been deferred under the

116

---



Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 3, 2008, March 29, 2007 and March 30, 2006

NOTE 13EMPLOYEE BENEFIT PLANS (Continued)

reporting
requirements of SFAS 87, SFAS 106 and SFAS 132(R). The following table reflects the effects of the adoption of SFAS 158 on our consolidated balance sheets as of
March 29, 2007.

(in thousands)

Before
Application of
SFAS No. 158

Adjustments

After
Application of
SFAS No. 158Other long-term liabilities

$
386,084

$
(12,141
)
$
373,943Total liabilities


2,963,237


(12,141
)

2,951,096Accumulated other comprehensive income (loss)


(15,975
)

12,141


(3,834
)Total stockholders' equity


1,154,912


12,141


1,167,053Total liabilities and stockholders' equity


4,118,149





4,118,149


Beginning
in its fiscal year ending April 2, 2009, the Company will be required to measure plan assets and obligations as of its fiscal year end.

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

|                                         |                                           |  |  
|---------------------------------------- | ----------------------------------------- |  | -
|
|
|Components of net periodic benefit cost: |                                           |  |  
|                                         | Service cost                              |  | $
|                                         | Interest cost                             |  |  
|                                         | Expected return on plan assets            |  |  
|                                         | Recognized net actuarial loss             |  |  
|                                         | Amortization of net transition obligation |  |  
|                                         | Amortization of net (gain) loss           |  |  
|                                         | Plan amendment                            |  |  
|                                         | Settlement                                |  |  
|                                         | Curtailment                               |  |  
|                                         |                                           |  |  
|                                         | Net periodic benefit cost                 |  | $
|                                         |                                           |  |  

117

---



Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 3, 2008, March 29, 2007 and March 30, 2006

NOTE 13EMPLOYEE BENEFIT PLANS (Continued)

The
following table summarizes the changes in other comprehensive income for fiscal 2008:

Pension Benefits



Other Benefits(In thousands)

53 Weeks
Ended
April 3, 2008



53 Weeks
Ended
April 3, 2008Net gain

$
(5,758
)


$
(1,906
)Amortization of net gain


1,115




Amortization of net transition obligation


(39
)



Amount recognized due to settlement


56




Total recognized in other comprehensive income

$
(4,626
)


$
(1,906
)


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:

|                              |                                           |  |  
|----------------------------- | ----------------------------------------- |  | -
|
|
|Change in benefit obligation: |                                           |  |  
|                              | Benefit obligation at beginning of period |  | $
|                              | Service cost                              |  |  
|                              | Interest cost                             |  |  
|                              | Plan participant's contributions          |  |  
|                              | Increase due to settlement                |  |  
|                              | Actuarial gain                            |  |  
|                              | Benefits paid                             |  |  
|                              | Curtailment                               |  |  
|                              | Currency translation adjustment           |  |  
|                              |                                           |  |  
|                              | Benefit obligation at end of period       |  | $
|                              |                                           |  |  

|
|

|                                |                                                  |  |  
|------------------------------- | ------------------------------------------------ |  | -
|
|
|Change in plan assets:          |                                                  |  |  
|                                | Fair value of plan assets at beginning of period |  | $
|                                | Actual return on plan assets                     |  |  
|                                | Employer contribution                            |  |  
|                                | Plan participant's contributions                 |  |  
|                                | Benefits paid                                    |  |  
|                                |                                                  |  |  
|                                | Fair value of plan assets at end of period       |  | $
|                                |                                                  |  |  
|Net liability for benefit cost: |                                                  |  |  
|                                | Funded status                                    |  | $
|                                |                                                  |  |  

118

---



Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 3, 2008, March 29, 2007 and March 30, 2006

NOTE 13EMPLOYEE BENEFIT PLANS (Continued)

|                                         |                                        |   |        
|---------------------------------------- | -------------------------------------- | - | -------
|
|
|
|Amounts recognized in the Balance Sheet: |                                        |   |        
|                                         | Other long-term assets                 |   | $      
|                                         | Accrued expenses and other liabilities |   |        
|                                         | Other long-term liabilities            |   |        
|                                         |                                        |   |        
|Net liability recognized                 |                                        | $ | (11,216
|                                         |                                        |   |        

---

The
following table sets forth pension and other benefit plans with accumulated benefit obligations in excess of plan assets:

Pension Benefits



Other Benefits(In thousands)

April 3, 2008

March 29, 2007



April 3, 2008

March 29, 2007Aggregated benefit obligation

$
(63,665
)
$
(79,542
)


$
(26,830
)
$
(27,729
)Aggregated fair value of plan assets


51,777


57,424










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

Pension Benefits



Other Benefits(In thousands)

April 3, 2008

March 29, 2007



April 3, 2008

March 29, 2007Net actuarial gain

$
(16,308
)
$
(11,286
)


$
(2,451
)
$
(545
)Net transition obligation


396













Amounts
in accumulated other comprehensive income (loss) expected to be recognized in components of net periodic pension cost in Fiscal 2009 are as follows (in thousands):

Pension
Benefits

Other
BenefitsNet actuarial gain

$
(1,602
)
$
Net transition obligation


39





For
its Defined Benefit Pension Plan investments, the Company employs a long-term risk-controlled approach using diversified investment options with minimal
exposure to volatile investment options like derivatives. The Company uses a diversified allocation of equity, debt, and real

119

---



Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 3, 2008, March 29, 2007 and March 30, 2006

NOTE 13EMPLOYEE BENEFIT PLANS (Continued)

estate
exposures that are customized to the Plan's cash flow benefit needs. The percentage of plan assets by category as of the plan measurement date:

April 3, 2008

March 29, 2007Equity Securities

67
%
61
%Debt Securities

26
%
31
%Real Estate Investments & Other

7
%
8
%100
%
100
%


The
expected rate of return on plan assets was 8.25% for fiscal 2008, 2007, and 2006. The rate used is based upon analysis of actual returns on plan assets in prior years including
analysis provided by the Plan Administrator.

The
Company expects to contribute $1,952,000 to the pension plans and $1,390,000 to the post-retirement deferred compensation plan during fiscal 2009.

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
Adjustments2009

$
2,054,000

$
1,390,000

$
70,0002010


2,143,000


1,440,000


80,0002011


2,338,000


1,450,000


90,0002012


2,551,000


1,460,000


100,0002013


2,663,000


1,450,000


110,000Years 2014 - 2018


16,190,000


7,790,000


710,000


For
measurement purposes, the annual rate of increase in the per capita cost of covered health care benefits assumed for 2008 was 8.0% for medical and 3.5% for dental and vision. The
rates were assumed to decrease gradually to 5.0% for medical in 2010 and remain at 3.5% 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 April 3, 2008 by $3,911,000 and
the aggregate of the service and interest cost components of postretirement expense for fiscal 2008 by $455,000. Decreasing the assumed health care cost trend rates by one percentage point in each
year would decrease the accumulated postretirement obligation for fiscal 2008 by $3,238,000 and the aggregate service and interest cost components of postretirement expense for fiscal 2008 by
$370,000.

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"). Since the Company's plan is more generous than Medicare Part D, it is considered at least
actuarially equivalent to Medicare Part D and the government provides a federal subsidy to the plan. The Company made no adjustment to its participation rates due to Medicare

120

---



Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 3, 2008, March 29, 2007 and March 30, 2006

NOTE 13EMPLOYEE BENEFIT PLANS (Continued)

Part D
and estimated a $400 per year subsidy at age 75 for the initial year of 2006, with the amount of the subsidy moving in direct relation to the participant's age.

The
Company sponsors a voluntary 401(k) savings plan covering employees age 21 or older who have completed at least 1,000 hours of service in their first twelve months of
employment, or in a calendar year thereafter, and who are not covered by a collective bargaining agreement. The Company matches 100% of each eligible employee's elective contributions up to 5% of the
employee's eligible compensation. The Company's expense under the 401(k) savings plan was $2,476,000, $2,295,000, and $1,919,000 for the periods ended April 3, 2008, March 29, 2007 and
March 30, 2006, respectively. The Company acquired the LCE defined contribution Profit Sharing and Savings Plan which was frozen as of the Merger date and merged into the AMCE 401(k)
savings plan as of January 1, 2007.

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 $1,004,000, $792,000, and $358,000, for the periods ended April 3, 2008, March 29, 2007 and March 30, 2006, respectively. As
of April 3, 2008, the Company estimates potential complete withdrawal liabilities for certain of these plans of approximately
$7,234,000. As of April 3, 2008, other than a payment of $423,000 in connection with the termination of one of the plans, no demand has been received by the Company related to these plans
asserting either a complete or partial withdrawal liability.

NOTE 14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 AMCE's stadium
style theatres violate the ADA and related regulations. The Department alleged that AMCE 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. The Department sought declaratory and injunctive relief regarding existing and future theatres with stadium
style seating, compensatory damages in the approximate amount of $75,000 and a civil penalty of $110,000.

On
November 20, 2002 the trial court entered summary judgment in favor of the Department on the line of sight aspects of this case and on January 10, 2006, the trial court
ruled in favor of the Department regarding the appropriate remedy. In its decision, the court issued a comprehensive order regarding line of sight and other related remedies. AMCE estimates that the
cost of the betterments related to the remedies for line of sight violations of the ADA will be $22,000,000, which is expected to be incurred over a 4-5 year term. Through
April 3, 2008 AMCE has not incurred any of these costs. Additionally, the order calls for payments of $300,000 to the United States and individual complainants. AMCE has appealed these
decisions and argued its case to the Ninth Circuit Court of Appeals on November 8, 2007. We anticipate a decision soon.

121

---



Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 3, 2008, March 29, 2007 and March 30, 2006

NOTE 14COMMITMENTS AND CONTINGENCIES (Continued)

As
a result of the January 10, 2006 order, AMCE estimates the range of the loss to be between $349,000 and $444,000. Accordingly, AMCE has recorded the related liability of
approximately $349,000.

On
January 21, 2003, the trial court entered summary judgment in favor of the Department on non-line of sight aspects of the case, which involve such matters 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 AMCE agreed to remedy certain violations at its stadium-style theatres and at certain theatres it may open in the
future. Currently AMCE estimates that these betterments will be required at approximately 140 stadium-style theatres. AMC estimates that the total cost of these betterments will be $53,300,000, which
is to be incurred over the remaining term of the consent order of twelve months and is expected to be extended by agreement between the parties prior to the end of the remaining term of the consent
order. Through April 3, 2008 AMCE has incurred approximately $16,860,000 of these costs. 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. Plaintiff is seeking an order
certifying the case as a class action as well as statutory and punitive damages in an unspecified amount. On October 31, 2007, the District Court denied plaintiff's motion for class
certification without prejudice pending the Ninth Circuit's decision in an appeal from a denial of certification in a similar FACTA case. The parties have requested the District Court to stay all
proceedings in the case pending the outcome of the Ninth Circuit case. The Company believes the plaintiff's allegations, particularly those asserting willingness, are without merit.

The
Company is a party to various other legal proceedings in the ordinary course of business, none of which is expected to have a material adverse effect on us.

NOTE 15THEATRE AND OTHER CLOSURE AND DISPOSITION OF ASSETS

The Company has provided reserves for estimated losses from theatres which have been closed, vacated office space, and from terminating the operation of fast food
and other restaurants operated adjacent to certain of the Company's theatres. As of April 3, 2008, the Company has reserved $10,884,000 for lease terminations which have either not been
consummated or paid, related primarily to 5 U.S. and Canada theatres with 44 screens and vacant restaurant and office space. In connection with the Loews Merger, the Company accrued $4,845,000 for
future lease obligations at facilities that had been closed or were duplicate facilities that were planned to be closed following the Merger. The accrual was primarily related to the planned closing
of the New York City home office. The Company is obligated under long-term lease commitments with remaining terms of up to 20 years for theatres

122

---



Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 3, 2008, March 29, 2007 and March 30, 2006

NOTE 15THEATRE AND OTHER CLOSURE AND DISPOSITION OF ASSETS (Continued)

which
have been closed. As of April 3, 2008, base rents aggregated approximately $1,790,000 annually and $12,036,000 over the remaining terms of the leases. The estimated future lease
obligations of the Loews' properties were discounted at the estimated borrowing rate at the date of the Merger of 8.82%. In connection with the merger with Marquee, the carrying value of the theatre
closure liability was remeasured by using the Company's estimated borrowing rate on the date of the Merger of 7.55%.

A
rollforward of reserves for theatre and other closure is as follows (in thousands):

|                                |                                                         | Fifty-three Week Period
April 3, 2008 |        | Fifty-two Week Period
March 29, 2007 |   | Fifty-two Week Period
March 30, 2006 |     
|------------------------------- | ------------------------------------------------------- | ------------------------------------- | ------ | ------------------------------------ | - | ------------------------------------ | ----
|
|Beginning balance               |                                                         | $                                     | 17,621 |                                      | $ | 1,274                                |     
|                                | Merger adjustment                                       |                                       |        |                                     |   |                                      |    
|                                | Theatre and other closure expense (income)              |                                       |        | (20,677                              | ) |                                      | (293
|                                | Restructuring charge                                    |                                       |        |                                     |   |                                      |    
|                                | Transfer of deferred rent and capital lease obligations |                                       |        | 10,514                               |   |                                      |    
|Cash (payments) & receipts, net |                                                         |                                       | 3,386  |                                      |   | (981                                 | )   
|                                |                                                         |                                       |        |                                      |   |                                      |     
|Ending balance                  |                                                         | $                                     | 10,844 |                                      | $ |                                     |     
|                                |                                                         |                                       |        |                                      |   |                                      |     

During the fifty-three weeks ended April 3, 2008, the Company recognized $20,970,000 of theatre and other closure income due primarily to
lease terminations negotiated on favorable terms at seven of its theatres that were either closed or the lease terms were settled favorably during this period. The Company received net cash payments
of $10,159,000 in connection with these seven lease terminations

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. Theatre closure reserves at April 3, 2008 and March 29, 2007 by operating segment are as follows (in thousands):

April 3, 2008

March 29, 2007U.S. and Canada Theatrical Exhibition

$
10,147

$
16,955International Theatrical Exhibition


628


525Other


69


57Total segment reserves


10,844


17,537Corporate





1,358$
10,844

$
18,895


123

---



Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 3, 2008, March 29, 2007 and March 30, 2006

NOTE 16RESTRUCTURING

The Company's restructuring activities are described in Note 1 of the Notes to the Consolidated Financial Statements. A summary of restructuring and Merger
severance payable activity is set forth below (in thousands):

|                     |  | Fifty-three Week Period
April 3, 2008 |   | Fifty-two Week Period
March 29, 2007 |   | Fifty-two Week Period
March 30, 2006 |  
|-------------------- |  | ------------------------------------- | - | ------------------------------------ | - | ------------------------------------ | -
|
|Beginning balance    |  | $                                     |  |                                      | $ | 369                                  |  
|Restructuring charge |  |                                       |  |                                      |   |                                     |  
|Merger adjustments   |  |                                       |  |                                      |   |                                     |  
|Payments             |  |                                       |  |                                      |   | (369                                 | )
|                     |  |                                       |   |                                      |   |                                      |  
|Ending balance       |  | $                                     |  |                                      | $ |                                     |  
|                     |  |                                       |   |                                      |   |                                      |  

Restructuring and merger severance reserves at March 29, 2007 were recorded in the corporate operating segment. Payments relating to
restructuring reserves were complete as of April 3, 2008.

NOTE 17FAIR VALUE OF FINANCIAL INSTRUMENTS

The following methods and assumptions were used to estimate the fair value of each class of financial instrument for which it was practicable to estimate that
value.

The
carrying value of cash and equivalents approximates fair value because of the short duration of those instruments. Quoted market prices were used to value publicly held corporate
borrowings. The fair value of the Fandango investment was based on the price for which the investment was sold in the first quarter of fiscal 2008. The estimated fair value for the interest rate swap
agreements was based on prevailing market data that represents the theoretical cost the company would have to pay to terminate the transactions.

The
estimated fair values of the Company's financial instruments are as follows:

April 3, 2008

March 29, 2007(In thousands)

Carrying
Amount

Fair
Value

Carrying
Amount

Fair
ValueFinancial assets:Cash and equivalents

$
108,717

$
108,717

$
319,533

$
319,533Investment in Fandango








2,000


19,997Financial liabilities:Cash overdrafts

$
55,246

$
55,246

$
21,101

$
21,101Corporate borrowings


1,856,467


1,684,462


1,864,670


1,964,028Interest rate swaps


6,511


6,511


2,937


2,937


NOTE 18OPERATING SEGMENTS

The Company has identified three reportable segments around differences in products and services and geographical areas. United States and Canada and
International theatrical exhibition operations

124

---



Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 3, 2008, March 29, 2007 and March 30, 2006

NOTE 18OPERATING SEGMENTS (Continued)

are
identified as separate segments based on dissimilarities in international markets from United States and Canada. Other is identified as a separate segment due to differences in products and
services offered and primarily related to on-screen advertising through NCM.

The
Company evaluates the performance of its segments and allocates resources based on several factors, of which the primary measure is Adjusted EBITDA. The Company defines Adjusted
EBITDA
as earnings (loss) from continuing operations before income taxes, interest expense, depreciation and amortization and adjusted for impairment of long-lived assets, preopening expense,
theatre and other closure expense (income), restructuring charge, disposition of assets and other gains, equity in non-consolidated entities, investment income, other (income) expense,
stock-based compensation expense, management fees, and merger, acquisition and transaction costs. The Company evaluates Adjusted EBITDA generated by its segments in a number of manners, of which the
primary measure is a comparison of segment Adjusted EBITDA to segment property, intangibles and goodwill.

The
Company's segments follow the same accounting policies as discussed in Note 1 to the Consolidated Financial Statements.

Information
about the Company's operations by operating segment is as follows:

Revenues (In thousands)

53 Weeks
Ended
April 3, 2008

52 Weeks
Ended
March 29, 2007

52 Weeks
Ended
March 30, 2006U. S. and Canada theatrical exhibition

$
2,310,980

$
2,284,852

$
1,630,529International theatrical exhibition


193,347


176,546


43,442Other





1,322


31,962Intersegment elimination





(1,149
)

(19,055
)Total revenues

$
2,504,327

$
2,461,571

$
1,686,878


|
|

Segment Adjusted EBITDA (In thousands)

53 Weeks
Ended
April 3, 2008

52 Weeks
Ended
March 29, 2007

52 Weeks
Ended
March 30, 2006U.S. and Canada theatrical exhibition

$
390,145

$
425,884

$
270,802International theatrical exhibition


55,685


48,075


1,471Other(1)


(258
)

(1,617
)

(2,062
)Total segment Adjusted EBITDA

$
445,572

$
472,342

$
270,211


125

---



Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 3, 2008, March 29, 2007 and March 30, 2006

NOTE 18OPERATING SEGMENTS (Continued)

A
reconciliation of earnings (loss) from continuing operations before income taxes to segment Adjusted EBITDA is as follows:

(In thousands)

53 Weeks
Ended
April 3, 2008

52 Weeks
Ended
March 29, 2007

52 Weeks
Ended
March 30, 2006Earnings (loss) from continuing operations before income taxes

$
30,533

$
145,959

$
(119,132
)Plus:Interest expense


179,334


232,382


143,110Depreciation and amortization


251,194


256,472


164,047Impairment of long-lived assets


8,933


10,686


11,974Preopening expense


7,130


6,569


6,607Theatre and other closure expense (income)


(20,970
)

9,011


601Restructuring charge








3,980Disposition of assets and other gains


(2,408
)

(11,183
)

(997
)Equity in non-consolidated entities


(43,019
)

(233,704
)

7,807Investment loss (income)


(25,679
)

(18,191
)

(3,409
)Other (income) expense(2)


(745
)

1,019


849General and administrative expenseunallocated:Management fee


5,000


5,000


2,000Merger, acquisition and transaction costs


6,372


12,447


12,523Other(3)


49,897


55,875


40,251Total Segment Adjusted EBITDA

$
445,572

$
472,342

$
270,211


|
|

Long-term Assets (In thousands)

April 3, 2008

March 29, 2007U.S. and Canada theatrical exhibition

$
4,421,135

$
4,314,811International theatrical exhibition


428,931


402,265Total segment long-term assets


4,850,066


4,717,076Construction in progress


21,649


29,147Corporate


183,281


134,159Accumulated depreciationproperty


(1,227,349
)

(1,037,380
)Accumulated amortizationintangible assets


(122,424
)

(94,037
)Accumulated amortizationother long-term assets


(58,124
)

(50,330
)Noncurrent assets held for sale


2,300


7,300Consolidated long-term assets, net(4)

$
3,649,399

$
3,705,935


126

---



Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 3, 2008, March 29, 2007 and March 30, 2006

NOTE 18OPERATING SEGMENTS (Continued)

|
|

Long-term Assets, net of accumulated depreciation and amortization
(In thousands)

April 3, 2008

March 29, 2007U.S. and Canada theatrical exhibition

$
3,116,771

$
3,212,711International theatrical exhibition


348,358


341,203Total segment long-term assets(4)


3,465,129


3,553,914Construction in progress


21,649


29,147Corporate


160,321


115,574Noncurrent assets held for sale


2,300


7,300Consolidated long-term assets, net(4)

$
3,649,399

$
3,705,935


The
components of the reportable segments' long-term assets to long-term assets presented in the Consolidated Balance Sheet are as follows:

Consolidated Balance Sheet (In thousands)

April 3, 2008

March 29, 2007Property, net

$
1,250,406

$
1,298,823Intangible assets, net


206,674


234,176Goodwill


2,070,858


2,066,853Other long-term assets


119,161


98,783Noncurrent assets held for sale


2,300


7,300Consolidated long-term assets, net(4)

$
3,649,399

$
3,705,935


|
|

Additions to long-term assets, net of acquisitions
(In thousands)

53 Weeks
Ended
April 3, 2008

52 Weeks
Ended
March 29, 2007

52 Weeks
Ended
March 30, 2006U.S. and Canada theatrical exhibition

$
153,592

$
121,332

$
90,356International theatrical exhibition


8,007


19,205


7,571Total segment capital expenditures


161,599


140,537


97,927Construction in progress


(5,360
)

(5,644
)

13,634Corporate


(4,563
)

3,846


6,107Total additions to long-term assets, net of acquisitions(5)

$
151,676

$
138,739

$
117,668


A
reconciliation of the reportable segments' additions to net assets to the Consolidated Statements of Cash Flow is as follows:

Consolidated Statements of Cash Flows
(In thousands)

53 Weeks
Ended
April 3, 2008

52 Weeks
Ended
March 29, 2007

52 Weeks
Ended
March 30, 2006Cash Flows from investing activities:Capital expenditures(5)

$
151,676

$
138,739

$
117,668


127

---



Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 3, 2008, March 29, 2007 and March 30, 2006

NOTE 18OPERATING SEGMENTS (Continued)

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

Revenues (In thousands)

53 Weeks
Ended
April 3, 2008

52 Weeks
Ended
March 29, 2007

52 Weeks
Ended
March 30, 2006United States

$
2,254,399

$
2,232,529

$
1,593,976Canada


56,581


52,496


49,460China (Hong Kong)








5,567France


6,100


5,021


4,492United Kingdom


15,964


13,176


10,465Mexico


171,283


158,349


22,918Total revenues

$
2,504,327

$
2,461,571

$
1,686,878


|
|

Long-term assets (In thousands), Gross

April 3, 2008

March 29, 2007United States

$
4,552,567

$
4,409,764Canada


75,798


58,638France


14,955


9,726United Kingdom


11,573


14,633Mexico


402,403


394,921Total long-term assets(4)

$
5,057,296

$
4,887,682




128

---





Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 3, 2008, March 29, 2007 and March 30, 2006

NOTE 19RELATED PARTY TRANSACTIONS

Governance Agreements

In connection with the Mergers, Holdings, the Sponsors and the other pre-existing stockholders of Holdings, as applicable, entered into various
agreements defining the rights of Holdings' stockholders with respect to voting, governance and ownership and transfer of the stock of Holdings, including a Second Amended and Restated Certificate of
Incorporation of Holdings, a Second Amended and Restated Stockholders Agreement, a Voting Agreement among Holdings and the pre-existing stockholders of Holdings, a Voting Agreement among
Holdings and the former stockholders of LCE Holdings and an Amended and Restated Management Stockholders Agreement among Holdings and certain members of management of Holdings who are stockholders of
Holdings. These agreements terminated on June 11, 2007, the date of the holdco merger, and were superseded by substantially identical agreements entered into by AMC Entertainment
Holdings, Inc., the Sponsors and Holdings' other stockholders (collectively, the "Governance Agreements").

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 would 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 provided 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 provided 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
prohibited the Sponsors and the other pre-existing stockholders of Holdings from transferring any of their interests in

129

---



Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 3, 2008, March 29, 2007 and March 30, 2006

NOTE 19RELATED PARTY TRANSACTIONS (Continued)

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 did
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 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 have given notice to each other stockholder, who would each have had 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

130

---



Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 3, 2008, March 29, 2007 and March 30, 2006

NOTE 19RELATED PARTY TRANSACTIONS (Continued)

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 agreed 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.

Amended and Restated Fee Agreement

In connection with the Mergers, 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 twelfth anniversary from December 23, 2004, and 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.

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 (20.776%); Apollo (20.776%); Bain Capital Partners (15.084%); The
Carlyle Group (15.084%); Spectrum Equity Investors (9.76%); Weston Presidio Capital IV, L.P. and WPC Entrepreneur Fund II, L.P. (3.898%); Co-Investment
Partners, L.P. (3.898%); Caisse de Depot et Placement du Quebec (3.118%); 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. (2.728%); SSB Capital Partners (Master Fund) I, L.P.
(1.949%); CSFB Strategic Partners Holdings II, L.P., CSFB Strategic Partners Parallel Holdings II, L.P., and GSO Credit Opportunities Fund (Helios), L.P. (1.559%);
Credit Suisse Anlagestiftung, Pearl Holding Limited, Vega

131

---



Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 3, 2008, March 29, 2007 and March 30, 2006

NOTE 19RELATED PARTY TRANSACTIONS (Continued)

Invest
(Guernsey) Limited and Partners Group Private Equity Performance Holding Limited (0.779%); Screen Investors 2004, LLC (0.152%); and members of management (0.439%)(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.

Continuing Service Agreement

In connection with the termination of his current employment agreement with Loews, the Company paid Mr. Travis Reid severance of $87,500 per month for
18 months following the closing of the Mergers, has paid him a lump sum payment of $1,575,000, and provided outplacement assistance and automobile benefits through December 31, 2006 and
granted Mr. Reid an option under the Holdings 2004 Stock Option Plan to acquire Class N Common Stock at an exercise price not less than the fair market value (as determined by the Board
of Directors of Holdings) on the date of grant. In June 2007, Parent assumed the option, and the option is subject to other terms and conditions substantially similar to the terms of Parent
options currently held by employees and is also subject to the Management Stockholders Agreement. The option vests in three installments on December 23, 2006, 2007 and 2008, and vests in full
upon a change of control of Parent or AMCE if provided for by the Compensation Committee. In addition, in order to facilitate integration following the Mergers, the Company entered
into an agreement with Mr. Reid, whereby Mr. Reid provided certain transitional consulting services to the Company and reported to Mr. Peter C. Brown, the Company's Chief
Executive Officer. Pursuant to the continuing service agreement, the Company paid Mr. Reid a consulting fee for each month of service at the following rate: $50,000 for each of the first four
months, $33,333 for each of the next four months and $16,667 for the final five months. The continuing services agreement terminated in February 2007 and the final severance payment to
Mr. Reid was made during fiscal 2008.

Market Making Transactions

On August 18, 2004, Holdings sold $304,000,000 in aggregate principal amount at maturity of its 12% Senior Discount Notes due 2014 (the "Holdco Notes"). On
the same date, Marquee sold $250,000,000 in aggregate principal amount of its 85/8% Senior Notes due 2012 and $205,000,000 in aggregate principal amount of its Senior Floating Notes due
2010 (Collectively, the "Senior Notes"). J.P. Morgan Securities Inc., an affiliate of JPMP which owns approximately 20.8% of Holdings, was an initial purchaser of both the Holdco Notes
and the Senior Notes.

On
January 26, 2006 AMCE sold $325,000,000 in aggregate principal amount of its 11% Senior Subordinated Notes due 2016. JP Morgan Securities Inc., an affiliate of
JPMP which owns approximately 20.8% of Holdings, was an initial purchaser of these notes. Credit Suisse Securities (USA) LLC, whose affiliates own approximately 1.6% of Holdings, was also an
initial purchaser of these notes.

132

---



Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 3, 2008, March 29, 2007 and March 30, 2006

NOTE 19RELATED PARTY TRANSACTIONS (Continued)

AMCE Dividends to Holdings

On April 3, 2008 AMCE declared and made distributions to Holdings in the amount of $21,830,000 which has been recorded by AMCE as a reduction to Additional
paid-in capital. The distribution included $3,279,000 of advances made by AMCE on behalf of Holdings prior to fiscal 2008 and $18,551,000 of cash advances made during fiscal 2008 including
payment of interest on the Holdings Discount Notes due 2014 of $14,447,700. In connection with the holdco merger, AMCE paid a dividend to Holdings of $275,000,000 which has been recorded by AMCE as a
reduction to Additional paid-in capital.

NOTE 20CONDENSED FINANCIAL INFORMATION OF PARENT COMPANY

Marquee Holdings Inc. is a holding company that conducts substantially all of its business operations through its subsidiaries and was formed on
July 16, 2004.

There
are significant restrictions on the Company's ability to obtain funds from any of its subsidiaries through dividends, loans or advances. Accordingly, these condensed financial
statements have been presented on a "parent-only" basis. Under a parent-only presentation, the Company's investments in its consolidated subsidiaries are presented under the
equity method of accounting. These parent-only financial statements should be read in conjunction with the Company's audited consolidated financial statements.

133

---





Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 3, 2008, March 29, 2007 and March 30, 2006

NOTE 20CONDENSED FINANCIAL INFORMATION OF PARENT COMPANY (Continued)

Marquee Holdings Inc.    CONDENSED STATEMENTS OF OPERATIONSPARENT ONLY

|(In thousands)                      |                                                     | 53 Weeks
Ended
April 3,
2008              |         | 52 Weeks
Ended
March 29,
2007 |        | 52 Weeks
Ended
March 30,
2006 |         
|----------------------------------- | --------------------------------------------------- | ----------------------------------------- | ------- | ----------------------------- | ------ | ----------------------------- | --------
|Costs and Expenses                  |                                                     |                                           |         |                               |        |                               |         
|                                    | General and administrative:                         |                                           |         |                               |        |                               |         
|                                    |                                                     | Merger, acquisition and transaction costs |         | $                             | 2,633  |                               | $       
|                                    |                                                     | Other                                     |         |                               | 75     |                               |         
|                                    |                                                     |                                           |         |                               |        |                               |         
|                                    |                                                     | Total costs and expenses                  |         |                               | 2,708  |                               |         
|                                    |                                                     |                                           |         |                               |        |                               |         
|Other expense (income)              |                                                     |                                           |         |                               |        |                               |         
|                                    | Equity in (earnings) loss of AMC Entertainment Inc. |                                           |         | (43,445                       | )      |                               | (134,079
|                                    | Interest expense                                    |                                           |         |                               |        |                               |         
|                                    |                                                     | Corporate borrowings                      |         |                               | 29,745 |                               |         
|                                    | Investment income                                   |                                           |         | (141                          | )      |                               | (209    
|                                    |                                                     |                                           |         |                               |        |                               |         
|Total other (income) expense        |                                                     |                                           | (13,841 | )                             |        | (108,558                      | )       
|                                    |                                                     |                                           |         |                               |        |                               |         
|Earnings (loss) before income taxes |                                                     |                                           | 11,133  |                               |        | 106,107                       |         
|Income tax provision (benefit)      |                                                     |                                           | (11,600 | )                             |        | (10,800                       | )       
|                                    |                                                     |                                           |         |                               |        |                               |         
|Net earnings (loss)                 |                                                     | $                                         | 22,733  |                               | $      | 116,907                       |         
|                                    |                                                     |                                           |         |                               |        |                               |         

134

---





Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 3, 2008, March 29, 2007 and March 30, 2006

NOTE 20CONDENSED FINANCIAL INFORMATION OF PARENT COMPANY (Continued)

Marquee Holdings Inc.    CONSOLIDATED BALANCE SHEETSPARENT ONLY

|(In thousands, except share data)    |                                                                                                                                                                                     | April 3, 2008                              |           | March 29, 2007 |          
|------------------------------------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | --------- | -------------- | ---------
|Assets                               |                                                                                                                                                                                     |                                            |           |                |          
|Cash and equivalents                 |                                                                                                                                                                                     | $                                          | 2,536     |                | $        
|Receivables                          |                                                                                                                                                                                     |                                            | 286       |                |          
|                                     |                                                                                                                                                                                     |                                            |           |                |          
|                                     | Total current assets                                                                                                                                                                |                                            |           | 2,822          |          
|Goodwill                             |                                                                                                                                                                                     |                                            | 21,993    |                |          
|Investment in AMC Entertainment Inc. |                                                                                                                                                                                     |                                            | 1,133,495 |                |          
|Other long-term assets               |                                                                                                                                                                                     |                                            | 8,127     |                |          
|                                     |                                                                                                                                                                                     |                                            |           |                |          
|                                     | Total assets                                                                                                                                                                        |                                            | $         | 1,166,437      |          
|                                     |                                                                                                                                                                                     |                                            |           |                |          
|Liabilities and Stockholder's Equity |                                                                                                                                                                                     |                                            |           |                |          
|Current liabilities:                 |                                                                                                                                                                                     |                                            |           |                |          
|                                     | Due to AMC Entertainment Inc.                                                                                                                                                       |                                            | $         |               |          
|                                     | Accrued expenses and other liabilities                                                                                                                                              |                                            |           | 8,226          |          
|                                     |                                                                                                                                                                                     |                                            |           |                |          
|                                     |                                                                                                                                                                                     | Total current liabilities                  |           |                | 8,226    
|Corporate borrowings                 |                                                                                                                                                                                     |                                            | 240,795   |                |          
|Other long-term liabilities          |                                                                                                                                                                                     |                                            |          |                |          
|                                     |                                                                                                                                                                                     |                                            |           |                |          
|                                     | Total liabilities                                                                                                                                                                   |                                            |           | 249,021        |          
|                                     |                                                                                                                                                                                     |                                            |           |                |          
|Stockholder's Equity:                |                                                                                                                                                                                     |                                            |           |                |          
|                                     | Common Stock, 1 and 0 shares issued as of April 3, 2008 and March 29, 2007, respectively with 1¢ per value                                                                          |                                            |           |               |          
|                                     | Class A-1 Common Stock voting ($.01 par value, 1,500,000 shares authorized; 0 and 382,475.00000 shares issued and outstanding as of April 3, 2008 and March 29, 2007, respectively) |                                            |           |               |          
|                                     | Class A-2 Common Stock voting ($.01 par value, 1,500,000 shares authorized; 0 and 382,475.00000 shares issued and outstanding as of April 3, 2008 and March 29, 2007, respectively) |                                            |           |               |          
|                                     | Class N Common Stock nonvoting ($.01 par value, 375,000 shares authorized; 0 and 5,128.77496 shares issued and outstanding as of April 3, 2008 and March 29, 2007, respectively)    |                                            |           |               |          
|                                     | Class L-1 Common Stock voting ($.01 par value, 1,500,000 shares authorized; 0 and 256,085.61252 shares issued and outstanding as of April 3, 2008 and March 29, 2007, respectively) |                                            |           |               |          
|                                     | Class L-2 Common Stock voting ($.01 par value, 1,500,000 shares authorized; 0 and 256,085.61252 shares issued and outstanding as of April 3, 2008 and March 29, 2007, respectively) |                                            |           |               |          
|                                     | Additional paid-in capital                                                                                                                                                          |                                            |           | 1,047,430      |          
|                                     | Accumulated other comprehensive income (loss)                                                                                                                                       |                                            |           | (3,668         | )        
|                                     | Accumulated deficit                                                                                                                                                                 |                                            |           | (126,346       | )        
|                                     |                                                                                                                                                                                     |                                            |           |                |          
|                                     |                                                                                                                                                                                     | Total stockholder's equity                 |           |                | 917,416  
|                                     |                                                                                                                                                                                     |                                            |           |                |          
|                                     |                                                                                                                                                                                     | Total liabilities and stockholder's equity |           | $              | 1,166,437
|                                     |                                                                                                                                                                                     |                                            |           |                |          

135

---





Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 3, 2008, March 29, 2007 and March 30, 2006

NOTE 20CONDENSED FINANCIAL INFORMATION OF PARENT COMPANY (Continued)

Marquee Holdings Inc.    CONDENSED STATEMENTS OF CASH FLOWSPARENT ONLY

|(In thousands)                              |                                                                                                      | 53 Weeks
Ended
April 3, 2008   |       | 52 Weeks
Ended
March 29, 2007 |       | 52 Weeks
Ended
March 30, 2006 |         
|------------------------------------------- | ---------------------------------------------------------------------------------------------------- | ------------------------------ | ----- | ----------------------------- | ----- | ----------------------------- | --------
|INCREASE (DECREASE) IN CASH AND EQUIVALENTS |                                                                                                      |                                |       |                               |       |                               |         
|Cash flows from operating activities        |                                                                                                      |                                |       |                               |       |                               |         
|                                            | Net earnings (loss)                                                                                  |                                | $     | 22,733                        |       | $                             | 116,907 
|                                            | Adjustments to reconcile net earnings (loss) to net cash provided by (used in) operating activities: |                                |       |                               |       |                               |         
|                                            | Amortization of discount on corporate borrowings                                                     |                                |       | 10,390                        |       |                               | 25,278  
|                                            | Deferred income taxes                                                                                |                                |       | (11,600                       | )     |                               | (10,800 
|                                            | Equity in (earnings) loss of AMC Entertainment Inc.                                                  |                                |       | (43,445                       | )     |                               | (134,079
|                                            | Net change in operating activities:                                                                  |                                |       |                               |       |                               |         
|                                            |                                                                                                      | Receivables                    |       |                               | (260  | )                             |         
|                                            |                                                                                                      | Accrueds and other liabilities |       |                               | 1,462 |                               |         
|                                            | Other, net                                                                                           |                                |       | 2,283                         |       |                               | 453     
|                                            |                                                                                                      |                                |       |                               |       |                               |         
|                                            | Net cash provided by (used in) operating activities                                                  |                                |       | (18,437                       | )     |                               | 148     
|                                            |                                                                                                      |                                |       |                               |       |                               |         
|Cash flows from investing activities        |                                                                                                      |                                |       |                               |       |                               |         
|                                            | Contribution from AMC Entertainment Inc.                                                             |                                |       | 293,551                       |       |                               |        
|                                            |                                                                                                      |                                |       |                               |       |                               |         
|                                            | Net cash (used in) investing activities                                                              |                                |       | 293,551                       |       |                               |        
|                                            |                                                                                                      |                                |       |                               |       |                               |         
|Cash flows from financing activities        |                                                                                                      |                                |       |                               |       |                               |         
|                                            | Dividends paid to Parent                                                                             |                                |       | (270,588                      | )     |                               |        
|                                            | Deferred financing costs                                                                             |                                |       | (4,360                        | )     |                               | (29     
|                                            |                                                                                                      |                                |       |                               |       |                               |         
|                                            | Net cash provided by financing activities                                                            |                                |       | (274,948                      | )     |                               | (29     
|                                            |                                                                                                      |                                |       |                               |       |                               |         
|Net increase in cash and equivalents        |                                                                                                      |                                | 166   |                               |       | 119                           |         
|Cash and equivalents at beginning of year   |                                                                                                      |                                | 2,370 |                               |       | 2,251                         |         
|                                            |                                                                                                      |                                |       |                               |       |                               |         
|Cash and equivalents at end of year         |                                                                                                      | $                              | 2,536 |                               | $     | 2,370                         |         
|                                            |                                                                                                      |                                |       |                               |       |                               |         
|Schedule of non-cash investing activities:  |                                                                                                      |                                |       |                               |       |                               |         
|                                            | Contribution from AMCE                                                                               |                                | $     | 3,279                         |       | $                             |        

136

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Marquee Holdings Inc.    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)    Years Ended April 3, 2008, March 29, 2007 and March 30, 2006

NOTE 20CONDENSED FINANCIAL INFORMATION OF PARENT COMPANY (Continued)

Marquee Holdings Inc.        CONDENSED STATEMENTS OF STOCKHOLDER'S EQUITYPARENT ONLY

|                                            |                                                 |         |          |   |   | Class A-1
Voting
Common Stock |               | Class A-2
Voting
Common Stock |   | Class N
Nonvoting
Common Stock |   | Class L-1
Voting
Common Stock |               | Class L-2
Voting
Common Stock |   |   |             |             |   |   |   |               |              
|------------------------------------------- | ----------------------------------------------- | ------- | -------- | - | - | ----------------------------- | ------------- | ----------------------------- | - | ------------------------------ | - | ----------------------------- | ------------- | ----------------------------- | - | - | ----------- | ----------- | - | - | - | ------------- | -------------
|
|
|
|Balance, March 31, 2005                     |                                                 | 769,350 |          | $ | 8 |                               |              |                               | $ |                               |   |                              |               | $                             |  |   |            |             | $ |  |   |              |              
|Comprehensive loss:                         |                                                 |         |          |   |   |                               |               |                               |   |                                |   |                               |               |                               |   |   |             |             |   |   |   |               |              
|                                            | Net loss                                        |         |         |   |   |                              |               |                              |   |                                |  |                               |              |                               |   |  |             |            |   |   |  |               |             
|                                            | Foreign currency translation adjustment         |         |         |   |   |                              |               |                              |   |                                |  |                               |              |                               |   |  |             |            |   |   |  |               |             
|Additional minimum pension liability        |                                                 |        |          |   |  |                               |              |                               |   |                               |   |                              |               |                               |  |   |            |             |   |  |   |              |              
|Unrealized gain on Cinemex swap agreements  |                                                 |        |          |   |  |                               |              |                               |   |                               |   |                              |               |                               |  |   |            |             |   |  |   |              |              
|Unrealized loss on marketable securities    |                                                 |        |          |   |  |                               |              |                               |   |                               |   |                              |               |                               |  |   |            |             |   |  |   |              |              
|                                            |                                                 |         |          |   |   |                               |               |                               |   |                                |   |                               |               |                               |   |   |             |             |   |   |   |               |              
|Comprehensive loss                          |                                                 |         |          |   |   |                               |               |                               |   |                                |   |                               |               |                               |   |   |             |             |   |   |   |               |              
|                                            | Stock-based compensationoptions                |         |         |   |   |                              |               |                              |   |                                |  |                               |              |                               |   |  |             |            |   |   |  |               |             
|                                            | Issuance of Common Stock for Merger             |         | (769,350 | ) |   | (8                            | )             | 382,475.00000                 |   |                                | 4 |                               | 382,475.00000 |                               |   | 4 |             | 5,128.77496 |   |   |   |               | 256,085.61252
|                                            |                                                 |         |          |   |   |                               |               |                               |   |                                |   |                               |               |                               |   |   |             |             |   |   |   |               |              
|Balance, March 30, 2006                     |                                                 |        |          |   |  |                               | 382,475.00000 |                               |   | 4                              |   | 382,475.00000                 |               |                               | 4 |   | 5,128.77496 |             |   |  |   | 256,085.61252 |              
|Comprehensive earnings:                     |                                                 |         |          |   |   |                               |               |                               |   |                                |   |                               |               |                               |   |   |             |             |   |   |   |               |              
|                                            | Net earnings                                    |         |         |   |   |                              |               |                              |   |                                |  |                               |              |                               |   |  |             |            |   |   |  |               |             
|                                            | Foreign currency translation adjustment         |         |         |   |   |                              |               |                              |   |                                |  |                               |              |                               |   |  |             |            |   |   |  |               |             
|Additional minimum pension liability        |                                                 |        |          |   |  |                               |              |                               |   |                               |   |                              |               |                               |  |   |            |             |   |  |   |              |              
|Unrealized loss on Cinemex swap agreements  |                                                 |        |          |   |  |                               |              |                               |   |                               |   |                              |               |                               |  |   |            |             |   |  |   |              |              
|Unrealized gain on Cinemex lease agreements |                                                 |        |          |   |  |                               |              |                               |   |                               |   |                              |               |                               |  |   |            |             |   |  |   |              |              
|Unrealized loss on marketable securities    |                                                 |        |          |   |  |                               |              |                               |   |                               |   |                              |               |                               |  |   |            |             |   |  |   |              |              
|                                            |                                                 |         |          |   |   |                               |               |                               |   |                                |   |                               |               |                               |   |   |             |             |   |   |   |               |              
|Comprehensive earnings                      |                                                 |         |          |   |   |                               |               |                               |   |                                |   |                               |               |                               |   |   |             |             |   |   |   |               |              
|                                            | Adjustment for initially applying SFAS No. 158  |         |         |   |   |                              |               |                              |   |                                |  |                               |              |                               |   |  |             |            |   |   |  |               |             
|                                            | Stock-based compensationoptions                |         |         |   |   |                              |               |                              |   |                                |  |                               |              |                               |   |  |             |            |   |   |  |               |             
|                                            | Revised value of Common Stock issued for Merger |         |         |   |   |                              |               |                              |   |                                |  |                               |              |                               |   |  |             |            |   |   |  |               |             
|                                            |                                                 |         |          |   |   |                               |               |                               |   |                                |   |                               |               |                               |   |   |             |             |   |   |   |               |              
|Balance, March 29, 2007                     |                                                 |        |          |   |  |                               | 382,475.00000 |                               |   | 4                              |   | 382,475.00000                 |               |                               | 4 |   | 5,128.77496 |             |   |  |   | 256,085.61252 |              
|                                            |                                                 |         |          |   |   |                               |               |                               |   |                                |   |                               |               |                               |   |   |             |             |   |   |   |               |              

137

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Marquee Holdings Inc.    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)    Years Ended April 3, 2008, March 29, 2007 and March 30, 2006

NOTE 20CONDENSED FINANCIAL INFORMATION OF PARENT COMPANY (Continued)

Marquee Holdings Inc.

CONDENSED STATEMENTS OF STOCKHOLDER'S EQUITYPARENT ONLY (Continued)

|                                                                                    |                                                                   |   |   |   |   | Class A-1
Voting
Common Stock |   | Class A-2
Voting
Common Stock |   | Class N
Nonvoting
Common Stock |    | Class L-1
Voting
Common Stock |                | Class L-2
Voting
Common Stock |   |    |   |              |   |   |   |   |               
|----------------------------------------------------------------------------------- | ----------------------------------------------------------------- | - | - | - | - | ----------------------------- | - | ----------------------------- | - | ------------------------------ | -- | ----------------------------- | -------------- | ----------------------------- | - | -- | - | ------------ | - | - | - | - | --------------
|
|
|
|Comprehensive earnings:                                                             |                                                                   |   |   |   |   |                               |   |                               |   |                                |    |                               |                |                               |   |    |   |              |   |   |   |   |               
|                                                                                    | Net earnings                                                      |   |  |   |   |                              |   |                              |   |                                |   |                               |               |                               |   |   |   |             |   |   |  |   |              
|                                                                                    | FIN 48 adoption adjustments                                       |   |  |   |   |                              |   |                              |   |                                |   |                               |               |                               |   |   |   |             |   |   |  |   |              
|                                                                                    | Foreign currency translation adjustment                           |   |  |   |   |                              |   |                              |   |                                |   |                               |               |                               |   |   |   |             |   |   |  |   |              
|Change in fair value of cash flow hedges                                            |                                                                   |  |   |   |  |                               |  |                               |   |                               |    |                              |                |                               |  |    |  |              |   |  |   |  |               
|Losses on interest rate swaps reclassified to interest expense corporate borrowings |                                                                   |  |   |   |  |                               |  |                               |   |                               |    |                              |                |                               |  |    |  |              |   |  |   |  |               
|Unrealized loss on marketable equity securities                                     |                                                                   |  |   |   |  |                               |  |                               |   |                               |    |                              |                |                               |  |    |  |              |   |  |   |   |               
|Pension and other benefit adjustments                                               |                                                                   |  |   |   |  |                               |  |                               |   |                               |    |                              |                |                               |  |    |  |              |   |  |   |  |               
|Unrealized loss on marketable equity securities                                     |                                                                   |  |   |   |  |                               |  |                               |   |                               |    |                              |                |                               |  |    |  |              |   |  |   |  |               
|                                                                                    |                                                                   |   |   |   |   |                               |   |                               |   |                                |    |                               |                |                               |   |    |   |              |   |   |   |   |               
|Comprehensive earnings                                                              |                                                                   |   |   |   |   |                               |   |                               |   |                                |    |                               |                |                               |   |    |   |              |   |   |   |   |               
|                                                                                    | Stock-based compensationoptions                                  |   |  |   |   |                              |   |                              |   |                                |   |                               |               |                               |   |   |   |             |   |   |  |   |              
|                                                                                    | Dividends received from AMC Entertainment Inc                     |   |   |   |   |                               |   |                               |   |                                |    |                               |                |                               |   |    |   |              |   |   |   |   |              
|                                                                                    | Conversion of stock upon creation of Entertainment Holdings, Inc. |   | 1 |   |   |                              |   | (382,475.00000                | ) |                                | (4 | )                             | (382,475.00000 | )                             |   | (4 | ) | (5,128.77496 | ) |   |  |   | (256,085.61252
|                                                                                    |                                                                   |   |   |   |   |                               |   |                               |   |                                |    |                               |                |                               |   |    |   |              |   |   |   |   |               
|Balance, April 3, 2008                                                              |                                                                   | 1 |   | $ |  |                               |  |                               | $ |                               |    |                              |                | $                             |  |    |  |              | $ |  |   |  |               
|                                                                                    |                                                                   |   |   |   |   |                               |   |                               |   |                                |    |                               |                |                               |   |    |   |              |   |   |   |   |               

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Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 3, 2008, March 29, 2007 and March 30, 2006

NOTE 20CONDENSED FINANCIAL INFORMATION OF PARENT COMPANY (Continued)

Marquee Holdings Inc.    Note to Condensed Financial Statements of Parent Company

BASIS OF PRESENTATION

Holdings is an investment vehicle owned by J.P. Morgan Partners, LLC Apollo Management, L.P. and certain related investment funds and affiliates of
Bain Capital Partners, The Carlyle Group and Spectrum Equity Investors. Holdings was formed for the purpose of acquiring AMC Entertainment Inc. ("AMCE") pursuant to a definitive merger
agreement approved by AMCE's Board of Directors on July 22, 2004. Holdings is a holding company with no operations of its own and it has one direct subsidiary, AMCE.

The
Parent Company follows the accounting policies as described in Note 1 to the Consolidated Financial Statements of Marquee Holdings Inc. and subsidiary with the
exception of its investment in its subsidiary AMCE for which the Parent Company uses the equity method of accounting.



For a discussion of the debt obligations of the Company and its subsidiaries, refer to Note 8 in the audited consolidated financial statements included
elsewhere herein.



For a discussion of the commitments and contingencies of the Company and its subsidiaries, refer to Note 14 Commitments and Contingencies in the audited
consolidated financial statements included elsewhere herein.

For
further information, reference should be made to the Notes to Consolidated Financial Statements of the Company included in this Annual Report on Form 10-K.

NOTE 21SUBSEQUENT EVENTS

On May 2, 2008, the Company's Board of Directors approved revisions to the Company's Post-Retirement Medical and Life Insurance Plan effective
as of January 1, 2009. As a result of these revisions and restating this plan to implement the changes, the Company expects to recognize a curtailment gain during fiscal 2009.

Effective
as of May 14, 2008, NCM issued additional common membership units to Regal pursuant to the Common Unit Adjustment which resulted in a decrease to the Company's interest
in NCM from 19.1% to 18.5%.

139

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Item 9.    Changes in Disagreements With Accountants on Accounting and Financial Disclosure

None

Item 9A(T).    Controls and Procedures

(a)   Evaluation
of disclosure controls and procedures.

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 April 3, 2008, 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 April 3, 2008.

This
annual report does not include an attestation report of the Company's registered public accounting firm regarding internal control over financial reporting pursuant to temporary
rules of the Securities and Exchange Commission that permit the Company to provide only management's report in this annual report.

(b)   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

140

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Item 10.    Directors, Executive Officers and Corporate Governance

MANAGEMENT

Our business and affairs are managed by our board of directors currently consisting of nine members. Peter C. Brown, our chief executive officer, is a
director of Parent.

The
following table sets forth certain information regarding our directors, executive officers and key employees as of May 30, 2008:

|Name                 |  | Age |  | Position(s) Held                                                                                                                                                  
|-------------------- |  | --- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Peter C. Brown       |  | 49  |  | Chairman of the Board, Chief Executive Officer, President and Director (Parent, Holdings, AMC Entertainment and American Multi-Cinema, Inc.)                      
|Michael R. Hannon    |  | 48  |  | Director (Parent, Holdings and AMC Entertainment)                                                                                                                 
|Stephen P. Murray    |  | 45  |  | Director (Parent, Holdings and AMC Entertainment)                                                                                                                 
|Stan Parker          |  | 32  |  | Director (Parent, Holdings and AMC Entertainment)                                                                                                                 
|Aaron J. Stone       |  | 35  |  | Director (Parent, Holdings and AMC Entertainment)                                                                                                                 
|John Connaughton     |  | 42  |  | Director (Parent, Holdings and AMC Entertainment)                                                                                                                 
|Eliot P. S. Merrill  |  | 37  |  | Director (Parent, Holdings and AMC Entertainment)                                                                                                                 
|Kevin Maroni         |  | 45  |  | Director (Parent, Holdings and AMC Entertainment)                                                                                                                 
|Travis Reid          |  | 54  |  | Director (Parent, Holdings and AMC Entertainment)                                                                                                                 
|Craig R. Ramsey      |  | 56  |  | Executive Vice President and Chief Financial Officer (Parent, Holdings, AMC Entertainment and American Multi-Cinema, Inc.); Director (American Multi-Cinema, Inc.)
|John D. McDonald     |  | 51  |  | Director Executive Vice President, U.S. and Canada Operations (American Multi-Cinema, Inc.)                                                                       
|Kevin M. Connor      |  | 45  |  | Senior Vice President, General Counsel and Secretary (Parent, Holdings, AMC Entertainment and American Multi-Cinema, Inc.)                                        
|Mark A. McDonald     |  | 49  |  | Executive Vice President, International Operations (AMC Entertainment International, Inc.)                                                                        
|Chris A. Cox         |  | 42  |  | Vice President and Chief Accounting Officer (Parent, Holdings, AMC Entertainment and American Multi-Cinema, Inc.)                                                 
|Terry W. Crawford    |  | 51  |  | Vice President and Treasurer (Parent, Holdings, AMC Entertainment and American Multi-Cinema, Inc.)                                                                
|Michael W. Zwonitzer |  | 43  |  | Vice President Finance (Parent, Holdings, AMC Entertainment and American Multi-Cinema, Inc.)                                                                      

All our current executive officers hold their offices at the pleasure of our board of directors, subject to rights under their respective
employment agreements. 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.

Mr. Peter C. Brownhas served as a Director of AMC Entertainment and American Multi-Cinema, Inc., a subsidiary of AMC
Entertainment, since November 1992, as Chairman of the Board and Chief Executive Officer of AMC Entertainment since July 1999 and as President of AMC Entertainment since January 1997. Mr. Brown
has served as a Director, Chairman of the Board and Chief Executive Officer of Parent and Holdings since June 2007 and December 2004, respectively. Mr. Brown served as Co-Chairman
of the Board of AMC Entertainment from May 1998 through July 1999 and as Executive Vice President of AMC Entertainment from August 1994 to January 1997. Mr. Brown has served as a Director,
Chairman of the Board, Chief Executive Officer and President of

141

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Holdings
since December 2004 and President of American Multi-Cinema, Inc. since March 2007. Mr. Brown is also Chairman of the Board, Chief Executive Officer and a director of American
Multi-Cinema, Inc. Mr. Brown serves as a Director of Embarq Corporation, Midway Games, Inc., National CineMedia, Inc. and MovieTickets.com. Mr. Brown is also a
member of the executive committee and Vice Chairman of the Board of Directors of the National Association of Theatre Owners. Mr. Brown is a graduate of the University of Kansas.

Mr. Michael R. Hannonhas served as a Director of Parent since June 2007, and has served as a Director of Holdings and AMC
Entertainment since December 2004. Mr. Hannon serves as Managing Director in the New York office of 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. Mr. Hannon joined J.P. Morgan Partners, LLC in
1988 and has focused on making investments in the media and telecommunications and the financial services sectors. Mr. Hannon has been responsible for numerous investments in broadcasting,
publishing, cable, outdoor, and both wireless and wireline communications. Mr. Hannon also serves on the board of directors of Ascend Media, Hanley Wood and Olympus Media. Mr. Hannon
holds a B.A. from Yale University and an M.B.A. from Columbia Business School.

Mr. Stephen P. Murrayhas served as a Director of Parent since June 2007, and has served as a Director of Holdings and AMC
Entertainment since December 2004. Mr. Murray serves as President and Chief Executive Officer of 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. Mr. Murray is also an investment committee member of
CCMP Capital Asia Ltd. Mr. Murray focuses on investments in consumer, Retail and Services, and Healthcare Infrastructure. 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 also serves on the board of directors of ARAMARK Holdings Corporation,
Cabela's, Generac, Jetro Holdings, Noble
Environmental Power, Quiznos Subs, Strongwood Insurance and Warner Chilcott. Mr. Murray holds a B.A. from Boston College and an M.B.A. from Columbia Business School.

Mr. Stan Parkerhas served as a Director of Parent since June 2007, and has served as a Director of Holdings and AMC Entertainment
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 board of directors of Momentive Performance Materials. Mr. Parker holds a B.S.
degree in Economics from The Wharton School of Business at the University of Pennsylvania.

Mr. Aaron J. Stonehas served as a Director of Parent since June 2007, and has served as a Director of Holdings and AMC
Entertainment since December 2004. Mr. Stone is a Senior Partner of Apollo Management, L.P. which, together with its affiliates, acts as manager of Apollo and related private securities
investment funds. Mr. Stone also serves on the board of directors of Hughes Communications, Inc., Intelstat, Ltd and Skyterra Communications Inc. Prior to joining Apollo,
Mr. Stone was a member of the Mergers and Acquisition Group at Smith Barney, Inc. Mr. Stone holds an A.B. Degree from Harvard College.

Mr. John Connaughtonhas served as a Director of Parent since June 2007, and has served as a Director of Holdings and AMC
Entertainment since January 2006. Mr. Connaughton has served as a Managing Director of Bain Capital Partners, LLC since 1997 and a member of the firm since 1989. Prior to joining Bain
Capital Partners, LLC, Mr. Connaughton served as a consultant at Bain & Company, Inc., where he advised Fortune 500 companies. Mr. Connaughton also serves as a
director of MIC Communications (PriMed), Warner Chilcott, CRC Health Group, Hospital Corporation of America (HCA), Quintiles Transnational Corp., Warner Music Group (NYSE-WMG), Sungard
Data

142

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Systems,
Cumulus Media Partners and The Boston Celtics. He also volunteers for a variety of charitable organizations, serving as a member of The Berklee College of Music Board of Trustees and the UVa
McIntire Foundation Board of Trustees. Mr. Connaughton received a B.S. in commerce from the University of Virginia and an M.B.A. from Harvard Business School.

Mr. Eliot P. S. Merrillhas served as a Director of Parent, Holdings and AMC Entertainment since January 2008. Mr. Merrill
is a Managing Director of The Carlyle Group focused 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. and, before that, 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. Kevin Maronihas served as a Director of Parent, Holdings and AMC Entertainment since April 2008. Mr. Maroni is a Senior
Managing Director of Spectrum Equity Investors ("Spectrum'), based in
Boston, Massachusetts. 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
holds a BA from the University of Michigan and an MBA from Harvard University.

Mr. Travis Reidhas served as a Director of Parent since June 2007, and has served as a Director of Holdings and AMC Entertainment
since January 2006. Prior thereto, Mr. Reid served as President, Chief Executive Officer and a director of Loews since April 2002. Mr. Reid has been in the film exhibition industry for
30 years. Prior to 2002, Mr. Reid served as President, North American Operations of Loews beginning May 1998. Mr. Reid served as President of Loews Theatres beginning October 1996
and for the preceding year served as Executive Vice President, Film Buying of Loews Theatres. Prior to joining Loews in 1991, Mr. Reid held senior film buying positions at General Cinema Corp.,
Cineamerica Theatres, Century Theatres and Theatre Management Inc. Mr. Reid began his career at age 20 at a drive-in movie theatre in California. Mr. Reid is also
Chief Executive Officer and a director of Digital Cinema Implementation Partners LLC. Mr. Reid holds a B.S. in Business Administration from California State University at Hayward.

Mr. Craig R. Ramseyhas served as Executive Vice President and Chief Financial Officer of AMC Entertainment and American
Multi-Cinema, Inc. since April 3, 2003. Mr. Ramsey has served as Executive Vice President and Chief Financial Officer of Parent and Holdings since June 2007 and December 2004,
respectively. Prior to April 2003, Mr. Ramsey served as Executive Vice President, Chief Financial Officer and Secretary of AMC Entertainment and American Multi-Cinema, Inc. effective
April 2002. Mr. Ramsey served as Senior Vice President, Finance, Chief Financial Officer and Chief Accounting Officer, of AMC Entertainment 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 AMC Entertainment
and American Multi-Cinema, Inc. effective October 1999. Mr. Ramsey served as Vice President, Finance from January 1997 to October 1999 and prior thereto 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 Bank Midwest.

Mr. John D. McDonaldhas served as Director of American Multi-Cinema, Inc. since November 2007, and has served as Executive
Vice President, U.S. and Canada Operations of American Multi-Cinema, Inc. since October 1998. Prior thereto, Mr. McDonald served as Senior Vice President, Corporate Operations from
November 1995 until his promotion to Executive Vice President in October 1998.

Mr. Kevin M. Connorhas served as Senior Vice President, General Counsel and Secretary of AMC Entertainment and American
Multi-Cinema, Inc. since April 2003. Mr. Connor has served as Senior Vice President, General Counsel and Secretary of Parent and Holdings since June 2007 and December

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2004,
respectively. Prior to April 2003, Mr. Connor served as Senior Vice President, Legal of AMC Entertainment 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. Mark A. McDonaldhas served as Executive Vice President, and as Executive Vice President, International Operations of AMC
Entertainment International, Inc., a subsidiary of AMC Entertainment, 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 in December 1998.

Mr. Chris A. Coxhas served as Vice President and Chief Accounting Officer of AMC Entertainment and American
Multi-Cinema, Inc. since May 2002. Mr. Cox has served as Vice President and Chief Accounting Officer of Parent and Holdings since June 2007 and December 2004, respectively. Prior to May
2002, Mr. Cox served as Vice President and Controller of American Multi-Cinema, Inc. from November 2000. Previously, Mr. Cox served as Director of Corporate Accounting for the
Dial Corporation from December 1999 until November 2000.

Mr. Terry W. Crawfordhas served as Vice President and Treasurer of Parent since June 2007, and of Holdings, AMC Entertainment and
American Multi-Cinema, Inc. since April 2005. Prior thereto, Mr. Crawford served as Vice President and Assistant Treasurer of Holdings, AMC Entertainment and American
Multi-Cinema, Inc. from December 2004 until April 2005. Previously, Mr. Crawford served as Vice President, Assistant Treasurer and Assistant Secretary of AMC Entertainment 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 AMC Entertainment from
September 2001 until May 2002 and AMC from November 1999 until January 2004. Mr. Crawford served as Assistant Secretary of AMC Entertainment from March 1997 until September 2001 and American
Multi-Cinema, Inc. from March 1997 until November 1999.

Mr. Michael W. Zwonitzerhas served as Vice President, Finance of AMC Entertainment and American Multi-Cinema, Inc. since
September 2004 and has served as Vice President, Finance of Parent and Holdings since June 2007 and December 2004, respectively. 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.

Code of Ethics

The Company has adopted a code of ethics that applies to the principal executive officer, principal financial officer and principal accounting officer, or persons
performing similar functions, a copy of which was filed as Exhibit 14 to Form 10-K for the fiscal year ended April 1, 2004.

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 and Richard Walsh, our former Executive Vice President, AMCE and the former Chairman of AMC Film Programming, a division of American
Multi-Cinema, Inc., whose employment ended on August 17, 2007. 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

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the
Compensation Committee does consider the recommendations of Mr. Brown in setting compensation levels for our executive officers other than Mr. Brown.

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 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 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 an annual 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. In
fiscal 2008, the Compensation Committee conducted a series of exploratory meetings with outside compensation consultants and selected Towers Perrin to evaluate our current compensation programs,
review our benchmarking group, and make recommendations regarding compensation and benefits.

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 their general business and industry experience and knowledge that the use of the combination of base salary, discretionary 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

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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. For fiscal 2008, the Company obtained 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 annually or at other
appropriate times by the Compensation Committee and may be increased from time to time 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. For fiscal 2008, this review began in the fourth quarter of fiscal 2007
as part of our annual budgeting process and was finished during the first quarter of fiscal 2008 as part of our annual performance review process. Following this review, base salaries for our Named
Executive Officers increased between 2.0% and 2.5% from fiscal 2007 to fiscal 2008.

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 shareholders, and our annual bonus program is primarily designed to reward increases in 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 2008, the annual incentive compensation program was based primarily on attainment of
specified EBITDA targets. The plan guideline was that no bonus would be paid below attainment of 90% of targeted EBITDA and that upon attainment of 100% of targeted EBITDA, each Named Executive
Officer would receive 100% of his assigned bonus target. Upon attainment of 120% of targeted EBITDA, each Named Executive Officer would receive a maximum of 200% of his assigned bonus target. 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. No bonuses were earned in fiscal 2008 under the annual incentive compensation program because
the Company did not meet the minimum 90% of targeted EBITDA threshold established by the Compensation Committee.

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. On a going forward basis, it is contemplated that these annual bonuses may be paid in a combination of cash and equity value with the method for any
allocation between cash and equity value to be determined in the future.

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Long Term Incentive Equity Awards

In connection with the holdco merger, on June 11, 2007 Parent adopted an amended and restarted 2004 stock option plan (formerly known as the 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 previously granted under the plan vest in equal
installments over 3 to 5 years from the grant date, subject to the optionee's continued service with Parent or one of its subsidiaries. The Compensation Committee did not grant any options
pursuant to the 2004 Stock Option Plan during fiscal 2008.

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 our supplemental defined-benefit plans, the AMC Supplemental Executive Retirement Plan and the AMC Retirement
Enhancement Plan, effective as of December 31, 2006. The Compensation Committee determined that these types of plans are not as effective as other elements of compensation in aligning
executives' interests with the interests of shareholders, a particularly important consideration for a public company. As a result, the Compensation Committee determined to freeze these plans.
Benefits no longer accrue under the AMC Defined Benefit Retirement Income Plan, the AMC
Supplemental Executive Retirement Plan or the AMC Retirement Enhancement Plan for our Named Executive Officers or for other participants.

In
connection with the freezing of benefits under our defined-benefit plans, our Board of Directors determined it was important to further encourage participation in our defined
contribution plan, so our Board of Directors simultaneously approved a proposal to increase our matching contribution in the 401(k) Savings Plan to 100% of elective contributions up to 5% of employee
compensation (previously, the company matched 100% of contributions up to 3% of employee compensation and 50% of contributions between 3% and 5% of employee compensation). The increase in our matching
contribution was effective January 1, 2007.

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.

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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 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 or due to death or disability. In the case of Mr. Brown, 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 60 days following certain specified changes in their responsibilities 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). In the case of Mr. Brown only, he is eligible for severance if he resigns during 60 days following a change in control. 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, and in the case of Mr. Brown, for three years following his actual
termination date.

Perquisites

The perquisites provided to each Named Executive Officer during fiscal 2008 and 2007 are reported in Column (i) of the "Summary Compensation Table" below,
and are further described in footnote (6) to that table. Perquisites are benchmarked and reviewed, revised and approved by the Compensation Committee every year.

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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 stockholder.

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



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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 2008 and for Richard T. Walsh, who although not serving as an executive officer on the last day of our fiscal year, had served as our
Executive Vice President, AMC Entertainment Inc., and Chairman, AMC Film Programming, until his employment ended on August 17, 2007. These individuals are referred to as "Named Executive
Officers."

|Name and Principal Position(1)                                                                                                      |  | Year      |  | Salary
($) |                 | Bonus
($) |   | Stock
Awards
($) |  | Option
Awards
($)(2) |     | Non-Equity
Incentive
Plan
Compensation
($)(3) |   | Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings
($)(4) |   | All Other
Compensation
($)(5)(6) |           | Total
($)
|----------------------------------------------------------------------------------------------------------------------------------- |  | --------- |  | ---------- | --------------- | --------- | - | ---------------- |  | -------------------- | --- | --------------------------------------------- | - | ------------------------------------------------------------------------------ | - | -------------------------------- | --------- | ---------
|Peter C. Brown
Chairman of the Board, Chief Executive Officer and President (AMCE and American Multi-Cinema, Inc.)                  |  | 2008
2007 |  | $          | 822,065
772,700 |           | $ | 
              |  | $                    | 
 |                                               | $ | 1,884,022
1,884,022                                                            |   | $                                | 
124,684 |          
|Craig R. Ramsey
Executive Vice President and Chief Financial Officer (AMCE and American and American Multi-Cinema, Inc.)            |  | 2008
2007 |  |            | 374,183
351,700 |           |   | 
              |  |                      | 
 |                                               |   | 471,005
471,005                                                                |   |                                  | 
55,510  |          
|John D. McDonald
Executive Vice President North American Operations (American Multi-Cinema, Inc.)                                   |  | 2008
2007 |  |            | 374,182
351,700 |           |   | 
              |  |                      | 
 |                                               |   | 235,503
235,503                                                                |   |                                  | 
55,510  |          
|Kevin M. Connor
Senior Vice President, General Counsel and Secretary (AMCE and American Multi-Cinema, Inc.)                         |  | 2008
2007 |  |            | 321,696
302,400 |           |   | 
              |  |                      | 
 |                                               |   | 235,503
235,503                                                                |   |                                  | 
43,188  |          
|Mark A. McDonald
Executive Vice President International Operations (AMC Entertainment International, Inc.)                          |  | 2008      |  |            | 281,851         |           |   |                 |  |                      |    |                                               |   | 235,503                                                                        |   |                                  |          |          
|Richard T. Walsh
Former Executive Vice President (AMCE): Chairman (AMC Film Programming, a division of American Multi-Cinema, Inc.) |  | 2008
2007 |  |            | 149,066
358,800 |           |   | 
              |  |                      | 
 |                                               |   | (94,484
471,005                                                                | ) |                                  | 
55,510  |          

---

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For
fiscal 2007 the amounts include the aggregate change in actuarial present value of the officer's accumulated benefit under the AMC Supplemental Executive Retirement Plan in the following amounts:
Mr. Peter Brown $6,335, Mr. Craig Ramsey $8,579, Mr. John McDonald $9,651, Mr. Kevin Connor $6,076 and Mr. Richard Walsh $11,423 and the aggregate change in
actuarial present value of the officer's accumulated benefit under the Defined Benefit Retirement Income Plan in the following amounts: Mr. Peter Brown $19,759, Mr. Craig Ramsey $24,948,
Mr. John McDonald $35,969, Mr. Kevin Connor $7,664 and Mr. Richard Walsh $42,590. Mr. Brown is the only active participant in the Retirement Enhancement Plan and the
aggregate decrease in actual present value for his accumulated benefits of $235,505, has been omitted from the table.

Perquisites and Other Personal Benefits


Additional All Other CompensationCar
Allowance

Holiday Gift
Award

Club
Membership


Company Matching
Contributions
to 401(k) Plan

Life Insurance
PremiumsPeter Brown

2008
2007

$
16,200
15,600

$
254
500

$

1,397


$
12,792
11,073

$
1,383
1,239Craig Ramsey

2008
2007


13,500
13,000


254
500







12,128
10,382


3,483
3,485John McDonald

2008
2007


13,500
12,650


254
500







12,739
7,554


1,863
1,306Kevin Connor

2008
2007


12,150
11,700


254
500







11,781
6,780


1,045
773Mark McDonald

2008


10,800


254






11,849


1,032Richard Walsh

2008
2007


5,300
13,000



500







7,110
10,414


690
1,894


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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
2008. The primary element of each Named Executive Officer's total compensation reported in the table is base salary. Mr. Walsh also earned a lump sum cash severance payment of $731,944 in
connection with his separation from the Company pursuant to his employment agreement.

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 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. Brown, Ramsey, McDonald, Connor, and McDonald. Provisions of these agreements relating to
outstanding equity incentive awards and post-termination of employment benefits are discussed below.

Peter C. Brown.On December 23, 2004, Holdings and AMCE entered into an employment agreement with Peter C. Brown who
has served as the Chairman of the Board, Chief Executive Officer and President of each of Holdings and AMCE since that time. The agreement was amended on January 26, 2006 in connection with the
Merger. The term of the agreement is for five years, with automatic one-year extensions each year. The agreement provides that Mr. Brown will receive an initial annualized base
salary of $772,654 subject to review by the Compensation Committee. Based on its review, the Compensation Committee has discretion to increase (but not reduce) the base salary each year. The agreement
also provides for annual bonuses for Mr. Brown based on the applicable incentive compensation program of the Company and consistent with the determination of 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. Brown 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, severance arrangements and restrictive covenants in
Mr. Brown's employment agreement are discussed in detail below in the narrative section "Potential Payments Upon Termination or Change in Control."

On
December 17, 2007, Parent, Holdings and AMC Entertainment entered into an amended and restated employment agreement with Peter C. Brown, which agreement will take effect only
in the event of an initial public offering of Parent on or before December 31, 2008. The term of the agreement is for three years, with automatic one-year extensions each year. The
agreement provides that Mr. Brown will receive an initial annualized base salary of $791,970 subject to review by the Compensation Committee. Based on its review, the Compensation Committee has
discretion to increase (but not reduce) the base salary each year. The agreement also provides for annual bonuses for Mr. Brown based on the applicable incentive compensation program of the
Company and consistent with the determination of the Compensation Committee. As an inducement for Mr. Brown to enter into the amended and restated employment agreement, which reduces the term
of Mr. Brown's employment and whereby Mr. Brown agrees to both non-competition and non-solicitation covenants, the agreement also provides that within
15 days after a calendar year 2008 initial public offering of

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Parent,
Mr. Brown will receive a grant of restricted stock or restricted stock units of Parent with an aggregate value of $2,567,000 on the date of grant (based on our estimated initial public
offering price). Such grant shall vest in three equal annual installments on the first three anniversaries of the grant date, and is subject to accelerated vesting upon Mr. Brown's termination
for death, disability, by the Company without cause, or by Mr. Brown for good reason or following a change in control. Change in control, severance arrangements and restrictive covenants in
Mr. Brown's amended and restated 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 review by the
Chairman of the Board, President and Chief Executive Officer of AMCE and, if applicable, the Compensation Committee. Based on their review, the Chairman of the Board, President and Chief Executive
Officer of AMCE and, if applicable, the Compensation Committee have discretion to increase (but not reduce) 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. Mr. Ramsey also receives a
company owned or leased automobile or equivalent automobile allowance. 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 review by the President and Chief Financial 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. Based on their review, the President and Chief Financial 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 (but not reduce) 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 Financial 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. Mr. McDonald also receives a company owned or leased automobile or equivalent automobile allowance. Change in control and severance arrangements in Mr. McDonalds'

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employment
agreements 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 review by the Chairman of the Board, President and Chief Executive Officer of AMCE and,
if applicable, the Compensation Committee. Based on their review, the Chairman of the Board, President and Chief Executive Officer of AMCE and, if applicable, the Compensation Committee have
discretion to increase (but not reduce) 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. Mr. Connor also receives a company owned or leased automobile or equivalent automobile allowance. 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."

Mark A. McDonald.On July 1, 2001, AMC Entertainment and AMC Entertainment International entered into an employment
agreement with Mark A. McDonald who serves as the Executive Vice President of International Operations. 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 $225,000 subject to review by the Chairman of the Board, President and Chief Executive Officer
of AMCE and, if applicable, the Compensation Committee. 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 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. 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. Mr. McDonald also receives a company owned or leased automobile or equivalent automobile allowance. Change in control and severance
arrangements in Mr. McDonald's employment agreement are discussed in detail below in the narrative section "Potential Payments Upon Termination or Change in Control."

154

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Grants of Plan-based AwardsFiscal 2008

There were no grants of plan-based awards to Named Executive Officers in fiscal 2008.

Outstanding Equity Awards at end of Fiscal 2008

The following table presents information regarding the outstanding equity awards held by each of our Named Executive Officers as of April 3, 2008,
including the vesting dates for the portions of these awards that had not vested as of that date.

|                    |  | Option Awards |  | Stock Awards
|------------------- |  | ------------- |  | ------------
|
|Peter C. Brown      |  | 9,821.489364  |  | 6,547.659576
|Craig R. Ramsey     |  | 2,455.372338  |  | 1,636.914892
|John D. McDonald    |  | 1,227.686172  |  | 818.457448  
|Kevin M. Connor     |  | 1,227.686172  |  | 818.457448  
|Mark A. McDonald    |  | 1,227.686172  |  | 818.457448  
|Richard T. Walsh(2) |  | 1,636.914892  |  |            

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Option Exercises and Stock VestedFiscal 2008

None of our Named Executive Officers exercised options or held any outstanding stock awards during fiscal 2008.

155

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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)
($) |                          | Payments
During Last
Fiscal Year
($)
|------------------- |  | --------------------------------------------------------------------------------------------------------- |  | ------------------------------------ |  | ------------------------------------------- | ------------------------ | ------------------------------------
|Peter C. Brown      |  | Defined Benefit Retirement Income Plan
Supplemental Executive Retirement Plan
Retirement Enhancement Plan |  | 15.60
15.60
15.60                    |  | $                                           | 118,376
61,377
1,005,031 |                                     
|Craig R. Ramsey     |  | Defined Benefit Retirement Income Plan
Supplemental Executive Retirement Plan                             |  | 12.00
12.00                          |  |                                             | 139,194
72,171           |                                     
|John D. McDonald    |  | Defined Benefit Retirement Income Plan
Supplemental Executive Retirement Plan                             |  | 31.05
31.05                          |  |                                             | 265,985
137,911          |                                     
|Kevin M. Connor     |  | Defined Benefit Retirement Income Plan
Supplemental Executive Retirement Plan                             |  | 4.00
4.00                            |  |                                             | 23,355
9,644             |                                     
|Mark A. McDonald    |  | Defined Benefit Retirement Income Plan
Supplemental Executive Retirement Plan                             |  | 26.60
26.60                          |  |                                             | 201,845
97,897           |                                     
|Richard T. Walsh(2) |  | Defined Benefit Retirement Income Plan                                                                    |  | 31.10                                |  |                                             | 319,552                  |                                     

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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 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 our supplemental plans, the AMC Supplemental Executive
Retirement Plan and the AMC Retirement

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Enhancement
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, the AMC Supplemental Executive Retirement Plan and the AMC Retirement Enhancement 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 2 to 10 years, with such form, and, if applicable, period, to be 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.

AMC Retirement Enhancement Plan.AMC has established a Retirement Enhancement Plan for the benefit of officers who, from time
to time, may be designated as eligible participants therein by the Board of Directors. As mentioned above, the plan was frozen, effective December 31, 2006, and no new participants can enter
the plan and no additional benefits can accrue thereafter.

The
only active participant in the plan is Peter C. Brown.

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The Retirement Enhancement Plan is a non-qualified defined benefit plan designed to provide an unfunded retirement benefit to an eligible participant in an amount equal to
(i) sixty percent (60%) of his or her average compensation (including paid and deferred incentive compensation but excluding certain special compensation) during the last three full years of
employment, less (ii) the sum of (A) such participant's benefits under the retirement plan and the participant's primary social security benefit at age 65, or if later, at the
date of normal retirement, and (B) the amount of a straight life annuity commencing at the participant's normal retirement date attributable to AMC's contributions under the supplemental
executive retirement plan, the 401(k) savings plan and the non-qualified deferred compensation plan. The base amount in clause (i) will be reduced on a pro rata basis if the
participant completes fewer than 25 years of service. The Retirement Enhancement Plan benefit may commence for a participant who has attained the later of age 55 or completion of
15 years of service and has participated in the plan for at least five years and who retires on or after age 55. For participants retiring before age 65 the benefit is reduced
actuarially, namely 62/3% for each of the first five years by which commencement precedes age 65 and an additional 31/3% for each year by which commencement
precedes age 60. Benefits commence at a participant's normal retirement date (i.e., the later of age 65 or the participant's completion of
five years of service) whether or not the participant continues to be employed by AMC. The accrued benefit payable upon total and permanent disability is not reduced by reason of early commencement. A
participant will be entitled to receive a benefit under the Retirement Enhancement Plan if such a participant's employment is terminated at AMC's request (other than for cause) or as a result of a
change of control (as defined in the Retirement Enhancement Plan).

Nonqualified Deferred Compensation

The following table presents information regarding the contributions to and earnings on the Named Executive Officers' deferred compensation balances during fiscal
2008, and also shows the total deferred amounts for the Named Executive Officers at the end of fiscal 2008.

|Name             |  | Executive
Contributions
in Last FY
$ |        | Registrant
Contributions
in Last FY
($) |   | Aggregate
Earnings in
Last FY
($) |  | Aggregate
Withdrawals/
Distributions
($) |         | Aggregate
Balance at
Last FYE
($)
|---------------- |  | ------------------------------------ | ------ | --------------------------------------- | - | --------------------------------- |  | ---------------------------------------- | ------- | ---------------------------------
|Peter C. Brown   |  | $                                    | 79,160 |                                         | $ |                                  |  | $                                        | (1,111  | )                                
|Craig R. Ramsey  |  |                                      | 1,665  |                                         |   |                                  |  |                                          | (2,584  | )                                
|John D. McDonald |  |                                      | 29,129 |                                         |   |                                  |  |                                          | (22,627 | )                                
|Kevin M. Connor  |  |                                      |       |                                         |   |                                  |  |                                          |        |                                  
|Mark A. McDonald |  |                                      |       |                                         |   |                                  |  |                                          | (13,275 | )                                
|Richard T. Walsh |  |                                      |       |                                         |   |                                  |  |                                          | 3,011   |                                  

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 2008 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.

158

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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.

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 of Holdings under the terms of our 2004 Stock Option Plan. Furthermore, upon a termination following a
"Change of Control" (as such term is defined in the AMC Retirement Enhancement Plan), the Named Executive Officer is entitled to his accrued benefits payable thereunder in a form of payment that he
has previously chosen. The Retirement Enhancement Plan and the present value of benefits accumulated under the plan are described above in the table "Pension Benefits" and the accompanying narrative
"Pension and Other Retirement Plans."

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 of Holdings) occurred
on the last business day of fiscal 2008 and that the price per share of our common stock is equal to the fair market value of a share of our common stock as of that date.

Peter C. Brown

Mr. Brown's employment agreement, described above under "Employment AgreementsSalary and Bonus Payments," provides for certain benefits to be
paid to Mr. Brown in connection with a termination of his employment with Holdings under the circumstances described below.

Severance Benefits.In the event Mr. Brown's employment is terminated during the employment term by Parent, Holdings
or AMC Entertainment pursuant to a termination for death, "Disability", "Without Cause" (each as defined in the employment agreement) or by Mr. Brown pursuant to a termination for "Good Reason"
or within sixty days after a "Change of Control" (as those terms are defined in the employment agreement), Mr. Brown will be entitled to severance pay in a lump sum cash payment equal to the
product of (x) the sum of his base salary as then in effect plus his target bonus times (y) three. In addition, upon such a qualifying termination, the restricted stock or restricted
stock units granted pursuant to the employment agreement and all of Mr. Brown's stock options shall vest in full.

If
Mr. Brown had terminated employment with us on April 3, 2008 pursuant to his amended and restated employment agreement under the circumstances described in the preceding
paragraph, we estimate that he would have been entitled to a lump sum cash payment equal to $3,908,910. This amount is derived by multiplying three by the sum of $791,970 which represents
Mr. Brown's annualized base salary rate in effect on April 3, 2008, plus $511,000, which represents his target bonus. Finally, Mr. Brown would have been entitled to accelerated
vesting of unvested stock options with an aggregate value of $3,332,759 (based on the spread between the exercise price of the options and the estimated fair market value of our common stock as of
April 3, 2008). Since Mr. Brown's restricted stock or restricted stock unit grant pursuant to his employment agreement having a value of $2,567,000 did not occur as of April 3,
2008, we did not include the potential accelerated vesting of this award.

159

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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 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 during 60 days 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.

Upon
a termination of employment with us on April 3, 2008 under the circumstances described in the preceding paragraph, we estimate that each Named Executive Officer (other than
Mr. Brown) would have been entitled to a lump sum cash payment as follows: Mr. Craig Ramsey$720,962; Mr. John McDonald$720,961; Mr. Kevin
Connor$619,832; and Mr. Mark McDonald$543,058. These amounts are derived by multiplying two by the respective executive's annualized base salary rate in effect on
April 3, 2008.

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.

Richard T. Walsh Separation

On August 17, 2007, Mr. Walsh's employment with AMC Entertainment ended. Mr. Walsh received a cash severance payment of $731,944 in a lump
sum, less applicable withholdings. Mr. Walsh's unexercisable options were forfeited at the end of his employment.

On
November 14, 2007, we entered into an agreement with Mr. Walsh that extended the exercise period applicable to his vested stock options from 90 days following his
departure on August 17, 2007 until 60 days after an initial public offering of Parent's common stock, and in the event no initial public offering has occurred by June 16, 2008,
until January 2, 2009.

Director CompensationFiscal 2008

The following section presents information regarding the compensation paid during fiscal 2008 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. Peter C. Brown, who is also one of our employees, is presented above in the Summary
Compensation Table and the related explanatory tables. Mr. Brown 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

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The
following table presents information regarding the compensation of our non-employee Directors in fiscal 2008:

|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
($)
|---------------------- |  | ------------------------------- | ------ | ---------------- | - | ----------------- |  | ------------------------------------------ | - | ------------------------------------------------------------------- | - | -------------------------- |  | ---------
|Michael R. Hannon      |  | $                               | 63,000 |                  | $ |                  |  | $                                          |  |                                                                     | $ |                           |  | $        
|Stephen P. Murray      |  |                                 | 56,500 |                  |   |                  |  |                                            |  |                                                                     |   |                           |  |          
|Stan Parker            |  |                                 | 61,500 |                  |   |                  |  |                                            |  |                                                                     |   |                           |  |          
|Aaron J. Stone         |  |                                 | 59,000 |                  |   |                  |  |                                            |  |                                                                     |   |                           |  |          
|John Connaughton       |  |                                 | 59,000 |                  |   |                  |  |                                            |  |                                                                     |   |                           |  |          
|Michael Connelly(1)    |  |                                 | 6,500  |                  |   |                  |  |                                            |  |                                                                     |   |                           |  |          
|Benjamin Coughlin      |  |                                 | 63,000 |                  |   |                  |  |                                            |  |                                                                     |   |                           |  |          
|Travis Reid            |  |                                 | 62,500 |                  |   |                  |  |                                            |  |                                                                     |   |                           |  |          
|Eliot P. S. Merrill(1) |  |                                 | 52,500 |                  |   |                  |  |                                            |  |                                                                     |   |                           |  |          

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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 2008. 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 April 3, 2008.

Item 12.    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

All of the issued and outstanding capital stock of Holdings is owned by Parent, and all of the issued and outstanding capital stock of Holdings 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 by (i) each of its
directors and executive officers who own shares of common stock of Parent, (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.

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Security Ownership of Beneficial Owners, Directors and Officers.

PRINCIPAL STOCKHOLDERS

The following table sets forth certain information regarding beneficial ownership of Parent capital stock as of May 30, 2008, with respect to:



|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-1
Common
Stock |  | Percentage of
Ownership |  
|------------------------------------------------------------------ |  | -------------------------------- | --- | -------------------------------- | --- | ------------------------------ |  | -------------------------------- |  | -------------------------------- |  | ----------------------- | -
|J.P. Morgan Partners (BHCA), L.P. and Related Funds(1)(2)          |  | 249,225.00                       | (2) | 249,225.00                       | (2) |                               |  |                                 |  |                                 |  | 38.86                   | %
|Apollo Investment Fund V, L.P. and Related Funds(3)(4)             |  | 249,225.00                       | (4) | 249,225.00                       | (4) |                               |  |                                 |  |                                 |  | 38.86                   | %
|Bain Capital Investors, LLC and Related Funds(5)(6)                |  |                                 |     |                                 |     |                               |  | 96,743.45                        |  | 96,743.45                        |  | 15.08                   | %
|The Carlyle Group Partners III Loews, L.P. and Related Funds(7)(8) |  |                                 |     |                                 |     |                               |  | 96,743.45                        |  | 96,743.45                        |  | 15.08                   | %
|Spectrum Equity Investors IV. L.P. and Related Funds(9)(10)        |  |                                 |     |                                 |     |                               |  | 62,598.71                        |  | 62,598.71                        |  | 9.76                    | %
|Peter C. Brown(11)(12)                                             |  |                                 |     |                                 |     | 2,542.00                       |  |                                 |  |                                 |  |                         | *
|Craig R. Ramsey(11)(13)                                            |  |                                 |     |                                 |     | 153.00                         |  |                                 |  |                                 |  |                         | *
|Richard T. Walsh(11)(14)                                           |  |                                 |     |                                 |     | 153.00                         |  |                                 |  |                                 |  |                         | *
|John D. McDonald(11)(15)                                           |  |                                 |     |                                 |     | 127.00                         |  |                                 |  |                                 |  |                         | *
|Kevin M. Connor(11)(16)                                            |  |                                 |     |                                 |     | 51.00                          |  |                                 |  |                                 |  |                         | *
|Mark A. McDonald(11)(17)                                           |  |                                 |     |                                 |     | 102.00                         |  |                                 |  |                                 |  |                         | *
|Michael R. Hannon(1)                                               |  |                                 |     |                                 |     |                               |  |                                 |  |                                 |  |                         | *
|Stephen P. Murray(1)                                               |  |                                 |     |                                 |     |                               |  |                                 |  |                                 |  |                         | *
|Stan Parker(18)                                                    |  |                                 |     |                                 |     |                               |  |                                 |  |                                 |  |                         | *
|Aaron J. Stone(18)                                                 |  |                                 |     |                                 |     |                               |  |                                 |  |                                 |  |                         | *
|John Connaughton(5)(6)                                             |  |                                 |     |                                 |     |                               |  |                                 |  |                                 |  |                         | *
|Eliot P. S. Merrill(7)                                             |  |                                 |     |                                 |     |                               |  |                                 |  |                                 |  |                         | *
|Kevin Maroni(9)(10)                                                |  |                                 |     |                                 |     |                               |  |                                 |  |                                 |  |                         | *
|Travis Reid(11)(19)                                                |  |                                 |     |                                 |     | 728.77                         |  |                                 |  |                                 |  |                         | *
|All directors and officers as a group (17 persons)                 |  |                                 |     |                                 |     | 22,312.61                      |  |                                 |  |                                 |  | 1.72                    | %

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162

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163

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164

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Equity Compensation Plan Information

The following is a summary of securities authorized for issuance under Parent's equity compensation plans as of April 3, 2008.

|                                                           |  | 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(1)
|---------------------------------------------------------- |  | --------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------ | --- | -----------------------------------------------------------------------------------------------
|Equity compensation plans approved by security holders     |  | 36,521.356392                                                                           |  | $                                                                              | 491 |                                                                                                
|Equity compensation plans not approved by security holders |  |                                                                                        |  |                                                                                |    |                                                                                                
|                                                           |  |                                                                                         |  |                                                                                |     |                                                                                                
|Total                                                      |  | 36,521.356392                                                                           |  | $                                                                              | 491 |                                                                                                
|                                                           |  |                                                                                         |  |                                                                                |     |                                                                                                

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Item 13.    Certain Relationships and Related Transactions.

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

165

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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 30, 2007 or which involve obligations that remain outstanding as of April 3, 2008.

Parent
is owned by the Sponsors, other co-investors and by certain members of management as follows: JPMP (20.776%); Apollo (20.776%); Bain Capital Partners (15.084%); The
Carlyle Group (15.084%); Spectrum Equity Investors (9.76%); Weston Presidio Capital IV, L.P. and WPC Entrepreneur Fund II, L.P. (3.898%); Co-Investment
Partners, L.P. (3.898%); Caisse de Depot et Placement du Quebec (3.118%); 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. (2.728%); SSB Capital Partners (Master Fund) I, L.P.
(1.949%); CSFB Strategic Partners Holdings II, L.P., CSFB Strategic Partners Parallel Holdings II, L.P., and GSO Credit Opoprtunities Fund (Helios), L.P. (1.559%);
Credit Suisse Anlagestiftung, Pearl Holding Limited, Vega Invest (Guernsey) Limited and Partners Group Private Equity Performance Holding Limited (0.779%); Screen Investors 2004, LLC (0.152%);
and members of management (0.439%)(1).

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For
a description of certain employment agreements between us and Messrs. Peter C. Brown, John D. McDonald, Craig R. Ramsey, Kevin M. Connor and
Mark A. McDonald 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
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 former continuing stockholders of Holdings provides that, until the fifth anniversary of the holdco merger ("Blockout Period"), the former
continuing stockholders of Holdings (other than Apollo and JPMP) will 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 BCS Investors further provide that during the Blockout Period, the

166

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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, Holdings 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 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

167

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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.

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 twelfth anniversary from December 23, 2004, and 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.

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.

Continuing Service Agreement with Travis Reid

In connection with the termination of his current employment agreement with Loews, the Company paid Mr. Travis Reid severance of $87,500 per month for
18 months following the closing of the Mergers, paid him a lump sum payment of $1,575,000, and provided outplacement assistance and automobile benefits through December 31, 2006 and
granted Mr. Reid an option under the Holdings 2004 Stock Option Plan to acquire Class N Common Stock at an exercise price not less than the fair market value (as determined by the Board
of Directors of Holdings) on the date of grant. In June 2007, the option was assumed by Parent, and the option is subject to other terms and conditions substantially similar to the terms of options
currently held by employees and is also subject to the Management Stockholders Agreement. The option vests in three equal installments on December 23, 2006, 2007 and 2008, and vests in full
upon a change of control of Parent, Holdings or AMCE if provided for by the Compensation Committee. In addition, in order to facilitate integration following the Mergers, the Company entered into an
agreement with Mr. Reid, whereby Mr. Reid provided certain transitional consulting services to the Company and reported to Mr. Peter C. Brown, our Chief Executive Officer.
Pursuant to the continuing service agreement, which terminated in February 2007, the Company paid Mr. Reid a consulting fee for each month of service at the following rate: $50,000

168

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for
each of the first four months, $33,333 for each of the next four months and $16,667 for the final five months. The continuing service agreement terminated in February 2007 and the final
severance payment to Mr. Reid was made during fiscal 2008. In February 2007, Mr. Reid was hired as the chief executive officer of DCIP, a joint venture between AMCE, Cinemark USA
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.

Market Making Transactions

On August 18, 2004, Holdings sold $304,000,000 in aggregate principal amount at maturity of its 12% Senior Discount Notes due 2014 (the "Holdco Notes"). On
the same date, Marquee sold $250,000,000 in aggregate principal amount of its 85/8% Senior Notes due 2012 and $205,000,000 in aggregate principal amount of its Senior Floating Notes due
2010 (Collectively, the "Senior Notes"). J.P. Morgan Securities Inc., an affiliate of JPMP which owns approximately 20.8% of Holdings, was an initial purchaser of both the Holdco Notes and the
Senior Notes.

On
January 26, 2006 AMC Entertainment Inc. sold $325,000,000 in aggregate principal amount of its 11% Senior Subordinated Notes due 2016. JP Morgan Securities Inc.,
an affiliate of JPMP which owns approximately 20.8% of Holdings, was an initial purchaser of these notes. Credit Suisse Securities (USA) LLC, whose affiliates own approximately 1.6% of
Holdings, was also an initial purchaser of these notes.

AMCE Dividend to Holdings

On April 3, 2008 the Company declared and made distributions to Holdings in the amount of $21,830,000 which has been recorded by the Company as a reduction
to Additional paid-in capital. The distribution included $3,279,000 of advances made by the Company on behalf of Holdings prior to fiscal 2008 and $18,551,000 of cash advances made during
fiscal 2008 including payment of interest on the Holdings Discount Notes due 2014 of $14,447,700. In connection with the holdco merger, AMCE paid a dividend to Holdings of $275,000,000 which has been
recorded by AMCE as a reduction to Additional paid-in capital.

Item 14.    Principal Accountant Fees and Services

Audit And Certain Other Fees Paid To Accountants

The following table shows the fees that Holdings and AMC Entertainment was billed for the audit and other services provided by PricewaterhouseCoopers LLP
for fiscal years 2008 and 2007. The Audit Committee has considered whether the provision of such services is compatible with maintaining the independence of PricewaterhouseCoopers 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

2008

2007Audit Fees

$
1,544,561

$
1,694,398Audit-Related Fees


246,547


988,785Tax Fees


6,575


20,831All Other Fees





Total

$
1,797,683

$
2,704,014


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

169

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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.

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. There were no fees that related to audit-related, tax and other services for which the pre-approval requirement was waived under the de minimisexception for fiscal year 2008.

Audit Fees

This category includes the audit of the Company's annual financial statements, review of financial statements included in the Company's
Form 10-Q Quarterly Reports 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 PricewaterhouseCoopers 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 PricewaterhouseCoopers LLP for tax preparation and tax compliance.

All Other Fees

This category consists of services rendered by PricewaterhouseCoopers LLP for technical tax advice.

170

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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 Firm

65Consolidated Statements of OperationsPeriods ended April 3, 2008, March 29, 2007 and March 30, 2006

67Consolidated Balance SheetsApril 3, 2008 and March 29, 2007

68Consolidated Statements of Cash FlowsPeriods ended April 3, 2008 and March 29, 2007

69Consolidated Statements of Stockholder's Equity (Deficit)Periods ended April 3, 2008, March 29, 2007 and March 30, 2006

70Notes to Consolidated Financial StatementsPeriods ended April 3, 2008, March 29, 2007 and March 30, 2006

72


(a)(2)
Financial Statement SchedulesAll schedules have been omitted because the necessary information is included in the Notes to the Consolidated Financial Statements.



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.



The
following financial statements of National CineMedia, LLC are as follows:

PageReport of Independent Registered Public Accounting Firm

172Balance SheetsDecember 28, 2006 and December 27, 2007

173Statements of OperationsPeriods ended December 28, 2006 and December 27, 2007

174Statements of Changes in Members' EquityPeriods ended December 28, 2006 and December 27, 2007

175Statements of Cash FlowsPeriods ended December 28, 2006 and December 27, 2007

176Notes to Financial StatementsAs of and for the periods ended December 28, 2006 and December 27, 2007

177


171

---





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 27, 2007 and as of December 28, 2006 and the related
statements of operations, members' equity (deficit) and cash flows for the period February 13, 2007 through December 27, 2007, the period December 29, 2006 through
February 12, 2007, for the year ended December 28, 2006, and for the period March 29, 2005 through December 29, 2005. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on the 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 National CineMedia LLC as of December 27, 2007 and the related
statements of operations, members' equity (deficit) and cash flows for the period February 13, 2007 through December 27, 2007, the period December 29, 2006 through
February 12, 2007, for the year ended December 28, 2006, and for the period March 29, 2005 through December 29, 2005 in conformity with accounting principles generally
accepted in the United States of America.

/s/
Deloitte & Touche LLP

Denver,
Colorado
March 21, 2008

172

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NATIONAL CINEMEDIA, LLC        BALANCE SHEETS        (In millions)

|                                                                                                           |                                                                                | December 27, 2007         |        | December 28, 2006
|---------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------ | ------------------------- | ------ | -----------------
|ASSETS                                                                                                     |                                                                                |                           |        |                  
|CURRENT ASSETS:                                                                                            |                                                                                |                           |        |                  
|                                                                                                           | Cash and cash equivalents                                                      |                           | $      | 7.5              
|                                                                                                           | Receivables, net of allowance of $1.5 million in 2007 and $1.1 million in 2006 |                           |        | 91.6             
|                                                                                                           | Prepaid expenses                                                               |                           |        | 1.9              
|                                                                                                           | Prepaid management fees to managing member                                     |                           |        | 0.5              
|                                                                                                           |                                                                                |                           |        |                  
|                                                                                                           |                                                                                | Total current assets      |        |                  
|PROPERTY AND EQUIPMENT, net of accumulated depreciation of $17.3 million in 2007 and $12.7 million in 2006 |                                                                                |                           | 22.2   |                  
|OTHER ASSETS:                                                                                              |                                                                                |                           |        |                  
|                                                                                                           | Debt issuance costs, net                                                       |                           |        | 13.0             
|                                                                                                           | Investment in affiliate                                                        |                           |        | 7.0              
|                                                                                                           | Restricted cash                                                                |                           |        | 0.3              
|                                                                                                           | Other assets                                                                   |                           |        | 0.2              
|                                                                                                           |                                                                                |                           |        |                  
|                                                                                                           |                                                                                | Total other assets        |        |                  
|                                                                                                           |                                                                                |                           |        |                  
|TOTAL                                                                                                      |                                                                                | $                         | 144.2  |                  
|                                                                                                           |                                                                                |                           |        |                  
|LIABILITIES AND STOCKHOLDERS' EQUITY                                                                       |                                                                                |                           |        |                  
|CURRENT LIABILITIES:                                                                                       |                                                                                |                           |        |                  
|                                                                                                           | Accounts payable                                                               |                           | $      | 6.6              
|                                                                                                           | Amounts due to founding members                                                |                           |        | 15.8             
|                                                                                                           | Amounts due to managing member                                                 |                           |        | 16.7             
|                                                                                                           | Accrued payroll and related expenses                                           |                           |        | 7.2              
|                                                                                                           | Accrued expenses                                                               |                           |        | 10.0             
|                                                                                                           | Deferred revenue                                                               |                           |        | 3.3              
|                                                                                                           |                                                                                |                           |        |                  
|                                                                                                           |                                                                                | Total current liabilities |        |                  
|OTHER LIABILITIES:                                                                                         |                                                                                |                           |        |                  
|                                                                                                           | Unit option plan payable                                                       |                           |        |                 
|                                                                                                           | Interest rate swap agreements and other liabilities                            |                           |        | 14.4             
|                                                                                                           | Borrowings                                                                     |                           |        | 784.0            
|                                                                                                           |                                                                                |                           |        |                  
|                                                                                                           |                                                                                | Total other liabilities   |        |                  
|                                                                                                           |                                                                                |                           |        |                  
|                                                                                                           |                                                                                | Total liabilities         |        |                  
|                                                                                                           |                                                                                |                           |        |                  
|COMMITMENTS AND CONTINGENCIES (NOTE 10)                                                                    |                                                                                |                           |        |                  
|MEMBERS' EQUITY (DEFICIT)                                                                                  |                                                                                |                           | (713.8 | )                
|                                                                                                           |                                                                                |                           |        |                  
|TOTAL                                                                                                      |                                                                                | $                         | 144.2  |                  
|                                                                                                           |                                                                                |                           |        |                  

See
accompanying notes to financial statements.

173

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NATIONAL CINEMEDIA, LLC        STATEMENTS OF OPERATIONS        (In millions, except share and per share data)

|                        |                                                                                                   | Period February 13, 2007 through December 27, 2007 |       |       | Period December 29, 2006 through February 12, 2007 |   | Year Ended December 28, 2006 |      | Period March 29, 2005 through December 29, 2005 |      
|----------------------- | ------------------------------------------------------------------------------------------------- | -------------------------------------------------- | ----- | ----- | -------------------------------------------------- | - | ---------------------------- | ---- | ----------------------------------------------- | -----
|REVENUE:                |                                                                                                   |                                                    |       |       |                                                    |   |                              |      |                                                 |      
|                        | Advertising (including revenue from founding members of $40.9 and $0.0 for all remaining periods) |                                                    | $     | 282.7 |                                                    |   | $                            | 20.6 |                                                 | $    
|                        | Administrative feesfounding members                                                              |                                                    |       |      |                                                    |   |                              | 0.1  |                                                 |      
|                        | Meetings and events                                                                               |                                                    |       | 25.4  |                                                    |   |                              | 2.9  |                                                 |      
|                        | Other                                                                                             |                                                    |       | 0.2   |                                                    |   |                              |     |                                                 |      
|                        |                                                                                                   |                                                    |       |       |                                                    |   |                              |      |                                                 |      
|                        |                                                                                                   | Total                                              |       |       | 308.3                                              |   |                              |      | 23.6                                            |      
|                        |                                                                                                   |                                                    |       |       |                                                    |   |                              |      |                                                 |      
|EXPENSES:               |                                                                                                   |                                                    |       |       |                                                    |   |                              |      |                                                 |      
|                        | Advertising operating costs                                                                       |                                                    |       | 9.1   |                                                    |   |                              | 1.1  |                                                 |      
|                        | Meetings and events operating costs                                                               |                                                    |       | 15.4  |                                                    |   |                              | 1.4  |                                                 |      
|                        | Network costs                                                                                     |                                                    |       | 13.3  |                                                    |   |                              | 1.7  |                                                 |      
|                        | Theatre access fees/circuit share costsfounding members                                          |                                                    |       | 41.5  |                                                    |   |                              | 14.4 |                                                 |      
|                        | Selling and marketing costs                                                                       |                                                    |       | 40.9  |                                                    |   |                              | 5.2  |                                                 |      
|                        | Administrative costs                                                                              |                                                    |       | 10.0  |                                                    |   |                              | 2.8  |                                                 |      
|                        | Administrative fee- managing member                                                               |                                                    |       | 9.2   |                                                    |   |                              |     |                                                 |      
|                        | Severance plan costs                                                                              |                                                    |       | 1.5   |                                                    |   |                              | 0.4  |                                                 |      
|                        | Depreciation and amortization                                                                     |                                                    |       | 5.0   |                                                    |   |                              | 0.7  |                                                 |      
|                        | Other costs                                                                                       |                                                    |       | 0.9   |                                                    |   |                              |     |                                                 |      
|                        |                                                                                                   |                                                    |       |       |                                                    |   |                              |      |                                                 |      
|                        |                                                                                                   | Total                                              |       |       | 146.8                                              |   |                              |      | 27.7                                            |      
|                        |                                                                                                   |                                                    |       |       |                                                    |   |                              |      |                                                 |      
|OPERATING INCOME (LOSS) |                                                                                                   |                                                    | 161.5 |       |                                                    |   | (4.1                         | )    |                                                 | (10.0
|Interest Expense, Net   |                                                                                                   |                                                    | 47.8  |       |                                                    |   | 0.1                          |      |                                                 | 0.5  
|                        |                                                                                                   |                                                    |       |       |                                                    |   |                              |      |                                                 |      
|NET INCOME (LOSS)       |                                                                                                   | $                                                  | 113.7 |       |                                                    | $ | (4.2                         | )    | $                                               | (10.5
|                        |                                                                                                   |                                                    |       |       |                                                    |   |                              |      |                                                 |      

See
accompanying notes to financial statements.

174

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NATIONAL CINEMEDIA, LLC        STATEMENTS OF MEMBERS' EQUITY/ (DEFICIT)  AND COMPREHENSIVE INCOME        (In millions, except share data)

|                                                                                                           |                                      | Total                                  |         
|---------------------------------------------------------------------------------------------------------- | ------------------------------------ | -------------------------------------- | --------
|Members' Equity                                                                                            |                                      |                                        |         
|BalanceMarch 29, 2005                                                                                     |                                      |                                        |        
|Issuance of initial units at inception date in exchange for contributed assets, net of liabilities assumed |                                      | $                                      | 0.9     
|Issuance of additional units in exchange for cash                                                          |                                      | $                                      | 7.3     
|Contribution of Severance Plan payments                                                                    |                                      | $                                      | 8.5     
|Net loss                                                                                                   |                                      | $                                      | (6.9    
|                                                                                                           |                                      |                                        |         
|BalanceDecember 29, 2005                                                                                  |                                      | $                                      | 9.8     
|                                                                                                           |                                      |                                        |         
|Capital contribution from Members                                                                          |                                      | $                                      | 0.9     
|Contribution of Severance Plan payments                                                                    |                                      | $                                      | 4.2     
|Distribution to Members                                                                                    |                                      | $                                      | (0.9    
|Net loss                                                                                                   |                                      | $                                      | (10.5   
|                                                                                                           |                                      |                                        |         
|BalanceDecember 28, 2006                                                                                  |                                      | $                                      | 3.5     
|                                                                                                           |                                      |                                        |         
|Contribution of Severance Plan payments                                                                    |                                      | $                                      | 0.4     
|Net loss                                                                                                   |                                      | $                                      | (4.2    
|                                                                                                           |                                      |                                        |         
|BalanceFebruary 12, 2007                                                                                  |                                      | $                                      | (0.3    
|                                                                                                           |                                      |                                        |         
|Members' Equity                                                                                            |                                      |                                        |         
|BalanceFebruary 13, 2007                                                                                  |                                      | $                                      | (0.3    
|Contribution of Severance Plan payments                                                                    |                                      | $                                      | 1.5     
|Capital contribution from managing member                                                                  |                                      | $                                      | 746.1   
|Capital contribution from founding members                                                                 |                                      | $                                      | 11.2    
|Distribution to managing member                                                                            |                                      | $                                      | (53.3   
|Distributions to founding members                                                                          |                                      | $                                      | (1,521.6
|Reclassification of unit option plan                                                                       |                                      | $                                      | 2.3     
|Comprehensive Income:                                                                                      |                                      |                                        |         
|                                                                                                           | Unrealized (loss) on cash flow hedge |                                        | $       
|                                                                                                           | Net income                           |                                        | $       
|                                                                                                           |                                      |                                        |         
|                                                                                                           |                                      | Total Comprehensive Income, net of tax |         
|Share-based compensation expense                                                                           |                                      | $                                      | 1.0     
|                                                                                                           |                                      |                                        |         
|BalanceDecember 27, 2007                                                                                  |                                      | $                                      | (713.8  
|                                                                                                           |                                      |                                        |         

See
accompanying notes to financial statements.

175

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NATIONAL CINEMEDIA, LLC        STATEMENTS OF CASH FLOWS        (In millions)

|                                                                      |                                                                           | Period
February 13,
2007 through
December 27,
2007                                                 |                                                                   |                                                                            |     | Period
December 29,
2006 through
February 12,
2007 |       | Year Ended
December 28,
2006 |       | Period
March 29,
2005 through
December 29,
2005 |    
|--------------------------------------------------------------------- | ------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------- | -------------------------------------------------------------------------- | --- | -------------------------------------------------- | ----- | ---------------------------- | ----- | ----------------------------------------------- | ---
|CASH FLOWS FROM OPERATING ACTIVITIES:                                 |                                                                           |                                                                                                    |                                                                   |                                                                            |     |                                                    |       |                              |       |                                                 |    
|                                                                      | Net income(loss)                                                          |                                                                                                    | $                                                                 | 113.7                                                                      |     |                                                    |       | $                            | (4.2  | )                                               | $  
|                                                                      |                                                                           | Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |                                                                   |                                                                            |     |                                                    |       |                              |       |                                                 |    
|                                                                      |                                                                           |                                                                                                    | Depreciation and amortization                                     |                                                                            |     | 5.0                                                |       |                              |       |                                                 | 0.7
|                                                                      |                                                                           |                                                                                                    | Non-cash severance plan and share-based compensation              |                                                                            |     | 2.5                                                |       |                              |       |                                                 | 0.7
|                                                                      |                                                                           |                                                                                                    | Amortization of debt issuance costs and loss on repayment of debt |                                                                            |     | 1.7                                                |       |                              |       |                                                 |   
|                                                                      |                                                                           |                                                                                                    | Changes in operating assets and liabilities:                      |                                                                            |     |                                                    |       |                              |       |                                                 |    
|                                                                      |                                                                           |                                                                                                    |                                                                   | (Increase) decrease in receivablesnet                                     |     |                                                    | (40.3 | )                            |       |                                                 |    
|                                                                      |                                                                           |                                                                                                    |                                                                   | Increase (decrease) in accounts payable and accrued expenses               |     |                                                    | 10.4  |                              |       |                                                 |    
|                                                                      |                                                                           |                                                                                                    |                                                                   | (Decrease) increase in amounts due to founding members and managing member |     |                                                    | (51.1 | )                            |       |                                                 |    
|                                                                      |                                                                           |                                                                                                    |                                                                   | Payment of severance plan costs                                            |     |                                                    |      |                              |       |                                                 |    
|                                                                      |                                                                           |                                                                                                    |                                                                   | Increase (decrease)in other                                                |     |                                                    | (1.3  | )                            |       |                                                 |    
|                                                                      |                                                                           |                                                                                                    |                                                                   |                                                                            |     |                                                    |       |                              |       |                                                 |    
|                                                                      |                                                                           |                                                                                                    |                                                                   | Net cash provided by operating activities                                  |     |                                                    | 40.6  |                              |       |                                                 |    
|                                                                      |                                                                           |                                                                                                    |                                                                   |                                                                            |     |                                                    |       |                              |       |                                                 |    
|CASH FLOWS FROM INVESTING ACTIVITIES:                                 |                                                                           |                                                                                                    |                                                                   |                                                                            |     |                                                    |       |                              |       |                                                 |    
|                                                                      | Purchases of property and equipment                                       |                                                                                                    |                                                                   | (13.8                                                                      | )   |                                                    |       |                              | (0.5  | )                                               |    
|                                                                      | Investment in restricted cash                                             |                                                                                                    |                                                                   | (0.3                                                                       | )   |                                                    |       |                              |      |                                                 |    
|                                                                      | Increase in investment in affiliate                                       |                                                                                                    |                                                                   | (7.0                                                                       | )   |                                                    |       |                              |      |                                                 |    
|                                                                      |                                                                           |                                                                                                    |                                                                   |                                                                            |     |                                                    |       |                              |       |                                                 |    
|                                                                      |                                                                           |                                                                                                    |                                                                   | Net cash (used in) provided by investing activities                        |     |                                                    | (21.1 | )                            |       |                                                 |    
|                                                                      |                                                                           |                                                                                                    |                                                                   |                                                                            |     |                                                    |       |                              |       |                                                 |    
|CASH FLOWS FROM FINANCING ACTIVITIES:                                 |                                                                           |                                                                                                    |                                                                   |                                                                            |     |                                                    |       |                              |       |                                                 |    
|                                                                      | Reimbursement (payment) of offering costs and fees                        |                                                                                                    |                                                                   | 4.7                                                                        |     |                                                    |       |                              | (0.1  | )                                               |    
|                                                                      | Proceeds of short-term borrowings from founding members                   |                                                                                                    |                                                                   |                                                                           |     |                                                    |       |                              |      |                                                 |    
|                                                                      | Repayments of short-term borrowings to founding members                   |                                                                                                    |                                                                   |                                                                           |     |                                                    |       |                              |      |                                                 |    
|                                                                      | Proceeds from borrowings                                                  |                                                                                                    |                                                                   | 924.0                                                                      |     |                                                    |       |                              | 13.0  |                                                 |    
|                                                                      | Repayments of borrowings                                                  |                                                                                                    |                                                                   | (150.0                                                                     | )   |                                                    |       |                              | (13.0 | )                                               |    
|                                                                      | Payment of debt issuance costs                                            |                                                                                                    |                                                                   | (14.6                                                                      | )   |                                                    |       |                              |      |                                                 |    
|                                                                      | Proceeds from issuance of units                                           |                                                                                                    |                                                                   |                                                                           |     |                                                    |       |                              |      |                                                 |    
|                                                                      | Contributions from managing member                                        |                                                                                                    |                                                                   | 746.1                                                                      |     |                                                    |       |                              |      |                                                 |    
|                                                                      | Proceeds from founding member contributions                               |                                                                                                    |                                                                   | 7.5                                                                        |     |                                                    |       |                              |      |                                                 |    
|                                                                      | Distribution to founding members and managing member                      |                                                                                                    |                                                                   | (1,538.0                                                                   | )   |                                                    |       |                              |      |                                                 |    
|                                                                      |                                                                           |                                                                                                    |                                                                   |                                                                            |     |                                                    |       |                              |       |                                                 |    
|                                                                      |                                                                           |                                                                                                    |                                                                   | Net cash (used in) provided by financing activities                        |     |                                                    | (20.3 | )                            |       |                                                 |    
|                                                                      |                                                                           |                                                                                                    |                                                                   |                                                                            |     |                                                    |       |                              |       |                                                 |    
|(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS                      |                                                                           |                                                                                                    | (0.8                                                              | )                                                                          |     |                                                    |       | 1.6                          |       |                                                 | 6.7
|CASH AND CASH EQUIVALENTS:                                            |                                                                           |                                                                                                    |                                                                   |                                                                            |     |                                                    |       |                              |       |                                                 |    
|                                                                      |                                                                           | Beginning of period                                                                                |                                                                   |                                                                            | 8.3 |                                                    |       |                              |       | 6.7                                             |    
|                                                                      |                                                                           |                                                                                                    |                                                                   |                                                                            |     |                                                    |       |                              |       |                                                 |    
|                                                                      |                                                                           | End of period                                                                                      |                                                                   | $                                                                          | 7.5 |                                                    |       |                              | $     | 8.3                                             |    
|                                                                      |                                                                           |                                                                                                    |                                                                   |                                                                            |     |                                                    |       |                              |       |                                                 |    
|Supplemental disclosure of non-cash financing and investing activity: |                                                                           |                                                                                                    |                                                                   |                                                                            |     |                                                    |       |                              |       |                                                 |    
|                                                                      | Contribution for severance plan payments                                  |                                                                                                    | $                                                                 | 1.5                                                                        |     |                                                    |       | $                            | 0.4   |                                                 | $  
|                                                                      | Increase in distributions payable to founding members and managing member |                                                                                                    | $                                                                 | 37.0                                                                       |     |                                                    |       |                              |      |                                                 |    
|                                                                      | Contributions from members collected after period end                     |                                                                                                    | $                                                                 | 3.7                                                                        |     |                                                    |       |                              |      |                                                 |    
|                                                                      | Increase in property and equipment not requiring cash in the period       |                                                                                                    | $                                                                 | 0.6                                                                        |     |                                                    |       |                              |      |                                                 | $  
|                                                                      | Increase in deferred offering costs                                       |                                                                                                    |                                                                   |                                                                           |     |                                                    |       |                              |      |                                                 | $  
|                                                                      | Unit option plan reclassified to equity                                   |                                                                                                    | $                                                                 | 2.3                                                                        |     |                                                    |       |                              |      |                                                 |    
|Supplemental disclosure of cash flow information:                     |                                                                           |                                                                                                    |                                                                   |                                                                            |     |                                                    |       |                              |       |                                                 |    
|                                                                      | Cash paid for interest                                                    |                                                                                                    | $                                                                 | 44.0                                                                       |     |                                                    |       | $                            | 0.1   |                                                 | $  

See accompanying notes to financial statements.

176

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1. THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of Business

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 that allows NCM to distribute advertising, business meeting, and Fathom event services 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 theater circuits under Network Affiliate Agreements which expire at various
dates.

NCM LLC
was formed through the combination of the operations of National Cinema Network, Inc. ("NCN"), a wholly owned subsidiary of AMCE, and Regal CineMedia Corporation
("RCM"), a wholly owned subsidiary of Regal. In accordance with the Contribution and Unit Holders Agreement entered into on that date by NCM LLC, NCN, and RCM, 16,387,670 units were issued to
NCN and 27,903,330 units were issued to Regal CineMedia Holdings, LLC ("RCM Holdings") in exchange for the contribution of $0.9 million of cash and other assets, net of liabilities
assumed. All assets contributed to and liabilities assumed by NCM LLC were recorded on NCM LLC's records in the amounts as reflected on the Members' historic accounting records, based on
the application of accounting principles for the formation of a joint venture under Emerging Issues Task Force ("EITF") 98-4,Accounting by a Joint Venture
for Businesses Received at its Formation. Although legally structured as a limited liability company, NCM LLC was considered a joint venture for accounting purposes
given the
joint control provisions of the operating agreement among the members, consistent with Accounting Principles Board ("APB") Opinion No. 18,The Equity Method of
Accounting for Investments in Common Stock.

On
July 15, 2005, in exchange for a cash contribution of $7.3 million, 11,559,951 units were issued to Cinemark Media, Inc. ("Cinemark Media"), a wholly owned
subsidiary of Cinemark USA, Inc.

As
the result of final adjustments to the valuations attributed to the contributed assets and liabilities resulting from AMCE's merger on December 23, 2004, with Marquee
Holdings Inc., NCN contributed additional cash to NCM LLC during 2006, which was then distributed to RCM Holdings and Cinemark Media, thus having no impact on the assets and liabilities
of NCM LLC.

On
February 13, 2007, National CineMedia, Inc. ("NCM, Inc." or "managing member"), 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, closed its initial public offering ("IPO"). NCM, Inc. used the net proceeds from the IPO to purchase a 44.8% interest
in NCM LLC, paying NCM LLC $746.1 million, which included reimbursement to NCM LLC for expenses it advanced related to the NCM, Inc. IPO and paying the founding
members $78.5 million for a portion of the NCM LLC units owned by them. NCM LLC paid $686.3 million of the funds received from NCM, Inc. to the founding members as
consideration for their agreement to modify the then-existing ESAs. Proceeds received by NCM LLC from NCM, Inc. of $59.8 million, together with $709.7 million
net proceeds from NCM LLC's new senior secured credit facility (see Note 7) entered into concurrently with the completion of NCM, Inc.'s IPO were used to redeem
$769.5 million in NCM LLC preferred units held by the founding members. The preferred units were created immediately prior to the NCM, Inc. IPO in a non-cash
recapitalization of each membership unit into one common unit and one preferred unit. Immediately prior to this non-cash recapitalization, the existing common units and employee unit
options (see Note 8) were split on a 44,291-to-1 basis. All unit and per unit amounts in these financial statements reflect the impact of this split. At
December 27, 2007, NCM LLC had

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1. THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

93,850,951
membership units outstanding, of which 42,000,000 (44.8%) were owned by NCM, Inc., 21,230,712 (22.6%) were owned by RCM, 17,474,890 (18.6%) were owned by AMC, and 13,145,349 (14.0%)
were owned by Cinemark.

In
connection with the completion of the NCM, Inc.'s IPO, NCM, Inc. and the founding members entered into a third amended and restated limited liability company operating
agreement of NCM LLC ("LLC Operating Agreement"). Under the LLC Operating Agreement, NCM, Inc. became a member and the sole manager of NCM LLC. As the sole manager,
NCM, Inc. is able to control all of the day to day business affairs and decision-making of NCM LLC without the approval of any other member. NCM, Inc. cannot be removed as manager
of NCM LLC. NCM LLC entered into a management services agreement with NCM, Inc. pursuant to which NCM, Inc. agrees to provide certain specific management services to
NCM LLC, including those services typically provided by the individuals serving in 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 technology and 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 (see Note 6). NCM LLC
also provides administrative and support services to NCM, Inc. such as office facilities, equipment, supplies, payroll and accounting and financial reporting. The management services agreement
also provides that NCM LLC employees may participate in the NCM, Inc. equity incentive plan (see Note 8). NCM LLC will indemnify NCM, Inc. for any losses arising
from NCM, Inc.'s performance under the management services agreement, except that NCM, Inc. will indemnify NCM LLC for any losses caused by NCM, Inc.'s willful misconduct
or gross negligence.

Under
the amended and restated ESAs with the founding members, subject to limited exceptions, NCM LLC is the exclusive provider of advertising services to the founding members for
a 30-year term (with a five-year right of first refusal commencing one year before the end of the term) and meetings and event services to the founding members for an initial
five-year term, with an automatic five-year renewal providing certain financial tests are met. In exchange for the right to provide these services to the founding members,
NCM LLC is required to pay to the founding members a theatre access fee which is a specified calculation based on the attendance at the founding member theatres and the number of digital
screens in founding member theatres. Prior to the NCM, Inc. IPO, NCM LLC paid to the founding members a percentage of NCM LLC's advertising revenue as advertising circuit share.
Upon the completion of the NCM, Inc. IPO, the founding members assigned to NCM LLC all "legacy contracts", which are generally contracts for advertising sold by the founding members
prior to the formation of NCM LLC but which were unfulfilled at the date of formation. In addition, the founding members made additional time available for sale by NCM LLC, subject to a
first right to purchase the time, if needed, by the founding members to fulfill advertising obligations with their in-theatre beverage concessionaries. NCM, Inc. also entered into
employment agreements with five executive officers to carry out obligations entered into pursuant to a management services agreement between NCM, Inc. and NCM LLC.

Basis of Presentation

The financial statements contained herein were prepared in accordance with accounting principles generally accepted in the United States of America. The results
of operations for the period ended December 27, 2007 are presented in two periods, reflecting operations prior to and subsequent to the NCM, Inc. IPO. The period from December 29,
2006 through February 12, 2007 is referred to as the "2007 pre-IPO period". The period from February 13, 2007 through December 27, 2007 is referred to as the "2007
post-IPO period". Separate periods have been presented because there were significant

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1. THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

changes
at the time of the IPO of NCM, Inc. due to the ESA modifications and related expenses thereunder, and significant changes to revenue arrangements and contracts with the founding
members.

The
financial statements for both the 2007 pre-IPO period and 2007 post-IPO period give effect to allocations of revenues and expenses made using relative
percentages of founding member attendance or days in each period, discrete events and other methods management considered to be a reasonable reflection of the results for such periods.

The
Company has established various accounting policies that govern the application of accounting principles generally accepted in the United States of America in the preparation and
presentation of NCM LLC's financial statements. Certain accounting policies involve significant judgments, assumptions and estimates by management that have a material impact on the carrying
value of certain assets and liabilities, which management considers critical accounting policies. The judgments, assumptions and estimates used by management are based on historical experience,
knowledge of the accounts and other factors, which are believed to be reasonable under the circumstances and are evaluated on an ongoing basis. Because of the nature of the judgments and assumptions
made by management, actual results could differ from these judgments and estimates, which could have a material impact on the carrying values of assets and liabilities and the results of operations of
NCM LLC. As a result of the various related-party agreements discussed above and in Note 6, the operating results as presented are not necessarily indicative of the results that would
have occurred if all agreements were with non-related third parties.

The
founding members received all of the proceeds NCM LLC received from NCM, Inc. at the date of NCM, Inc.'s IPO and the related issuance of debt, except for amounts
needed to pay out-of-pocket costs of the financings and other expenses, and $10.0 million to repay outstanding amounts under NCM LLC's then-existing
revolving line of credit agreement. In conformity with accounting guidance of Securities and Exchange Commission concerning monetary consideration paid to promoters, such as the founding members, in
exchange for property conveyed by the promoters and because the founding members had no cost basis in the ESAs, all payments to the founding members with the proceeds of the managing member's IPO and
related debt issuance, amounting to approximately $1.456 billion, have been accounted for as distributions, except for the payments to liquidate accounts payable to the founding members arising
from the ESAs.

Summary of 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.

Revenue RecognitionAdvertising revenue and administrative fees from legacy contracts are 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, 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. Meetings and events revenue is recognized in the period in which the event is held. NCM LLC considers estimates
regarding make-good provisions in advertising revenue to be a critical accounting policy that requires complicated mathematical calculations used in the preparation of its financial
statements. Legacy contracts are advertising contracts with the founding members prior to the formation of NCM LLC, which were not assigned to NCM LLC until the NCM, Inc. IPO was
completed. Administrative fees earned by the Company prior to the NCM, Inc. IPO for its services in

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1. THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

fulfilling
the legacy contracts were based on a percentage of legacy contract revenue (32% during the 2007 pre-IPO period and 2006, and 35% during 2005, respectively).

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 theatres circuits under the "Network Affiliate Agreements."

Meeting
and event 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.

In
the 2007 pre-IPO period and prior periods, circuit share costs were fees payable to the founding members for the right to exhibit advertisements within the theatres, based
on a percentage of advertising revenue. In the 2007 post-IPO period, under the amended and restated ESAs, a payment to the founding members of a theatre access fee, in lieu of circuit
share expense, comprised of a payment per theatre attendee and a payment per digital screen, both of which escalate over time, is reflected in expense.

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 relate primarily to the advertising business and to a lesser extent to the meetings and events business.

LeasesThe Company leases various office facilities under operating leases with terms ranging from
month-to-month to 8 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. Periodically these 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 27, 2007, other non-current assets included restricted cash of $0.3, which is a
letter of credit used as a lease deposit on NCM LLC's New York office.

InvestmentsNCM LLC considers estimates regarding fair value of the Company's investment in the preferred stock of
IdeaCast, Inc. to be a critical accounting policy that requires significant judgments, assumptions and estimates used in the preparation of its financial statements. Refer to Note 5,
Investment in Affiliate.

ReceivablesTrade accounts receivable are uncollateralized and represent a large number of geographically dispersed debtors.
Refer to Note 2, Receivables. Bad debts are provided for using the allowance for doubtful accounts method based on historical experience and management's evaluation of outstanding receivables
and delinquencies in account balances past customary terms at the end of the period. Receivables are written off when management determines amounts are uncollectible. Estimating the amount of
allowance for doubtful accounts requires significant judgment and the use of estimates related to the amount and timing of estimated losses based on historical loss experience, consideration of
current economic trends and conditions and debtor-specific factors, all of which may be susceptible to significant change. To the extent actual outcomes differ from management estimates, additional

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1. THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

provision
for bad debt could be required that could adversely affect earnings or financial position in future periods.

Property and EquipmentProperty and equipment is stated at cost, net of accumulated depreciation or amortization. Refer to
Note 2, Property and Equipment. 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


The
Company follows the Accounting Standards Executive Committee Statement of Position ("SOP") 98-1,Accounting for the Costs of Computer Software
Developed or Obtained for Internal Use.This SOP requires the capitalization of certain costs incurred in developing or obtaining software for internal use. The majority of the
software costs, which are included in equipment, are depreciated over three to five years. As of December 27, 2007 and December 28, 2006, NCM LLC had a net book value of
$9.3 million and $6.1 million, respectively, of capitalized software costs. The Company recorded approximately $2.8 million, $0.3 million, $1.9 million and
$0.6 million for the 2007 post-IPO period, 2007 pre-IPO period, year ended December 28, 2006 and the period ended December 29, 2005, respectively, in
depreciation expense.

Construction
in progress includes costs relating to the affiliate installations. Assets under construction are not depreciated until placed into service.

NCM LLC's
long-lived assets consist principally of property, plant and equipment. It is the Company's policy to assess impairment of long-lived assets
pursuant with SFAS No. 144,Accounting for the Impairment or Disposal of Long-Lived Assetsannually. This includes determining if
certain triggering events have occurred, including significant decreases in the market value of certain assets, significant changes in the manner in which an asset is used or its physical condition,
significant changes in the legal climate or business climate that could affect the value of an asset, or current period or continuing operating or cash flow losses or projections that demonstrate
continuing losses associated with certain assets used for the purpose of producing revenue that might be an indicator of impairment. When the Company performs the SFAS No. 144 impairment tests,
the Company identifies the appropriate asset group as the total digital system, which includes the grouping of all of the assets required to provide service to our customers. The Company bases this
conclusion of asset grouping on the revenue dependency, operating interdependency and shared costs to operate the Company's network. Thus far, none of the above triggering events has resulted in any
impairment charges.

Amounts Due to/from Founding MembersIn the 2007 pre-IPO period and prior periods, amounts due to/from founding
members included circuit share costs and cost reimbursements, net of the administrative fees earned on Legacy contracts. Amounts due to/from founding members in the 2007 post-IPO period
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 meetings and events plus any amounts
outstanding under other contractually obligated payments. Payments to or received from the founding members against outstanding balances are made monthly.

181

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1. THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Amounts Due to/from Managing MemberIn the 2007 post-IPO period, amounts due to/from managing member includes
amounts due under the LLC Operating Agreement and other contractually obligated payments. Payments to or received from the managing member against outstanding balances are made periodically.

Network Affiliate AgreementsNetwork affiliate agreements were contributed at NCM LLC's formation at the net book value
of the founding members and are amortized on a straight-line basis over the remaining life of the agreement. These agreements require payment to the affiliate of a percentage of the
advertising revenue associated with the advertisements played in affiliate theatres, and also specify minimum payments that must be made. Amortization expense related to the network affiliate
agreements was $0.2 million, $0.1 million, $0.8 million and $1.2 million for the 2007 post-IPO period, 2007 pre-IPO period, year ended
December 28, 2006 and the period ended December 29, 2005, respectively.

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, no provision or liability for income taxes is included in the financial statements.

Interest Rate SwapNCM LLC has entered into interest rate swap agreements which qualify for and have been designated as
a cash flow hedge against interest rate exposure on $550.0 million of the variable rate debt obligations under the senior secured credit facility in accordance with SFAS No. 133, Accounting for Derivative Instruments
and Hedging Activities,as amended by SFAS No. 138. The interest rate swap agreements have the effect of
converting a portion of the variable rate debt to a fixed rate of 6.734%. Both at inception and on an on-going basis the Company performs an effectiveness test using the hypothetical
derivative method. The fair value of the interest rate swap is recorded on the Company's balance sheet as an asset or liability with the change in fair value recorded in other comprehensive income
since the instruments were determined to be perfectly effective at December 27, 2007. There were no amounts reclassified into current earnings due to ineffectiveness during the periods
presented. 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.

(in millions)Fair value of swap at inception

$
Change in fair valueinterest rate changes


(14.4
)Fair value of swap (liability) at December 27, 2007

$
(14.4
)


The
Company will not use financial instruments for trading or other speculative purposes, nor will the Company be a party to any leveraged derivative instrument. The use of derivative
financial instruments is monitored through regular communication with senior management. The Company will be exposed to credit loss in the event of nonperformance by the counter parties. This credit
risk is minimized by dealing with a group of major financial institutions with whom the Company has other financial relationships. The Company does not anticipate nonperformance by these counter
parties.

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1. THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Debt Issuance CostsIn relation to the issuance of long-term debt discussed in
Note 7, Borrowings, the Company has a balance of $13.0 million and $0.2 million in deferred financing costs as of December 27, 2007 and December 28, 2006,
respectively. These debt issuance costs are being amortized over the terms of the underlying obligation and are included in interest expense. For the 2007 post-IPO period, 2007
pre-IPO period, year ended December 28, 2006 and the period ended December 29, 2005 the Company amortized $1.6 million, $0.0 million, $0.0 million and
$0.0 million of debt issuance costs, respectively.

Fair Value of Financial InstrumentsThe carrying amounts of cash and cash equivalents, accounts payable, accrued expenses and
the credit facility as reported in the Company's balance sheets approximate their fair values due to their short maturity or floating rate terms, as applicable. The carrying amount and fair value of
the interest rate swap agreement are the same since the Company recorded the fair value on the balance sheet.

Share-Based CompensationStock-based employee compensation is accounted for at fair value under SFAS No. 123(R), Share-Based Payment. The Company
adopted SFAS No. 123(R) on December 30, 2005 prospectively for new equity based grants, as there were no
equity based grants prior to the date of adoption. The determination of fair value of options requires that management make complex estimates and judgments. The Company utilizes the Black-Scholes
option price model to estimate the fair value of the options, which model requires estimates of various factors used, including expected life of options, risk free interest rate, expected volatility
and dividend yield. Refer to Note 8, Share-Based Compensation.

EstimatesThe preparation of financial statements in conformity with accounting principles generally accepted in the United
States of America 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, deferred revenue, equity-based compensation and the
valuation of investments in absence of market data. Actual results could differ from those estimates.

Recent Accounting Pronouncements

During September 2006, the Financial Accounting Standards Board ("FASB") issued SFAS No. 157,Fair Value
Measurements. SFAS No. 157 establishes a framework for measuring fair value in GAAP, and expands disclosures about fair value measurements. SFAS No. 157 is
effective for fiscal years beginning after November 15, 2007. The Company expects its investment in IdeaCast, Inc. (see Note 5) to be measured for fair value based on unobservable
inputs (level 3) and expects the impact that SFAS No. 157 will have on its results of operations, financial condition and liquidity will not be significant.

During
February 2007, the FASB issued SFAS No. 159,The Fair Value Option for Financial Assets and Financial LiabilitiesIncluding an Amendment
of FASB Statement No. 115. This statement permits entities to choose to measure many financial instruments and certain other items at fair value and report unrealized
gains and losses on these investments in earnings. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007. The Company expects the impact that SFAS No. 159
will have on its results of operations, financial condition and liquidity will not be significant.

The
Company has considered all other recently issued accounting pronouncements and do not believe the adoption of such pronouncements will have a material impact on the financial
statements.

183

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2. RECEIVABLES

Receivables consisted of the following, in millions:

As of
December 27,
2007

As of
December 28,
2006Trade accounts

$
92.2

$
64.8Other


0.9


0.2Less allowance for doubtful accounts


(1.5
)

(1.1
)Total

$
91.6

$
63.9


At
December 27, 2007, there is one individual account representing approximately 15% of the outstanding gross receivable balance.

The
changes in NCM's allowance for doubtful accounts are as follows, in millions:

|                                 |                                | Period
February 13,
2007 through
December 27,
2007 |   |      |   | Period
December 29,
2006 through
February 12,
2007 |  | Year Ended
December 28,
2006 |      | Period
March 29,
2005 through
December 29,
2005
|-------------------------------- | ------------------------------ | -------------------------------------------------- | - | ---- | - | -------------------------------------------------- |  | ---------------------------- | ---- | -----------------------------------------------
|ALLOWANCE FOR DOUBTFUL ACCOUNTS: |                                |                                                    |   |      |   |                                                    |  |                              |      |                                                
|                                 | Balance at beginning of period |                                                    | $ | 1.1  |   |                                                    |  | $                            | 1.1  |                                                
|                                 | Provision for bad debt         |                                                    |   | 1.0  |   |                                                    |  |                              | 0.1  |                                                
|                                 | Write-offs, net                |                                                    |   | (0.6 | ) |                                                    |  |                              | (0.1 | )                                              
|                                 |                                |                                                    |   |      |   |                                                    |  |                              |      |                                                
|                                 | Balance at end of period       |                                                    | $ | 1.5  |   |                                                    |  | $                            | 1.1  |                                                
|                                 |                                |                                                    |   |      |   |                                                    |  |                              |      |                                                

3. PROPERTY AND EQUIPMENT(in millions)

As of
December 27,
2007

As of
December 28,
2006Equipment

$
37.3

$
24.1Leasehold Improvements


1.4


1.2Less accumulated depreciation


(17.3
)

(12.7
)Subtotal


21.4


12.6Construction in Progress


0.8


Total property and equipment

$
22.2

$
12.6


For
the 2007 post-IPO period, 2007 pre-IPO period, year ended December 28, 2006 and the period ended December 29, 2005 the Company recorded
depreciation of $4.8 million, $0.6 million, $4.0 million and $1.8 million, respectively.

184

---



4. ACCRUED EXPENSES(in millions)

As of
December 27,
2007

As of
December 28,
2006Makegood Reserve

$
4.0

$
2.6Accrued Interest


2.3


0.1Accrued beverage concessionaire unit cost


2.4


1.1Other accrued expenses


1.3


1.7Total accrued expenses

$
10.0

$
5.5


5. INVESTMENT IN AFFILIATE

On June 26, 2007, NCM LLC invested $5.0 million of cash in 6% convertible preferred stock of IdeaCast, Inc., a provider of advertising
to fitness centers and health clubs throughout the United States. On September 27, 2007, NCM LLC invested an additional $2.0 million of cash in 6% convertible preferred stock of
IdeaCast, Inc. The amount of IdeaCast, Inc. 6% convertible preferred stock owned by NCM LLC at December 27, 2007 is convertible into a minority interest of
IdeaCast, Inc.'s common stock. The preferred stock is accounted for as an investment in debt securities per SFAS No. 115,Accounting for Certain Investments in
Debt and Equity Securities,due to the provisions in the agreement, which gave the Company a mandatory redemption right five years after the date of investment. The securities
are not held for trading purposes and are therefore by default and definition, classified as available-for-sale even though it is not the Company's intent to sell these
securities. There are no marketplace indicators of value that management can use to determine the fair value of the investment in IdeaCast. Management concluded that the estimated fair value of the
securities at December 27, 2007 had not changed from their cost based on quantitative analysis which considered IdeaCast's potential future operating results under a variety of conditions and
consideration of various qualitative factors. Management's assessment considered that there have been no significant changes in the prospects of IdeaCast's business since the original investment and
the decision to make a follow-on investment. As a result, there were no gains or losses recorded in other comprehensive income for the investment in IdeaCast, Inc. for the 2007
post-IPO period.

During
September 2006, the FASB issued SFAS No. 157,Fair Value Measurements. SFAS No. 157 establishes a framework for
measuring fair value in GAAP, and expands disclosures about fair value measurements. SFAS No. 157 is effective for us as of fiscal 2008. The Company expects the investment in
IdeaCast, Inc. to be measured for fair value based on unobservable inputs (level 3) and expects the impact that SFAS No. 157 will have on its results of operations, financial
condition and liquidity will not be significant.

A
further agreement was entered into whereby, at the option of NCM LLC during the period June 30, 2008 through December 2009, a further investment may be made by
NCM LLC to purchase common
stock of IdeaCast, Inc. at a predetermined valuation formula, to bring NCM LLC's total investment to approximately 50.1% of the capital stock of IdeaCast, Inc. (on a fully diluted
basis assuming conversion of all of the 6% convertible preferred stock). The option to purchase common stock of IdeaCast, Inc. has not yet been exercised. The companies also entered into a
shared services agreement which allows for cross-marketing and certain services to be provided between the companies at rates which will be determined on an arms length basis. The services provided by
IdeaCast for the 2007 post-IPO period were not material to NCM.

185

---



6. RELATED-PARTY TRANSACTIONS

2007 Pre-IPO Period, 2006 and 2005

At the formation of NCM LLC and upon the admission of Cinemark as a founding member, circuit share arrangements and administrative services fee
arrangements were in place with each founding member. Circuit share cost and administrative fee revenue by founding member were as follows (in millions):

|         |  | Pre-IPO
Period December 29, 2006
through February 12, 2007 |      | Year Ended
December 28, 2006 |   | Period March 29, 2005
through December 29, 2005
|-------- |  | ---------------------------------------------------------- | ---- | ---------------------------- | - | -----------------------------------------------
|
|AMC      |  | $                                                          | 4.1  |                              | $ |                                               
|Cinemark |  |                                                            | 3.7  |                              |   | 0.1                                            
|Regal    |  |                                                            | 6.6  |                              |   |                                               
|         |  |                                                            |      |                              |   |                                                
|Total    |  | $                                                          | 14.4 |                              | $ | 0.1                                            
|         |  |                                                            |      |                              |   |                                                

NCM LLC's
administrative services fee was earned at a rate of 32% of the $0.3 million and $16.8 million of legacy contract value for the 2007 pre-IPO
period and year ended December 28, 2006, and at a rate of 35% of the $88.0 million of legacy contract value for the period ended December 29, 2005, respectively. At the closing of
the NCM, Inc. IPO, the founding members entered into amended and restated ESAs which, among other things, amended the circuit share structure in favor of the theatre access fee structure and
assigned all remaining legacy contracts to NCM LLC.

Pursuant
to the agreements entered into at the completion of the NCM, Inc. IPO, amounts owed to the founding members through the date of the NCM, Inc. IPO of
$50.8 million were paid by NCM LLC on March 15, 2007.

Amounts
due to/from founding members at December 28, 2006, were comprised of the following (in millions):

|                       |       | AMC |      | Cinemark |   | Regal |      | Total |     
|---------------------- | ----- | --- | ---- | -------- | - | ----- | ---- | ----- | ----
|Circuit share payments |       | $   | 15.2 |          | $ | 14.0  |      | $     | 24.8
|Cost reimbursement     |       |     | 0.1  |          |   |      |      |       | 0.4 
|Administrative fee     |       |     |     |          |   | (0.1  | )    |       | (0.5
|                       |       |     |      |          |   |       |      |       |     
|                       | Total |     | $    | 15.3     |   | $     | 13.9 |       | $   
|                       |       |     |      |          |   |       |      |       |     

2007 Post-IPO Period

Pursuant to the amended and restated ESAs in place since the close of the NCM, Inc. IPO, NCM LLC makes monthly theatre access fee payments to the
founding members, comprised of a payment per theatre attendee and a payment per digital screen of the founding member theatres. The theatre access fee replaced the circuit share expenses. Also, under
the amended and restated ESAs, the founding members can purchase advertising time for the display of up to 90 seconds of on-screen advertising under their beverage concessionaire
agreements at a specified 30 second equivalent cost per thousand ("CPM") impressions. The total theatre access fee to the founding members for the 2007 post-IPO period is
$41.5 million. The total revenue related to the beverage concessionaire agreements for the 2007 post-IPO period is $40.9 million. In addition, pursuant to the amended and
restated ESAs, NCM LLC makes monthly payments to the founding members for use of their screens and theatres for

186

---



6. RELATED-PARTY TRANSACTIONS (Continued)

the
meetings and events business. These payments are at agreed upon rates based on the nature of the event. Payments to the founding members for these events totaled $3.8 million for the 2007
post-IPO period. Also, pursuant to the terms of the NCM LLC Operating Agreement in place since the close of the NCM, Inc. IPO, NCM LLC is required to made mandatory
distributions to the members of available cash, as defined in the NCM LLC Operating Agreement, on a quarterly basis. The available cash distribution to the founding members of NCM LLC
for post-IPO period is $65.8 million, of which $20.5 million is included in the due to/from founding members at December 27, 2007.

On
January 26, 2006, AMC acquired the 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, commits AMC to cause the theatres it acquired from Loews to participate in the exhibitor services agreements beginning on June 1, 2008.
In accordance with the Loews screen integration agreement, AMC pays us amounts based on an agreed-upon calculation to reflect amounts that approximate what NCM LLC would have
generated if NCM LLC were able to sell on-screen advertising in the Loews theatre chain on an exclusive basis. These Loews payments are made on a quarterly basis in arrears through
May 31, 2008 in accordance with certain run-out provisions. For the 2007 post-IPO period the Loews payment is $11.2 million, of which $3.7 million is
included in the due to/from founding members at December 27, 2007. The Loews payment is recorded directly to NCM LLC's members' equity account.

Amounts
due to/from founding members at December 27, 2007 were comprised of the following (in millions):

|                                              |       | AMC |      | Cinemark |   | Regal |     | Total |     
|--------------------------------------------- | ----- | --- | ---- | -------- | - | ----- | --- | ----- | ----
|Theatre access fees, net of beverage revenues |       | $   | (0.2 | )        | $ | 0.1   |     | $     | 0.2 
|Cost and other reimbursement                  |       |     | (0.4 | )        |   | (0.2  | )   |       | (0.5
|Distributions payable, net                    |       |     | 3.2  |          |   | 5.2   |     |       | 8.4 
|                                              |       |     |      |          |   |       |     |       |     
|                                              | Total |     | $    | 2.6      |   | $     | 5.1 |       | $   
|                                              |       |     |      |          |   |       |     |       |     

Founding Members' Other

During the 2007 post-IPO period, the 2007 pre-IPO period, the year ended December 28, 2006 and the period ended December 29,
2005, AMC and Regal purchased $1.4 million, $0.1 million, $2.1 million and $1.1 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 is included in advertising revenue with a percentage of such amounts returned by NCM LLC to the
founding members as advertising circuit share during the 2007 pre-IPO period and the year ended December 28, 2006.

Included
in media and events operating costs is $3.3. million, $0.2 million, $4.1 million and $2.1 million for the 2007 post-IPO period, the 2007
pre-IPO period, the year December 28, 2006 and the period ended December 29, 2005, respectively, related to purchases of movie tickets and concession products from the
founding members primarily for resale to NCM LLC's customers.

Included
in advertising operating costs is $0.2 million, $0.0 million, $0.0 million and $0.0 million for the 2007 post-IPO period, the 2007
pre-IPO period, the year ended December 28, 2006 and the period ended December 29, 2005, respectively, related to payments to founding members for costs associated with lobby
promotions and concession items.

187

---



6. RELATED-PARTY TRANSACTIONS (Continued)

RCI Unit Option Plan

In connection with the formation of NCM, LLC in 2005, Regal Cinemas, Inc. adopted and approved the RCI Severance Plan for Equity Compensation.
Participation in the Severance Plan is limited to employees of RCM, who held unvested shares of Regal's restricted common stock pursuant to the terms of the incentive plan immediately prior to such
employees' termination of employment with RCM and commenced employment with NCM, LLC. Under the terms of and subject to the conditions of the Severance Plan, each eligible employee who
participates in the Severance Plan is, at the times set forth in the Severance Plan, entitled to a cash payments and payments in lieu of dividends as defined in the Severance Plan until the date that
each such participant's restricted stock would have vested in accordance with the incentive plan. As this severance plan provides for payments over future periods that are contingent upon continued
employment with the Company, the cost of the severance plan is being recorded as an expense over the remaining required service periods. As the payments under the plan are being funded by Regal, Regal
is credited with a capital contribution at NCM LLC equal to this severance plan expense. During the 2007 post-IPO period, the 2007 pre-IPO period, the year ended
December 28, 2006 and the period ended December 29, 2005, severance expense and the related capital contribution recognized for amounts under the Regal option plan were
$1.5 million, $0.4 million, $4.2 million and $8.5 million, respectively. The Company records the expense as a separate line item in the statements of operations. The amount
recorded is not allocated to advertising operating costs, network costs, selling and marketing costs and administrative costs because the recorded expense is associated with the past performance of
Regal's common stock market value rather than current period performance.

National CineMedia, Inc.

Pursuant to the 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 technology and 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 2007 post-IPO period, NCM LLC paid NCM, Inc. $9.2 million for these services and expenses. The payments for
estimated management services related to employment are made one month in advance. At December 27, 2007, $0.5 million 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 8).

Also,
pursuant to the terms of the NCM LLC Operating Agreement in place since the close of the NCM, Inc. IPO, the Company is required to made mandatory distributions to the
members of available cash, as defined in the NCM LLC Operating Agreement, on a quarterly basis. The available cash distribution to NCM, Inc. for the 2007 post-IPO period is
$53.3 million, of which $16.6 million is included in the due to/from managing member at December 27, 2007.

188

---



6. RELATED-PARTY TRANSACTIONS (Continued)

Amounts due to/from managing member at December 27, 2007 were comprised of the following (in millions):

TotalDistributions payable

$
16.6Cost and other reimbursement


0.1Total

$
16.7


7. BORROWINGS

Short-Term Borrowings From MembersIn 2005, NCM signed an Amended and Restated Demand Promissory Note
(the "Demand Note") with its founding members under which the Company could borrow up to $11.0 million on a revolving basis. Borrowings under the Demand Note were funded by the founding members
pro rata to their ownership of units. Interest was payable monthly at 200 basis points over LIBOR. Interest paid to the founding members during the period ended December 29, 2005 and the year
ended December 28, 2006 was less than $0.1 million, in each period. The demand note was repaid and cancelled on March 22, 2006.

Long-Term Borrowings

Revolving Credit AgreementOn March 22, 2006, NCM LLC entered into a bank-funded
$20.0 million Revolving Credit Agreement, of which $2.0 million could have been utilized in support of letters of credit. The revolving credit agreement was collateralized by trade
receivables, and borrowings under the revolving credit agreement were limited to 85% of eligible trade receivables, as defined. The revolving credit agreement bore interest, at NCM LLC's
option, at either an adjusted Eurodollar rate or the base rate plus, in each case, an applicable margin. Outstanding borrowings at December 28, 2006, were $10.0 million. The revolving
credit agreement was repaid and cancelled on February 13, 2007.

Senior Secured Credit Facility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 term loan is due on the eighth anniversary of the funding. 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 27, 2007 was $725.0 million. The outstanding balance under the revolving credit facility at December 27, 2007
was $59.0 million. The obligations under the credit facility are secured by a lien on substantially all of the assets of NCM LLC. Borrowings under the senior secured credit facility bear
interest, at the option of the Company, at a rate equal to an applicable margin plus either a variable base rate or a eurodollar rate. The applicable margin for both the term loan facility and the
revolving credit facility is 0.75% with respect to base rate loans and 1.75% with respect to eurodollar loans. As of December 27, 2007, the effective rate on the term loan was 6.77% (the
interest rate swap 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 6.87%) and the
weighted-average interest rate on the revolver was 6.81%. Commencing with the third fiscal quarter in fiscal year 2008, the applicable margin for the revolving credit facility will be determined
quarterly and will be subject to adjustment based upon a consolidated net senior secured leverage ratio for NCM LLC and its subsidiaries (defined in the NCM LLC credit agreement as the
ratio of secured funded debt less unrestricted cash and cash

189

---



7. BORROWINGS (Continued)

equivalents,
over adjusted EBITDA, as defined). Upon the occurrence of any payment default, certain amounts under the senior secured credit facility will bear interest at a rate equal to the rate then
in effect with respect to such borrowings, plus 2.00% per annum. The senior secured credit facility also contains a number of covenants and financial ratio requirements, with which, at
December 27, 2007, the Company was in compliance. Upon occurrence of an event of default, among other remedies available to the lenders, all outstanding loans may be accelerated and/or the
lenders' commitments may be terminated.

Future Maturities of Long-Term Borrowings

There are no scheduled annual maturities on the credit facility for the next five years and as of December 27, 2007; the next scheduled annual maturity on
the outstanding credit facility of $784.0 million is after fiscal year 2012.

8. SHARE-BASED COMPENSATION

On April 4, 2006, NCM LLC's board of directors approved the NCM LLC 2006 Unit Option Plan, under which 1,131,728 units were outstanding as of
December 28, 2006. Under certain circumstances, holders of unit options could put the options to NCM LLC for cash. As such, the Unit Option Plan was accounted for as a liability plan and
the liability was measured at its fair value at each reporting date. The valuation of the liability was determined based on provisions of SFAS No. 123(R), and factored into the valuation that
the options were granted in contemplation of an IPO. The Company used the estimated pricing of the IPO at the time of the grant to determine the equity value, for each unit underlying the options. The
Unit Option Plan allowed for additional equity awards to be issued to outstanding option holders in the event of the occurrence of an IPO, with the purpose of the additional option awards or
restricted units being to ensure that the economic value of outstanding unit options, as defined in the agreement, held just prior to an IPO was maintained by the option holder immediately after the
offering.

At
the date of NCM, Inc.'s IPO, NCM, Inc. adopted the NCM, Inc. 2007 Equity Incentive Plan. The employees of NCM, Inc. and the employees of NCM LLC are
eligible for participation in the Equity Incentive Plan. There are 2,576,000 shares of common stock available for issuance or delivery under the Equity Incentive Plan. Under the Equity Incentive Plan,
NCM, Inc. issued stock options on 1,589,625 shares of common stock to holders of outstanding unit options in substitution of the unit options and also issued 262,466 shares of restricted stock.
In connection with the conversion at the date of the NCM, Inc. IPO, and pursuant to the antidilution adjustment terms of the Unit Option Plan, the exercise price and the number of shares of
common stock subject to options held by the Company's option holders were adjusted to prevent dilution and restore their economic position to that existing immediately before the NCM, Inc. IPO.
The Equity Incentive Plan is treated as an equity plan under the provisions of SFAS No. 123(R), and the existing liability under the Unit Option Plan at the end of the 2007 pre-IPO
period of $2.3 million was reclassified to members' equity of NCM LLC at that date.

190

---



8. SHARE-BASED COMPENSATION (Continued)

Activity
in the Equity Incentive Plan, as converted, is as follows:

|                                                                                             |  | Shares    |   | Weighted-Average
Exercise Price |       | Weighted-Average
Remaining Life
(in years) |      | Aggregate
Intrinsic Value
(in Millions)
|-------------------------------------------------------------------------------------------- |  | --------- | - | ------------------------------- | ----- | ------------------------------------------ | ---- | ---------------------------------------
|Outstanding at December 28, 2006                                                             |  | 1,131,728 |   | $                               | 23.85 |                                            |      |                                        
|Granted                                                                                      |  | 274,500   |   |                                 | 22.33 |                                            |      |                                        
|Exercised                                                                                    |  |          |   |                                 |      |                                            |      |                                        
|Anti-dilution adjustments made to outstanding options in connection with the plan conversion |  | 457,897   |   |                                 | 16.98 |                                            |      |                                        
|Forfeited                                                                                    |  | (41,219   | ) |                                 | 18.72 |                                            |      |                                        
|                                                                                             |  |           |   |                                 |       |                                            |      |                                        
|Outstanding at December 27, 2007                                                             |  | 1,822,906 |   | $                               | 17.75 |                                            | 12.7 |                                        
|Vested at December 27, 2007                                                                  |  |          |   |                                 |      |                                            |     |                                        
|                                                                                             |  |           |   |                                 |       |                                            |      |                                        
|Exercisable at December 27, 2007                                                             |  |          |   | $                               |      |                                            |     |                                        
|                                                                                             |  |           |   |                                 |       |                                            |      |                                        

NCM, Inc.
has estimated the fair value of these options to range from $5.46 to $8.17 per share based on the Black-Scholes option pricing model. The Black-Scholes model requires
that NCM, Inc. make estimates of various factors used, as noted below. The fair value of the options is being charged to operations over the vesting period.

Options
awarded under the Equity Incentive Plan are generally granted with an exercise price equal to the market price of NCM, Inc. common stock on the date of the grant. The
options vest annually over periods between 59 through 81 months and have either 10-year or 15-year contractual terms. The following table summarizes information about
the stock options at December 27, 2007, including the weighted average remaining contractual life and weighted average exercise price:

|                |  | Options Outstanding |  | Options Exercisable
|--------------- |  | ------------------- |  | -------------------
|
|$16.35 - $18.01 |  | 1,473,041           |  | 13.3               
|$21.00          |  | 197,000             |  | 9.1                
|$24.04 - $24.74 |  | 114,865             |  | 13.0               
|$26.76 - $29.05 |  | 38,000              |  | 14.1               
|                |  |                     |  |                    
|                |  | 1,822,906           |  | 12.7               
|                |  |                     |  |                    

The
following assumptions were used in the valuation of the options:



191

---



8. SHARE-BASED COMPENSATION (Continued)



Under
the fair value recognition provisions of SFAS No. 123R, recognizes stock-based compensation is recognized net of an estimated forfeiture rate, and therefore only stock-based
compensation cost for those shares expected to vest over the requisite service period of the award is recognized. A forfeiture rate of 5% was estimated for all employees to reflect the potential
separation of employees. NCM, Inc. expects approximately 1,732,000 of the outstanding options to vest.

The
Company recognized $1.9 million, $0.3 million and $1.9 million for the 2007 post-IPO period, the 2007 pre-IPO period and the year ended
December 28, 2006, respectively, of share-based compensation expense for these options and no amounts were capitalized. The recognized expense, including the equity based compensation costs of
NCM, Inc. employees, is included in the operating results of NCM, LLC. As of December 27, 2007, unrecognized compensation cost related to nonvested options was approximately
$8.9 million, which will be recognized over a remaining period of between 48 and 60 months.

Non-vested StockNCM, Inc. implemented a restricted stock program as part of the
Equity Incentive Plan. The plan provides for restricted stock awards to officers, board members and other key employees, including employees of NCM, LLC. Under the restricted 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 (generally at the
start of each subsequent calendar year), the award vests in that proportion. The participants are entitled to cash dividends from NCM, Inc. and to vote their respective shares at
NCM, Inc., although the sale and transfer of such shares is prohibited and the shares are subject to forfeiture during the restricted period. The shares are also subject to the terms and
provisions of the Equity Incentive Plan. The restricted stock vests in equal annual installments over a five-year period, except awards to non-employee directors, which 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 of NCM, Inc. that were granted during the period and outstanding as of December 27, 2007:

Period February 13, 2007
through December 27, 2007

Weighted Average
Grant-Date
Fair ValueNon-vested at December 28, 2006

Granted

275,184

$
21.21Forfeited

(3,339
)

21.00Non-vested as of December 27, 2007

271,845

$
21.21


The
forfeiture rates are consistent with the rates used for options. The Company recorded $1.2 million in compensation expense related to such outstanding restricted shares during
the 2007 post-IPO period and no amounts were capitalized. The recognized expense, including the equity based compensation costs of NCM, Inc. employees, is included in the operating
results of NCM, LLC. As of December 27, 2007, unrecognized compensation cost related to non-vested restricted stock was approximately $4.5 million, which will be
recognized over a remaining period of between 2 months and 53 months.

192

---



9. 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 Company made discretionary contributions of $0.6 million, $0.0 million,
$0.6 million and $0.3 million during the 2007 post-IPO period, 2007 pre-IPO period, the year ended December 28, 2006 and the period ended
December 29, 2005, respectively.

10. 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 2007 post-IPO period, 2007 pre-IPO period, year ended December 28, 2006 and the period
ended December 29, 2005, was $1.3 million, $0.3 million, $1.6 million and $1.1 million, respectively.

Future
minimum lease payments under noncancelable operating leases are as follows (in millions):

2008

$
1.82009


1.82010


1.52011


1.32012


1.3Thereafter


1.3Total

$
9.0


*    *    *    *    *    *

193

---





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.

| | MARQUEE HOLDINGS INC.
| | ---------------------
| | By:                  
| | Date:                

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/PETER C. BROWNPeter C. Brown           |  | Chairman of the Board, Chief Executive Officer, Director and President |  | June 18, 2008
|----------------------------------------- |  | ---------------------------------------------------------------------- |  | -------------
|/s/MICHAEL R. HANNONMichael R. Hannon     |  | Director                                                               |  | June 18, 2008
|/s/STEPHEN P. MURRAYStephen P. Murray     |  | Director                                                               |  | June 18, 2008
|/s/STAN PARKERStan Parker                 |  | Director                                                               |  | June 18, 2008
|/s/AARON J. STONEAaron J. Stone           |  | Director                                                               |  | June 18, 2008
|/s/JOHN CONNAUGHTONJohn Connaughton       |  | Director                                                               |  | June 18, 2008
|/s/ELIOT P. S. MERRILLEliot P. S. Merrill |  | Director                                                               |  | June 18, 2008
|/s/KEVIN MARONIKevin Maroni               |  | Director                                                               |  | June 18, 2008

194

---



|/s/TRAVIS REIDTravis Reid         |  | Director                                             |  | June 18, 2008
|--------------------------------- |  | ---------------------------------------------------- |  | -------------
|/s/CRAIG R. RAMSEYCraig R. Ramsey |  | Executive Vice President and Chief Financial Officer |  | June 18, 2008
|/s/KEVIN M. CONNORKevin M. Connor |  | Senior Vice President, General Counsel and Secretary |  | June 18, 2008
|/s/CHRIS A. COXChris A. Cox       |  | Vice President and Chief Accounting Officer          |  | June 18, 2008

195

---





EXHIBIT INDEX

|EXHIBIT NUMBER |  | DESCRIPTION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|-------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2.1(a)         |  | Modified First Amended Joint Plan of Reorganization of Debtors and Official Committee of Unsecured Creditors for GC Companies, Inc. and its Jointly Administered Subsidiaries filed on March 1, 2002 with the
United States Bankruptcy Court for the District of Delaware (incorporated by reference from Exhibit 2.2 to Form 8-K filed March 7, 2002).                                                                                                                                                                                                                           
|2.1(b)         |  | 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 Form 8-K 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 Form 8-K 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 Form 8-K filed June 23,
2004).                                                                                                                                                                                                                                                                                                                                                                 
|2.4            |  | Agreement and Plan of Merger, dated June 11, 2007, by and among AMC Entertainment Holdings, Inc., Marquee Holdings Inc., and Marquee Merger Sub Inc. (incorporated by reference from Exhibit 2.1 to the Company's Form 8-K
filed on June 13, 2007)                                                                                                                                                                                                                                                                                                                                
|3.1            |  | Third Amended and Restated Certificate of Incorporation of Marquee Holdings Inc. (incorporated by reference from Exhibit 3.1 to the Company's Form 8-K filed on June 13, 2007)                                                                                                                                                                                                                                                                                                                                                                                                    
|3.2            |  | Third Amended and Restated Bylaws of Marquee Holdings Inc. (incorporated by reference from Exhibit 3.2 to the Company's Form 8-K filed on June 13, 2007)                                                                                                                                                                                                                                                                                                                                                                                                                          
|4.1(a)         |  | Credit Agreement, dated January 16, 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 10.6 to the Company's Form 8-K (File No. 1-8747) filed January 31, 2006).                                                                                                                                                                                                                                                      

196

---



|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 Form S-4 (File No. 333-133574)
filed April 27, 2006).                                                                       
|------ |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|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 4.7(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 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).                                                                    
|4.3    |  | 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 August 18, 2004, respecting AMC Entertainment Inc.'s, as successor by merger to Marquee Inc.'s, 85/8% Senior Notes due 2012 (incorporated by reference from Exhibit 4.9(a) to the Company's
Registration Statement on Form S-4 (File No. 333-122376) filed on January 28, 2005).                     
|4.4(b) |  | First Supplemental Indenture, dated December 23, 2004, respecting AMC Entertainment Inc.'s, as successor by merger to Marquee Inc.'s, 85/8% Senior Notes due 2012 (incorporated by reference from
Exhibit 4.9(b) to the Company's Registration Statement on Form S-4 (File No. 333-122376) filed on January 28, 2005).
|4.4(c) |  | Second Supplemental Indenture, dated January 26, 2006, respecting AMC Entertainment Inc.'s, as successor by merger to Marquee Inc.'s, 85/8% Senior Notes due 2012 (incorporated by reference from
Exhibit 4.8(c) to the Company's Form 10-Q filed on February 13, 2006).                                              
|4.4(d) |  | Third Supplemental Indenture dated April 20, 2006, respecting AMC Entertainment Inc.'s 85/8% Senior Notes due 2012 (incorporated by reference from Exhibit 4.8(d) to the Company's Form S-4 (File
No. 333-133574) filed April 27, 2006).                                                                              

197

---



|4.5(a) |  | Registration Rights Agreement dated August 18, 2004, respecting AMC Entertainment Inc.'s, as successor by merger to Marquee Inc.'s, 85/8% Senior Notes due 2012 (incorporated by reference from Exhibit 4.10
(a) to the Company's Registration Statement on Form S-4 (File No. 333-122376) filed on January 28, 2005).                                                                                              
|------ |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4.5(b) |  | Joinder Agreement to Registration Rights Agreement dated December 23, 2004, respecting AMC Entertainment Inc.'s, as successor by merger to Marquee Inc.'s, 85/8% Senior Notes due 2012 (incorporated by reference
from Exhibit 4.10(b) to the Company's Registration Statement on Form S-4 (File No. 333-122376) filed on January 28, 2005).                                                                        
|4.6(a) |  | Indenture, dated January 26, 2006, respecting AMC Entertainment Inc.'s 11% senior subordinated notes due 2016, between AMC Entertainment Inc. and HSBC Bank USA, National Association (incorporated by reference from Exhibit 4.1 to
the Company's Form 8-K (File No. 1-8747) filed on January 31, 2006).                                                                                                           
|4.6(b) |  | First Supplemental Indenture dated April 20, 2006, respecting AMC Entertainment Inc.'s 11% Senior Subordinated Notes due 2016 (incorporated by reference from Exhibit 4.12(b) to the Company's Form S-4 (File No. 333-133574)
filed April 27, 2006).                                                                                                                                                                
|4.7    |  | Registration Rights Agreement dated January 26, 2006, respecting AMC Entertainment Inc.'s 11% senior subordinated notes due 2016, among AMC Entertainment Inc., the guarantors party thereto, Credit Suisse Securities (USA) LLC,
Citigroup Global Markets Inc., and J.P. Morgan Securities Inc. (incorporated by reference from Exhibit 4.2 to the company's Form 8-K (File No. 1-8747) filed on January 31, 2006).
|4.8(a) |  | Indenture, dated August 18, 2004, respecting Marquee Holdings Inc.'s 12% Senior Discount Notes due 2014 (incorporated by reference from Exhibit 4.13 to Holdings' Registration Statement on Form S-4 (file No. 333-122636) filed
on February 8, 2005).                                                                                                                                                              
|4.8(b) |  | Registration Rights Agreement dated August 18, 2004, respecting Marquee Holdings Inc.'s 12% Senior Discount Notes due 2014 (incorporated by reference from Exhibit 4.14 to Holdings' Registration Statement on Form S-4 (File
No. 333-122636) filed on February 8, 2005).                                                                                                                                           
|4.8(c) |  | First Supplemental Indenture dated June 12, 2007, respecting Marque Holding Inc.'s 12% Senior Discount Notes due 2014 (incorporated by reference from Exhibit 4.1 to the Company's Form 8-K Filed on June 13, 2007).                                                                                                                                                                                                
|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 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 Form 8-K (File
No. 1-8747) filed on December 27, 2005).                                                                                                                                              

198

---



|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
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 Form 8-K (File No. 1-8747) filed on December 27, 2005).                                                                                                                                                                                                                                                                                                   
|10.5  |  | 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 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 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 Form 8-K (File
No. 1-8747) filed on December 27, 2005).                                                                                                                                                                                                                                                                                                                                                 
|10.8  |  | 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 Form 8-K filed on June 13, 2007).                                                                                                                                                                                                                                                                                                              
|10.9  |  | 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 Form 8-K filed on June 13, 2007)                                                                                                                                                                                                                                                                                                    
|10.10 |  | 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 10.1 to the Company's Form 8-K (File No. 1-8747) filed on January 31, 2006).                                                                                                                                                                                                                 
|10.11 |  | Non-Qualified Stock Option Agreement, dated January 26, 2006, between Marquee Holdings Inc. and Travis Reid (incorporated by reference from Exhibit 10.2 to the Company's Form 8-K (File No. 1-8747) filed on January 31,
2006).                                                                                                                                                                                                                                                                                                                                                                             
|10.12 |  | 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 Form 8-K filed on June 13, 2007).

199

---



|10.13    |  | 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).                                                                                                              
|-------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.14(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 10.14(a) to the Company's Form S-1 (File No. 333-139249) filed April 12, 2007, as amended).                     
|10.14(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 10.14(b) to the Company's Form S-1 (File
No. 333-139249) filed April 12, 2007, as amended).                                                              
|10.15    |  | Amended and Restated Employment Agreement, dated as of June 11, 2007, by and among Peter C. Brown, Marquee Holdings Inc. and AMC Entertainment Inc. (incorporated by reference from Exhibit 10.8 to the Company's Form 8-K filed
on June 13, 2007)                                                                                                    
|10.16    |  | Employment Separation and General Release Agreement, dated as of March 20, 2007, by and among Philip M. Singleton, Marquee Holdings Inc., AMC Entertainment Inc. and American Multi-Cinema, Inc. (incorporated by reference from
Exhibit 10.1 to the Company's Form 8-K filed March 20, 2007).                                                        
|10.16(a) |  | First Amendment to Employment Separation and General Release Agreement, dated as of April 4, 2007, by and among Philip M. Singleton, Marquee Holdings Inc., AMC Entertainment Inc. and American Multi-Cinema, Inc. (Incorporated by
reference from Exhibit 10.16(a) to the Company's Form S-1 (File No. 333-139249) filed April 12, 2007, as amended).
|10.17    |  | 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).                                                                                                                                                                                          
|10.18    |  | 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).                                                                                                                                           
|10.19    |  | 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 10.19 to the Company's Form S-1
(File No. 333-139249) filed April 12, 2007, as amended).                                                              
|10.20    |  | Employment agreement between AMC Entertainment Inc., American Multi-Cinema, Inc. and Richard M. Fay which commenced on July 1, 2001. (Incorporated by Reference from Exhibit 10.15 to Amendment No. 1 to the Company's
Form 10-K (File No. 1-8747) for the year ended March 29, 2001).                                                                
|10.21    |  | AMC Non-Qualified Deferred Compensation Plan, as Amended and Restated, effective January 1, 2005 (Incorporated by reference from Exhibit 10.21 to the Company's Form S-1 (File No. 333-139249) filed April 12, 2007, as
amended).                                                                                                                     
|10.22    |  | 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).                                                                                                                                                             

200

---



|10.23 |  | 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).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.24 |  | 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).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|10.25 |  | 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.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|10.26 |  | 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.          
|10.27 |  | 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.
|10.28 |  | Employment agreement between AMC Entertainment Inc., American Multi-Cinema, Inc. and Richard T. Walsh which commenced July 1, 2001. (Incorporated by Reference from Exhibit 10.25 to the Company's Form 10-K (File
No. 1-8747) for the year ended March 29, 2001).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|10.29 |  | Form of Non-Qualified Stock Option Agreement used in December 22, 2004 option grants to Mr. Peter C. Brown and Mr. Philip M. Singleton (incorporated by reference from Exhibit 10.18 to AMCE's Registration Statement on Form S-4
(File No. 333-122376) filed on January 28, 2005).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

201

---



|10.30 |  | Form of Incentive Stock Option Agreement used in December 22, 2004 option grants to Mr. Peter C. Brown and Mr. Philip M. Singleton (incorporated by reference from Exhibit 10.19 to AMCE's Registration Statement on Form S-4
(File No. 333-122376) filed on January 28, 2005).                                                                                                                                                                                                                                                       
|----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.31 |  | Retainer agreement with Raymond F. Beagle, Jr. dated October 1, 2002. (Incorporated by Reference from Exhibit 10.27 to the Company's Form 10-Q (File No. 1-8747) for the quarter ended September 26, 2002).                                                                                                                                                                                                                                                                                                                           
|10.32 |  | 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) for the year ended March 29, 2001).                                                                                                                                                                                                                                                 
|10.33 |  | 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 (File
No. 1-8747) for the quarter ended June 27, 2002).                                                                                                                                                                                                                                                                
|10.34 |  | 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 the Company's Form 8-K (File No. 1-8747) filed on April 20, 2001).                                                                                                                             
|10.35 |  | 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 the Company's Form 8-K (File No. 1-8747) filed on April 20, 2001).                                                                                                                          
|10.36 |  | 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 the Company's Form 8-K (File No. 1-8747) filed on April 20, 2001).                                                                                                                                                                                     
|10.37 |  | 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 the Company's Form 10-Q (File No. 1-8747) for the quarter ended June 28, 2001).
|10.38 |  | 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) for the quarter ended January 1, 2004).                                                                                                                                                                  

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|10.39    |  | 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) for the quarter ended October 2, 2003).                                                                                                                                              
|-------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.40    |  | 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) for the quarter ended October 2,
2003).                                                                                                          
|10.41(a) |  | AMC Entertainment Holdings, Inc. Amended and Restated 2004 Stock Option Plan. (incorporated by reference from Exhibit 10.9 to the Company's Form 8-K filed on June 13, 2007)                                                                                                                                                        
|10.41(b) |  | 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).                                                                                                                                        
|10.41(c) |  | 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).                                                                                                                                            
|10.42    |  | 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
Form 8-K filed April 4, 2005).                                                                      
|10.43    |  | 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).                                
|10.44    |  | 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).
|10.45    |  | 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 Form 8-K filed February 20, 2007).            
|10.46    |  | 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 Form 8-K
filed February 20, 2007).                                                                            
|10.47    |  | 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 Form 8-K filed
March 15, 2007).                                                                                  
|10.48    |  | 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 Amendment No. 5 to
Form S-1 filed on April 19, 2007)                                                                        

203

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|10.49 |  | 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 Form 8-K (File
No. 333-122636) filed on June 13, 2007)                                                                                                                                                                                                                                                                                                                                                                                                                                 
|----- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.50 |  | 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 Form 8-K (File No. 333-122636) filed on
June 13, 2007)
|10.51 |  | Amended and Restated Certificate of Incorporation of AMC Entertainment Holdings, Inc. (incorporated by reference from Exhibit 10.1 to the Company's Form 8-K filed on June 13, 2007)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|10.52 |  | Amended and Restated Bylaws of AMC Entertainment Holdings, Inc. (incorporated by reference from Exhibit 10.2 to the Company's Form 8-K filed on June 13, 2007)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|10.53 |  | 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 15, 2007).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|10.54 |  | 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 8-K (File No. 1-8747)
 filed on June 13, 2007).                                                                                                                                                                                                                                                                                                                                                                                                                                        
|10.55 |  | 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 8-K (File No. 1-8747) filed on June 13,
2007).        

204

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|10.56  |  | Agreement with Richard T. Walsh (incorporated by reference from Exhibit 10.1 to the Company's Form 10-Q (File No. 1-8747) filed on February 8, 2008).                            
|------ |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|*10.57 |  | Employment Agreement, dated as of July 1, 2001 by and among Mark A. McDonald, AMC Entertainment Inc. and American Multi- Cinema, Inc.                                            
|14     |  | Code of Ethics (incorporated by reference from Exhibit 14 to AMCE's Form 10-K filed on June 23, 2004).                                                                           
|*21    |  | Subsidiaries of Marquee Holdings 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 Peter C. Brown (Chief Executive Officer) and Craig R. Ramsey (Chief Financial Officer) furnished in accordance with Securities Act Release 33-8212.

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