Table of Contents



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



FORM 10-K

(Mark One)ý

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended April 2, 2009ORo

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 1-33344



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




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



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

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

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

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

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

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

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

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 8, 2009Common Stock, 1¢ par value

1


DOCUMENTS INCORPORATED BY REFERENCENone



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Table of Contents

MARQUEE HOLDINGS INC.
FORM 10-K
FOR THE FISCAL YEAR ENDED APRIL 2, 2009
INDEX



PagePART IItem 1.

Business

4Item 1A.

Risk Factors

20Item 1B.

Unresolved Staff Comments

28Item 2.

Properties

28Item 3.

Legal Proceedings

29Item 4.

Submission of Matters to a Vote of Security Holders

30PART IIItem 5.

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

31Item 6.

Selected Financial Data

32Item 7.

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

35Item 7A.

Quantitative and Qualitative Disclosures about Market Risk

66Item 8.

Financial Statements and Supplementary Data

67Item 9.

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

135Item 9A(T).

Controls and Procedures

135Item 9B.

Other Information

136PART IIIItem 10.

Directors, Executive Officers and Corporate Governance

137Item 11.

Executive Compensation

141Item 12.

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

157Item 13.

Certain Relationships and Related Transactions, and Director Independence

161Item 14.

Principal Accountant Fees and Services

165PART IVItem 15.

Exhibits, Financial Statement Schedules

167


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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 Marquee Holdings Inc.," which may cause our actual results, performance or achievements to be materially different from any future results,
performance or achievements expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to, the
following:



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

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

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PART I

Item 1.    Business

(a)   General Development of Business

Marquee Holdings Inc. ("Holdings" or the "Company") 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" or "AMCE"). AMCE's principal directly owned subsidiaries are American Multi-Cinema, Inc. ("AMC"), and AMC Entertainment
International, Inc. ("AMCEI"). We conduct our theatrical exhibition business through AMC and its subsidiaries and AMCEI.

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 2004, we completed a merger in which AMC Entertainment was acquired by 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 2, 2009.

In
March 2005, we commenced an organizational restructuring of corporate functions. Our new organizational system flattened management structure and aligned systems, resources and areas
of expertise to 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 $4,926,000 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.

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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 after 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 after 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 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. The operations of the Iberia theatres were previously
reported in our International Theatrical exhibition operating segment.

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 17,000 North
American theatre screens (of which approximately 15,000 are equipped with digital projection capabilities) and reaching over 600,000,000 movie guests annually. As of April 2, 2009, we had an
18.5% 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

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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 the former screen advertising agreements expired in fiscal 2009. The Loews
payments were $15,981,000 through the end of the agreement of which $15,901,000 has been paid through fiscal 2009. We are also required to purchase from NCM any on-screen advertising time
provided to our beverage concessionaire 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 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. Immediately following the NCM, Inc. IPO, we held an
18.6% interest in NCM and as of April 2, 2009, we held an 18.5% interest in NCM.

We
used the proceeds from the preferred unit redemption and the ESA modification payment described above, along with 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

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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. DCIP has signed long-term agreements with six studios and continues negotiations with additional studios that are expected to
provide financing for the estimated costs to deploy digital cinema. Future digital cinema developments will be managed by DCIP, subject to financing and to the approval of us, Cinemark and Regal. See
"Our Strategy" below.

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. We disposed of our investment in Fandango, accounted for using the cost method, for total proceeds of approximately $20,360,000, of which $17,977,000 was received in fiscal 2008 and $2,383,000
was received in fiscal 2009.

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.

In
July 2007 we disposed of our investment in Hoyt's General Cinema South America ("HGCSA") for total proceeds of $28,682,000 and 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. We have
installed 34 IMAX projection systems during fiscal 2009 and expect to install an additional 45 in fiscal 2010 and the remaining 21 in fiscal 2011. 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.

On
December 29, 2008, we sold all of our interests in Cinemex, which then operated 44 theatres with 493 screens primarily in the Mexico City Metropolitan Area, to Entretenimiento
GM de

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Mexico S.A.
de C.V. Under the Stock Purchase Agreement for the transaction, the purchase price was $315,000,000, decreased by the amount of net funded indebtedness of Cinemex and other
specified
items of $66,859,000. Costs related to the disposition are estimated to be $4,046,000. Additionally, we estimate that we will receive an additional $12,253,000 in the form of tax payments and refunds
in later periods and have received an additional $809,000 of purchase price related to a working capital calculation and post closing adjustments subsequent to April 2, 2009 which are included
in the gain on disposition. We have recorded a gain on disposition before income taxes of $14,772,000 related to the disposition that is included as discontinued operations.

(b)   Financial Information about Segments

In fiscal 2009, we identified one reportable segment for our theatrical exhibition operations. Previously, the Company had three operating segments which
consisted of United States and Canada Theatrical Exhibition, International Theatrical Exhibition, and Other. The reduction in the number of operating segments was a result of the disposition of
Cinemex in December 2008. Cinemex was previously reported in the International Theatrical Exhibition operating segment and accounted for a substantial majority of that segment. In addition, in fiscal
2009, the Company consolidated the Other operating segment with the United States and Canada Theatrical Exhibition operating segment due to a previous contribution of advertising net assets to NCM. In
fiscal 2009, the United States and Canada Theatrical Exhibition operating segment was renamed the Theatrical Exhibition operating segment. Certain prior period information has been reclassified to
conform with the current period presentation.

For
information about our operating segment, see Note 16 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 2, 2009, we had revenues of $2,265,487,000 and loss from continuing operations of $90,900,000. As of April 2, 2009, we owned, operated or held
interests in 307 theatres with a total of 4,612 screens, approximately 99% 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 of 15.0 for our circuit and
our annual attendance per theatre of 650,000 patrons substantially exceed industry averages. Historically, these favorable attributes have enabled us to generate significant cash provided by operating
activities. We have a significant presence in most major urban "Designated Market Areas," or "DMA's" (television areas as defined by Nielsen Media Research).

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The
following table provides detail with respect to the geographic location of our Theatrical Exhibition circuit as of April 2, 2009:

Theatrical Exhibition

Theatres(1)

Screens(1)California


42


651Texas


22


437Florida


23


392New Jersey


24


310New York


27


279Illinois


18


271Michigan


13


214Georgia


12


189Arizona


9


183Washington


14


149Pennsylvania


12


142Maryland


13


136Massachusetts


10


129Missouri


8


117Virginia


7


113Ohio


5


86Colorado


4


74Louisiana


5


68Minnesota


4


64North Carolina


3


60Oklahoma


3


60Kansas


2


48Indiana


3


42Connecticut


2


36Nebraska


1


24District of Columbia


3


22Kentucky


1


20Wisconsin


1


18Arkansas


1


16South Carolina


1


14Utah


1


9Canada


8


184China (Hong Kong)(2)


2


13France


1


14United Kingdom


2


28Total Theatrical Exhibition


307


4,612


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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 2, 2009, 3,521, or approximately 76%, of our screens were located in megaplex theatres. Our average number of screens per theatre as of April 2,
2009 was 15.0, which was more than twice the National Association of Theatre Owners average of 7.1 for calendar year 2008 and higher than any of our peer competitors.

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The
following table sets forth historical information of AMC Entertainment on a continuing operations basis, concerning new builds (including expansions), acquisitions and dispositions
and end of period operated theatres and screens through April 2, 2009:

New Builds

Acquisitions

Closures/Dispositions

Total TheatresFiscal Year

Number of
Theatres

Number of
Screens

Number of
Theatres

Number of
Screens

Number of
Theatres

Number of
Screens

Number of
Theatres

Number of
Screens2005


3


44








6


42


219


3,3612006


7


106


116


1,363


7


60


335


4,7702007


7


107


2


32


26


243


318


4,6662008


9


136








18


196


309


4,6062009


6


83








8


77


307


4,61232


476


118


1,395


65


618


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
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 AMCE'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:



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Major Market Position.We are one of the world's leading theatrical exhibition companies by having broad major market
diversification and leading
market share within those markets. As of April 2, 2009, 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 Houston. 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.

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, enhanced seat design and a
variety of food and beverage offerings. From April 2005 through April 2, 2009, AMC Entertainment opened 32 theatres with 476 new screens, acquired 118 theatres with 1,395 screens and disposed
of 65 theatres with 618 screens. As of April 2, 2009, 3,521, or approximately 76%, of our screens were located in megaplex theatres, and the average number of screens per theatre was 15.0,
which was more than twice the 2008 industry average of 7.1, according to the National Association of Theatre Owners ("NATO"), and higher than any of our peer competitors. Over the past five years we
invested approximately $665,000,000 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 2, 2009, we had the number one market share in New York City, Chicago, Dallas and Houston, among others, and we operated 19 of the top 50 theatres in the United States in terms
of box office revenue, as measured by Rentrak. Our next closest competitor operated 11 of the top 50 theatres. For the fiscal year ended April 2, 2009, our theatre exhibition circuit produced
box office revenues per screen at rates approximately 30% higher than our closest peer competitor and 46% 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 3D, 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

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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 2, 2009, our
net cash provided by operating activities totaled $168,096,000. 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 20 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:



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 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:



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We
currently have IMAX systems in place at 41 of our theatres. In fiscal 2008, we 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 commenced in July 2008 and will extend through fiscal 2011, 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.

In
February 2007, we joined with two exhibitors to form 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 3D 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 3D content which we believe will drive incremental attendance and revenues.

Over
the past two years, 3D versions of a movie have generated more than double the attendance of 2D versions of the same movie at an additional $2 to $3 more per ticket for a 3D movie
than for a standard 2D movie. 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 has signed long-term agreements with six studios, and continues
negotiations with additional studios, that are expected to provide financing for the estimated costs to deploy digital cinema. DCIP and its members have yet to execute definitive financing 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 $68,000 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 approximately $43,000 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 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 2009.

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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 15.3% for
the fiscal year ended April 2, 2009. 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. As a result, cost of operations as a percentage of total revenues decreased from 67.4% in fiscal 2001 to 65.5% for the
fiscal year ended April 2, 2009.

---

Enhancing our Theatre Portfolio.Through a deliberate and focused internal review process, we have closed or disposed of 65 older
or obsolete
theatres representing 618 screens on a combined basis over the past five fiscal years. 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 15 theatres with 141 screens that we may close over the next fiscal year due to
expiration of leases or early lease terminations. 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 1 theatre representing 6 screens opening in fiscal 2010 that is operated by us through a joint venture. Actual number of
closures and new builds from fiscal 2010 through 2012 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 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 606 in 2008, according to the Motion Picture Association 2008 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

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those
offered and negotiating directly with the distributor. As of April 2, 2009, approximately 88% 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 81%
of our U.S. and Canadian admissions revenues during fiscal 2009. 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 2009, no single distributor accounted for more than 20% of our box office admissions.

Concessions

Concessions sales are our second largest source of revenue after box office admissions. Concessions items include popcorn, soft drinks,
candy, hot dogs 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.

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

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.

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.

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Employees

As of April 2, 2009, we employed approximately 800 full-time and 16,000 part-time employees.
Approximately 39% of our U.S. theatre associates were paid the minimum wage.

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

Theatrical Exhibition Industry and Competition

Theatrical exhibition is the primary initial distribution channel for new motion picture releases, and we believe that the theatrical
success of a motion picture is often the most important factor in establishing 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 4.0% 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 2.8% CAGR. In calendar 2008, industry box
office revenues were $9,791,000,000, an increase of 1.7%, compared to an increase of 5.4% in calendar year 2007.

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
Theatre2008

$
9,791


1,364

$
7.18


5,403


38,198


7.12007


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


1,378


6.41


5,713


37,092


6.52004


9,215


1,484


6.21


5,629


36,012


6.4


There
are approximately 769 companies competing in the North American theatrical exhibition industry, approximately 421 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 Encyclopedia of Exhibition, we believe that the ten largest
exhibitors (in terms of number of screens) operated approximately 62% of the indoor screens in 2008. 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 approximately 56% of box office revenues in 2008 compared to 29% in 1995. According to NATO and the
Motion Picture Association 2008 MPA Market Statistics, average screens per theatre have increased from 6.4 in 2004 to 7.1 in 2008, which we believe is indicative of the industry's development of
megaplex theatres.

Our
theatres are subject to varying degrees of competition in the geographic areas in which they operate. Competition is often intense with respect to attracting patrons, licensing
motion pictures and finding new theatre sites. Where real estate is readily available, there are few barriers preventing another company from opening a theatre near one of our theatres, which may
adversely affect operations at our theatre.

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

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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 2008, attendance at indoor movie theatres in United States and Canada was 1,364,000,000. This contrasts to the 119,800,000
combined annual attendance generated by professional baseball, basketball and football over the same time period. The estimated average price of a movie ticket was $7.18 in 2008, 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 have increased at a 4.0% 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 3D and alternative content offerings. Recent experience with digital has produced increased attendance and average ticket prices. For example,
theatres are able to charge $2 to $3 more per ticket for a 3D film than for a standard 2D film. Furthermore, 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

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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 December 5,
2008, the Ninth Circuit Court of Appeals reversed the trial court as to the appropriate remedy and remanded the case back to the trial court for findings consistent with its decision. The Justice
Department may seek review by a larger panel of judges on the Ninth Circuit Court of Appeals. 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 during the summer months and
holiday seasons. Our results of operations may vary significantly from quarter to quarter.

(d)   Financial Information About Geographic Areas

For information about the geographic areas in which we operate, see Note 16Operating Segment to the Consolidated Financial Statements under
Part II Item 8. of this Annual Report on Form 10-K. During fiscal 2009, revenues from our theatre operations outside the United States accounted for 4%

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of
our total revenues. There are significant differences between the theatrical exhibition industry in the United States and in these international markets. These 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 2, 2009, we had $1,989,445,000 of outstanding indebtedness. As of
April 2, 2009, our subsidiaries had approximately $4,178,205,000 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 AMC Entertainment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 had reported net losses in each of the last nine fiscal years totaling approximately
$510,088,000. For fiscal 2007 and 2008, AMCE reported net earnings of $134,079,000 and $43,445,000, respectively. AMCE reported a net loss of $81,172,000 in fiscal 2009. 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 $104,704,000 for fiscal 2009. We estimate that our planned capital expenditures
will be between $100,000,000 and $105,000,000 in fiscal 2010. Actual capital expenditures in fiscal 2010 and 2011 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:



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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 AMCE was permitted to distribute to Holdings in compliance with its senior secured credit facility and the indentures governing AMCE's debt
securities was approximately $523,000,000 as of April 2, 2009.

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

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

Capital and Credit Market Crisis

In the event we were to require or propose to issue debt financing in the future, the severe dislocations and liquidity disruptions in
the credit markets could materially impact our ability to obtain debt financing on reasonable terms. The inability to access debt financing on reasonable terms could materially impact our ability to
make acquisitions or materially expand our business in the future. Additionally, a prolonged economic downturn or recession could materially impact our operations to the extent it results in reduced
demand for moviegoing. If current market and economic conditions persist or deteriorate, we may experience adverse impacts on our business, results of operations and financial condition.

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.

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

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

We may suffer future impairment losses and 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 $281,276,000. Loews' impairment losses aggregated approximately $4,000,000 in the period since it emerged
from bankruptcy in 2002. Beginning fiscal 1999 through April 2, 2009, AMC Entertainment also incurred lease termination charges aggregating approximately $57,080,000. 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 2, 2009, we owned, operated or held interests in megaplexes in Canada, China (Hong Kong), France and the
United Kingdom. Because the results of operations and the financial position of our 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 4% of our total revenues during the 52 weeks ended April 2, 2009. As a result of our international operations, we have
risks from fluctuating currency values. As of April 2, 2009, 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 $1,781,000 and $7,680,000, respectively. We do not currently hedge against foreign
currency exchange rate risk.

We sometimes have been unable to obtain the films we want for our theatres in certain foreign markets.

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, attendance at some of our international theatres may not be sufficient to permit us to operate them profitably.

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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 violated the ADA and related regulations. On
December 5, 2003, the trial court entered a consent order and final judgment on non-line-of-sight issues under which AMC Entertainment agreed to remedy
certain violations at its stadium-style theatres and at certain theatres it may open in the future. Currently we estimate that betterments 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 $51,871,000 and through April 2, 2009 AMCE has incurred
approximately $23,582,000 of these costs. See Part I 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 2010.

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 management report and included the report in our Annual Report on Form 10-K for fiscal 2009, which ended in
April 2009. Our independent registered public accounting firm did not, however, need to include its attestation report in our annual report for fiscal 2009. 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 2010, which ends in April 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.

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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 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 has 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 contract between film producers and the Screen Actors Guild ("SAG") expired at the beginning of July 2008. A tentative agreement was reached on April 17, 2009. The two
year agreement is being submitted to SAG's members for approval. If SAG members choose to reject the proposed agreement, and subsequently vote to strike, or film producers choose to lock out the union
members, a disruption in production of motion pictures could result.

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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:



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

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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 2009, 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 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 2, 2009:

Property Holding Classification

Theatres

ScreensOwned


11


109Leased pursuant to ground leases


7


87Leased pursuant to building leases


282


4,339Total


300


4,535


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

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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.

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
violated 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.

As
to line-of-sight matters, the trial court entered summary judgment in favor of the Justice Department as to both liability and as to the appropriate remedy. On
December 5, 2008, the Ninth Circuit Court of Appeals reversed the trial court as to the appropriate remedy and remanded the case back to the trial court for findings consistent with its
decision. AMCE estimates that the cost of betterments related to the remaining remedies required for line-of-sight violations will be approximately $4,300,000 over a
4-5 year term. The Justice Department has moved for reconsideration and in the alternate, a larger panel of judges to review before the Ninth Circuit Court of Appeals.

As
to the non-line-of-sight aspects of the case, on January 21, 2003, the trial court entered summary judgment in favor of the Department on
matters such as parking areas, signage, ramps, location of toilets, counter heights, ramp slopes, companion seating and the location and size of handrails. On December 5, 2003, the trial court
entered a consent order and final judgment on non-line of sight issues under which 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. AMCE estimates that the total cost of these betterments will be
$51,871,000, and through April 2, 2009 AMCE has incurred approximately $23,582,000 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.

AMCE
estimates the range of the loss for liability fines to be between $349,000 and $444,000. Accordingly, AMCE has recorded the related liability of approximately $349,000.

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

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a
credit or debit card may be printed on receipts given to customers. FACTA imposes significant penalties upon violators where the violation is deemed to have been willful. Otherwise damages are
limited to actual losses incurred by the card holder. On October 24, 2008, the District Court denied plaintiff's renewed motion for class certification. Plaintiff has appealed this decision and
the case is stayed pending this appeal. The Company believes the plaintiff's allegations, particularly those asserting AMCE's willfulness, are without merit.

Union Sponsored Pension Plan.On November 7, 2008, the Company received notice of a written demand for payment of a partial
withdrawal liability assessment from a collectively bargained multiemployer pension plan that covers certain of its unionized theatre employees. Based on a payment schedule that the Company has
received from this plan in December 2008, the Company began making quarterly payments on January 1, 2009 related to the $5,279,000 in partial withdrawal liability. However, the Company also
estimates that approximately $2,839,000 of this liability was discharged in bankruptcy by companies it acquired. As of April 2, 2009, the Company has recorded a liability related to this matter
in the amount of $4,311,000 and has made contributions of approximately $968,000. The final partial withdrawal liability amount may be adjusted based on a legal review of the plan's assessment, the
Company's records and ensuing discussions with the plan's trustees.

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 January 1, 2009, the Class L-1 Stockholders of AMC Entertainment Holdings, Inc. unanimously elected
Mr. Philip H. Loughlin to the Company's Board of Directors.

On
March 5, 2009 the Requisite Stockholder Majority (as defined under the Stockholders' Agreement) of AMC Entertainment Holdings, Inc. unanimously approved a grant of
Options to Mr. Gerardo I.
Lopez, the Company's Chief Executive Officer to purchase up to 15,980.45 shares of AMCE Entertainment Holdings, Inc. Class N Common Stock at an exercise price of $323.95 per share.

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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 8, 2009, there was one stockholder of record of our Common Stock (AMC Entertainment Holdings, Inc.).

On
October 2, 2008 and March 24, 2009, Holdings used cash received from AMCE to pay a dividend to Parent of $2,255,000 and $1,094,000, respectively. Parent used the
available funds to repurchase treasury stock and pay corporate expenses incurred in the ordinary course of business.

Issuer Purchase of Equity Securities

There were no repurchases of Holding's Common Stock during the thirteen weeks ended April 2, 2009.

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Item 6.    Selected Financial Data.

Years Ended(1)(3)(6)52 Weeks
Ended April 2,
2009(4)

53 Weeks
Ended April 3,
2008(4)

52 Weeks
Ended
March 29,
2007(4)

52 Weeks
Ended
March 30,
2006(4)

From
Inception
July 16, 2004
through
March 31,
2005(7)



April 2, 2004
through
December 23,
2004(7)(Predecessor)(in thousands, except operating data)Statement of Operations Data:Revenues:Admissions

$
1,580,328

$
1,615,606

$
1,576,924

$
1,125,243

$
297,310



$
847,476Concessions


626,251


648,330


631,924


448,086


117,266




328,970Other revenue


58,908


69,108


94,374


90,631


24,884




82,826Total revenues


2,265,487


2,333,044


2,303,222


1,663,960


439,460




1,259,272Costs and Expenses:Film exhibition costs


827,785


841,641


820,865


590,456


152,747




452,727Concession costs


67,779


69,597


66,614


48,845


12,801




37,880Operating expense


589,376


607,588


579,123


444,593


115,590




324,427Rent


448,803


439,389


428,044


326,627


80,776




223,734General and administrative:Merger, acquisition and transactions costs


652


6,372


12,447


12,523


22,286




42,732Management fee


5,000


5,000


5,000


2,000


500




Other(8)


53,747


39,177


45,860


38,296


14,615




33,727Pre-opening expense


5,421


7,130


4,776


5,768


39




1,292Theatre and other closure expense (income)


(2,262
)

(20,970
)

9,011


601


1,267




10,758Restructuring charge(9)











3,980


4,926




Depreciation and amortization


201,413


222,111


228,437


158,098


43,931




86,052Impairment of long-lived assets


73,547


8,933


10,686


11,974







Disposition of assets and other gains


(1,642
)

(2,408
)

(11,183
)

(997
)

(302
)



(2,715
)Total costs and expenses


2,269,619


2,223,560


2,199,680


1,642,764


449,176




1,210,614Other (income)(5)


(14,139
)

(12,932
)

(10,267
)

(9,818
)

(6,778
)



Interest expense:Corporate borrowings


145,657


160,902


214,539


136,932


52,502




66,851Capital and financing lease obligations


5,990


6,505


4,669


3,937


1,449




5,848Equity in (earnings) losses of non-consolidated entities(12)


(24,823
)

(43,019
)

(233,704
)

7,807


(161
)



(129
)Investment (income)(13)


(1,731
)

(23,923
)

(17,594
)

(3,333
)

(3,191
)



(6,344
)Earnings (loss) from continuing operations before income taxes


(115,086
)

21,951


145,899


(114,329
)

(53,537
)



(17,568
)Income tax provision (benefit)


5,800


1,020


28,246


70,660


(9,280
)



14,760Earnings (loss) from continuing operations


(120,886
)

20,931


117,653


(184,989
)

(44,257
)



(32,328
)Earnings (loss) from discontinued operations, net of income tax benefit(2)


9,728


1,802


(746
)

(31,234
)

(133
)



(3,550
)Net earnings (loss)

$
(111,158
)
$
22,733

$
116,907

$
(216,223
)
$
(44,390
)


$
(35,878
)Preferred dividends



















104,300Net earnings (loss) for shares of common stock

$
(111,158
)
$
22,733

$
116,907

$
(216,223
)
$
(44,390
)


$
(140,178
)


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Table of Contents

Years Ended(1)(3)(6)52 Weeks
Ended April 2,
2009(4)

53 Weeks
Ended April 3,
2008(4)

52 Weeks
Ended
March 29,
2007(4)

52 Weeks
Ended
March 30,
2006(4)

From
Inception
July 16, 2004
through
March 31,
2005(7)



April 2, 2004
through
December 23,
2004(7)(Predecessor)(in thousands, except operating data)Balance Sheet Data (at period end):Cash and equivalents

$
536,580

$
108,717

$
319,533

$
232,366

$
72,945



$
Corporate borrowings


1,928,736


1,856,467


1,864,670


2,455,686


1,344,531




Other long-term liabilities


308,703


350,498


373,943


395,458


354,240




Capital and financing lease obligations


60,709


69,983


53,125


68,130


65,470




Stockholder's equity


826,178


917,416


1,167,053


1,042,642


722,038




Total assets


3,756,741


3,879,007


4,118,149


4,407,351


2,797,511




Other Data:Net cash provided by (used in) operating activities(11)

$
168,096

$
201,676

$
417,870

$
25,694

$
(45,364
)


$
145,364Capital expenditures


(104,704
)

(151,676
)

(138,739
)

(117,668
)

(18,622
)



(66,155
)Proceeds from sale/leasebacks











35,010


50,910




Screen additions


83


136


107


106







44Screen acquisitions








32


1,363


3,375




Screen dispositions


77


196


243


60


14




28Average screenscontinuing operations(10)


4,545


4,561


4,627


3,583


3,355




3,350Number of screens operated


4,612


4,606


4,666


4,770


3,361




3,560Number of theatres operated


307


309


318


335


219




231Screens per theatre


15.0


14.9


14.7


14.2


15.3




15.4Attendance (in thousands)continuing operations(10)


196,184


207,603


213,041


161,867


44,278




126,450


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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 2, 2009, we owned, operated or had interests in
307 theatres and 4,612 screens with 99%, or 4,557
of our screens in the U.S. and Canada, and 1%, or 55 of our screens in China (Hong Kong), France and the United Kingdom.

Our
principal directly owned subsidiaries are AMC Entertainment Inc. ("AMCE") American Multi-Cinema, Inc. ("AMC") and AMC Entertainment International, Inc. ("AMCEI"). We
conduct our theatrical exhibition business through AMC and its subsidiaries 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 18.53% as of April 2, 2009, 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. 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 AMCE's 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 AMCE's 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 AMCE's 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
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.

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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. There was no gain or loss
recorded on the sale of Yelmo.

In
May 2007, we disposed of our investment in Fandango, accounted for using the cost method, for total proceeds of $20,360,000, of which $17,977,000 was received in May and September
2007 and $2,383,000 was received in November 2008, and have recorded a gain on the sale included in investment income of approximately $15,977,000 during fiscal 2008 and $2,383,000 during fiscal 2009.
In July 2007 we disposed of our investment in HGCSA, an entity that operated 17 theatres in South America, for total proceeds of approximately $28,682,000 and recorded a gain on the sale included in
equity earnings of non-consolidated entities of approximately $18,751,000.

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

On
December 29, 2008, we sold all of our interests in Grupo Cinemex, S.A. de C.V. ("Cinemex"), which then operated 44 theatres with 493 screens primarily in the Mexico City
Metropolitan Area, to Entretenimiento GM de Mexico S.A. de C.V. ("Entretenimiento"). The purchase price received at the date of the sale and in accordance with the Stock Purchase Agreement was
$248,141,000 and costs related to the disposition were estimated to be $4,046,000. Additionally, we estimate that we will receive an additional $12,253,000 of the purchase price related to tax
payments and refunds in later periods and have received an additional $809,000 of purchase price related to a working capital calculation and post closing adjustments subsequent to April 2,
2009 which are included in our gain on disposition. We have recorded a gain on disposition before income taxes of $14,772,000 related to the disposition that is included as discontinued operations.

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

The
operations and cash flows of the Cinemex theatres have been eliminated from our ongoing operations as a result of the disposal transaction. We will not have any significant
continuing
involvement in the operations of the Cinemex theatres after the disposition. The results of operations of the Cinemex theatres have been classified as discontinued operations, and information
presented for all periods reflects the new classification. The operations of the Cinemex theatres were previously reported in our International Theatrical Exhibition operating segment. As a result of
the sale of Cinemex, we no longer report an International Theatrical Exhibition operating segment and for financial reporting purposes we have one operating segment.

On
February 23, 2009, Mr. Peter C. Brown provided AMC Entertainment Holdings, Inc. ("Parent") with notice of his retirement from his positions as Chairman of the
Board, Chief Executive Officer and President of Parent and its subsidiaries including Marquee Holdings Inc. and AMC Entertainment Inc. In connection with a Separation and General Release
Agreement, Mr. Brown received a cash severance payment of $7,014,000 which is recorded in general and administrative: other during the fifty-two weeks ended April 2, 2009.

During
the fifty-two weeks ended April 2, 2009 we recorded $5,279,000 of expense related to our partial withdrawal liability for a union-sponsored pension plan
included in general and administrative: other.

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During
the fifty-two weeks ended April 2, 2009, we closed eight theatres with 77 screens in the U.S. and opened six new theatres with 83 screens in the U.S. resulting
in a circuit total of 307 theatres and 4,612 screens.

Our
Theatrical Exhibition revenues are generated primarily from box office admissions and theatre concession sales. The balance of our revenues are generated from ancillary sources,
including on-screen advertising, rental of theatre auditoriums, fees and other revenues generated from the sale of gift cards and packaged tickets 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 generally occurring during the summer months and holiday seasons. Our results of
operations may vary significantly from quarter to quarter.

During
fiscal 2009, films licensed from our 6 largest distributors based on revenues accounted for approximately 81% of our U.S. and Canada admissions revenues. Our revenues attributable
to individual distributors may vary significantly from year to year depending upon the commercial success of each distributor's motion pictures in any given year.

During
the period from 1990 to 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 606 in 2008, according to the Motion Picture Association 2008 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 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. As of April 2, 2009, approximately 76% of our screens 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

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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, 600 options on January 26, 2006 and 15,980.45 options on March 6, 2009 to employees to acquire our common
stock. The fair value of these options on their respective grant dates was $22,373,000, $138,000 and $2,069,000. All of these options currently outstanding are equity classified.

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

One
of the previous holders of stock options held put rights associated with his options deemed to be within his control whereby he could require Holdings to repurchase his options and,
as a result, the expense for these options was remeasured each reporting period as liability based options at the Holdings level and the related compensation expense was included in AMCE's financial
statements.

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. In May 2008,
Holdings was notified of the holder's intention to exercise the put option and Holdings made cash payments to settle the accrued
liability of $3,911,000 during fiscal 2009. As a result of the exercise of the put right, there was no additional stock compensation expense related to these options in fiscal 2009 and the related
options were canceled upon exercise of the put right during fiscal 2009.

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 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.

On
February 23, 2009, we entered into a Separation and General Release Agreement with Peter C. Brown (formerly Chairman of the Board, Chief Executive Officer and President of
Parent, Holdings and AMCE), whereby all outstanding vested and unvested options were voluntarily forfeited. Stock compensation expense recorded in fiscal 2009 related only to awards that vested prior
to February 23, 2009. Because all vested and unvested awards were forfeited, there is no additional compensation cost to recognize in future periods 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

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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 Holdings' 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 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 definite-lived intangibles, investments in non-consolidated subsidiaries
accounted for under the equity method, marketable equity securities and internal use software 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 identify impairments related to internal use software when management determines that the remaining carrying value of
the software will not be realized through future use. 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. We perform our 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. We performed an interim impairment analysis during the third quarter of fiscal 2009 as a result of the recent downturns in the
current economic operating environment related to the credit and capital market crisis. Under these analyses, if the sum of the estimated future cash flows, undiscounted and without interest charges,
are less than the carrying amount of the asset, an impairment loss is recognized in the amount by which the carrying value of the asset exceeds its estimated fair value. Assets are evaluated for
impairment on an individual theatre basis, which 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

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expected
return on assets during fiscal 2009, 2008, and 2007. 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 $73,547,000, $8,933,000, and $10,686,000 during fiscal 2009, 2008, and 2007, respectively.

Goodwill.Our recorded goodwill was $1,836,731,000 and $2,070,858,000 as of April 2, 2009 and April 3, 2008, respectively. We
evaluate
goodwill and our trademark for impairment annually as of the beginning of the fourth fiscal quarter and any time an event occurs or circumstances change that would more likely than not reduce the fair
value for a reporting unit below its carrying amount. Our goodwill is recorded in our Theatrical Exhibition operating segment, which is also the reporting unit for purposes of evaluating recorded
goodwill for impairment. If the carrying value of the reporting unit exceeds its fair value we are required to reallocate the fair value of the reporting unit as if the reporting unit had been
acquired in a business combination and the fair value of the reporting unit was the price paid to acquire the reporting unit. We determine fair value by using an enterprise valuation methodology
determined by applying multiples to cash flow estimates less net indebtedness, which we believe is an appropriate method to determine fair value. There is considerable management judgment with respect
to cash flow estimates and appropriate multiples and discount rates to be used in determining fair value.

We
performed an interim impairment analysis during the third quarter of fiscal 2009 as a result of the recent downturns in the current economic operating environment related to the
credit and capital market crisis and declines in equity values for our publicly traded peer group competitors. While the fair value of our Theatrical Exhibition operations exceed the carrying value at
the present time and management does not believe that impairment is probable, the performance of our Theatrical Exhibition operations requires continued improvement in future periods to sustain its
carrying value and small changes in certain assumptions can have a significant impact on fair value. In the future, if the carrying value of our reporting unit exceeds the estimated 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 for purposes of measuring goodwill. As a result of this hypothetical allocation, the carrying value of goodwill could be reduced to the hypothetically recomputed amount. If the
performance of our Theatrical Exhibition operations does not continue to improve, a future impairment could result for a portion or all of the goodwill or trademark intangibles noted previously.

We
evaluated our enterprise value for fiscal 2009 and 2008 based on a contemporaneous valuation reflecting market conditions as of January 1, 2009 and December 27, 2007,
respectively. Two valuation approaches were utilized; the income approach and the market approach. The income approach provides an estimate of enterprise value by measuring estimated annual cash flows
over a discrete projection period and applying a present value rate to the cash flows. The present value of the cash flows is then added to the present value equivalent of the residual value of the
business to arrive at an estimated fair value of the business. The residual value represents the present value of the projected cash flows beyond the discrete projection period. The discount rate is
carefully determined using a rate of return deemed appropriate for the risk of achieving the projected cash flows. The market approach used publicly traded peer companies and reported transactions in
the industry. Due to market

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conditions
and the relatively few sale transactions, the market approach was used to provide additional support for the value achieved in the income approach.

Key
rates used in the income approach for fiscal 2009 and 2008 follow:

Description

Fiscal 2009

Fiscal 2008Discount rate


10.0
%

8.5
%Market risk premium


6.0
%

5.0
%Hypothetical capital structure: Debt/Equity


40%/60
%

40%/60
%


The
discount rate is an estimate of the weighted average cost of debt and equity capital. The required return on common equity was estimated by adding the risk-free required
rate of return, the market risk premium (which is adjusted for the Company's estimated market volatility, or beta), and small stock premium. The discount rate used for fiscal 2008 was 8.5% as compared
to the 10.0% discount rate used for the fiscal 2009 impairment test. The higher discount rate was due to a number of factors, such as an increase in corporate bond yields, increase in betas, and
increase in market risk premiums, given current market conditions.

The
aggregate annual cash flows were determined based on management projections on a theatre-by-theatre basis further adjusted by non-theatre cash
flows. The projections considered various factors including theatre lease terms, a reduction in attendance, and a reduction in capital investments in new theatres, given current market conditions and
the resulting difficulty with obtaining contracts for new-builds. Because Cinemex was sold in December 2008, cash flows for the fiscal 2009 study did not include results from Cinemex. Cash
flows were projected through fiscal 2015 and assumed revenues would increase approximately 1.7% annually primarily due to projected increases in ticket and concession pricing. The residual value is a
function of the estimated cash flow for fiscal 2016 divided by a capitalization rate (discount rate less long-term growth rate of 2%) then discounted back to represent the present value of the cash
flows beyond the discrete projection period.

As
the expectations of the average investor are not directly observable, the market risk premium must be inferred. One approach is to use the long-run historical arithmetic
average premiums that investors have historically earned over and above the returns on long-term Treasury bonds. The premium obtained using the historical approach is sensitive to the time
period over which one calculates the average. Depending on the time period chosen, the historical approach yields an average premium in a range of 5.0% to 8.0%. Another approach is to look at
projected rates of return obtained from analysts who follow the stock market. Again, this approach will lead to differing estimates depending upon the source. The published expected returns from firms
such as Merrill Lynch, Value Line, and Greenwich Associates collectively tend to indicate a premium in a range of 3.0% to 5.0%. Under normal market conditions, we have utilized a market risk premium
of 5.0%; however, given the current economic conditions, we utilized a market risk premium of 6.0% for fiscal 2009.

There
was no goodwill impairment as of April 2, 2009. During the fourth fiscal quarter of 2009 the equity values of our publicly traded peer group competitors increased by
approximately 40% from the third fiscal quarter ended on January 1, 2009. Based on the results of the study conducted at the end of the third quarter of fiscal 2009, our fair value exceeded the
book value by 0.6%.

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Following, for illustrative purposes, are the percentages at which our fair value exceeds the carrying value assuming hypothetical reductions in the fair value as
of January 1, 2009 (in thousands):

Carrying Value

$
2,660,361Hypothetical Reduction of Fair Value

Fair Value

% Fair Value
Exceeds/(Less than)
Carrying Value0.0%

$
2,676,365


0.6
%2.5%


2,609,520


(1.9
)%5.0%


2,542,675


(4.4
)%7.5%


2,475,830


(6.9
)%10.0%


2,408,985


(9.4
)%


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 2, 2009, we had recorded approximately $31,000,000 of net deferred tax assets (net of valuation allowances of approximately $321,523,000) 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 a discount rate of 8.54%. We have
recorded theatre and other closure (income) expense of $(2,262,000), $(20,970,000), and $9,011,000 during the fiscal years ended April 2, 2009, April 3, 2008, and March 29, 2007.

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 2, 2009 and April 3, 2008, we had recorded casualty insurance reserves of $19,179,000 and $23,254,000, respectively, net of
estimated insurance recoveries. We have recorded expense related to general liability and workers compensation claims of $10,537,000, $14,836,000, and $14,519,000 during the periods ended
April 2,

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2009,
April 3, 2008, and March 29, 2007, respectively. During fiscal 2009 we recorded a change in estimate related to favorable loss developments compared to what was originally
estimated which reduced our expense by approximately $2,100,000.

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.

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 $173,000. For our postretirement plans, a 50 basis point
decrease in the discount rate would increase postretirement expense by approximately $65,000. For fiscal 2009, we increased our discount rate to 7.43% from 6.25% for our pension plans and to 7.42%
from 6.00% for our postretirement benefit plan. On May 2, 2008, our Board of Directors approved revisions to our Post Retirement Medical and Life Insurance Plan effective January 1,
2009, and on July 3, 2008 the changes were communicated to the
plan participants. As a result of these revisions, we recorded a negative prior service cost of $5,969,000 through other comprehensive income to be amortized over eleven years based on expected future
service of the remaining participants. 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. We have recorded net periodic benefit cost (income) for our pension and postretirement plans of
$(1,890,000), $1,461,000, and $(4,454,000) during the periods ended April 2, 2009, April 3, 2008, and March 29, 2007, 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 $203,000 per year.

The
annual rate of increase in the per capita cost of covered health care benefits assumed for 2009 was 8.0% for medical and 4.0% for dental and vision. The rates were assumed to
decrease gradually to 5.0% for medical in 2012 and remain at 4.0% for dental. The health care cost trend rate assumption has a significant effect on the amounts reported. Increasing the assumed health
care cost trend rates by one percentage point in each year would increase the accumulated postretirement benefit obligation as of April 2, 2009 by $1,840,000 and the aggregate of the service
and interest cost components of postretirement expense for fiscal 2009 by $149,000. Decreasing the assumed health care cost trend rates by one percentage point in each year would decrease the
accumulated postretirement obligation for

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fiscal
2009 by $1,585,000 and the aggregate service and interest cost components of postretirement expense for fiscal 2009 by $130,000. Note 12Employee Benefit Plans to AMCE's
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.

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 2009, 2008, and 2007 there were no significant changes in our film cost estimation and settlement procedures.

As
of April 2, 2009 and April 3, 2008, we had recorded film payables of $60,286,000 and $44,028,000, respectively. We have recorded film exhibition costs of $827,785,000,
$841,641,000, and $820,865,000 during the periods ended April 2, 2009, April 3, 2008, and March 29, 2007.

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.

Operating Results

The following table sets forth our revenues, costs and expenses attributable to our operations. Reference is made to
Note 16Operating Segment to 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 2009 includes 52 weeks, fiscal year 2008 includes 53 weeks and fiscal year 2007 includes 52 weeks.

(In thousands)

52 Weeks
Ended
April 2,
2009

53 Weeks
Ended
April 3,
2008

52 Weeks
Ended
March 29,
2007Revenues:Admissions

$
1,580,328

$
1,615,606

$
1,576,924Concessions


626,251


648,330


631,924Other revenue


58,908


69,108


94,374Total revenues

$
2,265,487

$
2,333,044

$
2,303,222Costs and Expenses:Theatrical exhibitionFilm exhibition costs

$
827,785

$
841,641

$
820,865Concession costs


67,779


69,597


66,614Theatre operating expense


589,376


607,588


579,123Rent


448,803


439,389


428,044Pre-opening expense


5,421


7,130


4,776Theatre and other closure expense (income)


(2,262
)

(20,970
)

9,0111,936,902


1,944,375


1,908,433General and administrative expense:Merger, acquisition and transaction costs


652


6,372


12,447Management fee


5,000


5,000


5,000Other


53,747


39,177


45,860Depreciation and amortization


201,413


222,111


228,437Impairment of long-lived assets


73,547


8,933


10,686Disposition of assets and other gains


(1,642
)

(2,408
)

(11,183
)Total costs and expenses

$
2,269,619

$
2,223,560

$
2,199,680Operating Data (at period end):Screen additions


83


136


107Screen acquisitions








32Screen dispositions


77


196


243Average screenscontinuing operations(1)


4,545


4,561


4,627Number of screens operated


4,612


4,606


4,666Number of theatres operated


307


309


318Screens per theatre


15.0


14.9


14.7Attendance (in thousands)continuing operations(1)


196,184


207,603


213,041


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

(In thousands)

52 Weeks
Ended
April 2,
2009

53 Weeks
Ended
April 3,
2008

52 Weeks
Ended
March 29,
2007Earnings (loss) from continuing operations before income taxes

$
(115,086
)
$
21,951

$
145,899Plus:Interest expense


151,647


167,407


219,208Depreciation and amortization


201,413


222,111


228,437Impairment of long-lived assets


73,547


8,933


10,686Preopening expense


5,421


7,130


4,776Theatre and other closure expense (income)


(2,262
)

(20,970
)

9,011Disposition of assets and other gains


(1,642
)

(2,408
)

(11,183
)Equity in non-consolidated entities


(24,823
)

(43,019
)

(233,704
)Investment loss (income)


(1,731
)

(23,923
)

(17,594
)Other (income) expense(1)





(1,246
)

1,019General and administrative expenseunallocated:Management fee


5,000


5,000


5,000Merger, acquisition and transaction costs


652


6,372


12,447Other(2)


53,747


39,177


45,860Total Segment Adjusted EBITDA

$
345,883

$
386,515

$
419,862


---

For the Year Ended April 2, 2009 and April 3, 2008

Revenues.Total revenues decreased 2.9%, or $67,557,000, during the year ended April 2, 2009 compared to the year ended
April 3, 2008.
Fiscal year 2009 includes 52 weeks and fiscal year 2008 includes 53 weeks which we estimate contributed approximately $30,000,000 to the decline in our total revenues. Admissions
revenues decreased 2.2%, or $35,278,000, during the year ended April 2, 2009 compared to the year ended April 3, 2008, due to a 5.5% decrease in attendance partially offset by a 3.6%
increase in average ticket price. The increase in average ticket price was primarily due to our practice of periodically reviewing ticket prices and making selective adjustments based upon such
factors as general inflationary trends and conditions in local markets. Admissions revenues at comparable theatres (theatres opened on or before the first quarter of fiscal 2008) decreased 4.1%, or
$63,821,000, during the year ended April 2, 2009 from the comparable period last year. Based upon available industry sources, box office revenues of our comparable theatres slightly
underperformed the overall industry comparable theatres in the markets where we operate. We believe our underperformance is primarily the result of changes in distribution patterns and an increase in
the number of prints released in our markets. While our box office performance on such films was in line with our expectations, the increase in prints in our market diluted our overall performance
against the industry. Concessions revenues decreased 3.4%, or $22,079,000, during the year ended April 2, 2009 compared to the year ended April 3, 2008 due to the decrease in attendance
partially offset by a 2.2% increase in average concessions per patron. Other theatre revenues decreased 14.8%, or $10,200,000, during the year ended April 2, 2009 compared to year ended
April 3, 2008, primarily due to a decrease

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in
advertising revenues. See Note 1Revenuesfor discussion of the change in estimate for revenues recorded during the years ended
April 2, 2009 and April 3, 2008.

Costs and expenses.Total costs and expenses increased 2.1%, or $46,059,000, during the year ended April 2, 2009 compared to the
year ended
April 3, 2008. Film exhibition costs decreased 1.6%, or $13,856,000, during the year ended April 2, 2009 compared to the year ended April 3, 2008 due to the decrease in admissions
revenues partially offset by an increase in film exhibition costs as a percentage of admission revenues. As a percentage of admissions revenues, film exhibition costs were 52.4% in the current period
as compared with 52.1% in the prior period. Concession costs decreased 2.6%, or $1,818,000, during the year ended April 2, 2009 compared to the year ended April 3, 2008 due to the
decrease in concession revenues partially offset by an increase in concession costs as a percentage of concessions revenues. As a percentage of concessions revenues, concession costs were 10.8% in the
current period and 10.7% in the prior period. As a percentage of revenues, operating expense was 26.0% in both the current and prior period. Rent expense increased 2.1%, or $9,414,000, during the
year ended April 2, 2009 compared to the year ended April 3, 2008 due primarily to the opening of new theatres. Preopening expense decreased $1,709,000 during the year ended
April 2, 2009 due to a decline in screen additions. During the year ended April 2, 2009 we recognized $2,262,000 of theatre and other closure income primarily due to lease terminations
negotiated on favorable terms for two theaters closed during the year ended April 2, 2009. During the year ended April 3, 2008, we recognized $20,970,000 of theatre and other closure
income due primarily to a lease termination negotiated on favorable terms for seven of our theatres that were closed during the year ended April 3, 2008 or where the lease was terminated during
this period.

General and Administrative Expense:

Merger, acquisition and transaction costs.Merger, acquisition and transaction costs decreased $5,720,000 during the year ended
April 2, 2009
compared to the year ended April 3, 2008. Prior period costs are primarily comprised of professional and consulting expenses related to a proposed initial public offering of common stock that
was withdrawn on June 19, 2007 and preacquisition expenses for casualty insurance losses that occurred prior to the merger with Loews.

Management fees.Management fees were unchanged during the year ended April 2, 2009. Management fees of $1,250,000 are paid
quarterly, in
advance, to our Sponsors in exchange for consulting and other services.

Other.Other general and administrative expense increased 37.2%, or $14,570,000, during the year ended April 2, 2009 compared to
the year
ended April 3, 2008. The increase in other general and administrative expenses is primarily due to a cash severance payment of $7,014,000 to our former Chief Executive Officer and an expense of
$5,279,000 related to our partial withdrawal liability for a union-sponsored pension plan, partially offset by a pension curtailment gain of $1,072,000 as a result of the retirement of our former
Chief Executive Officer.

Depreciation and Amortization.Depreciation and amortization decreased 9.3%, or $20,698,000, compared to the prior period due primarily
to certain
intangible assets becoming fully amortized, the closing of theatres and impairment of long-lived assets.

Impairment of Long-Lived Assets.During fiscal 2009 we recognized non-cash impairment losses of $73,547,000 related to
theatre fixed assets, internal use software and assets held for sale. We recognized an impairment loss of $65,636,000 on 34 theatres with 520 screens (in Arizona, California, Canada, Florida, Georgia,
Illinois, Maryland, Massachusetts, Michigan, New York, North Carolina, Ohio, Texas, Virginia, Washington and Wisconsin). Of the theatre charge, $1,365,000 was related to intangible assets, net, and
$64,271,000 was related to property, net. We recognized an impairment loss on abandonment of internal use software, recorded in other long-term assets of $7,125,000 when

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management
determined that the carrying value would not be realized through future use; and adjusted the carrying value of our assets held for sale to reflect the sales proceeds received in fiscal
2009 and declines in fair value which resulted in impairment charges of $786,000. 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 of Columbia).

Disposition of Assets and Other Gains.Disposition of assets and other gains were $1,642,000 in the current period compared to
$2,408,000 in the
prior period. The current and prior periods include $2,015,000 and $5,321,000, respectively, of settlements received related to fireproofing litigation and other construction related recoveries at
various theatres. The current and prior year also includes contingent legal expense related to the litigation recoveries of $104,000 and $2,895,000, respectively.

Other Income.Other income includes $14,139,000 and $11,289,000 of income related to the derecognition of gift card liabilities as to
which we
believe future redemption to be remote, during the year ended April 2, 2009 and April 3, 2008, respectively. 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 during the year ended April 3, 2008.

Interest Expense.Interest expense decreased 9.4%, or $15,760,000, primarily due to decreased interest rates on the Senior Secured
Credit Facility.

Equity in Earnings of Non-Consolidated Entities.Equity in earnings of non-consolidated entities was $24,823,000 in the
current period compared to $43,019,000 in the prior period. Equity in earnings related to our investment in National CineMedia, LLC were $27,654,000 and $22,175,000 for the year ended
April 2, 2009 and April 3, 2008, respectively. Equity in earnings related to HGCSA was $18,743,000 during the year ended April 3, 2008 and includes the gain related to the
disposition of $18,751,000. We recognized an impairment loss of $2,742,000 related to an equity method investment in one U.S. motion picture theatre during the year ended April 2, 2009.

Investment Income.Investment income was $1,731,000 for the year ended April 2, 2009 compared to $23,923,000 for the year ended
April 3, 2008. The year ended April 2, 2009 and April 3, 2008 include a gain on the sale of our investment in Fandango of $2,383,000 and $15,977,000, respectively. Interest income
decreased $6,672,000 from the prior period primarily due to decreases in temporary investments and decreases in rates of interest earned on temporary investments. During the year ended April 2,
2009, we recognized an impairment loss of $1,512,000 related to unrealized losses previously recorded in accumulated other comprehensive income on marketable securities related to one of our deferred
compensation plans when we determined the decline in fair value below historical cost to be other than temporary.

Income Tax Provision.The provision for income taxes from continuing operations was $5,800,000 for the year ended April 2, 2009
and $1,020,000
for the year ended April 3, 2008. See Note 10Income Taxes.

Earnings from Discontinued Operations, Net.On December 29, 2008 we sold our operations in Mexico, including 44 theatres and
493 screens. The results of operations of the Cinemex theatres have been classified as discontinued operations, and information presented for all periods reflects the new classification. See
Note 2Discontinued Operations for the components of the earnings from discontinued operations.

Net Earnings (Loss).Net earnings (loss) were $(111,158,000) and $22,733,000 for the year ended April 2, 2009 and April 3,
2008,
respectively. The decrease in net earnings was primarily due to impairment charges of $73,547,000 in the current year and the recognition of a gain on disposition of HGCSA of $18,751,000, a gain on
the disposition of Fandango of $15,977,000 and theatre and other closure income of $20,970,000 which were recorded in the prior year.

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Revenues.Total revenues increased 1.3%, or $29,822,000 during the year ended April 3, 2008 compared to the year ended
March 29, 2007.
Admissions revenues increased 2.5%, or $38,682,000, 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 2007) increased 1.7% during the year ended
April 3, 2008 over the comparable period last year, primarily due to a 4.9% increase in average ticket price partially offset by a 3.0% 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 2.6%, or $16,406,000, during the year ended April 3, 2008 compared to the year ended
March 29, 2007 due to a 5.1% increase in average concessions per patron related primarily to price increases partially offset by the decrease in
attendance. Other theatre revenues decreased 26.8%, or $25,266,000, 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.

Costs and expenses.Total costs and expenses increased 1.1%, or $23,880,000, during the year ended April 3, 2008 compared to the
year ended
March 29, 2007. Film exhibition costs increased 2.5%, or $20,776,000, 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 $2,983,000, 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 26.0% in the current period from 25.1% 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 2.7%, or $11,345,000, during the year ended April 3, 2008 compared to the year ended March 29, 2007. During the year ended April 3, 2008, we recognized $20,970,000 of
theatre and other closure income due primarily to lease terminations negotiated on favorable terms for 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 $9,011,000 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.

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 a proposed initial public offering
of common stock that was withdrawn on June 19, 2007 and preacquisition expenses for casualty insurance losses that occurred prior to the merger with 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.

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Other.Other general and administrative expenses decreased 14.6%, or $6,683,000 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 less 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.

Depreciation and Amortization.Depreciation and amortization decreased 2.8%, or $6,326,000 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.

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 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.

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 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 $11,289,000 and $10,992,000 of income related to the derecognition of gift 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. 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 23.6%, or $51,801,000, primarily due to decreased borrowings.

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 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 our Notes due 2011 at 100% of principal value, on
March 23, 2007 we redeemed

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$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.

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 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 5Investments for the components of equity in earnings related to National CineMedia, LLC.

Investment Income.Investment income was $23,923,000 for the year ended April 3, 2008 compared to $17,594,000 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 $10,208,000 compared to prior year due primarily to less cash
and equivalents available for investment.

Income Tax Provision.The provision for income taxes from continuing operations was $1,020,000 for the year ended April 3, 2008 and
$28,246,000 for the year ended March 29, 2007. See Note 10Income Taxes.

Earnings (Loss) from Discontinued Operations, Net.On December 29, 2008 we sold our operations in Mexico, including 44 theatres
and 493
screens. The results of operations of the Cinemex theatres have been classified as discontinued operations, and information presented for all periods reflects the new classification. 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
4 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 2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.

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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 approximately $523,000,000 in the aggregate as of April 2, 2009. 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 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 $168,096,000, $201,676,000
and $417,870,000 during the periods ended April 2, 2009, April 3, 2008 and March 29, 2007 respectively. The decrease in operating cash flows during the year ended April 2,
2009 is primarily due to the decrease in net earnings which was partially offset by an increase in non-cash impairment charges. 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. We had working
capital surplus (deficit) as of April 2, 2009 and April 3, 2008 of $257,714,000 and ($225,476,000), respectively. Working capital includes $121,628,000 and $134,560,000 of deferred
revenue as of April 2, 2009 and April 3, 2008 respectively. We received litigation settlement checks related to fireproofing and other construction related claims totaling $1,911,000,
$2,426,000 and $13,130,000 during the years ended April 2, 2009, April 3, 2008 and March 29, 2007, respectively. As of April 2, 2009 we have borrowed the available amount
of $185,000,000 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 $0 and
$185,947,000 available on our credit facility to meet these obligations for the periods ended April 2, 2009 and April 3, 2008, respectively.

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During
the year ended April 2, 2009, we closed 8 theatres with 77 screens in the U.S. and opened 6 new theatres with 83 screens in the U.S., resulting in a circuit total of 307
theatres and 4,612 screens.

Cash Flows from Investing Activities

Cash provided by (used in) investing activities, as reflected in the Consolidated Statement of Cash Flows were $100,925,000,
$(139,405,000) and $283,969,000 during the periods ended April 2, 2009, April 3, 2008 and March 29, 2007 respectively. As of April 2, 2009, we had construction in progress
of $0. We had no U.S. theatres or screens under construction on April 2, 2009.
Cash outflows from investing activities include capital expenditures of $104,704,000 during the year ended April 2, 2009. We expect that our gross capital expenditures in fiscal 2010 will be
approximately $100,000,000 to $105,000,000.

Cash
flows for the period ended April 2, 2009 include proceeds from the sale of Cinemex of $224,378,000 and proceeds from the sale of Fandango of $2,383,000. 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.

On
December 29, 2008, we sold all of our interests in Cinemex, which then operated 44 theatres with 493 screens primarily in the Mexico City Metropolitan Area, to Entretenimiento
GM de Mexico S.A. de C.V. Under the Stock Purchase Agreement for the transaction, the purchase price was $315,000,000, decreased by the amount of net funded indebtedness of Cinemex and other
specified items of $66,859,000. Costs paid related to the disposition were $4,046,000 and the cash balance for Cinemex as of the date of sale was $19,717,000, which was accounted for in the purchase
price in the calculation of net funded indebtedness. Additionally, we estimate that we will receive an additional $12,253,000 of the purchase price related to tax payments and refunds in later periods
and have received an additional $809,000 of purchase price related to a working capital calculation and post closing adjustments subsequent to April 2, 2009.

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.

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

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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 were made quarterly and were $15,981,000 through the end of the agreement of which $15,901,000 has been paid through fiscal 2009. 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 18,821,114 units or an 18.53% interest in NCM accounted for using the equity method of accounting. As of April 2, 2009 the fair market value of the shares in
National CineMedia LLC was approximately $262,743,000 based on a price for shares of National CineMedia, Inc. on April 2, 2009 of $13.96 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 $361,759,000 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.

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 have received approximately $20,360,000 in cash consideration in connection with the sale
of our interest in Fandango of which $17,977,000 was received during fiscal 2008 and $2,383,000 was received during fiscal 2009.

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.

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Cash Flows from Financing Activities

Cash flows provided by (used in) financing activities, as reflected in the Consolidated Statement of Cash Flows, were $161,843,000,
$(270,690,000) and $(611,131,000) during the periods ended April 2, 2009, April 3, 2008 and March 29, 2007, respectively. During fiscal 2009 we paid two cash dividends totaling
$3,349,000 to our stockholder Marquee Holdings Inc. and borrowed $185,000,000 under our credit facility. 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.

Concurrently
with the closing of the Mergers, we entered into the following financing transactions: (1) our Senior Secured Credit Facility, consisting of a $650,000,000 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 on 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

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(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 to the event on a pro forma basis. Under the
indentures and the Parent Term Loan Facility, we could borrow approximately $1,096,000,000 (assuming an interest rate of 9.5% per annum on the additional indebtedness) in addition to specified
permitted indebtedness. If we cannot satisfy the coverage ratios of the indentures, generally we can incur, in addition to amounts borrowed under the 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 2, 2009, we were in compliance with all financial covenants relating to the Senior Secured Credit Facility, the Notes due 2016, the Notes due 2014, the Fixed Notes due
2012 and the Discount Notes due 2014.

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 will include borrowing capacity available 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 $0 as of April 2, 2009 due to $14,169,000 of outstanding letters of credit and additional borrowings in fiscal 2009 which reduce the capacity of the revolving
credit facility. The interest rate as of April 2, 2009 on the
outstanding term loans and revolving credit facility borrowings was 2.021% and 2.046% per annum, respectively.

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
0.50% with respect to base rate borrowings and 1.50% with respect to LIBOR borrowings, and the current applicable margin for

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borrowings
under the term loan facility is 0.50% with respect to base rate borrowings and 1.50% with respect to LIBOR borrowings. 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.

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 were 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.

Holdings Discount Notes due 2014

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

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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 Discount Notes due 2014. As a result, Holdings made its first cash interest payment in the amount of $14,447,700 on the Discount Notes due 2014 on
February 15, 2008. During fiscal 2008 Holdings used cash on hand at AMCE to pay a dividend to Holdings' current stockholders in an aggregate amount of $275,000,000 and Holdings used cash on
hand at AMCE of $18,551,000 from a $21,830,000 dividend paid by AMCE to make the interest payment on the Discount Notes due 2014 and to pay other professional and consulting expenses. During fiscal
2009 Holdings made cash interest payments of $28,895,400 on the Discount Notes due 2014 from two dividend payments of $35,989,000 in the aggregated paid by AMCE to cover interest payments on the
Discount Notes due 2014, repurchase treasury stock, make payments related to liability classified options and pay corporate overhead expenses in the ordinary course of business. The outstanding
principal balance on the Discount Notes due 2014 was $240,795,000 as of April 2, 2009. 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 approximately $523,000,000 in the aggregate
as of April 2, 2009.

Parent Term Loan Facility

To help finance the dividend paid by Parent to its stockholders discussed in Note 9 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 6.32% per annum as of April 2, 2009. The principal balance of the Parent Term Loan Facility was $466,936,000 as of April 2, 2009. 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 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, Holdings, AMCE 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.

Subsequent Event

During April and May of 2009, AMCE made dividend payments to its stockholder Marquee Holdings Inc. and Marquee
Holdings Inc. made dividend payments to its stockholder AMC Entertainment Holdings, Inc. totaling $300,000,000. AMC Entertainment Holdings, Inc. made payments to purchase term
loans and reduced the principal balance of the Parent Term Loan Facility to $226,261,000 with a portion of the dividend proceeds.

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,

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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 2, 2009 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
Commitments2010

$
9,075

$
6,500

$
126,703

$
393,452

$
19,645

$
6,396

$
561,7712011


9,225


6,500


126,571


393,321


12,754


1,937


550,3082012


8,023


191,500


125,809


379,991





437


705,7602013


7,055


859,375


106,994


367,166








1,340,5902014


6,706


300,000


86,645


345,761








739,112Thereafter


68,628


565,795


76,377


2,298,514








3,009,314Total

$
108,712

$
1,929,670

$
649,099

$
4,178,205

$
32,399

$
8,770

$
6,906,855


---

As
discussed in Note 10Income Taxes, the Company adopted FASB Interpretation No. 48 "Accounting for Uncertainty in Income Taxes-an interpretation
of FASB No. 109." At April 2, 2009, the Company had a liability for unrecognized benefits for $33,500,000. 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. Any amounts related to these items are not included in
the table above.

Fee Agreement

In connection with the holdco merger, on June 11, 2007, Parent, Holdings, AMCE and the Sponsors entered into a Fee Agreement
(the "Management Fee Agreement"), which replaced the December 23, 2004 fee agreement among Holdings, AMCE and the 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 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

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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 2, 2009, we estimate this amount would be $34,097,000 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 18.53% of NCM accounted for following the equity method.
The fair market value of these shares is approximately $262,743,000 as of April 2, 2009. 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 $361,759,000 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 on hand in excess of our anticipated operating needs or from the proceeds of new debt issues by AMCE or Holdings.
Such options might include, but are not limited to, acquisitions of theatres or theatre companies, repayment of corporate borrowings of AMCE, Holdings and Parent 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.

AMCE Covenant Compliance

AMCE's senior secured credit facility requires AMCE to maintain a net senior secured leverage ratio of no more than 3.25 to 1.0,
calculated on a pro forma basis for the trailing four quarters (as determined under our senior secured credit facility) as long as the commitments under AMCE's revolving credit facility remain
outstanding. Failure to comply with this covenant would result in an event of default under AMCE's senior secured credit facility unless waived by AMCE's revolving credit lenders, and in any event
would likely limit AMCE's ability to borrow funds pursuant to AMCE's revolving credit facility. An event of default under AMCE's senior credit facility can result in the acceleration of AMCE's
indebtedness under the facility, which in turn would result in an event of default and possible acceleration of indebtedness under the Parent Term Loan Facility and our debt securities as well. In
addition, AMCE's senior secured credit facility restricts AMCE's ability to take

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certain
actions such as incurring additional debt or making certain acquisitions if AMCE is unable to comply with AMCE's net senior secured leverage ratio covenant or, in the case of additional debt,
maintain an Adjusted EBITDA to consolidated interest expense ratio of at least 2.0 to 1.0 and a senior leverage ratio of no more than 3.25 to 1.0 after giving pro forma effect (as determined under our
senior secured credit facility) to the debt incurrence or acquisition, as the case may be. Failure to comply with these covenants would result in limiting our long-term growth prospects by
hindering our ability to incur future indebtedness or grow through acquisitions. As our failure to comply with the covenants described above can, at best, limit our ability to incur debt or grow our
company, and at worst, cause us to go into default under the agreements governing our indebtedness, management believes that our senior secured credit facility and these covenants are material to the
Company. As of April 2, 2009, we were in compliance with the covenants described above.

Pro
forma Adjusted EBITDA is defined in AMCE's senior secured credit facility as loss from continuing operations, as adjusted for the items summarized in the table below. Consolidated
interest expense is defined in our senior secured credit facility as interest expense excluding, among other things, the amortization of fees and expenses associated with certain investment and
financing transactions and certain payments made in respect of operating leases, as described in the definition of consolidated interest expense, less interest income for the applicable period.

Adjusted
EBITDA is not a measurement of our financial performance or liquidity under U.S. GAAP and should not be considered as an alternative to loss from continuing operations,
operating income or any other performance measures derived in accordance with U.S. GAAP. Consolidated interest expense as defined in AMCE's senior secured credit facility should not be
considered an alternative to U.S. GAAP interest expense. Adjusted EBITDA also includes estimated annual cost savings initiatives that we expect to achieve in the ordinary course of business as
a result of actions we have taken or anticipate taking in the near future. The adjustments set forth below reflecting estimated cost savings and operating synergies do not qualify as pro forma
adjustments under Regulation S-X promulgated under the Securities Act and constitute forward-looking statements within the Private Securities Litigation Reform Act of 1995, as
amended. Actual results may differ materially from those reflected due to a number of factors, including without limitation, (i) an inability to reduce

61

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advertising
without negatively impacting operations, (ii) an inability to successfully modify lease terms with landlords and (iii) an inability to consolidate vendors or enter into more
favorable contracts.

52 Weeks Ended
April 2, 2009(thousands of
dollars,
except ratios)Calculation of Adjusted EBITDA based on AMCE's financials:Loss from continuing operations

$
(90,900
)Income tax provision


5,800Investment income


(1,696
)Equity in (earnings) of non-consolidated entities


(24,823
)Interest expense


121,747Disposition of assets and other (gains)


(1,642
)Depreciation and amortization


201,413Impairment charge


73,547Theatre and other closure (income)


(2,262
)Pre-opening expense


5,421Stock-based compensation expense


2,622Management fees


5,000Merger and acquisition costs


650Subtotal

$
294,877Additional credit facility adjustments:Gain on sale of investments and income from equity investments


218,077Non-cash items, deferred rent and other


4,450Cost savings initiatives(1)


18,000Adjusted EBITDA(2) $

$
535,404

RequiredNet senior secured indebtedness(3)

$
185,140Net senior secured leverage ratio(4)


.35 to 1.00

3.25 to 1.00 MaximumSenior indebtedness(5)

$
1,093,166Senior leverage ratio(6)


2.04 to 1.00

3.25 to 1.00 MaximumConsolidated interest expense(7)

$
120,357Annualized EBITDA Ratio(8)


4.45 to 1.00

2.00 to 1.00 Minimum


---

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Table of Contents

New Accounting Pronouncements

In April 2009, the FASB issued FSP No. FAS 157-4,Determining Fair Value When the Volume and
Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly("FSP FAS 157-4"). FSP
FAS 157-4 provides guidance on estimating fair value when market activity has decreased and on identifying transactions that are not orderly. Additionally, entities are required to
disclose in interim and annual periods the inputs and valuation techniques used to measure fair value. This FSP is effective for interim and annual periods ending after June 15, 2009. We are
currently evaluating the impact of FSP FAS 157-4 on our consolidated financial statements and will adopt this FSP effective July 2, 2009.

In
April 2009, the FASB issued FSP FAS 115-2 and FAS 124-2,Recognition and Presentation of
Other-Than-Temporary Impairments, ("FSP FAS 115-2 and FAS 124-2"). The existing accounting guidance was modified
to demonstrate the intent and ability to hold an investment security for a period of time sufficient to allow for any anticipated recovery in fair value. When the fair value of a debt or equity
security has declined below the amortized cost at the measurement date, an entity that intends to sell a security or is more-likely-than-not to sell the security
before the recovery of the security's cost basis, must recognize the
other-than-temporary impairment in earnings. FSP FAS 115-2 and FAS 124-2 is effective for interim and annual periods ending after
June 15, 2009. We are currently evaluating the impact of FSP FAS 115-2 and FAS 124-2 on our consolidated financial statements.

In
April 2009, the FASB issued FSP FAS 107-1 and APB 28-1,Interim Disclosures about Fair Value of Financial
Instruments, ("FSP FAS 107-1 and APB 28-1"). SFAS No. 107,Disclosures about Fair Value of Financial
Instruments, ("SFAS No. 107") was amended to require an entity to provide disclosures about fair value of financial instruments in interim financial statements. FSP
FAS 107-1 and APB 28-1 are effective for interim and annual periods ending after June 15, 2009. We are currently evaluating the impact of FSP
FAS 107-1 and APB 28-1 on our consolidated financial statements.

In
December 2008, the FASB issued FASB Staff Position FSP 132(R)-1,Employers' Disclosures about Postretirement Benefit Plan
Assets, ("FSP 132(R)-1"), which provides guidance on an employer's disclosures about plan assets of a defined benefit pension or other postretirement plan. This
interpretation is effective for financial statements issued for fiscal years ending after December 15, 2009 and is effective for us in fiscal 2010. We are currently evaluating the disclosure
requirements of this pronouncement.

In
June 2008, the FASB issued FSP EITF 03-6-1,Determining Whether Instruments Granted in Share-Based Payment Transactions are
Participating Securities, which addresses whether instruments granted in share-based payment transactions are participating securities prior to vesting and, therefore, need to
be included in the earnings allocation in computing earnings per share under the two-class method. FSP EITF 03-6-1 is effective for fiscal years beginning
after December 15, 2008. We are evaluating the impact of FSP EITF 03-6-1 on our financial statements.

In
April 2008, the FASB issued FASB Staff Position Financial Accounting Standard 142-3,Determination of the Useful Life of Intangible
Assets, ("FSP 142-3"). FSP 142-3 amends the factors that should be considered in developing renewal or extension assumptions used to determine the
useful life of a recognized intangible asset under SFAS No. 142,Goodwill and Other Intangible Assets, ("SFAS 142"). In developing
assumptions about renewal or extension, FSP 142-3 requires an entity to consider its own historical experience (or, if no experience, market participant assumptions) adjusted for the
entity-specific factors in paragraph 11 of SFAS 142. FSP 142-3 expands the disclosure requirements of SFAS 142 and is effective for financial statements issued for
fiscal years beginning after December 15, 2008, and is effective for us at the beginning of fiscal 2010. Early adoption is prohibited. The guidance for determining the useful life of a
recognized intangible asset shall be applied prospectively to intangible assets acquired after the effective date. We have not determined the effect that the application of FSP 142-3 will
have on our consolidated financial position.

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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. Upon adoption of SFAS No. 141(R), the reversal of valuation allowance for
deferred tax assets related to business combinations would flow through our income tax provision as opposed to goodwill.

In
September 2006, the FASB released SFAS No. 157,Fair Value Measurements,("SFAS 157") which provides enhanced guidance
for using fair value to measure assets and liabilities. 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. 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. The Statement was effective at the beginning of the first quarter of fiscal 2009 for financial assets and liabilities recognized or disclosed at
fair value on a recurring basis. The partial adoption of this Statement did not have a material impact on our consolidated financial position and results of operations. Please refer to
Note 15Fair Value of Financial Instruments for additional information. Due to the deferral, we have delayed the implementation of SFAS 157 provisions on the fair value of
goodwill, intangible assets with indefinite lives, and nonfinancial long-lived assets until the
beginning of fiscal 2010. We are in the process of evaluating the impact related to our nonfinancial assets and liabilities not valued on a recurring basis (at least annually).

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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. Based upon a sensitivity analysis performed
as of April 2, 2009, an increase or decrease in the underlying interest rates of 100 basis points would have ade minimuseffect on the fair
value of the interest rate swap liability.

Market risk on variable-rate financial instruments.We maintain an $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 borrowed $185,000,000 on our revolving credit facility as
of April 2, 2009 and had $628,875,000 outstanding under the term loan facility on April 2, 2009, of which $200,000,000 is hedged at a fixed rate. A 100 basis point change in market
interest rates would have increased or decreased interest expense on the Senior Secured Credit Facility by $4,490,000 during the fifty-two weeks ended April 2, 2009.

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

Foreign currency exchange rates.We currently operate theatres in Canada, France and the United Kingdom. As a result of these
operations, we have
assets, liabilities, revenues and expenses denominated in foreign currencies. The strengthening of the U.S. dollar against the respective currencies causes a decrease in the carrying values of assets,
liabilities, revenues and expenses denominated in such foreign currencies and the weakening of the U.S. dollar against the respective currencies causes an increase in the carrying values of these
items. The increases and decreases in assets, liabilities, revenues and expenses are included in accumulated other comprehensive 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. 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 $1,781,000 and $7,680,000, respectively, as of April 2, 2009.

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Item 8.    Financial Statements and Supplementary Data

MANAGEMENT'S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Marquee Holdings 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 2, 2009, 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 2, 2009.
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

Chief
Executive Officer
and President

GRAPHIC

Executive
Vice President and
Chief Financial Officer

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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 subsidiaries (the "Company"), at April 2, 2009 and
April 3, 2008, and the results of their operations and their cash flows for the 52 week period ended April 2, 2009, the 53 week period ended April 3, 2008 and the
52 week period ended March 29, 2007, 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 in Note 10, the Company changed the manner in which it accounts for uncertain tax positions in fiscal 2008.

/s/
PricewaterhouseCoopers LLP

Kansas
City, Missouri
May 26, 2009

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Marquee Holdings Inc.        CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands)

52 Weeks
Ended
April 2, 2009

53 Weeks
Ended
April 3, 2008

52 Weeks
Ended
March 29, 2007RevenuesAdmissions

$
1,580,328

$
1,615,606

$
1,576,924Concessions


626,251


648,330


631,924Other theatre


58,908


69,108


94,374Total revenues


2,265,487


2,333,044


2,303,222Costs and ExpensesFilm exhibition costs


827,785


841,641


820,865Concession costs


67,779


69,597


66,614Operating expense


589,376


607,588


579,123Rent


448,803


439,389


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


652


6,372


12,447Management fee


5,000


5,000


5,000Other


53,747


39,177


45,860Preopening expense


5,421


7,130


4,776Theatre and other closure expense (income)


(2,262
)

(20,970
)

9,011Depreciation and amortization


201,413


222,111


228,437Impairment of long-lived assets


73,547


8,933


10,686Disposition of assets and other gains


(1,642
)

(2,408
)

(11,183
)Total costs and expenses


2,269,619


2,223,560


2,199,680Other expense (income)Other income


(14,139
)

(12,932
)

(10,267
)Interest expenseCorporate borrowings


145,657


160,902


214,539Capital and financing lease obligations


5,990


6,505


4,669Equity in earnings of non-consolidated entities


(24,823
)

(43,019
)

(233,704
)Investment income


(1,731
)

(23,923
)

(17,594
)Total other expense (income)


110,954


87,533


(42,357
)Earnings (loss) from continuing operations before income taxes


(115,086
)

21,951


145,899Income tax provision


5,800


1,020


28,246Earnings (loss) from continuing operations


(120,886
)

20,931


117,653Earnings (loss) from discontinued operations, net of income taxes


9,728


1,802


(746
)Net earnings (loss)

$
(111,158
)
$
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 2,
2009

April 3,
2008AssetsCurrent assets:Cash and equivalents

$
536,580

$
108,717Receivables, net of allowance for doubtful accounts of $1,564 and $1,597 as of April 2, 2009 and April 3, 2008, respectively


29,782


47,130Other current assets


80,526


73,761Total current assets


646,888


229,608Property, net


964,668


1,250,406Intangible assets, net


162,366


206,674Goodwill


1,836,731


2,070,858Other long-term assets


146,088


119,161Non-current assets held for sale





2,300Total assets

$
3,756,741

$
3,879,007Liabilities and Stockholder's EquityCurrent liabilities:Accounts payable

$
155,553

$
177,354Accrued expenses and other liabilities


102,070


122,417Deferred revenues and income


121,628


134,560Current maturities of corporate borrowings and capital and financing lease obligations


9,923


20,753Total current liabilities


389,174


455,084Corporate borrowings


1,922,236


1,839,329Capital and financing lease obligations


57,286


66,368Deferred revenues for exhibitor services agreement


253,164


250,312Other long-term liabilities


308,703


350,498Total liabilities


2,930,563


2,961,591Commitments and contingenciesStockholder's equity:Common Stock, 1 share issued as of April 2, 2009 and April 3, 2008 with 1¢ par value





Additional paid-in capital


1,046,703


1,047,430Accumulated other comprehensive income (loss)


17,061


(3,668
)Accumulated deficit


(237,586
)

(126,346
)Total stockholder's equity


826,178


917,416Total liabilities and stockholder's equity

$
3,756,741

$
3,879,007


See
Notes to Consolidated Financial Statements.

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Marquee Holdings Inc.        CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

52 Weeks Ended
April 2, 2009

53 Weeks Ended
April 3, 2008

52 Weeks Ended
March 29, 2007Cash flows from operating activities:Net earnings (loss)

$
(111,158
)
$
22,733

$
116,907Adjustments to reconcile net earnings (loss) to cash provided by operating activities:Depreciation and amortization


222,483


251,194


257,017Amortization of discount on corporate borrowings





10,530


22,776Non-cash portion of stock-based compensation


2,622


207


10,568Non-cash portion of pension and postretirement (income) expense


(1,890
)

1,461


(4,454
)Impairment of long-lived assets


73,547


8,933


10,686Deferred income taxes


400


(2,800
)

19,200Write-off of unamortized premium and issuance costs related to early extinguishment of debt








(11,304
)Increase in deferred revenues from NCM ESA








231,308Gain on disposition of Cinemex


(14,772
)




Excess distributions/(Equity in earnings losses from investments, net of distributions)


6,600


(18,354
)

(233,704
)Disposition of assets and other gains


(2,265
)

(16,152
)

(729
)Change in assets and liabilities, net of effects from acquisitions:Receivables


9,296


10,128


4,742Other assets


(2,861
)

(40,379
)

(3,682
)Accounts payable


20,423


5,906


3,448Accrued expenses and other liabilities


(24,130
)

(23,166
)

(5,420
)Other, net


(10,199
)

(8,565
)

511Net cash provided by operating activities


168,096


201,676


417,870Cash flows from investing activities:Capital expenditures, net


(104,704
)

(151,676
)

(138,739
)Construction project costs reimbursable by landlord





(2,138
)

(9,726
)NCM Distribution








285,814Proceeds from restricted cash





1,513


Proceeds on disposition of Fandango


2,383


17,977


Proceeds on disposition of HGCSA





28,682


Proceeds on disposition of Cinemex, net of cash disposed


224,378





Proceeds on disposition of Iberia








35,446LCE screen integration


(4,700
)

(11,201
)

Proceeds from disposition of long-term assets





175


116,439Software licensing and development


(16,752
)

(19,424
)

(4,703
)Other, net


320


(3,313
)

(562
)Net cash provided by (used in) investing activities


100,925


(139,405
)

283,969Cash 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


(6,500
)

(8,125
)

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


(3,452
)

(6,070
)

(3,848
)Deferred financing costs


(525
)

(4,265
)

(2,606
)Change in construction payables


(9,331
)

13,586


(7,466
)Borrowing under Revolver credit facility


185,000





(Repayment of) borrowing under Cinemex credit facility





(12,100
)

2,100Dividends paid to Parent


(3,349
)

(270,588
)

Proceeds from financing lease obligations





16,872


Net cash provided by (used in) financing activities


161,843


(270,690
)

(611,131
)Effect of exchange rate changes on cash and equivalents


(3,001
)

(2,397
)

(3,541
)Net increase (decrease) in cash and equivalents


427,863


(210,816
)

87,167Cash and equivalents at beginning of year


108,717


319,533


232,366Cash and equivalents at end of year

$
536,580

$
108,717

$
319,533SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:Cash paid (refunded) during the period for:Interest (including amounts capitalized of $415, $1,114, and $1,760 during periods 2009, 2008, and 2007, respectively)

$
154,830

$
161,303

$
210,284Income taxes, net


16,731


17,064


897Schedule of non-cash investing and financing activities:Assets capitalized under EITF 97-10

$


$
4,600

$
8,199Investment in NCM (See Note 5Investments)


5,453


21,598





See Notes to Consolidated Financial Statements.

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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 StockCommon Stock



Accumulated
Other
Comprehensive
Income (Loss)

Retained
Earnings
(Accumulated
Deficit)Additional
Paid-in
Capital

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

Shares

Amount

Shares

Amount

Shares

Amount

Shares

Amount

Shares

Amount

Shares

AmountMarch 30, 2006 through April 2, 2009Balance, March 30, 2006








382,475.00000


4


382,475.00000


4


5,128.77496





256,085.61252


3


256,085.61252


3


1,313,899


(10,658
)

(260,613
)

1,042,642Comprehensive earnings:Net earnings












































116,907


116,907Foreign currency translation adjustment









































(5,037
)




(5,037
)Additional minimum pension liability









































(139
)




(139
)Unrealized loss on Cinemex swap agreements









































(560
)




(560
)Unrealized gain on Cinemex lease agreements









































80





80Unrealized gain on marketable securities









































339





339Comprehensive earnings















































111,590Adjustment for adoption of SFAS No. 158









































12,141





12,141Stock-based compensationoptions






































4,180








4,180Purchase price adjustment of fair value of Common Stock issued for Merger






































(3,500
)







(3,500
)Balance March 29, 2007








382,475.00000


4


382,475.00000


4


5,128.77496





256,085.61252


3


256,085.61252


3


1,314,579


(3,834
)

(143,706
)

1,167,053Comprehensive earnings:Net earnings












































22,733


22,733FIN 48 adoption adjustment












































(5,373
)

(5,373
)Foreign currency translation adjustment









































(1,708
)




(1,708
)Change in fair value of cash flow hedges









































(5,507
)




(5,507
)Losses on interest rate swaps reclassified to interest expense corporate borrowings









































1,523





1,523Pension and other benefit adjustments









































6,532





6,532Unrealized loss on marketable securities









































(674
)




(674
)Comprehensive earnings















































17,526Stock-based compensationoptions






































3,439








3,439Dividends paid to AMC Entertainment Holdings, Inc.






































(270,588
)







(270,588
)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
)

(3
)

(256,085.61252
)

(3
)










(14
)Balance April 3, 2008


1

$





$





$





$





$





$



1,047,430


(3,668
)

(126,346
)

917,416


72

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Table of Contents

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 StockCommon Stock



Accumulated
Other
Comprehensive
Income (Loss)

Retained
Earnings
(Accumulated
Deficit)Additional
Paid-in
Capital

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

Shares

Amount

Shares

Amount

Shares

Amount

Shares

Amount

Shares

Amount

Shares

AmountComprehensive earnings (loss):Net loss












































(111,158
)

(111,158
)Foreign currency translation adjustment









































25,558





25,558Change in fair value of cash flow hedges









































(1,833
)




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









































5,230





5,230Pension and other benefit adjustments









































(8,117
)




(8,117
)Unrealized loss on marketable securities









































(109
)




(109
)Comprehensive loss















































(90,429
)SFAS 158 adoption adjustment












































(82
)

(82
)Stock-based compensationoptions






































2,622








2,622Dividends paid to AMC Entertainment Holdings, Inc.






































(3,349
)







(3,349
)Balance April 2, 2009


1

$





$





$





$





$





$


$
1,046,703

$
17,061

$
(237,586
)
$
826,178


See Notes to Consolidated Financial Statements

73

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Table of Contents



Marquee Holdings Inc.        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS        Years Ended April 2, 2009, April 3, 2008 and March 29, 2007

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' 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, China (Hong Kong), France and the United Kingdom. The Company discontinued its operations in Spain and Portugal during the third quarter
of fiscal 2007 and discontinued its operations in Mexico during the third quarter of fiscal 2009. The Company's theatrical exhibition business is conducted through AMC and its subsidiaries and AMCEI.

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 and the Existing Subordinated Notes and the senior secured credit facility. AMCE has
not guaranteed the indebtedness of Holdings nor pledged any of its assets as collateral.

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.

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 7Corporate Borrowings and Capital and Financing Lease Obligations and
Note 9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 2Discontinued Operations.

74

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Table of Contents

Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 2, 2009, April 3, 2008 and March 29, 2007

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

Assets held for Sale:The Company classified certain real estate as available for sale based on an active marketing program to
sell the assets, which
are recorded in noncurrent assets held for sale. These assets were disposed of during fiscal 2009.

Use of Estimates:The preparation of financial statements in conformity with generally accepted accounting principles requires
management to make
estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Significant estimates and assumptions are used for, but not limited to: (1) Impairments, (2) Goodwill, (3) Income
Taxes, (4) Theatre and Other Closure Expense (Income), (5) Casualty Insurance, (6) Pension and Post Retirement Assumptions, (7) Film Exhibition Costs and
(8) Acquisitions. Actual results could differ from those estimates.

Principles of Consolidation:The consolidated financial statements include the accounts of Marquee Holdings Inc. 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 2009 and fiscal 2007 reflect 52 week periods.

Revenues:Revenues are recognized when admissions and concessions sales are received at the theatres. The Company defers 100% of
the revenue
associated with the sales of gift cards and packaged tickets (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. During fiscal 2009, management changed its estimate of redemption rates for packaged tickets. Management believes the 18 month estimate and
revised redemption rates are supported by its continued development of redemption history and that they are reflective of management's current best estimate. These changes 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 and by approximately $2,600,000 and $1,600,000,
respectively, during fiscal 2009. 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 2, 2009, April 3, 2008, and March 29, 2007, the Company recognized $14,139,000, $11,289,000, and $10,992,000 of income,
respectively, related to the derecognition of gift card liabilities where management believes future redemption to be remote which was recorded in other expense (income) in the Consolidated Statements
of Operations.

Film Exhibition Costs:Film exhibition costs are accrued based on the applicable box office receipts and
estimates of the final settlement to the film licenses. As of April 2, 2009 and April 3, 2008, the Company recorded film payables of $60,286,000 and $44,028,000, respectively. The
Company recorded film exhibition costs of $827,785,000, $841,641,000, and $820,865,000 for the periods ended April 2, 2009, April 3, 2008 and March 29, 2007, respectively.

75

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Table of Contents

Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 2, 2009, April 3, 2008 and March 29, 2007

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

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.

Screen Advertising:On March 29, 2005, the Company and Regal Entertainment Group combined their respective cinema screen
advertising
businesses into a new joint venture company called National CineMedia, LLC ("NCM"). 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 NCM in other theatre
revenues. The Company contributed fixed assets and exhibitor agreements of its cinema screen advertising subsidiary to NCM. The Company also included goodwill (recorded in connection with the merger
with Marquee) in the cost assigned to its investment in NCM. In consideration of the contributions described above, NCM issued a 37% interest in its Class A units to the Company. Since that
date, the Company's interest in NCM has declined to 18.53% primarily due to the entry of new investors.

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

Advertising Costs:The Company expenses advertising costs as incurred and does not have any direct-response advertising recorded
as assets.
Advertising costs were $18,112,000, $20,825,000 and $21,385,000 for the periods ended April 2, 2009, April 3, 2008 and March 29, 2007, 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 2, 2009 and April 3. 2008 was $55,302,000 and $55,246,000, respectively. All
highly liquid debt instruments and investments purchased with an original maturity of three months or less are classified as cash equivalents.

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


76

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Table of Contents

Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 2, 2009, April 3, 2008 and March 29, 2007

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

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
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 Trademark intangible asset 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 Trademark
intangible asset is considered an indefinite lived intangible asset, and therefore not amortized, but rather evaluated for impairment annually. In fiscal 2009, the Company impaired a favorable lease
intangible asset in the amount of $1,364,000 (SeeImpairment of Long-Lived Assets).

Investments:The Company accounts for its investments in non-consolidated entities using either the cost or equity methods of
accounting
as appropriate, and has recorded the investments within other long-term assets in its consolidated balance sheets and records equity in earnings and losses of those entities accounted for
following the equity method of accounting within equity in (earnings) losses of 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 2, 2009, the Company holds an 18.53% 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 charged with 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 are less than its proportional ownership of the underlying equity in these entities by approximately $1,518,000, 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. Included in

77

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Table of Contents

Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 2, 2009, April 3, 2008 and March 29, 2007

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

equity
in earnings of non-consolidated entities for the fifty-two weeks ended April 2, 2009 is an impairment charge of $2,742,000 related to a theatre joint venture
investment. The decline in the fair market value of the investment was considered other than temporary due to competitive theatre builds.

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 $1,836,731,000 and $2,070,858,000 as of April 2, 2009 and April 3, 2008, respectively. The Company evaluates goodwill and its trademark
for impairment annually as of the beginning of the fourth fiscal quarter and any time an event occurs or circumstances change that would more likely than not reduce the fair value for a reporting unit
below its carrying amount. The Company's goodwill is recorded in its Theatrical Exhibition operating segment which is also the reporting unit for purposes of evaluating recorded goodwill for
impairment. If the carrying value of the reporting unit exceeds its fair value the Company is required to reallocate the fair value of the reporting unit as if the reporting unit had been acquired in
a business combination and the fair value of the reporting unit was the price paid to acquire the reporting unit. The Company determines fair value by using an enterprise valuation methodology
determined by applying multiples to cash flow estimates less net indebtedness, which the Company believes is an appropriate method to determine fair value. There is considerable management judgment
with respect to cash flow estimates and appropriate multiples and discount rates to be used in determining fair value.

The
Company performed an interim impairment analysis during the third quarter of fiscal 2009 as a result of the recent downturns in the current economic operating environment related to
the credit and capital market crisis and declines in equity values of publicly traded peer group competitors. While the fair value of the Company's Theatrical Exhibition operations exceed the carrying
value at the present time and management does not believe that impairment is probable, the performance of the Company's Theatrical Exhibition operations requires continued improvement in future
periods to sustain its carrying value and small changes in certain assumptions can have a significant impact on fair value. In the future, if the carrying value of the Company's reporting unit exceeds
the estimated 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 for purposes of measuring goodwill. As a result of this hypothetical allocation, the carrying value of goodwill could be reduced to the
hypothetically recomputed amount. If the performance of the Company's Theatrical Exhibition operations does not continue to improve, a future impairment could result for a portion or all of the
goodwill or trademark intangibles noted previously.

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Table of Contents

Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 2, 2009, April 3, 2008 and March 29, 2007

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

The
Company evaluated its enterprise value for fiscal 2009 and 2008 based on a contemporaneous valuation reflecting market conditions as of January 1, 2009 and December 27,
2007, respectively. Two valuation approaches were utilized; the income approach and the market approach. The income approach provides an estimate of the Company's fair value by measuring estimated
annual cash flows over a discrete projection period and applying a present value rate to the cash flows. The present value of the cash flows is then added to the present value equivalent of the
residual value of the business to arrive at an estimated fair value of the business. The residual value represents the present value of the
projected cash flows beyond the discrete projection period. The discount rate is carefully determined using a rate of return deemed appropriate for the risk of achieving the projected cash flows. The
market approach used publicly traded peer companies and reported transactions in the industry. Due to market conditions and the relatively few sale transactions, the market approach was used to
provide additional support for the value achieved in the income approach.

Key
rates used in the income approach for fiscal 2009 and 2008 follow:

Description

Fiscal 2009

Fiscal 2008Discount rate


10.0%


8.5%Market risk premium


6.0%


5.0%Hypothetical capital structure: Debt/Equity


40%/60%


40%/60%


The
discount rate is an estimate of the weighted average cost of debt and equity capital. The required return on common equity was estimated by adding the risk-free required rate of
return, the market risk premium (which is adjusted for the Company's estimated market volatility, or beta), and small stock premium. The discount rate used for fiscal 2008 was 8.5% as compared to the
10.0% discount rate used for the fiscal 2009 impairment test. The higher discount rate was due to a number of factors, such as an increase in corporate bond yields, increase in betas, and increase in
market risk premiums, given current market conditions.

The
aggregate annual cash flows were determined based on management projections on a theatre-by-theatre basis further adjusted by non-theatre cash
flows. The projections considered various factors including theatre lease terms, a reduction in attendance, and a reduction in capital investments in new theatres, given current market conditions and
the resulting difficulty with obtaining contracts for new-builds. Because Cinemex was sold in December 2008, cash flows for the fiscal 2009 study did not include results from Cinemex. Cash
flows were projected through fiscal 2015 and assumed revenues would increase approximately 1.7% annually primarily due to projected increases in ticket and concession pricing. The residual value is a
function of the estimated cash flow for fiscal 2016 divided by a capitalization rate (discount rate less long-term growth rate of 2%) then discounted back to represent the present value of the cash
flows beyond the discrete projection period.

Since
the expectations of the average investor are not directly observable, the market risk premium must be inferred. One approach is to use the long-run historical
arithmetic average premiums that investors have historically earned over and above the returns on long-term Treasury bonds. The premium obtained using the historical approach is sensitive
to the time period over which one calculates the average. Depending on the time period chosen, the historical approach yields an average premium in a range of 5.0% to 8.0%. Another approach is to look
at projected rates of return obtained from analysts who follow the stock market. Again, this approach will lead to differing estimates

79

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Table of Contents

Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 2, 2009, April 3, 2008 and March 29, 2007

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

depending
upon the source. The published expected returns from firms such as Merrill Lynch, Value Line, and Greenwich Associates collectively tend to indicate a premium in a range of 3.0% to 5.0%.
Under normal market conditions, the Company utilized a market risk premium of 5.0%; however, given the current economic conditions, a market risk premium of 6.0% was used for fiscal 2009.

There
was no goodwill impairment as of April 2, 2009. During the fourth fiscal quarter of 2009 the equity values of the Company's publicly traded peer group competitors increased
by approximately 40% from the third fiscal quarter ended on January 1, 2009. Based on the results of the study conducted as of the end of the third quarter of fiscal 2009, the indicated fair
value of the Company exceeded the book value by 0.6%.

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 $(2,262,000), $(20,970,000), and $9,011,000
for the periods ended April 2, 2009, April 3, 2008 and March 29, 2007, respectively. The theatre and other closure income recognized in fiscal 2009 was primarily due to the
write-off of deferred rent balances on two theatres that were closed on favorable terms. 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 Note 14Theatre and Other Closure and Disposition of Assets.

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.

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Table of Contents

Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 2, 2009, April 3, 2008 and March 29, 2007

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

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 determined that its lease terms commence at the time it obtains "control and access" to the leased premises which is generally a date prior to the "lease commencement date"
contained in the 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.

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 $31,970,000 and $39,117,000 as financing lease obligations for failed sale leaseback transactions on its Consolidated Balance Sheets related to
these types of projects as of April 2, 2009 and April 3, 2008, 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.

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Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 2, 2009, April 3, 2008 and March 29, 2007

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

Impairment of Long-lived Assets:The Company reviews long-lived assets, including definite-lived intangibles, investments in
non-consolidated subsidiaries accounted for under the equity method, marketable equity securities and internal use software for impairment 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. The
Company identifies impairments related to internal use software when management determines that the remaining carrying value of the software will not be realized through future use. The Company
reviews internal management reports on a quarterly basis as well as monitors current and potential future competition in the markets where it operates for indicators of triggering events or
circumstances that indicate potential impairment of individual theatre assets. The Company evaluates theatres using historical and projected data of theatre level cash flow as its primary indicator of
potential impairment and considers the seasonality of its business when evaluating theatres for impairment. We perform our 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. The Company performed an interim impairment analysis during the third quarter of fiscal 2009 as a result of the recent downturns in the current economic
operating environment related to the credit and capital market crisis. Under these analyses, if the sum of the estimated future cash flows, undiscounted and without interest charges, are less than the
carrying amount of the asset, an impairment loss is recognized in the amount by which the carrying value of the asset exceeds its estimated fair value. Assets are evaluated for impairment on an
individual theatre basis, which management believes is the lowest level for which there are identifiable cash flows. The impairment evaluation is based on the estimated cash flows from continuing use
until the expected disposal date 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 the Company does not expect to operate the theatre to the end of its lease term. The fair value of assets is determined as either
the expected selling price less selling costs (where appropriate) or the present value of the estimated future cash flows. The fair value of furniture, fixtures and equipment has been determined using
similar asset sales and in some instances with the assistance of third party valuation studies. The discount rate used in determining the present value of the estimated future cash flows was 20% and
was based on management's expected return on assets during fiscal 2009.

There
is considerable management judgment necessary to determine the future cash flows, fair value and the expected operating period of the Company's theatres and other
long-lived assets, and, accordingly, actual results could vary significantly from such estimates. During fiscal 2009 the Company recognized non-cash impairment losses of
$73,547,000 related to theatre fixed assets, internal use software, and assets held for sale. The Company recognized an impairment loss of $65,636,000 on 34 theatres with 520 screens (in California,
Canada, Florida, Georgia, Illinois, Maryland, Massachusetts, Michigan, New York, North Carolina, Ohio, Texas, Virginia, Washington and Wisconsin). Of the theatre charge, $1,365,000 was related to
intangible assets, net, and $64,271,000 was related to property, net. The Company recognized an impairment loss on abandonment of internal use software recorded in other long-term assets
of $7,125,000 when management determined that the carrying value would not be realized through future use; and adjusted the carrying value of its assets held for sale to reflect the

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Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 2, 2009, April 3, 2008 and March 29, 2007

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

subsequent
sales proceeds received in January 2009 and declines in fair value which resulted in an impairment charge of $786,000.

Additionally,
the Company recognized an impairment loss of $2,742,000 recorded in equity in earnings of non-consolidated entities related to an equity method investment in
one U.S. motion picture theatre where the estimated fair value based on discounted cash flows was less than the
carrying value and recognized an impairment loss of $1,512,000 recorded in investment income related to unrealized losses previously recorded in accumulated other comprehensive income on marketable
equity securities related to one of its deferred compensation plans where the Company determined the decline in fair value below historical cost to be other than temporary.

Impairment
losses included in the Consolidated Statements of Operations are as follows:

(In thousands)

52 weeks
Ended
April 2, 2009

53 weeks
Ended
April 3, 2008

52 weeks
Ended
March 29, 2007Impairment of long-lived assets

$
73,547

$
8,933

$
10,686Equity in (earnings) losses of non-consolidated entities


2,742





Investment income


1,512





Total impairment losses

$
77,801

$
8,933

$
10,686


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 earnings (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 55,457.17873 shares to certain employees during the periods ended March 31, 2005, March 30, 2006 and April 2, 2009. 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 having occurred on December 23, 2008. The options granted during
fiscal 2009 step-vest in equal amounts over five years with final vesting occurring on March 6, 2014, but vesting may accelerate for certain participants if there is a change of
control (as defined in the plan). Holdings has recorded $2,622,000, $207,000 and $10,568,000 of stock-based compensation expense related to these options within general and administrative: other for
fiscal 2009, 2008 and 2007, respectively.

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-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.

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Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 2, 2009, April 3, 2008 and March 29, 2007

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

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 2, 2009(2)

April 3, 2008(1)

March 29, 2007(1)Weighted average fair value on grant date

$
323.95

$


$
Risk-free interest rate


2.6
%




Expected life (years)


6.5





Expected volatility(3)


35.0
%




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 Uncertainty 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 10Income Taxes.

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 2,
2009 and April 3, 2008, the Company had recorded casualty insurance reserves of $19,179,000 and $23,254,000, respectively, net of estimated insurance recoveries. The Company recorded expenses
related to general liability and workers compensation claims of

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Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 2, 2009, April 3, 2008 and March 29, 2007

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

$10,537,000,
$14,836,000 and $14,519,000 for the periods ended April 2, 2009, April 3, 2008 and March 29, 2007, respectively. During fiscal 2009 we recorded a change in estimate
related to favorable loss developments compared to what was originally estimated which reduced our expense by approximately $2,100,000.

Derivative Instruments: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 8Derivative Instruments to these consolidated financial statements regarding the Company's derivative
hedging activities.

New Accounting Pronouncements:In April 2009, the FASB issued FSP No. FAS 157-4,Determining Fair
Value
When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly("FSP
FAS 157-4"). FSP FAS 157-4 provides guidance on estimating fair value when market activity has decreased and on identifying transactions that are not orderly.
Additionally, entities are required to disclose in interim and annual periods the inputs and valuation techniques used to measure fair value. This FSP is effective for interim and annual periods
ending after June 15, 2009. The Company is currently evaluating the impact of FSP FAS 157-4 on its consolidated financial statements and will adopt this FSP effective
July 2, 2009.

In
April 2009, the FASB issued FSP FAS 115-2 and FAS 124-2, Recognition and Presentation of Other-Than-Temporary
Impairments, ("FSP FAS 115-2 and FAS 124-2"). The existing accounting guidance was modified to demonstrate the intent and ability to hold an investment security
for a period of time sufficient to allow for any anticipated recovery in fair value. When the fair value of a debt or equity security has declined below the amortized cost at the measurement date, an
entity that intends to sell a security or is more-likely-than-not to sell the security before the recovery of the security's cost basis, must recognize the
other-than-temporary impairment in earnings. FSP FAS 115-2 and FAS 124-2 is effective for interim and annual periods ending after
June 15, 2009. The Company is currently evaluating the impact of FSP FAS 115-2 and FAS 124-2 on its consolidated financial statements.

In
April 2009, the FASB issued FSP FAS 107-1 and APB 28-1,Interim Disclosures about Fair Value of Financial
Instruments, ("FSP FAS 107-1 and APB 28-1"). SFAS No. 107,Disclosures about Fair Value of Financial
Instruments, ("SFAS No. 107") was amended to require an entity to provide disclosures about fair value of financial instruments in interim financial statements. FSP
FAS 107-1 and APB 28-1 are effective for interim and annual periods ending after June 15, 2009. The Company is currently evaluating the impact of FSP
FAS 107-1 and APB 28-1 on its consolidated financial statements.

In
December 2008, the FASB issued FASB Staff Position FSP 132(R)-1,Employers' Disclosures about Postretirement Benefit Plan
Assets, ("FSP 132(R)-1"), which provides guidance on an employer's

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Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 2, 2009, April 3, 2008 and March 29, 2007

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

disclosures
about plan assets of a defined benefit pension or other postretirement plan. This interpretation is effective for financial statements issued for fiscal years ending after
December 15, 2009 and is effective for us in fiscal 2010. The Company is currently evaluating the disclosure requirements of this pronouncement.

In
June 2008, the FASB issued FSP EITF 03-6-1,Determining Whether Instruments Granted in Share-Based Payment Transactions are
Participating Securities, which addresses whether instruments granted in share-based payment transactions are participating securities prior to vesting and, therefore, need to
be included in the earnings allocation in computing earnings per share under the two-class method. FSP EITF 03-6-1 is effective for fiscal years beginning
after December 15, 2008. The Company is evaluating the impact of FSP EITF 03-6-1 on its financial statements.

In
April 2008, the FASB issued FASB Staff Position Financial Accounting Standard 142-3,Determination of the Useful Life of Intangible
Assets, ("FSP 142-3"). FSP 142-3 amends the factors that should be considered in developing renewal or extension assumptions used to determine the
useful life of a recognized intangible asset under SFAS No. 142,Goodwill and Other Intangible Assets, ("SFAS 142"). In developing
assumptions about renewal or extension, FSP 142-3 requires an entity to consider its own historical experience (or, if no experience, market participant assumptions) adjusted for the
entity-specific factors in paragraph 11 of SFAS 142. FSP 142-3 expands the disclosure requirements of SFAS 142 and is effective for financial statements issued for
fiscal years beginning after December 15, 2008, and is effective for us at the beginning of fiscal 2010. Early adoption is prohibited. The guidance for determining the useful life of a
recognized intangible asset shall be applied prospectively to intangible assets acquired after the effective date. The Company has not determined the effect that the application of FSP
142-3 will have on its consolidated financial position.

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 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

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Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 2, 2009, April 3, 2008 and March 29, 2007

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

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. Upon adoption of SFAS No. 141(R), the reversal of valuation allowance for deferred tax assets related to business
combinations would flow through the Company's income tax provision as opposed to goodwill.

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, or the first quarter of
fiscal 2009 for the Company. 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 to the
current year presentation.

NOTE 2DISCONTINUED OPERATIONS

On December 29, 2008, the Company sold all of its interests in Cinemex, which then operated 44 theatres with 493 screens primarily in the Mexico City Metropolitan Area, to
Entretenimiento GM de Mexico S.A. de C.V. Under the Stock Purchase Agreement for the transaction, the purchase price was $315,000,000, decreased by the amount of net funded indebtedness of
Cinemex and other specified items of $66,859,000. Costs related to the disposition are estimated to be $4,046,000. Additionally, the Company estimates that it will receive an additional $12,253,000 in
the form of tax payments and refunds in later periods and has received an additional $809,000 of purchase price related to a working capital calculation and post closing adjustments subsequent to
April 2, 2009 which are included in the gain on disposition. The Company has recorded a gain on disposition before income taxes of $14,772,000 related to the disposition that is included as
discontinued operations.

The
Company acquired Cinemex in January 2006 as part of a larger acquisition of Loews Cineplex Entertainment Corporation. The Company does not operate any other theatres in Mexico
and has divested of the majority of its other investments in international theatres in Japan, Hong Kong, Spain, Portugal, Sweden, Argentina, Brazil, Chile, and Uruguay over the past several years as
part of its overall business strategy.

The
operations and cash flows of the Cinemex theatres have been eliminated from the Company's ongoing operations as a result of the disposal transaction. The Company will not have any
significant continuing involvement in the operations of the Cinemex theatres after the disposition. The results of operations of the Cinemex theatres have been classified as discontinued operations,
and information

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Table of Contents

Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 2, 2009, April 3, 2008 and March 29, 2007

NOTE 2DISCONTINUED OPERATIONS (Continued)

presented
for all periods reflects the new classification. The operations of the Cinemex theatres were previously reported in the Company's International Theatrical Exhibition operating segment.
Components of amounts reflected as earnings (loss) from discontinued operations in the Company's consolidated Statements of Operations are presented in the following table:

Statements of operations data:

(In thousands)

52 Weeks
Ended
April 2, 2009

53 Weeks
Ended
April 3, 2008

52 Weeks
Ended
March 29, 2007RevenuesAdmissions

$
62,009

$
87,469

$
83,015Concessions


44,744


60,456


54,394Other revenue


21,755


23,358


20,940Total revenues


128,508


171,283


158,349Costs and ExpensesFilm exhibition costs


27,338


37,435


34,939Concession costs


10,158


13,949


13,097Operating expense


32,699


42,302


39,953Rent


14,934


18,540


17,880General and administrativeother


8,880


10,720


10,015Preopening expense








1,793Depreciation and amortization


21,070


29,083


28,035Gain on disposal


(14,772
)




Total costs and expenses


100,307


152,029


145,712Other Expense (Income)Other expense


416


501


Interest expenseCorporate borrowings


7,299


11,282


12,258Capital, financing lease obligations and other


582


645


916Investment income


(1,124
)

(1,756
)

(597
)Total other expense


7,173


10,672


12,577Earnings before income taxes


21,028


8,582


60Income tax provision


11,300


6,780


3,254Earnings (loss) from discontinued operations

$
9,728

$
1,802

$
(3,194
)


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

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Table of Contents

Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 2, 2009, April 3, 2008 and March 29, 2007

NOTE 2DISCONTINUED OPERATIONS (Continued)

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.

Components
of amounts reflected as earnings 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, 2007RevenuesAdmissions

$
3,892Concessions


1,292Other revenue


172Total revenues


5,356Costs and ExpensesFilm exhibition costs


1,901Concession costs


255Operating expense


1,189Rent


1,410General and administrativeother


50Preopening expense


Depreciation and amortization


545Disposition of assets and other gains


(2,658
)Total costs and expenses


2,692Interest expense


220Investment income


(4
)Total other expense


216Earnings before income taxes


2,448Income tax provision


Earnings from discontinued operations

$
2,448


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Table of Contents

Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 2, 2009, April 3, 2008 and March 29, 2007

NOTE 3PROPERTY

A summary of property is as follows:

(In thousands)

April 2, 2009

April 3, 2008Property owned:Land

$
43,384

$
44,565Buildings and improvements


156,665


172,232Leasehold improvements


812,972


888,513Furniture, fixtures and equipment


1,253,050


1,334,1172,266,071


2,439,427Less-accumulated depreciation and amortization


1,319,353


1,208,332946,718


1,231,095Property leased under capital leases:Buildings and improvements


33,864


35,342Less-accumulated amortization


15,914


16,03117,950


19,311$
964,668

$
1,250,406


Included
in property is $0 and $21,649,000 of construction in progress as of April 2, 2009 and April 3, 2008, respectively. Also included is capitalized interest of
$415,000 and $1,114,000 as of April 2, 2009 and April 3, 2008, respectively.

NOTE 4GOODWILL AND OTHER INTANGIBLE ASSETS

Activity of goodwill by operating segment is presented below.

(In thousands)

Theatrical
ExhibitionBalance as of March 29, 2007

$
2,066,853Currency translation adjustment


7,565Fair value deferred tax asset adjustments LCE(1)


(8,039
)Fair value change in fiscal 2007 APB 23 assertion(2)


6,220Other fair value adjustments(3)


(1,741
)Balance as of April 3, 2008

$
2,070,858Currency translation adjustment


(45,977
)Fair value deferred tax asset adjustments LCE(1)


(31,515
)Disposition of Cinemex


(156,635
)Balance as of April 2, 2009

$
1,836,731


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Table of Contents

Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 2, 2009, April 3, 2008 and March 29, 2007

NOTE 4GOODWILL AND OTHER INTANGIBLE ASSETS (Continued)

Activity
of other intangible assets is presented below:

April 2, 2009

April 3, 2008(In thousands)

Remaining
Useful Life

Gross
Carrying
Amount

Accumulated
Amortization

Gross
Carrying
Amount

Accumulated
AmortizationAcquired Intangible Assets:Amortizable Intangible Assets:Favorable leases

1 to 12 years

$
104,646

$
(35,949
)
$
115,419

$
(33,233
)Loyalty program

2 years


46,000


(34,914
)

46,000


(29,946
)LCE trade name

2 years


2,300


(1,460
)

2,300


(1,000
)LCE/Cinemex advertising and management contracts

1 to 22 years


35,400


(27,893
)

52,147


(27,610
)Other intangible assets

1 to 13 years


13,654


(13,418
)

19,088


(17,685
)Total, amortizable



$
202,000

$
(113,634
)
$
234,954

$
(109,474
)Unamortized Intangible Assets:AMC trademark



$
74,000




$
74,000Cinemex trademark










7,194Total, unamortized



$
74,000




$
81,194


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

(In thousands)

52 Weeks Ended
April 2, 2009

53 Weeks Ended
April 3, 2008

52 Weeks Ended
March 29, 2007Recorded amortization

$
21,481

$
28,387

$
37,029


Estimated
amortization expense for the next five fiscal years for intangible assets owned as of April 2, 2009 is projected below:

(In thousands)

2010

2011

2012

2013

2014Projected amortization expense

$
13,934

$
11,980

$
10,856

$
10,147

$
7,769


NOTE 5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

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Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 2, 2009, April 3, 2008 and March 29, 2007

NOTE 5INVESTMENTS (Continued)

April 2,
2009, include an 18.53% interest in National CineMedia, LLC ("NCM"), a 50% interest in three U.S. motion picture theatres, a 26% equity interest in Movietickets.com, Inc.
("MTC"), a 50% interest in Midland Empire Partners, LLC and a 33.3% interest in Digital Cinema Implementation Partners, LLC ("DCIP"). Financial results for the fifty-three weeks ended
April 3, 2008 and for the fifty-two weeks ended 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 proceeds of approximately $20,360,000, of which $17,977,000 was
received in May and September 2007 and $2,383,000 was received in November 2008. The Company recorded a gain on the sale recorded in investment income of approximately $15,977,000 during
fiscal 2008 and $2,383,000 during fiscal 2009. In July 2007 the Company disposed of its investment in Hoyt's General Cinema South America ("HGCSA") for total proceeds of approximately
$28,682,000 and recorded a gain on the sale included in equity earnings of non-consolidated entities of approximately $18,751,000.

NCM Transactions

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 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

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Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 2, 2009, April 3, 2008 and March 29, 2007

NOTE 5INVESTMENTS (Continued)

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 the former
screen advertising agreements expire in fiscal 2009. The Loews payments were $15,981,000 through the end of the agreement of which $15,901,000 has been paid through fiscal 2009. The Company is also
required to purchase from NCM any on-screen advertising time provided to our beverage concessionaire 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 Common Unit Adjustment the Company's interest in NCM was
increased to 19.1% effective March 27, 2008. The Company recorded the additional units received as a result of the Common Unit Adjustment at fair value and as a new investment (Tranche 2
Investment) with an offsetting adjustment to deferred revenue. Effective May 29, 2008, NCM issued of 2,913,754 common membership units to another founding member due to an acquisition which
caused a decrease in AMC's ownership share from 19.1% to 18.52%. Effective March 17, 2009, the Company's interest in NCM was increased to 18.53% as a result of the Common Unit Adjustment. The
Company recorded the additional units received at fair value and 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 redemption of preferred and common units of $106,188,000. The Company 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.

Following
the NCM, Inc. IPO, the Company will not recognize undistributed equity in the earnings on the original NCM membership units until NCM's future net earnings, less
distributions received surpass the amount of the excess distribution. 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, net of distributions received exceeds the excess
distribution. The Company believes that

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Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 2, 2009, April 3, 2008 and March 29, 2007

NOTE 5INVESTMENTS (Continued)

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 2, 2009, the Company owns 18,821,114 units or an 18.53% interest in NCM accounted for using the equity method of accounting. The fair market value of the units in
National CineMedia, LLC was approximately $262,743,000, based on a price for shares of National CineMedia, Inc. on April 2, 2009 of $13.96 per share.

As
of April 2, 2009 and April 3, 2008, the Company has recorded $1,342,000 and $1,255,000 respectively, of amounts due from NCM related to on-screen advertising
revenue. As of April 2, 2009 and April 3, 2008, the Company had recorded $1,657,000 and $6,177,000 respectively, of amounts due to NCM related to the ESA and the Loew's Screen
Integration Agreement. The Company recorded revenues for advertising from NCM of $19,116,000, $14,531,000 and $38,600,000 during the fifty-two weeks ended April 2, 2009, the
fifty-three weeks ended April 3, 2008 and the fifty-two weeks ended March 29, 2007, respectively. The Company recorded expenses related to its beverage advertising agreement
with NCM of $15,118,000, $16,314,000 and $1,829,000 during fiscal years 2009, 2008, and 2007, respectively.

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 2, 2009

April 3, 2008Current assets

$
110,184

$
72,848Noncurrent assets


252,163


131,751Total assets


362,347


204,599Current liabilities


71,448


29,485Noncurrent liabilities


892,376


822,832Total liabilities


963,824


852,317Stockholders' deficit


(601,477
)

(647,718
)Liabilities and stockholders' deficit


362,347


204,599The Company's recorded investment(1)

$
47,439

$
41,693


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Table of Contents

Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 2, 2009, April 3, 2008 and March 29, 2007

NOTE 5INVESTMENTS (Continued)

Included
in impairment of long-lived assets for the fifty-two weeks ended April 2, 2009 is an impairment charge of $2,742,000 related to a theatre joint
venture investment. The decline in the fair market value of the investment was considered other than temporary due to competitive theatre builds.

Operating
Results:

(In thousands)

52 Weeks Ended
April 2, 2009

53 Weeks Ended
April 3, 2008

52 Weeks Ended
March 29, 2007Revenues

$
419,401

$
322,536

$
403,455Operating costs and expenses


318,774


214,144


386,572Net earnings

$
100,627

$
108,392

$
16,883The Company's recorded equity in earnings

$
24,823

$
43,019

$
233,704


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Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 2, 2009, April 3, 2008 and March 29, 2007

NOTE 5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-three weeks ended April 3, 2008
and the fifty-two weeks ended April 2, 2009:

(in thousands)

Investment
in NCM(1)

Deferred
Revenue(2)

Due to
NCM(3)

Cash
Received
(Paid)

Equity in
(Earnings)
Losses

Advertising
(Revenue)Beginning balance March 30, 2006

$
35,751

$


$


$


$


$
Equity in losses


(4,597
)










4,597


Loew's Screen Integration Agreement


15,850





(15.850
)







Change of interest gain


132,622











(132,622
)

ESA Payment





(231,308
)




231,308





Amortization of deferred revenue





263











(263
)Preferred and common unit redemption


(179,626
)







285,814


(106,188
)

Ending balance March 29, 2007

$


$
(231,045
)
$
(15,850
)
$
517,122

$
(234,213
)
$
(263
)Receipt of excess cash distributions

$


$


$


$
22,175

$
(22,175
)
$
Payments on Loews' Screen Integration Agreement








11,201


(11,201
)




Receipt of Common Units


21,598


(21,598
)










Amortization of deferred revenue





2,331











(2,331
)Ending balance April 3, 2008

$
21,598

$
(250,312
)
$
(4,649
)
$
10,974

$
(22,175
)
$
(2,331
)Receipt under Tax Receivable Agreement

$


$


$


$
3,796

$
(3,796
)
$
Receipt of Common Units


5,453


(5,453
)










Receipt of excess cash distributions


(1,241
)







24,308


(23,067
)

Payments on Loews' Screen Integration Agreement








4,700


(4,700
)




Increase Loews' Screen Integration Liability








(132
)




132


Change in interest loss(4)


(83
)










83


Amortization of deferred revenue





2,601











(2,601
)Equity in earnings(5)


1,006











(1,006
)

Ending balance April 2, 2009

$
26,733

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

$
(27,654
)
$
(2,601
)


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Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 2, 2009, April 3, 2008 and March 29, 2007

NOTE 6SUPPLEMENTAL BALANCE SHEET INFORMATION

Other assets and liabilities consist of the following:

(In thousands)

April 2, 2009

April 3, 2008Other current assets:Prepaid rent

$
34,135

$
33,986Income taxes receivable


8,757


8,690Prepaid insurance and other


16,854


12,796Merchandise inventory


6,745


8,820Deferred tax asset


7,800


2,980Other


6,235


6,489$
80,526

$
73,761Other long-term assets:Investments in real estate

$
6,561

$
7,100Deferred financing costs


26,037


32,181Investments in joint ventures


47,439


41,693EDP and other deferred charges


31,249


23,087Cinemex prepaid rent





6,894Pension assets





672Deferred tax asset


30,200


Other


4,602


7,534$
146,088

$
119,161Accrued expenses and other liabilities:Taxes other than income

$
40,175

$
43,360Interest


15,596


16,946Payroll and vacation


7,855


8,142Current portion of casualty claims and premiums


7,923


9,984Accrued bonus


1,183


4,110Theatre and other closure


7,386


10,146Rent


7,280


10,130Current portion of pension liabilities


1,549


1,580Other


13,123


18,019$
102,070

$
122,417Other long-term liabilities:Unfavorable lease obligations

$
139,537

$
184,743Deferred rent


86,420


71,443Pension and other benefits


37,642


37,138Deferred gain


15,899


21,086Deferred tax liability





3,710FIN 48 liability


7,000


Casualty claims and premiums


14,600


16,365Other


7,605


16,013$
308,703

$
350,498


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Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 2, 2009, April 3, 2008 and March 29, 2007

NOTE 7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 2, 2009

April 3, 2008Senior Secured Credit Facility-Term Loan (2.021% as of April 2, 2009)

$
628,875

$
635,375Senior Secured Credit Facility-Revolver (2.046% as of April 2, 2009)


185,000


85/8% Senior Fixed Rate Notes due 2012


250,000


250,0008% Senior Subordinated Notes due 2014


299,066


298,91512% Senior Discount Notes due 2014


240,795


240,79511% Senior Subordinated Notes due 2016


325,000


325,000Capital and financing lease obligations, 9%-11.5%


60,709


69,983Cinemex Credit Facility





106,3821,989,445


1,926,450Less: current maturities


(9,923
)

(20,753
)$
1,979,522

$
1,905,697


Minimum
annual payments required under existing capital and financing lease obligations (net present value thereof) and maturities of corporate borrowings as of April 2, 2009 are
as follows:

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

Minimum Lease
Payments

Less Interest

Principal

Total2010

$
9,075

$
5,652

$
3,423

$
6,500

$
9,9232011


9,225


5,262


3,963


6,500


10,4632012


8,023


4,870


3,153


191,500


194,6532013


7,055


4,578


2,477


859,375


861,8522014


6,706


4,338


2,368


300,000


302,368Thereafter


68,628


23,303


45,325


565,795


611,120Total

$
108,712

$
48,003

$
60,709

$
1,929,670

$
1,990,379


Senior Secured Credit Facility

The Senior Secured Credit Facility is with a syndicate of banks and other financial institutions and provides AMCE 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 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 8,
the Company has hedged a portion of its borrowings to limit the interest rate variability. The applicable margin for borrowings under the revolving credit facility is currently 0.50% with respect to
base rate borrowings and 1.50% with respect to LIBOR borrowings, and the current applicable margin for borrowings under the term loan facility is 0.50% with respect to base rate borrowings and 1.50%
with respect to LIBOR

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Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 2, 2009, April 3, 2008 and March 29, 2007

NOTE 7CORPORATE BORROWINGS AND CAPITAL AND FINANCING LEASE OBLIGATIONS (Continued)

borrowings.
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 is not guaranteed by Marquee Holdings nor is it secured by Marquee Holdings' assets.

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 $8,590,000 as of April 2, 2009 and $10,883,000 as of April 3, 2008.

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

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Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 2, 2009, April 3, 2008 and March 29, 2007

NOTE 7CORPORATE BORROWINGS AND CAPITAL AND FINANCING LEASE OBLIGATIONS (Continued)

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.

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 2, 2009 is $934,000 and $1,085,000 as of April 3, 2008. Unamortized issuance costs were $0
as of April 2, 2009 and $0 as of April 3, 2008.

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.

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Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 2, 2009, April 3, 2008 and March 29, 2007

NOTE 7CORPORATE BORROWINGS AND CAPITAL AND FINANCING LEASE OBLIGATIONS (Continued)

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 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 $3,681,000 as of April 2, 2009 and $4,767,000 as of April 3, 2008, 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 $7,593,000 as of April 2, 2009 and $8,700,000 as of April 3, 2008, are included in other long-term assets.

As
of April 2, 2009, the Company was in compliance with all financial covenants relating to the Senior Secured Credit Facility, the Notes due 2016, the Notes due 2014 and the
Fixed Notes due 2012.

101

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Table of Contents

Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 2, 2009, April 3, 2008 and March 29, 2007

NOTE 7CORPORATE BORROWINGS AND CAPITAL AND FINANCING LEASE OBLIGATIONS (Continued)

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.

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 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 and the obligation is not
reflected on AMCE's balance sheet.

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.
Unamortized issuance costs of $6,173,000 and $7,316,000 are included in other long-term assets.

Parent Term Loan Facility

To help finance the dividend paid by Parent to its stockholders discussed in Note 9Stockholder's Equity, Parent
entered into a $400,000,000 Credit Agreement dated as of June 13, 2007 ("Parent Term Loan Facility") for net proceeds of $396,000,000. Costs related to the issuance of the Parent Term Loan
Facility were capitalized and are charged to interest expense, following the interest method, over the life of the Parent Term Loan Facility. The principal balance of the Parent Term Loan Facility was
$466,936,000 as of April 2, 2009 and the interest rate on borrowings under was 6.32% per annum as of April 2, 2009.

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 Senior Secured Credit Facility. Holdings, AMCE and its subsidiaries have not guaranteed the indebtedness of Parent nor pledged any of their assets as
collateral.

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

102

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Table of Contents

Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 2, 2009, April 3, 2008 and March 29, 2007

NOTE 7CORPORATE BORROWINGS AND CAPITAL AND FINANCING LEASE OBLIGATIONS (Continued)

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.

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 stocks and this obligation is not reflected on Holdings or AMCE's balance sheet.

NOTE 8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.

103

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Table of Contents

Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 2, 2009, April 3, 2008 and March 29, 2007

NOTE 8DERIVATIVE INSTRUMENTS (Continued)

In
October 2007 AMCE executed an interest rate swap agreement, scheduled to mature in April 2009, to hedge $200,000,000 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
December 2008, the Company sold all of its interests in Cinemex. For further information, refer to Note 2Discontinued Operations.

The
following table summarizes the fair value of derivatives that are designated as hedging instruments in the statement of financial position:

Liabilities(In thousands)

Balance Sheet Location

April 2,
2009

April 3,
2008Interest rate swaps

Other long term liabilities

$
552

$
6,511


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.

Activity
related to the effect of derivative instruments on the statement of financial performance is presented below:

Amount of Gain/(Loss)
Recognized in Income on
Derivatives
(Ineffective Portion)(In thousands)



Fifty-two
Weeks Ended
April 2, 2009

Fifty-three
Weeks Ended
April 3, 2008Derivatives in SFAS 133
Cash Flow Hedging Relationships

Location of Gain/(Loss)Interest rate swaps

Discontinued operations

$
495

$
(501
)


The
amount of gain / (loss) recognized in accumulated other comprehensive income on derivatives is presented below (in thousands):

Derivatives in SFAS 133 Cash Flow Hedging Relationships

April 2, 2009

April 3, 2008Interest rate swaps

$
(552
)
$
(3,950
)


For
more information regarding activity in accumulated other comprehensive for interest rate swaps, refer to the consolidated statement of stockholder's equity of the Company's financial
statements.

During
the next 12 months, the Company expects to reclassify approximately $552,000 of the net unrealized loss in accumulated other comprehensive loss against interest expense
corporate borrowings.
The Company is exposed to credit losses in the event of nonperformance by counterparties on interest rate swap agreements.

104

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Table of Contents

Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 2, 2009, April 3, 2008 and March 29, 2007

NOTE 9STOCKHOLDER'S EQUITY

Holdings has one share of Common Stock issued as of April 2, 2009 which is owned by Parent. Holdings has one share of Common Stock issued as of April 2, 2009 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").

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

On
June 11, 2007, 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 a $400,000,000 Credit Agreement issued by Parent (See Note 7) 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

105

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Table of Contents

Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 2, 2009, April 3, 2008 and March 29, 2007

NOTE 9STOCKHOLDER'S EQUITY (Continued)

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.

During
fiscal 2009 Holdings distributed to Parent $3,349,000 which has been recorded by Holdings as a reduction to additional paid-in capital. Parent used the available funds
to repurchase treasury stock and pay corporate overhead expenses incurred in the ordinary course of business.

As
discussed in Note 10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. As discussed in Note 12Employee Benefit Plans, the Company adopted the provisions of SFAS 158 and recorded an $82,000 loss to
fiscal 2009 opening accumulated deficit.

Common Stock Rights and Privileges

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

Stock-Based Compensation

The Company has no stock-based compensation arrangements of its own, but Parent, has 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 15,980.45, 600.00000 and 38,876.72873 of its shares to certain employees during the periods ended
April 2, 2009, March 30, 2006 and March 31, 2005, respectively. As of April 2, 2009, there was $2,901,000 of total estimated unrecognized compensation cost related to
nonvested stock-based compensation arrangements under the Parent plan expected to be recognized over 5 years.

106

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Table of Contents

Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 2, 2009, April 3, 2008 and March 29, 2007

NOTE 9STOCKHOLDER'S EQUITY (Continued)

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 and the options
granted in fiscal 2009 step-vest in equal amounts over 5 years with final vesting occurring on March 6, 2014, 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 $2,622,000, $207,000, and $10,568,000 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 2, 2009, April 3, 2008 and March 29, 2007, respectively. One of the previous
holders of stock options held put rights associated with his options deemed to be within his control whereby he could require Holdings to repurchase his options and, as a result, the expense for these
options was remeasured each reporting period as liability based options at the Holdings level. For the option awards classified as liabilities by Holdings, the Company 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. In May 2008, Holdings was notified of the holder's intention to exercise the put option and Holdings made cash payments to settle the
accrued liability of $3,911,000 during fiscal 2009. As a result of the exercise of the put right, there was no additional stock compensation expense related to these options in fiscal 2009 and the
related options were canceled upon exercise of the put right during fiscal 2009.

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 March 6,
2009 option grants using the Black-Scholes formula including a contemporaneous valuation reflecting market conditions as of January 1, 2009 which indicated a fair value price per share of the
underlying shares of $323.95 per share, a purchase of 2,542 shares by Parent for $323.95 per share from the Company's former Chief Executive Officer pursuant to his Separation and General Release
Agreement dated February 23, 2009 and a sale of 385.862 shares by Parent to the Company's current Chief Executive Officer pursuant to his Employment Agreement dated February 23, 2009 for
$323.95 per share. See Note 1The Company and Significant Accounting Policies, Stock-based Compensation for more information regarding Parent's stock option plan.

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

107

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Table of Contents

Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 2, 2009, April 3, 2008 and March 29, 2007

NOTE 9STOCKHOLDER'S EQUITY (Continued)

that
there was no incremental value transferred as a result of the modification and as a result no additional compensation cost to recognize.

On
February 23, 2009, the Company entered into a Separation and General Release Agreement with Peter C. Brown (formerly Chairman of the Board, Chief Executive Officer and
President of Parent, Holdings and AMCE), whereby all outstanding vested and unvested options were voluntarily forfeited. Stock compensation expense recorded in fiscal 2009 related only to awards that
vested prior to February 23, 2009. Because all vested and unvested awards were forfeited, there is no additional compensation cost to recognize in future periods related to his awards.

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

April 2, 2009

April 3, 2008

March 29, 2007Number
of
Shares

Weighted
Average
Exercise
Price Per
Share

Number
of
Shares

Weighted
Average
Exercise
Price Per
Share

Number
of
Shares

Weighted
Average
Exercise
Price Per
ShareOutstanding at beginning of year


36,521.356392

$
491


39,476.72873

$
491


39,476.72873

$
491Granted(1)


15,980.45000


323.95











Forfeited


(25,690.6383015
)




(2,455.372338
)







Exercised








(500.00000
)







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


26,811.1680905

$
391.43


36,521.356392

$
491


39,476.72873

$
491Exercisable at end of year(3)


14,026.8080901

$
491


25,681.40958

$
491


20,661.436174

$
491Available for grant at end of year


14,111.7042495





12,086.090418





9,630.71808


---

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 2009.
Parent received cash from the exercise of stock options during fiscal 2008 of $500,000 and a related tax deduction of $164,800.

108

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Table of Contents

Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 2, 2009, April 3, 2008 and March 29, 2007

NOTE 10INCOME TAXES

Income tax provision reflected in the Consolidated Statements of Operations for the periods in the three years ended April 2, 2009 consists of the following components:

(In thousands)

April 2, 2009

April 3, 2008

March 29, 2007Current:Federal

$


$
800

$
3,100Foreign


13,200


6,200


3,500State


3,500


3,600


5,700Total current


16,700


10,600


12,300Deferred:Federal





(4,600
)

16,400Foreign


(1,900
)

2,500


State


2,300


(700
)

2,800Total deferred


400


(2,800
)

19,200Total provision


17,100


7,800


31,500Tax provision from discontinued operations


(11,300
)

(6,780
)

(3,254
)Total provision from continuing operations

$
5,800

$
1,020

$
28,246


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

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

(In thousands)

April 2, 2009

April 3, 2008

March 29, 2007Domestic

$
(101,066
)
$
22,091

$
152,808Foreign


7,008


8,442


(4,401
)Total

$
(94,058
)
$
30,533

$
148,407


109

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Table of Contents

Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 2, 2009, April 3, 2008 and March 29, 2007

NOTE 10INCOME TAXES (Continued)

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

April 2, 2009

April 3, 2008

March 29, 2007Federal statutory rate


35.0
%

35.0
%

35.0
%Foreign rate differential





9.1State income taxes, net of federal tax benefit


(5.0
)

13.2


5.8Change in FIN 48 reserve


4.7


(24.5
)Foreign basis difference








(27.6
)Change in APB 23 assertion


(.3
)

(28.3
)Valuation allowance


(39.2
)

(4.4
)

4.9Other, net


(.2
)

4.5


1.2Effective tax rate


(5.0
)%

4.6
%

19.3
%


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.

The
significant components of deferred income tax assets and liabilities as of April 2, 2009 and April 3, 2008 are as follows:

April 2, 2009

April 3, 2008Deferred Income Tax

Deferred Income Tax(In thousands)

Assets

Liabilities

Assets

LiabilitiesProperty

$
32,130

$


$
51,343

$
Investments in joint ventures





(50,709
)




(55,297
)Intangible assets





(24,234
)




(51,035
)Pension postretirement and deferred compensation


17,260





15,685


Accrued reserves and liabilities


23,653





22,825


Deferred interest


25,660





25,660


Deferred revenue


116,882





116,561


Deferred rents


100,343





106,551


Alternative minimum tax and other credit carryovers


15,265





15,318


Capital loss carryforward








8,240


Net operating loss carryforward


103,273





122,500


Total

$
434,466

$
(74,943
)
$
484,683

$
(106,332
)Less: Valuation allowance


(321,523
)




(379,081
)

Total deferred income taxes(1)

$
112,943

$
(74,943
)
$
105,602

$
(106,332
)


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110

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Table of Contents

Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 2, 2009, April 3, 2008 and March 29, 2007

NOTE 10INCOME TAXES (Continued)

The
Company's federal income tax loss carryforward of $242,279,000 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 $460,514,000 which may be used over various periods ranging from 1 to 20 years.

Parent
began negotiations with certain of its debt holders during fiscal 2009 and completed the repurchase of certain term loans under the Parent Term Loan Facility in fiscal 2010. Based
upon the historical tax sharing arrangement, Parent will utilize the company's net operating losses in future years. The Company has reversed $31,000,000 of its valuation allowance through Goodwill in
anticipation of future utilization by Parent. As of April 2, 2009, management believed it was more likely than not, that net remaining deferred tax assets of $321,523,000 related primarily to
tax net operating loss carryforwards, deferred rents and deferred revenue would not be realized due to uncertainties as to the timing and amounts of future taxable income as a result of the Mergers.
The Company has recorded a valuation allowance against its remaining net deferred tax asset in U.S. and foreign jurisdictions of $321,523,000 as of April 2, 2009. The Company had a valuation
allowance of $321,523,000 and $379,081,000 as of April 2, 2009 and April 3, 2008, 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 2, 2009 was as follows:

(In millions)

April 2, 2009

April 3, 2008Balance at Beginning of Period

$
38.7

$
44.1Gross IncreasesCurrent Period Tax Positions


1.5


Gross DecreasesTax Position in Prior Periods


(2.1
)

Favorable Resolutions with Authorities





(5.4
)Expired Attributes





Lapse of Statute of Limitations


(4.6
)

Cash Settlements





Balance at End of Period

$
33.5

$
38.7


As
of April 2, 2009, the Company recognized a $7,000,000 FIN 48 liability and a $7,000,000 deferred tax asset for net operating losses on the balance sheet. These uncertain
positions were taken in tax years where the Company generated positive taxable income and they were previously netted against deferred tax assets on the balance sheet.

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Table of Contents

Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 2, 2009, April 3, 2008 and March 29, 2007

NOTE 10INCOME TAXES (Continued)

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 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 increased $45,000 as of
April 2, 2009.

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

The
Company or one of its subsidiaries files income tax returns in the U.S. federal jurisdiction, and various state and foreign jurisdictions. An IRS examination of the tax years
February 28, 2002 through December 31, 2003 of the former Loews Cineplex Entertainment Corporation and subsidiaries was concluded during fiscal 2007. An IRS examination for the tax years
ended March 31, 2005 and March 30, 2006 was completed during 2009. As of April 2, 2009, the IRS has notified the Company that it will begin examination of the tax period ended
March 29, 2007. Generally, tax years beginning after March 28, 2002 are still open to examination by various taxing authorities. Additionally, the Company has net operating loss
("NOL") carryforwards for tax years ended October 31, 2000 through March 28, 2002 in the U.S. and various state jurisdictions which have carryforwards of varying lengths
of time. These NOLs are subject to adjustment based on the statute of limitations of the return in which they are utilized, not the year in which they are generated. Various state, local and foreign
income tax returns are also under examination by taxing authorities. The Company does not believe that the outcome of any examination will have a material impact on its financial statements.

NOTE 11LEASES

Beginning in fiscal 1998, the Company has completed numerous real estate lease agreements with Entertainment Properties Trust ("EPT") including transactions accounted for as sale and
leaseback
transactions in accordance with 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 2, 2009 the Company leases from EPT 42 theatres with 924 screens located in the United States and Canada.

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Table of Contents

Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 2, 2009, April 3, 2008 and March 29, 2007

NOTE 11LEASES (Continued)

Following
is a schedule, by year, of future minimum rental payments required under existing operating leases that have initial or remaining non-cancelable terms in excess of
one year as of April 2, 2009:

(In thousands)

Minimum operating
lease payments2010

$
393,4522011


393,3212012


379,9912013


367,1662014


345,761Thereafter


2,298,514Total minimum payments required

$
4,178,205


As
of April 2, 2009, the Company has no lease agreements for theatres under construction or future theatre builds. 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 2, 2009 and April 3, 2008 is $225,957,000 and $256,186,000, respectively, of deferred rent representing future
minimum rental payments for leases with scheduled rent increases and unfavorable lease liabilities.

Rent
expense is summarized as follows:

(In thousands)

52 Weeks
Ended
April 2, 2009

53 Weeks
Ended
April 3, 2008

52 Weeks
Ended
March 29, 2007Minimum rentals

$
398,289

$
387,449

$
378,488Common area expenses


43,409


44,667


42,144Percentage rentals based on revenues


7,105


7,273


7,412Theatre rent


448,803


439,389


428,044General and administrative and other


1,227


1,463


1,512Total

$
450,030

$
440,852

$
429,556


NOTE 12EMPLOYEE BENEFIT PLANS

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

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Table of Contents

Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 2, 2009, April 3, 2008 and March 29, 2007

NOTE 12EMPLOYEE BENEFIT PLANS (Continued)

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

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

Effective
March 29, 2007, the Company adopted SFAS 158,Employers' Accounting for Defined Benefit Pension and Other Postretirement
Plansan amendment of FASB Statements No. 87, 88, 106, and 132 (R),("SFAS 158"). SFAS 158 requires that, effective for fiscal years ending
after December 15, 2008 the assumptions used to measure annual pension and retiree medical expense be determined as of the balance sheet date and all plan assets and liabilities be reported as
of that date. Accordingly, as of the beginning of fiscal 2009, the Company changed the measurement date for the annual pension and postretirement medical expense and all plan assets and liabilities by
applying the transition option under which a 15 month measurement was determined as of January 1, 2008, that covers the period to the Company's year-end balance sheet date. As a
result of this change in measurement date, the Company recorded an $82,000 loss to fiscal 2009 opening accumulated deficit and a $411,000 unrealized loss to other comprehensive income.

As
a result of the Merger in January 2006, 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 has 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. On December 29, 2008, the Company sold all of its interests in Cinemex, which includes the Mexico Plan. See
Note 2Discontinued Operations for more information.

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

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Table of Contents

Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 2, 2009, April 3, 2008 and March 29, 2007

NOTE 12EMPLOYEE BENEFIT PLANS (Continued)

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.

The
measurement date used to determine pension and other postretirement benefits is April 2, 2009. The assumptions to determine benefit obligations and net periodic benefit costs
are as follows:

LCE

AMCE



AMCEPension Benefits

Pension Benefits



Other BenefitsApril 2,
2009

April 3,
2008

April 2,
2009

April 3,
2008



April 2,
2009

April 3,
2008Weighted-average assumptions used to determine benefit obligations at:Discount rate


7.43
%

6.25
%

7.43
%

6.25
%



7.42
%

6.00
%Rate of compensation increase


N/A


N/A


N/A


N/A




5.00
%

5.00
%




LCE

AMCE



LCE

AMCEPension Benefits

Pension Benefits



Other Benefits

Other Benefits52 Weeks
ended
April 2,
2009

53 Weeks
ended
April 3,
2008

52 Weeks
ended
March 29,
2007

52 Weeks
ended
April 2,
2009

53 Weeks
ended
April 3,
2008

52 Weeks
ended
March 29,
2007



52 Weeks
ended
April 2,
2009

53 Weeks
ended
April 3,
2008

52 Weeks
ended
March 29,
2007

52 Weeks
ended
April 2,
2009

53 Weeks
ended
April 3,
2008

52 Weeks
ended
March 29,
2007Weighted-average assumptions used to determine net periodic benefit cost:Discount rate


6.25
%

5.50
%

5.50
%

6.25
%

5.75
%

5.75
%


N/A

N/A


5.75
%

6.25
%

5.75
%

5.75
%Expected long-term return on plan assets


8.25
%

8.25
%

8.25
%

8.25
%

8.25
%

8.25
%


N/A

N/A


N/A


N/A


N/A


N/ARate of compensation increase


N/A


N/A


N/A


N/A


N/A


3.50-6.00
%


N/A

N/A


5.00
%

5.00
%

5.00
%

5.00
%


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 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 2, 2009

April 3, 2008

TargetEquity Securities


57
%

67
%

52
%Debt Securities


36
%

26
%

31
%Real Estate Investments & Other


7
%

7
%

17
%100
%

100
%

100
%


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

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Table of Contents

Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 2, 2009, April 3, 2008 and March 29, 2007

NOTE 12EMPLOYEE BENEFIT PLANS (Continued)

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

Pension Benefits



Other Benefits(In thousands)

52 Weeks
Ended
April 2,
2009

53 Weeks
Ended
April 3,
2008

52 Weeks
Ended
March 29,
2007



52 Weeks
Ended
April 2,
2009

53 Weeks
Ended
April 3,
2008

52 Weeks
Ended
March 29,
2007Components of net periodic benefit cost:Service cost

$
369

$
443

$
3,214



$
402

$
846

$
910Interest cost


4,468


4,440


5,272




1,111


1,555


1,550Expected return on plan assets


(5,098
)

(4,691
)

(4,474
)









Recognized net actuarial loss








3










Amortization of prior service credit













(407
)




Amortization of net transition obligation


28


39


41










Amortization of net (gain) loss


(1,622
)

(1,115
)

13




(69
)




Settlement





(56
)












Curtailment


(1,072
)




(10,983
)









Net periodic benefit cost

$
(2,927
)
$
(940
)
$
(6,914
)


$
1,037

$
2,401

$
2,460


The
following table summarizes the changes in other comprehensive income for fiscal 2009:

Pension Benefits



Other Benefits(In thousands)

52 Weeks
Ended
April 2, 2009

53 Weeks
Ended
April 3, 2008



52 Weeks
Ended
April 2, 2009

53 Weeks
Ended
April 3, 2008Net (gain) loss

$
16,086

$
(5,758
)


$
(9,573
)
$
(1,906
)Amortization of net gain


1,622


1,115




69


Amortization of prior service credit










407


Amortization of net transition obligation


(28
)

(39
)






Amount recognized due to settlement





56







Impact of changing measurement date


411










Disposition of Cinemex


(877
)









Total recognized in other comprehensive income

$
17,214

$
(4,626
)


$
(9,097
)
$
(1,906
)Net periodic benefit cost


(2,927
)

(940
)



1,037


2,401Total recognized in net periodic benefit cost and other comprehensive income

$
14,287

$
(5,566
)


$
(8,060
)
$
495


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Table of Contents

Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 2, 2009, April 3, 2008 and March 29, 2007

NOTE 12EMPLOYEE BENEFIT PLANS (Continued)

The
following tables set forth the plan's change in benefit obligations and plan assets and the accrued liability for benefit costs included in the consolidated balance sheets:

Pension Benefits



Other Benefits(In thousands)

52 Weeks
Ended
April 2, 2009

53 Weeks
Ended
April 3, 2008



52 Weeks
Ended
April 2, 2009

53 Weeks
Ended
April 3, 2008Change in benefit obligation:Benefit obligation at beginning of period

$
73,330

$
79,542



$
26,830

$
27,729Service cost


414


443




632


846Interest cost


5,604


4,440




1,727


1,555Plan participant's contributions










447


340Actuarial gain


(12,017
)

(6,718
)



(9,573
)

(1,906
)Benefits paid


(4,638
)

(4,420
)



(1,962
)

(1,734
)Disposition of Cinemex


(1,468
)









Currency translation adjustment


(535
)

43







Benefit obligation at end of period

$
60,690

$
73,330



$
18,101

$
26,830




Pension Benefits



Other Benefits(In thousands)

52 Weeks
Ended
April 2, 2009

53 Weeks
Ended
April 3, 2008



52 Weeks
Ended
April 2, 2009

53 Weeks
Ended
April 3, 2008Change in plan assets:Fair value of plan assets at beginning of period

$
62,114

$
57,424



$


$
Actual return on plan assets gain (loss)


(20,623
)

3,727







Employer contribution


2,747


5,383




1,515


1,394Plan participant's contributions










447


340Benefits paid


(4,638
)

(4,420
)



(1,962
)

(1,734
)Fair value of plan assets at end of period

$
39,600

$
62,114



$


$
Net liability for benefit cost:Funded status

$
(21,090
)
$
(11,216
)


$
(18,101
)
$
(26,830
)




Pension Benefits



Other Benefits(In thousands)

April 2, 2009

April 3, 2008



April 2, 2009

April 3, 2008Amounts recognized in the Balance Sheet:Other long-term assets

$


$
672



$


$
Accrued expenses and other liabilities


(249
)

(190
)



(1,300
)

(1,390
)Other long-term liabilities


(20,841
)

(11,698
)



(16,801
)

(25,440
)Net liability recognized

$
(21,090
)
$
(11,216
)


$
(18,101
)
$
(26,830
)


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Table of Contents

Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 2, 2009, April 3, 2008 and March 29, 2007

NOTE 12EMPLOYEE BENEFIT PLANS (Continued)

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 2, 2009

April 3, 2008



April 2, 2009

April 3, 2008Aggregated benefit obligation

$
(60,690
)
$
(63,665
)


$
(18,101
)
$
(26,830
)Aggregated fair value of plan assets


39,600


51,777










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

Pension Benefits



Other Benefits(In thousands)

April 2, 2009

April 3, 2008



April 2, 2009

April 3, 2008Net actuarial (gain) loss

$
1,303

$
(16,308
)


$
(5,986
)
$
(2,451
)Net transition obligation





396







Prior service credit










(5,562
)




Amounts
in accumulated other comprehensive income (loss) expected to be recognized in components of net periodic pension cost in fiscal 2010 are as follows:

(In thousands)

Pension Benefits

Other BenefitsNet actuarial gain

$
364

$
278Prior service credit





543Total

$
364

$
821


The
Company expects to contribute $4,459,000 to the pension plans plan during fiscal 2010.

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
Adjustments2010

$
2,702

$
1,300

$
702011


1,941


1,330


802012


2,027


1,370


902013


2,254


1,390


1002014


2,841


1,420


110Years 2015-2019


18,438


7,570


670


For
measurement purposes, the annual rate of increase in the per capita cost of covered health care benefits assumed for 2009 was 8.0% for medical and 4.0% for dental and vision. The
rates were assumed to decrease gradually to 5.0% for medical in 2012 and remain at 4.0% for dental. The health care cost trend rate assumption has a significant effect on the amounts reported.
Increasing the assumed health care cost trend rates by one percentage point in each year would increase the

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Table of Contents

Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 2, 2009, April 3, 2008 and March 29, 2007

NOTE 12EMPLOYEE BENEFIT PLANS (Continued)

accumulated
postretirement benefit obligation as of April 2, 2009 by $1,840,000 and the aggregate of the service and interest cost components of postretirement expense for fiscal 2009 by
$149,000. Decreasing the assumed health care cost trend rates by one percentage point in each year would decrease the accumulated postretirement obligation for fiscal 2009 by $1,585,000 and the
aggregate service and interest cost components of postretirement expense for fiscal 2009 by $130,000. 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").

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 currently matches 100% of each eligible employee's elective contributions up to
5% of the employee's eligible compensation. Effective for fiscal year 2010, the Company will match 50% of each eligible employee's elective contributions up to 6% of the employee's eligible
compensation. The Company's expense under the 401(k) savings plan was $2,374,000, $2,476,000, and $2,295,000 for the periods ended April 2, 2009, April 3, 2008 and March 29, 2007,
respectively.

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 $559,000, $1,004,000, and $792,000, for the periods ended April 2, 2009, April 3, 2008 and March 29, 2007, respectively. On
November 7, 2008, the Company received notice of a written demand for payment of a partial withdrawal liability assessment from a collectively bargained multiemployer pension plan that covers
certain of its unionized theatre employees. Based on a payment schedule that the Company has received from this plan in December 2008, the Company began making quarterly payments on January 1,
2009 related to the $5,279,000 in partial withdrawal liability. However, the Company also estimates that approximately $2,839,000 of this liability was discharged in bankruptcy by companies it
acquired. As of April 2, 2009, the Company has recorded a liability related to this matter in the amount of $4,311,000 and has made contributions of approximately $968,000. The final partial
withdrawal liability amount may be adjusted based on a legal review of the plan's assessment, the Company's records and ensuing discussions with the plan's trustees.

NOTE 13COMMITMENTS AND CONTINGENCIES

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

United States of America v. AMC Entertainment Inc. and American Multi Cinema, Inc.(No. 99 01034 FMC (SHx), filed in
the U.S. District Court for the Central District of California). On January 29, 1999, the Department of Justice (the "Department") filed suit alleging that AMCE's stadium style theatres
violated 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

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Table of Contents

Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 2, 2009, April 3, 2008 and March 29, 2007

NOTE 13COMMITMENTS AND CONTINGENCIES (Continued)

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.

As
to line-of-sight matters, the trial court entered summary judgment in favor of the Justice Department as to both liability and as to the appropriate remedy. On
December 5, 2008, the Ninth Circuit Court of Appeals reversed the trial court as to the appropriate remedy and remanded the case back to the trial court for findings consistent with its
decision. AMCE estimates that the cost of betterments related to the remaining remedies required for line-of-sight violations will be approximately $4,300,000 over a
4-5 year term. The Justice Department has moved for reconsideration and in the alternate, a larger panel of judges to review before the Ninth Circuit Court of Appeals.

As
to the non-line-of-sight aspects of the case, on January 21, 2003, the trial court entered summary judgment in favor of the Department on
matters such as parking areas, signage, ramps, location of toilets, counter heights, ramp slopes, companion seating and the location and size of handrails. On December 5, 2003, the trial court
entered a consent order and final judgment on non-line of sight issues under which 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. AMCE estimates that the total cost of these betterments will be
$51,871,000, and through April 2, 2009 AMCE has incurred approximately $23,582,000 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.

AMCE
estimates the range of the loss for liability fines to be between $349,000 and $444,000. Accordingly, AMCE has recorded the related liability of approximately $349,000.

Michael Bateman v. American Multi-Cinema, Inc.(No. CV07-00171). In January 2007, a class action complaint was filed against the
Company in the Central District of the United States District Court of California (the "District Court") alleging violations of the Fair and Accurate Credit Transactions Act ("FACTA"). FACTA provides
in part that neither expiration dates nor more than the last 5 numbers of a credit or debit card may be printed on receipts given to customers. FACTA imposes significant penalties upon violators where
the violation is deemed to have been willful. Otherwise damages are limited to actual losses incurred by the card holder. On October 24, 2008, the District Court denied plaintiff's renewed
motion for class certification. Plaintiff has appealed this decision and the case is stayed pending this appeal. The Company believes the plaintiff's allegations, particularly those asserting AMCE's
willfulness, are without merit.

Union Sponsored Pension Plan.On November 7, 2008, the Company received notice of a written demand for payment of a partial
withdrawal
liability assessment from a collectively bargained multiemployer pension plan that covers certain of its unionized theatre employees. Based on a payment schedule that the Company has received from
this plan in December 2008, the Company began making quarterly payments on January 1, 2009 related to the $5,279,000 in partial withdrawal liability. However, the Company also estimates that
approximately $2,839,000 of this liability was discharged in bankruptcy by companies it acquired. As of April 2, 2009, the Company has recorded a liability related to this matter in the amount
of $4,311,000 and has made contributions of approximately $968,000. The

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Table of Contents

Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 2, 2009, April 3, 2008 and March 29, 2007

NOTE 13COMMITMENTS AND CONTINGENCIES (Continued)

final
partial withdrawal liability amount may be adjusted based on a legal review of the plan's assessment, the Company's records and ensuing discussions with the plan's trustees.

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

NOTE 14THEATRE AND OTHER CLOSURE AND DISPOSITION OF ASSETS

The Company has provided reserves for estimated losses from theatres 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 2, 2009, the Company has reserved $7,386,000 for lease terminations which have either not been consummated or paid, related
primarily to 2 theatres with 14 screens and vacant restaurant 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 New York City home office lease, which has been fully paid in fiscal 2008.
The Company is obligated under long-term lease commitments with remaining terms of up to 19 years for theatres which have been closed. As of April 2, 2009, base rents
aggregated approximately $1,492,000 annually and $9,933,000 over the remaining terms of the leases.

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

Fifty-two Week Period

Fifty-three Week Period

Fifty-two Week PeriodApril 2, 2009

April 3, 2008

March 29, 2007(In thousands)

Theatre
and
Other

Merger
Exit
Costs

Total

Theatre
and
Other

Merger
Exit
Costs

Total

Theatre
and
Other

Merger
Exit
Costs

TotalBeginning balance

$
10,844

$


$
10,844

$
17,621

$
1,274

$
18,895

$
21,716

$
4,618

$
26,334Merger adjustment




















(195
)

(718
)

(913
)Theatre and other closure expense (income)


(2,262
)




(2,262
)

(20,677
)

(293
)

(20,970
)

8,849


162


9,011Transfer of deferred rent and capital lease obligations


2,824





2,824


10,514





10,514


194





194Cash (payments) & receipts, net


(4,020
)




(4,020
)

3,386


(981
)

2,405


(12,943
)

(2,788
)

(15,731
)Ending balance

$
7,386

$


$
7,386

$
10,844

$


$
10,844

$
17,621

$
1,274

$
18,895


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Table of Contents

Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 2, 2009, April 3, 2008 and March 29, 2007

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

During the fifty-two weeks ended April 2, 2009, the Company recognized $2,262,000 of theatre and other closure income due
primarily to lease terminations negotiated on favorable terms for two theatres that were closed during this period. The Company did not receive cash payments in connection with the lease terminations,
but recognized income from the write-off of the unamortized deferred rent liability. 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. As of April 2, 2009, the future lease obligations are discounted at annual rates ranging from 7.55% to 8.54%.

NOTE 15FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company adopted Statement of Financial Accounting Standards No. 157,Fair Value Measurements, ("SFAS 157") as of the
beginning of the first quarter of fiscal 2009 for financial assets and liabilities recognized or disclosed at fair value on a recurring basis. The adoption of this Statement did not have a material
impact on the Company's consolidated financial position and results of operations. 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. In February 2008, the FASB issued FASB Staff Position
FAS 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 (at least annually). Due to the deferral, the Company has delayed the implementation of SFAS 157 provisions on the fair value of goodwill, intangible assets with indefinite
lives, and nonfinancial long-lived assets until the beginning of fiscal 2010. SFAS 157 enables the reader of the financial statements to assess the inputs used to develop those
measurements by establishing a hierarchy for ranking the quality and reliability of the information used to determine fair values. SFAS 157 requires that assets and liabilities carried at fair
value be classified and disclosed in one of the following categories:

Level 1:
Quoted market prices in active markets for identical assets or liabilities.

Level 2:
Observable market based inputs or unobservable inputs that are corroborated by market data.

Level 3:
Unobservable inputs that are not corroborated by market data.

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Table of Contents

Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 2, 2009, April 3, 2008 and March 29, 2007

NOTE 15FAIR VALUE OF FINANCIAL INSTRUMENTS (Continued)

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

Fair Value Measurements at April 2, 2009 Using(In thousands)

Total Carrying
Value at
April 2, 2009

Quoted prices in
active market
(Level 1)

Significant other
observable inputs
(Level 2)

Significant
unobservable inputs
(Level 3)Assets:Money market mutual funds

$
377,944

$
377,944

$


$
Deferred compensation plan assets(1)


2,828


2,828





Non-qualified defined benefit plan assets


83


83





Total assets at fair value

$
380,855

$
380,855

$


$
Liabilities:Interest rate swap agreements

$
552

$


$
552

$
Total liabilities at fair value

$
522

$


$
552

$



---

Valuation Techniques.The Company's money market mutual funds are invested in funds that seek to preserve principal, are highly liquid,
and therefore
are recorded on the balance sheet at the principal amounts deposited, which equals fair value. The money market funds are classified within Level 1 of the valuation hierarchy. The deferred
compensation plan and non-qualified defined benefit plan assets are measured at fair value using quoted market prices and are classified within Level 1 of the valuation hierarchy.
The interest rate swap is measured at fair value using LIBOR and incorporates credit data that measures nonperformance risk. The interest rate swap agreement is classified within Level 2 of the
valuation hierarchy.

SFAS
No. 107,Disclosures about Fair Value of Financial Instruments, requires that an entity disclose the fair value of financial
instruments for which it is practicable to estimate that value. The carrying value of cash and equivalents approximates fair value because of the short duration of those instruments. At
April 2, 2009, the carrying amount of the Company's liabilities for corporate borrowings was approximately $1,928,736,000 and the fair value was approximately $1,699,681,000. At April 3,
2008, the carrying amount of the corporate borrowings was approximately $1,856,467,000 and the fair value of was approximately $1,684,462,000. Quoted market prices were used to value publicly held
corporate borrowings.

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Table of Contents

Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 2, 2009, April 3, 2008 and March 29, 2007

NOTE 16OPERATING SEGMENT

The Company reports information about operating segments in accordance with SFAS No. 131,Disclosures about Segments of an Enterprise and Related
Information,("SFAS 131"). SFAS 131 requires financial information to be reported based on the way management organizes segments within a company for making
operating decisions and evaluating performance. During fiscal 2009, the Company has identified one reportable segment for its theatrical exhibition operations. Previously, the Company had three
operating segments which consisted of United States and Canada Theatrical Exhibition, International Theatrical Exhibition, and Other. The reduction in the number of operating segments was a result of
the disposition of Cinemex in December 2008. Cinemex was previously reported in the International Theatrical Exhibition operating segment and accounted for a substantial majority of that segment. In
addition, in the second quarter of fiscal 2009, the Company consolidated the Other operating segment with the United States and Canada Theatrical Exhibition operating segment due to a previous
contribution of advertising net assets to NCM. During fiscal 2009, the United States and Canada Theatrical Exhibition operating segment was renamed the Theatrical Exhibition operating segment.

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

Revenues (In thousands)

52 Weeks
Ended
April 2, 2009

53 Weeks
Ended
April 3, 2008

52 Weeks
Ended
March 29, 2007United States

$
2,184,686

$
2,254,399

$
2,232,529Canada


61,830


56,581


52,496France


5,015


6,100


5,021United Kingdom


13,956


15,964


13,176Total revenues

$
2,265,487

$
2,333,044

$
2,303,222




Long-term assets (In thousands), Gross

April 2, 2009

April 3, 2008United States

$
4,534,189

$
4,552,567Canada


63,700


75,798France


9,803


14,955United Kingdom


11,068


11,573Mexico





402,403Total long-term assets(1)

$
4,618,760

$
5,057,296


---

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Table of Contents

Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 2, 2009, April 3, 2008 and March 29, 2007

NOTE 17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 are to be reduced upon a decrease in such Sponsors' ownership in Parent below certain thresholds.

The
Voting Agreement among Parent and the pre-existing stockholders of Holdings 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

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Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 2, 2009, April 3, 2008 and March 29, 2007

NOTE 17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

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Table of Contents

Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 2, 2009, April 3, 2008 and March 29, 2007

NOTE 17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 agrees that it would not offer for public sale any equity interests during a period not to exceed
90 days (180 days in the case of an initial public offering) after the effective date of any registration statement filed by Parent in connection with an underwritten public offering
(except as part of such underwritten registration or as otherwise permitted by such underwriters), subject to certain limitations.

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 (20.839%); Apollo (20.839%); Bain Capital Partners (15.13%); The
Carlyle Group (15.13%); Spectrum Equity Investors (9.79%); Weston Presidio Capital IV, L.P. and WPC Entrepreneur Fund II, L.P. (3.91%); Co-Investment
Partners, L.P. (3.91%); Caisse de Depot et Placement du Quebec (3.128%); 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. (2.737%); SSB Capital Partners (Master Fund) I, L.P.
(1.955%); CSFB Strategic Partners Holdings II, L.P., CSFB Strategic Partners Parallel Holdings II, L.P., and GSO Credit Opportunities Fund (Helios), L.P. (1.564%); Credit
Suisse Anlagestiftung, Pearl Holding Limited, Vega Invest (Guernsey) Limited and

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Table of Contents

Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 2, 2009, April 3, 2008 and March 29, 2007

NOTE 17RELATED PARTY TRANSACTIONS (Continued)

Partners
Group Private Equity Performance Holding Limited (0.782%); Screen Investors 2004, LLC (0.152%); and current and former members of management (0.134%)(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.

DCIP

In February 2007, Mr. Travis Reid was hired as the chief executive officer of DCIP, a joint venture between AMCE,
Cinemark USA and Regal formed to explore the possibility of implementing digital cinema in our theatres and to create a financing model and establish
agreements with major motion picture studios for the implementation of digital cinema. Mr. Reid is a member of the Company's Board of Directors.

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.

AMCE Dividends to Holdings

On April 3, 2008 the 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 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 and Holdings paid a dividend to Parent of $270,588,000 which has been recorded by Holdings as a
reduction to additional paid-in capital.

During
fiscal 2009, AMCE used cash on hand to pay dividend distributions to Holdings in an aggregate amount of $35,989,000. Holdings used the available funds to make cash interest
payments on the 12% Senior Discount Notes due 2014, repurchase treasury stock and make payments related to the

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Table of Contents

Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 2, 2009, April 3, 2008 and March 29, 2007

NOTE 17RELATED PARTY TRANSACTIONS (Continued)

liability
classified options, and pay corporate overhead expenses incurred in the ordinary course of business. During fiscal 2009, Holdings used cash from AMCE to pay dividend distributions to Parent
of $3,349,000. Parent used the available funds to repurchase treasury stock and pay corporate overhead expenses incurred in the ordinary course of business.

NOTE 18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.

Marquee Holdings Inc.    CONDENSED STATEMENTS OF OPERATIONSPARENT ONLY

(In thousands)

52 Weeks
Ended
April 2,
2009

53 Weeks
Ended
April 3,
2008

52 Weeks
Ended
March 29,
2007Costs and ExpensesGeneral and administrative:Merger, acquisition and transaction costs

$
2

$
2,633

$
2,451Other


119


75


Total costs and expenses


121


2,708


2,451Other expense (income)Equity in (earnings) loss of AMC Entertainment Inc.


81,172


(43,445
)

(134,079
)Interest expenseCorporate borrowings


29,900


29,745


25,730Investment income


(35
)

(141
)

(209
)Total other (income) expense


111,037


(13,841
)

(108,558
)Earnings (loss) before income taxes


(111,158
)

11,133


106,107Income tax provision (benefit)





(11,600
)

(10,800
)Net earnings (loss)

$
(111,158
)
$
22,733

$
116,907


129

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Table of Contents

Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 2, 2009, April 3, 2008 and March 29, 2007

NOTE 18CONDENSED FINANCIAL INFORMATION OF PARENT COMPANY (Continued)

Marquee Holdings Inc.    CONSOLIDATED BALANCE SHEETSPARENT ONLY

(In thousands, except share data)

April 2, 2009

April 3, 2008AssetsCash and equivalents

$
2,571

$
2,536Receivables





286Other current assets





Total current assets


2,571


2,822Goodwill


21,993


21,993Investment in AMC Entertainment Inc.


1,039,603


1,133,495Other long-term assets


6,973


8,127Total assets

$
1,071,140

$
1,166,437Liabilities and Stockholder's EquityCurrent liabilities:Accrued expenses and other liabilities

$
4,167

$
8,226Total current liabilities


4,167


8,226Corporate borrowings


240,795


240,795Total liabilities


244,962


249,021Stockholder's Equity:Common Stock, 1 shares issued as of April 2, 2009 and April 3, 2008 with 1¢ per value





Additional paid-in capital


1,046,703


1,047,430Accumulated other comprehensive income (loss)


17,061


(3,668
)Accumulated deficit


(237,586
)

(126,346
)Total stockholder's equity


826,178


917,416Total liabilities and stockholder's equity


1,071,140

$
1,166,437


130

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Table of Contents

Marquee Holdings Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended April 2, 2009, April 3, 2008 and March 29, 2007

NOTE 18CONDENSED FINANCIAL INFORMATION OF PARENT COMPANY (Continued)

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

(In thousands)

52 Weeks
Ended
April 2, 2009

53 Weeks
Ended
April 3, 2008

52 Weeks
Ended
March 29, 2007INCREASE (DECREASE) IN CASH AND EQUIVALENTSCash flows from operating activitiesNet earnings (loss)

$
(111,158
)
$
22,733

$
116,907Adjustments to reconcile net earnings (loss) to net cash provided by (used in) operating activities:Amortization of discount on corporate borrowings





10,390


25,278Deferred income taxes





(11,600
)

(10,800
)Equity in (earnings) loss of AMC Entertainment Inc.


81,172


(43,445
)

(134,079
)Net change in operating activities:Receivables and other assets


286


(260
)

1,367Accrueds and other liabilities


(4,047
)

1,462


1,022Other, net


1,142


2,283


453Net cash provided by (used in) operating activities


(32,605
)

(18,437
)

148Cash flows from investing activitiesDividends from AMC Entertainment Inc.


35,989


293,551


Net cash provided by investing activities


35,989


293,551


Cash flows from financing activitiesDividends paid to Parent


(3,349
)

(270,588
)

Deferred financing costs





(4,360
)

(29
)Net cash used in financing activities


(3,349
)

(274,948
)

(29
)Net increase in cash and equivalents


35


166


119Cash and equivalents at beginning of year


2,536


2,370


2,251Cash and equivalents at end of year

$
2,571

$
2,536

$
2,370Schedule of non-cash investing activities:Contribution from AMCE

$


$
3,279

$



131

---





Marquee Holdings Inc.    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)    Years Ended April 2, 2009, April 3, 2008 and March 29, 2007

NOTE 18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 StockCommon Stock



Accumulated
Other
Comprehensive
Income (Loss)

Retained
Earnings
(Accumulated
Deficit)Additional
Paid-in
Capital

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

Shares

Amount

Shares

Amount

Shares

Amount

Shares

Amount

Shares

Amount

Shares

AmountBalance, March 30, 2006








382,475.00000

$
4


382,475.00000

$
4


5,128.77496





256,085.61252

$
3


256,085.61252

$
3

$
1,313,899

$
(10,658
)
$
(260,613
)
$
1,042,642Comprehensive earnings:Net earnings












































116,907


116,907Foreign currency translation adjustment









































(5,037
)




(5,037
)Additional minimum pension liability









































(139
)




(139
)Unrealized loss on Cinemex swap agreements









































(560
)




(560
)Unrealized gain on Cinemex lease agreements









































80





80Unrealized loss on marketable securities









































339





339Comprehensive earnings















































111,590Adjustment for initially applying SFAS No. 158









































12,141





12,141Stock-based compensationoptions






































4,180








4,180Revised value of Common Stock issued for Merger






































(3,500
)







(3,500
)Balance, March 29, 2007








382,475.00000


4


382,475.00000


4


5,128.77496





256,085.61252


3


256,085.61252


3


1,314,579


(3,834
)

(143,706
)

1,167,053


132

---



Marquee Holdings Inc.    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)    Years Ended April 2, 2009, April 3, 2008 and March 29, 2007

NOTE 18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 StockCommon Stock



Accumulated
Other
Comprehensive
Income (Loss)

Retained
Earnings
(Accumulated
Deficit)Additional
Paid-in
Capital

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

Shares

Amount

Shares

Amount

Shares

Amount

Shares

Amount

Shares

Amount

Shares

AmountComprehensive earnings:Net earnings












































22,733


22,733FIN 48 adoption adjustments












































(5,373
)

(5,373
)Foreign currency translation adjustment









































(1,708
)




(1,708
)Change in fair value of cash flow hedges









































(5,507
)




(5,507
)Losses on interest rate swaps reclassified to interest expense corporate borrowings









































1,523





1,523Unrealized loss on marketable equity securities























Pension and other benefit adjustments









































6,532





6,532Unrealized loss on marketable equity securities









































(674
)




(674
)Comprehensive earnings















































17,526Stock-based compensationoptions






































3,439








3,439Dividends received from AMC Entertainment Inc






































(270,588
)







(270,588
)Conversion of stock upon creation of Entertainment Holdings, Inc.


1





(382,475.00000
)

(4
)

(382,475.00000
)

(4
)

(5,128.77496
)




(256,085.61252
)

(3
)

(256,085.61252
)

(3
)










(14
)Balance, April 3, 2008


1


































$
1,047,430


(3,668
)

(126,346
)

917,416Comprehensive (loss):Net loss












































(111,158
)

(111,158
)Foreign currency translation adjustment









































25,558





25,558Change in fair value of cash flow hedges









































(1,833
)




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









































5,230





5,230Pension and other benefit adjustments









































(8,117
)




(8,117
)Unrealized loss on marketable securities









































(109
)




(109
)Comprehensive earnings















































(90,429
)SFAS 158 adoption adjustment












































(82
)

(82
)Stock-based compensationoptions






































2,622








2,622Dividends paid to AMC Entertainment Holdings, Inc.






































(3,349
)







(3,349
)Balance April 2, 2009


1

$





$





$





$





$





$


$
1,046,703

$
17,061

$
(237,586
)
$
826,178


133

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Table of Contents

Marquee Holdings Inc.    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)    Years Ended April 2, 2009, April 3, 2008 and March 29, 2007

NOTE 18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 7 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 13 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 19SUBSEQUENT EVENTS

During April and May of 2009, AMCE made dividend payments to its stockholder Marquee Holdings Inc. and Marquee
Holdings Inc. made dividend payments to its stockholder AMC Entertainment Holdings, Inc. totaling $300,000,000. AMC Entertainment Holdings, Inc. made payments to purchase term
loans and reduced the principal balance of the Parent Term Loan Facility to $226,261,000 with a portion of the dividend proceeds.

134

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Table of Contents

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

None

Item 9A(T).    Controls and Procedures



The
Company maintains a set of disclosure controls and procedures designed to provide reasonable assurance that material information required to be disclosed in its filings under the
Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms and that material
information is accumulated and communicated to the Company's management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required
disclosure. The Company's Chief Executive Officer and Chief Financial Officer have evaluated these disclosure controls and procedures as of the end of the period covered by this Annual Report on
Form 10-K and have determined that such disclosure controls and procedures were effective.

Management's Consideration of the Interim Period Restatements

In coming to the conclusion that our disclosure controls and procedures were effective as of the end of the period covered by this
Annual Report on Form 10-K, management considered, among other things, the fact that it restated previously issued quarterly financial statements during the period covered by this Annual Report
for an error in applying SFAS 106 Employers' Accounting for Postretirement Benefits Other than Pensions ("FAS 106") to an amendment of its Post-Retirement Medical and Life Insurance Plan (the
"Plan"). Management also considered the Company's internal controls over its financial reporting for Plan related assets, liabilities and related expenses. Such controls included but were not limited
to: the use of competent Company personnel; the gathering of complete, accurate and relevant information for analysis; providing such information to external third party actuarial specialists who
assisted management in the application of generally accepted accounting principles, including those contained in FAS 106; and, related management reviews. Based on the conclusion that the
Company's internal controls associated with the above-noted accounts were designed and operated effectively so as to provide reasonable assurance over financial reporting, the Company's Chief
Executive Officer and Chief Financial Officer concluded that no deficiency in internal control over financial reporting existed and therefore further concluded that as of the end of the period covered
by this Annual Report on Form 10-K the Company's disclosure controls and procedures were effective at a reasonable level of assurance.



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 2, 2009, 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 2, 2009.

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.

135

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Table of Contents



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

136

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Table of Contents

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. Gerardo I. Lopez, 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 8, 2009:

Name

Age

Position(s) HeldAaron J. Stone

36

Chairman of the Board, Director (Parent, Holdings and AMC Entertainment)Gerardo I. Lopez

49

Chief Executive Officer, President and Director (Parent, Holdings, AMC Entertainment and American Multi-Cinema, Inc.)Dana B. Ardi

61

Director (Parent, Holdings and AMC Entertainment)Stephen P. Murray

46

Director (Parent, Holdings and AMC Entertainment)Stan Parker

33

Director (Parent, Holdings and AMC Entertainment)Phillip H. Loughlin

41

Director (Parent, Holdings and AMC Entertainment)Eliot P. S. Merrill

38

Director (Parent, Holdings and AMC Entertainment)Kevin Maroni

46

Director (Parent, Holdings and AMC Entertainment)Travis Reid

55

Director (Parent, Holdings and AMC Entertainment)Craig R. Ramsey

57

Executive Vice President and Chief Financial Officer (Parent, Holdings, AMC Entertainment and American Multi-Cinema, Inc.); Director (American Multi-Cinema, Inc.)John D. McDonald

52

Executive Vice President, U.S. and Canada Operations (Parent, Holdings, AMC Entertainment and American Multi-Cinema, Inc.); Director (American Multi-Cinema, Inc.)Kevin M. Connor

46

Senior Vice President, General Counsel and Secretary (Parent, Holdings, AMC Entertainment and American Multi-Cinema, Inc.)Mark A. McDonald

50

Executive Vice President, International Operations (Parent, Holdings, AMC Entertainment and American Multi-Cinema, Inc.); Director (AMC Entertainment International, Inc.)Robert J. Lenihan

55

President, Programming (Parent, Holdings, AMC Entertainment and American Multi-Cinema, Inc.)Chris A. Cox

43

Vice President and Chief Accounting Officer (Parent, Holdings, AMC Entertainment and American Multi-Cinema, Inc.)Terry W. Crawford

52

Vice President and Treasurer (Parent, Holdings, AMC Entertainment and American Multi-Cinema, Inc.)Michael W. Zwonitzer

44

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.

137

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Table of Contents

Mr. Aaron J. Stonehas served as Chairman of the Board of Parent, Holdings and AMC Entertainment since February 2009.
Mr. Stone has 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. Gerardo I. Lopezhas served as Chief Executive Officer, President and a Director of Parent, Holdings and AMC
Entertainment since March 2009. Prior to joining the Company, Mr. Lopez served as Executive Vice President of Starbucks Coffee Company and President of its Global Consumer Products,
Seattle's Best Coffee and Foodservice divisions from September 2004 to March 2009. Prior to joining Starbucks, Mr. Lopez was president of the Handleman Entertainment Resources
division of Handleman Company from November 2001 to September 2004. Mr. Lopez also serves on the board of directors of SilkRoute Global, National CineMedia, LLC and Digital
Cinema Implementation Partners, LLC. Mr. Lopez holds a B.S. degree in Marketing from George Washington University and a MBA in Finance from Harvard Business School.

Dr. Dana B. Ardihas served as a Director of Parent, Holdings and AMC Entertainment since April 2009. Dr. Ardi serves
as Managing Director and Founder of Corporate Anthropology Advisors L.L.C., a consulting company that provides human capital advisory and innovative solutions that build value
through organizational design and people development. Through her company, Dr. Ardi has taken on the role of Executive Advisor to CCMP Capital Advisors, LLC, a private equity firm formed
in August 2006 by the former buyout/growth equity investment team of J.P. Morgan Partners, LLC a private equity division of JPMorgan Chase & Co. Prior to founding
Corporate Anthropology Advisors L.L.C. in 2009, Dr. Ardi served as a Managing Director at CCMP Capital Advisors, LLC from August 2006 through January 2009, as a Partner at
J.P. Morgan Partners, LLC from June 2001 to July 2006, as a Partner at Flatiron Partners, LLC from 1999 to June 2001, as co-chair of the Global
Communications, Entertainment and Technology practice of TMP Worldwide from 1995 to 1999 and before that as Senior Vice President of New Media at R.R. Donnelley & Sons Company. Dr. Ardi
holds a B.S. Degree from the State University of New York at Buffalo and M.S. and Ph.D. Degrees in Education from Boston College.

Mr. Stephen P. Murrayhas served as a Director of Parent since June 2007, and has served as a Director of 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.

138

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Table of Contents

Mr. Philip H. Loughlinhas served as a Director of Parent, Holdings and AMC Entertainment since January 2009.
Mr. Loughlin is a Managing Director of Bain Capital Partners ("Bain"). Prior to joining Bain in 1996, Mr. Loughlin was Executive Advisor to the President of Eagle Snacks, Inc.,
where he helped manage the restructuring and liquidation of the company. Previously, Mr. Loughlin was a consultant at Bain & Company, where he worked in the telecommunications,
industrial manufacturing and consumer products industries and also was a Product Manager at Norton Company.

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 Parent and Holdings since
June 2007 and December 2004, respectively. Mr. Ramsey has served as Executive Vice President and Chief Financial Officer of AMC Entertainment and American
Multi-Cinema, Inc. since April 3, 2003. 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 and Movietickets.com.

Mr. John D. McDonaldhas served as Executive Vice President, U.S. and Canada Operations of Parent, Holdings and AMC
Entertainment since October 2008. Mr. McDonald has 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.

139

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Table of Contents

Mr. Kevin M. Connorhas served as Senior Vice President, General Counsel and Secretary of Parent and Holdings since
June 2007 and December 2004, respectively. Mr. Connor has served as Senior Vice President, General Counsel and Secretary of AMC Entertainment and American
Multi-Cinema, Inc. since April 2003. 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, International Operations of Parent, Holdings and AMC
Entertainment since October 2008. Mr. McDonald has 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. Robert J Lenihanhas served as President, Programming, of Parent, Holdings, AMC Entertainment and American
Multi-Cinema, Inc. since May 2009. Prior to that, Mr. Lenihan has served as Executive Vice President for Loews Cineplex from August 1998 to February 2002. He was
appointed Senior Vice President and Head Film Buyer at Mann Theatres in 1985 and has served in that capacity at Act III Theatres, Century Theatres, Sundance Cinemas and most recently at Village
Roadshow. He is a 1976 graduate of Rowan University.

Mr. Chris A. Coxhas served as Vice President and Chief Accounting Officer of Parent and Holdings since June 2007 and
December 2004, respectively. Mr. Cox has served as Vice President and Chief Accounting Officer of AMC Entertainment and American Multi-Cinema, Inc. since May 2002. Prior to
May 2002, Mr. Cox served as Vice President and Controller of American Multi-Cinema, Inc. 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 Parent and Holdings since June 2007 and
December 2004, respectively. Mr. Zwonitzer has served as Vice President, Finance of AMC Entertainment and American Multi-Cinema, Inc. since September 2004 and. Prior
thereto, Mr. Zwonitzer served as Director of Finance from December 2002 to September 2004 and Manager of Financial Analysis from November 2000 to December 2002.
Mr. Zwonitzer joined AMC in June 1998.

140

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Table of Contents

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 Mr. Peter Brown, our former Chairman of the Board, Chief Executive Officer and President, whose
employment ended on March 2, 2009. These individuals are referred to as the "Named Executive Officers."

Our
executive compensation programs are determined and approved by our Compensation Committee. None of the Named Executive Officers are members of the Compensation Committee or otherwise
had any role in determining the compensation of other Named Executive Officers, although the Compensation Committee does consider the recommendations of our Chief Executive Officer in setting
compensation levels for our executive officers other than the Chief Executive Officer.

Executive Compensation Program Objectives and Overview

The goals of the Compensation Committee with respect to executive compensation are to attract, retain, motivate and reward talented
executives, to tie annual and long-term compensation incentives to the achievement of specified performance objectives, and to achieve long-term creation of value for our
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 a periodic review of the aggregate level of our executive compensation as part of the annual budget review and annual performance review processes, which includes determining
the operating metrics and non-financial elements used to measure our performance and to compensate our executive officers. This review is based on our knowledge of how other theatrical
exhibition industry and similar retail type businesses measure their executive performance and on the key operating metrics that are critical in our effort to increase the value of our company.

Current Executive Compensation Program Elements

Our executive compensation program consists of the elements described in the following sections. The Compensation Committee determines
the portion of compensation allocated to each element for each individual Named Executive Officer. Our Compensation Committee expects to continue these policies in the short term but will reevaluate
the current policies and practices as it considers advisable.

The
Compensation Committee believes based on 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.

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Base Salaries

Base salaries for our Named Executive Officers are established based on the scope of their responsibilities, taking into account
competitive market compensation for similar positions, as well as seniority of the individual, our ability to replace the individual and other primarily judgmental factors deemed relevant by the
Compensation Committee. Generally, we believe that executive base salaries should be targeted near the median of the range of salaries for executives in similar positions with similar responsibilities
at comparable companies, in line with our compensation philosophy, but we do not make any determinations or changes in compensation in reaction to market data alone. The Compensation Committee's goal
is to provide total compensation packages that are competitive with prevailing practices in our industry and in the geographic markets in which we conduct business. However, the Compensation Committee
retains flexibility within the compensation program to respond to and adjust for specific circumstances and our evolving business environment. Periodically, the Company obtains information regarding
the salaries of employees at comparable companies, including approximately 150 multi-unit businesses in the retail, entertainment and food service industries. Base salaries for our Named
Executive Officers are reviewed at 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. Base salaries for our Named Executive
Officers increased between 1.1% and 3.1% from fiscal 2008 to fiscal 2009.

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 2009, 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 85% 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 110% 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 for fiscal 2009 under the annual
incentive compensation program because the Company did not meet the minimum 85% 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 will be paid in cash.

Special Incentive Bonus

Mr. Gerardo Lopez is entitled to a one-time special incentive bonus of $2,000,000 that vests at the rate of $400,000
per year over five years, provided that he remains employed on each vesting date. The

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first
three installments of the special incentive bonus are payable on the third anniversary and the fourth and fifth installments are payable upon vesting. The special incentive bonus of $2,000,000
shall immediately vest in full upon Mr. Lopez's involuntary termination within twelve months after a change of control.

Long Term Incentive Equity Awards

In connection with the holdco merger, on June 11, 2007 Parent adopted an amended and restated 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 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 approved a stock
option grant to Mr. Gerardo Lopez, Chief Executive Officer, during fiscal 2009.

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.

Effective
for fiscal year 2010, in the Company's 401(k) Savings Plan the Company will match 50% of each eligible employee's elective contributions up to 6% of the employee's eligible
compensation. Previously, the Company matched 100% of elective contributions up to 5% of employee compensation.

The
"Pension Benefits" table and related narrative section "Pension and Other Retirement Plans" below describes our qualified and non-qualified defined-benefit plans in which
our Named Executive Officers participate.

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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. Lopez, resignation for good reason would also
entitle the employee to severance benefits. We have determined that it is appropriate to provide these executives with severance benefits under these circumstances in light of their positions with
AMCE and as part of their overall compensation package.

We
believe that the occurrence, or potential occurrence, of a change in control transaction will create uncertainty regarding the continued employment of our executive officers. This
uncertainty results from the fact that many change in control transactions result in significant organizational changes, particularly at the senior executive level. In order to encourage certain of
our executive officers to remain employed with us during an important time when their prospects for continued employment following the transaction are often uncertain, we provide the executives with
severance benefits if they
terminate their employment within 60 days following certain specified changes in their compensation, responsibilities or benefits following a change in control. No claim for severance due to a
change in control has been made by an executive who is a party to an employment agreement providing for such severance benefits since the Marquee Transactions (then a change in control for purposes of
the agreements). The severance benefits for these executives are generally determined as if they continued to remain employed by us for two years following their actual termination date.

Perquisites

The perquisites provided to each Named Executive Officer during fiscal 2009, 2008 and 2007 are reported in All Other Compensation
column 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.

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

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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

Aaron J.
Stone
Stephen P. Murray
Eliot P.S. Merrill
Philip Loughlin

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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 2009 and for Peter C. Brown, who although not serving as an executive officer on the last day of
our fiscal year, had served as our Chairman of the Board, Chief Executive Officer and President of AMC Entertainment Inc., until his employment ended on March 2, 2009. 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
($)Gerardo I. Lopez


2009

$
64,615

$


$


$
31,883

$


$


$
16,570

$
113,068Chief Executive Officer and
President (Parent, Holdings,
AMCE and American
Multi-Cinema, Inc.)Craig R. Ramsey


2009


383,508








471,005








16,634


871,147Executive Vice President


2008


374,183








471,005








29,365


874,553and Chief Financial Officer
(Parent, Holdings, AMCE and
American and American
Multi-Cinema, Inc.)


2007


351,700








471,005


55,510


33,527


27,367


939,109John D. McDonald


2009


383,508








235,503








21,626


640,637Executive Vice President


2008


374,182








235,503








28,356


638,041North American Operations
(Parent, Holdings, AMCE and
American Multi-Cinema, Inc.)


2007


351,700








235,503


55,510


45,620


22,010


710,343Kevin M. Connor


2009


323,658








235,503








16,123


575,284Senior Vice President, General


2008


321,696








235,503








25,230


582,429Counsel and Secretary
(Parent, Holdings, AMCE and
American Multi-Cinema, Inc.)


2007


302,400








235,503


43,188


13,740


19,753


614,584Mark A. McDonald


2009


283,808








235,503








16,605


535,916Executive Vice President International Operations
(Parent, Holdings, AMCE
and AMC Entertainment
International, Inc.)


2008


281,851








235,503








23,935


541,289Peter C. Brown


2009


750,386








1,376,785








7,081,853


9,209,024Former Chairman of the Board,


2008


822,065








1,884,022








30,629


2,736,716Chief Executive Officer and
President (Parent, Holdings,
AMCE and American
Multi-Cinema, Inc.)


2007


772,700








1,884,022


124,684


26,094


29,809


2,837,309


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Defined
Benefit Plan

Supplemental
Executive
Retirement
Plan

Retirement
Enhancement
PlanCraig Ramsey


2009

$
(2,109
)
$
(1,094
)
$
2008


(3,426
)

(1,776
)

John McDonald


2009


(35,248
)

(18,276
)

2008


(13,050
)

(6,766
)

Kevin Connor


2009


(4,394
)

(1,814
)

2008


(1,849
)

(3,567
)

Mark McDonald


2009


(17,848
)

(8,656
)

2008


(11,911
)

(8,010
)

Peter Brown(a)


2009


(18,891
)

(61,377
)

(1,005,031
)2008


(6,985
)

(3,621
)

(59,837
)2007








(235,505
)




Perquisites and Other Personal Benefits

Additional All Other
CompensationCar
Allowance

Holiday
Gift
Award

Theatre
Chairs

Relocation
Expenses

Club
Membership

Company
Matching
Contributions
to 401(k) Plan

Life Insurance
PremiumsGerardo Lopez


2009

$


$


$


$
16,570

$


$


$
Craig Ramsey


2009


1,500


305











11,475


3,3542008


13,500


254











12,128


3,4832007


13,000


500











10,382


3,485John McDonald


2009


1,500


305











18,027


1,7942008


13,500


254











12,739


1,8632007


12,650


500











7,554


1,306Kevin Connor


2009


1,350


305


2,366








11,061


1,0412008


12,150


254











11,781


1,0452007


11,700


500











6,780


773Mark McDonald


2009


1,200


305











13,716


1,3842008


10,800


254











11,849


1,032Peter Brown


2009


1,800


305











10,438


1,6562008


16,200


254











12,792


1,3832007


15,600


500








1,397


11,073


1,239




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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 2009. The primary element of each Named Executive Officer's total compensation reported in the table is base salary. Mr. Brown also earned a lump sum cash severance
payment of $7,013,985 in connection with his separation from the Company pursuant to his separation and general release 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. Lopez, Ramsey, McDonald, Connor, and McDonald. Provisions of
these agreements relating to outstanding equity incentive awards and post-termination of employment benefits are discussed below.

Gerardo I. Lopez.On February 23, 2009, AMC Entertainment entered into an employment agreement with Gerardo I. Lopez to
serve as
its Chief Executive Officer. The term of the agreement is for three years, with automatic one-year extensions each year. The agreement provides that Mr. Lopez will receive an
initial annualized base salary of $700,000. The Compensation Committee, based on its review, has discretion to increase (but not reduce) the base salary each year. Mr. Lopez is ineligible for a
bonus for fiscal 2009 but his target incentive bonus for fiscal 2010 is equal to 70% of his annual base salary. In addition, Mr. Lopez is receiving a one-time special incentive
bonus that vests at the rate of $400,000 per year over five years, provided he remains employed on each vesting date. The first three installments of the special incentive bonus are payable on the
third anniversary and the fourth and fifth installments are payable upon vesting. Upon approval by the Compensation Committee, Mr. Lopez received a grant of options to purchase 15,980.45 shares
of the common stock of AMCEH. The options will vest in five equal annual installments, subject to Mr. Lopez's continued employment. In making its determination with respect to salary and bonus
levels, the Compensation Committee considers the factors discussed in the "Current Executive Compensation Program Elements" of the Compensation Discussion and Analysis above. The agreement also
provides that Mr. Lopez will be eligible for benefits offered by the Company to other executive officers and will be entitled to reimbursements for expenses reasonably incurred in connection
with related business expenses and travel. Change in control, severance arrangements and restrictive covenants in Mr. Lopez's employment agreement are discussed in detail below in the narrative
section "Potential Payments Upon Termination or Change in Control."

Craig R. Ramsey.On July 1, 2001, AMC and AMCE entered into an employment agreement with Craig R. Ramsey who serves as
the
Executive Vice President and Chief Financial Officer of the Company and reports directly to AMCE's Chairman of the Board, President and Chief Executive Officer. The term of the agreement is for two
years, with automatic one-year extensions each year. The agreement provides that Mr. Ramsey will receive an initial annualized base salary of $275,000 subject to 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

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consistent
with the determination of the Chairman of the Board, President and Chief Executive Officer of AMCE and, if applicable, the Compensation Committee. In making its determination with respect
to salary and bonus levels, the Compensation Committee considers the factors discussed in the "Current Executive Compensation Program Elements" of the Compensation Discussion and Analysis above. In
addition, the agreement provides that Mr. Ramsey will be eligible for benefits offered by the Company to other executive officers and will be entitled to reimbursements for expenses reasonably
incurred in connection with business travel and entertainment. Change in control and severance arrangements in Mr. Ramsey's employment agreement are discussed in detail below in the narrative
section "Potential Payments Upon Termination or Change in Control."

John D. McDonald.On July 1, 2001, AMC and AMC Entertainment entered into an employment agreement with John D. McDonald,
who
serves as an Executive Vice President, North America Operations. Mr. McDonald reports directly to AMC's President and Chief Operating Officer or such officer's designee. The term of the
agreement is for two years, with automatic one-year extensions each year. The agreement provides that Mr. McDonald will receive an initial annualized base salary of $275,000,
subject to 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. Change in control and severance arrangements in Mr. McDonalds' employment agreements are discussed in detail below in the narrative section "Potential Payments Upon Termination
or Change in Control."

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. 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."

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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. 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."

Grants of Plan-based AwardsFiscal 2009

The following table summarizes an equity award granted to a named executive officer during fiscal 2009:

All Other
Stock
Awards:
Number of
Shares of
Stock or
Units
(#)

All Other
Option
Awards:
Number of
Securities
Underlying
Options
(#)Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards

Estimated Future Payouts
Under Equity Incentive
Plan Awards

Exercise
Or Base
Price of
Option
Awards
($/Sh)Grant Date
Fair Value
of Stock
and Option
AwardsName

Grant Date

Threshold
($)

Target
($)

Maximum
($)

Threshold
($)

Target
($)

Maximum
($)Gerardo Lopez


03/06/2009

$


$


$


$


$


$






15,980.45

$
323.95

$
2,068,847


On March 6, 2009, Mr. Lopez received a grant of stock options to purchase 15,980.45 shares of Class N Common Stock of AMCEH
at a price equal to $323.95 per share. The options will vest in five equal annual installments, subject to Mr. Lopez's continued employment. The options shall expire after ten years from the
date of the grant. The Company accounts for stock options using the fair value method of accounting as prescribed by SFAS No. 123(R), Shared-Based Payment (Revised), and Staff Accounting
Bulletins No. 107 and 110,Share Based Payments. The Black-Scholes formula is used to value the options.

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Outstanding Equity Awards at end of Fiscal 2009

The following table presents information regarding the outstanding equity awards held by each of our Named Executive Officers as of
April 2, 2009, including the vesting dates for the portions of these awards that had not vested as of that date:

Option Awards

Stock AwardsName

Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable

Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable

Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#)

Option
Exercise
Price
($)

Option
Expiration
Date

Number
of Shares
or Units
of Stock
That Have
Not
Vested
(#)

Market
Value
of Shares
or Units
of Stock
That Have
Not
Vested
(#)

Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units or
Other
Rights
That Have
Not
Vested
(#)

Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares,
Units or
Other
Rights
That Have
Not
Vested
($)Gerardo I. Lopez(1)





15,980.450000




$
323.95


03/06/2019Craig R. Ramsey(2)(3)


3,273.829784


818.457446





491.00


12/23/2014John D. McDonald(2)(3)


1,636.914896


409.228724





491.00


12/23/2014Kevin M. Connor(2)(3)


1,636.914896


409.228724





491.00


12/23/2014Mark A. McDonald(2)(3)


1,636.914896


409.228724





491.00


12/23/2014Peter C. Brown(4)

















---

Option Exercises and Stock VestedFiscal 2009

None of our Named Executive Officers exercised options or held any outstanding stock awards during fiscal 2009.

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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
($)Gerardo I. Lopez






$


$
Craig R. Ramsey

Defined Benefit Retirement Income Plan


12.00


137,085


Supplemental Executive Retirement Plan


12.00


71,077


John D. McDonald

Defined Benefit Retirement Income Plan


31.05


230,737


Supplemental Executive Retirement Plan


31.05


119,635


Kevin M. Connor

Defined Benefit Retirement Income Plan


4.00


18,961


Supplemental Executive Retirement Plan


4.00


7,830


Mark A. McDonald

Defined Benefit Retirement Income Plan


26.60


183,997


Supplemental Executive Retirement Plan


26.60


89,241


Peter C. Brown(2)

Defined Benefit Retirement Income Plan


15.60


99,485


Supplemental Executive Retirement Plan


15.60





Retirement Enhancement Plan


15.60








---

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 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.

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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, having been irrevocably elected by the participant.

If
a participant's employment with AMC terminates for any reason (or no reason) before the earliest date he/she qualifies for early, normal or late retirement benefits under the AMC
Defined Benefit Retirement Income Plan, no benefit is payable under the Supplemental Executive Retirement Plan.

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. There are no active participants or Named Executive Officers in the plan.

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Table of Contents

Nonqualified Deferred Compensation

The following table presents information regarding the contributions to and earnings on the Named Executive Officers' deferred
compensation balances during fiscal 2009, and also shows the total deferred amounts for the Named Executive Officers at the end of fiscal 2009:

Name

Executive
Contributions
in Last FY
($)

Registrant
Contributions
in Last FY
($)

Aggregate
Earnings in
Last FY
($)

Aggregate
Withdrawals/
Distributions
($)

Aggregate
Balance at
Last FYE
($)Gerardo I. Lopez

$


$


$


$


$
Craig R. Ramsey


8,885





(44,537
)




101,807John D. McDonald


1,481





(174,102
)

(355,509
)

1,561Kevin M. Connor














Mark A. McDonald


5,231





(75,339
)

(121,534
)

132,504Peter C. Brown


84,432





(60,758
)

(5,170
)

210,521


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 2009 and in recent years have been made under the AMC Non-Qualified Deferred Compensation Plan.
Participants of the plan are able to defer annual salary and bonus (excluding commissions, expense reimbursement or allowances, cash and non-cash fringe benefits and any stock-based
incentive compensation). Amounts deferred under the plans are credited with an investment return determined as if the participant's account were invested in one or more investment funds made available
by the Committee and selected by the participant. AMC may, but need not, credit the deferred compensation account of any participant with a discretionary or profit sharing credit as determined by AMC.
The deferred compensation account will be distributed either in a lump sum payment or in equal annual installments over a term not to exceed 10 years as elected by the participant and may be
distributed pursuant to in-service withdrawals pursuant to certain circumstances. Any such payment shall commence upon the date of a "Qualifying Distribution Event" (as such term is
defined in the Non-Qualified Deferred Compensation Plan). The Qualifying Distribution Events are designed to be compliant with Section 409A of the Internal Revenue Code.

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 2009 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.

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Table of Contents

Gerardo I. Lopez

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

Severance Benefits.In the event Mr. Lopez's employment is terminated as a result of an involuntary termination during the
employment term by
AMC Entertainment without cause pursuant to a termination for death, "Disability", "Without Cause" (each as defined in the employment agreement) or by Mr. Lopez pursuant to a termination for
"Good Reason" or after a "Change of Control" (as those terms are defined in the employment agreement), Mr. Lopez will be entitled to severance pay equal to two times the sum of his base salary
plus the average of each Incentive Bonus paid to the Executive during the 24 months preceding the severance date (or previous year, if he has not been employed for two bonus cycles as of the
severance date). If his employment is terminated before determination of the first Incentive Bonus for which he is eligible under the agreement, then the amount shall be based upon the average actual
percentage of target bonus paid to executive officers who participated in the Company's annual bonus plan in the preceding year. In addition, upon such a qualifying termination, the stock options
granted pursuant to the employment agreement shall vest in full. The special incentive bonus equal to $2,000,000, which vests in equal annual installments over 5 years, shall immediately vest
and be paid in full upon the involuntary termination of employment within twelve months after a change of control.

If
Mr. Lopez had terminated employment with us on April 2, 2009 pursuant to his employment agreement under the circumstances described in the preceding paragraph, we
estimate that he would have been entitled to a cash payment equal to $1,400,000. This amount is derived by multiplying two by
the sum of $700,000 which represents Mr. Lopez's annualized base salary rate in effect on April 2, 2009. Additionally, Mr. Lopez would have been entitled to accelerated vesting of
unvested stock options with a grant date fair value of $2,068,847 (based on a Black Sholes formula as of March 6, 2009). The special incentive bonus of $2,000,000 shall immediately vest and be
paid in full upon Mr. Lopez's involuntary termination within twelve months after a change of control.

Other Named Executive Officers

The employment agreements for each of the other Named Executive Officers, described above under "Employment
AgreementsSalary and Bonus Payments," provide for certain benefits to be paid 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 2, 2009 under the circumstances described in the preceding paragraph, we estimate that each Named Executive Officer (other than
Mr. Lopez) would have been entitled to a lump sum cash payment as follows: Mr. Craig Ramsey$770,000; Mr. John McDonald$770,000; Mr. Kevin
Connor$650,000; and Mr. Mark McDonald$570,000. These amounts are derived by multiplying two by the respective executive's annualized base salary rate in effect on
April 2, 2009.

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.

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Table of Contents

Peter C. Brown Separation

On March 2, 2009, Mr. Brown's employment with AMC Entertainment ended. Mr. Brown received a cash severance payment
of $7,013,985, less applicable withholdings, and payment of $823,481 for his 2,542 shares of AMCEH common stock, which he elected to sell to AMCEH at fair value pursuant to a right provided to him
under his employment agreement. All of Mr. Brown's outstanding stock options were forfeited as of the separation date.

Director CompensationFiscal 2009

The following section presents information regarding the compensation paid during fiscal 2009 to members of our Board of Directors who
are not also our employees (referred to herein as "Non-Employee Directors"). The compensation paid to Mr. Gerardo I. Lopez, who is also an employee, and Mr. Peter C.
Brown, who is a former employee, is presented above in the Summary Compensation Table and the related explanatory tables. Mr. Lopez and Mr. Brown did not receive additional compensation
for their 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.

The
following table presents information regarding the compensation of our non-employee Directors in fiscal 2009:

Name

Fees
earned
or paid
in cash
($)

Stock
Awards
($)

Option
Awards
($)

Non-equity
Incentive
Plan
Compensation
($)

Changes in
Pension
Value and
Nonqualified
Deferred
Compensation
($)

All other
Compensation
($)

Total
($)Aaron J. Stone

$
60,000

$


$


$


$


$


$
60,000Dr. Dana B. Ardi(2)

$

















$
Michael R. Hannon(2)

$
59,500
















$
59,500Stephen P. Murray

$
57,500
















$
57,500Stan Parker

$
58,500
















$
58,500Philip H. Loughlin(1)

$
53,500
















$
53,500John Connaughton(1)

$
5,000
















$
5,000Eliot P. S. Merrill

$
59,000
















$
59,000Kevin Maroni

$
60,000
















$
60,000Travis Reid

$
57,500
















$
57,500


---

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Table of Contents

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
2009, except for Mr. Philip Loughlin who fills the vacancy created by the resignation of Mr. John Connaughton on January 1, 2009. 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 2, 2009.

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. 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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Table of Contents

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 8, 2009,
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
OwnershipJ.P. Morgan Partners (BHCA),
L.P. and Related Funds(1)(2)


249,225.00
(2)

249,225.00
(2)









38.98%Apollo Investment Fund V, L.P. and Related Funds(3)(4)


249,225.00
(4)

249,225.00
(4)









38.98%Bain Capital Investors, LLC and Related Funds(5)(6)











96,743.45


96,743.45

15.13%The Carlyle Group Partners III Loews, L.P. and Related Funds(7)(8)











96,743.45


96,743.45

15.13%Spectrum Equity Investors IV. L.P. and Related Funds(9)(10)











62,598.71


62,598.71

9.79%Gerardo I. Lopez(11)








385.86







*Craig R. Ramsey(11)(12)








153.00







*John D. McDonald(11)(13)








127.00







*Kevin M. Connor(11)(14)








51.00







*Mark A. McDonald(11)(15)








102.00







*Dr. Dana B. Ardi(1)
















*Stephen P. Murray(1)
















*Stan Parker(16)
















*Aaron J. Stone(16)
















*Philip H. Loughlin(5)(6)
















*Eliot P. S. Merrill(7)
















*Kevin Maroni(9)(10)
















*Travis Reid(11)(17)








728.77







*All directors and executive officers as a group (17 persons)








10,332.21







*


---

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Table of Contents





Leon
Black, Joshua Harris and Marc Rowan effectively have the power to exercise voting and investment control over ACM V, with respect to the shares held by the Apollo Funds. Each of
Messrs. Black, Harris and Rowan disclaim beneficial ownership of such shares.

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Table of Contents

BCI,
by virtue of the relationships described above, may be deemed to have voting or investment control with respect to the shares held by each of the Bain entities. BCI disclaims beneficial ownership
of such shares.

SpectrumEquity
Associates IV, L.P., by virtue of the relationships described above, may be deemed to have voting or investment control with respect to the shares held by Spectrum Equity
Investors IV, L.P. and Spectrum Equity Investors Parallel IV, L.P. Spectrum Equity Associates IV, L.P. disclaims beneficial ownership of such shares.

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Table of Contents

Equity Compensation Plan Information

The following is a summary of securities authorized for issuance under Parent's equity compensation plans as of April 2, 2009.

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


26,811.1680905

$
391.43


14,111.7042495Equity compensation plans not approved by security holders








Total


26,811.1680905

$
391.43


14,111.7042495


---

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 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 April 4, 2008 or which involve obligations that remain outstanding as of April 2, 2009.

Parent
is owned by the Sponsors, other co-investors and by certain members of management as follows: JPMP (20.839%); Apollo (20.839%); Bain Capital Partners (15.13%); The
Carlyle Group (15.13%); Spectrum Equity Investors (9.79%); Weston Presidio Capital IV, L.P. and WPC Entrepreneur Fund II, L.P. (3.91%); Co-Investment Partners, L.P.
(3.91%); Caisse de Depot et Placement du Quebec (3.128%); 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. (2.737%); SSB Capital Partners (Master Fund) I, L.P. (1.955%); CSFB Strategic Partners Holdings II, L.P., CSFB
Strategic Partners Parallel Holdings II, L.P., and GSO Credit Opportunities Fund (Helios), L.P. (1.564%); Credit Suisse Anlagestiftung, Pearl
Holding Limited, Vega Invest (Guernsey) Limited and Partners Group Private Equity Performance Holding Limited (0.782%); Screen Investors 2004, LLC (0.152%); and current and former members of
management (0.134%)(1).

---

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Table of Contents

For
a description of certain employment agreements between us and Messrs. Gerardo I. Lopez, 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
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.

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Table of Contents

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 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,

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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.

DCIP

In February 2007, Mr. Travis Reid was hired as the chief executive officer of DCIP, a joint venture between AMCE, Cinemark USA
and Regal formed to explore the possibility of implementing digital cinema in our theatres and to create a financing model and establish agreements with major motion picture studios for the
implementation of digital cinema. Mr. Reid is a member of the Company's Board of Directors.

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 the Company as a reduction to additional paid-in capital and Holdings paid a
dividend to Parent of $270,588,000 which has been recorded by Holdings as a reduction to additional paid-in capital.

During
fiscal 2009, AMCE used cash on hand to pay dividend distributions to Holdings in an aggregate amount of $35,989,000. Holdings and Parent used the available funds to make cash
interest payments on the 12% Senior Discount Notes due 2014, repurchase treasury stock and make payments

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related
to the liability classified options, and pay corporate overhead expenses incurred in the ordinary course of business. During fiscal 2009, Holdings used cash from AMCE to pay a dividend to
Parent of $3,349,000. Parent used the available funds to repurchase treasury stock and pay corporate overhead expenses incurred in the ordinary course of business.

Subsequent Event- Dividend to Holdings

During April and May of 2009, AMCE made dividend payments to its stockholder Marquee Holdings Inc. and Marquee
Holdings Inc. made dividend payments to its stockholder AMC Entertainment Holdings, Inc. totaling $300,000,000. AMC Entertainment Holdings, Inc. made payments to purchase term
loans and reduced the principal balance of the Parent Term Loan Facility to $226,261,000 with a portion of the dividend proceeds.

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 were billed for the audit and other services provided by
PricewaterhouseCoopers LLP for fiscal years 2009 and 2008. 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

2009

2008Audit Fees

$
1,332,616

$
1,544,561Audit-Related Fees


707,797


246,547Tax Fees





6,575Total

$
2,040,413

$
1,797,683


The
Audit Committee has adopted policies and procedures for the pre-approval of audit services and permitted non-audit services to be performed by its independent
registered public accounting firm in order to assure that the provision of such services does not impair the independent registered public accounting firm's independence. The policies provide general
pre-approval for certain types of services, as well as approved costs for those services. The term of any general pre-approval is 12 months from the date of
pre-approval unless the Audit Committee specifies otherwise. Any costs or services that are not given general pre-approval require specific pre-approval by the
Audit Committee. The policy directs that, if management must make a judgment as to whether a proposed service is a pre-approved service, management should seek approval of the Audit
Committee before such service is performed.

Requests
to provide services that require specific approval by the Audit Committee must be submitted to the Audit Committee by both the independent auditor and management, and must
include a joint statement as to whether, in their view, the request or application is consistent with the SEC's rules on auditor independence.

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

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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 thede
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.

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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

68Consolidated Statements of OperationsPeriods ended April 2, 2009, April 3, 2008 and
March 29, 2007

69Consolidated Balance SheetsApril 2, 2009 and April 3, 2008

70Consolidated Statements of Cash FlowsPeriods ended April 2, 2009, April 3, 2008 and
March 29, 2007

71Consolidated Statements of Stockholder's Equity (Deficit)Periods ended April 2, 2009,
April 3, 2008 and March 29, 2007

72Notes to Consolidated Financial StatementsPeriods ended April 2, 2009, April 3, 2008 and
March 29, 2007

74




(b)
Exhibits

A
list of exhibits required to be filed as part of this report on Form 10-K is set forth in the Exhibit Index, which immediately precedes such exhibits.

(c)
Separate Financial Statements of Subsidiaries Not Consolidated

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



PageReport of Independent Registered Public Accounting Firm

168Balance SheetsDecember 27, 2007 and January 1, 2009

169Statements of OperationsPeriods ended December 28, 2006, December 27, 2007 and
January 1, 2009

170Statements of Changes in Members' EquityPeriods ended December 28, 2006, December 27,
2007 and January 1, 2009

171Statements of Cash FlowsPeriods ended December 28, 2006 and December 27,
2007

172Notes to Financial StatementsAs of and for the periods ended December 28, 2006,
December 27, 2007 and January 1, 2009

173


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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 January 1, 2009 and December 27, 2007, and the related statements of
operations, members' equity (deficit), and cash flows for the year ended January 1, 2009, the period February 13, 2007 through December 27, 2007, the period December 29,
2006 through February 12, 2007, and for the year ended
December 28, 2006. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We
conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In
our opinion, such financial statements present fairly, in all material respects, the financial position of the Company as of January 1, 2009 and December 27, 2007, and
the results of its operations and its cash flows for the year ended January 1, 2009, the period February 13, 2007 through December 27, 2007, the period December 29, 2006
through February 12, 2007, and for the year ended December 28, 2006 in conformity with accounting principles generally accepted in the United States of America.

/s/
Deloitte & Touche LLP

Denver,
Colorado
March 5, 2009

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NATIONAL CINEMEDIA, LLC

BALANCE SHEETS

(In millions)

January 1, 2009

December 27, 2007ASSETSCURRENT ASSETS:Cash and cash equivalents

$
34.1

$
7.5Receivables, net of allowance of $2.6 and $1.5 million, respectively


92.0


91.6Prepaid expenses


1.6


1.9Prepaid management fees to managing member


0.5


0.5Total current assets


128.2


101.5PROPERTY AND EQUIPMENT, net of accumulated depreciation of $27.0 and $17.3 million, respectively


28.0


22.2INTANGIBLE ASSETS, net of accumulated amortization of $1.5 and $0 million, respectively


111.8


OTHER ASSETS:Debt issuance costs, net


11.1


13.0Investment in affiliate





7.0Restricted cash


0.3


0.3Other long-term assets


0.5


0.2Total other assets


11.9


20.5TOTAL

$
279.9

$
144.2LIABILITIES AND MEMBERS' EQUITY/(DEFICIT)CURRENT LIABILITIES:Amounts due to founding members


25.6


15.8Amounts due to managing member


22.1


16.7Accrued expenses


6.3


10.0Accrued payroll and related expenses


5.7


7.2Accounts payable


11.2


6.6Deferred revenue


3.4


3.3Total current liabilities


74.3


59.6OTHER LIABILITIES:Borrowings


799.0


784.0Interest rate swap agreements


87.7


14.4Other long-term liabilities


4.5


Total other liabilities


891.2


798.4Total liabilities


965.5


858.0COMMITMENTS AND CONTINGENCIES (NOTE 10)MEMBERS' EQUITY/(DEFICIT)


(685.6
)

(713.8
)TOTAL

$
279.9

$
144.2


See
accompanying notes to financial statements.

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NATIONAL CINEMEDIA, LLC

STATEMENTS OF OPERATIONS

(In millions)

Year Ended
January 1,
2009

Period
February 13,
2007 through
December 27,
2007



Period
December 29,
2006 through
February 12,
2007

Year Ended
December 28,
2006REVENUE:Advertising (including revenue from founding members of $43.3, $40.9, $0.0 and $0.0 million, respectively)

$
330.3

$
282.7



$
20.6

$
188.2Administrative feesfounding members










0.1


5.4Meetings and events


38.9


25.4




2.9


25.4Other


0.3


0.2







0.3Total


369.5


308.3




23.6


219.3OPERATING EXPENSES:Advertising operating cost


18.7


9.1




1.1


9.2Meetings and events operating costs


25.1


15.4




1.4


11.1Network costs


17.0


13.3




1.7


14.7Theatre access fees/circuit share costsfounding members


49.8


41.5




14.4


130.1Selling and marketing costs


47.9


40.9




5.2


38.2Administrative costs


14.5


10.0




2.8


16.4Administrative feemanaging member


9.7


9.2







Severance plan costs


0.5


1.5




0.4


4.2Depreciation and amortization


12.4


5.0




0.7


4.8Other costs


1.3


0.9







0.6Total


196.9


146.8




27.7


229.3OPERATING INCOME (LOSS)


172.6


161.5




(4.1
)

(10.0
)Interest Expense, Net:Borrowings


51.8


48.0




0.1


0.6Change in derivative fair value


14.2










Interest income and other


(0.2
)

(0.2
)






(0.1
)Total


65.8


47.8




0.1


0.5Impairment and related loss


11.5










NET INCOME (LOSS)

$
95.3

$
113.7



$
(4.2
)
$
(10.5
)


See
accompanying notes to financial statements.

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NATIONAL CINEMEDIA, LLC

STATEMENTS OF MEMBERS' EQUITY/(DEFICIT)

(In millions)

TotalBalanceDecember 29, 2005

$
9.8Capital contribution from members


0.9Contribution of severance plan payments


4.2Distribution to members


(0.9
)Net loss


(10.5
)BalanceDecember 28, 2006

$
3.5Contribution of severance plan payments


0.4Net loss


(4.2
)BalanceFebruary 12, 2007

$
(0.3
)BalanceFebruary 13, 2007

$
(0.3
)Contribution of severance plan payments


1.5Capital contribution from managing member


746.1Capital contribution from founding member


11.2Distribution to managing member


(53.3
)Distribution to founding members


(1,521.6
)Reclassification of unit option plan


2.3Comprehensive Income:Unrealized (loss) on cash flow hedge

$
(14.4
)Net income


113.7Total Comprehensive Income

$
99.3Share-based compensation expense


1.0BalanceDecember 27, 2007

$
(713.8
)Contribution of severance plan payments


0.5Capital contribution from managing member


0.6Capital contribution from founding members


4.7Distribution to managing member


(55.5
)Distribution to founding members


(75.5
)Units issued for purchase of intangible asset


116.1Comprehensive Income:Unrealized (loss) on cash flow hedge

$
(59.1
)Net income


95.3Total Comprehensive Income

$
36.2Share-based compensation expense


1.1BalanceJanuary 1, 2009

$
(685.6
)


See
accompanying notes to financial statements.

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NATIONAL CINEMEDIA, LLC

STATEMENTS OF CASH FLOWS

(In millions)

Year
Ended
January 1,
2009

Period
February 13,
2007 through
December 27,
2007



Period
December 29,
2006 through
February 12,
2007

Year
Ended
December 28,
2006CASH FLOWS FROM OPERATING ACTIVITIES:Net income(loss)

$
95.3

$
113.7



$
(4.2
)
$
(10.5
)Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:Depreciation and amortization


12.4


5.0




0.7


4.8Non-cash severance plan and share-based compensation


1.5


2.5




0.7


6.1Non-cash impairment and related loss


11.5










Net realized and unrealized hedging transactions


14.2










Amortization of debt issuance costs and loss on repayment of debt


1.9


1.7







Changes in operating assets and liabilities:Receivablesnet


(0.4
)

(40.3
)



12.6


(27.3
)Accounts payable and accrued expenses


(0.7
)

10.4




(4.4
)

4.4Amounts due to founding members and managing member


0.4


(51.1
)



(3.7
)

33.4Payment of severance plan costs













(3.5
)Other


0.1


(1.3
)



0.5


0.9Net cash provided by operating activities


136.2


40.6




2.2


8.3CASH FLOWS FROM INVESTING ACTIVITIES:Purchases of property and equipment


(16.6
)

(13.8
)



(0.5
)

(6.3
)Investment in restricted cash





(0.3
)






Investment in affiliate





(7.0
)






Net cash (used in) investing activities


(16.6
)

(21.1
)



(0.5
)

(6.3
)CASH FLOWS FROM FINANCING ACTIVITIES:Reimbursement (payment) of offering costs and fees





4.7




(0.1
)

(4.0
)Proceeds from borrowings


139.0


924.0




13.0


66.0Repayments of borrowings


(124.0
)

(150.0
)



(13.0
)

(56.0
)Proceeds from managing member contributions


0.6


746.1







Proceeds from founding member contributions


9.7


7.5







0.9Distribution to founding members and managing member


(118.3
)

(1,538.0
)






(0.9
)Payment of debt issuance costs





(14.6
)






Proceeds of short-term borrowings from founding members













3.0Repayments of short-term borrowings to founding members













(4.3
)Net cash provided by (used in) financing activities


(93.0
)

(20.3
)



(0.1
)

4.7CHANGE IN CASH AND CASH EQUIVALENTS


26.6


(0.8
)



1.6


6.7CASH AND CASH EQUIVALENTS:Beginning of period


7.5


8.3




6.7


End of period

$
34.1

$
7.5



$
8.3

$
6.7Supplemental disclosure of non-cash financing and investing activity:Contribution for severance plan payments

$
0.5

$
1.5



$
0.4

$
4.2Increase in distributions payable to founding members and managing member

$
49.7

$
37.0







Contributions from members collected after period end

$
0.4

$
3.7







Integration payment from founding member collected after period end

$
1.2










Purchase of an intangible asset with subsidiary equity

$
116.1










Increase in property and equipment not requiring cash in the period




$
0.6






$
0.3Increase in deferred offering costs












$
0.5Unit option plan reclassified to equity




$
2.3







Supplemental disclosure of cash flow information:Cash paid for interest

$
48.3

$
44.0



$
0.1

$
0.4


See accompanying notes to financial statements.

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NATIONAL CINEMEDIA, LLC        NOTES TO FINANCIAL STATEMENTS

1. THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Formation 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, allowing 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 multi-year 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. All assets contributed to and liabilities assumed by NCM LLC were recorded on NCM LLC's accounting 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. Cinemark became a founding member on July 15, 2005.

Initial Public Offering and Related Transactions

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 its IPO to purchase a 44.8% interest in NCM LLC, paying NCM LLC $746.1 million, which included reimbursement to NCM LLC for expenses the Company
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 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
January 1, 2009, NCM LLC had 99,419,620 membership units outstanding, of which 42,109,966 (42.4%) were owned by NCM, Inc., 24,903,259 (25.0%) were owned by RCM,
18,414,743 (18.5%) were owned by AMC, and 13,991,652 (14.1%) were owned by Cinemark.

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Table of Contents

NATIONAL CINEMEDIA, LLC

NOTES TO FINANCIAL STATEMENTS (Continued)

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

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) beginning February 13, 2007 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 Company has prepared its financial statements and related notes in accordance with accounting principles generally accepted in the
United States of America and the rules and regulations of the Securities and Exchange Commission ("SEC").

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

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 changes at the time of the NCM, Inc. IPO including modifications to
the ESAs 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 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 the NCM, Inc. and 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 the SEC 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, 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, as was the case for fiscal year 2008.

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

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

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.

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 in subsequent periods, that portion of the revenue earned is recognized in that period. Deferred revenue refers to the
unearned portion of advertising contracts. All deferred revenue is classified as a current liability. Meetings and events revenue is recognized in the period in which the event is held. 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 IPO was completed. Administrative fees
earned by the Company prior to the IPO for its services in fulfilling the legacy contracts were based on a percentage of legacy contract revenue (32% during 2006 and the 2007 pre-IPO
period).

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 and subsequent periods, 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. We calculate 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 our business, we have 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.

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NOTES TO FINANCIAL STATEMENTS (Continued)

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

Restricted CashAt January 1, 2009 and December 27, 2007, other non-current assets included
restricted cash of $0.3, which secures a letter of credit used as a lease deposit on NCM LLC's New York office.

ReceivablesTrade accounts receivable are uncollateralized and represent a large number of geographically dispersed debtors.
Refer to Note 2. Bad debts are provided for using the allowance for doubtful accounts method based on historical experience and management's evaluation of outstanding receivables at the end of
the period. Receivables are written off when management determines amounts
are uncollectible. 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 changes. To the extent actual outcomes
differ from management estimates, additional provision for bad debt could be required that could adversely affect earnings or financial position in future periods.

Long-lived AssetsProperty and equipment is stated at cost, net of accumulated depreciation or amortization. Refer
to Note 3. 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


We
account for the costs of software and web site development costs developed or obtained for internal use in accordance with American Institute of Certified Public Accountants Statement
of Position ("SOP") 98-1,Accounting for the Costs of Computer Software Developed or Obtained for Internal Useand
EITF 00-2,Accounting for Web Site Development Costs.The SOP and EITF require the capitalization of certain costs incurred in
developing or obtaining software for internal use. The majority of our software costs and web site development costs, which are included in equipment, are depreciated over three to five years. As of
January 1, 2009 and December 27, 2007, we had a net book value of $11.8 million and $9.3 million, respectively, of capitalized software and web site development costs. We
recorded approximately $4.9 million, $2.8 million, $0.3 million and $1.9 million for the year ended January 1, 2009, the 2007 post-IPO period, 2007
pre-IPO period and the year ended December 28, 2006, respectively, in depreciation expense.

Construction
in progress includes costs relating to installations of our equipment into affiliate theatres. Assets under construction are not depreciated until placed into service.

Intangible
assets consist of contractual rights and are stated at cost, net of accumulated amortization. Refer to Note 4. The Company records amortization using the
straight-line method over the estimated useful life of the intangibles.

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

We
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 that could affect the value of an asset. Thus far, none of the above triggering events has
resulted in any material 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 and subsequent periods include amounts due for
the theatre access fee, offset by a receivable for advertising time purchased by the founding members, as well as revenue share earned for 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.

Amounts Due to/from Managing MemberIn 2008 and the 2007 post-IPO period, amounts due to/from managing member
include 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.

Assets and Liabilities Measured at Fair Value on a Recurring BasisThe fair values of the Company's assets and liabilities
measured on a recurring basis pursuant to SFAS No. 157,Fair Value Measurements,which the Company adopted December 28, 2007, is as
follows (in millions):

Fair Value Measurements at Reporting Date UsingAt
January 1,
2009

Quoted Prices in
Active Markets
for Identical
Assets (Level 1)

Significant Other
Observable
Inputs (Level 2)

Significant
Unobservable
Inputs (Level 3)ASSETS:Investment in Affiliate(1)











LIABILITIES:Interest Rate Swap Agreements(2)

$
87.7




$
87.7





---

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NOTES TO FINANCIAL STATEMENTS (Continued)

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



Fair Value Measurements
Using Significant
Unobservable Inputs (Level 3)
(in millions)Investment in Affiliate

Year Ended January 1, 2009Beginning Balance

$
7.0Total gains or losses (realized/unrealized)Included in earnings


(7.0
)Included in other comprehensive income


Purchases, sales, issuances, and settlements, net


Transfers in and/or out of Level 3


Ending Balance





---

On
September 15, 2008, Lehman Brothers Holdings Inc. ("Lehman") filed for protection under Chapter 11 of the federal Bankruptcy Code in the United States Bankruptcy
Court for the Southern District of New York. Lehman Brothers Special Financing ("LBSF"), a subsidiary of Lehman, is the counterparty to a notional amount of $137.5 million of NCM LLC's
interest rate swaps, and Lehman is a guarantor of LBSF's obligations under such swap. NCM LLC notified LBSF on September 18, 2008 that, as a result of the bankruptcy of Lehman, an event
of default had occurred under the swap with respect to which LBSF was the defaulting party. As a result, as permitted under the terms of NCM LLC's swap agreement with LBSF, the Company withheld
interest rate swap payments of $1.5 million that were due to LBSF. As of January 1, 2009 the interest rate swap agreement had not been terminated. On October 3, 2008, LBSF also
filed for Chapter 11 protection, which constituted another default by LBSF under the swap. To the Company's knowledge, LBSF has neither communicated its intent, nor has it taken any action in
bankruptcy court to assume or reject its swap

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NOTES TO FINANCIAL STATEMENTS (Continued)

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

agreement
with NCM LLC. In addition, while the bankruptcy court has authorized LBSF to assign certain of its hedges that have not been terminated under certain circumstances, we have not
received any notice that Lehman has assigned, or has entered into any negotiations to assign its swap agreement with NCM LLC. As of January 1, 2009, NCM LLC's interest rate swaps
liability was $87.7 million, of which $21.9 million is related to the LBSF swap.

Both
at inception and on an on-going basis the Company performs an effectiveness test using the hypothetical derivative method. The fair values of the interest rate swaps
with the counterparties other than LBSF (representing notional amounts of $412.5 million associated with a like amount of the variable rate debt) are recorded on the Company's balance sheet as
a liability with the change in fair value recorded in other comprehensive income since the instruments other than LBSF were determined to be perfectly effective at January 1, 2007 and
December 27, 2007. There were no amounts reclassified into current earnings due to ineffectiveness during the periods presented other than as described below.

The
Company performed an effectiveness test for the swaps with LBSF as of September 14, 2008, the day immediately prior to the default date, and determined they were effective on
that date. As a result, the fair values of the interest rate swap on that date was recorded as a liability with an offsetting amount recorded in other comprehensive income. Cash flow hedge accounting
was discontinued on September 15, 2008 due to the event of default and the inability of the Company to continue to demonstrate the swap would be effective. The Company continues to record the
interest rate swap with LBSF at fair value with any change in the fair value recorded in the statement of operations. During the period from September 15, 2008 to January 1, 2009, there
was a $13.8 million increase in the fair value of the liability and the Company recorded an offsetting debit to interest expense. In accordance with SFAS No. 133, the net derivative loss
as of September 14, 2008 related to the discontinued cash flow hedge with LBSF shall continue to be reported in accumulated other comprehensive income unless it is probable that the forecasted
transaction will not occur by the end of the originally specified time period. Accordingly, the net derivative loss will be amortized to interest expense over the remaining term of the interest rate
swap through February 13, 2015. The amount amortized during the year ended January 1, 2009 was $0.4 million. The Company estimates approximately $1.3 million will be
amortized to interest expense in the next 12 months.

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.

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NOTES TO FINANCIAL STATEMENTS (Continued)

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

Accumulated Other Comprehensive Income/LossAccumulated other comprehensive income/loss is composed of the following (in
millions):

Hedging TransactionsBalanceFebruary 13, 2007

$
Change in fair value


(14.4
)BalanceDecember 27, 2007


(14.4
)Change in fair value


(59.5
)Reclassifications into earnings


0.4BalanceJanuary 1, 2009

$
(73.5
)


Debt Issuance CostsIn relation to the issuance of long-term debt discussed in Note 7, we have a balance of
$11.1 million and $13.0 million in deferred financing costs as of January 1, 2009 and December 27, 2007, respectively. These debt issuance costs are being amortized over
the terms of the underlying obligation and are included in interest expense. For the year ended January 1, 2009, 2007 post-IPO period, 2007 pre-IPO period and the year
ended December 28, 2006 we amortized $1.9 million, $1.6 million, $0.0 million and $0.0 million of debt issuance costs, respectively.

Other Long-Terms Assets and LiabilitiesOn April 29, 2008, NCM LLC, IdeaCast, the IdeaCast lender
and certain of its stockholders agreed to a financial restructuring of IdeaCast. Among other things, the restructuring resulted in the reduction of the price at which the preferred stock held by
NCM LLC can be converted into common stock; the lender being granted an option to "put," or require NCM LLC to purchase, up to $10 million of the funded convertible debt at par,
on or after December 31, 2010 through March 31, 2011; NCM LLC being granted an option to "call," or require the lender to sell to NCM LLC up to $10 million of funded
convertible debt at par, at any time before the put is exercised in whole; and an amendment to the preexisting option to acquire additional IdeaCast common stock. The put is accounted for under FIN
No. 45 (as amended),Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others.Refer to Note 10 for additional details. The estimated fair value of the call of $2.4 million was recorded to other long-term assets and the estimated fair value of the put
of $2.4 million was recorded in other long-term liabilities during the second quarter of 2008. The Company based its estimated fair value of the call and put on a discounted cash
flow model that probability weights IdeaCast's business potential future cash flows under various scenarios,
including the likelihood of the call, put or option being executed and management's judgment, which is based in part on communications with IdeaCast and their lender. During the fourth quarter of
2008, the Company recorded an impairment to the value of the call and the carrying value was adjusted to zero since the Company determined that the put was probable. The Company determined the
impairment was other-then-temporary and the unrealized loss was reported as a non-operating loss in the statement of operations since the fair value was determined
to be significantly below cost and the realizable value is not equal to or greater than the carrying value.

Fair Value of Financial InstrumentsThe carrying amounts of cash and cash equivalents, accounts payable, accrued expenses and
the revolving 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

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NOTES TO FINANCIAL STATEMENTS (Continued)

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

carrying
amounts and fair value of interest rate swap agreements are the same since the Company accounts for these instruments at fair value. As the Company's term loan does not have an active market,
the Company has estimated the fair value of the term loan to be $514.8 million based on our analysis of current credit market conditions. The carrying value of the term loan was
$725.00 million as of January 1, 2009.

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.

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.

Recent Accounting Pronouncements

In March 2008, the FASB issued SFAS No. 161,Disclosures about Derivative Instruments and Hedging
Activities. The new standard changes the manner of presentation and related disclosures of the fair values of derivative instruments and their gains and losses. It also
provides more information about an entity's liquidity by requiring disclosure of derivative features that
are credit risk related. SFAS No. 161 is effective for fiscal years beginning after November 15, 2008. The Company is evaluating the impact of SFAS No. 161 on its financial
statements.

In
April 2008, the FASB issued FASB Staff Position ("FSP") No. FAS 142-3,Determination of the Useful Life of Intangible
Assets, which improves the consistency of the useful life of a recognized intangible asset among various pronouncements. FSP SFAS No. 142-3 is effective for
fiscal years beginning after December 15, 2008. The Company is evaluating the impact of FSP SFAS No. 142-3 on its financial statements.

In
June 2008, the FASB issued FSP No. EITF 03-6-1,Determining Whether Instruments Granted in Share-Based Payment Transactions are
Participating Securities, which addresses whether instruments granted in share-based payment transactions are participating securities prior to vesting and, therefore, need to
be included in the earnings allocation in computing earnings per share under the two-class method. FSP No. EITF 03-6-1 is effective for fiscal years
beginning after December 15, 2008. The Company is evaluating the impact of FSP No. EITF 03-6-1 on its financial statements.

The
Company has considered all other recently issued accounting pronouncements and does not believe the adoption of such pronouncements will have a material impact on its financial
statements.

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NOTES TO FINANCIAL STATEMENTS (Continued)

2. RECEIVABLES

(In Millions)

As of
January 1,
2009

As of
December 27,
2007Trade accounts

$
91.3

$
92.2Other


3.3


0.9Less allowance for doubtful accounts


(2.6
)

(1.5
)Total

$
92.0

$
91.6


At
January 1, 2009 , there was one client and one advertising agency group through which the Company sources national advertising revenue representing approximately 10% and 20%,
respectively, of the Company's outstanding gross receivable balance; however, none of the individual contracts related to the advertising agency were more than 10% of advertising revenue. At
December 27, 2007, there was one individual account representing approximately 15% of the Company's gross receivable balance. The collectability risk is reduced by dealing with large,
nationwide firms who have strong reputations in the advertising industry and stable financial conditions.

Year Ended
January 1, 2009

Period
February 13,
2007 through
December 27,
2007



Period
December 29,
2006 through
February 12,
2007

Year Ended
December 28,
2006ALLOWANCE FOR DOUBTFUL ACCOUNTS:Balance at beginning of period

$
1.5

$
1.1



$
1.1

$
0.5Provision for bad debt


2.3


1.0




0.1


0.8Write-offs, net


(1.2
)

(0.6
)



(0.1
)

(0.2
)Balance at end of period

$
2.6

$
1.5



$
1.1

$
1.1


3. PROPERTY AND EQUIPMENT(in millions)

As of
January 1,
2009

As of
December 27,
2007Equipment

$
53.3

$
37.3Leasehold Improvements


1.4


1.4Less accumulated depreciation


(27.0
)

(17.3
)Subtotal


27.7


21.4Construction in Progress


0.3


0.8Total property and equipment

$
28.0

$
22.2


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NOTES TO FINANCIAL STATEMENTS (Continued)

3. PROPERTY AND EQUIPMENT(in millions) (Continued)

For the year ended January 1, 2009, 2007 post-IPO period, 2007 pre-IPO
period and the year ended December 28, 2006 we recorded depreciation of $10.2 million, $4.8 million, $0.6 million and $4.0 million, respectively.

4. INTANGIBLE ASSETS

During 2008, NCM LLC issued 2,544,949 common membership units to its founding members in connection with its rights of exclusive access to net new theatres and attendees added by
the founding members to NCM LLC's network and 2,913,754 common membership units to Regal in connection with the closing of its acquisition of Consolidated Theatres. The Company recorded an
intangible asset of $116.1 million representing the contractual rights. The Company based the fair value of the intangibles on the fair value of the common membership units issued. The number
of units issued to Regal assumed that NCM LLC would have immediate access to the Consolidated Theatres for sales of advertising. However, Consolidated Theatres has a pre-existing
advertising agreement. Accordingly, Regal makes cash integration payments to NCM LLC which will continue through January 2011 to account for the lack of access, which are recorded as a
reduction of the intangible asset. As of January 1, 2009, $2.8 million has been applied to the intangible asset.

Pursuant
to SFAS No. 142,Goodwill and Other Intangible Assets, the intangible asset has a finite useful life and the Company began
to amortize the asset related to the common membership units in 2008 over the remaining useful life corresponding with the ESAs. Amortization of the asset related to Consolidated Theatres will not
begin until after January 2011 since the Company will not have access to on-screen advertising in the Consolidated Theatres until the run-out of their existing
onscreen advertising agreement. The weighted-average amortization period is 29 years.

As of
January 1,
2009

As of
December 27,
2007(in millions)Beginning balance

$


$
Purchase of intangible asset subject to amortization


116.1


Less integration payments


(2.8
)

Less accumulated amortization


(1.5
)

Total intangible assets

$
111.8

$



For
the year ended January 1, 2009 we recorded amortization of $1.5 million. No amount of amortization was recorded prior to the current year as there were no intangible
assets.

The
estimated aggregate amortization expense for each of the five succeeding years is as follows (in millions):

2009

$
2.02010


2.02011


3.92012


3.92013


3.9


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NOTES TO FINANCIAL STATEMENTS (Continued)

5. ACCRUED EXPENSES(in millions)

As of
January 1,
2009

As of
December 27,
2007Make-good Reserve

$
1.3

$
4.0Accrued Interest


4.0


2.3Accrued beverage concessionaire unit cost


0.1


2.4Other accrued expenses


0.9


1.3Total accrued expenses

$
6.3

$
10.0


6. RELATED-PARTY TRANSACTIONS

Year Ended January 1, 2009 and 2007 Post-IPO Period

Pursuant to the ESAs, the Company makes monthly theatre access fee payments to the founding members, comprised of a payment per theatre
attendee and a payment per digital screen of the founding member theatres. Also, 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 year
ended January 1, 2009 and the 2007 post-IPO period is $49.8 million and $41.5 million, respectively. The total revenue related to the beverage concessionaire
agreements for the year ended January 1, 2009 and the 2007 post-IPO period is $43.3 million and $40.9 million, respectively. In addition, the Company makes payments to
the founding members for use of their screens and theatres for its meetings and events business. These payments are at rates (percentage of event revenue) included in the ESAs based on the nature of
the event. Payments to the founding members for these events totaled $6.0 million and
$3.8 million for the year ended January 1, 2009 and the 2007 post-IPO period, respectively.

Also,
pursuant to the terms of the LLC Operating Agreement in place since the close of the IPO, NCM LLC is required to make mandatory distributions to its members of
available cash, as defined in the NCM LLC Operating Agreement, on a quarterly basis. The available cash distribution to the members of NCM LLC for the year ended January 1, 2009
and the 2007 post-IPO period was $131.0 million and $119.1 million, respectively. At January 1, 2009, $28.7 million was included in the due to/from founding
members.

Amounts
due to/from founding members at January 1, 2009 were comprised of the following (in millions):

AMC

Cinemark

Regal

TotalTheatre access fees, net of beverage revenues

$
(0.1
)
$


$
0.7

$
0.6Cost and other reimbursement


(1.1
)

(0.5
)

(0.6
)

(2.2
)Distributions payable, net


8.9


7.0


11.3


27.2Total

$
7.7

$
6.5

$
11.4

$
25.6


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NATIONAL CINEMEDIA, LLC

NOTES TO FINANCIAL STATEMENTS (Continued)

6. RELATED-PARTY TRANSACTIONS (Continued)

Amounts
due to/from founding members at December 27, 2007 were comprised of the following (in millions):

AMC

Cinemark

Regal

TotalTheatre access fees, net of beverage revenues

$
(0.2
)
$
0.1

$
0.2

$
0.1Cost and other reimbursement


(0.4
)

(0.2
)

(0.5
)

(1.1
)Distributions payable, net


3.2


5.2


8.4


16.8Total

$
2.6

$
5.1

$
8.1

$
15.8


On
January 26, 2006, AMC acquired the Loews Cineplex Entertainment Inc. ("AMC Loews") theatre circuit. The Loews screen integration agreement, effective as of
January 5, 2007 and amended and restated as of February 13, 2007, between NCM LLC and AMC, commits AMC to cause substantially all of the theatres it acquired from Loews to be
included in the NCM digital network in accordance with the ESAs on June 1, 2008. In accordance with the Loews screen integration agreement, prior to June 1, 2008 AMC paid the Company
amounts based on an agreed-upon calculation to reflect cash amounts that approximated what NCM LLC would have generated if the Company sold on-screen advertising in the
Loews theatre chain on an exclusive basis. These AMC Loews payments were made on a quarterly basis in arrears through May 31, 2008, with the exception of Star Theatres, which will be paid
through March 2009 in accordance with certain run-out provisions. For the year ended January 1, 2009 and the 2007 post-IPO period, the AMC Loews payment was
$4.7 million (including Star Theatres) and $11.2 million, respectively. At January 1, 2009, $0.4 million was included in the due to/from founding members. The AMC Loews
payment was recorded directly to NCM LLC's members' equity account.

On
April 30, 2008, Regal acquired Consolidated Theatres. Regal must make payments pursuant to the ESAs on a quarterly basis in arrears through January 2011 in accordance with
certain run-out provisions. For the year ended January 1, 2009, the Consolidated Theatres payment was $2.8 million, of which $1.2 million was included in the due
to/from founding members. The Consolidated Theatres payment was recorded as a reduction of the intangible asset that was created in connection with the common membership units issued to Regal upon the
closing of its acquisition of Consolidated Theatres (see Note 4).

2007 Pre-IPO Period and 2006

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

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NOTES TO FINANCIAL STATEMENTS (Continued)

6. RELATED-PARTY TRANSACTIONS (Continued)

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, 2006Circuit
Share
Cost

Administrative
Fee Revenue

Circuit
Share
Cost

Administrative
Fee RevenueAMC

$
4.1

$


$
38.6

$
0.2Cinemark


3.7


0.1


29.7


0.4Regal


6.6





61.8


4.8Total

$
14.4

$
0.1

$
130.1

$
5.4


NCM LLC's
administrative services fee was earned at a rate of 32% of the $16.8 million of legacy contract value for the year ended December 28, 2006. At the closing
of the 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 IPO, amounts owed to the founding members through the date of the IPO of $50.8 million were paid by NCM LLC
on March 15, 2007.

Other

During the year ended January 1, 2009, the 2007 post-IPO period, the 2007 pre-IPO period and the year
ended December 28, 2006, AMC, Cinemark and Regal purchased $2.3 million, $1.4 million, $0.1 million and $2.1 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 meetings and events operating costs is $1.8 million, $3.3 million, $0.2 million and $4.1 million for the year ended January 1, 2009, the
2007 post-IPO period, the 2007 pre-IPO period and the year December 28, 2006, respectively, related to purchases of movie tickets and concession products from the
founding members primarily for resale to NCM LLC's customers.

IdeaCast

NCM LLC and IdeaCast 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 or to IdeaCast for the year ended January 1, 2009 and the 2007
post-IPO period were not material to NCM.

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NOTES TO FINANCIAL STATEMENTS (Continued)

6. RELATED-PARTY TRANSACTIONS (Continued)

RCI Unit Option Plan

During the year ended January 1, 2009, the 2007 post-IPO period, the 2007 pre-IPO period and the year
ended December 28, 2006, severance expense and the related capital contribution recognized for amounts under the Regal Unit Option Plan were $0.5 million, $1.5 million,
$0.4 million and $4.2 million, respectively. Since 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. 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 year ended January 1, 2009 and the 2007
post-IPO period, NCM LLC paid NCM, Inc. $9.7 million and $9.2 million, respectively, for these services and expenses. The payments for estimated management
services related to employment are made one month in advance. At January 1, 2009 and December 27, 2007, $0.5 million and $0.5 million, respectively, has been paid in
advance and is reflected as prepaid management fees to managing member in the accompanying financial statements. NCM LLC also provides administrative and support services to NCM, Inc.
such as office facilities, equipment, supplies, payroll and accounting and financial reporting at no charge. Based on the limited activities of NCM, Inc. as a standalone entity, the Company
does not believe such unreimbursed costs are significant. The management services agreement also provides that NCM LLC employees may participate in the NCM, Inc. equity incentive plan
(see Note 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 year ended January 1, 2009 and
the 2007 post-IPO period is $55.5 million and $53.3 million, respectively. At January 1, 2009, $21.0 million is included in the due to/from managing member.

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NOTES TO FINANCIAL STATEMENTS (Continued)

6. RELATED-PARTY TRANSACTIONS (Continued)

Amounts
due to/from managing member were comprised of the following (in millions):

January 1,
2009

December 27,
2007Distributions payable

$
21.0

$
16.6Cost and other reimbursement


1.2


0.1Total

$
22.1

$
16.7


7. 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 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 obligations under the credit facility are secured
by a lien on substantially all of the assets of NCM LLC.

The
outstanding balance of the term loan facility at January 1, 2009 was $725.0 million. The outstanding balance under the revolving credit facility at January 1,
2009 was $74.0 million. As of January 1, 2009, the effective rate on the term loan was 6.01% including the effect of the interest rate swaps (both those accounted for as hedges and those
not). The interest rate swaps hedged $550.0 million of the $725.0 million term loan at a fixed interest rate of 6.734% while the unhedged portion was at an interest rate of 3.75%. The
weighted-average interest rate on the unhedged revolver was 3.19%. Commencing with the fourth 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 equivalents, over Adjusted EBITDA, as defined in the credit agreement). The senior secured credit facility also contains a
number of covenants and financial ratio requirements, with which the Company was in compliance at January 1, 2009, including the consolidated net senior secured leverage ratio. As of
January 1, 2009, our consolidated net senior secured leverage ratio was 3.9 times the covenant amount of debt that is required to be hedged. The debt covenants require 50% of the term loan, or
$362.5 million to be hedged at a fixed rate. As of January 1, 2009, the Company had approximately 76% hedged (57% without considering the LBSF portion of the hedge). Of the
$550.0 million that is hedged, $137.5 million is with LBSF and is still in effect. However, the Company has notified LBSF of

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NOTES TO FINANCIAL STATEMENTS (Continued)

7. BORROWINGS (Continued)

an
event of default. While not required to be in compliance with its debt covenants, the Company is evaluating whether to seek a replacement hedge for the LBSF portion. In addition, while the
bankruptcy court has authorized LBSF to assign certain of its hedges that have not been terminated under certain circumstances, the Company has not received any notice that Lehman has assigned, or has
entered into any negotiations to assign, its swap agreement with NCM LLC. See Note 1 for an additional discussion of the interest rate swaps.

On
September 15, 2008, Lehman filed for protection under Chapter 11 of the federal Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New
York. NCM LLC has an aggregate revolving credit facility commitment of $80.0 million with a consortium of banks, including $20.0 million with Lehman Commercial Paper Inc.
("LCPI"), a subsidiary of Lehman. As of January 1, 2009, NCM LLC borrowed $14.0 million from LCPI under the revolving credit facility. LCPI failed to fund its undrawn commitment
of $6.0 million. NCM LLC does not anticipate LCPI to fulfill its funding commitment; however, the Company's cash flows have not been adversely impacted. Until the LCPI issues are
resolved, NCM LLC is not anticipating repaying any of its revolver borrowings as it would effectively result in a permanent reduction of its revolving credit facility, to the extent of the LCPI
commitments. In addition, while the bankruptcy court has authorized LCPI to resign as the administrative agent under the revolving credit facility, to the Company's knowledge they have not yet done
so.

Future Maturities of Long-Term Borrowings

There
are no scheduled annual maturities on the credit facility for the next five years and as of January 1, 2009; the next scheduled annual maturity on the outstanding credit
facility of $799.0 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 the NCM, Inc. IPO, the Company 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. 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

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NOTES TO FINANCIAL STATEMENTS (Continued)

8. SHARE-BASED COMPENSATION (Continued)

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 at that date.

As
of January 1, 2009, there were 2,576,000 shares of common stock available for issuance or delivery under the Equity Incentive Plan. 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. Under the fair value recognition provisions of SFAS
No. 123R, the Company recognizes stock-based compensation net of an estimated forfeiture rate, and therefore only recognizes stock-based compensation cost for those shares NCM, Inc.
expects to vest over the requisite service period of the award. Options generally vest annually over a five-year period and have either 10-year or 15-year
contractual terms. A forfeiture rate of 5% was estimated for all employees to reflect the potential separation of employees.

The
Company recognized $2.1 million, $1.9 million, $0.3 million and $1.9 million for the year ended January 1, 2009, 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 $0.1 million and $0 were
capitalized during the year ended January 1, 2009 and December 27, 2007, respectively. The recognized expense, including the equity based compensation costs of NCM, Inc. employees
is included in the operating results of NCM LLC. As of January 1, 2009, unrecognized compensation cost related to nonvested options was approximately $7.2 million, which will be
recognized over a weighted average remaining period of 3.38 years.

The
weighted average grant date fair value of granted options was $3.77 and $6.23 for the year ended January 1, 2009 and the 2007 post-IPO period. The intrinsic value
of options exercised during the year ended January 1, 2009 was $0.2 million. During 2008, the amount of cash received on option exercises was $0.6 million. The total fair value of
awards vested during the year ended January 1, 2009 was $3.9 million. There were no options vested or exercised prior to the 2008 fiscal year.

The
fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model, which requires that NCM, Inc. make estimates of various
factors. The following assumptions were used in the valuation of the options:

Fiscal 2008

2007 post-IPOExpected life of options

6.5 years

6.5 to 9 yearsRisk free interest rate

3.74% to 4.09%

4.1% to 4.9%Expected volatility

30%

30%Dividend yield

3%

3%


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NOTES TO FINANCIAL STATEMENTS (Continued)

8. SHARE-BASED COMPENSATION (Continued)

Activity
in the Equity Incentive Plan, as converted, is as follows:

Shares

Weighted Average
Exercise Price

Weighted Average
Remaining
Contractual Life
(in years)

Aggregate
Intrinsic Value
(in millions)Outstanding at December 27, 2007


1,822,906

$
17.75Granted


259,000


14.39Exercised


(35,763
)

16.35Forfeited


(21,044
)

18.56Outstanding at January 1, 2009


2,025,099

$
17.33


11.4

$
0.3Exercisable at January 1, 2009


600,177

$
17.71


11.7


Vested and Expected to Vest at January 1, 2009


1,876,533

$
17.36


11.4

$
0.2


The
following table summarizes information about the stock options at January 1, 2009, including the weighted average remaining contractual life and weighted average exercise
price:

Options Outstanding

Options ExercisableRange of Exercise Price

Number
Outstanding at
Jan. 1, 2009

Weighted Average
Remaining Life
(in years)

Weighted Average
Exercise Price

Number
Exercisable at
Jan. 1, 2009

Weighted Average
Exercise Price$5.35


50,500


9.8

$
5.35




$
$9.70 - $12.61


80,500


9.6


12.09





$16.35 - $18.01


1,426,233


12.3


16.52


482,998


16.56$19.37 - $21.00


315,000


8.4


20.35


74,800


21.00$24.04 - $24.74


114,866


10.7


24.25


34,779


24.27$26.76 - $29.05


38,000


8.7


28.87


7,600


28.872,025,099


11.4

$
17.33


600,177

$
17.71


Non-vested StockNCM, Inc. implemented a non-vested stock program as part of the Equity
Incentive Plan. The plan provides for non-vested stock awards to officers, board members and other key employees, including employees of NCM LLC. Under the non-vested
stock program, common stock of NCM, Inc. may be granted at no cost to officers, board members and key employees, subject to a continued employment restriction and as such restrictions lapse,
the award vests in that proportion. The participants are entitled to cash dividends from NCM, Inc. and to vote their respective shares, although the sale and transfer of such shares is
prohibited and the shares are subject to forfeiture during the non-vested period. The shares are also subject to the terms and provisions of the Equity Incentive Plan.
Non-vested stock granted in 2008 to employees vest in equal annual installments over a five-year period. Non-vested stock granted to non-employee
directors vest after one year. Compensation cost is valued based on the market price on the grant date and is expensed over the vesting period.

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NATIONAL CINEMEDIA, LLC

NOTES TO FINANCIAL STATEMENTS (Continued)

8. SHARE-BASED COMPENSATION (Continued)

The
following table represents the shares of non-vested stock:

Shares

Weighted Average
Grant-Date
Fair ValueNon-vested as of December 27, 2007


271,845

$
21.21Granted


31,500


18.97Forfeited


(1,823
)

21.00Vested


(97,904
)

21.12Non-vested as of January 1, 2009


203,618

$
20.91


The
Company recorded $1.3 million and $1.2 million in compensation expense related to such outstanding non-vested shares during the year ended January 1,
2009 and 2007 post-IPO period and minimal amounts were capitalized during the 2008 fiscal year. The recognized expense, including the equity based compensation costs of NCM, Inc.
employees, is included in the operating results of NCM LLC. As of January 1, 2009, unrecognized compensation cost related to non-vested stock was approximately
$3.6 million, which will be recognized over a weighted average remaining period of 3.36 years. The total fair value of awards vested during the year ended January 1, 2009 was
$2.1 million.

9. EMPLOYEE BENEFIT PLANS

NCM 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 $0.8 million, $0.6 million and $0.6 million during
the years ended January 1, 2009, December 27, 2007 and December 28, 2006, 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.

Operating Lease Commitments

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 year ended January 1, 2009, 2007 post-IPO period, 2007
pre-IPO period and the year ended December 28, 2006, was $2.0 million, $1.3 million, $0.3 million and $1.6 million, respectively.

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NOTES TO FINANCIAL STATEMENTS (Continued)

10. COMMITMENTS AND CONTINGENCIES (Continued)

Future
minimum lease payments under noncancelable operating leases as of January 1, 2009 are as follows (in millions):

2009

$
2.12010


1.82011


1.42012


1.32013


1.2Thereafter


0.1Total

$
7.9


Contingent Put Obligation

On April 29, 2008, NCM LLC, IdeaCast, the IdeaCast lender and certain of its stockholders agreed to a financial
restructuring of IdeaCast. Among other things, the restructuring resulted in the lender being granted an option to "put," or require NCM LLC to purchase, up to $10 million of the funded
convertible debt at par, on or after December 31, 2010 through March 31, 2011. NCM may satisfy its put obligation by paying cash or issuing NCM shares of equal value. In accordance with
FIN No. 45, the estimated fair value of $2.4 million was recorded as of April 29, 2008, which represents the noncontingent obligation. The carrying amount of the FIN 45
liability was $2.0 million as of January 1, 2009. During the fourth quarter of 2008, the Company determined that the initial investment and call right in IdeaCast were
other-than-temporarily impaired due to IdeaCast's defaults on its senior debt and liquidity issues. The key factors identified by management in making these assessments and
determining the amounts were events of default on IdeaCast's convertible debt that emerged after the fourth quarter 2008 IdeaCast operating results were analyzed and after IdeaCast failed to make a
scheduled debt service payment and ongoing discussions with the convertible debt lender. Refer to Note 1 for additional details. In addition, the Company determined that the put obligation was
probable and recorded an additional contingent liability of $2.5 million. The total liability at January 1, 2009 was $4.5 million, which represents the excess of a reasonably
estimated probable loss on the put (net of estimated recoveries from the net assets of IdeaCast that serve as collateral for the convertible debt) obligation over the unamortized FIN 45
liability.

Minimum Revenue Guarantees

As part of the network affiliate agreements entered in the ordinary course of business, the Company has agreed to certain minimum
revenue guarantees. If an affiliate achieves the attendance set forth in their respective agreement, the Company has guaranteed minimum revenue for the network affiliate per attendee. The amount and
term varies for each network affiliate. The maximum potential amount of future payments the Company could be required to make pursuant to the minimum revenue guarantees is $24.0 million over
the remaining terms of the network affiliate agreements. The Company has no liabilities recorded for these obligations as of January 1, 2009.

*
* * * * *

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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:

/s/CHRIS A. COX Chris A. Cox Chief Accounting OfficerDate:

May 26, 2009


Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on
the dates indicated.

/s/ AARON J. STONE Aaron J. Stone

Chairman of the Board

May 26, 2009/s/ GERARDO I. LOPEZ Gerardo I. Lopez

Chief Executive Officer, Director and President

May 26, 2009/s/ DR. DANA B. ARDI Dr. Dana B. Ardi

Director

May 26, 2009/s/ STEPHEN P. MURRAY Stephen P. Murray

Director

May 26, 2009/s/ STAN PARKER Stan Parker

Director

May 26, 2009/s/ PHILIP H. LOUGHLIN Philip H. Loughlin

Director

May 26, 2009/s/ ELIOT P. S. MERRILL Eliot P. S. Merrill

Director

May 26, 2009/s/ KEVIN MARONI Kevin Maroni

Director

May 26, 2009/s/ TRAVIS REID Travis Reid

Director

May 26, 2009/s/ CRAIG R. RAMSEY Craig R. Ramsey

Executive Vice President and Chief Financial Officer

May 26, 2009


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/s/ KEVIN M. CONNOR Kevin M. Connor

Senior Vice President, General Counsel and Secretary

May 26, 2009/s/ CHRIS A. COX Chris A. Cox

Vice President and Chief Accounting Officer

May 26, 2009


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EXHIBIT INDEX

EXHIBIT NUMBER

DESCRIPTION2.1(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).


197

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EXHIBIT NUMBER

DESCRIPTION4.1(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).


198

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EXHIBIT NUMBER

DESCRIPTION4.5(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).


199

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EXHIBIT NUMBER

DESCRIPTION10.3

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).


200

---



EXHIBIT NUMBER

DESCRIPTION10.13

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).


201

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EXHIBIT NUMBER

DESCRIPTION10.23

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).


202

---



EXHIBIT NUMBER

DESCRIPTION10.30

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).


203

---



EXHIBIT NUMBER

DESCRIPTION10.39

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)


204

---



EXHIBIT NUMBER

DESCRIPTION10.49

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).


205

---



EXHIBIT NUMBER

DESCRIPTION10.56

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. (incorporated by reference from Exhibit 10.57 to the Company's
Form 10-K (File No. 1-33344) filed on June 18, 2008)10.58

Amendment to Stock Purchase Agreement dated as of November 5, 2008 among Entretenimiento GM de Mexico S.A. de C.V., as Buyer, and AMC Netherlands HoldCo B.V., LCE Mexican Holdings, Inc., and AMC
Europe S.A., as sellers (incorporated by reference from Exhibit 10.2 to the Company's Form 8-K (File No. 1-33344) filed January 5, 2009).10.59

Stock Purchase Agreement dated as of November 5, 2008 among Entretenimiento GM de Mexico S.A. de C.V., as Buyer, and AMC Netherlands HoldCo B.V., LCE Mexican Holdings, Inc., and AMC
Europe S.A., as sellers (filed as Exhibit 10.1 to the Company's Form 10-Q (File No. 1-33344) filed on November 17, 2008).10.60

Amendment to Exhibitor Services Agreement dated as of November 5, 2008, by and between National CineMedia, LLC and American Multi-Cinema, Inc. (filed as Exhibit 10.1 to the Current Report on
Form 8-K (File No. 001-33296) of National CineMedia, Inc., filed on February 6, 2008, and incorporated herein by reference)10.61

Separation and General Release Agreement, dated as of February 23, 2009, by and between Peter C. Brown, AMC Entertainment Holdings, Inc., Marquee Holdings Inc. and AMC Entertainment Inc.
(incorporated by reference from Exhibit 10.1 to the Company's Form 8-K (File No. 1-33344) filed on February 25, 2009)10.62

Employment Agreement, dated as of February 23, 2009, by and between Gerardo I. Lopez and AMC Entertainment Inc. (incorporated by reference from Exhibit 10.2 to the Company's Form 8-K (File
No. 1-33344) filed on February 25, 2009)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 Gerardo I. Lopez (Chief Executive Officer) and Craig R. Ramsey (Chief Financial Officer) furnished in accordance with Securities Act Release 33-8212.


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206

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