Table of Contents



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



FORM 10-Q

(Mark One)ý

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended July 1, 2010
ORo

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

77-0642885(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)920 Main
Kansas City, Missouri(Address of principal executive offices)

64105(Zip Code)


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

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 Web site, if any, every Interactive Data File required to
be submitted and posted pursuant to Rule 405 of Regulations S-T (§232.405 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 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

Smaller reporting company o(Do not check if a smaller
reporting company)


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

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

Title of Each Class of Common Stock

Number of Shares
Outstanding as of July 1, 2010Common Stock, 1¢ par value

1




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Table of Contents

MARQUEE HOLDINGS INC. AND SUBSIDIARY

INDEX



Page
NumberPART IFINANCIAL INFORMATIONItem 1.

Financial Statements (unaudited)


3Consolidated Statements of Operations


3Consolidated Balance Sheets


4Consolidated Statements of Cash Flows


5Notes to Consolidated Financial Statements


6Item 2.

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


21Item 3.

Quantitative and Qualitative Disclosures About Market Risk


30Item 4.

Controls and Procedures


31PART IIOTHER INFORMATIONItem 1.

Legal Proceedings


32Item 1A.

Risk Factors


32Item 6.

Exhibits


33Signatures


34


2

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Table of Contents

PART IFINANCIAL INFORMATION

Item 1.    Financial Statements. (Unaudited)



MARQUEE HOLDINGS INC. AND SUBSIDIARY    CONSOLIDATED STATEMENTS OF OPERATIONS    (in thousands)

Thirteen Weeks EndedJuly 1, 2010

July 2, 2009(unaudited)RevenuesAdmissions

$
448,597

$
446,227Concessions


175,959


173,660Other theatre


16,396


15,425Total revenues


640,952


635,312Costs and ExpensesFilm exhibition costs


238,823


249,101Concession costs


20,496


19,165Operating expense


147,641


150,177Rent


114,554


112,373General and administrative:Merger, acquisition and transaction costs


5,756


281Management fee


1,250


1,250Other


13,071


13,083Depreciation and amortization


48,603


48,788Total costs and expenses


590,194


594,218Other expense (income)Other expense (income)


(1,939
)

8,773Interest expenseCorporate borrowings


40,569


35,849Capital and financing lease obligations


1,383


1,413Equity in (earnings) loss of non-consolidated entities


1,766


(6,262
)Investment income


(50
)

(99
)Total other expense


41,729


39,674Earnings from continuing operations before income taxes


9,029


1,420Income tax provision


6,600


1,000Earnings from continuing operations


2,429


420Earnings (loss) from discontinued operations, net of income taxes


(17
)

723Net earnings

$
2,412

$
1,143


See
Notes to Consolidated Financial Statements.

3

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MARQUEE HOLDINGS INC. AND SUBSIDIARY        CONSOLIDATED BALANCE SHEETS        (in thousands, except share data)

July 1, 2010

April 1, 2010(unaudited)ASSETSCurrent assets:Cash and equivalents

$
288,307

$
497,948Receivables, net


42,075


25,539Other current assets


86,564


72,919Total current assets


416,946


596,406Property, net


1,013,635


863,532Intangible assets, net


162,134


148,432Goodwill


1,929,078


1,836,731Other long-term assets


355,603


238,103Total assets

$
3,877,396

$
3,683,204LIABILITIES AND STOCKHOLDER'S EQUITYCurrent liabilities:Accounts payable

$
194,335

$
175,142Accrued expenses and other liabilities


160,674


143,274Deferred revenues and income


124,735


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


10,261


10,463Total current liabilities


490,005


454,721Corporate borrowings


2,065,810


2,067,149Capital and financing lease obligations


65,118


53,323Deferred revenuesfor exhibitor services agreement


362,910


252,322Other long-term liabilities


343,397


309,591Total liabilities

$
3,327,240

$
3,137,106Commitments and contingenciesStockholder's equity:Common Stock, 1 share issued with 1¢ par value





Additional paid-in capital


747,342


747,206Accumulated other comprehensive loss


(1,666
)

(3,176
)Accumulated deficit


(195,520
)

(197,932
)Total stockholder's equity


550,156


546,098Total liabilities and stockholder's equity

$
3,877,396

$
3,683,204


See
Notes to Consolidated Financial Statements.

4

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MARQUEE HOLDINGS INC. AND SUBSIDIARY        CONSOLIDATED STATEMENTS OF CASH FLOWS        (in thousands)

Thirteen Weeks EndedJuly 1, 2010

July 2, 2009(unaudited)INCREASE (DECREASE) IN CASH AND EQUIVALENTSCash flows from operating activities:Net earnings

$
2,412

$
1,143Adjustments to reconcile net earnings to net cash provided by operating activities:Depreciation and amortization


48,603


48,788Write-off of issuance costs related to early extinguishment of debt





3,312Excess distributions/(Equity in (earnings) losses from investments, net of distributions)


3,686


2,163Gain on dispositions


(10,056
)

(823
)Change in assets and liabilities, net of acquisition:Receivables


(14,219
)

(11,478
)Other assets


(740
)

(752
)Accounts payable


8,199


26,463Accrued expenses and other liabilities


(1,770
)

36,031Other, net


(816
)

2,213Net cash provided by operating activities


35,299


107,060Cash flows from investing activities:Capital expenditures


(13,988
)

(7,307
)Acquisition of Kerasotes, net of cash acquired


(276,798
)

Proceeds from disposition of Cinemex


876


2,904Proceeds from the disposition of long-term assets


55,000


Other, net


15


(4,845
)Net cash used in investing activities


(234,895
)

(9,248
)Cash flows from financing activities:Repayment under revolving credit facility





(185,000
)Repurchase of Fixed Notes due 2012





(238,065
)Proceeds from issuance of Senior Notes due 2019





585,492Deferred financing costs


(95
)

(14,413
)Principal payments under capital and financing lease obligations


(990
)

(855
)Payments under Term Loan B


(1,625
)

(1,625
)Change in construction payables


(7,737
)

(3,145
)Dividends paid to Parent





(300,000
)Net cash used in financing activities


(10,447
)

(157,611
)Effect of exchange rate changes on cash and equivalents


402


(1,111
)Net decrease in cash and equivalents


(209,641
)

(60,910
)Cash and equivalents at beginning of period


497,948


536,580Cash and equivalents at end of period

$
288,307

$
475,670


See
Notes to Consolidated Financial Statements.

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MARQUEE HOLDINGS INC. AND SUBSIDIARY        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS        July 1, 2010        (Unaudited)

NOTE 1BASIS OF PRESENTATION

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

The
accompanying unaudited consolidated financial statements have been prepared in response to the requirements of Form 10-Q and should be read in conjunction with the
Company's Annual report on Form 10-K for the year ended April 1, 2010. In the opinion of management, these interim financial statements reflect all adjustments (consisting of
normal recurring adjustments) necessary for a fair statement of the Company's financial position and results of operations. Due to the seasonal nature of the Company's business, results for the
thirteen weeks ended July 1, 2010 are not necessarily indicative of the results to be expected for the fiscal year (52 weeks) ending March 31, 2011. The Company manages its
business under one operating segment called Theatrical Exhibition.

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) Pension and Postretirement Assumptions and (5) Film Exhibition Costs. Actual results could differ from those estimates.

The
April 1, 2010 consolidated balance sheet data was derived from the audited balance sheet included in the Form 10-K, but does not include all disclosures
required by generally accepted accounting principles.

Presentation:Effective April 1, 2010, preopening expense, theatre and other closure expense (income), and disposition of
assets and other
losses (gains) were reclassified to operating expense with a conforming reclassification made for the prior year presentation. Additionally, in the Consolidated Statements of Cash Flows, certain
operating activities were reclassified to other, net and certain investing activities were reclassified to other, net, with conforming reclassifications made for the prior

6

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MARQUEE HOLDINGS INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

July 1, 2010

(Unaudited)

NOTE 1BASIS OF PRESENTATION (Continued)

year
presentation. These presentation reclassifications reflect how management evaluates information presented in the Consolidated Statement of Operations and Consolidated Statements of Cash Flows.

NOTE 2ACQUISITION

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

The
acquisition of Kerasotes is being treated as a purchase in accordance with Accounting Standards Topic 805,Business Combinations. The
following is a summary of the allocation of the purchase price to the estimated fair values of assets and liabilities acquired in the transaction. The allocation of purchase price is based on
management's judgment after evaluating several factors, including bid prices from potential buyers and a preliminary valuation assessment. The allocation of purchase price is preliminary and subject
to changes as an appraisal of both tangible and intangible assets and liabilities is finalized and additional information becomes available:

(In thousands)

TotalCash

$
809Receivables, net(1)


3,832Other current assets


12,905Property, net


204,998Intangible assets, net(2)


17,425Goodwill(3)


109,233Other long-term assets


5,920Accounts payable


(12,980
)Accrued expenses and other liabilities


(12,439
)Deferred revenues and income


(1,690
)Capital and financing lease obligations


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


(34,015
)Total estimated purchase price

$
281,415


(1)Receivables
consist of trade receivables recorded at fair value. The Company did not acquire any other class of receivables as a result of the acquisition
of Kerasotes.


7

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MARQUEE HOLDINGS INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

July 1, 2010

(Unaudited)

NOTE 2ACQUISITION (Continued)

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


During
the thirteen weeks ended July 1, 2010, the Company incurred acquisition-related costs of approximately $5,754,000 included in general and administrative
expense: merger, acquisition and transaction costs in the Consolidated Statement of Operations.

In
connection with the acquisition of Kerasotes, the Company divested of five Kerasotes theatres with 59 screens as required by the Antitrust Division of the United States Department of
Justice. Proceeds from the divested theatres exceeded the carrying amount of such theatres by $16,886,000, which was recorded as a reduction to goodwill. In addition, the Company has classified two
Kerasotes theatres with 26 screens as held for sale during the thirteen weeks ended July 1, 2010, that will be divested. Assets held for sale of approximately $9,020,000 were classified as
other current assets in the Company's Consolidated Balance Sheets. The theatres are expected to be sold within the next 12 months.

The
Company was also required by the Antitrust Division of the United States Department of Justice to divest of four legacy AMC theatres with 57 screens. The Company recorded a gain on
disposition of assets of $10,056,000 for one divested legacy theatre with 14 screens during the thirteen weeks ended July 1, 2010, which reduced operating expenses by approximately $10,056,000.
Additionally, the Company acquired two theatres with 26 screens that were received in exchange for three of the legacy AMC theatres with 43 screens.

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

8

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MARQUEE HOLDINGS INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

July 1, 2010

(Unaudited)

NOTE 2ACQUISITION (Continued)

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

Thirteen Weeks EndedPro forma
July 1, 2010

Pro forma
July 2, 2009(unaudited)RevenuesAdmissions

$
468,860

$
491,740Concessions


185,295


194,679Other theatre


17,226


17,402Total revenues


671,381


703,821Costs and ExpensesFilm exhibition costs


249,613


273,333Concession costs


21,993


21,758Operating expense


154,524


167,697Rent


119,350


122,144General and administrative:Merger, acquisition and transaction costs*


5,756


281Management fee


1,250


1,250Other


14,722


16,835Depreciation and amortization


52,530


55,193Total costs and expenses


619,738


658,491Other expense (income)Other expense (income)


(1,939
)

8,773Interest expenseCorporate borrowings


40,569


35,849Capital and financing lease obligations


1,599


1,629Equity in (earnings) loss of non-consolidated entities


1,766


(6,262
)Investment income


(50
)

(99
)Total other expense


41,945


39,890Earnings from continuing operations before income taxes


9,698


5,440Income tax provision


6,900


2,500Earnings from continuing operations


2,798


2,940Earnings (loss) from discontinued operations, net of income taxes


(17
)

723Net earnings

$
2,781

$
3,663


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


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MARQUEE HOLDINGS INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

July 1, 2010

(Unaudited)

NOTE 2ACQUISITION (Continued)

The
Company recorded revenues of approximately $35,700,000 from May 24, 2010 through July 1, 2010 resulting from the acquisition of Kerasotes, while total costs and
expenses increased by approximately $34,200,000. Total costs and expenses include other expenses and non-recurring acquisition costs.

NOTE 3COMPREHENSIVE EARNINGS (LOSS)

The components of comprehensive earnings (loss) are as follows:

Thirteen Weeks Ended(In thousands)

July 1, 2010

July 2, 2009Net earnings

$
2,412

$
1,143Foreign currency translation adjustment


1,892


(7,739
)Pension and other benefit adjustments


(62
)

(47
)Change in fair value of cash flow hedges





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





558Increase (decrease) in unrealized gain on marketable securities


(320
)

255Total comprehensive earnings (loss)

$
3,922

$
(5,836
)


NOTE 4GOODWILL AND INTANGIBLE ASSETS

Activity of goodwill is presented below.

(In thousands)

TotalBalance as of April 1, 2010

$
1,836,731Acquisition of Kerasotes


109,233Goodwill allocated to sales(1)


(16,886
)Balance as of July 1, 2010

$
1,929,078


(1)Reduction
in goodwill for sales of five Kerasotes theatres with 59 screens. Subsequent to the acquisition, the Company was required to sell certain acquired
theatres to comply with government requirements related to the sale. No gains or losses were recorded for these transactions.


10

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MARQUEE HOLDINGS INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

July 1, 2010

(Unaudited)

NOTE 4GOODWILL AND INTANGIBLE ASSETS (Continued)




Activity
for intangible assets is presented below:

July 1, 2010

April 1, 2010(In thousands)

Remaining
Useful Life

Gross
Carrying
Amount

Accumulated
Amortization

Gross
Carrying
Amount

Accumulated
AmortizationAcquired Intangible Assets:Amortizable Intangible Assets:Favorable leases

2 to 17 years

$
110,231

$
(46,400
)
$
104,646

$
(44,127
)Loyalty program

3 years


46,000


(39,629
)

46,000


(38,870
)Loews' trade name

1 year


2,300


(2,035
)

2,300


(1,920
)Loews' management contracts

12 to 21 years


35,400


(29,299
)

35,400


(29,209
)Non-compete agreement

5 years


6,400


(140
)




Other intangible assets

1 to 12 years


13,309


(13,103
)

13,309


(13,097
)Total, amortizable



$
213,640

$
(130,606
)
$
201,655

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



$
74,000




$
74,000Kerasotes trade names




5,100





Total, unamortizable



$
79,100




$
74,000


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

(In thousands)

Weighted Average
Amortization
Period

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

9.5 years

$
5,585Non-compete agreement

5 years


6,400Total, amortizable

7 years

$
11,985Unamortizable Intangible Assets:Kerasotes trade names



$
5,100


Amortization
expense associated with the Company's intangible assets is as follows:

Thirteen Weeks Ended(In thousands)

July 1, 2010

July 2, 2009Recorded amortization

$
3,383

$
4,199


Estimated
amortization expense for the next five fiscal years for intangible assets owned as of July 1, 2010 is projected below:

(In thousands)

2011

2012

2013

2014

2015Projected amortization expense

$
13,656

$
12,868

$
12,159

$
9,779

$
8,958


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MARQUEE HOLDINGS INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

July 1, 2010

(Unaudited)

NOTE 5STOCKHOLDER'S EQUITY

Holdings has one share of Common Stock issued as of July 1, 2010 which is owned by Parent.

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 a maximum of 49,107.44681 options to be issued on Parent's stock under the amended and restated 2004 Stock Option Plan. The stock options have a ten year term and generally step vest in equal
amounts from one to three or five years from the date of the grant. Vesting may accelerate for a certain participant if there is a change of control (as defined in the plan). All outstanding options
have been granted to employees and one director of the Company. The Company accounts for stock options using the fair value method of accounting and has elected to use the simplified method for
estimating the expected term of "plain vanilla" share option grants, as it does not have enough historical experience to provide a reasonable estimate.

The
Company has recorded stock-based compensation expense of $136,000 and $411,000 within general and administrative: other during the thirteen weeks ended July 1, 2010, and
July 2, 2009, respectively. The Company's financial statements reflect an increase to additional paid-in capital related to stock-based compensation for all outstanding options of
$136,000 during fiscal 2011. As of July 1, 2010, there was approximately $2,030,000 of total estimated unrecognized compensation cost related to nonvested stock-based compensation arrangements
under the Parent's plan expected to be recognized over approximately 4 years.

On
July 8, 2010, the Board approved a grant of 1,023 non-qualified stock options to a certain employee of the Company under the amended and restated 2004 Stock Option
Plan. These options vest ratably over 5 years with an exercise price of $752 per share. Expense for this award will be
recognized over the vesting period, beginning in the second quarter of fiscal 2011. See 2010 Equity Incentive Plan below for further information regarding assumptions used in determining fair value.
On July 23, 2010, the Board determined that the Company would no longer grant any awards of shares of common stock of the Company under the amended and restated 2004 Stock Option Plan on and
after July 23, 2010.

2010 Equity Incentive Plan

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

The
aggregate number of shares of common stock of Parent available for delivery pursuant to awards granted under the Plan is 39,312 shares (subject to adjustment as provided in the
Plan). Subject to adjustment as provided for in the Plan, (i) the number of shares available for granting incentive stock options under the Plan will not exceed 19,652 shares and
(ii) the maximum number of shares that may be granted to a participant each year is 7,862. To the extent shares subject to an award are not issued or delivered by reason of (i) the
expiration, cancellation, forfeiture or other termination of an

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MARQUEE HOLDINGS INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

July 1, 2010

(Unaudited)

NOTE 5STOCKHOLDER'S EQUITY (Continued)

award,
(ii) the withholding of such shares in satisfaction of applicable taxes or (iii) the settlement of all or a portion of an award in cash, then such shares will again be available
for issuance under the Plan.

Award
agreements under the Plan generally have the following features, subject to Parent's compensation committee:



On
the date the Board adopted the Plan, the Board approved the grants of 5,399 non-qualified stock options, 5,399 shares of restricted stock (time vesting), and 5,404 shares
of restricted stock (performance vesting) to certain of its employees. The estimated fair value of the stock at the grant date was $752 per share and was based upon a contemporaneous valuation
reflecting market conditions. Expense for these awards will be recognized over the respective performance and vesting periods, beginning in the second quarter of fiscal 2011.

The
following table reflects the weighted average fair value per option granted under the amended and restated 2004 Option Plan and the 2010 Equity Incentive Plan during the second
quarter of fiscal 2011, as well as the significant assumptions used in determining weighted average fair value using the Black-Scholes option-pricing model:

2010 Plan

2004 PlanWeighted average fair value of options on grant date

$
293.72

$
300.91Risk-free interest rate


2.50
%

2.58
%Expected life (years)


6.25


6.50Expected volatility(1)


35.0
%

35.0
%Expected dividend yield








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


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MARQUEE HOLDINGS INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

July 1, 2010

(Unaudited)

NOTE 6INVESTMENTS

Investments in non-consolidated affiliates and certain other investments accounted for following 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 July 1, 2010, include a 23.05% interest in National
CineMedia, LLC ("NCM"), a 50% interest in three U.S. motion picture theatres, a 26% equity interest in Movietickets.com ("MTC"), a 50% interest in Midland Empire Partners, LLC ("MEP")
and a 29% interest in Digital Cinema Implementation Partners, LLC ("DCIP").

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.

Operating
Results(1):

For the thirteen weeks ended July 1, 2010

(In thousands)

NCM

DCIP

Other

TotalRevenues

$
98,998

$
5,286

$
10,688

$
114,972Operating costs and expenses


71,452


23,440


10,455


105,347Net earnings (loss)

$
27,546

$
(18,154
)
$
233

$
9,625The Company's recorded equity in earnings (loss)

$
3,458

$
(5,169
)
$
(55
)
$
(1,766
)


For the thirteen weeks ended July 2, 2009

(In thousands)

NCM

DCIP

Other

TotalRevenues

$
92,898

$


$
10,606

$
103,504Operating costs and expenses


60,438


2,513


11,085


74,036Net earnings (loss)

$
32,460

$
(2,513
)
$
(479
)
$
29,468The Company's recorded equity in earnings (loss)

$
7,366

$
(838
)
$
(266
)
$
6,262


(1)Certain
differences in the Company's recorded investment over its proportional ownership share are amortized to equity in (earnings) or losses over the
estimated useful life of the underlying assets or liabilities. The recorded equity in earnings of NCM on common membership units owned immediately following the IPO of NCM, Inc.
(Tranche 1 Investment) does not include undistributed equity in earnings. The Company considered the excess distribution received following NCM, Inc.'s IPO as an advance on NCM's future
earnings. As a result, the Company will not recognize any undistributed equity in earnings of NCM on the original common membership units (Tranche 1 Investment) until NCM's future net earnings
equal the amount of the excess distribution.


As
of July 1, 2010, the Company owns 25,458,613 units, or a 23.05% interest, in NCM accounted for following the equity method of accounting. The estimated fair market value of the
units in National CineMedia, LLC was approximately $442,216,000, based on a price for shares of National CineMedia, Inc. on July 1, 2010 of $17.37 per share.

As
of July 1, 2010 and April 1, 2010, the Company has recorded $2,170,000 and $1,462,000 respectively, of amounts due from NCM related to on-screen advertising
revenue. As of July 1, 2010

14

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Table of Contents

MARQUEE HOLDINGS INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

July 1, 2010

(Unaudited)

NOTE 6INVESTMENTS (Continued)

and
April 1, 2010, the Company had recorded $1,911,000 and $1,502,000 respectively, of amounts due to NCM related to the Exhibitors Services Agreement. The Company recorded revenues for
advertising from NCM of $5,419,000 and $5,416,000 during the thirteen weeks ended July 1, 2010 and July 2, 2009, respectively. The Company recorded advertising expenses related to a
beverage advertising agreement paid to NCM of $3,264,000 and $3,206,000 during the thirteen weeks ended July 1, 2010 and July 2, 2009, respectively.

The
Company recorded the following changes in the carrying amount of its investment in NCM and equity in (earnings) losses of NCM during the thirteen weeks ended July 1, 2010:

(In thousands)

Investment in
NCM(1)

Deferred
Revenue(2)

Cash Received
(Paid)

Equity in
(Earnings)
Losses

Advertising
(Revenue)Beginning balance April 1, 2010

$
28,826

$
(252,322
)
$


$


$
Receipt of Common Units(3)


111,520


(111,520
)







Receipt of excess cash distribution


(148
)




1,920


(1,772
)

Amortization of deferred revenue





932








(932
)Equity in earnings(4)


1,686








(1,686
)

Ending balance July 1, 2010

$
141,884

$
(362,910
)
$
1,920

$
(3,458
)
$
(932
)


(1)Represents
AMC's investment in 939,853 common membership units originally valued at March 27, 2008 and 406,371 common membership units originally
valued at March 17, 2009, 127,290 common membership units originally valued at March 17, 2010, and 6,510,209 common membership units originally valued at June 14, 2010 received
under the Common Unit Adjustment Agreement dated as of February 13, 2007 (Tranche 2 Investments). AMC's investment in 17,474,890 common membership units (Tranche 1 Investment) is
carried at zero cost.(2)Represents
the unamortized portion of the Exhibitors Services Agreement (ESA) modifications payment received from NCM. Such amounts are being amortized to
revenues over the remainder of the 30 year term of the ESA ending in 2036.(3)Effective
June 14, 2010 and with a settlement date of June 28, 2010, the Company received 6,510,209 common membership units of NCM as a result
of an Extraordinary Common Unit Adjustment in connection with the Company's acquisition of Kerasotes. The Company recorded the additional units at a fair value of $111,520,000 with an offsetting
adjustment to deferred revenue.(4)Represents
equity in earnings on the Tranche 2 Investments only.


15

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Table of Contents

MARQUEE HOLDINGS INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

July 1, 2010

(Unaudited)

NOTE 7FAIR VALUE MEASUREMENTS

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

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.


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

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

Total Carrying
Value at
July 1, 2010

Quoted prices in
active market
(Level 1)

Significant other
observable inputs
(Level 2)

Significant
unobservable inputs
(Level 3)Assets:Money Market Mutual Funds

$
864

$
864

$


$
Equity securities, available-for-sale:RealD Inc. Common Stock


6,522





6,522


Mutual Fund International


2,193


2,193





Mutual Fund Large U.S. Equity


128


128





Mutual Fund Small/Mid U.S. Equity


208


208





Mutual Fund Other Equity


21


21





Mutual Fund Fixed Income


323


323





Total assets at fair value

$
10,259

$
3,737

$
6,522

$
Liabilities:Total liabilities at fair value

$


$


$


$



Valuation Techniques.The Company's money market mutual funds are invested in funds that seek to preserve principal, are highly liquid,
and therefore
are recorded on the balance sheet at the principal amounts deposited, which equals fair value. The equity securities primarily consist of common stock and mutual funds invested in equity, fixed
income, and international funds. 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 fair value of the RealD common stock was determined using
RealD's initial public offering price, which falls under Level 2 of the valuation hierarchy. The amortized cost basis of the equity securities held as of July 1, 2010 is $9,250,000.

16

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Table of Contents

MARQUEE HOLDINGS INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

July 1, 2010

(Unaudited)

NOTE 7FAIR VALUE MEASUREMENTS (Continued)

In
connection with the RealD Inc. motion picture license agreement, the Company received a ten-year option to purchase 1,222,782 shares of RealD Inc. common
stock at approximately $0.00667 per share. The stock options vest in 3 tranches upon the achievement of screen installation targets. During the first quarter of fiscal 2011, the Company vested in the
first tranche and has exercised its option to purchase 407,594 shares of RealD Inc. common stock. The stock is accounted for an equity security, available for sale, and is recorded in the
consolidated balance sheet in other long term assets with an offsetting entry recorded to other long term liabilities. Any recurring fair value adjustments will be recorded to other long term assets
with an offsetting entry to accumulated other comprehensive loss. The amount recorded in other long term liabilities will be amortized on a straight-line basis to reduce RealD license
expense recorded in the statement of operations under operating expense.

The
Company is required to disclose the fair value of financial instruments that are not recognized in the statement of financial position for which it is practicable to estimate that
value. At July 1, 2010, the carrying amount of the Company's liabilities for corporate borrowings was approximately $2,072,310,000 and the fair value was approximately $2,076,589,000. At
April 1, 2010, the carrying amount of the corporate borrowings was approximately $2,073,649,000 and the fair value of was approximately $2,146,362,000. Quoted market prices were used to value
publicly held corporate borrowings. The carrying value of cash and equivalents approximates fair value because of the short duration of those instruments.

NOTE 8INCOME TAXES

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:

Thirteen Weeks EndedJuly 1, 2010

July 2, 2009Income tax expense at the federal statutory rate


3,200


500Effect of:State income taxes


4,600


950Permanent items


(100
)

100Valuation allowance


(1,100
)

(500
)Other, net





(50
)Income tax expense


6,600


1,000Effective income tax rate


73.1
%

70.4
%


The
accounting for income taxes requires that deferred tax assets and liabilities be recognized, using enacted tax rates, for the tax effect of temporary differences between the
financial reporting and tax
bases of recorded assets and liabilities. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that some or all of the deferred tax assets will not be realized.

17

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Table of Contents

MARQUEE HOLDINGS INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

July 1, 2010

(Unaudited)

NOTE 9EMPLOYEE BENEFIT PLANS

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

The
Company expects to make pension contributions of approximately $390,000 per quarter for a total of approximately $1,560,000 during fiscal 2011.

Net
periodic benefit cost (income) recognized for the plans during the thirteen weeks ended July 1, 2010 and July 2, 2009 consists of the following:

Pension Benefits

Other Benefits(In thousands)

July 1, 2010

July 2, 2009

July 1, 2010

July 2, 2009Components of net periodic benefit cost:Service cost

$
46

$
45

$
38

$
52Interest cost


1,151


1,101


319


324Expected return on plan assets


(996
)

(748
)




Amortization of (gain) loss


154


158





(69
)Amortization of prior service credit








(216
)

(136
)Net periodic benefit cost

$
355

$
556

$
141

$
171


Effective
July 29, 2010, the Company was able to determine it will no longer be obligated to contribute to one of its union sponsored pension plans under a new union contract
triggering a complete withdrawal from the plan. The Company expects to record a liability and pension cost related to the complete withdrawal of approximately $2,660,000 in the second quarter of
fiscal 2011.

NOTE 10COMMITMENTS AND CONTINGENCIES

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

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

18

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Table of Contents

MARQUEE HOLDINGS INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

July 1, 2010

(Unaudited)

NOTE 10COMMITMENTS AND CONTINGENCIES (Continued)

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. The Company is negotiating the extent of betterments related to the remaining remedies required for line-of-sight violations consistent with the Ninth Circuit's
decision. The improvements will be made over a 5 year term. The Justice Department moved for reconsideration on the line-of-sight matters and was denied on
June 8, 2009 by the Ninth Circuit Court of Appeals. The case has reverted to the trial court. The Company has recorded a liability of approximately $349,000 for estimated fines related to this
matter.

As
to the non-line-of-sight aspects of the case, on January 21, 2003, the trial court entered summary judgment in favor of the Department on
matters such as parking areas, signage, ramps, location of toilets, counter heights, ramp slopes, companion seating and the location and size of handrails. On December 5, 2003, the trial court
entered a consent order and final judgment on non-line-of-sight issues under which the Company agreed to remedy certain violations at its stadium-style theatres and
at certain theatres it may open in the future. Currently the Company estimates that these betterments will be required at approximately 140 stadium-style theatres. The Company estimates that the total
cost of these betterments will be approximately $54,000,000, and through July 1, 2010 the Company has incurred approximately $34,100,000 of these costs. The estimate is based on actual costs
incurred on remediation work completed to date. The actual costs of betterments may vary based on the results of surveys of the remaining theatres.

Michael Bateman v. American Multi-Cinema, Inc.(No. CV07-00171). In January 2007, a class action complaint was filed against the
Company in the Central District of the United States District Court of California (the "District Court") alleging violations of the Fair and Accurate Credit Transactions Act ("FACTA"). FACTA provides
in part that neither expiration dates nor more than the last 5 numbers of a credit or debit card may be printed on receipts given to customers. FACTA imposes significant penalties upon violators where
the violation is deemed to have been willful. Otherwise damages are limited to actual losses incurred by the card holder. 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.

On
May 14, 2009, Harout Jarchafjian filed a similar lawsuit alleging that the Company willfully violated FACTA and seeking statutory damages, but without alleging any actual
injury (Jarchafjian v. American Multi-Cinema, Inc.(C.D. Cal. Case No. CV09-03434). The Jarchafjian case has been deemed related to
the Bateman case and is stayed pending a Ninth Circuit decision in the Bateman case. The Company believes the plaintiff's allegations in both these cases, particularly those asserting AMC's
willfulness, are without merit.

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

19

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Table of Contents

MARQUEE HOLDINGS INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

July 1, 2010

(Unaudited)

NOTE 10COMMITMENTS AND CONTINGENCIES (Continued)

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 11RELATED PARTY TRANSACTIONS

Amended and Restated Fee Agreement

In connection with the merger with LCE Holdings Inc., Holdings, AMCE and the Sponsors entered into an Amended and Restated Fee
Agreement, which 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 earliest of (i) the twelfth anniversary
from December 23, 2004; (ii) such time as the sponsors own less than 20% in the aggregate of Parent; and (iii) such earlier time as Holdings, AMCE and the Requisite Stockholder
Majority agree. In addition, the fee agreement provided for reimbursements by AMCE to the Sponsors for their out-of-pocket expenses and to Holdings of up to $3,500,000 for fees
payable by Holdings in any single fiscal year in order to maintain AMCE's and its corporate existence, corporate overhead expenses and salaries or other compensation of certain employees. The Amended
and Restated Fee Agreement terminated on June 11, 2007, the date of the holdco merger, and was superseded by a substantially identical agreement entered into by AMC Entertainment
Holdings, Inc., Holdings, AMCE, the Sponsors and Holdings' other stockholders.

Upon
the consummation of a change in control transaction or an initial public offering, each of the Sponsors will receive, in lieu of quarterly payments of the annual management fee, a
fee equal to the net present value of the aggregate annual management fee that would have been payable to the Sponsors during the remainder of the term of the fee agreement (assuming a twelve year
term from the date of the original fee agreement), calculated using the treasury rate having a final maturity date that is closest to the twelfth anniversary of the date of the original fee agreement
date. As of July 1, 2010, the Company estimates that this amount would be $28,177,000.

The
fee agreement also provides that the Company 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.

20

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Table of Contents

Item 2.    Management's Discussion and Analysis of Financial Condition and Results of Operations.

Forward Looking Statements

In addition to historical information, this Report on Form 10-Q 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 "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.

Readers
are urged to consider these factors carefully in evaluating the forward-looking statements. For further information about these and other risks and uncertainties, see
Item 1A. "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended April 1, 2010 and in this Quarterly Report on Form 10-Q.

All
subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by these cautionary statements.
The forward-looking statements included herein are made only as of the date of this Quarterly Report on Form 10-Q, and we do not undertake any obligation to release publicly any
revisions to such forward-looking statements

21

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Table of Contents

to
reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

Significant Event

On May 24, 2010, we completed the acquisition of 92 theatres and 928 screens from Kerasotes Showplace Theatres, LLC
("Kerasotes"). Kerasotes operated 95 theatres and 972 screens in mid-sized, suburban and metropolitan markets, primarily in the Midwest. More than three quarters of the Kerasotes theatres
feature stadium seating and almost 90 percent have been built since 1994. The purchase price for the Kerasotes theatres paid in cash at closing was $276,798,000, net of cash acquired and is
subject to working capital and other purchase price adjustments as described in the Unit Purchase Agreement. The acquisition of Kerasotes significantly increased our size. Accordingly, results of
operations for the thirteen weeks ended July 1, 2010, which include five weeks of operations of the theatres we acquired, are not comparable to our results for the thirteen weeks ended
July 2, 2009. For additional information about the Kerasotes acquisition, see Note 2Acquisition to our Consolidated Financial Statements under Part I Item 1.
of this Report on Form 10-Q.

Overview

We are one of the world's leading theatrical exhibition companies. As of July 1, 2010, we owned, operated or had interests in
382 theatres and 5,342 screens, with 99%, or 5,287, of our screens in the U.S. and Canada and 1%, or 55, of our screens in China (Hong Kong), France and the United Kingdom.

During
the thirteen weeks ended July 1, 2010, we acquired 92 theatres with 928 screens from Kerasotes in the U.S. In connection with the acquisition of Kerasotes, we divested of
nine theatres with 116 screens as required by the Antitrust Division of the United States Department of Justice and acquired two theatres with 26 screens that were received in exchange for three of
the divested theatres above
with 43 screens. We also closed one theatre with 15 screens in the U.S. and acquired one theatre with 6 screens in the U.S. in the ordinary course of business.

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

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

22

---



Table of Contents

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

During
fiscal 2010, films licensed from our six largest distributors based on revenues accounted for approximately 84% 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 2009, 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 633 in 2008, according to Motion Picture Association of America 2009 MPAA Theatrical Market Statistics. The number of digital 3D films released increased to a high of 20 from a low of 0 during this
same time period.

We
continually upgrade the quality of our theatre circuit by adding new screens through new builds (including expansions) and acquisitions and by disposing of older screens through
closures and sales. We are an industry leader in the development and operation of 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. We have increased our 3D screens by 467 to 628 screens and our IMAX screens by
29 to 85 screens since July 2, 2009; and as of July 1, 2010, approximately 11.8% of our screens were 3D screens and 1.6% were IMAX screens.

Operating Results

The following table sets forth our revenues, costs and expenses attributable to our theatrical exhibition operations.

Thirteen Weeks EndedJuly 1, 2010

July 2, 2009

% Change(In thousands)RevenuesTheatrical exhibitionAdmissions

$
448,597

$
446,227


0.5
%Concessions


175,959


173,660


1.3
%Other theatre


16,396


15,425


6.3
%Total revenues

$
640,952

$
635,312


0.9
%Cost of OperationsTheatrical exhibitionFilm exhibition costs

$
238,823

$
249,101


-4.1
%Concession costs


20,496


19,165


6.9
%Operating expense


147,641


150,177


-1.7
%Rent


114,554


112,373


1.9
%521,514


530,816


-1.8
%General and administrative expense:Merger, acquisition and transaction costs


5,756


281


*Management Fee


1,250


1,250



%Other


13,071


13,083


-0.1
%Depreciation and amortization


48,603


48,788


-0.4
%Total costs and expenses

$
590,194

$
594,218


-0.7
%


---

23

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Table of Contents

Thirteen Weeks EndedJuly 1, 2010

July 2, 2009Operating DataContinuing Operations (at period end):New theatre screens





6Screens acquired


960


Screen dispositions


131


8Average screenscontinuing operations(1)


4,834


4,534Number of screens operated


5,342


4,610Number of theatres operated


382


307Screens per theatre


14.0


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


51,619


53,703


---

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

Thirteen Weeks Ended(In thousands)

July 1, 2010

July 2, 2009Earnings from continuing operations

$
2,429

$
420Plus:Income tax provision


6,600


1,000Interest expense


41,952


37,262Depreciation and amortization


48,603


48,788Certain operating expenses(1)


(9,475
)

956Equity in (earnings) loss of non-consolidated entities


1,766


(6,262
)Investment income


(50
)

(99
)Other (income) expense(2)





10,826General and administrative expenseunallocated:Merger, acquisition and transaction costs


5,756


281Management fee


1,250


1,250Stock-based compensation expense


136


411Adjusted EBITDA(3)

$
98,967

$
94,833


---

Adjusted
EBITDA is a non-GAAP financial measure commonly used in our industry and should not be construed as an alternative to net earnings (loss) as an indicator of
operating performance or as

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

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



Thirteen Weeks Ended July 1, 2010 and July 2, 2009

Revenues.Total revenues increased 0.9%, or $5,640,000, during the thirteen weeks ended July 1, 2010 compared to the thirteen
weeks ended
July 2, 2009. This increase included approximately $35,700,000 of additional revenues resulting from the acquisition of Kerasotes. Admissions revenues increased 0.5%, or $2,370,000, during the
thirteen weeks ended July 1, 2010 compared to the thirteen weeks ended July 2, 2009, due to the acquisition of Kerasotes and a 4.6% increase in average ticket prices, partially offset by
a 3.9% decrease in attendance. The decrease in attendance and increase in admissions revenues includes the increased attendance and admissions revenues of approximately $24,000,000 from Kerasotes. The
increase in average ticket price was primarily due to an increase in attendance from IMAX and 3D film product where we are able to charge more per ticket than for a standard 2D film. Admissions
revenues at comparable theatres (theatres opened on or before the first quarter of fiscal 2010) decreased 3.8%, or $16,462,000, during the thirteen weeks ended July 1, 2010 from the comparable
period last year. Attendance was negatively impacted by less popular film product during the thirteen weeks ended July 1, 2010 as compared to the thirteen weeks ended July 2, 2009.
Concessions revenues increased 1.3%, or $2,299,000, during the thirteen weeks ended July 1, 2010 compared to the thirteen weeks ended July 2, 2009, due to the acquisition of Kerasotes
and a 5.6% increase in average concessions per patron, partially offset by the decrease in attendance. The increase in concession revenues includes approximately $11,200,000 from Kerasotes. The
increase in concessions per patron includes the impact of concession price and size increases placed in effect during the thirteen weeks ended December 31, 2009. Other theatre revenues
increased 6.3%, or $971,000, during the thirteen weeks ended July 1, 2010 compared to the thirteen weeks ended July 2, 2009, primarily due to increases in on-line ticket
fees, non-presentment income from package ticket sales, and merchandise sales, partially offset by decreases in arcade sales. The increase in other theatre revenues includes $500,000 from
Kerasotes.

Costs and expenses.Total costs and expenses decreased 0.7%, or $4,024,000, during the thirteen weeks ended July 1, 2010 compared
to the
thirteen weeks ended July 2, 2009. The effect of the acquisition of Kerasotes was an increase in total costs and expenses of approximately $34,000,000. Film exhibition costs decreased 4.1%, or
$10,278,000, during the thirteen weeks ended July 1, 2010 compared

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to
the thirteen weeks ended July 2, 2009 due to the decrease in film exhibition costs as a percentage of admissions revenues, partially offset by the increase in admissions revenues. As a
percentage of admissions revenues, film exhibition costs were 53.2% in the current period and 55.8% in the prior year period. Film exhibition costs in the prior year period were higher in comparison
primarily due to admissions revenues on higher grossing films, which typically carry a higher film cost as a percentage of admissions revenues. Concession costs increased 6.9%, or $1,331,000, during
the thirteen weeks ended July 1, 2010 compared to the thirteen weeks ended July 2, 2009 due to an increase in concession costs as a percentage of concession revenues and the increase in
concession revenues. As a percentage of concessions revenues, concession costs were 11.6% in the current period compared with 11.0% in the prior period, primarily due to the concession price and size
increases. As a percentage of revenues, operating expense was 23.0% in the current period as compared to 23.6% in the prior period. A gain was recorded on disposition of assets during the thirteen
weeks ended July 1, 2010 which reduced operating expenses by approximately $10,056,000, primarily due to the sale of a divested legacy AMC theatre in conjunction with the acquisition of
Kerasotes. Rent expense increased 1.9%, or $2,181,000, during the thirteen weeks ended July 1, 2010 compared to the thirteen weeks ended July 2, 2009 primarily due to increased rent as a
result of the acquisition of Kerasotes of approximately $4,300,000, partially offset by dispositions and closures of theatres and rent reductions from landlords related to their failure to meet
co-tenancy provisions in certain lease agreements and renegotiations on more favorable terms. Rent reductions related to co-tenancy may not continue should our landlords meet
the related co-tenancy provisions in the future.

General and Administrative Expense:

Merger, acquisition and transaction costs.Merger, acquisition and transaction costs increased $5,475,000 during the thirteen weeks
ended
July 1, 2010 compared to the thirteen weeks ended July 2, 2009. Current year costs primarily consist of costs related to the acquisition of Kerasotes.

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

Other.Other general and administrative expense decreased 0.1%, or $12,000, during the thirteen weeks ended July 1, 2010 compared
to the
thirteen weeks ended July 2, 2009.

Depreciation and Amortization.Depreciation and amortization decreased 0.4%, or $185,000, compared to the prior period. Decreases in
depreciation and
amortization expenses related to declining net book value of theatre assets, partially offset by increases in depreciation and amortization as a result of the acquisition of Kerasotes.

Other (Income) Expense.Other (income) expense includes $(1,939,000) and $(2,053,000) of income related to the derecognition of gift
card
liabilities, as to which we believe future redemption to be remote, during the thirteen weeks ended July 1, 2010 and July 2, 2009, respectively. Other (income) expense includes a loss of
$10,826,000 related to the redemption of our 85/8% Senior Notes due 2012 during the thirteen weeks ended July 2, 2009.

Interest Expense.Interest expense increased 12.6%, or $4,690,000, primarily due to an increase in interest expense related to the
issuance of our
8.75% Senior Notes due 2019 (the "Notes due 2019") on June 9, 2009.

Equity in (Earnings) Loss of Non-Consolidated Entities.Equity in (earnings) loss of non-consolidated entities was $1,766,000
in the current period compared to $(6,262,000) in the prior period. Equity in (earnings) related to our investment in National CineMedia, LLC were $(3,458,000) and $(7,366,000) for the thirteen
weeks ended July 1, 2010 and July 2, 2009, respectively. Equity in

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losses
related to our investment in Digital Cinema Implementation Partners, LLC ("DCIP") were $5,169,000 and $838,000 for the thirteen weeks ended July 1, 2010 and July 2, 2009,
respectively.

Investment Income.Investment income was $50,000 for the thirteen weeks ended July 1, 2010 compared to $99,000 for the thirteen
weeks ended
July 2, 2009.

Income Tax Provision.The income tax provision from continuing operations was $6,600,000 for the thirteen weeks ended July 1, 2010
and
$1,000,000 for the thirteen weeks ended July 2, 2009. See Note 8Income Taxes for further information.

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

Net Earnings.Net earnings were $2,412,000 and $1,143,000 for the thirteen weeks ended July 1, 2010 and July 2, 2009,
respectively. Net
earnings during the thirteen weeks ended July 1, 2010 were positively impacted by a gain on disposition of a theatre for approximately $10,056,000 and negatively impacted by merger and
acquisition costs of approximately $5,756,000 related to the acquisition of Kerasotes and increased interest expense of $4,690,000. Net earnings during the thirteen weeks ended July 2, 2009
were negatively impacted by an expense of $10,826,000 related to the redemption of our 85/8% Senior Notes due 2012.

LIQUIDITY AND CAPITAL RESOURCES

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

We
believe that cash generated from operations and existing cash and equivalents will be sufficient to fund operations and planned capital expenditures for at least the next
12 months and enable us to maintain compliance with covenants related to the senior secured credit facility and our 8% Senior Subordinated Notes due 2014 (the "Notes due 2014"), 11% Senior
Subordinated Notes due 2016 (the "Notes due 2016"), 8.75% Senior Notes due 2019 (the "Notes due 2019") and 12% Senior Discount Notes due 2014 (the "Notes due 2014").

Holding Company Status

Marquee Holdings Inc. 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, AMCE is restricted from paying dividends to Holdings by the terms
of the indentures relating to its notes and its senior secured credit facility. AMCE'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 Notes due 2016, the amount of loans and dividends which AMCE
could make to Holdings may not exceed approximately $361,139,000 in the aggregate as of July 1, 2010. Under the note indentures, a loan to Holdings would have to be on terms no less favorable
to AMCE 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 AMCE. Provided no event of default has occurred or
would result, the senior secured credit facility also permits AMCE to pay cash dividends to Holdings for specified purposes, including indemnification claims, taxes, up to $4,000,000

27

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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, AMCE may also pay Holdings a portion of net cash proceeds from specified assets sales.

Cash Flows provided by Operating Activities

Cash flows provided by operating activities, as reflected in the Consolidated Statements of Cash Flows, were $35,299,000 and
$107,060,000 during the thirteen weeks ended July 1, 2010 and July 2, 2009, respectively. The decrease in cash flows provided by operating activities for the thirteen weeks ended
July 1, 2010 was primarily due to an increase in payments on accounts payables and accrued expenses and other liabilities, net of any additions related to the Kerasotes acquisition. Cash flows
during the thirteen weeks ended July 2, 2009 include consent fee
payments of $7,142,000 related to the redemption of our 85/8% Senior Notes due 2012, which reduced our cash flows from operating activities. We had working capital (deficit) surplus as
of July 1, 2010 and April 1, 2010 of $(73,059,000) and $141,685,000, respectively. Working capital includes $124,735,000 and $125,842,000 of deferred revenues as of July 1, 2010
and April 1, 2010, respectively. We have the ability to borrow against our credit facility to meet obligations as they come due (subject to limitations on the incurrence of indebtedness in our
various debt instruments) and could incur indebtedness of $187,324,000 on our Credit Facility to meet these obligations as of July 1, 2010.

Cash Flows used in Investing Activities

Cash flows used in investing activities, as reflected in the Consolidated Statements of Cash Flows, were $234,895,000 and $9,248,000,
during the thirteen weeks ended July 1, 2010 and July 2, 2009, respectively. Cash outflows from investing activities include capital expenditures of $13,988,000 and $7,307,000 during the
thirteen weeks ended July 1, 2010 and July 2, 2009, respectively. We expect that our gross capital expenditures cash outflows will be approximately $130,000,000 to $160,000,000 for
fiscal 2011.

During
the thirteen weeks ended July 1, 2010, we paid $276,798,000 in cash for the purchase of Kerasotes theatres at closing, net of cash acquired. The purchase is subject to
working capital and other purchase price adjustments as described in the Unit Purchase Agreement.

We
received $55,000,000 in cash proceeds from the sale of certain theatres required to be divested in connection with the Kerasotes acquisition during the thirteen weeks ended
July 1, 2010.

We
fund the costs of constructing new theatres using 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.

Cash Flows used in Financing Activities

Cash flows used in financing activities, as reflected in the Consolidated Statement of Cash Flows, were $10,447,000 and $157,611,000
during the thirteen weeks ended July 1, 2010 and July 2, 2009, respectively.

During
the thirteen weeks ended July 2, 2009, we made dividend payments of $300,000,000 to Parent, which was treated as a reduction of additional paid-in capital.

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Proceeds
from the issuance of the 8.75% Senior Notes due 2019 were $585,492,000 and deferred financing costs paid related to the issuance of the 8.75% Senior Notes due 2019 were
$14,411,000 during the thirteen weeks ended July 2, 2009.

During
the thirteen weeks ended July 2, 2009, we made principal payments of $238,065,000 in connection with the redemption of our 85/8% Senior Notes due 2012 and
repaid $185,000,000 of borrowings under our revolving credit facility.

Reference
is made to Management's Discussion and Analysis of Financial Condition and Results of OperationsLiquidity and Capital Resources in our Annual Report on
Form 10-K for the fiscal year ended April 1, 2010 for certain information about our Senior Secured Credit Facility, our 8% Senior Subordinated Notes due 2014 (the "Notes due
2014"), 11% Senior Subordinated Notes due 2016 (the "Notes due 2016"), our 8.75% Senior Notes due 2019 (the "Notes due 2019"), our 12% Senior Discount Notes due 2014 (the "Discount Notes due 2014")
and for certain information about Parent's Term Loan Facility.

The
indentures relating to our notes (Notes due 2014, Notes due 2016, Notes due 2019, and Discount Notes due 2014) and the Parent Term Loan Facility allow us to incur specified permitted
indebtedness (as defined therein) without restriction. The indentures and the Parent Term Loan Facility also allow us to incur any amount of additional debt, including borrowings under the revolving
portion of our Senior Secured Credit Facility, as long as we can satisfy the applicable coverage ratio of each indenture, after giving effect to the event on a pro forma basis. Under the indentures
relating to the Discount Notes due 2014, we could borrow approximately $295,200,000 (assuming an interest rate of 9.00% per annum on the additional indebtedness) in addition to specified permitted
indebtedness. If we cannot satisfy the applicable coverage ratios, generally we can incur no more than $100,000,000 of new "permitted indebtedness" under the terms of the indentures relating to our
notes and the Parent Term Loan Facility.

As
of July 1, 2010, we were in compliance with all financial covenants relating to the Senior Secured Credit Facility, the Notes due 2016, the Notes due 2014, the Notes due 2019,
and the Discount Notes due 2014.

Investment in NCM LLC

We hold an investment in 23.05% of NCM LLC accounted for following the equity method as of July 1, 2010. The fair market value
of these shares is approximately $442,216,000 as of July 1, 2010. Because we have little tax basis in these units, the sale of all these units at July 1, 2010 would require us to report
taxable income of approximately $458,000,000, including distributions received from NCM LLC that were previously deferred. Our investment in NCM LLC is a source of liquidity for us and we expect that
any sales we may make of NCM LLC units would be made in such a manner to most efficiently manage any related tax liability. We have available net operating loss carryforwards which could reduce any
related tax liability. On August 9, 2010, we announced our intent, subject to market and other conditions, to redeem 6,500,000 common membership units of NCM LLC for a like number of shares of
National CineMedia, Inc.'s ("NCM Inc.") common stock and then resell such shares of common stock in a registered underwritten public offering. NCM Inc. is the managing member and owner of 38.3% of NCM
LLC. We intend to grant the underwriters an option for 30 days to purchase up to 812,500 additional shares of NCM Inc. common stock after conversion of NCM LLC common membership units by us to
cover over-allotments, if any. The expected proceeds would be used for general corporate purposes including repaying indebtedness and to pursue accretive acquisitions as they become available.

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Commitments and Contingencies

Minimum annual cash payments required under existing capital and financing lease obligations, maturities of corporate borrowings,
future minimum rental payments under existing operating leases, furniture, fixtures and equipment and leasehold purchase provisions, ADA related betterments and pension funding that have initial or
remaining non-cancelable terms in excess of one year for fiscal years 2011 through 2015 and thereafter 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

Acquisitions
and Capital
Related
Betterments(3)

Pension
Funding(4)

Total
Commitments2011

$
10,096

$
6,500

$
153,521

$
436,448

$
18,234

$
4,754

$
629,5532012


8,894


6,500


153,391


438,158


10,323


976


618,2422013


7,926


609,375


151,250


425,731








1,194,2822014


7,612


300,000


139,145


399,275








846,0322015


7,683


240,795


99,086


395,984








743,548Thereafter


76,304


925,000


252,917


2,500,207








3,754,428Total

$
118,515

$
2,088,170

$
949,310

$
4,595,803

$
28,557

$
5,730

$
7,786,085


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Item 3.    Quantitative and Qualitative Disclosures about Market Risk

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

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 no borrowings on our revolving credit facility as of July 1, 2010 and had $620,750,000 outstanding under the term loan
facility on July 1, 2010. A 100 basis point change in market interest rates would have increased or decreased interest expense on the Senior Secured Credit Facility by $1,573,000 during the
thirteen weeks ended July 1, 2010.

Market risk on fixed-rate financial instruments.Included in long-term debt are principal amounts of $325,000,000 of our
Notes due 2016, $300,000,000 of our Notes due 2014, $600,000,000 of our Notes due 2019 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, Notes

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due
2019, 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, Notes due 2019, 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 loss. Changes in foreign currency exchange rates also impact the
comparability of earnings in these countries on a year-to-year basis. As the U.S. dollar strengthens, comparative translated earnings decrease, and as the U.S. dollar weakens,
comparative translated earnings from foreign operations increase. A 10% increase in the value of the U.S. dollar against all foreign currencies of countries where we currently operate theatres would
increase earnings before income taxes by approximately $253,000 and decrease accumulated other comprehensive loss by approximately $8,060,000, respectively, as of July 1, 2010. A 10% decrease
in the value of the U.S. dollar against all foreign currencies of countries where we currently operate theatres would increase earnings before income taxes by approximately $29,000 and increase
accumulated other comprehensive loss by approximately $9,852,000, respectively, as of July 1, 2010.

Item 4.    Controls and Procedures.

(a)   Evaluation
of disclosure controls and procedures.

The
Company maintains a set of disclosure controls and procedures designed to ensure 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 Quarterly Report on Form 10-Q
and have determined that such disclosure controls and procedures were effective.

(b)   Changes
in internal controls.

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.

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PART IIOTHER INFORMATION

Item 1.    Legal Proceedings

Reference is made to Part I. Item 3. Legal Proceedings in our Annual Report on Form 10-K for the
fiscal year ended April 1, 2010 for information on certain litigation to which we are a party.

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 1A.    Risk Factors

Reference is made to Part I Item 1A. Risk Factors in our Annual Report on Form 10-K for the fiscal
year ended April 1, 2010.

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Table of Contents

Item 6.    Exhibits.

EXHIBIT INDEX

EXHIBIT
NUMBER

DESCRIPTION2.1

Agreement and Plan of Merger, dated June 20, 2005, by and among Marquee Holdings Inc. and LCE Holdings, Inc. (incorporated by reference from Exhibit 2.1 to AMCE's Current Report on Form 8-K (File
No. 1-8747) filed on June 24, 2005).2.2

Agreement and Plan of Merger, dated as of July 22, 2004 by and among Marquee Holdings Inc., Marquee Inc. and AMCE (incorporated by reference from Exhibit 2.1 to AMCE's Current Report on
Form 8-K (File No. 1-8747) filed on July 23, 2004).2.3

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

Fourth Supplemental Indenture dated June 24, 2010, respecting AMC Entertainment Inc.'s 8% Senior Subordinated Notes due 2014.*4.2

Second Supplemental Indenture dated June 24, 2010, respecting AMC Entertainment Inc.'s 11% Senior Subordinated Notes due 2016.*4.3

First Supplemental Indenture, dated as of June 24, 2010, respecting AMC Entertainment Inc.'s 8.75% Senior Notes due 2019.4.4

First Supplemental Indenture dated June 12, 2007, respecting Marquee 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).*31.1

Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Acts of 2002.*31.2

Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Acts of 2002.*32.1

Section 906 Certifications of Gerardo I. Lopez (Chief Executive Officer) and Craig R. Ramsey (Chief Financial Officer) furnished in accordance with Securities Act Release 33-8212.


*Filed
herewith


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SIGNATURES

Pursuant to the requirements 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.Date: August 10, 2010

/s/ GERARDO I. LOPEZ Gerardo I. Lopez Chief Executive Officer, Director and PresidentDate: August 10, 2010

/s/ CRAIG R. RAMSEY Craig R. Ramsey Executive Vice President and Chief Financial Officer


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