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



FORM 10-Q/A
(Amendment No. 1)

(Mark One)ý

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended October 2, 2008ORo

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


Commission file number 1-33344



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 MainKansas 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 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 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 October 2, 2008Common Stock, 1¢ par value

1




---



Explanatory Note:Marquee Holdings Inc. hereby amends Parts I and II of its Quarterly Report on Form 10-Q for the quarterly period
ended October 2, 2008 ("Original Filing") to include amended Item 1. Financial Statements (unaudited), Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations, Item 4. Controls and Procedures and Item 6. Exhibits to give effect to the restatement of the financial statements for the reason described below.

On
May 19, 2009, in connection with the preparation of the year-end financial statements, the Company determined that the previously approved revisions to the Company's
Post-Retirement Medical and Life Insurance Plan (effective on January 1, 2009 and announced on July 3, 2008) should have been accounted for as a negative plan amendment in accordance
with SFAS 106Employers' Accounting for Postretirement Benefits Other than Pensions,rather than as a curtailment of plan benefits. As a result
of the negative plan amendment, the net negative prior service cost of $6 million commenced being amortized as of July 3, 2008 over the active participants' expected future service
periods (approximately 11 years) to full eligibility. Accordingly, the Company has restated its financial statements as of and for the thirteen weeks ended July 3, 2008, as of and for
the thirteen and twenty-six weeks ended October 2, 2008 and as of and for the thirteen and thirty-nine weeks ended January 1, 2009 to reverse the previously recorded curtailment gain and
record the resultant amortization.

The
impact of the correction of this error, decreased G&A Other by approximately $0.1 million, increased earnings before income taxes by $0.1 million, increased the provision for
income taxes by $0.6 million and increased net loss by approximately $0.5 million for the thirteen weeks ended October 2, 2008.

The
impact of the correction of this error, increased G&A Other by approximately $5.8 million, decreased earnings before income taxes by $5.8 million and decreased net income by
approximately $5.8 million to a loss for the twenty-six weeks ended October 2, 2008. The impact on the balance sheet was to increase accumulated other comprehensive income (AOCI) by $5.8
million. There was no impact on net cash provided by operating activities as a result of the above mentioned items or any impact on any period prior to fiscal 2009.

The
information contained in this Form 10-Q/A has not been updated to reflect other events, other than those identified above related to the restatement, occurring after
November 7, 2008, the date of the Original Filing, or to modify or update those disclosures affected by subsequent events, including the changes in segments and discontinued operations
reflected in the January 1, 2009 Form 10-Q/A.
Without limitation of the foregoing, this filing does not purport to update Management's Discussion and Analysis of Financial Condition and Results of Operations contained in the Original Filing of
the October 2, 2008 Form 10-Q for any information, uncertainties, transactions, risks, events or trends known to management occurring subsequent to the filing of the original
October 2, 2008 Form 10-Q. More current information is contained in the Company's Quarterly Reports on Form 10-Q/A for the quarterly period ended January 1, 2009 and other
filings with the Securities and Exchange Commission.

---



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


27Item 3.

Quantitative and Qualitative Disclosures About Market Risk


43Item 4T.

Controls and Procedures


44PART IIOTHER INFORMATIONItem 1.

Legal Proceedings


45Item 1A.

Risk Factors


45Item 6.

Exhibits


46Signatures


47


2

---





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 Ended

Twenty-six Weeks EndedOctober 2,
2008

September 27,
2007

October 2,
2008

September 27,
2007(restated)



(restated)(unaudited)

(unaudited)RevenuesAdmissions

$
429,316

$
478,373

$
868,530

$
895,247Concessions


177,916


196,203


363,774


380,430Other revenue


23,285


26,828


46,235


48,219Total revenues


630,517


701,404


1,278,539


1,323,896Costs and ExpensesFilm exhibition costs


225,678


251,778


463,238


473,625Concession costs


20,847


22,986


42,795


45,173Operating expense


164,711


169,616


325,222


326,141Rent


118,249


115,581


235,710


228,289General and administrative:Merger, acquisition and transaction costs


235


1,168


252


5,340Management fee


1,250


1,250


2,500


2,500Other


14,652


12,710


29,433


25,798Preopening expense


1,185


256


3,060


2,341Theatre and other closure income


(2,319
)

(1,618
)

(2,333
)

(16,446
)Depreciation and amortization


58,097


61,749


116,114


125,438Disposition of assets and other gains


(374
)

(1,698
)

(355
)

(1,698
)Total costs and expenses


602,211


633,778


1,215,636


1,216,501Other expense (income)Other


(7,754
)

(5,628
)

(10,426
)

(9,025
)Interest expenseCorporate borrowings


39,689


43,393


78,863


86,664Capital and financing lease obligations


1,728


1,799


3,404


3,291Equity in earnings of non-consolidated entities


(5,321
)

(25,172
)

(9,706
)

(27,425
)Investment income


(633
)

(2,109
)

(1,354
)

(21,395
)Total other expense


27,709


12,283


60,781


32,110Earnings before income taxes


597


55,343


2,122


75,285Income tax provision


2,700


31,000


2,800


35,000Net earnings (loss)

$
(2,103
)
$
24,343

$
(678
)
$
40,285


See
Notes to Consolidated Financial Statements.

3

---





Table of Contents



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

October 2,
2008

April 3,
2008(restated)(unaudited)ASSETSCurrent assets:Cash and equivalents

$
89,895

$
108,717Receivables, net of allowance for doubtful accounts of $1,312 as of
October 2, 2008 and $1,597 as of April 3, 2008


39,735


47,130Other current assets


77,425


73,761Current assets held for sale


2,300


Total current assets


209,355


229,608Property, net


1,196,545


1,250,406Intangible assets, net


194,763


206,674Goodwill


2,065,459


2,070,858Other long-term assets


119,828


119,161Noncurrent assets held for sale





2,300Total assets

$
3,785,950

$
3,879,007LIABILITIES AND STOCKHOLDER'S EQUITYCurrent liabilities:Accounts payable

$
131,492

$
177,354Accrued expenses and other liabilities


126,167


122,417Deferred revenues and income


116,313


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


31,400


20,753Total current liabilities


405,372


455,084Corporate borrowings


1,823,246


1,839,329Capital and financing lease obligations


63,738


66,368Deferred revenuesfor exhibitor services agreement


249,066


250,312Other long-term liabilities


323,498


350,498Total liabilities

$
2,864,920

$
2,961,591Stockholder's equity:Common Stock, 1 share issued as of October 2, 2008 and April 3, 2008 with 1¢ par value





Additional paid-in capital


1,046,724


1,047,430Accumulated other comprehensive loss


1,412


(3,668
)Accumulated deficit


(127,106
)

(126,346
)Total stockholder's equity


921,030


917,416Total liabilities and stockholder's equity

$
3,785,950

$
3,879,007


See
Notes to Consolidated Financial Statements.

4

---





Table of Contents



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

Twenty-six Weeks EndedOctober 2,
2008

September 27,
2007(restated)(unaudited)INCREASE (DECREASE) IN CASH AND EQUIVALENTSCash flows from operating activities:Net earnings

$
(678
)
$
40,285Adjustments to reconcile net earnings to net cash provided by operating activities:Depreciation and amortization


116,114


125,438Amortization of discount on corporate borrowings





10,457Non-cash portion of stock-based compensation


1,549


1,020Non-cash portion of pension and postretirement expense


(298
)

727Deferred income taxes


361


23,882Equity in (earnings) losses from investments, net of distributions


1,371


(19,172
)Disposition of assets and other gains


118


(16,152
)Change in assets and liabilities:Receivables


4,692


16,509Other assets


(6,434
)

(2,910
)Accounts payable


(30,466
)

(43,978
)Accrued expenses and other liabilities


(18,667
)

(36,215
)Other, net


(6,303
)

(4,217
)Net cash provided by operating activities


61,359


95,674Cash flows from investing activities:Capital expenditures


(54,914
)

(57,530
)Construction project costs reimbursable by landlord





(3,388
)Net change in reimbursable construction advances


2,073


(12,073
)Partnership investments


(1,550
)

(4,060
)Proceeds from disposition of Fandango





17,977Proceeds from disposition of HGCSA





28,682Proceeds from restricted cash





1,513LCE screen integration


(3,990
)

(3,657
)Proceeds on disposition of long-term assets





175Software licensing and development


(5,587
)

(5,905
)Other, net


1,520


(163
)Net cash used in investing activities


(62,448
)

(38,429
)Cash flows from financing activities:Proceeds from financing lease obligations





13,141Repayment of Cinemex Credit Facility





(12,100
)Principal payments under mortgages and capital and financing lease obligations


(1,817
)

(4,195
)Principal payments under Term Loan B


(3,250
)

(3,250
)Change in construction payables


(9,439
)

6,091Dividends paid to Parent


(2,255
)

(270,588
)Deferred financing costs





(4,360
)Net cash used in financing activities


(16,761
)

(275,261
)Effect of exchange rate changes on cash and equivalents


(972
)

(1,255
)Net decrease in cash and equivalents


(18,822
)

(219,271
)Cash and equivalents at beginning of period


108,717


319,533Cash and equivalents at end of period

$
89,895

$
100,262SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATIONCash paid during the period for:Interest (including amounts capitalized of $387 and $696)

$
80,367

$
73,566Income taxes paid


5,176


16,145Schedule of non-cash investing and financing activities:Assets capitalized under EITF 97-10

$


$
13,000


See Notes to Consolidated Financial Statements.

5

---





Table of Contents



MARQUEE HOLDINGS INC. AND SUBSIDIARY        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS        October 2, 2008        (Unaudited)

NOTE 1RESTATEMENT OF FINANCIAL STATEMENTS

In connection with the preparation of its financial statements in May 2009 for the year ended April 2, 2009, the Company determined that the effect of the revisions to its
post-retirement medical and life insurance plan (see Note 12) should have been accounted for as a negative plan amendment in accordance with FAS 106,Employers'
Accounting for Postretirement Benefits Other than Pensions,rather than as a curtailment of plan benefits. Accordingly, the Company has restated its financial statements as of
and for the thirteen and twenty-six weeks ended October 2, 2008 to reverse the previously recorded curtailment gain of $6 million, and to commence amortizing as of July 3, 2008,
the net negative prior service cost of $6 million resulting from the negative plan amendment over the active participants' expected future service periods (approximately 11 years) to
full eligibility. There was no impact on net cash provided by operating activities as a result of the above mentioned items or any impact on any period prior to fiscal 2009.

The
net effects of the adjustments recorded to restate the financial statements are summarized as follows (dollars in thousands):

Thirteen
weeks ended October 2, 2008

Financial Statement Line items

Previously Reported

Adjustments

RestatedG&AOther

$
14,788

$
(136
)
$
14,652Earnings before income taxes


461


136


597Income tax provision(1)


2,100


600


2,700Net loss


(1,639
)

(464
)

(2,103
)


---

Twenty-six
weeks ended October 2, 2008

Financial Statement Line items

Previously Reported

Adjustments

RestatedG&AOther

$
23,600

$
5,833

$
29,433Earnings before income taxes


7,955


(5,833
)

2,122Net income (loss)


5,155


(5,833
)

(678
)


As
of October 2, 2008

Financial Statement Line items

Previously Reported

Adjustments

RestatedAOCI

$
(4,421
)
$
5,833

$
1,412


All
previously reported amounts affected by the restatement that appear elsewhere in these footnotes to the consolidated financial statements have also been restated.

6

---



Table of Contents

MARQUEE HOLDINGS INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

October 2, 2008

(Unaudited)

NOTE 2BASIS OF PRESENTATION

Marquee Holdings Inc. ("Holdings") is an investment vehicle owned through AMC Entertainment Holdings, Inc. ("Parent") 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 in 2004 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.

On
June 11, 2007, Marquee Merger Sub Inc. ("merger sub"), a wholly-owned subsidiary of Parent, merged with and into Holdings, with Holdings continuing as the surviving
corporation (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 JPMP, Apollo and Bain, Carlyle
and Spectrum (collectively with JPMP and Apollo, 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 Holdings' stockholders.

AMCE,
through its direct and indirect subsidiaries, including American Multi-Cinema, Inc. ("AMC") and its subsidiaries' Grupo Cinemex, S.A. de C.V. ("Cinemex") and AMC
Entertainment International, Inc. ("AMCEI") and its subsidiaries (collectively with Holdings and AMCE, unless the context otherwise requires, the "Company"), is principally involved in the
theatrical exhibition business and owns, operates or has interests in theatres located in the United States and Canada ("U.S. and Canada") and in Mexico, China (Hong Kong), France and the United
Kingdom. The Company's U.S. and Canada theatrical exhibition business is conducted through AMC and AMCEI. The Company's International theatrical exhibition business is conducted primarily through
Cinemex and AMCEI.

Holdings
has no ability to service interest or principal on its 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 AMCE's Fixed Notes due 2012, its Floating Notes due 2010 and its Existing Subordinated Notes and its amended
credit facility. AMCE has not guaranteed the indebtedness of Holdings nor pledged any of its assets as collateral.

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 (53 weeks) ended April 3, 2008. 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 twenty-six weeks ended October 2, 2008 are not necessarily indicative of the results to be expected for the fiscal year (52 weeks) ending
April 2, 2009.

7

---



Table of Contents

MARQUEE HOLDINGS INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

October 2, 2008

(Unaudited)

NOTE 2BASIS OF PRESENTATION (Continued)

The
April 3, 2008 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.

Certain
amounts have been reclassified from prior period consolidated financial statements to conform to the current period presentation.

NOTE 3COMPREHENSIVE EARNINGS (LOSS), RESTATED

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

Thirteen Weeks Ended

Twenty-six Weeks EndedOctober 2,
2008

September 27,
2007

October 2,
2008

September 27,
2007(restated)



(restated)Net earnings (loss)

$
(2,103
)
$
24,343

$
(678
)
$
40,285Foreign currency translation adjustment


(10,220
)

(7,863
)

(2,964
)

(8,437
)Pension and other benefit adjustments


(514
)

(282
)

5,654


(565
)Change in fair value of cash flow hedges


(90
)

149


665


367Losses on interest rate swaps reclassified to interest expense: corporate borrowings


1,164


419


2,409


837Increase (decrease) in unrealized gain on marketable securities


(459
)

97


(684
)

294Total comprehensive earnings (loss)

$
(12,222
)
$
16,863

$
4,402

$
32,781


NOTE 4GOODWILL AND OTHER INTANGIBLE ASSETS

Activity of goodwill by operating segment is presented below.

(In thousands)

U.S. and
Canada

International

TotalBalance as of April 3, 2008

$
1,868,246

$
202,612

$
2,070,858Currency translation adjustment





(5,399
)

(5,399
)Balance as of October 2, 2008

$
1,868,246

$
197,213

$
2,065,459


8

---



Table of Contents

MARQUEE HOLDINGS INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

October 2, 2008

(Unaudited)

NOTE 4GOODWILL AND OTHER INTANGIBLE ASSETS (Continued)

Activity
of other intangible assets is presented below.

October 2, 2008

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 13 years

$
112,034

$
(34,683
)
$
115,419

$
(33,233
)Loyalty program

3 years


46,000


(32,430
)

46,000


(29,946
)LCE trade name

3 years


2,300


(1,230
)

2,300


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

1 to 23 years


52,019


(31,057
)

52,147


(27,610
)Other intangible assets

1 to 14 years


13,654


(12,846
)

19,088


(17,685
)Total, amortizable



$
226,007

$
(112,246
)
$
234,954

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



$
74,000




$
74,000Cinemex trademark




7,002





7,194Total, unamortized



$
81,002




$
81,194


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

Thirteen Weeks Ended

Twenty-six Weeks EndedOctober 2,
2008

September 27,
2007

October 2,
2008

September 27,
2007Recorded amortization

$
5,545

$
7,578

$
11,339

$
15,847


Estimated
amortization expense for the next five fiscal years for intangible assets owned as of October 2, 2008 is projected below:

(In thousands)

2009

2010

2011

2012

2013Projected amortization expense

$
22,287

$
16,581

$
14,627

$
13,504

$
12,634


NOTE 5STOCKHOLDER'S EQUITY

Holdings has one share of Common Stock issued as of October 2, 2008 which is owned by Parent.

On
October 2, 2008, Holdings used cash on hand to pay a dividend distribution to Parent in an aggregate amount of $2,255,000. Parent used the available funds to repurchase
treasury stock and pay corporate overhead expenses incurred in the ordinary course of business.

9

---



Table of Contents

MARQUEE HOLDINGS INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

October 2, 2008

(Unaudited)

NOTE 5STOCKHOLDER'S EQUITY (Continued)

Stock-Based Compensation

The Company has no stock-based compensation arrangements of its own, but Parent has adopted a stock-based compensation plan that
permits grants of up to 49,107.44681 options on Parent's stock and has granted options on 600.00000 and 38,876.72873 of its shares to certain employees during the periods ended March 30, 2006
and March 31, 2005, respectively. As of October 2, 2008, there was $3,786,000 of total estimated unrecognized compensation cost related to nonvested stock-based compensation arrangements
under the Parent's plan expected to be recognized over 1.25 years.

As
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. Vesting may
accelerate for certain participants if there is a change of control (as defined in the plan). The Company has recorded $786,000 and $520,000 of stock-based compensation expense related to these
options within general and administrative: other during the thirteen weeks ended October 2, 2008, and September 27, 2007, respectively. The Company has recorded $1,549,000 and $1,020,000
of stock-based compensation expense related to these options within general and administrative: other during the twenty-six weeks ended October 2, 2008 and September 27,
2007, respectively. Holdings' financial statements reflect an increase to additional paid-in capital related to stock-based compensation for all outstanding options of $1,549,000 during
fiscal 2009. One of the holders of Parent's stock options has a put right deemed to be within the holder's control associated with the option. A liability of $1,304,000 is recorded within current
liabilities on the consolidated balance sheet as of October 2, 2008 for options containing written put rights. In May 2008, Holdings was notified of one holder's intention to exercise the put
option and Holdings will make cash payments to settle its remaining accrued liability over the next three months. The Company accounts for stock options using the fair value method of accounting as
prescribed by SFAS No. 123(R),Shared-Based Payment (Revised),("SFAS 123(R)") and Staff Accounting Bulletins No. 107 and 110, Share Based Payments.

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

10

---



Table of Contents

MARQUEE HOLDINGS INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

October 2, 2008

(Unaudited)

NOTE 6INVESTMENTS

Investments in non-consolidated affiliates and certain other investments accounted for under the equity method generally include all entities in which the Company or its
subsidiaries have significant influence, but not more than 50% voting control. Investments in non-consolidated affiliates as of October 2, 2008, include an 18.5% 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
and a 33.3% 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):

Thirteen Weeks EndedOctober 2, 2008 (in thousands):

NCM

MTC

DCIP

Other

TotalRevenues

$
107,709

$
5,359

$


$
4,907

$
117,975Operating costs & expenses


60,700


2,089


2,882


4,410


70,081Net earnings (loss)

$
47,009

$
3,270

$
(2,882
)
$
497

$
47,894The Company's recorded equity in (earnings) loss

$
(5,221
)
$
(764
)
$
960

$
(296
)
$
(5,321
)




Twenty-six Weeks EndedOctober 2, 2008 (in thousands):

NCM

MTC

DCIP

Other

TotalRevenues

$
194,445

$
10,741

$


$
8,937

$
214,123Operating costs & expenses


120,766


6,104


5,009


8,305


140,184Net earnings (loss)

$
73,679

$
4,637

$
(5,009
)
$
632

$
73,939The Company's recorded equity in (earnings) loss

$
(9,876
)
$
(1,121
)
$
1,702

$
(411
)
$
(9,706
)




Thirteen Weeks EndedSeptember 27, 2007 (in thousands):

NCM

MTC

DCIP

Other

TotalRevenues

$
97,552

$
3,893

$


$
5,103

$
106,548Operating costs & expenses


57,434


2,628


1,147


4,365


65,574Net earnings (loss)

$
40,118

$
1,265

$
(1,147
)
$
738

$
40,974The Company's recorded equity in (earnings) loss

$
(5,839
)
$
(300
)
$
382

$
(19,415
)
$
(25,172
)


11

---



Table of Contents

MARQUEE HOLDINGS INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

October 2, 2008

(Unaudited)

NOTE 6INVESTMENTS (Continued)

Twenty-six Weeks EndedSeptember 27, 2007 (in thousands):

NCM

MTC

DCIP

Other

TotalRevenues

$
181,300

$
7,869

$


$
24,346

$
213,515Operating costs & expenses


110,810


4,820


1,851


22,825


140,306Net earnings (loss)

$
70,490

$
3,049

$
(1,851
)
$
1,521

$
73,209The Company's recorded equity in (earnings) loss

$
(7,649
)
$
(762
)
$
617

$
(19,631
)
$
(27,425
)


---

As
of October 2, 2008, the Company owns 18,414,743 units or an 18.5% interest in NCM accounted for using the equity method of accounting. The fair market value of
the units in National CineMedia, LLC
was approximately $193,539,000, based on a price for shares of National CineMedia, Inc. on October 2, 2008 of $10.51 per share.

As
of October 2, 2008 and April 3, 2008, the Company has recorded $1,207,000 and $1,255,000 respectively, of amounts due from NCM related to on-screen
advertising revenue. As of October 2, 2008 and April 3, 2008, the Company had recorded $1,699,000 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 $4,626,000 and $3,994,000 during the thirteen weeks ended October 2, 2008 and September 27, 2007,
respectively and $10,025,000 and $7,585,000 during the twenty-six weeks ended October 2, 2008 and September 27, 2007 respectively.

In
May 2007 the Company disposed of its investment in Fandango, accounted for using the cost method, for total expected proceeds of approximately $20,000,000, of which $17,977,000 was
received in May and September 2007 and has recorded a gain on the sale included in investment income of approximately $15,977,000. In July 2007 the Company disposed of its investment in 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 during the thirteen weeks ended September 27, 2007.

12

---



Table of Contents

MARQUEE HOLDINGS INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

October 2, 2008

(Unaudited)

NOTE 6INVESTMENTS (Continued)

The
Company recorded the following changes in the carrying amount of its investment in NCM and equity in (earnings) losses of NCM during the twenty-six weeks ended
October 2, 2008:

(in thousands)

Investment in
NCM(1)

Deferred
Revenue(2)

Due to
NCM(3)

Cash
Received
(Paid)

Equity in
(Earnings)
Losses

Advertising
(Revenue)Beginning balance April 3, 2008

$
21,598

$
(250,312
)
$
(4,649
)
$


$


$
Receipt under Tax Receivable Agreement











3,463


(3,463
)

Receipt of excess cash distribution


(312
)







6,108


(5,796
)

Payment on Loews Screen Integration Agreement








3,990


(3,990
)




Change in interest loss(4)


(83
)










83


Amortization of deferred revenue





1,246











(1,246
)Equity in earnings


700











(700
)

Ending balance October 2, 2008

$
21,903

$
(249,066
)
$
(659
)
$
5,581

$
(9,876
)
$
(1,246
)


---

13

---



Table of Contents

MARQUEE HOLDINGS INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

October 2, 2008

(Unaudited)

NOTE 7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 loss, to the extent the cash flow hedges are effective, and is reclassified into interest expense: corporate borrowings in the period during which the
hedged transaction affects earnings. Any ineffective portion of the hedges is recognized currently in the consolidated statements of operations in other income.

In
October 2007 AMCE executed an interest rate swap agreement, scheduled to mature in April 2009, to hedge $200,000,000 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
November 2007 the Company redesignated the interest rate swap prospectively in a new cash flow hedging relationship. In addition, at the date of redesignation, the interest rate swap had an unrealized
gain of approximately $1,091,000 recorded in accumulated other comprehensive loss that will be reclassified against interest expense: corporate borrowings over the remaining term of the hedged period,
through August 2009. The effective portion of the changes in fair value of the interest rate swap under the new hedging relationship will be deferred in accumulated other comprehensive loss and will
be reclassified into interest expense: corporate borrowings when the hedged forecasted transactions affect earnings.

The
aggregate fair value of the interest rate swaps was a liability of approximately $2,041,000 as of October 2, 2008, which was recorded as a component of other
long-term liabilities. The estimated fair value for the interest rate swap agreements was based on prevailing market data that represents the theoretical exit cost the Company would have
to pay to transfer the obligation to a market participant with similar credit risk. At October 2, 2008, the Company had a net unrealized loss
of approximately $875,000 recorded in accumulated other comprehensive loss with offsetting entries to other long-term liabilities. During the next 12 months the Company expects to
reclassify approximately $862,000 of net unrealized loss from accumulated other comprehensive loss against interest expense: corporate borrowings. During the second quarter of fiscal 2009 the Company
recorded a gain of $53,000 in other income resulting from hedge ineffectiveness for a total gain of $522,000 fiscal year-to-date, recorded in other income.

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

14

---



Table of Contents

MARQUEE HOLDINGS INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

October 2, 2008

(Unaudited)

NOTE 8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.                              

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 October 2, 2008 Using(In thousands)

Total Carrying
Value at
October 2, 2008

Quoted prices in
active market
(Level 1)

Significant other
observable inputs
(Level 2)

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

$
34,131

$
34,131

$


$
Deferred compensation plan assets


4,372


4,372





Non-qualified defined benefit plan assets


113


113





Total assets at fair value

$
38,616

$
38,616

$


$
Liabilities:Interest rate swap agreements

$
2,041

$


$
2,041

$
Total liabilities at fair value

$
2,041

$


$
2,041

$



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

15

---



Table of Contents

MARQUEE HOLDINGS INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

October 2, 2008

(Unaudited)

NOTE 8FAIR VALUE OF FINANCIAL INSTRUMENTS (Continued)

plan
assets are measured at fair value using quoted market prices and are classified within Level 1 of the valuation hierarchy. Interest rate swap agreements are measured at fair value using
either LIBOR or Mexican TIIE market indices and incorporate credit data that measure nonperformance risk. The interest rate swap agreements are classified within Level 2 of the valuation
hierarchy.

NOTE 9THEATRE AND OTHER CLOSURE AND DISPOSITION OF ASSETS

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

Twenty-six Weeks Ended
October 2, 2008

Twenty-six Weeks Ended
September 27, 2007Theatre
and Other

Merger
Exit costs

Total

Theatre
and Other

Merger
Exit costs

TotalBeginning balance

$
10,844

$


$
10,844

$
17,621

$
1,274

$
18,895Theatre and other closure (income) expense(1)


(2,333
)




(2,333
)

(16,103
)

(343
)

(16,446
)Transfer of deferred rent and capital lease obligations(1)


2,824





2,824


5,101





5,101Cash (payments) receipts(1)


(1,229
)




(1,229
)

3,802


(698
)

3,104Ending balance

$
10,106

$


$
10,106

$
10,421

$
233

$
10,654


---

During
the twenty-six weeks ended September 27, 2007, the Company recognized ($16,446,000) of theatre and other closure income due primarily to lease terminations negotiated on
favorable terms at three of its theatres that were closed during the twenty-six weeks ended September 27, 2007. The Company received net cash payments of approximately $6,735,000 in
connection with these three terminations.

Theatre
and other closure reserves for leases that have not been terminated are recorded at the present value of the future contractual commitments for the base rents, taxes and maintenance.

Theatre
closure reserves at October 2, 2008 by operating segment are as follows (in thousands):

October 2, 2008U.S. and Canada Theatrical Exhibition

$
9,609International Theatrical Exhibition


497Total segment reserves

$
10,106


16

---



Table of Contents

MARQUEE HOLDINGS INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

October 2, 2008

(Unaudited)

NOTE 10ASSET HELD FOR SALE

The Company has classified certain long-lived assets as held for sale in the consolidated balance sheets in accordance with the guidance in SFAS 144, Accounting for the
Impairment or Disposal of Long-Lived Assets. In the first quarter of fiscal 2009 one theatre located in the United States
that is no longer used and is valued at approximately $2,300,000, has been identified and reclassified to current assets held for sale. The property is expected to be sold within the next
12 months.

NOTE 11INCOME TAXES, RESTATED

Effective income tax rate

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

Twenty-six Weeks EndedOctober 2, 2008

September 27, 2007(restated)Federal statutory rate


35.0
%

35.0
%Change in foreign tax reserve


(49.4
)

Foreign rate differential


(42.9
)

(1.1
)Valuation allowance


353.8


(0.9
)State income taxes, net of federal tax benefit


(208.7
)

11.3Permanent items


42.2


2.3Other, net


2.0


(0.1
)Effective tax rate


132.0
%

46.5
%


The
Company accounts for income taxes in accordance with SFAS No. 109, Statement of Financial Accounting Standards ("SFAS No. 109"),Accounting for
Income Taxes,which 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. SFAS 109 also requires that deferred tax assets be 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.

Based
upon the consideration of all available evidence, the Company has provided a valuation allowance on its net deferred tax assets. The Company continues to record a valuation
allowance against its net deferred tax assets due to the uncertainty regarding the ultimate realization of those assets in all taxing jurisdictions. Net deferred tax assets in excess of valuation
allowance were not material.

The
Company determines income tax expense for interim periods by applying SFAS No. 109 and APB Opinion No. 28,Interim Financial
Reporting, which prescribes the use of the full year's estimated effective tax rate in financial statements for interim periods. As such, permanent differences such as state
income taxes and changes in valuation allowance impact the Company's effective tax rate. During the current period, income tax expense differed from the expected tax expense using the U.S. federal
statutory tax rate of 35% primarily due to state income taxes, foreign tax rate differential, valuation

17

---



Table of Contents

MARQUEE HOLDINGS INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

October 2, 2008

(Unaudited)

NOTE 11INCOME TAXES, RESTATED (Continued)

allowance
and the release of a previously reserved foreign tax due to updated interpretation by authorities.

Uncertain tax positions

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 for the tax year ended March 31, 2005 began during 2007. Generally, tax years beginning after March 28, 2002 are still open to examination by various
taxing authorities. Additionally, the Company has NOL carryforwards for tax years ended October 31, 2000 through January 26, 2006 in the U.S. and various state jurisdictions which have
carryforwards of varying lengths of time. These NOL's 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. There are currently unrecognized tax
benefits which the Company estimates will be resolved in the next twelve months; however, the Company is unable at this time to estimate what the impact on its unrecognized tax benefits will be.

NOTE 12EMPLOYEE BENEFIT PLANS, RESTATED

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.

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
from January 1 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 accumulated other comprehensive income.

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. The revisions were accounted for as a negative plan amendment in accordance with FAS 106. As a result of these
revisions and restating this plan to

18

---



Table of Contents

MARQUEE HOLDINGS INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

October 2, 2008

(Unaudited)

NOTE 12EMPLOYEE BENEFIT PLANS, RESTATED (Continued)

implement
the changes, the Company recognized $5,969,000 of negative prior service cost in other comprehensive income during the twenty six weeks ended October 2, 2008. The negative prior
service cost will be amortized over the active participants' future service to full eligibility of approximately 11 years starting on July 3, 2008. The measurement date used to determine
the negative prior service cost was July 3, 2008.

The
Company made its annual pension contribution of $2,000,000 during its second quarter of fiscal 2009.

Net
periodic benefit cost recognized for the plans during the thirteen weeks ended October 2, 2008 and September 27, 2007 consists of the following:

Pension Benefits

Other Benefits(In thousands)

October 2,
2008

September 27,
2007

October 2,
2008

September 27,
2007(restated)Components of net periodic benefit cost:Service cost

$
113

$
105

$
58

$
208Interest cost


1,097


1,100


313


381Expected return on plan assets


(1,275
)

(1,151
)




Amortization of gain


(403
)

(282
)

(159
)

Amortization of transition obligation


10


10





Net periodic benefit cost (income)

$
(458
)
$
(218
)
$
212

$
589


Net
periodic benefit cost recognized for the plans during the twenty-six weeks ended October 2, 2008 and September 27, 2007 consists of the following:

Pension Benefits

Other Benefits(In thousands)

October 2,
2008

September 27,
2007

October 2,
2008

September 27,
2007(restated)Components of net periodic benefit cost:Service cost

$
226

$
196

$
284

$
416Interest cost


2,199


2,200


487


762Expected return on plan assets


(2,549
)

(2,302
)




Amortization of gain


(806
)

(565
)

(159
)

Amortization of transition obligation


20


20





Net periodic benefit cost (income)

$
(910
)
$
(451
)
$
612

$
1,178


19

---



Table of Contents

MARQUEE HOLDINGS INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

October 2, 2008

(Unaudited)

NOTE 13OPERATING SEGMENTS, RESTATED

Information about the Company's operations by operating segment is as follows (in thousands):

Thirteen Weeks Ended

Twenty-six Weeks EndedOctober 2,
2008

September 27,
2007

October 2,
2008

September 27,
2007RevenuesU.S. and Canada theatrical exhibition

$
574,585

$
649,747

$
1,171,556

$
1,220,320International theatrical exhibition


55,932


51,657


106,983


103,576Total revenues

$
630,517

$
701,404

$
1,278,539

$
1,323,896Segment Adjusted EBITDAU.S. and Canada theatrical exhibition

$
91,190

$
131,351

$
189,042

$
227,080International theatrical exhibition


17,543


15,720


32,436


31,367Segment Adjusted EBITDA

$
108,733

$
147,071

$
221,478

$
258,447


A
reconciliation of earnings before income taxes to Segment Adjusted EBITDA is as follows (in thousands):

Thirteen Weeks Ended

Twenty-six Weeks EndedOctober 2,
2008

September 27,
2007

October 2,
2008

September 27,
2007(restated)



(restated)Earnings before income taxes

$
597

$
55,343

$
2,122

$
75,285Plus:Interest expense


41,417


45,192


82,267


89,955Depreciation and amortization


58,097


61,749


116,114


125,438Preopening expense


1,185


256


3,060


2,341Theatre and other closure income


(2,319
)

(1,618
)

(2,333
)

(16,446
)Disposition of assets and other (gains) losses


(374
)

(1,698
)

(355
)

(1,698
)Equity in earnings of non-consolidated entities


(5,321
)

(25,172
)

(9,706
)

(27,425
)Investment income


(633
)

(2,109
)

(1,354
)

(21,395
)Other income(1)


(53
)




(522
)

(1,246
)General and administrative expenseunallocated:Merger and acquisition costs


235


1,168


252


5,340Management fee


1,250


1,250


2,500


2,500Other(2)


14,652


12,710


29,433


25,798Segment Adjusted EBITDA

$
108,733

$
147,071

$
221,478

$
258,447


---

20

---



Table of Contents

MARQUEE HOLDINGS INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

October 2, 2008

(Unaudited)

NOTE 13OPERATING SEGMENTS, RESTATED (Continued)

NOTE 14COMMITMENTS AND CONTINGENCIES

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

United States of America v. AMC Entertainment Inc. and American Multi Cinema, Inc.(No. 99 01034 FMC (SHx), filed in
the U.S. District Court for the Central District of California). On January 29, 1999, the Department of Justice (the "Department") filed suit alleging that AMCE's stadium style theatres violate
the ADA and related regulations. The Department alleged that AMCE had failed to provide persons in wheelchairs seating arrangements with lines of sight comparable to the general public. The Department
alleged various non-line of sight violations as well. The Department sought declaratory and injunctive relief regarding existing and future theatres with stadium-style seating,
compensatory damages in the approximate amount of $75,000 and a civil penalty of $110,000.

On
November 20, 2002, the trial court entered summary judgment in favor of the Justice Department on the line of sight aspects of this case and on January 10, 2006, the
trial court ruled in favor of the Department regarding the appropriate remedy. In its decision, the court issued a comprehensive order regarding line of sight and other related remedies. AMCE
estimates that the cost of the betterments related to the remedies for line of sight violations of the ADA will be $22,000,000, which is expected to be incurred over a 4-5 year
term. Through October 2, 2008 AMCE has not incurred any of these costs. Additionally, the order calls for payments of $300,000 to the United States and individual complainants. AMCE has
appealed these decisions and argued its case to the Ninth Circuit Court of Appeals on November 8, 2007. We anticipate a decision soon.

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

On
January 21, 2003, the trial court entered summary judgment in favor of the Department on non-line of sight aspects of the case, which involve such matters as
parking areas, signage, ramps, location of toilets, counter heights, ramp slopes, companion seating and the location and size of handrails. On December 5, 2003, the trial court entered a
consent order and final judgment on non-line of sight issues under which AMCE agreed to remedy certain violations at its stadium-style theatres and at certain theatres it may open in the
future. Currently AMCE estimates that these betterments will be required at approximately 140 stadium-style theatres. AMC estimates that the total cost of these betterments will be $53,300,000, and
through October 2, 2008 AMCE has incurred approximately $19,277,000 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.

21

---



Table of Contents

MARQUEE HOLDINGS INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

October 2, 2008

(Unaudited)

NOTE 14COMMITMENTS AND CONTINGENCIES (Continued)

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 31, 2007,
the District Court denied plaintiff's motion for class certification without prejudice pending the Ninth Circuit's decision in an appeal from a denial of certification in a similar FACTA case. The
District Court stayed all proceedings in the case pending the outcome of the Ninth Circuit case. On June 3, 2008, the President of the United States of America signed the FACTA reform bill. The
bill specifies that if a company printed the expiration date on credit card receipts, but otherwise complied with FACTA, it did not willfully violate the law. The legislation does not specifically
address the situation where more than five digits of the credit card are printed on a receipt. The Ninth Circuit appeal was subsequently dismissed after the parties reached a settlement. On
October 24, 2008, the District Court denied plaintiff's renewed motion for class certification. Plaintiff has appealed this decision. The Company believes the plaintiff's allegations,
particularly those asserting AMC's willfulness, are without merit.

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 information that the Company has received from this plan, the Company estimates that it could be currently liable for up to
$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
October 2, 2008, the Company has recorded a liability related to this matter in the amount of $2,440,000. The final partial withdrawal liability amount will 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 15NEW ACCOUNTING PRONOUNCEMENTS

In October 2008, the FASB issued FSP No. 157-3,Determining the Fair Value of a Financial Asset When the Market for That Asset Is Not
Active, ("FSP 157-3"). FSP 157-3 clarifies the application of SFAS 157 in a market that is not active and provides an example to illustrate key
considerations in determining the fair value of a financial asset when the market for that financial asset is not active. FSP 157-3 was effective for the Company on
October 2, 2008 for all financial assets and liabilities recognized or disclosed at fair value in its condensed consolidated financial statements on a recurring basis (at least annually). The
adoption of FSP 157-3 did not have a material impact on the Company's consolidated financial position and results of operations.

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

22

---



Table of Contents

MARQUEE HOLDINGS INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

October 2, 2008

(Unaudited)

NOTE 15NEW ACCOUNTING PRONOUNCEMENTS (Continued)

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 the Company 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
March 2008, the FASB released SFAS No. 161,Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement
No. 133, ("SFAS 161"), which expands the disclosure requirements about an entity's derivative and hedging activities. SFAS 161 requires entities to provide
enhanced disclosures about (1) how and why an entity uses derivative instruments, (2) how derivative instruments and related hedged items are accounted for under Statement 133 and its
related interpretations, and (3) how derivative instruments and related hedged items affect an entity's financial position, financial performance, and cash flows. SFAS 161 is effective
for fiscal years and interim periods beginning after November 15, 2008, and is effective for the Company in the fourth quarter of fiscal 2009. Early application is encouraged. The Company is
currently evaluating the enhanced disclosure requirements of this pronouncement.

In
December 2007, the FASB issued SFAS No. 160,Noncontrolling Interests in Consolidated Financial Statementsan amendment of ARB
No. 51,("SFAS 160"). SFAS 160 establishes accounting and reporting standards that require noncontrolling interest in a subsidiary to be reported as a
component of equity, changes in a parent's ownership interest while the parent retains its controlling interest to be accounted for as equity transactions, and any retained non-controlling
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 prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period on or after
December 15, 2008, and is effective for the Company at the beginning of fiscal 2010. Earlier adoption is prohibited. The Company is in the process of evaluating the impact SFAS 141(R)
will have on its financial statements.

23

---



Table of Contents

MARQUEE HOLDINGS INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

October 2, 2008

(Unaudited)

NOTE 15NEW ACCOUNTING PRONOUNCEMENTS (Continued)

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

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

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, 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 the Company's consolidated financial position and results of operations. Please refer to
Note 8Fair Value of Financial Instruments for additional information. 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. The Company is in the process of evaluating the impact
related to the Company's nonfinancial assets and liabilities not valued on a recurring basis (at least annually).

NOTE 16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

24

---



Table of Contents

MARQUEE HOLDINGS INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

October 2, 2008

(Unaudited)

NOTE 16RELATED PARTY TRANSACTIONS (Continued)

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.

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.

Control Arrangement

The Sponsors have the ability to control the Company's affairs and policies and the election of directors and appointment of
management. Reference is made to Note 19Related Party Transactions in the Company's annual report on Form 10-K for the year (53 weeks) ended
April 3, 2008 for additional disclosures about its governance agreements with the Sponsors.

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.

25

---



Table of Contents

MARQUEE HOLDINGS INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

October 2, 2008

(Unaudited)

NOTE 17SUBSEQUENT EVENTS

Subsequent to October 2, 2008, the Board of Directors and Stockholders of Parent agreed to sell all of its interests in Cinemex which operates 44 theatres with 493 screens
primarily in the Mexico City Metropolitan Area to Entretenimiento GM de Mexico S.A. de C.V. ("Entretenimiento"). The Cinemex operations are included in the Company's international theatrical
exhibition operating segment. The expected sales price is $315,000,000 decreased by the amount of net funded indebtedness of Cinemex of approximately $77,500,000 as of September 30, 2008 and
other specified items as defined in the Stock Purchase Agreement (the "Agreement"). Net funded indebtedness of Cinemex expressed in U.S. dollars will fluctuate in the future depending on the amount of
cash and cash equivalents at the date of closing and current US dollar exchange rates for the Mexican peso denominated cash and indebtedness. The Agreement provides that, upon termination of the
Agreement without completing the sale of Cinemex, the Company may be obligated, under certain circumstances, to pay Entretenimiento a termination fee of $50,000,000 and Entretenimiento, under certain
circumstances, may be obligated to pay the Company a termination fee of $50,000,000. This pending transaction is expected to close during the Company's third fiscal quarter of 2009 and the Cinemex
operations are expected to be reclassified as discontinued operations in future periods. The carrying amount of the Cinemex net assets was $232,983,000 as of October 2, 2008.

26

---





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



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

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 3, 2008 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 to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

27

---



Table of Contents

Overview

We are one of the world's leading theatrical exhibition companies. During the twenty-six weeks ended October 2,
2008, we opened four new theatres with 54 screens in the U.S., closed four theatres with 36 screens in the U.S, and closed 12 screens for remodeling at an existing theatre in the U.S. During the
twenty-six weeks ended October 2, 2008, we expanded one theatre in Mexico by adding 5 additional screens. As of October 2, 2008, we owned, operated or had interests in 353
theatres and 5,105 screens, with 89% or 4,557 of our screens in the U.S. and Canada and 11%, or 548 of our screens in Mexico, China (Hong Kong), France and the United Kingdom.

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

On
May 2, 2008, the Company's Board of Directors approved revisions to our Postretirement Medical and Life Insurance Plan effective January 1, 2009 and on October 2, 2008
the changes were communicated to the plan participants. The revisions were accounted for as a negative plan amendment in accordance with FAS 106. As a result of these revisions and restating
this plan to implement the changes, we recognized $5,969,000 of negative prior service cost in other comprehensive income during the twenty six weeks ended October 2, 2008. The negative prior
service cost will be amortized over the active participants' future service to full eligibility of approximately 11 years starting on July 3, 2008. The measurement date used to determine
the negative prior service cost was July 3, 2008. See Note 1Restatement of Financial Statements.

In
May 2007, the Company disposed of its investment in Fandango, accounted for using the cost method, for total expected proceeds of approximately $20,000,000, of which $17,977,000 was
received in May and September 2007 and has recorded a gain on the sale included in investment income of approximately $15,977,000. In July 2007 the Company disposed of its investment in HGCSA, 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 during the thirteen weeks ended September 27, 2007.

For
financial reporting purposes we have two segments, (1) U.S. and Canada theatrical exhibition and (2) International theatrical exhibition.

Our
U.S. and Canada and International theatrical exhibition revenues are generated primarily from box office admissions and theatre concession sales. The balance of our revenues are
generated from ancillary sources, including on-screen advertising, rental of theatre auditoriums, fees and other revenues generated from the sale of gift 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 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.

28

---



Table of Contents

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 2008, films licensed from our six largest distributors based on revenues accounted for approximately 85% of our U.S. and Canada admissions revenues. Our revenues
attributable to individual distributors may vary significantly from year to year depending upon the commercial success of each distributor's motion pictures in any given year.

During
the period from 1990 to 2007, the annual number of first-run motion pictures released by distributors in the United States ranged from a low of 370 in 1995 to a high
of 599 in 2006, according to Motion Picture Association 2007 MPA Market Statistics.

We
continually upgrade the quality of our theatre circuit by adding new screens through new builds (including expansions) and acquisitions and by disposing of older screens through
closures and sales. We 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 believe our introduction of the megaplex concept to North America in 1995 has
led to the current industry replacement cycle, which has accelerated the obsolescence of older, smaller theatres by setting new standards for moviegoers. From 1995 through October 2, 2008, AMC
Entertainment and Loews added 212 theatres with 3,792 new screens, acquired 431 theatres with 3,007 screens and disposed of or temporarily closed for remodeling 701 theatres with 4,343 screens. As of
October 2, 2008, approximately 76% of our screens in the U.S. and Canada were located in megaplex theatres.

Stock-Based Compensation

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

We
granted 38,876.72873 options on December 23, 2004 and 600 options on January 26, 2006 to employees to acquire our common stock. The fair value of these options on their
respective grant dates was $22,373,000 and $138,000. All of these options are equity classified for AMCE. However, the holder of a written put option for options that are classified as a liability at
Holdings exercised the written put option in May 2008 and, accordingly, Holdings will make cash payments to settle the remaining accrued liability over the next three months.

29

---



Table of Contents

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. Accordingly, because we had contemporaneous objective evidence of
the fair value of our common stock on December 23, 2004, we did not obtain a contemporaneous valuation by an unrelated valuation specialist.

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

30

---



Table of Contents

Operating Results

The following table sets forth our revenues, costs and expenses attributable to our United States and Canada and International
theatrical exhibition operations. Reference is made to Note 12Operating Segments to our consolidated financial statements included elsewhere in this Form 10-Q
for additional information about our operations by operating segment.

Thirteen Weeks Ended

Twenty-six Weeks EndedOctober 2,
2008

September 27,
2007

%
Change

October 2,
2008

September 27,
2007

%
Changerestated(4)





restated(4)(Dollars in thousands, except operating data)RevenuesU.S. and Canada theatrical exhibitionAdmissions

$
400,924

$
451,862


-11.3
%
$
814,435

$
840,547


-3.1
%Concessions


158,383


178,716


-11.4
%

326,810


344,064


-5.0
%Other theatre


15,278


19,169


-20.3
%

30,311


35,709


-15.1
%574,585


649,747


-11.6
%

1,171,556


1,220,320


-4.0
%International theatrical exhibitionAdmissions


28,392


26,511


7.1
%

54,095


54,700


-1.1
%Concessions


19,533


17,487


11.7
%

36,964


36,366


1.6
%Other theatre


8,007


7,659


4.5
%

15,924


12,510


27.3
%55,932


51,657


8.3
%

106,983


103,576


3.3
%Total revenues

$
630,517

$
701,404


-10.1
%
$
1,278,539

$
1,323,896


-3.4
%Cost of OperationsU.S. and Canada theatrical exhibitionFilm exhibition costs

$
213,037

$
239,978


-11.2
%
$
439,106

$
449,457


-2.3
%Concession costs


16,254


19,190


-15.3
%

34,386


36,915


-6.9
%Operating expense


151,207


157,087


-3.7
%

298,302


301,471


-1.1
%Rent


110,598


107,769


2.6
%

220,624


213,176


3.5
%Preopening expense


1,185


376


*


3,060


2,341


30.7
%Theatre and other closure (income) expense


(2,209
)

(1,628
)

35.7
%

(2,235
)

(16,466
)

-86.4
%490,072


522,772


-6.3
%

993,243


986,894


0.6
%International theatrical exhibitionFilm exhibition costs


12,641


11,800


7.1
%

24,132


24,168


-0.1
%Concession costs


4,593


3,796


21.0
%

8,409


8,258


1.8
%Operating expense


13,504


12,529


7.8
%

26,920


24,670


9.1
%Rent


7,651


7,812


-2.1
%

15,086


15,113


-0.2
%Preopening expense





(120
)

-100.0
%








%Theatre closure


(110
)

10


*


(98
)

20


*38,279


35,827


6.8
%

74,449


72,229


3.1
%General and administrative expense:Merger, acquisition and transaction costs


235


1,168


-79.9
%

252


5,340


-95.3
%Management Fee


1,250


1,250



%

2,500


2,500



%Other


14,652


12,710


15.3
%

29,433


25,798


14.1
%Depreciation and amortization


58,097


61,749


-5.9
%

116,114


125,438


-7.4
%Disposition of assets and other losses


(374
)

(1,698
)

-78.0
%

(355
)

(1,698
)

-79.1
%Total costs and expenses

$
602,211

$
633,778


-5.0
%
$
1,215,636

$
1,216,501



%


---

31

---



Table of Contents

Thirteen Weeks Ended

Twenty-six Weeks EndedOctober 2,
2008

September 27,
2007

October 2,
2008

September 27,
2007Operating Data (at period end):Screen additions(1)


22


12


65


58Screen dispositions(2)


34


184


54


244Average screenscontinuing operations(3)


5,039


5,061


5,034


5,068Number of screens operated








5,105


5,128Number of theatres operated








353


358Screens per theatre








14.5


14.3Attendancecontinuing operations(3)
(in thousands)


58,218


66,754


117,611


126,724


---

Thirteen Weeks Ended October 2, 2008 and September 27, 2007

Revenues.Total revenues decreased 10.1%, or $70,887,000, during the thirteen weeks ended October 2, 2008 compared to the thirteen
weeks ended
September 27, 2007 primarily due to a difference in reporting periods. The thirteen weeks ended October 2, 2008 began on July 4, 2008 and included fewer days of the Fourth of July
holiday box office revenues compared to the thirteen weeks ended September 27, 2007 that began on June 29, 2007.

U.S.
and Canada theatrical exhibition revenues decreased 11.6%, or $75,162,000, during the thirteen weeks ended October 2, 2008 compared to the thirteen weeks ended
September 27, 2007. Admissions revenues decreased 11.3%, or $50,938,000, during the thirteen weeks ended October 2, 2008 compared to the thirteen weeks ended September 27, 2007,
due to a 14.9% decrease in attendance partially offset by a 4.3% increase in average ticket prices. Attendance declined due to the difference in reporting periods noted above. Admissions revenues at
comparable theatres (theatres opened on or before the
second quarter of fiscal 2008) decreased 12.6%, or $56,159,000 during the thirteen weeks ended October 2, 2008 from the comparable period last year. 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. Based
upon available industry sources, box office revenues of our comparable theatres performed in line with the overall performance of industry comparable theatres in the markets where we operate.
Concessions revenues decreased 11.4%, or $20,333,000, during the thirteen weeks ended October 2, 2008 compared to the thirteen weeks ended September 27, 2007 due to the decrease in
attendance partially offset by a 4.1% increase in average concessions per patron. Other theatre revenues decreased 20.3%, or $3,891,000, during the thirteen weeks ended October 2, 2008 compared
to the thirteen weeks ended September 27, 2007, primarily due to decreases in advertising revenues.

International
theatrical exhibition revenues increased 8.3%, or $4,275,000, during the thirteen weeks ended October 2, 2008 compared to the thirteen weeks ended
September 27, 2007. Admissions revenues increased by 7.1%, or $1,881,000, due to a 4.3% increase in average ticket prices and a 2.7% increase in attendance. The increase in attendance was
primarily due to the popularity of film product during the thirteen weeks ended October 2, 2008 compared to the thirteen weeks ended September 27, 2007. Concessions revenues increased
11.7%, or $2,046,000, due to an 8.8% increase in concessions per

32

---



Table of Contents

patron
and the increase in attendance. Concessions per patron increased in Mexico due primarily to price increases and increased promotions designed to increase transaction size and incidence of
purchase. Other theatre revenues increased by 4.5% or $348,000. International revenues were positively impacted by a weaker U.S. dollar, although this did not materially contribute to our consolidated
earnings.

Costs and expenses.Total costs and expenses decreased 5%, or $31,567,000, during the thirteen weeks ended October 2, 2008
compared to the
thirteen weeks ended September 27, 2007.

U.S.
and Canada theatrical exhibition costs and expenses decreased 6.3%, or $32,700,000, during the thirteen weeks ended October 2, 2008 compared to the thirteen weeks ended
September 27, 2007. Film exhibition costs decreased 11.2%, or $26,941,000, during the thirteen weeks ended October 2, 2008 compared to the thirteen weeks ended September 27, 2007
due to the decrease in admissions revenues. As a percentage of admissions revenues, film exhibition costs were 53.1% in the current and prior year periods. Concession costs decreased 15.3%, or
$2,936,000, during the thirteen weeks ended October 2, 2008 compared to the thirteen weeks ended September 27, 2007 due to the decrease in concession revenues and a decrease in
concession costs as a percentage of concessions revenues. As a percentage of concessions revenues, concession costs were 10.3% in the current period compared with 10.7% in the prior period. As a
percentage of revenues, operating expense was 26.3% in the current period as compared to 24.2% in the prior period. Rent expense increased 2.6%, or $2,829,000, during the thirteen weeks ended
October 2, 2008 compared to the thirteen weeks ended September 27, 2007 due primarily to the opening of new theatres. Preopening expense increased $809,000 during the thirteen weeks
ended October 2, 2008 due to screen additions and remodeling activity. During the thirteen
weeks ended October 2, 2008, we recognized $2,209,000 of theatre and other closure income due primarily to a lease termination negotiated on favorable terms for one of our theatres that closed
during the quarter.

International
theatrical exhibition costs and expenses increased 6.8%, or $2,452,000, during the thirteen weeks ended October 2, 2008 compared to the thirteen weeks ended
September 27, 2007. Film exhibition costs increased 7.1%, or $841,000, during the thirteen weeks ended October 2, 2008 compared to the thirteen weeks ended September 27, 2007 due
primarily to the increase in admissions revenues. Concession costs increased 21.0%, or $797,000, during the thirteen weeks ended October 2, 2008 compared to the thirteen weeks ended
September 27, 2007 due to the increase in concession revenues and an increase in concession costs as a percentage of concessions revenues. As a percentage of concessions revenues, concession
costs were 23.5% in the current period compared with 21.7% in the prior period. As a percentage of revenues, operating expense was 24.1% in the current period compared to 24.3% in the prior period.
Rent expense decreased 2.1%, or $161,000, during the thirteen weeks ended October 2, 2008 compared to the thirteen weeks ended September 27, 2007. International costs and expenses were
negatively impacted by a weaker U.S. dollar, although this did not contribute materially to our consolidated earnings. We continually monitor the performance of our international theatres, and factors
such as changing consumer preferences for filmed entertainment in international markets and our inability to sublease vacant retail space could negatively impact operating results and result in future
closures, sales, dispositions and theatre closure charges prior to expiration of underlying lease agreements.

General and Administrative Expense:

Merger, acquisition and transaction costs.Merger, acquisition and transaction costs decreased $933,000 during the thirteen weeks ended
October 2, 2008 compared to the thirteen weeks ended September 27, 2007. 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 related to the Merger with Loews.

33

---



Table of Contents

Management fees.Management fees were unchanged during the thirteen weeks ended October 2, 2008. 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 15.3%, or $1,942,000, during the thirteen weeks ended October 2, 2008
compared to
the thirteen weeks ended September 27, 2007 due primarily to an expense of $2,440,000 related to our estimated partial withdrawal liability for a union-sponsored pension plan.

Depreciation and Amortization.Depreciation and amortization decreased 5.9%, or $3,652,000, compared to the prior period due primarily
to certain
intangible assets becoming fully amortized and the closing of theatres.

Disposition of Assets and Other Gains.Disposition of assets and other gains were $374,000 in the current period compared to $1,698,000
in the prior
period. The current and prior periods include $428,000 and $1,980,000, respectively, of settlements received related to fireproofing litigation recoveries at various theatres. The prior year also
includes contingent legal expense related to the litigation recoveries of $457,000.

Other Income.Other income includes $7,701,000 and $5,628,000 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 October 2, 2008 and September 27, 2007, respectively. Other income includes $53,000 of income related to ineffectiveness
of interest rate swaps during the thirteen weeks ended October 2, 2008.

Interest Expense.Interest expense decreased 8.4%, or $3,775,000, 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 $5,321,000 in the
current period compared to $25,172,000 in the prior period. Equity in earnings related to our investment in National CineMedia, LLC were
$5,221,000 and $5,839,000 for the thirteen weeks ended October 2, 2008 and September 27, 2007, respectively. Equity in earnings related to HGSCA was $18,767,000 during the prior period
and includes the gain related to the disposition of $18,751,000.

Investment Income.Investment income was $633,000 for the thirteen weeks ended October 2, 2008 compared to $2,109,000 for the
thirteen weeks
ended September 27, 2007. Interest income decreased $1,280,000 from the prior period primarily due to decreases in temporary investments and decreases in rates of interest earned on temporary
investments.

Income Tax Provision.The provision for income taxes from continuing operations was $2,700,000 for the thirteen weeks ended
October 2, 2008
and $31,000,000 for the thirteen weeks ended September 27, 2007 with the reduction due primarily to the decrease in earnings before income taxes.

Net Earnings (Loss).Net earnings (loss) were $(2,103,000) and $24,343,000 for the thirteen weeks ended October 2, 2008 and
September 27, 2007, respectively. The decrease in net earnings was primarily due to the recognition of a gain on disposition of HGCSA in the prior year of $18,751,000 and the decrease in
attendance due to the change in reporting periods noted above.

34

---



Table of Contents

Twenty-six Weeks Ended October 2, 2008 and September 27, 2007

Revenues.Total revenues decreased 3.4%, or $45,357,000, during the twenty-six weeks ended October 2, 2008 compared to the
twenty-six weeks ended September 27, 2007.

U.S.
and Canada theatrical exhibition revenues decreased 4.0%, or $48,764,000, during the twenty-six weeks ended October 2, 2008 compared to the twenty-six
weeks ended September 27, 2007. Admissions revenues decreased 3.1%, or $26,112,000, during the twenty-six weeks ended October 2, 2008 compared to the twenty-six
weeks ended September 27, 2007, due to a 7.2% decrease in attendance partially offset by a 4.4% increase in average ticket price. Admissions revenues at comparable theatres (theatres opened on
or before the first quarter of fiscal 2008) decreased 5.1%, or $42,009,000, during the twenty-six weeks ended October 2, 2008 from the comparable period last year. 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. Based upon available industry sources, box office revenues of our comparable theatres performed consistently with overall performance of industry comparable theatres in the markets
where we operate. Concessions revenues decreased 5.0%, or $17,254,000, during the twenty-six weeks ended October 2, 2008 compared to the twenty-six weeks ended
September 27, 2007 due to the decrease in attendance partially offset by a 2.3% increase in average concessions per patron. Other theatre revenues decreased 15.1%, or $5,398,000, during the
twenty-six weeks ended October 2, 2008 compared to the twenty-six weeks ended September 27, 2007, primarily due to decreases in advertising and theatre rentals.

International
theatrical exhibition revenues increased 3.3%, or $3,407,000, during the twenty-six weeks ended October 2, 2008 compared to the twenty-six
weeks ended September 27, 2007. Admissions revenues decreased by 1.1%, or $605,000, due to a 7.3% decrease in attendance partially offset by a 6.6% increase in average ticket prices. The
decrease in attendance was primarily due to the popularity of film product during the twenty-six weeks ended October 2, 2008 compared to the twenty-six weeks ended
September 27, 2007. Concessions revenues increased 1.6%, or $598,000, due to a 9.6% increase in concessions per patron offset by the decrease in attendance. Concessions per patron increased in
Mexico due primarily to price increases and increased promotions designed to increase transaction size and incidence of purchase. Other theatre revenues increased by 27.3% or $3,414,000 due to
increased on-screen campaigns by advertisers which shifted fiscal 2009 revenues into the first fiscal quarter. International revenues were positively impacted by a weaker U.S. dollar,
although this did not materially contribute to our consolidated earnings.

Costs and expenses.Total costs and expenses decreased $865,000, during the twenty-six weeks ended October 2, 2008 compared to the
twenty-six weeks ended September 27, 2007.

35

---



Table of Contents

U.S. and Canada theatrical exhibition costs and expenses increased 0.6%, or $6,349,000, during the twenty-six weeks ended October 2, 2008
compared to the twenty-six weeks ended September 27, 2007. Film exhibition costs decreased 2.3%, or $10,351,000, during the twenty-six weeks ended October 2, 2008
compared to the twenty-six weeks ended September 27, 2007 due to the decrease in admissions revenues offset by an increase in film exhibition costs as a percentage of admission
revenues. As a percentage of admissions revenues, film exhibition costs were 53.9% in the current period as compared with 53.5% in the prior period. Concession costs decreased 6.9%, or $2,529,000,
during the twenty-six weeks ended October 2, 2008 compared to the twenty-six weeks ended September 27, 2007 due to the decrease in concession revenues and a
decrease in concession costs as a percentage of concessions revenues. As a percentage of concessions revenues, concession costs were 10.5% in the current period compared with 10.7% in the prior
period. As a percentage of revenues, operating expense was 25.5% in the current period as compared to 24.7% in the prior period. Rent expense increased 3.5%, or $7,448,000, during the
twenty-six weeks ended October 2, 2008 compared to the twenty-six weeks ended September 27, 2007 due primarily to the opening of new theatres. Preopening expense
increased $719,000 during the twenty-six weeks ended October 2, 2008 due to the opening of new theatres and remodeling activity. During the twenty-six weeks ended
October 2, 2008 we recognized $2,235,000 of theatre and other closure income primarily due to lease terminations negotiated on favorable terms for two theaters closed during the
twenty-six weeks ended October 2, 2008. During the twenty-six weeks ended September 27, 2007, we recognized $16,466,000 of theatre and other closure income due
primarily to a lease termination negotiated on favorable terms for three of our theatres that were closed during the twenty-six weeks ended September 27, 2007 or where the lease was
terminated during this period.

International
theatrical exhibition costs and expenses increased 3.1%, or $2,220,000, during the twenty-six weeks ended October 2, 2008 compared to the
twenty-six weeks ended September 27, 2007. Film exhibition costs decreased 0.1%, or $36,000, during the twenty-six weeks ended October 2, 2008 compared to the
twenty-six weeks ended September 27, 2007 due primarily to the decrease in admissions revenues. Concession costs increased 1.8%, or $151,000, during the twenty-six weeks
ended October 2, 2008 compared to the twenty-six weeks ended September 27, 2007 due to the increase in concession revenues. As a percentage of concessions revenues,
concession costs were 22.7% in the current and prior period. As a percentage of revenues, theatre operating expense was 25.2% in the current period compared to 23.8% in the prior period due primarily
to increases in utilities expense. Rent expense decreased 0.2%, or $27,000, during the twenty-six weeks ended October 2, 2008 compared to the twenty-six weeks ended
September 27, 2007. International costs and expenses were negatively impacted by a weaker U.S. dollar, although this did not contribute materially to our consolidated earnings. We continually
monitor the performance of our international theatres, and factors such as changing consumer preferences for filmed entertainment in international markets and our inability to sublease vacant retail
space could negatively impact operating results and result in future closures, sales, dispositions and theatre closure charges prior to expiration of underlying lease agreements.

General and Administrative Expense:

Merger, acquisition and transaction costs.Merger, acquisition and transaction costs decreased $5,088,000 during the twenty-six weeks
ended October 2, 2008 compared to the twenty-six weeks ended September 27, 2007. 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 related to the Merger with Loews.

Management fees.Management fees were unchanged during the twenty-six weeks ended October 2, 2008. Management fees of $1,250,000
are paid quarterly, in advance, to our Sponsors in exchange for consulting and other services.

36

---



Table of Contents

Other.Other general and administrative expense increased 14.1%, or $3,635,000, during the twenty-six weeks ended October 2, 2008
compared to the twenty-six weeks ended September 27, 2007. The increase in other general and administrative expenses is primarily due an expense of $2,440,000 related to our
estimated partial withdrawal liability for a union-sponsored pension plan.

Depreciation and Amortization.Depreciation and amortization decreased 7.4%, or $9,324,000, compared to the prior period due primarily
to certain
intangible assets becoming fully amortized and the closing of theatres.

Disposition of Assets and Other Gains.Disposition of assets and other gains were $355,000 in the current period compared to $1,698,000
in the prior
period. The current and prior periods include $498,000 and $1,980,000, respectively, of settlements received related to fireproofing litigation recoveries at various theatres. The current and prior
year also includes contingent legal expense related to the litigation recoveries of $25,000 and $457,000, respectively.

Other Income.Other income includes $9,904,000 and $7,382,000 of income related to the derecognition of gift card liabilities as to
which we believe
future redemption to be remote, during the twenty-six weeks ended October 2, 2008 and September 27, 2007, 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 twenty-six weeks ended September 27, 2007.
Other income includes $522,000 of income related to ineffectiveness of interest rate swaps during the twenty-six weeks ended October 2, 2008.

Interest Expense.Interest expense decreased 8.5%, or $7,688,000, 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 $9,706,000 in the
current period compared to $27,425,000 in the prior period. Equity in earnings related to our investment in National CineMedia, LLC were $9,876,000 and $7,649,000 for the twenty-six
weeks ended October 2, 2008 and September 27, 2007, respectively. Equity in earnings related to HGCSA was $18,743,000 during the twenty-six weeks ended September 27,
2007 and includes the gain related to the disposition of $18,751,000.

Investment Income.Investment income was $1,354,000 for the twenty-six weeks ended October 2, 2008 compared to $21,395,000 for the
twenty-six weeks ended September 27, 2007. The twenty-six weeks ended September 27, 2007 includes a gain on the sale of our investment in Fandango of $15,977,000.
Interest income decreased $3,977,000 from the prior period primarily due to decreases in temporary investments and decreases in rates of interest earned on temporary investments.

Income Tax Provision.The provision for income taxes from continuing operations was $2,800,000 for the twenty-six weeks ended
October 2, 2008 and $35,000,000 for the twenty-six weeks ended September 27, 2007 with the reduction due primarily to the decrease in earnings before income taxes. See
Note 11Income Taxes.

Net Earnings (Loss).Net earnings (loss) was ($678,000) and $40,285,000 for the twenty-six weeks ended October 2, 2008 and
September 27, 2007, respectively. The decrease in net earnings was primarily due to the recognition of a gain on disposition of HGSCA of $18,751,000, a gain on the disposition of Fandango of
$15,977,000, and theatre and other closure income of $16,446,000 which were recorded in the prior year.

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

37

---



Table of Contents

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 $313,040,000 in the aggregate as of October 2, 2008. Under the note
indentures, a loan to Holdings would have to be on terms no less favorable to AMC Entertainment than could be obtained in a comparable transaction on an arm's length basis with an unaffiliated third
party and be in the best interest of AMC Entertainment. Provided no event of default has occurred or would result, the Senior Secured Credit Facility also permits AMC Entertainment to pay cash
dividends to Holdings for specified purposes, including indemnification claims, taxes, up to $4,000,000 annually for operating expenses, repurchases of equity awards to satisfy tax withholding
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 provided by Operating Activities

Cash flows provided by operating activities, as reflected in the Consolidated Statements of Cash Flows, were $61,359,000 and
$95,674,000 during the twenty-six weeks ended October 2, 2008 and September 27, 2007, respectively. The decrease in operating cash flows during the twenty-six
weeks ended October 2, 2008 is primarily due to the decrease in net earnings and the payment of interest expense on the 12% Senior Discount Notes due 2014. We had working capital deficits as of
October 2, 2008 and April 3, 2008 of $(196,017,000) and $(225,476,000), respectively. Working capital includes $116,313,000 and $134,560,000 of deferred revenues as of October 2,
2008 and April 3, 2008, 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 $122,808,000 on our credit facility to meet these obligations as of October 2, 2008.

Cash Flows used in Investing Activities

Cash flows used in investing activities, as reflected in the consolidated statements of cash flows, were $62,448,000 and $38,429,000,
during the twenty-six weeks ended October 2, 2008 and September 27, 2007, respectively. As of October 2, 2008, we had construction in progress of $6,387,000. We had
one U.S. theatre with 12 screens under construction on October 2, 2008 that we expect to open in fiscal 2009 and 12 screens under construction for remodeling that will reopen in fiscal 2009.
Cash outflows from investing activities include capital expenditures of $54,914,000 and $57,530,000 during the

38

---



Table of Contents

twenty-six
weeks ended October 2, 2008 and September 27, 2007, respectively. We expect that our gross capital expenditures in fiscal 2009 will be approximately $125,000,000
to $130,000,000.

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 May of 2007. In connection with the transaction, we received
an equity earn up which raised our interest in Fandango to approximately 10.4% of the outstanding common stock on an as converted basis immediately prior to the sale of our shares. Pursuant to the
terms of the Fandango Merger Agreement and subject to certain closing adjustments, we estimate that we will receive a total of approximately $20,000,000 in cash consideration in connection with the
sale of
our interest in Fandango of which $17,977,000 was received during the twenty-six weeks ended September 27, 2007.

On
July 5, 2007 we disposed of our investment in HGSCA, a partnership that operated 17 theatres in South America, for sales proceeds of $28,682,000.

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 a portion of the construction costs. However, 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. We may also decide to sell certain real estate assets that we currently own where the value of the real estate may be greater than the value generated by our theatre operations.

Cash Flows used in Financing Activities

Cash flows used in financing activities, as reflected in the consolidated statement of cash flows, were $16,761,000 and $275,261,000
during the twenty-six weeks ended October 2, 2008 and September 27, 2007, respectively.

During
the twenty-six weeks ended October 2, 2008 and September 27, 2007 we paid dividends of $2,255,000 and $270,588,000 to our stockholder AMC Entertainment
Holdings, Inc. During the twenty-six weeks ended September 27, 2007 we paid $4,360,000 in deferred financing costs related to a consent solicitation from holders of our
Discount Notes due 2014. 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 3, 2008 for certain information about our Senior Secured Credit Facility, the Cinemex Credit Facility, our 8% Senior Subordinated
Notes due 2014 (the "Notes due 2014"), 11% Senior Subordinated Notes due 2016 (the "Notes due 2016"), 85/8% Senior Notes due 2012 (the "Fixed Notes due 2012") and 12% Senior Discount
Notes due 2014 (the "Discount Notes due 2014").

Our
Senior Secured Credit Facility is with a syndicate of banks and other financial institutions and provides financing of up to $850,000,000, consisting of a $650,000,000 term loan
facility with a maturity of seven years and a $200,000,000 revolving credit facility with a maturity of six years. The revolving credit facility includes borrowing capacity available for Mexican
peso-denominated revolving loans, for letters of credit and for swingline borrowings on same-day notice. As of October 2, 2008, we had no borrowings under the revolving
credit facility and $632,125,000 was outstanding under the term loan facility at an interest rate of 5.18%.

39

---



Table of Contents

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, we
amended the Senior Secured Credit Facility to, among other things, lower the interest rates related to our term loan, reduce our unused commitment fee and amend the change of control definition so
that an initial public offering and related transactions would not constitute a change of control. The current applicable margin for borrowings under the revolving credit facility is 0.75% with
respect to base rate borrowings and 1.75% with respect to LIBOR borrowings, and the current applicable margin for borrowings under the term loan facility is 0.75% with respect to base rate borrowings
and 1.75% with respect to LIBOR borrowings. The applicable margin for such borrowings may be reduced, subject to AMC Entertainment attaining certain leverage ratios. In addition to paying interest on
outstanding principal under the Senior Secured Credit Facility, AMC Entertainment is required to pay a commitment fee to the lenders under the revolving credit facility in respect of the unutilized
commitments there under 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.

The
indentures relating to our notes (Discount Notes due 2014, Fixed Notes due 2012, Notes due 2014 and Notes due 2016) 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 AMCE's Senior Secured Credit Facility, as long as we can satisfy the applicable coverage ratio, after giving effect to the event on a pro forma basis. Under the indentures
relating to the Discount Notes due 2014, the most restrictive limitation, we could borrow approximately $210,400,000 (assuming an interest rate of 15% 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. In addition, certain of the indentures limit our ability to incur liens, which limits our ability to secure any new
indebtedness, including new borrowings under AMCE's Senior Secured Credit Facility.

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 due 2016, Notes due 2014, Fixed Notes due 2012, and the Discount Notes due 2014, at a price equal to 101% of the principal
amount thereof plus accrued and unpaid interest to the date of repurchase.

As
of October 2, 2008, we were in compliance with all financial covenants relating to the Senior Secured Credit Facility, the Cinemex Credit Facility, the Notes due 2016, the
Notes due 2014, the Fixed Notes due 2012 and the Discount Notes due 2014.

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 twelve
months and enable us to maintain compliance with covenants related to the Senior Secured Credit Facility and the notes.

40

---





Table of Contents

Investment in NCM

We hold an investment in 18.5% of NCM accounted for following the equity method. The fair market value of the common membership units
is approximately $193,539,000 as of October 2, 2008. Because we have little tax basis in these units and because the sale of all these units would require us to report taxable income of
$305,267,000 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.

Commitments and Contingencies

The Company has commitments and contingencies for capital and financing leases, corporate borrowings, operating leases, capital related
betterments and pension funding that were summarized in a table in the Company's Form 10-K for the year ended
April 3, 2008. Since April 3, 2008 there have been no material changes to the commitments and contingencies of the Company outside the ordinary course of business.

NEW ACCOUNTING PRONOUNCEMENTS

In October 2008, the FASB issued FSP No. 157-3,Determining the Fair Value of a Financial
Asset When the Market for That Asset Is Not Active, ("FSP 157-3"). FSP 157-3 clarifies the application of SFAS 157 in a market that is not active
and provides an example to illustrate key considerations in determining the fair value of a financial asset when the market for that financial asset is not active. FSP 157-3 was effective
for us on October 2, 2008 for all financial assets and liabilities recognized or disclosed at fair value in our condensed consolidated financial statements on a recurring basis (at least
annually). The adoption of FSP 157-3 did not have a material impact on our consolidated financial position and results of operations.

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.

In
March 2008, the FASB released SFAS No. 161,Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement
No. 133,("SFAS 161"), which expands the disclosure requirements about an entity's derivative and hedging activities. SFAS 161 requires entities to provide
enhanced disclosures about (1) how and why an entity uses derivative instruments, (2) how derivative instruments and related hedged items are accounted for under Statement 133 and its
related interpretations, and (3) how derivative instruments and related hedged items affect an entity's financial position, financial performance, and cash flows. SFAS 161 is effective
for fiscal years and interim periods beginning after November 15, 2008, and is effective for us in the fourth quarter of fiscal 2009. Early application is encouraged. We are currently
evaluating the enhanced disclosure requirements of this pronouncement.

41

---



Table of Contents

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

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

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

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

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

42

---



Table of Contents

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 8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).

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

Interest Rate Swaps.We periodically enter into interest rate swap agreements to manage the interest rate risk associated with variable
rate debt
instruments. In October 2007, AMCE executed an interest rate swap agreement, scheduled to mature in April 2009, to hedge $200,000,000 of our variable rate debt obligation. Under the terms of the
agreement, we pay interest at a fixed rate of 4.707% and
receive interest at a variable rate based on 1-month U.S. Dollar LIBOR-BBA. In addition, Grupo Cinemex is party to an interest rate swap with notional amounts ranging between
283,932,000 and 907,146,000 Mexican pesos ($26,151,000 and $83,894,000). Under the terms of the agreement, we pay interest at a fixed rate of 9.89% and receive interest at a variable rate based on
1-month MXN TIIE. The interest rate swap is scheduled to mature in August 2009. Based upon a sensitivity analysis performed as of October 2, 2008, a decrease in the underlying
interest rates of 100 basis points would increase the fair value of the interest rate swap liabilities by $1,301,000 and a 100 basis point increase in the underlying interest rates would decrease the
fair value of the interest rate swap liabilities by $1,272,000.

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
October 2, 2008 and had $632,125,000 outstanding under the term loan facility on October 2, 2008, 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 $2,197,000 during the twenty-six weeks ended October 2, 2008.

Market risk on fixed-rate financial instruments.Included in long-term debt are $325,000,000 of our Notes due 2016,
$300,000,000 of our Notes due 2014, $250,000,000 of our Fixed Notes due 2012 and $240,795,000 of our Discount Notes due 2014. Increases in market interest rates would generally cause 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, Mexico, France and the United Kingdom. As a result of these
operations, we
have assets, liabilities, revenues and expenses

43

---



Table of Contents

denominated
in foreign currencies. The strengthening of the U.S. dollar against the respective currencies causes a decrease in the carrying values of assets, liabilities, revenues and expenses
denominated in such foreign currencies and the weakening of the U.S. dollar against the respective currencies causes an increase in the carrying values of these items. The increases and decreases in
assets, liabilities, revenues and expenses are included in accumulated other comprehensive income.
Changes in foreign currency exchange rates also impact the comparability of earnings in these countries on a year-to-year basis. As the U.S. dollar strengthens, comparative
translated earnings decrease, and as the U.S. dollar weakens comparative translated earnings from foreign operations increase. Although we do not currently hedge against foreign currency exchange rate
risk, we do not intend to repatriate funds from the operations of our international theatres but instead intend to use them to fund current and future operations. A 10% fluctuation in the value of the
U.S. dollar against all foreign currencies of countries where we currently operate theatres would either increase or decrease earnings before income taxes and accumulated other comprehensive income
(loss) by approximately $90,000 and $37,111,000 respectively, as of October 2, 2008.

Item 4T.    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 re-evaluated these disclosure controls and procedures as of the end of the period covered by this Amended Quarterly
Report on Form 10-Q/A and have determined that such disclosure controls and procedures were effective.

Management's Consideration of the Restatement

In coming to the conclusion that our disclosure controls and procedures were effective as of the end of the period covered by this
Amended Quarterly Report on Form 10-Q/A, management considered, among other things, the fact that it was restating previously issued financial statements 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 Amended Quarterly Report on Form 10-Q/A the Company's disclosure controls and procedures were effective
at a reasonable level of assurance.



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.

44

---





Table of Contents

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 3, 2008 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 3, 2008.

Capital and Credit Market Crisis

Although we do not currently need debt financing, in the event we were to require 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.

We
believe that the oversight of the investments held under our frozen defined benefit pension plans is rigorous and that the investment strategies are prudent. The market value of the
investments within the frozen pension plan trusts declined by approximately 16% during the nine months ended September 30, 2008. The benefit plan assets and obligations of our frozen plans are
remeasured annually and reductions in plan assets from investment losses will result in an increase to the plans' unfunded status and a decrease in stockholder's equity upon actuarial revaluation of
the plan for the upcoming year. Changes in the value of our frozen plan assets (during calendar year 2008) will not have an impact on the income statement for fiscal 2009; however, reduced benefit
plan assets will result in increased benefit costs in future years and may increase the amount and accelerate the timing of required future funding contributions.

We depend on motion picture production and performances.

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

The
master contract between film producers and the Screen Actors Guild ("SAG") expired at the beginning of July 2008. A strike has not been initiated, but the parties have been unable to
reach agreement on a new contract. The American Federation of Television and Radio Artists, the smaller of the two actors' unions, had previously reached a new three year agreement with producers
prior to its contract expiration. If SAG union members choose to strike or film producers choose to lock out the union members, a disruption in production of motion pictures could result.

45

---



Table of Contents

We will not be fully subject to the requirement 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 2008, which ended in
April 2008. Our independent registered public accounting firm did not, however, need to include its attestation report in our annual report for fiscal 2008. Under current rules, the attestation of our
independent registered public accounting firm will be required beginning in our Annual Report on Form 10-K for our fiscal 2010, which ends in April 2010.

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 the Company's Form 8-K 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 AMC Entertainment Inc. (incorporated by reference from Exhibit 2.1 to Form 8-K
filed June 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)**10.1

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.10.2

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).*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.


---

46

---



Table of Contents

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: May 21, 2009

/s/ GERARDO I. LOPEZ Gerardo I. Lopez Chief Executive Officer and PresidentDate: May 21, 2009

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


47

---