AMC 電影院 (AMC) 2021 Q3 法說會逐字稿

Greetings. Welcome to the AMC Entertainment Third Quarter Webcast. (Operator Instructions) And please note that this conference is being recorded.

I will now turn the conference over to your host, John Merriwether, Vice President of Investor Relations. You may begin.

Thank you, John. Good afternoon, everyone. I'd like to welcome you to AMC's Third Quarter 2021 Earnings Webcast. With me this afternoon is Adam Aron, our CEO and Chairman; and Sean Goodman, our Chief Financial Officer.

Before I turn the webcast over to Adam, let me remind everyone that some of the comments made by management today during this webcast may contain forward-looking statements that are based on management's current expectations. Numerous risks and uncertainties and other factors may cause actual results to differ materially from those that might be expressed today. Many of these risks and uncertainties are discussed in our most recent public filings, including our most recently filed 10-Q. Several of the factors that will determine the company's future results are beyond the ability of the company to control or predict.

In light of the uncertainties inherent in any forward-looking statements, listeners are cautioned to not place undue reliance on those statements. The company undertakes no obligation to revise or update any forward-looking statements, whether as a result of new information or future events.

On this webcast, we may reference measures such as adjusted EBITDA, free cash flow, operating cash burn and constant currency, among others, which are non-GAAP financial measures. For a full reconciliation of our non-GAAP measures to GAAP results, please see our earnings release posted in the Investor Relations section of our website earlier today.

After our prepared remarks, there will be a Q&A session. This afternoon's webcast is being recorded, and a replay will be available in the Investor Relations section of our website at amctheatres.com later today.

With that, I'll turn the call over to Adam.

Thank you, John. Good afternoon, everyone, and thank you for joining us today. And a very special welcome to thousands of our individual shareholders who we expect will be joining us on this webcast as well.

At the beginning of 2021, we shared with you our view that both the film exhibition industry and AMC would see sequential improvements in the industry-wide box office during the course of 2021. And indeed, we are seeing exactly that. The industry's box office has been meaningfully increasing each and every quarter, thanks to improved vaccination levels and an increasingly appealing film slate. Add to that AMC's commitment to robust health and safety protocols through AMC Safe & Clean and our stepped-up marketing activity, and our numbers for attendance and admission ticket revenues at AMC also continue to rise.

When we reported second quarter 2021 numbers, I said on that quarterly earnings call in August that "AMC crushed it." I didn't say that because we were yet profitable or because we were out of the pandemic woods at that point, but rather, because our results were so much better than market expectations and also because Q2 results were so much stronger than Q1 results.

In that spirit, the just announced Q3 results for AMC once again are encouraging. Our numbers for attendance, revenues, adjusted EBITDA and net loss continue to markedly improve and continue to be well ahead of consensus market expectations.

Looking at our industry, the third quarter of 2021 posted the largest domestic industry box office of the year at nearly $1.4 billion, 66% higher than that of Q2 2021 and 486% higher than that of Q1 2021.

And as for AMC, more specifically, here are just a few snippets of the improving performance that we reported today. The global attendance count for AMC in Q3 2021 was 40 million people. Now we'd not normally be smiling at an attendance level that was not even half of what it was 2 years ago. But again, this attendance count of 40 million in Q3 of this year is so very much larger than the 22 million guests we had with us in Q2 of this year, or the 7 million guests we had in Q1 of this year. And for that matter, the 40 million guests in Q3 are so much higher than the 8 million guests we had in Q4 of 2020, the 6.5 million guests we had in Q3 of 2020 and the mere 100,000 guests we had in Q2 of 2020. 40 million AMC guests in Q3 2021 was up 81% from our Q2 2021 attendance and up 488% from our Q1 2021 attendance.

And look at this positive trend another way. Q1 2021 attendance at AMC was only 9% of that from the comparable prepandemic first quarter of 2019. However, Q2 2021 AMC attendance was 23% of the comparable Q2 of 2019 and Q3 at AMC just completed was 46% of the comparable Q3 of 2019. Importantly, these positive trends continue as the fourth quarter of 2021 begins. Thanks to Venom, Bond, Halloween Kills and Dune, 4 different film titles that each won in the first 4 weeks of October, respectively. Last week, we announced that October 2021 was AMC's biggest month for attendance and admission revenues since February of 2020. And we can tell you now that our attendance in October 2021 was 72% of that of October 2019, and admissions revenue was even stronger, almost 90% of that of October 2019. The upward trend is clear and unmistakable.

The story is similarly compelling for AMC's total consolidated revenues. $763 million in Q3 2021 was up 72% over 2021 Q2's $445 million. It was up 414% from 2021 Q1's $148 million. And if you want a year-over-year comparison, $763 million of consolidated revenues in Q3 of 2021 was up 539%, over the $120 million of revenue AMC had in Q3 of 2020 a year ago.

How about we looked at adjusted EBITDA? We essentially broke even on the EBITDA line in Q3 2021, with an adjusted EBITDA loss for the combined 3-month period of only $5 million. That number is much better than consensus market expectations. And it is $145 million or 96% better than the Q2 2021 adjusted EBITDA loss. It's $329 million better or 98% better than the Q3 2020 adjusted EBITDA loss for the same quarter a year ago.

But let's also look beyond the numbers. There were many bright spots for AMC during the third quarter of 2021 and the first 5 weeks of the current Q4. High notes that are of interest to consumers generally and what our shareholders tell us make them proud to be the owners of AMC.

Here are 9 examples of a variety of positive developments going on inside AMC right now. One, we upped our game on alternative content, showing concert movies and live sports -- sporting events, including UFC, WWE, heavyweight boxing championship fights and professional football games on Sunday afternoon in Q3. Two, we introduced open caption showtimes each week in hundreds of our U.S. theaters, specifically for the benefit of the hearing impaired and for those where English is a second language.

Three, recognizing the success of our promoting artist-driven curated movie releases through our artisan films effort that was launched in the summer of 2019, we just now launched AMC Thrills and Chills, our unique promotional spot lighting of horror movies that are showing at AMC. Four, we similarly launched $5 Fan Faves so we can bring back popular movies that were released in prior years.

Five, having a charitable event around the 20th anniversary of 9/11 in September, AMC again screened the Paul Greengrass movie, United 93, and donated the ticket proceeds to the Flight 93 National Memorial. On Veterans Day, on Thursday of this week, we will show Clint Eastwood film, American Sniper, and we'll donate our ticket proceeds to the Wounded Warrior Project. And we could never forget September 24, which is World Gorilla Day, where the ticket proceeds of Gorillas in the Mist showing in our theaters and the 9 Planet of the Apes showing on AMC theaters on demand, were donated both in the Dian Fossey Gorilla Fund and to the Wildlife Conservation Society.

Sixth, we started accepting cryptocurrency for AMC gift cards and are encoding right now to accept cryptocurrency for online payments on our website and mobile app. Bitcoin, Ethereum, Litecoin, Dogecoin, among other cryptocurrencies, are all in the works, and we are exploring now how we can take Shiba Inu as well. While we will accept cryptocurrency, we will not hold it on our balance sheet, and therefore, will not face increased balance sheet risks.

Seventh, we introduced a new program called AMC Investor Connect, a communication and rewards program for our shareholders, already with more than 385,000 people enrolled in AMC Investor Connect since its inception in late June of 2021. Next, we opened The Grove at Americana theaters in Los Angles to great success. Under AMC's management and benefiting from the power of AMC's marketing programs, a few weeks ago, these 2 theaters had already climbed to become the 8th and 34th highest-grossing movie theaters in the entire United States. And we're not done. As we sit here today, we have signed 3 signed leases and 5 signed letters of intent on particularly appealing potentially successful movie theater pickups around the U.S. 7 of the 8 are coming to us from ArcLight/Pacific Theatres, which has ceased operations, as you know.

Beyond these 8 new theaters, we are continuing to review additional new theater opportunities that are coming our way. And finally, there are our 7 new, in our opinion, simply stunning Nicole Kidman television commercials for AMC Theatres in the United States, also been used for all our theaters across Europe, which debuted in September of 2021 in Q3, and in which Nicole Kidman reminds us all how wonderful it is to see, in her words, dazzling images on a huge silver screen, and that at AMC Theatres, we make movies better.

Our financial results have gotten stronger and stronger, and our company is doing good things, innovative things, in area after area after area. One can see and one can feel that our industry and our company, AMC Entertainment, are on a path of recovery and improvement from this hard global pandemic that has occupied us all since early in 2020. Therefore, no surprise, our spirits are upbeat.

However, even amidst such good news, we're not yet where we want and where we need to be. We wish to emphasize that no one should have any illusions. There is more challenge ahead of us still to be met. The virus continues to be with us. We need to sell more tickets in future quarters than we did in the most recent quarter. And adjusted EBITDA is still well below prepandemic levels. But also clear, we are making progress, considerable progress.

Sean, over to you.

Thank you, Adam, and thank you, everyone, for joining us this afternoon. For the first time since the fourth quarter of 2019, essentially all of our theaters around the world were open for the entire quarter. Much has been written about the impact of the COVID pandemic on the theatrical exhibition industry and AMC, in particularly.

Recovery takes time, but with all of our theaters now open and looking at how our financial results have progressed over the last 9 months and considering the strength of the upcoming film slate, it really feels like we are moving towards a more normal theatrical exhibition environment. The numbers clearly show our recovery trajectory. Adam has already highlighted some of this information.

In Q3, we achieved, one, 40 million global attendees, representing an 81% increase over Q2 and a nearly fivefold increase over Q1; two, consolidated adjusted EBITDA of negative $5 million, very close to breakeven, and $145 million improvement over Q2's EBITDA loss of $151 million and a $289 million improvement over Q1's EBITDA loss of $295 million; and finally, operating cash burn representing operating cash flow before interest payments, payback of deferred rent and nonrecurring rent prepayments and after capital expenditure was approximately $10 million per month, and this compares to approximately $42 million per month in Q2 and $107 million per month in Q1.

And we continue to expect sequential improvement as we go into the fourth quarter. Indeed, as Adam noted, the fourth quarter got off to a very strong start. October 2021 admissions revenue was almost 90% of October 2019's admission revenue levels. And this just in, this last weekend's total AMC revenue exceeded the 2019 comparative period.

So while we have more room for improvement ahead, the comparisons of our performance now to that of 2 years ago, prepandemic, are much improved over where they were during the past 5 quarters. As you just heard, the 40 million guests that we welcomed at our theaters during the third quarter represented 46% of attendance in Q3 of 2019, but that was also 67% of attendance per show time during Q3 of 2019. This difference between having 46% of Q3 2019 attendance versus having 67% of Q3 attendance per show time illustrates our continued ability to flex capacity and, therefore, flex operating costs to efficiently meet the level of demand. This effective management of our cost structure is one of the key reasons we were able to achieve the sort of strong results that we saw this quarter, results that were considerably better than many expected from AMC.

As we are still in a ramp-up phase, comparison of our results to prior periods in 2020 and 2019 is often not particularly meaningful. However, there are some important performance indicators that are worth discussing. Our consolidated revenue per patron for Q3 was a very strong $19.08. This compares to $15.12 in Q3 of 2019, a 26% increase. In the domestic market, revenue per patron was $20.15, up $4.28 or 27% from Q3 of 2019. This was driven by a 39% increase in food and beverage spend per patron from $5.35 in 2019 up to $7.41 in 2021, coupled with a 16% increase in average ticket price from $9.45 in 2019 up to $10.98 in 2021 and a 64% increase in other revenue per patron from $1.07 in 2019 up to $1.76 in 2021.

In our international markets, revenue per patron was $16.95, up $3.60 or 27% from the third quarter of 2019. This was driven by a 41% increase in food and beverage spend per patron from $3.59 in 2019 up to $5.07 in 2021, coupled with a 17% increase in average ticket price from $8.45 in 2019 up to $9.91 in 2021 and a 50% increase in other revenue per patron from $1.31 in 2019 up to $1.96 in 2021.

Clearly, across all of our markets, we continue to see significant strength in average ticket prices, food and beverage spend and other revenue per patron. The strength in average ticket price has been helped by pricing actions taken during the third quarter, plus a high utilization of our premium large-format offerings such as IMAX and Dolby Cinema.

Our guests view going to the movies as a special occasion, and they increasingly choose to splurge on the best possible site and sound experiences available through our premium offerings. Likewise, the increase in our food and beverage revenue per patron is a reflection of guests' enjoyment of the full theatrical experience at AMC. The significant outperformance compared to 2019 is mainly driven by an increase in the proportion of guests choosing to enjoy our industry-leading food and beverage offerings.

Moving over to the balance sheet. We ended the quarter with $1.825 billion of total liquidity. This is comprised of $1.613 billion of cash and cash equivalents and $212 million undrawn under our revolving credit facilities.

Regarding capital allocation, we continue to pursue a balanced and disciplined approach to capital allocation. Our priorities remain, one, ensuring that we do have sufficient liquidity; two, strengthening our balance sheet by reducing our debt and associated interest costs; three, investing in our business to enhance the guest experience; and four, opportunistically pursuing value-enhancing initiatives, including those that lead to diversification of our business.

With respect to strengthening our balance sheet, as discussed during our last webcast, we continue to choose to pay cash interest rather than payment in kind, or PIK interest, thus avoiding any increases in our debt position. During the third quarter, we exercised an option to repurchase $35 million of our highest cost debt that carried a 15% cash, 17% payment in kind coupon. While this may seem like a relatively small amount, it is yet another step that we are taking on the path to recovery and will result in a reduction in our annual interest cost by approximately $5 million.

Similarly, during the quarter, we repaid approximately $45 million of deferred rent, taking our deferred rent balance down to $376 million. In total, during Q2 and Q3 of 2021, we have reduced our deferred rent obligations by approximately $100 million.

For now, we continue to focus the substantial majority of our capital expenditures on maintenance spend. CapEx for the third quarter was $17.5 million, net of landlord contributions. And net CapEx for the whole of 2021 is now expected to be in the range of $80 million to $100 million.

As part of our ongoing efforts to optimize our theater portfolio, during the quarter, we opened 7 new theaters and closed 4. This brings the total number of locations closed in 2021 to 17 and the total number of new locations opened to 18 for a net add of 1 location as we continue to effectively manage our portfolio by adding new high-performing locations and eliminating lower-performing ones.

Looking towards the fourth quarter and 2022, as Adam noted, we have reason to be optimistic. Based on a Q4 domestic box office forecast of approximately $2 billion, we currently believe that our adjusted EBITDA and our operating cash burn is likely to turn positive in the fourth quarter. While we are buoyed by our Q3 results and the momentum going into the fourth quarter, we do recognize that there is much work still to be done. We are very focused on the task at hand, and we are confident that we are well positioned to capitalize on the improving and increasingly more attractive industry box office as we close our 2021 and head into 2022.

And with that, I will pass the call back over to Adam.

Thanks, Sean. Before we open this up to your questions, I'd like to talk about our strategy going forward for a moment. It goes without saying that we're going to do all in our power to bring back AMC as you used to know it prepandemic, the biggest and most successful movie theater company in the world. And true to our company's heritage, we will strive to be as creative and innovative as we possibly can as we do so.

But you don't drive a car by looking only in the small rearview mirror and only ponder where you've been. Instead, you also look to the much larger front windshield, you look forward, you gaze at where you're headed in addition to where you've been. When some people have looked at AMC, they've made the mistake of only looking back to the company that we once were prepandemic. They don't factor in that our enthusiastic new shareholders have armed us with a war chest currently of more than $1.8 billion in liquidity.

Now we intend to be extremely careful with that liquidity, using it first to get to the other side of this global pandemic. At the same time, however, these monies should allow us to think hard and boldly about how we might transform AMC into a new and different company that does a lot more than just show movies in cinemas.

You've already seen, for example, our announcement of last week that at AMC, we will be entering the multibillion-dollar popcorn industry in 2022. There are 2 significant advantages that AMC enjoys in that regard. First, our brand. AMC Theatres Perfectly Popcorn, has credibility. After all, our company has been selling popcorn for 101 years. And on a peak day, we already sell some 50 tons of the stuff. And I ask you, is there anything that tastes better than real movie theater popcorn? Is there anything that tastes better than popcorn from AMC?

And second, we have terrific long-standing business relationships with the biggest and best mall operators around. So AMC, starting in '22, will open kiosks, counters and stores in retail malls around the country. We also are in discussions with manufacturers and co-packers to introduce an AMC Theatres line of ready-to-eat and microwaveable popcorn to be sold in grocery stores and convenience stores under the AMC Theatres brand, again, hopefully commencing later in 2022.

And given that we are now cooking popcorn right now, this very minute at nearly 1,000 theaters in a dozen countries, we also intend in 2022 to introduce new to-go packaging so we can offer pick-up and take-out options and partnering with existing home delivery services to offer home delivery as well.

On a completely separate idea, AMC has also been speaking publicly in recent months about cryptocurrencies and NFTs. I can confirm today that we have been exploring with third parties over the past few months both how we can accept cryptocurrency and if it is feasible for AMC to consider even launching our own cryptocurrency. Similarly, I can confirm to you today that we are now in conversation with multiple major Hollywood studios about the concept of joint venturing commemorative NFTs related to major film titles that show in our theaters. This is the 21st century after all, and it would seem that there may be a real opportunity for AMC in these areas.

But -- so there's absolutely no confusion on the store. Some of these conversations are only preliminary in nature. The regulatory climate is fast-moving and could affect our thinking, and there can be no assurance how, when or if we will proceed. Still, the whole concept is quite intriguing to us. But popcorn, cryptocurrency and nonfungible tokens are only 3 ideas of several we are actively thinking about within AMC. We'll say more publicly about them when and if we know more.

Our point, though, is that when you think about AMC's future, especially securities analysts for major firms who sometimes publish long [treatises] about various exhibitors, including AMC, you should be thinking broadly about us because at AMC, we are thinking broadly about our future.

Before we head to your questions, I'd like to end our prepared remarks with a personal comment, if I can. I believe that Chief Executive Officers of companies should own company stock, and I believe in transparency. So I want to repeat today comments that I made on our last earnings call 3 months ago. As one of my first acts this summer as the new Chairman of the Board of AMC, I announce my intention to recommend to our full Board of Directors a new executive stock ownership policy. The Board approved that recommendation of the new policy at its most recent meeting. It applies to 19 of our most senior executives. Without taking you through its many nuances and complexities, the new stock ownership policy generally requires that I, as CEO, be required to carry 8 years of my salary in fully owned or Board-granted AMC stock. The goal is for our company's CEO to think and act like a shareholder because I am a shareholder. I want my interests to be aligned with yours.

Separately, on the last call, I pointed out that much of my annual compensation is not in cash but is in AMC stock. Each year, 62.5% of my compensation is in AMC stock, not cash, to be exact. In the almost 6 full years I have led AMC, with a caveat that I did get some shares to my 2 adult children and I forfeited some granted shares in some years, but not in others to cover federal and state income tax withholding obligations, I have not sold a single AMC share. When AMC stock was rising in value earlier this year, I did not sell even one AMC share, not in March, not in June, not in September when I could have done so.

But on our last call, I also pointed out to you that in September of 2021, I would turn 67 years of age, a youthful, vibrant, vigorous full of life 67, I might add, but 67 nonetheless. Prudent estate planning suggests I should diversify my assets a bit, especially with Congress having been discussing imposing potentially soaring capital gains tax rates and significant changes to what can be passed on to one's heirs. So even though I was not required to make the public disclosures that I made back in August, to be transparent, I made those public announcements anyway. Nor am I required to make any public announcement today, although to be transparent, repeating those same public announcements today.

I said then that I expected to sell some AMC shares before year-end and that I would do so under the auspices of a so-called 10b5-1 plan where I give up stock trading control and turn it over to an independent bank, in my case, JPMorgan Chase. My plan, though, which I did put in place back in August, has several parameters, including that the plan be set up several months in advance and that any stock sale be spread over at least 3 different calendar months. So you should expect to see some stock transactions shortly on my behalf.

I can only imagine that naysayers and others who wish AMC harm, will try to spread fear, uncertainty and doubt in this regard. But here's what they probably won't tell you. Even after this brief wave of selling comes to an end, I, Adam Aron, still will have well more than 2 million, 2 million fully owned or granted AMC shares in my name. If you do the math, you will see that with this much current and future ownership of AMC, I have an enormous personal stake in the future of our company, of your company, of AMC Entertainment. I fervently believe in AMC, and my interests are very much aligned with our broad shareholder base to care very much about the value of your ongoing investment and my ongoing investment in AMC Entertainment stock.

So that's our thoughts coming out of Q3. Sean, let's turn first to questions that were submitted to us from our shareholders. What's the first question?

Thanks, Adam. So the first question is, will AMC consider various promotions associated with the new popcorn sales such as perhaps a golden ticket?

So I have to admit, I mean, it's no surprise, I think I'm following almost 2,500 of our shareholders on Twitter. And I receive hundreds, sometimes thousands of inbound messages every day on my Twitter feed. I tend to read as many of those as I possibly can every single day because I learn so much from what our shareholders tell me and what they think. And what's happened this year is we've been deluged by suggestions from our shareholder base. Over and over again, since the popcorn announcement, which was just last week, I've seen suggestions that we include in the boxes of popcorn that we sell in supermarkets, for example, that we include an AMC discount certificate or, occasionally, just as a random surprise, maybe a free ticket, even a free private theater rental at our theaters. And I got to tell you, I think it's a great idea.

If you look -- just turn on your television and look at other companies' advertisements these days, Domino's has a major promotion right now of something called Surprise Frees, where they're giving out things along with the pizzas that you order from them. It's not exactly a new idea. All my life, Cracker Jack has put a surprise. It's not a very good one, but they put a little surprise. in every package of Cracker Jack. And I think we have a great opportunity to bring down the perceived cost of buying AMC Theatres popcorn by putting in either discount certificate to go to a theater or a freebie of some kind. And similarly, we have an enormous promotional opportunity to let people know that they should go and give them incentives, that they should go see a movie. In some cases, it may be a particular movie. In some cases, it may be all movies at a nearby AMC theater. So I think it's a great idea. And write it down, folks, we're going to do it.

Thanks, Adam. So the next question is, will you accept Shiba Inu?

So Shiba Inu, again, suggestions from shareholders. There's just been a tidal wave of inbound messaging to our company and to me personally that we ought to get much more active in the sphere of cryptocurrency and that there was real opportunity for AMC. And in a groundbreaking announcement back in August or September, we announced with some bravado that we're going to accept Bitcoin by year-end for online payments, either on our website or our mobile app. It was very well received. So we figured out a way to increase the currencies that we would take, growing it to include Ethereum, Litecoin and Bitcoin Cash. We then received so many messages about Dogecoin. We took a quick look. I did a Twitter poll. A lot of you voted. A lot of you voted yes. So we're in the process of figuring out how to take Dogecoin.

More recently, once the Dogecoin announcement was out there, we announced that we'd already figured out a way to -- for people to buy AMC gift cards right now using all these currencies that I mentioned here before. And we are on track right now to accept, as we promised, Bitcoin, Ethereum, Litecoin, Bitcoin Cash and others prior to year-end next month. We believe that we'll be in a position -- that's for online payments directly with us on our -- through our website and app. We think we'll be able to launch the acceptance of Dogecoin in the first quarter of '22, just a few months from now, again, on our website and smartphone app.

And as we made those announcements, which was making a lot of you happy, the flood of commentary came in about Shiba Inu. So again, I did a Twitter poll. And again, a lot of you read the tweet. A lot of you voted, and a lot of you voted yes and we are now figuring out how we can take Shiba Inu as a currency. That's the next one on our cryptocurrency hit parade.

I might add that we believe we have figured out ways where we do not have to hold cryptocurrency on our balance sheet. So we're not taking increased balance sheet risk with all this potential acceptance of cryptocurrency. And as I said in -- earlier in the remarks, as we learn more and more about the opportunities available to AMC with cryptocurrency, it does really raise the question in a serious way. And we are engaged in serious thought and discussions with third parties on this subject, do we just accept cryptocurrency, or do we issue an AMC cryptocurrency of our own? By the way, that one I might hold on the balance sheet because we might own a lot of that. And it would be interesting to see what value creation could occur for the benefit of our shareholders if we do.

Thanks, Adam. And the next question is, what are the opportunities for AMC with respect to NFTs?

Here again, our inbox is filled with ideas from our shareholders about NFTs. I remember reading the first tweet that came to me -- was it a tweet or a DM, a direct message, that said, you really ought to launch the issuance of commemorative movie tickets in a format of an NFT. And I instantly thought, that's a really smart idea. That's just a really smart idea. And then I realized as I kept reading that wasn't the only inbound message I got about NFTs or about commemorative tickets. And the more I saw this cavalcade of advice from our shareholder base that we should explore commemorative movie theater tickets as NFTs, the more they set us down this path.

We have already commenced serious discussions with multiple Hollywood studios, major studios, about launching NFTs in conjunction with some of the major titles of movies that are playing in our theaters.

As I said in the prepared remarks, there's nothing to report today. But stay tuned, this space is very intriguing to us.

Thanks, Adam. The next question is, will AMC offer a method by which people can buy retail AMC merchandise?

Well, you seem to be on the hit parade of suggestions of our shareholders. Over and over and over and over and over again, people are telling me that we ought to launch various lines of AMC merchandise. It's a whole variety of things that would carry the AMC logo, whether it's golf shirts or coffee mugs or hats or a lot of other things. And again, it seems like a good idea to us, especially if we can connect it to major movie titles that are playing in our theaters. And so we're going to be exploring this area very carefully as we enter the new year 2022.

Will AMC offer eSports and gaming in the theaters?

eSports and gaming, this is something we looked at repeatedly over the 6 years that I have run AMC. There are reasons to think it might be one of these many ideas where we could branch out our company and do something different going forward than we have done in the past, hopefully creating shareholder value in the process. We're living up to the shareholder value that's already implied in our share price.

Interestingly for us, on our Board of Directors, is another Adam, Adam Sussman, who's the President of Epic Games. And not a week goes by that I don't receive suggestions in my inbound Twitter feed that we form some kind of partnership with a company called GameStop, which apparently many of you have heard of. So we'll -- we're going to take a look at what opportunity is available to AMC through gaming and eSports as the new year comes forward.

Next question is, what theater locations are you looking to expand into?

I'm really proud of the caliber of talent in our development organization. Development is our name for our real estate group. They have ownership of the -- whatever is -- the leases on almost 1,000 theaters that we have. They're in active dialogue with proprietors in the commercial real estate industry, mall operators, other commercial space.

AMC, over the past several years, has really become what we think is the clear undisputed leader in our industry. And what we're hearing from landlords across the United States as well as across Europe is that we're a company of choice and gets first crack on a lot of superb movie theater locations that may come our way.

So in addition to the 8 theaters that I mentioned are in the pipeline right now on their signed leases or signed LOIs to go to the next step with these leases, our development group is out there looking at and fielding proposals like every week for a new theater here, a new theater there based on the intriguing commercial real estate opportunity that's in front of us.

I think it was in your remarks on the call earlier, Sean. You talked about how we're adding high-performing theaters like the Grove and Americana in Los Angeles, which, a month after we took them over, were the 8th and 34th highest-gross movie theaters in the United States. At the same time, we're pruning out of our network of almost 1,000 theaters, low-performing theaters that essentially make no money at all or even lose money. We'd love to be in a position where we can refine our fleet so that we can continue to add high-performing profitable theaters and chase away leases that are far less attractive.

Thank you. And what about issuing AMC-branded credit cards?

It's another great idea. Well, I don't remember seeing that from -- on Twitter. I think that came from within our company. I thought about doing that when I joined AMC back in 2016 because earlier in my career, when I was the Chief Marketing Officer of United Airlines, United MileagePlus reported to me, and therefore, United's co-branded credit card reported to me. And back in 1990, which I hate to admit is 31 years ago, United was doing about $10 billion of volume on that branded credit card, $10 billion of volume or more. I didn't launch a branded credit card at AMC back in 2016 because at the time, I thought it was a small idea for us and that we wouldn't place a lot of cards. But something very dramatic has changed at AMC, first, in 2018 and now again in 2021.

Between 2016 and 2018, we started dramatically growing the amount of participation in our AMC Stubs loyalty program. And we now have over 20 million households who are enrolled in AMC Stubs just in the United States. A lot of those people are very committed at AMC. Then in the summer of 2018, we launched A-List and added another almost 1 million people who were -- particularly with our subscription program, committing to pay us each and every month for the opportunity to see as many as 3 movies a week for a fixed price. That's another group of people who are uniquely committed to AMC.

And then there's what happened this year. As you know, individual retail investors descended upon AMC, bought control of AMC. And the last time we announced it, we announced that we had some 4.1 million retail shareholders who are very much invested in our company, not just invested financially in our company, but invested mostly with our company. And that's another group of people who are very interested in our company and very committed to AMC.

So given these 3 populations now that are large, in the millions, that are committed to AMC, I think an AMC-branded credit card might work really well, both for the holder of the card and for us as the company with the co-branding partnership with a major bank. We have already started discussions with several of the major credit card issuing banks to see if we can do something here in 2022. This is yet another one of these big ideas where AMC, going forward, could be a company that is much more active and engaged in people's lives than just being the repository of where they go to watch movies at a movie theater when they want to go see a flick.

Next question I have is, would you consider expanding further in Europe?

Well, we would consider expanding further in Europe, but I do want to remind everybody that already today, AMC Entertainment is the largest movie theater exhibitor in Europe. We are either #1 or #2 in the U.K. and Ireland, in Portugal and Spain, in Italy, in Sweden, in Norway and Finland and Scandinavia. And we're #4 in Germany today. So we have a significant position in Europe. The brand names that we use are different in Europe. It's Odeon in the U.K. and Ireland. It's Cinesa in Spain. And it's UCI in Italy. It's Finnkino, (inaudible) other names and local names in Scandinavian languages up in the north. But we're a big player in Europe, and we're always looking to see if we can become bigger and stronger still.

Will AMC consider making its own movies?

Yet another interesting idea that has come into us of late, especially after we raised the $1.250 billion of equity capital in the month of May. When our shareholders facilitated our raising capital, equity capital, that puts our company in a position where we can consider how to deploy that capital and do so to create value for our shareholders. This is not entirely a new subject for AMC.

Many years ago, AMC became a 50% owner of something called Open Road Films. I was the Co-Chairman of Open Road Films back in 2016. And you'll recall that in 2016, Open Road Films won the Oscar for Best Picture of the Year for one of the movie called Spotlight. And so we've made content before. I do think in this day and age when so much content is being created, it is interesting to contemplate should AMC fund content? Should AMC fund exclusive content that might only be seen at our own theaters? These are all possibilities, again, possibilities that we'll be exploring in 2022 and beyond.

I've already had conversations with several of the best filmmakers in Hollywood, very experienced moviemakers that thanks to our shareholder base who armed us with what I called earlier on this call a war chest of equity capital to think differently about our future than some of you look merely at our past that possibly going into joint venture with moviemakers is something that we can consider. But again, no promises. No decisions have been made. It's a decision we'll make later in 2022.

So the next question, Adam, is can you increase the pay for loyal, hard-working AMC workers?

So that is a fabulous question. There are so many reasons why AMC survived calendar year 2020 when the pandemic was at its height. Our landlord community sided with us and gave us a pass on not forcing us to be current in rent when our theaters were closed and we had no revenue. In 2021, our new retail shareholders who were so enthusiastic about AMC, literally gave us billions of dollars of additional equity capital to strengthen the company's reserves and its financial strength.

But there's another group of people who you just can't say enough good things about, and that's the people who work at our theaters. We call them our film crew. And these are -- in some cases, they are the general managers of our theaters. In other cases, they're hourly workers who are manning the box offices and the concession stands and cleaning up the theaters and keeping them clean and putting -- making sure that we institute all the AMC Safe & Clean, safety health and safety protocols, which have made it so possible for you to be come back in big quantities to our theaters.

And I mean you've all read about the so-called labor shortages in the United States. You've seen that unemployment is now at the lowest rate than it's been since the pandemic started. You can't go anywhere in America without seeing help wanted and We're Hiring signs. At every retail store, at every fast food place, wherever you turn, people are looking for quantity workers -- quality workers. And among other things, that means you have to pay them. And so we already have taken a hard look at the wages that we pay around the United States. And especially with the political occurrence of the country, there's a lot of talk about $15 minimum wages, and you see rising minimum wages all around the country being instituted locally or in certain state jurisdictions, if not federally. We actually have already taken action to increase our wages for our film crew. And I can say without equivocation, they work hard, they work well, and they've earned it.

Thanks, Adam. The next question here is, what are your plans to pay off AMC's debt? And how long will it take?

This question really highlights, I think, some of the flood as it's called, the uncertainty and doubt that's thrown around our company. The -- of all the things that have kept me up at night in the last 2 years, our debt load is not one of them. And I'll tell you why. First of all, prior to the pandemic, we had extended out our debt maturities. And second, during the pandemic, we worked with our lenders, mostly -- both our first lien holders and our second lien holders, to again further stretch out our debt maturities.

When you look at how much money we have been, for sure, we took on a lot of additional debt to make it through the pandemic, but we did in a smart way. And if you look at our maturities, we don't have any debt maturities before August of 2023, and that's only a few hundred million dollars' worth.

We don't have big maturities until '20 -- debt maturities, which means that's when you got to pay the debt back until 2026. That gives us -- 2026, that's 5 years from now. That gives us a lot of time to build our EBITDA back. Remember that before the pandemic, this company was routinely generating $800 million or so of EBITDA each year. As the recovery moves to full bloom, we ought to be bringing in a lot of EBITDA between now and 2026. We can use some of that EBITDA to pay down debt.

If you look at what we've already done, it is true that we took on a lot of additional debt between March of 2020 and January of 2021 to survive the pandemic. But if you look at what we've done since the end of January through to now, we converted $600 million of debt into equity. We paid off our $200 million balance on our revolving credit line. We did that in March. We've paid in the second and third quarters, we paid off $100 million of deferred rent, which is debt. If you look at this -- recently, we announced we clawed back $35 million of debt -- high interest rate expense of debt that we took on last December. So we're already paying back debt.

But here's why I don't lose sleep on this and why people who don't necessarily wish AMC well throw this debt load around to scare people. Companies will never pay off all their debt. Companies do want to manage the debt load down to a prudent level. But every major company in America carries debt, may carry it almost in perpetuity. And the reason they do so is returns on equity are higher. Remember, shareholders own the equity. Returns on equity are higher if you can borrow some debt at reasonable cost.

And so we will, over the next 3 years when the first small maturity comes and the next 5 years when -- I guess, 2 years when the first small maturity comes and the next 5 years when the large maturities come, we will pay -- we will continue to pay down debt as we have over 2021, but we're also going to refinance our debt. And we've done that 3 times, at least, since I joined the company in 2016 where we get the debt hopefully down to a more prudent level, and then we stretch out the maturity, pushing it out another 2 years, 3 years, 4 years, 5 years, again, carrying a prudent level of debt so that we can increase returns on equity.

And by the way, when we refinance that debt, we borrowed some of that money when we were right on our knees because of the pandemic, and our theaters were all shut, and the interest rates we had to pay were very high, like very high. And I would expect that as we refinance our debt in '23 and '24 and '25 and '26, that we'll be able to refinance our debt, not only stretching out the maturities well out in the future, but also doing so at a much lower interest rate, which I'll say was a lot of interest expense as we go forward.

Thanks, Adam. And the final question from our shareholders is, what is AMC doing to ensure exclusive theatrical releases?

The issue of exclusive theatrical releases, the industry jargon is a window. The window that movies are in theaters solely as contrasted with when they go to the home, when they're still in theaters, has been one of the biggest issues that we've been tackling since when the pandemic started. Some studios started taking movies to the home right away simultaneously. And it makes it easier for people to watch at home instead of coming to one of our theaters.

So no surprise, AMC, as the largest exhibitor on the planet and having actually very solid relationships at the top of every major studio, engaged in constant dialogue with studio chiefs about how important it was for our business. But as we articulated to them, how important we thought it was to their business that we both get the benefit of the monies that are flowing in the movie theaters.

In calendar year 2019, $43 billion of movie theater tickets were sold across the face of the earth. You don't really want to light a match. If you're a major studio, you don't really want to light a match to $43 billion of revenue even if they share some of it with theaters. And we've been making that point. We were making that point strongly. They get strongly, sometimes publicly. Sometimes, we're making the point strongly privately. And I'd like to report that of late, we've had real success on this front.

You may recall that in July of 2020, we launched a groundbreaking announcement with Universal that we were going to participate, as what you might think, it was like a venture partner as they took movies to the home either at the 17-day mark or the 31-day mark where AMC was going to get paid whether they -- people came to see our -- their movies in our theaters or their movies on their home couches.

In August of this year, we reached a very important agreement with Warner Bros., who had been experimenting during the pandemic in calendar '21 of taking movies simultaneously to the home and theaters. We think that decision may have helped HBO Max, but we think it costs Warner Bros. Studios a lot of money. We think it costs us a lot of money. And so we're very pleased that we're able to sign a contractual commitment with Warner Bros. for calendar '22, beginning January 1, that if it's a theatrical movie being made by Warner Bros., it's coming to theaters first and coming to theaters only for a -- essentially a 45-day window where we have the movie exclusively.

We were similarly thrilled that Disney announced just right around Labor Day weekend that it, too, during the pandemic -- you might say COVID rules apply, was experimenting with different distribution models, including taking movies to Disney+ Premier Access, as they called it, where they were charging usually a $30 fee to watch a movie on Disney+. At the same time, they were taking the move to theaters.

What Disney announced Labor Day weekend was that for -- there are 4 movies that were being released between Labor Day and New Year's Day, that they were going to give theaters an exclusive theatrical window. And now it's our burden to generate significant -- and when I say our, I don't mean just AMC, I mean, all the exhibition, to generate significant revenues for Disney in movie theaters so that Disney has confidence that when it's deciding how to release movies in '22 and '23 and beyond, that they put in place and respect an exclusive theatrical window. And as I said, the Disney announcement in September was a significant announcement for us. What's more, Disney has an amazing movie product coming out.

I had the privilege last Monday of going out to Manhattan Beach and going to the studios of Lightstorm, which is James Cameron's and Jon Landau's production company, that's the company that made the incredible movie Avatar, the most successful movie of all time until Avengers: Endgame came out. And I'm told Avatar just repassed Avengers: Endgame as the #1 movie of all time.

Avatar 2 is coming out at Christmas of 2022. I've seen footage from it, it's mind-blowing. Avatar 2 is going to be such an incredible movie. And I can tell you right now, there is one and only one place to watch Avatar, and it's not on your telephone, and it's not on your tablet, and it's not in your home TV, it is on a big screen. To quote Nicole Kidman, dazzling images on a huge silver screen.

So I'm quite upbeat about what's coming, about -- as COVID lessens, the degree to which Americans have been trapped in their homes and apartments, and we are -- start getting out and about again, I think you're going to see a revival of an exclusive theatrical window, and that clearly is to AMC's benefit.

Having said all that, we weren't exactly wallflowers as all this was going on. And so if studios were going to experiment with windows, we were going to negotiate hard about film rent terms. And if you look at the third quarter financials that were released in, a little over an hour ago or 2 hours ago, I guess, you'll see that our film exhibition costs in the third quarter were in the low 40s. And I compared our film exhibition costs to those of Cinemark, who just announced their earnings a couple of days ago, and our film exhibition costs in the third quarter were 1,100 basis points lower than Cinemark. So make no mistake, AMC as industry leader, knows how to negotiate hard for the benefit of our shareholders.

Thank you.

Operator, we have no more questions from those who are on the call. So I'm going to conclude -- we do? There is one, I'm sorry. That concludes our shareholder questions. And I guess there is a question that we have from someone on the call.

Our final question comes from the line of Meghan Durkin with Crédit Suisse.

So Sean, I think you gave the October box office. Is there a way you can give us the idea of how that breaks down in the U.S. versus international? And I think you said that based on a $2 billion box office in the fourth quarter, that you'll be adjusted EBITDA positive. Is that total consolidated company? Is that U.S. and international? Or is it a just U.S. number? What exactly was that? And then, how are you doing with A-List? I think you talked about the almost 1 million subscribers. But are they still subscribing? Because I think you turned that back on recently.

Yes, Meghan. A couple of questions there. Let me try to address them. Firstly, on the expectation for Q4, what I said in the prepared remarks was assuming a $2 billion domestic box office. And the expectation that is both positive from an EBITDA point of view, adjusted EBITDA point of view that we disclosed, and also from an operating cash flow -- operating cash burn point of view as well. So that's the expectation for Q4.

When you look -- I think your question was on October attendance numbers. And if you look, at a high level, at our October attendance numbers, what you'll see is actually the international business outperformed the U.S. business a little bit. But overall, they were pretty much in line. So the domestic business was, from an attendance point of view, was around 30% below 2019's level, and the international business was around 25%, 26% below 2019's level.

But we also did refer on the call earlier to the box office for Q3 and the box office for October. Those numbers were all domestic numbers, Meghan.

Yes. They're all domestic box office.

And as for A-List, out of zenith, A-List had 900,000 people prepandemic who are paying us between $20 plus tax a month and $24 a month plus tax a month to see multiple movies. Needless to say, when all the theaters were shut, we thought it's probably a good idea to pause their memberships and keep them hanging around the hoop, so to speak, and not having them all disappear. And we did turn A-List back on in the July, August time frame, just a few months ago in this quarter. And we're already back at -- right around 2/3 of A-List members are back, subscribing us, paying us every single month. That was ahead of our expectations, and we're really pleased. And as more -- remember, the whole appeal of A-List is, you may recall, prepandemic, on average, those people were seeing 2.6 movies a month.

If you look at the titles that were released early in 2021, we weren't always seeing 2.6 movies a month that people want to see, or for that matter, 5 movies a month they want to see or 8 movies a month they want to see. But -- and -- but things started to get big when Shang-Chi opened up Labor Day weekend, and -- but then the new releases in September were a little light.

But if you look at October, we're back to an old pattern of big new movies coming out every single week. There was Venom, and there was Bond and No Time to Die, and there was Halloween Kills and there was Dune. I also got to see Ghostbusters: Afterlife. You all need to go see Ghostbusters: Afterlife. What a movie. If you remember the original Ghostbusters movie from a long time ago, this new Ghostbusters, which was directed by the son of the director of the original Ghostbusters movie, it's just wonderful. And I think it opens November 19, if I'm not mistaken, Sony Movie.

And when you look ahead, there are so many big movies coming out. Eternals just opened up a couple of nights ago. We've got Ghostbusters: Afterlife, and we've got West Side Story, and we've got the Spiderman movie coming out of Christmas. And we have a solid fleet starting immediately after New Year's Day for 2022. And there are -- there's an enormous array of major franchise blockbusters that are going to hit theaters in 2022. We've been waiting and waiting and waiting for the Top Gun: Maverick movie, which again I've seen footage of that movie. It's going to be incredible.

There's a Mission Impossible. At Christmas, we have Avatar. It's -- we have a Jurassic World coming out again in 2022. It's movie after movie after movie. The more movie releases that come out that are appealing, the more people who will sign up for A-List. So we're quite pleased with where we are, and we're expecting the A-List numbers to grow going forward, especially as we get into 2022.

So with that, operator, that'll be our last question on this call. I'm going to end the call by repeating something I just said. There are some incredible movies coming to an AMC theater near you really soon. They're in theaters now, and new ones are coming really soon. So see you at the movies, see you at AMC theater. Thank you for listening to our webcast today.

Thank you. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation, and have a great day.