AMC 電影院 (AMC) 2003 Q3 法說會逐字稿

Good morning.

My name is Samur, and I will be your Conference Facilitator today.

At this time, I would like to welcome everyone to the AMC Entertainment Incorporated fiscal year 2003 third quarter conference call hosted by Peter Brown, Chairman and Chief Executive Officer of AMC Entertainment Incorporated.

Any forward-looking statements contained in this call which reflect Management's best judgment based on factors currently known, involve risk and uncertainties, and actual results may differ materially from those anticipated in the forward-looking statements included herein as a result of a number of factors.

Including among others the company's ability to enter various [financing] programs, the performance of films licensed by the company, competition, construction delays, the ability to open or close theatres and screens as currently planned, domestic and international, political, social, and economic conditions, demographic changes, increases in demand for real estate, changes in real estate, the zoning and tax laws, unforeseen changes in operating requirements, the company's ability to identify suitable acquisition candidates and successfully integrate acquisitions into its operations, and results of significant litigation.

All lines have been placed on mute to prevent any background noise.

After the speakers' remarks there will be a question-and-answer period.

Analysts who would like to ask a question during this time should press star, one on your telephone keypad.

And questions will be taken in the order they are received.

To withdraw your question press the pound key.

Thank you.

Mr. Brown, you may begin your conference.

Okay, thank you Summer.

Good morning, everyone.

And welcome, again, to the fiscal 2003 third quarter earnings conference call for AMC Entertainment Inc.

As Summer just said, I'm Peter Brown, Chairman and Chief Executive Officer.

And joining me on the phone today are Craig Ramsey, our CFO, Phil Singleton, our COO, and Dick Walsh, Chairman of our Film Group.

Now, as is our custom, I'll lead-off the presentation today with a few brief comments about the quarter.

Craig Ramsey will then take us through the financial results.

And finally, Dick Walsh will wrap-up the formal part of the presentation with a preview and some thoughts on the upcoming film product.

We'll then take questions from our analyst group, and we'll wrap it up.

So on that note, let's begin.

It was really just a great quarter to end a terrific calendar 2002 year at the North American box office.

Now, as most of you I am sure have heard by now, calendar 2002 was a record year for the industry.

At $9.5b admissions revenues were up over 12 percent from the prior year which was also a record, by the way.

Now, this was the largest year-over-year percentage increase since 1989.

Additionally, attendance grew to 1.62b people which was the highest level of attendance recorded for the industry in the past 45 years.

Now those statistics will be flushed out and are typically announced to the marketplace at our Annual Industry Show, which is called 'Show West,' in March.

But most of the media and publications that follow the industry has reported these numbers up to this point in time, but there'll be more to come on that in March.

Now, as was noted in our press release, our total revenues and adjusted EBTIDA for the fiscal third quarter were both records.

At $432m our revenues were up eight percent over last year's revenues.

And when we look at last year's revenues on a pro forma basis, and that is to include the acquisitions that we completed as if we completed those acquisitions at the beginning of the year.

Our adjusted EBITDA of $55m was up 25 percent.

And Craig will be speaking more about the factors that drove this record performance in just a few minutes.

Now, a high level of asset quality and productivity that characterizes the AMC theatre circuit continued in the quarter.

AMC had 52 percent of the top 50 theatres in North America at the end of December.

And our asset quality continued to drive an industry-leading level of unit productivity which we see when we look at the two key metrics of box office revenues per screen and operating cash flow per screen.

The quarter also saw a continuation of the positive free cash flow trend that started in our last fiscal 2002 year.

We generated over $25m of free cash in the quarter, and on an LTM basis our free cash flow at the end of the quarter was $60m.

And Craig will be speaking more about this in just a few moments, as well.

We ended the quarter once again with a conservatively leveraged and flexible balance sheet.

Our total availability which we define as our cash plus the amount that we're able to borrow on our revolving credit facility stood at $629m, which was up approximately $32m from last quarter.

Now, last but not least, we also continued to make good progress on the strategic front in the quarter.

Now, one of the key elements of our strategic plan is to continue to improve the overall quality of our portfolio of theatres through careful and selective new building of megaplex theatres combined with the continued disposition of older, obsolete multiplex theatres.

We opened three new North American megaplex theatres in the quarter, one in Chicago, one in Dallas/Ft.

Worth, and one in the San Francisco Bay area.

Now, each of these theatres has gotten off to a great start, and we're confident that each one of them will be among the ranks of the top theatres in North America.

Now, in addition to our new theatre openings those of you who were with us on our last quarterly earning call will recall that I reported to you that we were in the early stages of the launch of our gift card product, something we call the 'AMC entertainment card.'

Now, as a reminder, this is essentially a stored value card, which is a credit card sized, plastic version of our paper based gift certificates.

We launched the AMC entertainment card across the entire AMC theatre circuit on September the 26th.

In November through an exclusive agreement with Safeway we began selling the card through their 1,400 store system.

Now, we sold over $23m of the AMC entertainment cards in the quarter which represented a 10 percent increase over the prior year's sales of gift certificates.

The AMC entertainment card has been a great success, and within the next few weeks we expect to continue its momentum through an announcement of another distribution deal that we'll be entering into with a major retailer outside the food-and-grocery channel.

So on that note, I'll now turn the program over to our CFO, Craig Ramsey, who will take you through the numbers.

Thank you, Peter.

Before discussing AMC's financial results for the third quarter and year-to-date periods I'd like to first look at some industry statistics that will serve as a backdrop to that discussion.

As we tracked the box office, admissions revenue revenues were up 10 percent for North America, from $1.929b in the third fiscal quarter of last year to $2.139b this year.

And as noted by Peter earlier, this performance in the quarter capped a year that set a record at $9.5b in total admissions revenue for the calendar year.

Now, the quarter started very strong with October box office up about 20 percent, just over 20 percent.

Sweet Home Alabama, The Ring, and a full release schedule were contributing factors.

Comps were a little tougher in November, but strong performance from The Santa Claus, Eight Mile, and of course, Harry Potter, and Die Another Day combined to provide enough fuel to increase or provide a positive comp of about six percent.

And then, anchored by Lord Of The Rings, and Catch Me If You Can, December produced a comp of just under 10 percent.

We also show on the slide films that are expected to gross over $100m, and they accounted for a bulk of the increase in the third fiscal quarter box office.

As you can see from the slide, nine films released during the third quarter of this year are expected to exceed $100m in box office and contribute $1.577b, versus six films last year during the same quarter that contributed $1. $1.338b, or an 18 percent increase.

So with that, let's look at the financial results for the quarter.

I'd like to note that on the slide and in the press release we're comparing current quarter results with prior year on a pro forma basis which, of course, treat the acquisitions of General Cinema and Gulf State as if they had occurred at the beginning of last year.

You see on the slide our total revenues increased $30m or eight percent compared to the same quarter of last year, increasing from $402m on a pro forma basis to $432m.

The total revenue increase was driven by increases in average ticket and concession per head amounts.

Adjusted EBITDA increased $11m or 25 percent from the same quarter last year to $55m, mostly due to strong revenue performance and effective cost controls.

As we'll see in a minute, operating expenses as a percent of theatre revenues were down about 130 basis points compared to the same quarter last year, and resulted in 182 basis point increase in our adjusted EBITDA margin.

This adjusted EBITDA performance exceeded our expectations for the quarter and analysts' revised expectations that averaged just under $52m.

Consistent with our objective of producing free cash flow results we closely monitor our after tax cash flow, which we define as our 'net loss plus depreciation and other non-cash items.'

And you can see on the slide the substantial improvement in after tax cash flow results.

They increased 41 percent year-over-year.

Net capex was $7m for the quarter, compared to $11m in the same quarter last year.

This in combination with a strong after tax cash flow performance produced free cash flow of $27m for the quarter, more than double the amount in last year's quarter, increasing by $14m.

In summary the quarter, as I said, exceeded our expectation and increased our LTM, or last 12 months adjusted EBITDA, to $226m which is also shown on the slide.

Another noteworthy point on the quarter is that our circuit in North America performed in-line with overall box office results.

Now, that's not readily apparent from the year-over-year change in total revenues, and here is why.

The summary of financial information on the slide includes the results of our North America and International circuits.

Also, the financial summary reports results through December 26th of the current quarter while the pro forma financial results of the prior year include admissions revenues for the acquired General Cinema and Gulf State circuits through December 31st.

Those two circuits reported on a calendar month basis.

Now that five-day difference, as I think we're all aware, can be pretty substantial.

That is the difference between the December 26th close for the current year and the December 31st close for those acquired circuits in the prior year.

That distorts the year-over-year comparison.

If you adjust for these two factors we produce a year-over-year increase in North America admission revenues of 10.2 percent, which is in-line with the overall industry performance.

Let's take a look at the year-to-date results.

Here [inaudible] revenues increased $84m or seven percent over the same period last year, increasing from $1.261b on a pro forma basis to $1.345b in the current 39-week period.

Again, total revenue performance was driven by increases in attendance reflecting the strength of the box office during this period, and by increases in total revenues per head.

Adjusted EBITDA increased $21m or 13 percent over the same period last year to $178m.

The combination of strong revenue performance while at the same time controlling our costs contributed to the improved adjusted EBITDA performance.

For both the quarter and year-to-date periods our margins at the operating level and at the adjusted EBITDA line have improved over the prior year.

In the year-to-date period our net net capex was $37m compared to $50m in the same period last year, and again, that in combination with the after tax cash flow performance produced a $21m improvement in our free cash flow for this 39-week period.

Now, one of our key initiatives over the last several years has been to achieve free cash flow operating results.

Again, I direct your attention to the last 12-month column on this slide which shows our delivery on this initiative of $60m of free cash flow.

Up from $14m in our fiscal 2002 year.

Let's take a look now at some of the key drivers in analytics for the quarter and year-to-date period.

First off, during the quarter we opened, or system-wide we opened four new theatres, or 77 screens.

That included a theatre, 20-screen theatre in Spain, and as Peter talked about earlier, a 21-screen theatre in downtown Chicago, 18-screen theatre in Dallas, and a 16-screen theatre in the Bay area of Oakland.

Year-to-date screen additions of 736 include acquisition of 641 screens, so indicating that our year-to-date new bills of 95 are very much in line with our full-year projection of adding 107 screens.

During the quarter we closed 13 screens in two theatres.

Now, that resulted, as you'll see on the press release and it's actually not on this slide, but it resulted in a theatre closure expense of $4m.

This included a lease restructuring at our theatre in France where for a cash payment we lowered our rent and related operating costs such that we should improve operating results on a go-forward basis by about $2m annually.

Now, year-to-date screen closings of 71 are in-line with our plan to close just over 100 screens during fiscal 2003.

Theatre revenues per head increased during the quarter, both the quarter and the year-to-date periods reflecting increases in average ticket and concession per head amounts.

You note that our film costs, film exhibition costs were down slightly during the recent quarter but up slightly on a year-to-date period.

Now, we have a philosophy of not just watching percentages or margins.

We also have tracked the productivity of our screens in terms of the dollars they produce per screen.

And in this case we focus on retention dollars or the amount of dollars we retain after paying film bills.

Now, on a retention basis we show considerable year-over-year improvement.

Eight percent during the recent quarter, and five percent during the year-to-date period.

Now, as noted earlier, our initiatives related to reducing operating expenses even during a time when we're experiencing increased revenues are demonstrated in the reduction of operating expenses as a percent of total theatre revenues, by 130 basis points in the quarter, and 100 basis points during the year-to-date period.

We continue to operate very efficiently in terms of our overhead.

We're at 2.4 percent of total revenues, and the increase over the prior year is mostly due to the timing of incentive compensation amounts which are, of course, based upon the improved operating results.

And finally, I'd like to review our capitalization and liquidity.

We maintain a very conservative balance sheet with financial flexibility to act on opportunities that are accretive to us.

Again, our balance sheet shows strong cash position with over $241m of cash at the end of the quarter, total debt $748m.

But our net debt is $507m, and it's down from the end of the prior quarter which was $538m due to seasonal working capital changes.

And it's down from the pro forma net debt at the end of our prior fiscal year of $558m.

At quarter end our leverage based on our debt agreements was very comfortable, 2.2 times, and it's further reduced if we adjust for the CIP capex which we consider to be a cash equivalent.

And our leverage is reduced to just under two times.

So in summary, we maintain a very conservative balance sheet with ample, ample flexibility.

And with that, I'd like to turn it over to Dick Walsh, who will give us a perspective on the upcoming film product.

Thank you, Craig.

We, as we move through this March quarter we see three trends developing, and they're all very positive for us and for the industry.

Again, as the industry tries to become more of a 52-a-week-year business we're going to see some Summer type releases that the studios will issue this quarter that just as easily could have been held-off for the Summer.

And we're very pleased to see that happen as it expands the box office.

We also see more titles coming into release.

Right now we have 49 versus 43.

And finally, the three major weekends for us are covered with strong product.

Those three major weekends are one that we've just concluded, the Martin Luther King weekend which was very strong, the second is the Valentine's/President's Day weekend, and the third one is the weekend after that, and we see solid titles at those key periods this year.

Titles in the fourth quarter that we really feel are going to be strong performers are Chicago, a picture that is out in limited release, and it's just recently won three Golden Globe Awards, and we believe as Miramax continues to platform this picture throughout North America this picture will grow in popularity and demand.

Daredevil is one of those examples of a Summer type picture being released, coming out on February 14th, with Ben Affleck, comic book hero, and this is from Fox, and we expect big things from this.

Old School is a comedy that we have seen, and it looks very, very solid.

Tears Of The Son is a high profile war picture with Bruce Willis.

Bringing Down The House is Steve Martin with Queen [Latiffa] in a comedy.

And The Core is a heavily sci-fi, special effects laden picture that again is a more Summer type oriented type of picture that's being released in this March quarter.

Throughout the year, as we continue to look at the calendar, we see title after title that jump off the page, that have high potential for carrying this industry forward.

It will start very early in April, with "Anger Management", move very quickly into May with "X-Men 2", the sequel to the first one.

And all the cast is back and we feel very strong with that picture. "The Matrix;

Reloaded", comes out on May 16th, followed by "Bruce Almighty", a Jim Carrey comedy on May 23rd. "Finding Nemo", is the Disney-Pixar picture for this summer on May 30th.

Then we move into "The Hulk", on June 20th. "The Hulk", being the high profile comic book action-adventure for the summer.

Then Arnold's back in "Terminator 3", on July 2nd; "Legally Blonde", that weekend; "Pirates of the Caribbean", two weeks later; "Matrix;

Revolution", a sequel to the sequel to the sequel opens in November.

Then you have "Mona Lisa Smile", with Julia Roberts in November. "The Cat in the Hat", comes out in December as the Seuss book-to-picture trend continues. "The Last Samurai", is in November, with Tom Cruise.

And we will end the calendar year with "Lord of the Rings: The Return of the King", on December 19th.

And as you have seen, the sequel, the second one, is outdoing the first one and we expect the third one to do similar or better business than the second one.

This, combined with seven additional sequels that I won't take time to mention here, give us a solid platform for business virtually throughout the year.

We have recently polled, over the last two weeks, major studio's distribution executives and we have obtained a snapshot composite consensus for the industry of 2003, which appears, despite last year's 9.5 billion record, to be equal to or slightly up for this calendar year.

So, with that I'll turn it back to Peter.

Okay, [Samur] [ph], I think we're ready for the Q and A portion of the program.

At this time, I would like to remind the analysts, in order to ask a question, please press star one on your telephone key pad.

The first question comes from Bishop Cheen of Wachovia.

Good morning, Peter and Craig and Phil and Dick.

A couple of questions; on the revenue per head, it looks like, just going by your numbers, that attendance again in this quarter, pro forma, was down and you're doing well with having lifting - I guess with higher ticket and concession prices.

The question is A, can you break-out the ticket from the concession prices?

B, can you talk about if you've done any adjustment to that five day period on whether the attendance would have been more even ahead or still in back of?

Yes, I'll try to respond to those.

The average ticket during the quarter was $6.38 and the concession per head was $2.40.

Now, I think the second part of your question was, can you tell me how much attendance we had in that five-day period last year, that I alluded to in the market comments.

It was about 448,000 people.

That would have been added during that five-day period?

Well, that were included in the pro forma numbers last year that were not picked-up this year.

All right.

And then, the 638 and 240 for this quarter just ended; can you do that breakdown to the same period, prior year?

Yes, just a second.

The average ticket, 5.81 and the concession, 2.32.

Again, you have nice theatres - we have one in this town.

They're great to go to and all that.

I guess the question is, in a relatively low inflation era, how much higher can you boost your ticket prices?

Well, I think that - first off, in our case in particular, it's not just a matter of raising prices.

We have, historically, offered discounts that also come into play as you set your pricing strategy.

And one of the things we've done over the last couple of years and recently, is take a look at those discounts.

And to the extent that we are utilizing capacity and offering discounts, we've taken those discounts off the table.

So, not all of it's just raising prices.

Okay.

Just a last question on competition.

In recent months you had some more competition come in, primarily in, I think, Los Angeles, San Francisco, which are two very important markets for you.

How has been the tenor and tone of that competition in the last quarter and, you know, what does it look like going forward?

Yes, I'll try to respond to that also.

We've got to measure the impact that we experienced in the second fiscal quarter and we're pleased to see pretty substantial improvement.

We still have that competitive pressure, but the impact, let's say, on our market share was much reduced during the third quarter.

And we think that will be a continuing trend - that we'll continue to recapture that share as we go forward.

And Bishop, I just want to add one thing on your pricing power question.

I think one of the things that we have going for us as AMC is given that really our philosophy, in terms of the type of facility and the quality of our operations, we actually think that we have a little more flexibility with respect to pricing our product, if you will, versus others that would have maybe a little frills, so to speak, approach to the business.

So, that, for us, is a competitive advantage.

Okay, point noted.

Thank you, Peter.

You're welcomed.

Your next question comes from Margaret Blaydes, of Salomon Smith Barney.

Yes, thanks.

Just following-up on that last question.

I was just curious if you could comment on any other regional pockets of particular strengths or weakness?

And secondly, just looking forward to 2003, I was curious, with the spreading out of the releases that you noted - in terms of the release schedule, if films tend to have a longer theatrical life and how that affects your profit in terms of how, you know, contractors [indecipherable] and stuff?

Thanks.

Okay.

I think, Margaret - this is Peter speaking.

On the regional pockets, we don't really - you know, as I think as we've said over the prior calls; as we look back over the last year and we look at the various competitors - we know, really, you know, who is building and who is not building so much.

What it seems to us is that it really has been more the, what I would call, sort of, the local, regional exhibitors as opposed to some of the major national exhibitors.

Other than ourselves, who have really maintained, I would say, a very steady, stayed approach to our unit development.

Which, philosophically, we believe as any industry leading retailer should believe, that you've always got to maintain a certain steady level of unit development in the form of new building.

And of course, in our case, we combine that with the disposition program that we've undertaken over the last several years.

And the net result of all that is to improve the overall portfolio.

So, it really isn't - we can't say that it's really market specific, as much as it is just depending on where some of these regional players are located.

They've been a little more active about growing their base.

But, the one thing that I would say is that we don't detect - I know folks are concerned or have been concerned about the notion of over-building.

And we don't really detect in the industry at this point, any one competitor or number of competitors combined that are in a high-growth over building mode.

And as we look ahead over the next several years, we just don't think that's a very likely scenario.

On the second part of the question --

The second part about the playoff of the pictures potentially being longer - we're not experiencing that the playoff is longer on any one particular picture.

You've obviously had "Greek Wedding" be out there for 40 weeks.

That's kind of an anomaly.

But, I think what you're seeing is a more intelligent approach to the release schedule that broadens it out - spreads it out throughout the entire year.

And the studios' paying attention to when the other guy's releasing their picture, are allowing their own picture to breath, as well as the other guy's picture to breath.

And by that, I mean they're not all ganging-up on the same weekend or spreading it out.

In fact, as we come into the room this morning, there's four or five major titles for 2004 that have already staked-out their weekends.

And we think this is a very healthy, intelligent approach to the business, that again, spreads it out over a longer period of time.

Now, if any one picture will perform better because of that, we believe that that will happen due to that scenario.

Okay, thanks.

Your next question comes from Jeff Logsdon, of Gerard Klauer.

Good quarter, guys.

Two chains - or it appears that two chains are out in the marketplace, Landmark and Hoyt's.

Any interest in either of those for you all?

Jeff, I would say no on them.

The business in those circuits are different, as you well know, having, you know, followed this industry for a number of years.

The Landmark circuit is really more of an art house type circuit.

And our feeling has been, about that business, it's a niche, boutique houses.

And we have the configuration in general, with our store product type - given that we're more megaplexed than the rest of the industry, to be able to bring that type product over into our megaplex facilities, if, as, and when it crosses over into the domain of a commercially appealing film.

So, for us, that type of acquisition just wouldn't make any sense.

We are actually partners with Hoyt's in an international company that has theaters down in South America.

And we feel they are a great partner with us in that.

And we've had no discussion about doing anything [with Hoyt's] [ph].

If any of Hoyt's theaters close, you know, in some other potential transaction, could that be a benefit to you?

Yes, absolutely.

Craig?

Yes, there's some overlap in markets where we participate and we could benefit some from attendance migration to the extent there are closures.

And then maybe finally, Capex expectations for fiscal '04 and theatre openings, theatre closings from your present vantage point, in fiscal '04?

Okay.

You know, let me give you the base of three.

I think I mentioned earlier, we had just over 100 screens come online this year.

Actually, kind of the same outlook for next year; 100 plus a few.

Closures; just over 100 in fiscal '03 and that number may be 70-80 next year.

Then on a Capex basis, it looks like the year will finish out - net Capex of about 54.

And we really look to have about the same level of Capex next year.

Great.

Keep it up.

Your next question comes from Ray Schleinkofer, from Thomas Weisel.

Yes, just a quick question; as we start to get into not so much this fourth quarter, but particularly the first quarter of '04, we do have some tough comps going against "Star Wars" and "Spiderman".

As we're looking at that, how should we be thinking about, sort of modeling into the quarter and then the full year, particularly given the operating leverage of the business?

You know, we haven't really sat down and done a by-quarter look.

But, I think our belief is that next year the box office could be up - flat to up a bit; let's say a percent.

We'll probably see some inflation, again, on ticket and concession spending.

History would say it ought to be 3 to 4 percent.

So, frankly, it looks like there could be some reduction in, actually, attendance for the year.

So, again, I think that's our view that we don't see a dramatic drop-off in the total box office, but it's probably going to be supported by what's been our traditional pricing increases.

Yes.

And then just a housekeeping question.

Do you have that balance on the Series A preferred?

The accreted balance?

Yes.

We'll have to call you with that.

We'll make a note.

I'll call you.

Thanks, guys.

Your next question comes from Chris Dixon, of UBS Warburg.

Thank you very much.

Good quarter.

As you look out as to the closings of your theatres, could you give us a sense as to where you are in terms of your mix?

Peter, you've talked in the past of kind of state-of-the-art megaplexes.

You've had multiplexes, which were just great demos in good locations.

And then let's just call them legacy leases.

Where are you in the under-performing and what's the mix look like today and what do you think you can be a year from now?

Okay.

Well, right now, Chris, we used to show a pie chart.

We divide the pie into the mega and the continuing multi's and the dispositions.

The disposition group at this point, is around 8 percent of the overall screen count.

That would have been at the end of the quarter.

That would be about 293 screens.

So, roughly 92 percent of the circuit in megas and what we define as continuing multi's.

Now, one of the things that we also watch when we look out over the next several years in terms of the content of the portfolio improving, is the screen-per-theatre count.

Because, as you bring off these older theatres with smaller screen for theater count and you bring on the newer theaters, which have larger screen per theatre counts, the mix of that will go up - or at least you would think that would be the case if you're doing the business right.

And, so as we work out the next several years, we're sitting at about 14.5 screens per theatre right now.

And at the end of '03, our projection would have us at about 14.7 and that would grow to around 15.1 at the end of '04.

And then as we look out to '05, around 15.4.

And that's a very interesting metric, because what it really says is the average size of or theatre has really grown to, if you will, be predominantly a megaplex circuit as we look out.

I don't know if that answers your question.

Yes.

And to follow-up on that; if you look across the operations during the most recent quarter, what are the margin differentials between the state-of-the-art megas with stadium seating?

All the way down.

Okay, Craig, you want to - we've got some - Just a second, Chris.

Well, obviously, it's subject to location.

Well, yes, we stratify the structure and look at the difference between the megas and [multiple speakers.]

Yes, the megaplexes - and again, I'm going to give you this on a before rent basis just to kind of common size it.

On a cash flow before rent, megaplexes are right at 35.5 percent.

The continuing multi's, as we define them, are at 32 percent.

The disposition multi's; at 23 percent.

Great.

Thank you very much.

I appreciate it.

The next question comes from John [Medglow] [ph], of [V and P Ferribus] [ph].

Good morning.

One last question that I had was that, Peter, you talked a bit about Hoyt's and Landmark, but could you give a little more color in terms of what you're seeing in terms of any potential acquisitions, given your strong liquidity?

Yes.

Well, John, I think we've made this comment in prior calls.

We've got a very disciplined approach to acquisitions, which really revolve around the two [axis] [ph] of the quality of the plant and facility and really, the quality of the market.

And on the latter point, the quality of the market for us means really more of a major market.

That's who we are; a top 25-50 DMA type of a player.

So, with that backdrop to the approach, for us, it's not so much a matter of just being opportunistic.

It's really more tactical and strategic in terms of the names of those circuits that really fit our criteria.

And the way we approach it is we know who those folks are and we are generally, in any given point in time, at some level or hopeful of dialogue with them, if nothing more just expressing interest to them that if, and, is, and when they decide that they might want some liquidity, that hopefully, they would talk to us first.

So, there's really no mystery to the acquisition approach for us.

It's, to summarize, stay focused, be disciplined, know who it is that we want to go after, and then just work those deals.

Okay.

So, I guess - and again, that's obviously consistent with what you've been saying.

So, you're not going to change that philosophy, you know, to field - you know, given the amount of liquidity you have, you know, pressure to possibly doing something else just to try to grow?

No, not at all.

Not at all.

That's a recipe for disaster.

Okay.

And actually, if you could, [line item] [ph], the NCN and other; what does that consist of please?

Well, the NCN is our wholly-owned company that is engaged in onscreen advertising.

Okay, great.

Thank you very much.

There are no further questions at this time.

Okay, great.

I'd like to thank everyone for joining us this morning.

Great questions, as usual.

And as you can tell, the company and its prospects - we're good to go on product, and we think that there is the prospect of good film product out there, as you've heard from Dick Walsh today.

The quality of the AMC asset base should continue to drive the industry leading levels of unit projectivity that really characterize who we are.

That, in turn, should produce leading returns on invested capital, which of course, will ultimately drive the continued creation of value for our shareholders.

So, on that point I'll close today.

Stay warm through the balance of the winter.

And we look forward to reporting to everyone after the spring [thaw] [ph] in May.

Thank you very much.

Thank you for participating in today's AMC Entertainment Incorporated conference call.

This call will be available for replay, beginning at 1:00 PM Eastern time today, through 11:59 PM Eastern time on Wednesday, February 5th, through the web site, www.AMCTheatres.com.

You may now disconnect.