AMC Entertainment Holdings, Inc. (NYSE:AMC) Second Quarter 2022 Earnings Conference Call August 4, 2022 5:00 p. m. Eastern Time
company representatives
Adam Aron – Executive Director
Sean Goodman – Chief Financial Officer
John Merriwether – Vice President of Capital Markets and Investor Relations
Conference Call Participants
Eric Wold – B. Riley Values
Operator
Best regards! And thank you for being here. Welcome to AMC Entertainment’s webcast on the 2022 results. During the presentation, all participants will be in listen-only mode and then we will have a Q&A session. [Operator Instructions] This convention is being recorded lately, on Thursday, August 4, 2022.
And now I would like to entrust the lecture to John Merriwether. Continue, please.
John Merriwether
Thank you Scott. Good afternoon everyone. I would like to welcome you to the webcast of GAC’s 2022 quarter earnings. With me this afternoon are Adam Aron, our president and chief executive officer; and Sean Goodman, our chief financial officer.
Before I entrust the webcast to Adam, let me remind everyone that some of the comments made through control in this webcast would possibly involve forward-looking statements based on existing expectations of control. Many dangers, uncertainties, and other points could cause the actual effects to differ materially from those that would possibly be expressed today. Many of those dangers and uncertainties are addressed in our most recent public documents, adding our most recently filed documents 10-K and 10-Q.
Many of the points that will determine the company’s long-term effects are beyond the company’s ability to predict or predict them. In view of the uncertainties inherent in any forward-looking statement, auditors are cautioned not to place undue reliance on such statements. The Company assumes no legal responsibility to revise or update any forward-looking statements, whether as a result of new data or long-term events.
In this webcast, we would possibly refer to non-GAAP monetary measures such as adjusted EBITDA, consistent currency, loose money flow, consumption of operating money, and operating money generated, among others. For a complete reconciliation of our non-GAAP measures with GAAP results, please refer to our earnings release issued in the Investor Relations segment from our previous day.
After our comments ready, there will be a Q&A session. This afternoon’s webcast is being recorded and there will be a repeat in the Investor Relations segment of our online page in www. amctheatres. com later today.
With that, I pass the one to Adam.
adam arron
Thank you, Jean. Hello everyone and thank you for joining us. Today, we have some incredibly exciting news to share with you. First, our effects for the current quarter, which were greatly ahead of the current quarter last year and exceeded market expectations. for revenue, adjusted EBITDA and net income. And for now, our plan to factor a special dividend into AMC percentages by the end of this month, not dilutive, because everything will pass and only pass to our percentage base from the date of the dividend. This is a resolution that fundamentally and deeply strengthens our business and will give us great flexibility as we move forward. These are exciting times for AMC and our investors.
I’m going to start this webcast through communication about the company. I will then pass the call on to Sean Goodman, our chief financial officer, to communicate about our finances in more detail, and then I will return to communicate with us about our announcement of special dividends and the significant benefits it brings to our shareholders.
I can’t begin to put into words the progress AMC Entertainment has made in the current quarter of 2022. Thanks to Dr. Stephen Strange, Tom Maverick Cruise, Elvis Presley and everyone who is hungry for other people who eat Jurassic dinosaurs, because they all revered our giant screens at AMC. The quarter of the moment was a good fortune and our quarter of the most productive moment in 3 years. In addition, and this is very important. They reinforced Hollywood’s confidence in theatrical exhibition and strengthened Hollywood’s commitment to theatrical exhibition.
As we predicted, the improvement in the effects of our quarter at the moment strengthens our brain and our server to further convince us that we are making wonderful strides on our way to recovery from the pandemic. As you can see from our press release, AMC exceeded expectations when other people returned. to mass cinemas. Some 59 million viewers arrived at our international AMC cinemas in the current quarter, up 168% from the same quarter last year, or more than 2. 5 times.
They take us to new heights in our high-margin food and beverage business and, thanks to their sponsorship, we generated a positive adjusted EBITDA of $107 million in the current quarter of 2022, an improvement of $258 million over that figure in the current quarter of 2021. We also generated positive operating money in the current quarter of 2022 of $52 million. This is an improvement of $178 million over the same quarter a year earlier.
The quarter of the moment marked the most powerful North American box since 2019. Many films shone brightly in the quarter of the moment, but none shone brighter than Top Gun: Maverick. I myself have noticed it 4 times now. Top Gun: Maverick now comes with $1. 3 billion in global box office earnings and occupies the most sensible spot at the box office so far in 2022. Maverick also broke all-time records by submitting the highest-grossing film of all time to premiere on Memorial Day. weekend. It has also become the highest-grossing film of all time, both for Paramount Pictures and for a film starring Tom Cruise.
I’ve said that other people will be coming back to theaters in gigantic numbers, and that’s precisely what they did in this quarter of 2022, and what they’ve been doing ever since.
To the opponents, who, in our view, necessarily predicted a secular decline in theatrical display. All I can say is look at my fiery hashtags on Twitter, you know what I mean.
This year’s part of the moment promises to be just as exciting, with a wonderful mix of horror, action, drama and comedy genres tailored to the family circle to appeal to everyone from young to old, adding Warner Brothers, DC Comics’ Black. Adam with Dwayne The Johnson Rock; and 3 Disney films, plus the animated film Strange World, and two highly anticipated Disney sequels, James Cameron’s Avatar 2, THE WATER ROAD, and Marvel’s Black Panther: Wakanda Forever.
Just last week, the tough and poignant trailer for Black Panther 2: Wakanda Forever was released and garnered 172 million amazing trailer insights in just 24 hours, fitting into one of the most productive debuts in the Marvel Cinematic Universe trailer. As Nicole Kidman reminds us in AMC’s now iconic and respected advertising crusade, “Since Hollywood has wonderful stories to tell. “It’s clear that moviegoers are still eager to enjoy those dazzling photographs on AMC’s massive single-player screens. Speaking of Nicole, our advertising crusade is so effective that we hired her to be our spokesperson for another full year.
The smart fortune of the quarter of the moment continued until the beginning of the third quarter. As with two examples of letting the smart times run, the July 2022 attendance that just ended saw the number of visitors visiting AMC theaters in the U. S. The U. S. Food and Beverage Earnings Figures for July appear to be the highest single-month figure in our U. S. theaters. In the 102-year history of our company.
For full transparency, there is a shortage of new primary film titles coming out in August and September. So, things will slow down for several weeks, don’t expect too much from us for the T3 total. But then comes the fourth quarter of 2022. It talks about the strength of the stars, appearing in movie theaters. These and many more will adorn all our screens in just thirteen weeks of the fourth quarter of 2022.
Jamie Lee Curtis in HALLOWEEN FINALE; Julia Roberts and George Clooney on TICKET TO PARADISE; Dwayne Johnson, Pierce Brosnan and Viola Davis in BLACK ADAM; Jessica Chastain, Anne Hathaway and Sir Anthony Hopkins in THE HOUR OF ARMAGEDDON; Margot Robbie, Christian Bale and Robert De Niro in AMSTERDAM; Tom Hanks in A MAN NAMED OTTO; Brad Pitt and Margot Robbie in BABYLON; oh!And not the expected sequels of BLACK PANTHER, SHAZAM and AVATAR.
Similarly, the list of movies for calendar year 2023 also makes us smile. Our current internal forecast is that the 2023 domestic box office, the fundamental measure suggesting the suitability of theatrical display, is expected to be in the U. S. In the U. S. and around the world, let it be several billion dollars more than that of calendar year 2022, billions of dollars to come. We look into the fourth quarter of 2022 and look into calendar year 2023 with absolute joy.
More progress has been made on GAC in recent months since our last quarterly call. We have begun the installation of the largest green initiative in our corporate history, with the advent of laser projection generation in the coming years on almost part of our American screens and laser projection will make the photographs on those screens much brighter and much sharper that will surely excite moviegoers in the future.
We are already in the verification markets in Chicago and Kansas City with our partner. Uber Eats for AMC Perfectly Popcorn home delivery and other parts at our movie theater dealerships. The first effects are available, so we expect a domestic launch in the fourth quarter. of this year. Similarly, the progression of ready-to-eat microwave and popcorn recipes is on track and we look forward to selling our popcorn products in grocery stores and/or convenience retail stores next year.
We are also in active discussions with the credit card issuer and hope to introduce an AMC credit card with the shared logo that will launch nationally in early 2023 or, in all likelihood, by the end of 2022. And with the express insistence of our shareholders, we are intensifying our game powerfully on products with the AMC logo and the movie logo.
As for Hycroft Mining, Hycroft has just announced its largest exploration program in about a decade. Keep in mind that Hycroft has only explored about 2% of its 71,000-acre mine site so far. We are confident that our investment in Hycroft will materialize through an excuse for puns, and that it will be lucrative for the GAC.
Speaking of investments, our Board of Directors has also legalized us to create a fund of up to $100 million for additional and transformative investments where AMC can seek to raise the price and thus create a significant additional price for our shareholders. In fact, as I’ve said, before, we’re surely committed to transforming AMC into a bigger, bolder, more powerful, and more successful company even than the one that existed before the pandemic.
That said, I will now pass the call on to Sean to talk about our finances in more detail. Are
Sean Bonman
Thank you Adam and thank you all for joining us this afternoon. As Adam said, the second quarter was wonderful for us. We welcome 59 million visitors to our cinemas worldwide, far more than the 22 million visitors we gain right now. last year’s quarter and the 39 million visitors who visited us in the first quarter of 2022.
This assistance generated profits of $1. 17 billion. That’s more than 2. 5 times the $445 million in profit we had in the current quarter of 2021 and that’s only 50% more than the $786 million in earnings we recorded in the first quarter of this year. But more importantly, we achieved a positive adjusted EBITDA of $107 million, a very significant improvement over the EBITDA loss recorded in the current quarter of last year and the first quarter of this year.
All monetary effects obviously reflect the continued recovery of the industry and our business. As has been our practice during the period of constant recovery, it is useful to take a look at our monetary functionality measures compared to pre-pandemic levels to better assess the dynamics of the company. and profitability as our recovery progresses. This research shows that our guest-consistent measures of functionality in the current quarter were universally well above pre-pandemic levels in 2019.
At the moment, quarter of 2022, on a consolidated basis, overall earnings consistent with visitors $19. 73. This is 27% more consistent than in the second quarter of 2019. This is due to an expansion of access gains consistent with visitors of 19%, expansion in food and beverage earnings consistent with visitor of 32%, and expansion in other gains consistent with visitor of 65%. All of this is compared to the current quarter of 2019.
In the domestic business, inbound profit consistent with visitor accumulation increased by 22% compared to the current quarter of 2019 and in our overseas business, accumulation increased by 12%; and when we normalize the strengthening of the U. S. dollar relative to 2019, gains from foreign inflows consistent with visitor accumulation will increase by up to 16% measured in consistent currency.
Revenue expansion consistent with visitors has been driven through consumers who have chosen to transfer to the most productive visual and sound capabilities imaginable found in our high-end large-format offerings, such as IMAX, Dolthrough Cinema at AMC Prime. Footfall accounted for 15. 6% of national footfall in the second quarter and this compares to 10. 9% in the current quarter of 2019. And in our overseas markets, large-format premium attendance in the second quarter of 2022 was 10. 4% compared to 6. 4% in the second quarter. moment quarter of 2019.
In addition, second-quarter access gains benefited from a favorable overall combination from Showtime, along with value adjustments, adding highly successful and opening weekend values.
From a consistent food and beverage standpoint, we have enjoyed incredibly high profits relative to visitors as our visitors continue to participate in the full entertainment party at the theatre. In our domestic markets, food and beverage spending is consistent with visitors in the $7. 52 quarter; that’s 55% more than the average spend in the current quarter of 2019 before the pandemic. And in foreign trade, food and beverage spending consistent with visitor $4. 43, up 22% from the current quarter of 2019 and up 26% on a constant currency basis.
Our significant inconsistent performance in food service remains basically due to an accumulation in the proportion of consumers who choose to take credit for our industry-leading food and beverage offerings, combined with the fact that they buy more parts according to order, and are made simple and convenient through our AMC applications.
Compared to the current quarter of 2019, other domestic earnings consistent with visitors increased by up to 65% and other foreign earnings consistent with visitors increased by 63% and 69% in constant currency. seating and ordering your food and beverages through our websites and internet applications, as well as the benefits of expansion and diversification projects such as renting our rooms outside peak hours and benefiting from various promotional and marketing projects.
During the period of constant recovery, we have been very agile in adjusting our payroll formula and flexible viewing schedules to meet market demands and optimize efficiency. session.
Let’s move on to money and liquidity. We ended the quarter with a strong liquidity position of approximately $1. 18 billion, consisting of $965 million in money and money equivalents and $211 million in unused credit lines. These strong effects for the quarter generated non-GAAP operating money of $52 million as operating money generated. This is an improvement of $178 million over the current quarter of 2021. We recall that this non-GAAP operating money measure represents money generated prior to debt service fees and prior to deferred payment of rents.
Going forward, we expect to return to non-GAAP operating money inflow in the third quarter as we experience weaker seasonal cash and capital pressures similar to those in the boxArray strong-momentum quarter.
With regard to capital allocation, we continue to apply a balanced and disciplined technique for capital allocation. Our top priorities remain unchanged: first, to ensure that we have sufficient liquidity to manage the recovery phase of our activities; two; Strengthen our balance sheet by reducing our debt and related interest expense. And three; invest in our business for the visitor experience. And yet four; opportunistically pursue pricing initiatives, adding those that lead to the department and the expansion of our business.
As we previously reported, in the quarter we quietly strengthened our balance sheet by purchasing approximately $72. 5 million of our 10% subordinated secured notes due 2026 on the open market. We made this acquisition for approximately $50 million, which represented a reduction in the nominal price of debt.
As a result of this transaction, we recorded a profit on debt extinction this quarter of $59 million and our annual interest expense will now be reduced by $7. 25 million. During the current quarter of 2022, we also paid approximately $53 million in deferred hires, reducing our deferred hire balance to approximately $219 million.
Remember that in March 2021, this deferred rental balance exceeded $470 million and that over the past 15 months, we have reduced the deferred rental balance by more than $250 million. We expect to further reduce this deferred rental balance in the current part of 2022 through approximately an additional $70 million.
Active control of our theater portfolio continues at AMC as we climb new high-performance and at the same time poor-performing venues, all with the goal of improving visitor satisfaction and improving our profitability.
During the quarter, we added 12 new theaters and closed three. This brings the total number of closed places since the beginning, since the beginning of the pandemic to 98, and the total number of new places open to forty-five for a net relief of 53 places. And I can tell you that the forty-five new seats combined not only exceed in particular the 98 closed places, but also exceed our subscription expectations.
Net CapEx from owner contributions was $36 million in the quarter, and for this year, regardless of any M&A activity, we expect net CapEx to be between $150 million and $200 million.
Finally, before handing over the webcast to Adam, I’d like to share with you how excited I and the entire AMC control team are about the innovative special dividend that Adam will now communicate in more detail. Adam?
adam arron
Thank you, Sean. We will open the call for questions in a few minutes. But before that, I would like to tell you about the decisive and ambitious action we took this afternoon. After months and months of work to arrive at this announcement, we announced the news at the breaking hour that we will factor a stock dividend one by one from a new unit of AMC-like stock for our existing non-unusual shareholders from the dividend. Dates from August 19 to the end of this month. This is a first step forward for AMC. In my opinion, it is probably the biggest favorable progress for our company of the entire calendar year 22, either backwards and into the future.
When it comes to the long term of our business, we believe this is literally wonderful news for AMC, and not such smart news for the prophets of doom that could take root in our opposition. In fact, I just spoke with someone I respect enormously to the Wall Street Journal, who saw our inventory dividend announcement. He told me it was a “stroke of genius. ” Either way, I don’t think the paper is going to publish that, however, that’s what they said.
Earlier this year, I said GAC intends to take meaningful and ambitious action for our business and address some of the grievances that many of our shareholders have continually voiced on social media and in other ways. However, I also said that the art way of running the business is complex and that AMC is equally in the spotlight, it is knowing what to do and what not to do; know when to do it and know when not to do it.
I previously commented that, in my opinion, we patiently await at least the release of GAC’s quarter 2022 monetary effects. After all, he knew that Top Gun: Maverick and Jurassic World Dominion would be coming. As we launch those effects today and in our minds, those effects are incredibly encouraging, as we showed a dramatic increase in traffic and earnings, as well as positive adjusted EBITDA, making it a much more advanced edition of the same quarter last year. As I said earlier on this call, thank you Tom Cruise. So, AMC shareholders, I am pleased to announce that today we are jumping.
In the context of the favorable effects of AMC in the quarter of the moment of the quarter of the moment, now is the time for us to take decisive and even valuable measures, take a look at that common word in the dictionary, “value”. Today, we announce that later this month, AMC will create a new class of securities and factor a dividend into AMC-like shares payable only to holders of our 516,820,595 non-unusual factored and notable shares factored through the Company. This includes all of our U. S. shareholders and all of our foreign shareholders as a good.
We will factor those new sets of AMC Preferred Shares one by one, investors will get one unit of AMC Preferred Shares for AMC Common Shares they own as of the mid-August registration date.
In addition to our non-unusual stocks, which are lately traded and will continue to be listed on the New York Stock Exchange under the symbol AMC. This new unit of GAC’s preferred shares will also be a marketable security. York Stock Exchange as of August 22, 2022 under the symbol A-P-E, yes APE. APE as in AMC-A, prefered-P, equity-E, A-P-E, APE. Et informally, we will now designate our two securities indexed on the New York Stock Exchange as stocks for non-unusual stocks and as EPA for AMC Preferred Equity Units.
For a variety of reasons, a dividend distribution in almost any form is a long-standing demand of our investor base. Today, we have responded to that demand. Therefore, this issuance of 516,820,595 new EPAs will necessarily meet the same goal as a widely expressed “share count” request, as new sets of shares to AMC’s liking will only pass to holders of non-unusual GAC shares issued and notable through the company. Once again, we answered the call.
Since the dividend is only distributed to our existing shareholder base as of the date of the dividend registration, there is also no dilution of this initial issuance of the EPA related to the percentage dividend, as those new EPAs all pass and only pass to shareholders. of the company that issued non-unusual percentages of AMC. The number of percentages of AMC ads issued and notable will remain unchanged at 516,820,595 after dividend payment. Thus, as of August 22, there will still be 516,820,595 EPAs issued and in circulation.
Think of this as something very similar to a two-for-one inventory split. Except that in an inventory division, an investor would get two new non-unusual percentages for every old and non-unusual inventory they own. In the case of AMC announced today, since this is a similar percentage dividend, an investor will have a percentage and an EPA instead of having a percentage not unusual for singles.
Since this inventory dividend announced today is similar to an inventory split, it makes sense to assume that once a dividend is issued on August 22, the value of our non-unusual percentages will fall. But above all, and I cannot repeat it enough, for each and every one of the percentages maintained, investors would not have only one percentage, but would have a percentage and an EPA.
Thus, his economic interest in AMC, which is now just an inventory, would be rather the value of a percentage plus the value of an EPA, any of which will operate on the New York Stock Exchange. And while no one’s crystal ball may be expecting inventory market fluctuations or volatility, the economic interest our percentage shareholders will have in inventories and EPA will be in a company that is particularly more powerful than AMC is now, before that announcement is made this afternoon.
EPA’s issuance is made imaginable given the continually announced approval by AMC shareholders in 2013 that the creation and issuance of AMC Preferred Shares could occur slowly at the long-term discretion of AMC Entertainment’s Board of Directors.
Although each EPA is designed to have the same rights as a common percentage and can be changed to a percentage percentage, this conversion resolution still falls solely on our shareholders. The conversion can only take a position if, at a long-term general meeting, the corporate proposes and the shareholders, together with the holders of EPAs, vote in favor of authorizing more percentages. It is still our shareholders who call to move or not to the road, they decide.
But here’s probably the most important thing of all, in this announcement about the creation of THE EPAs today. With the creation of the EPA, GAC is deeply and fundamentally strengthening our business. We already have shareholder approval, so our board may only consider more EPAs in the future, beyond those that result from that initial dividend.
Given the flexibility that the ability to factor more EPA will give us, we will be able to increase the budget seamlessly if we so choose, particularly reducing any threats to survival as we continue to struggle on our way through this pandemic toward recovery and transformation. Instead of having to worry about our survival, the flexibility we have from THE EPA would allow us to continue our efforts to see if AMC thrives and flies away.
This new AMC preferred stock provides AMC with a currency that can be used over the long term to further strengthen our balance sheet, adding through the payment of some of our debt and other liabilities. It also gives us the opportunity to pursue additional investment opportunities that decorate price for shareholders and potentially transformative. All of this makes AMC tremendously, and I mean much stronger. Anything that moves AMC so far in one step is bad news, bad news, bad news, bad news for those who need to harm us.
That said, there are a myriad of main points and warnings similar to our announcement today. Therefore, I strongly urge investors to carefully read our press releases and their SEC documents on those topics that are incorporated herein for reference. To celebrate this milestone and as a token of our appreciation for the continuity of our shareholders, we will also offer a loose “I Own APE” NFT to all existing AMC Investor Connect members and new members joining until August 31, 2022. By the way, we have about 765,000 more people who have joined AMC Investor Connect in the last thirteen months.
Similarly, based on the popularity of the original ‘I Own AMC’ NFT we launched in January for AMC Investor Connect members, those who are on AMC Investor Connect or those who joined on August 31, 2022, they will also be entitled to get a loose and updated edition of what I have AMC NFT, make a couple of them.
When I think about this pandemic and the adventure we’ve all undertaken in combination over the past two and a half years, I’m aware of our shareholders’ determination toward AMC Entertainment and if I may speak personally for a moment about their trust in me as CEO. I need each and every one of those who listen to this webcast today or broadcast it later to know once again that every resolution and every action I take is aimed at gaining advantages for all of our shareholders. in the long run.
I act and think like a percentage holder, because I am also a percentage fork and a large one. At the existing AMC percentage price, I now own approximately $15 million of AMC percentages and also add my assigned percentages in the past not yet earned, assuming I gain at so-called target acquisition levels. I have more than $50 million in economic participation from AMC. It’s pretty obvious, yet it’s a strong incentive for me to do the right thing for all of our shareholders.
Throughout this effort, I have been frank; I have tried to keep my word to our shareholders, Array. Just a few months ago I promised that we would be bold. And to that end, a few months ago, I promised that at the right time we would make the leap. Ok! Today we jump.
John, let’s move on to questions from shareholders and analysts.
Q&A session
A-John Merriwether
Super! Adam, a query just came and says the following. You say I saw in the press release that you said that this EPA dividend will be fundamentally AMC and has a great chance of creating a significant price for AMC and shareholders. Is that really as big and vital as you claim?
A-Adam Aron
Thanks for the consultation, Jean. Eh, well, I didn’t put it in the press release if I wouldn’t. You know, lawyers read those press releases thoroughly and make sure I need to. I can save what I’m saying. But I’m really going to surprise everybody and I’m going to say to this call right now, no, it’s not as big or as vital as I said in the press release. It’s bigger and more vital than I said in the press release.
As I mentioned in my prepared remarks, I believe this is the biggest step forward AMC will take in 2022. This necessarily eliminates the threat of short-term survival. You can never say never in the world, there are uncertainties, but I think the flexibility we will get from creating this new percentage will allow us to increase the liquidity we needed. This will allow us to reduce our debt; this will allow us to create interesting M&A opportunities. This is a huge step forward for AMC. This is very smart news for AMC and we all know that there are many other people in the world who don’t help AMC. This is not smart news for them.
John Merriwether
Thank you Adam! And there is some others who have just arrived via Twitter. It’s probably a foreign shareholder who says, wouldn’t foreign shareholders have a chance to fully participate in this EPA dividend?
A-Adam Aron
The answer to this question is certainly yes! That’s one of the things we made sure it would be. You know, one of the things that bothered me over the last year and in part is that we’ve made a lot of donations to our shareholders, through Investor Connect, but separately from Investor Connect, and we provide benefits in our American theaters. That’s because we have an IT system in all of our American theaters.
You know that we work in a dozen countries and that we have another PC system. System and we operate under other brands, Europe and the Middle East. This makes it very complicated to make global offers, because you can’t necessarily schedule it through everyone. those disparate data systems.
Most sensiblely, as far as voting rights are concerned, there is something that is quite a lot for us in the United States, and that is that many foreign brokerage firms do not have the ability to facilitate shareholder voting, and many of our foreign shareholders are: they feel somewhat disenfranchised because they don’t get the offers, you know, a loose popcorn, a loose ice cube, a loose cup of coffee, or early complex projections that we presented to our US Investor Connect members or they were at a disadvantage of their ability to vote, because they are, not because we deprive them of it, but because their agents are. That’s why we’ve made sure that when we factor in this unit of percentage that AMC likes, it will go into the accounts not just on our U. S. shoulders. In the U. S. , but also from our Canadian shareholders, our European shareholders and our shareholders around the world.
I have gained so many comments on my incoming Twitter account from so many other countries, where we have AMC shareholders. I must say that I appreciate your determination towards our company and that you read me your comments. So yes, this new EPA, this unit of shares to AMC’s liking will also be available to our foreign shareholders.
John Merriwether
Adam, I’m just going to read the next query, because I think it explains itself. The query is, it is said that now that the box is recovering from the pandemic, how do you see the relationship between broadcast, movie theaters and house studios?How have you replaced all of this compared to before the pandemic and where do you see things evolving in the future?
A-Adam Aron
So this is not a new query or a new problem. It has been: this total factor of not necessarily conveying, however, the commitments of the window and the Hollywood studio in theatrical exhibitions have been a hot topic since the summer of 2017 and we have been in active discussion. with studies since then. Nothing happened to replace theatrical exclusivity. With all those discussions in 2017 and in 2018 and 2019, nothing happened until the pandemic manifested itself in 2020.
And just as theaters closed, Hollywood continued with its films. And so, studio after studio has experimented with other methods of coming out of his films that are already in the box, adding other attempts outside of theatrical exposure. Some studios have released streaming-only videos, some have released streaming videos and theaters simultaneously, some have released videos in theaters, but on a much shorter basis.
Well, that experiment went on for two years, but here’s what everyone learned, especially from Sony’s Spider-Man: No Way Home movie that was released in December 2021. If you look at what happened in the last 8 months, with Spider-Man and Uncharted and Batman for Warner Brother, then this panoply of successes, one after another, after the other Doctor Strange, and Top Gun: Maverick and Jurassic World Dominion and Elvis, Thor and Minions.
Hollywood once again learned how much money can be made by posting videos exclusively in theaters first. lose subscribers, and there are many hypotheses that, although the market is large enough for a streamer or two streamers to be perhaps even 3 stainless, it will not reach 10 or more streamers.
And I think, taken together, Hollywood is moving away from streaming, Wall Street is moving away from streaming; Hollywood returns to theoretical exhibition. We now have agreements in place with all the major studios to bring their films that come out in our theaters exclusively for a sufficient time in which we believe the studio and AMC can make money.
And if this new window, which is like a month and a part of exclusive access to the cinema, if it is extended, we will be in a position to shorten it with the studios, and if it is shortened, we will push the doors of the studio saying to extend it. But you take it all together, I think it’s very smart news for AMC, we have a parade of hits on our hands that started last December or last March or last May depending on where you need it. begin with. And don’t forget when I told you I was looking for it, that the months of August and September are going to be difficult, so don’t worry, let’s not waste time being too positive about the 3rd quarter figures.
But look at the videos coming in the fourth quarter of 2022, it will be a monstrous shot, after a monstrous shot, after a monstrous shot, after a monstrous shot. And if you think the box is vital in 2022, it will have been billions of dollars more in 23 if our existing estimates are accurate. So again, we’re pretty positive about the future.
John Merriwether
Thank you Adam. Ask here from a shareholder and investor connect member who says what bonuses and AMC gives to their investors.
adam arron
A lot! Well, the first, the first merit is that we all just announced it, we announced that everyone will receive an inventory dividend in a few weeks. And by the way, if I can upload my answer about our foreign shareholders, you also deserve to have one, however, if you don’t, let your broker know how you deserve to get one, because you are entitled to one.
In addition to the launch of the new inventory dividend, we have implemented the AMC Investor Connect program. We have more than three-quarters of a million other people who have signed up and that’s the first thirteen months. foreign shareholders. One of the benefits of this is intelligent and flexible communication on our part about what is happening.
For our U. S. shareholders, take a look at what we’ve done and announced on Investor Connect. Some loose offers, we have our stalls, we had a new kind of main screening of films every month, almost every month before their audience. launch. In the world of moviegoers and bragging rights, you can watch a wonderful life movie before its general release, it’s a smart bragging right. We did this month after month, month after month.
Another laugh, a laugh for me anyway, is that we announced through Investor Connect that, as president and CEO of AMC, I personally organize film screenings, spread across the United States to have the ability to watch a movie with our shareholders. made in seven cities, Los Angeles, New York, Chicapass, Kansas City, Dallas, Miami and Washington DC. I hope to do a lot more in the fourth quarter and today I can announce with some enthusiasm that between September and Christmas I plan to have my first variety of investors abroad, probably in London, although it is also possible that it will move to other places in Europe.
And you know, the ones I attend, I shake hands with everyone in the room, I take a selfie photo with everyone who needs one. I committed everything from shirts to, I even signed a banana for one of them. This is a wonderful opportunity to meet our shareholders one by one. It’s seven of the happiest nights I’ve had all year.
We will continue to look for other tactics to praise our shareholders and, in particular, in my role, I have to figure out how to make some of the offerings we offer in our American cinemas available to our overseas investors. also.
John Merriwether
Ask Adam about our expansion plans. That said, will you see AMC theaters in Canada, for example, or more expansion in Europe?
adam arron
Well, in Europe, of course, because as you said in your comments before the call, you know that in the last two years we have opened forty-five cinemas. Most were in the United States, but many were in Europe and we continue to point to agreements. A horny asset to open new theatres, we just opened a theatre a few months ago in Finland and it is already one of the most successful theatres in Finland. And it is true that we are on the hunt for new opportunities in all the countries we serve lately.
But for us to go to Canada or other countries in Europe where we are not present lately, to decide on that, the Netherlands, Poland, anywhere we are not, the most productive way to do it is not to go to a country and open a theater. and being an irrelevant actor in that country. The most productive way to do this would be to gain something of limited length and scale. And before today, even though we had $1 billion of money at our disposal at the end of this peak last quarter, paying close attention to how we spend and invest it, as we seek to secure our still strong liquidity.
With this new inventory currency we have now, we can be much more competitive on the acquisitions front. Therefore, it is not definitive, there are no existing plans, but it is that we can make acquisitions abroad. This is not new concept for AMC or for me. Throughout AMC’s history, AMC has grown through acquisitions, 3 years ago, six years ago when I joined AMC, six and a half years ago, in my first year, we made 3 major acquisitions that took us from the largest movie theater of the moment in the United States, to the largest theater chain in the United States, to the largest cinema chain in Europe and to the largest cinema chain in the world.
Recently, just last year, we bought about a third of the Arclight Pacific circuit, which had not reopened after the COVID pandemic, and so far it is going very well. The Grove and The Americana theaters in Los Angeles, for example, are already two of the thirteen highest-grossing theaters in the entire United States under our leadership.
We just purchased five-eighths of the Bow Tie Cinemas circuit in the Northeast and this has allowed us to double our presence in the state of Connecticut, which is a major network of bedrooms in New York where we have significant market share, and already the theaters of our Bow Tie acquisition have approximately 20% more functionality than the projections we made in our modeling when we continued with this acquisition.
So we know we’re dealing with acquisitions, we’re smart at it. Now that we have a new percentage currency at our disposal, we will also be keeping an eye out for acquisition opportunities.
John Merriwether
Adam, I have other questions from investors, but why take a moment to replace and see if there are any questions from analysts right now?
adam arron
Absolutely!
Operator
Yes, we have one in line with Eric Wold with B. Riley Securities. Go ahead, your line is open.
Eric Wold
Hey, guys, good afternoon! I’m Eric Wold, a few questions. I guess one, obviously, this new currency has been used to potentially drive the company’s deleveraging and pay off some of the debt that has been incurred in recent years. any new moves you’ve possibly made, primary acquisitions or new entries, just the current state of the company, what do you think is the optimal leverage for a company like yours right now and your outlook for next year?
adam arron
Eric, the optimal leverage for our business is much lower than what we have lately. And, because of the pandemic, we have taken steps to reduce debt.
You may remember that in July 2020, we did a complicated bond swap, where we traded stocks for debt and erased, from memory, I think $555 million of debt at a stroke, they went away.
Similarly, just a few weeks ago, we announced that in the current quarter or in July, I the actual date, I know how to announce it. I the day we bought the debt. I think it was in the current quarter that we bought $72. 5 million of debt for $50 million and got a 31% forgiveness of that debt.
Now $72 million out of $5 billion; it’s like a drop in the ocean, but being able to recoup our debt with a 31% reduction is definitely a smart day for AMC. we would have to pay off our debt with a reduction in exchange for AMC shares, which is a wonderful deal for our shareholders.
Similarly, we have all been asked questions in previous calls about the deferred rental obligations we have contracted with landlords, theater owners, where we owe rent from calendar year 2020 or 2021, this year, next year, year 2024 and in the future. I’ve already contacted several owners, who said they wouldn’t mind being paid ahead of time and wouldn’t mind being paid ahead of time with a reduction if we could change it, but we were very concerned about maintaining our money load. , this war chest as I described it, because we need to make sure that we have been fundamentally in a position of strength with liquidity by our side.
But now we have a percentage coin that we like that we can use to lessen some of that: the obligations of the owners, again, at a discounted price. How fast can we get out of debt? Eric, I don’t know, you I know it’s just: we are in the first hour where we have this new coin at our disposal.
So I’m not sure we can give you an accurate figure of how much debt we can reduce in the next 3 months, six months, 12 months, 24 months, 36 months. What I can tell you is that we are a pretty artistic group. merit as a team. We have triumphed over a variety of demanding situations since 2020 and strengthened our balance sheet, and achieving a higher debt-to-EBITDA leverage ratio is very much in our value. So take place and we can tell you more as we become more informed.
Eric Wold
Sounds good. Thank you Adam, congratulations!
Operator
No questions about phones.
A-Adam Aron
We will pass, sorry, operator.
Operator
There are no questions from analysts.
adam arron
Well, let’s move on to Sean again. Do you have any of the latest from our shareholder base?
John Merriwether
Let me take a look ici. Si there is a query here, I think I will only cover another 3 quick shareholder inquiries. Here is a query about Highcroft and what is your timeline for making an investment and whether there are planned interactions between Highcroft and AMC?
A-Adam Aron
So there is one, Highcroft. I am so convinced. When history is written in spite of everything, it will be a smart thing for the GAC. A few months ago, I posted a kind of macho tweet that said that when the dust settles, there will be a lot of crows about Highcroft’s investment. I wasn’t going to be the one to eat the crow.
I remain that way, in part because Highcroft has raised all the money it wants to stay in business for years and years and years. Secondly, in terms of our interaction with Highcroft, I hear that Highcroft has selected a very wise new member. on your board; it would be you, Sean, because Sean Goodman, our CHIEF Financial Officer, is now a member of Highcroft’s board of directors.
But third, one of them so intriguing about Highcroft, and that is that it operates on 71,000 acres of land in Northern Nevada that is rich in minerals, and is only explored in the 40 years it has, 2% of its 71,000 hectares.
Gold and silver don’t just exist in a small place, they spread out and Highcroft just announced, partly for the money, a part. Because of the liquidity we allow it to raise, Highcroft has just announced that it is starting the largest exploration. he has more of his land than he has done in a decade. And while we don’t know what the effects of this exploration will be until they know, you and I hope they will find many more mineral reserves that deserve to be lucrative.
As for the investment program, we have received a very low market price. We have received a number of guarantees corresponding to the number of shares we have purchased. Therefore, we are necessarily doubling our savings without having to set up twice the amount. of money. And when we went to Highcroft, we didn’t do it for 90 days. If we were looking to make a 30- or 90-day success, we could have doubled our money in a matter of weeks. But that’s not why we were dedicated to investing in Highcroft. We think a lot more about ourselves, so I think our timeline with Highcroft is a bit like a personal equity firm.
Holding it for two to seven years and seeing what kind of price we can create for AMC shareholders, sometime within that time period, is when I’d be waiting. We know they gave it to us and that’s when I’d be waiting for us to come out, in a number of years.
John Merriwether
And here about GAC’s expansion initiatives. One user says I’m interested in branded products, retail popcorn, credit cards, NFT, and select content.
adam arron
You know, I tried to mention it in my ready comments, and to save time, I’m just going to temporarily say that we’re making progress on those fronts. I have given some time in my previous comments. I think it’s our popcorn business or our credit card business, our product business, you’re going to see developing activity starting this year and the first part of next year on all fronts.
John Merriwether
And the last thing I’ll ask this afternoon is that investors are requesting an update on our green initiatives.
adam arron
So, you know that the buzzword in the corporate world these days is ESG, and the E stands for Environment, and with smart reason. Many of us are very involved in what happens to the climate on this planet. Here in the Midwest in the United States it’s over a hundred degrees in the last few weeks, it’s hot, and that would make us all respect our planet, that we would like our young people and grandchildren to have a planet to live on.
The laser projection ad we made is a classified ad. That’s the value of $250 million of new projectors installed in our theaters, and the benefits are many. One is, of course, just for cinema, to make a much better film. the screen from 50% to 100%, makes the photographs brighter, sharper, clearer, sharper, moviegoers have many.
But environmentalists would also like it, because laser projectors consume much less electrical energy and we have thousands of them and they work all day 24 hours a day, 7 days a week, not 24 hours a day, 7 days a week. The thing in our current generation of 10-year projection is that they use halogen bulbs and halogen bulb grills, and they grill and therefore want to be replaced, which is expensive and laser lighting fixtures don’t go off as temporarily as halogen bulbs.
But once you have a halogen bulb burned out, guess what you’re doing with it. You put it in a landfill and I think I’ve been told it has a half-life of about five billion years, that’s not true, but the point is not having to throw them away. I mean, it’s true that they’re going to have life, but not five billion years ago. But not having to throw away halogen bulbs is very smart for the plant. We consume less energy, it’s an important step for AMC, but it’s smart for the environment and it’s smart for film producers.
adam arron
So I think you said your last consultation and I’m going to conclude, and I’m going to conclude.
To everyone listening to us today, thank you for your affection and fondness for AMC Entertainment. We have listened to everything we have been told for more than a year and a half. We have taken many steps that reflect their way of thinking and we have taken one today. with the creation of EPA that will be traded on the New York Stock Exchange in just a few weeks under the symbol APE. This is a big positive step for GAC. We are very happy to do so. We think they will be very happy that we do. In the long run, we know that this company will benefit, so it’s a very smart day at AMC, because today we jump. Thanks to all. we sign
Operator
This concludes today’s appeal. Thank you for your participation. I mean, disconnect your line.