UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)
ý		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 2009
For the quarterly period ended July 1, 2010 OR
OR
o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 1-33344

For the transition period from to

Commission file number 1-33344

MARQUEE HOLDINGS INC.
(Exact name of registrant as specified in its charter)

Delaware		77-0642885
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
920 Main Kansas City, Missouri		64105
920 Main Kansas City, Missouri (Address of principal executive offices)		64105 (Zip Code)
(Address of principal executive offices)		(Zip Code)
(816) 221-4000 (Registrant's telephone number, including area code)

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulations S-T (§~~229~~232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes o No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer o Accelerated filer o Non-accelerated filer ý Smaller reporting company o (Do not check if a smaller reporting company) ~~Smaller reporting company o~~

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

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

Title of Each Class of Common Stock		Number of Shares Outstanding as of ~~December~~July 311, ~~2009~~2010
Common Stock, 1¢ par value		1

Table of Contents

MARQUEE HOLDINGS INC. AND SUBSIDIARY ~~INDEX~~

		Page Number
PART I—FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited)	3
	Consolidated Statements of Operations	3
	Consolidated Balance Sheets	4
	Consolidated Statements of Cash Flows	5
	Notes to Consolidated Financial Statements	6
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	43
Item 4T.	Controls and Procedures	44
PART II—OTHER INFORMATION
Item 1.	Legal Proceedings	45
Item 1A.	Risk Factors	45
Item 4.	Submission of Matters to a Vote of Security Holders	45
Item 6.	Exhibits	46
	Signatures	47

INDEX



PART I—FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited)	3
	Consolidated Statements of Operations	3
	Consolidated Balance Sheets	4
	Consolidated Statements of Cash Flows	5
	Notes to Consolidated Financial Statements	6
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	30
Item 4.	Controls and Procedures	31
PART II—OTHER INFORMATION
Item 1.	Legal Proceedings	32
Item 1A.	Risk Factors	32
Item 6.	Exhibits	33
	Signatures	34

Table of Contents

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements. (Unaudited)

MARQUEE HOLDINGS INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands)

				Thirteen Weeks Ended						~~Thirty-nine Weeks Ended~~
				December 31, 2009			January 1, 2009			December 31, 2009			January 1, 2009
				July 1, 2010			July 2, 2009
				(unaudited)						~~(unaudited)~~
Revenues
	Admissions			$	~~444~~448,~~420~~597		$	~~376~~446,~~917~~227		$	~~1,281,145~~		$	~~1,198,365~~
	Concessions				~~166~~175,~~867~~959			~~148~~173,~~757~~660			~~487,908~~			~~478,507~~
	Other revenue				15,895			13,261			44,493			44,292
	Other theatre				16,396			15,425
		Total revenues			~~627~~640,~~182~~952			~~538~~635,~~935~~312			~~1,813,546~~			~~1,721,164~~
Costs and Expenses
	Film exhibition costs				~~239~~238,~~275~~823			~~196~~249,~~439~~101			~~696,704~~			~~646,551~~
	Concession costs				1820,~~378~~496			1619,~~000~~165			~~53,448~~			~~51,017~~
	Operating expense				~~153~~147,~~399~~641			~~141~~150,~~330~~177			~~445,179~~			~~435,411~~
	Rent				~~110~~114,~~423~~554			~~111~~112,~~724~~373			~~331,107~~			~~336,873~~
	General and administrative:
		Merger, acquisition and transaction costs			~~485~~5,756			~~306~~281			~~809~~			~~558~~
		Management fee			1,250			1,250			~~3,750~~			~~3,750~~
		Other			1413,~~709~~071			1013,~~741~~083			~~40,867~~			~~33,878~~
	Preopening expense				1,247			1,481			2,681			4,541
	Depreciation and amortization				48,603			48,788
	Theatre and other closure expense (income)				1,568			269			2,183			(2,064	)
		Total costs and expenses			590,194			594,218
	Depreciation and amortization				47,472			50,464			142,949			151,520
	Other expense (income)
	Impairment of long-lived assets				—			73,547			—			73,547
		Other expense (income)			(1,939	)		8,773
	Disposition of assets and other (gains) loss				(617	)		219			(878	)		(136	)
		Interest expense
		Total costs and expenses			587,589			603,770			1,718,799			1,735,446
			Corporate borrowings		40,569			35,849
	Other expense (income)
			Capital and financing lease obligations		1,383			1,413
		Other			(2,135	)		(1,889	)		(300	)		(11,793	)
		Equity in (earnings) loss of non-consolidated entities			1,766			(6,262	)
		Interest expense
		Investment income			(50	)		(99	)
			Corporate borrowings		39,611			37,003			115,929			110,646
			Total other expense		41,729			39,674
			Capital and financing lease obligations		1,413			1,497			4,239			4,492
Earnings from continuing operations before income taxes					9,029			1,420
		Equity in earnings of non-consolidated entities			(7,517	)		(6,033	)		(18,127	)		(15,739	)
Income tax provision					6,600			1,000
		Investment income			(36	)		(927	)		(168	)		(1,510	)
Earnings from continuing operations					2,429			420
			Total other expense		31,336			29,651			101,573			86,096
Earnings (loss) from discontinued operations, net of income taxes					(17	)		723
Earnings (loss) from continuing operations before income taxes					8,257			(94,486	)		(6,826	)		(100,378	)
Net earnings				$	2,412		$	1,143
Income tax provision					—			1,982			—			3,600
Earnings (loss) from continuing operations					8,257			(96,468	)		(6,826	)		(103,978	)
Earnings from discontinued operations, net of income taxes					494			2,085			1,086			8,917
Net earnings (loss)				$	8,751		$	(94,383	)	$	(5,740	)	$	(95,061	)

See Notes to Consolidated Financial Statements.

Table of Contents

MARQUEE HOLDINGS INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

			December 31, 2009			April 2, 2009
			July 1, 2010			April 1, 2010
			(unaudited)
ASSETS
Current assets:
	Cash and equivalents		$	~~533~~288,~~217~~307		$	~~536~~497,~~580~~948
	Receivables, net of allowance for doubtful accounts of $1,952 as of December 31, 2009 and $1,564 as of April 2, 2009			62,174			29,782
	Receivables, net			42,075			25,539
~~Other current assets~~	Other current assets			7486,~~070~~564			8072,~~526~~919
		Total current assets		~~669~~416,~~461~~946			~~646~~596,~~888~~406
Property, net				~~902~~1,~~917~~013,635			~~964~~863,~~668~~532
Intangible assets, net				~~151~~162,~~677~~134			~~162~~148,~~366~~432
Goodwill				1,~~836~~929,~~731~~078			1,836,731
Other long-term assets				~~160~~355,~~109~~603			~~146~~238,~~088~~103
		Total assets	$	3,~~720~~877,~~895~~396		$	3,~~756~~683,~~741~~204
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
	Accounts payable		$	~~213~~194,~~626~~335		$	~~155~~175,~~553~~142
	Accrued expenses and other liabilities			~~156~~160,~~708~~674			~~102~~143,~~070~~274
	Deferred revenues and income			~~148~~124,~~753~~735			~~121~~125,~~628~~842
	Current maturities of corporate borrowings and capital and financing lease obligations			10,~~328~~261			910,~~923~~463
		Total current liabilities		~~529~~490,~~415~~005			~~389~~454,~~174~~721
Corporate borrowings				2,~~068~~065,~~492~~810			12,~~922~~067,~~236~~149
Capital and financing lease obligations				5465,~~314~~118			5753,~~286~~323
Deferred revenues—for exhibitor services agreement				~~250~~362,~~890~~910			~~253~~252,~~164~~322
Other long-term liabilities				~~309~~343,~~542~~397			~~308~~309,~~703~~591
		Total liabilities	$	3,~~212~~327,~~653~~240		$	23,~~930~~137,~~563~~106
Commitments and contingencies
Stockholder's equity:
	Common Stock, 1 share issued as of December 31, 2009 and April 2, 2009 with 1¢ par value			—			—
	Common Stock, 1 share issued with 1¢ par value			—			—
	Additional paid-in capital			747,~~228~~342			1747,~~046,703~~206
	Accumulated other comprehensive earnings			4,340			17,061
Accumulated other comprehensive loss				(1,666	)		(3,176	)
	Accumulated deficit			(~~243~~195,~~326~~520	)		(~~237~~197,~~586~~932	)
		Total stockholder's equity		~~508~~550,~~242~~156			~~826~~546,~~178~~098
		Total liabilities and stockholder's equity	$	3,~~720~~877,~~895~~396		$	3,~~756~~683,~~741~~204

See Notes to Consolidated Financial Statements.

Table of Contents

MARQUEE HOLDINGS INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

			Thirty-nine Weeks Ended
			Thirteen Weeks Ended
			December 31, 2009			January 1, 2009
			July 1, 2010			July 2, 2009
			(unaudited)
INCREASE (DECREASE) IN CASH AND EQUIVALENTS
Cash flows from operating activities:
Net loss			$	(5,740	)	$	(95,061	)
Net earnings			$	2,412		$	1,143
Adjustments to reconcile net loss to net cash provided by operating activities:
Adjustments to reconcile net earnings to net cash provided by operating activities:
	Depreciation and amortization			~~142~~48,~~949~~603			~~172~~48,~~590~~788
	Non-cash portion of stock-based compensation			1,248			2,323
	Write-off of issuance costs related to early extinguishment of debt			—			3,312
	Non-cash portion of pension and postretirement expense (income)			1,850			(492	)
	Excess distributions/(Equity in (earnings) losses from investments, net of distributions)			3,686			2,163
	Impairment of long-lived assets			—			73,547
	Gain on dispositions			(10,056	)		(823	)
	Write-off of deferred charges for Fixed Notes due 2012			3,468			—
	Change in assets and liabilities, net of acquisition:
	Deferred income taxes			(1,150	)		(84	)
		Receivables		(14,219	)		(11,478	)
	Equity in earnings and losses from non-consolidated entities, net of distributions			3,537			6,424
		Other assets		(740	)		(752	)
	Disposition of assets and other gains			—			(2,265	)
		Accounts payable		8,199			26,463
	Gain on disposition of Cinemex			(1,086	)		(14,361	)
		Accrued expenses and other liabilities		(1,770	)		36,031
	Change in assets and liabilities:
	Other, net			(816	)		2,213
		Receivables		(38,566	)		(21,945	)
	Net cash provided by operating activities			35,299			107,060
		Other assets		922			2,029
		Accounts payable		53,245			40,261
		Accrued expenses and other liabilities		78,730			34,410
	Other, net			(7,652	)		(7,208	)
	Net cash provided by operating activities			231,755			190,168
Cash flows from investing activities:
	Capital expenditures			(5913,~~482~~988	)		(917,~~606~~307	)
	Net change in reimbursable construction advances			286			1,452
	Acquisition of Kerasotes, net of cash acquired			(276,798	)		—
	Investments in non-consolidated entities			(6,024	)		(2,257	)
	Proceeds from disposition of Cinemex			876			2,904
	Proceeds from disposition of Cinemex, net of cash disposed			4,342			224,686
	Proceeds from the disposition of long-term assets			55,000			—
	Proceeds from disposition of Fandango			—			2,383
	Other, net			15			(4,845	)
	LCE screen integration			(81	)		(4,342	)
	Net cash used in investing activities			(234,895	)		(9,248	)
	Other, net			1,277			2,746
	Net cash provided by (used in) investing activities			(59,682	)		133,062
Cash flows from financing activities:
	Repayment under revolving credit facility			~~(185,000~~—	)		—(185,000	)
	Repurchase of Fixed Notes due 2012			~~(250,000~~—	)		—(238,065	)
	Proceeds from issuance of Senior Notes due 2019			~~585,492~~—			—585,492
	Deferred financing costs			(~~16,259~~95	)		—(14,413	)
	Principal payments under capital and financing lease obligations			(~~2,567~~990	)		(~~2,690~~855	)
	Principal payments under Term Loan B			(4,875	)		(4,875	)
	Payments under Term Loan B			(1,625	)		(1,625	)
	Change in construction payables			~~722~~(7,737	)		(123,~~275~~145	)
	Dividends paid to Parent			~~(300,723~~—	)		(2300,~~255~~000	)
	Net cash used in financing activities			(~~173~~10,~~210~~447	)		(22157,~~095~~611	)
	Effect of exchange rate changes on cash and equivalents			~~(2,226~~402	)		(31,~~253~~111	)
Net increase (decrease) in cash and equivalents				(3,363	)		297,882
Net decrease in cash and equivalents				(209,641	)		(60,910	)
Cash and equivalents at beginning of period				~~536~~497,~~580~~948			~~108~~536,~~717~~580
Cash and equivalents at end of period			$	~~533~~288,~~217~~307		$	~~406~~475,~~599~~670

See Notes to Consolidated Financial Statements.

Table of Contents

MARQUEE HOLDINGS INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ~~December~~July 311, ~~2009~~2010 (Unaudited)

NOTE 1—BASIS OF PRESENTATION

Marquee Holdings Inc. ("Holdings") is an investment vehicle owned through AMC Entertainment Holdings, Inc. ("Parent") by J.P. Morgan Partners, LLC and certain related investment funds ("JPMP"), Apollo Management, L.P. and certain related investment funds ("Apollo") and affiliates of Bain Capital Partners ("Bain"), The Carlyle Group ~~and~~("Carlyle") and Spectrum Equity Investors ("Spectrum") (collectively with JPMP and Apollo the "Sponsors"). Holdings was formed ~~in 2004~~ for the purpose of acquiring AMC Entertainment Inc. ("AMCE") pursuant to a definitive merger agreement approved by AMCE's Board of Directors on July 22, 2004. Holdings is a holding company with no operations of its own and it has one direct subsidiary, AMCE.

~~On June 11~~AMCE, through ~~2007~~its direct and indirect subsidiaries, ~~Marquee~~including ~~Merger~~American ~~Sub~~Multi-Cinema, Inc. ("~~merger sub~~AMC"), aand ~~wholly-owned~~its ~~subsidiary~~subsidiaries' ~~of Parent, merged with~~ and ~~into~~AMC ~~Holdings~~Entertainment International, Inc. ~~with Holdings continuing as the surviving corporation~~ (~~the~~ "~~holdco merger~~AMCEI"). and Asits asubsidiaries ~~result~~(collectively ofwith ~~the holdco merger, (i)~~ Holdings ~~became a wholly owned subsidiary of Parent, a newly formed entity controlled by JPMP, Apollo~~ and ~~Bain~~AMCE, ~~Carlyle and~~unless ~~Spectrum~~the ~~(collectively~~context ~~with~~otherwise ~~JPMP and Apollo~~requires, the "~~Sponsors~~Company"), ~~(ii) each~~is ~~share~~principally ofinvolved ~~Holdings'~~in ~~common~~the ~~stock~~theatrical ~~that~~exhibition ~~was~~business ~~issued~~ and ~~outstanding~~owns, ~~immediately~~operates ~~prior~~or has tointerests ~~the~~in ~~effective~~theatres ~~time~~located ofin the ~~holdco merger~~United ~~was~~States ~~automatically~~and ~~converted~~Canada, ~~into~~China a(Hong ~~substantially~~Kong), ~~identical~~France ~~share~~and ofthe ~~common~~United ~~stock~~Kingdom. ofThe ~~Parent,~~Company ~~and~~discontinued ~~(iii) as~~its ~~further~~operations ~~described~~ in ~~this~~Spain ~~report,~~and ~~each~~Portugal ofduring ~~Holdings'~~the ~~governance agreements was~~third ~~superseded~~quarter byof afiscal ~~substantially~~2007 ~~identical~~and ~~governance~~discontinued ~~agreement~~its ~~entered~~operations ~~into~~in byMexico ~~and~~during ~~among Parent,~~ the ~~Sponsors~~third ~~and~~quarter ~~Holdings'~~of ~~other~~fiscal ~~stockholders~~2009. The ~~holdco~~Company's ~~merger~~theatrical ~~was~~exhibition ~~effected~~business byis ~~the~~conducted ~~Sponsors~~through ~~to facilitate~~AMC ~~a previously announced debt financing by Parent~~ and aits ~~related~~subsidiaries ~~dividend to Holdings' stockholders~~and AMCEI.

~~AMCE,~~The ~~through~~accompanying ~~its~~unaudited ~~direct~~consolidated ~~and~~financial ~~indirect~~statements ~~subsidiaries,~~have ~~including~~been ~~American~~prepared ~~Multi-Cinema, Inc.~~in ~~("AMC")~~response ~~and~~to ~~its~~the ~~subsidiaries'~~requirements ~~AMC~~of ~~Entertainment International,~~Form ~~Inc.~~10-Q ~~("AMCEI")~~ and ~~its~~ ~~subsidiaries~~should ~~(collectively~~be read in conjunction with ~~Holdings~~the Company's ~~and~~Annual ~~AMCE,~~report ~~unless~~on Form 10-K for the ~~context~~year ~~otherwise~~ended ~~requires~~April 1, 2010. In the ~~"Company")~~opinion of management, isthese ~~principally~~interim ~~involved~~financial instatements ~~the~~reflect ~~theatrical~~all ~~exhibition~~adjustments ~~business~~(consisting ~~and~~of normal ~~owns,~~recurring ~~operates~~adjustments) ornecessary ~~has interests~~for ina ~~theatres~~fair ~~located~~statement inof the ~~United~~Company's ~~States~~financial position and ~~Canada~~results ~~("U~~of operations.S. ~~and~~Due ~~Canada")~~to ~~and~~the inseasonal ~~China~~nature ~~(Hong~~of ~~Kong)~~the Company's business, ~~France~~results ~~and~~for the thirteen ~~United~~weeks ~~Kingdom.~~ended ~~The~~July 1, ~~Company's~~2010 ~~U.S.~~are ~~and~~not ~~Canada~~necessarily ~~theatrical~~indicative ~~exhibition~~of ~~business is~~the ~~conducted~~results ~~through~~to ~~AMC~~be ~~and~~expected ~~AMCEI~~for the fiscal year (52 weeks) ending March 31, 2011. The Company's ~~international~~manages ~~theatrical~~its business ~~exhibition~~under ~~business~~one isoperating ~~conducted~~segment ~~primarily~~called ~~through~~Theatrical ~~AMCEI~~Exhibition.

~~Holdings has~~Use noof ~~ability~~Estimates: The topreparation ~~service~~of ~~interest~~financial orstatements ~~principal~~in onconformity ~~its~~with ~~Discount~~generally ~~Notes~~accepted ~~due~~accounting ~~2014,~~principles ~~other~~requires management ~~than~~to ~~through~~make estimates ~~any~~and ~~dividends~~assumptions itthat ~~may~~affect ~~receive~~the ~~from~~reported ~~AMCE.~~amounts ~~AMCE~~of isassets ~~restricted,~~and inliabilities ~~certain circumstances,~~and ~~from~~disclosure ~~paying~~of ~~dividends~~contingent toassets ~~Holdings~~and byliabilities at the ~~terms~~date of the ~~indentures~~financial ~~governing~~statements ~~AMCE's~~and ~~Notes~~the ~~due~~reported amounts ~~2019,~~of ~~Notes~~revenues ~~due~~and ~~2016,~~expenses ~~Notes~~during ~~due~~the ~~2014~~reporting ~~and~~period. ~~its~~Significant ~~amended~~estimates ~~credit~~and ~~facility.~~assumptions ~~AMCE~~are ~~has~~used for, but not ~~guaranteed~~limited to: (1) Impairments, (2) Goodwill, (3) Income ~~the~~Taxes, ~~indebtedness~~(4) Pension ofand ~~Holdings~~Postretirement ~~nor~~Assumptions ~~pledged~~and ~~any~~(5) Film ofExhibition ~~its~~Costs. ~~assets~~Actual asresults ~~collateral~~could differ from those estimates.

The ~~accompanying~~April 1, ~~unaudited~~2010 consolidated ~~financial~~balance ~~statements~~sheet ~~have~~data ~~been~~was ~~prepared~~derived infrom ~~response to~~ the ~~requirements~~audited ofbalance ~~Form 10-Q~~sheet ~~and~~included ~~should be read~~ in ~~conjunction with~~ the ~~Company's~~ ~~annual report on~~ Form 10-K ~~for the year ended April 2~~, ~~2009.~~but Indoes ~~the~~not ~~opinion~~include ~~of management, these interim financial statements reflect~~ all ~~adjustments (consisting of~~disclosures ~~normal~~required ~~recurring~~by ~~adjustments)~~generally ~~necessary~~accepted ~~for~~accounting ~~a fair statement of the Company's financial position and results of operations~~principles. Due to the seasonal nature of the Company's business, results for the thirty-nine weeks ended December 31, 2009 are not necessarily indicative of the results to be expected for the fiscal year (52 weeks) ending April 1, 2010. The Company manages its business under one operating segment called Theatrical Exhibition.

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

Table of Contents

MARQUEE HOLDINGS INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

~~December~~July 311, ~~2009~~2010

(Unaudited)

NOTE 1—BASIS OF PRESENTATION (Continued)

~~The~~year ~~preparation~~presentation. ofThese ~~consolidated~~presentation ~~financial~~reclassifications ~~statements~~reflect inhow ~~conformity with generally accepted accounting principles requires~~ management toevaluates ~~make~~information ~~estimates~~presented ~~and~~in ~~assumptions that affect~~ the ~~reported~~ ~~amounts~~Consolidated ~~of assets~~Statement ~~and liabilities and disclosure~~ of ~~contingent~~Operations ~~assets~~ and ~~liabilities~~Consolidated atStatements ~~the date~~ of ~~the~~Cash ~~financial statements and the reported amounts of revenues and expenses during the reporting period~~Flows. ~~Actual results could differ from those estimates.~~

~~The April 2,~~ ~~2009~~NOTE ~~consolidated balance sheet data was derived from the audited balance sheet included in the Form 10-K, but does not include all disclosures required by generally accepted accounting principles.~~ 2—ACQUISITION

On May 24, 2010, the Company completed the acquisition of substantially all of the assets (92 theatres and 928 screens) of Kerasotes Showplace Theatres, LLC ("Kerasotes"). Kerasotes operated 95 theatres and 972 screens in mid-sized, suburban and metropolitan markets, primarily in the Midwest. More than three quarters of the Kerasotes theatres feature stadium seating and almost 90 percent have been built since 1994. The Company acquired Kerasotes based on their highly complementary geographic presence in certain key markets. Additionally, the Company ~~has~~expects ~~evaluated~~to ~~subsequent~~realize ~~events~~synergies ~~through~~and ~~February 8~~cost savings related to the Kerasotes acquisition as a result of moving to its operating practices, ~~2010~~decreasing costs for newspaper advertising and concessions and general and administrative expense savings, particularly with respect to the ~~date~~consolidation of ~~filing~~corporate related functions and elimination of redundancies. The purchase price for the Kerasotes theatres paid in cash at closing was $276,798,000, net of cash acquired, and is subject to working capital and other purchase price adjustments as described in the Unit Purchase Agreement. The Company expects to pay working capital and other purchase price adjustments of $3,808,000 during the second quarter of fiscal 2011, based on the final closing date working capital, and deferred revenue amounts and has accrued for this ~~Form 10-Q~~amount as part of the total estimated purchase price.

~~Film~~The acquisition ~~Exhibition~~of ~~Costs: Effective~~Kerasotes ~~April 3,~~is ~~2009~~being treated as a purchase in accordance with Accounting Standards Topic 805, ~~certain~~Business ~~advertising~~Combinations. ~~costs~~The following ~~related~~is a summary of the allocation of the purchase price to ~~film~~the ~~exhibition~~estimated ~~were~~fair ~~reclassified~~values ~~from~~of assets and liabilities acquired in the transaction. The allocation of purchase price is based on ~~operating~~management's ~~expense~~judgment after evaluating several factors, including bid prices from potential buyers and a preliminary valuation assessment. The allocation of purchase price is preliminary and subject to ~~film~~changes ~~exhibition~~as ~~costs~~an ~~with~~appraisal aof ~~conforming~~both ~~reclassification~~tangible ~~made~~and ~~for~~intangible ~~the~~assets ~~prior~~and ~~year~~liabilities ~~presentation.~~is finalized and additional information becomes available:

Discontinued Operations: Effective April 3, 2009, certain income tax amounts related to Grupo Cinemex, S.A. de C.V. ("Cinemex") were reclassified to discontinued operations for fiscal 2009.

(In thousands)	Total

Cash	$	809
Receivables, net(1)		3,832
Other current assets		12,905
Property, net		204,998
Intangible assets, net(2)		17,425
Goodwill(3)		109,233
Other long-term assets		5,920
Accounts payable		(12,980	)
Accrued expenses and other liabilities		(12,439	)
Deferred revenues and income		(1,690	)
Capital and financing lease obligations		(12,583	)
Other long-term liabilities(4)		(34,015	)

Total estimated purchase price	$	281,415

~~NOTE~~ (1)Receivables consist ~~2—DISCONTINUED~~of ~~OPERATIONS~~ trade receivables recorded at fair value. The Company did not acquire any other class of receivables as a result of the acquisition of Kerasotes.

On December 29, 2008, the Company sold all of its interests in Cinemex, which then operated 44 theatres with 493 screens primarily in the Mexico City Metropolitan Area, to Entretenimiento GM de Mexico S.A. de C.V. The operations and cash flows of the Cinemex theatres have been eliminated from the Company's ongoing operations as a result of the disposal transaction. As of December 31, 2009, the amount due from Cinemex for tax payments and refunds associated with the sale was $9,866,000, of which $9,332,000 has been classified by the Company as a long-term asset. The receivables for these taxes are recorded in pesos and translated to U.S. dollars each week. Any currency translation gains or losses on these receivables are recorded in discontinued operations as part of the gain on disposition of Cinemex. The Company does not have any significant continuing involvement in the operations of the Cinemex theatres after the disposition. The results of operations of the Cinemex theatres have been classified as discontinued operations for all periods presented.

Table of Contents

MARQUEE HOLDINGS INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

~~December~~July 311, ~~2009~~2010

(Unaudited)

NOTE 2—~~DISCONTINUED~~ACQUISITION ~~OPERATIONS~~ (Continued)

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

~~Components~~During ofthe ~~amounts~~thirteen ~~reflected~~weeks asended ~~earnings~~July 1, ~~from~~2010, ~~discontinued~~the ~~operations~~Company incurred acquisition-related costs of approximately $5,754,000 included in ~~the~~general ~~Company's~~and ~~Consolidated~~administrative expense: ~~Statements~~merger, ofacquisition ~~Operations~~and ~~are~~transaction ~~presented~~costs in the ~~following~~Consolidated ~~table~~Statement ~~(in~~of ~~thousands):~~Operations.

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

				Thirteen Weeks Ended						Thirty-nine Weeks Ended
				December 31, 2009			January 1, 2009			December 31, 2009			January 1, 2009
				(unaudited)						(unaudited)
Revenues
	Admissions			$	—		$	14,927		$	—		$	62,009
	Concessions				—			10,720			—			44,744
	Other revenue				—			6,551			—			21,755
			Total revenues		—			32,198			—			128,508
Costs and Expenses
	Film exhibition costs				—			6,402			—			27,338
	Concession costs				—			2,380			—			10,158
	Operating expense				—			9,368			—			32,699
	Rent				—			4,373			—			14,934
	General and administrative:
			Other		—			2,584			—			8,880
	Depreciation and amortization				—			6,012			—			21,070
	Disposition of assets and other gains				(494	)		(14,361	)		(1,086	)		(14,361	)
			Total costs and expenses		(494	)		16,758			(1,086	)		100,718
	Other expense (income)				—			938			—			416
	Interest expense
			Corporate borrowings		—			2,079			—			7,299
			Capital and financing lease obligations		—			173			—			582
	Investment income				—			(353	)		—			(1,124	)
		Total other expense			—			2,837			—			7,173
Earnings before income taxes					494			12,603			1,086			20,617
Income tax provision					—			10,518			—			11,700
Net earnings				$	494		$	2,085		$	1,086		$	8,917

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

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

Table of Contents

MARQUEE HOLDINGS INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

~~December~~July 311, ~~2009~~2010

(Unaudited)

NOTE 32—~~COMPREHENSIVE~~ACQUISITION ~~EARNINGS~~ (~~LOSS~~Continued)

had ~~The~~these ~~components~~transactions ofoccurred ~~comprehensive~~on ~~earnings~~the ~~(loss)~~date ~~are~~indicated asor ~~follows~~to ~~(in~~project ~~thousands):~~its results of operations for any future period or date.

		~~Thirteen Weeks Ended~~			Thirteen Weeks Ended			~~Thirty-nine Weeks Ended~~
		December 31, 2009			January 1, 2009			December 31, 2009			January 1, 2009
					Pro forma July 1, 2010			Pro forma July 2, 2009
Net earnings (loss)		$	8,751		$	(94,383	)	$	(5,740	)	$	(95,061	)
					(unaudited)
Foreign currency translation adjustment			(2,641	)		26,630			(13,443	)		23,666
Revenues
Pension and other benefit adjustments			(213	)		306			(474	)		5,960
	Admissions				$	468,860		$	491,740
Change in fair value of cash flow hedges			—			(2,575	)		(6	)		(1,910	)
	Concessions					185,295			194,679
Losses on interest rate swaps reclassified to interest expense: corporate borrowings			—			824			558			3,233
	Other theatre					17,226			17,402
Increase in net unrealized gain on marketable securities			81			965			644			281
		Total revenues				671,381			703,821
Total comprehensive earnings (loss)		$	5,978		$	(68,233	)	$	(18,461	)	$	(63,831	)
Costs and Expenses
	Film exhibition costs					249,613			273,333
	Concession costs					21,993			21,758
	Operating expense					154,524			167,697
	Rent					119,350			122,144
	General and administrative:
		Merger, acquisition and transaction costs*				5,756			281
		Management fee				1,250			1,250
		Other				14,722			16,835
	Depreciation and amortization					52,530			55,193
		Total costs and expenses				619,738			658,491
	Other expense (income)
		Other expense (income)				(1,939	)		8,773
		Interest expense
			Corporate borrowings			40,569			35,849
			Capital and financing lease obligations			1,599			1,629
		Equity in (earnings) loss of non-consolidated entities				1,766			(6,262	)
		Investment income				(50	)		(99	)
			Total other expense			41,945			39,890
Earnings from continuing operations before income taxes						9,698			5,440
Income tax provision						6,900			2,500
Earnings from continuing operations						2,798			2,940
Earnings (loss) from discontinued operations, net of income taxes						(17	)		723
Net earnings					$	2,781		$	3,663

~~NOTE~~ *Primarily represents ~~4—INTANGIBLE~~non-recurring ~~ASSETS~~ transaction costs for the acquisition and related transactions.

Activity for intangible assets is presented below.

			December 31, 2009					April 2, 2009
(In thousands)		Remaining Useful Life	Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization
Acquired Intangible Assets:
	Amortizable Intangible Assets:
	Favorable leases	1 to 12 years	$	104,646	$	(42,082	)	$	104,646	$	(35,949	)
	Loyalty program	4 years		46,000		(37,881	)		46,000		(34,914	)
	LCE trade name	1 year		2,300		(1,805	)		2,300		(1,460	)
	LCE advertising and management contracts	13 to 21 years		35,400		(29,118	)		35,400		(27,893	)
	Other intangible assets	1 to 13 years		13,654		(13,437	)		13,654		(13,418	)
	Total, amortizable		$	202,000	$	(124,323	)	$	202,000	$	(113,634	)
Unamortizable Intangible Assets:
	Total, unamortizable		$	74,000				$	74,000

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

		Thirteen Weeks Ended						Thirty-nine Weeks Ended
(In thousands)		December 31, 2009			January 1, 2009			December 31, 2009			January 1, 2009
Recorded amortization		$	3,245		$	5,396		$	10,689		$	16,735

Table of Contents

MARQUEE HOLDINGS INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

~~December~~July 311, ~~2009~~2010

(Unaudited)

NOTE 42—~~INTANGIBLE~~ACQUISITION ~~ASSETS~~ (Continued)

~~Estimated~~The ~~amortization~~Company ~~expense~~recorded ~~for~~revenues ~~the~~of ~~next~~approximately ~~five~~$35,700,000 ~~fiscal~~from ~~years~~May 24, ~~for~~2010 ~~intangible~~through ~~assets~~July 1, ~~owned~~2010 asresulting from the acquisition of ~~December 31~~Kerasotes, ~~2009~~while istotal ~~projected~~costs ~~below:~~and expenses increased by approximately $34,200,000. Total costs and expenses include other expenses and non-recurring acquisition costs.

(In thousands)		2010			2011			2012			2013			2014
Projected amortization expense		$	13,934		$	11,980		$	10,856		$	10,147		$	7,769

NOTE 3—COMPREHENSIVE EARNINGS (LOSS)

The ~~NOTE~~components ~~5—STOCKHOLDER'S~~of ~~EQUITY~~ comprehensive earnings (loss) are as follows:

Holdings has one share of Common Stock issued as of December 31, 2009 which is owned by Parent.

	Thirteen Weeks Ended

(In thousands)	July 1, 2010			July 2, 2009
Net earnings	$	2,412		$	1,143
Foreign currency translation adjustment		1,892			(7,739	)
Pension and other benefit adjustments		(62	)		(47	)
Change in fair value of cash flow hedges		—			(6	)
Losses on interest rate swaps reclassified to interest expense: corporate borrowings		—			558
Increase (decrease) in unrealized gain on marketable securities		(320	)		255

Total comprehensive earnings (loss)	$	3,922		$	(5,836	)

~~During April~~ ~~and~~NOTE ~~May~~4—GOODWILL ofAND ~~2009,~~INTANGIBLE Holdings made dividend payments to its stockholder, Parent, totaling $300,000,000, which were treated as a reduction of additional paid-in capital. Parent made payments to purchase term loans and reduced the principal balance of its Parent Term Loan Facility from $466,936,000 to $193,290,000 with a portion of the dividend proceeds. ASSETS

~~During~~ ~~September~~ Activity of ~~2009,~~goodwill ~~Holdings~~is ~~used~~presented ~~cash on hand to pay a dividend distribution to Parent in an aggregate amount of $723,000~~below. ~~Parent used the available funds to pay corporate overhead expenses incurred in the ordinary course of business.~~

Stock-Based Compensation

(In thousands)		Total

Balance as of April 1, 2010		$	1,836,731
	Acquisition of Kerasotes		109,233
	Goodwill allocated to sales(1)		(16,886	)

Balance as of July 1, 2010		$	1,929,078

~~The~~ ~~Company~~ (1)Reduction in ~~has~~goodwill nofor ~~stock-based~~sales ~~compensation arrangements~~ of ~~its~~five ~~own,~~Kerasotes ~~but~~theatres ~~Parent~~with ~~has~~59 ~~adopted a stock-based compensation plan that permits a maximum of 49,107~~screens.~~44681~~ ~~options~~Subsequent to bethe ~~issued on Parent's stock. On December 31~~acquisition, ~~2009, approximately 9,325 options were available for grant under~~ the ~~plan.~~Company ~~The~~was ~~stock~~required ~~options have a ten year term and generally step vest in equal amounts from one~~ to ~~three~~sell ~~or five years from the date of the grant. Vesting may accelerate for a~~ certain ~~participant if there is a change of control (as~~acquired ~~defined~~theatres into ~~the~~comply ~~plan).~~with ~~All~~government ~~outstanding~~requirements ~~options~~related ~~have been granted~~ to ~~employees and one director of~~ the ~~Company~~sale. ~~The~~No ~~Company~~gains ~~accounts~~or ~~for~~losses ~~stock~~were ~~options~~recorded ~~using the fair value method of accounting and has elected to use the simplified method~~ for ~~estimating~~these ~~the expected term of "plain vanilla" share option grants as it does not have enough historical experience to provide a reasonable estimate~~transactions.

On May 28, 2009, Parent granted options to certain employees of the Company on 4,786 of its shares that step vest in equal amounts over five years with final vesting occurring on May 28, 2014. The following table reflects the weighted average fair value per option granted on May 28, 2009, as well as

Table of Contents

MARQUEE HOLDINGS INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

~~December~~July 311, ~~2009~~2010

(Unaudited)

NOTE 54—~~STOCKHOLDER'S~~GOODWILL ~~EQUITY~~AND INTANGIBLE ASSETS (Continued)

~~the~~ Activity ~~significant~~for ~~weighted~~intangible ~~average~~assets ~~assumptions~~is ~~used~~presented ~~in determining fair value using the Black-Scholes option-pricing model~~below:

					July 1, 2010					April 1, 2010
Weighted average fair value on grant date		$	135.71
Risk-free interest rate			2.6	%
(In thousands)			Remaining Useful Life		Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization
Expected life (years)			6.5
Acquired Intangible Assets:
Expected volatility(1)			35.0	%
	Amortizable Intangible Assets:
Expected dividend yield			—
	Favorable leases		2 to 17 years		$	110,231	$	(46,400	)	$	104,646	$	(44,127	)
	Loyalty program		3 years			46,000		(39,629	)		46,000		(38,870	)
	Loews' trade name		1 year			2,300		(2,035	)		2,300		(1,920	)
	Loews' management contracts		12 to 21 years			35,400		(29,299	)		35,400		(29,209	)
	Non-compete agreement		5 years			6,400		(140	)		—		—
	Other intangible assets		1 to 12 years			13,309		(13,103	)		13,309		(13,097	)
	Total, amortizable				$	213,640	$	(130,606	)	$	201,655	$	(127,223	)
Unamortizable Intangible Assets:
	AMC trademark				$	74,000				$	74,000
	Kerasotes trade names					5,100					—
	Total, unamortizable				$	79,100				$	74,000

Additional information ~~(1)The Company~~for ~~uses~~Kerasotes ~~share~~intangible ~~values~~assets ofacquired ~~its~~on ~~publicly~~May 24, ~~traded~~2010 ~~competitor~~is ~~peer~~presented ~~group~~below: ~~for purpose of calculating volatility.~~

The Company has recorded stock-based compensation expense of $410,000 and $774,000 within general and administrative: other during the thirteen weeks ended December 31, 2009, and January 1, 2009, respectively. The Company has recorded stock-based compensation expense of $1,248,000 and $2,323,000 within general and administrative: other during the thirty-nine weeks ended December 31, 2009 and January 1, 2009, respectively. The Company's financial statements reflect an increase to additional paid-in capital related to stock-based compensation for all outstanding options of $1,248,000 during fiscal 2010. As of December 31, 2009, there was approximately $2,303,000 of total estimated unrecognized compensation cost related to nonvested stock-based compensation arrangements under the Parent's plan expected to be recognized over 5 years.

(In thousands)		Weighted Average Amortization Period	Gross Carrying Amount

Acquired Intangible Assets:
	Amortizable Intangible Assets:
	Favorable leases	9.5 years	$	5,585
	Non-compete agreement	5 years		6,400

	Total, amortizable	7 years	$	11,985

Unamortizable Intangible Assets:
	Kerasotes trade names		$	5,100

Amortization expense ~~NOTE~~associated ~~6—INVESTMENTS~~ with the Company's intangible assets is as follows:

Investments in non-consolidated affiliates and certain other investments accounted for under the equity method generally include all entities in which the Company or its subsidiaries have significant influence, but not more than 50% voting control. Investments in non-consolidated affiliates as of December 31, 2009, include an 18.53% interest in National CineMedia, LLC ("NCM"), a 50% interest in three U.S. motion picture theatres, a 26% equity interest in Movietickets.com ("MTC"), a 50% interest in Midland Empire Partners, LLC ("MEP") and a 33.3% interest in Digital Cinema Implementation Partners, LLC ("DCIP").

	Thirteen Weeks Ended

(In thousands)	July 1, 2010		July 2, 2009
Recorded amortization	$	3,383	$	4,199

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

(In thousands)		2011			2012			2013			2014			2015

Projected amortization expense		$	13,656		$	12,868		$	12,159		$	9,779		$	8,958

Table of Contents

MARQUEE HOLDINGS INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

~~December~~July 311, ~~2009~~2010

(Unaudited)

NOTE 65—~~INVESTMENTS~~STOCKHOLDER'S ~~(Continued)~~ EQUITY

~~Condensed~~ ~~financial~~ Holdings ~~information~~has ofone ~~our~~share ~~non-consolidated~~of ~~equity~~Common ~~method~~Stock ~~investments~~issued isas ~~shown~~of ~~below. Amounts are presented under U.S.~~July ~~GAAP~~1, ~~for~~2010 ~~the~~which ~~periods~~is ofowned ~~ownership~~ by ~~the~~ ~~Company~~Parent.

~~Operating Results(1):~~ Stock-Based Compensation

	Thirteen Weeks Ended						Thirty-nine Weeks Ended
(In thousands)	December 31, 2009			January 1, 2009			December 31, 2009			January 1, 2009
Revenues	$	133,070		$	119,352		$	344,719		$	333,475
Operating costs and expenses		81,574			93,096			234,028			233,280
Net earnings	$	51,496		$	26,256		$	110,691		$	100,195
The Company's recorded equity in earnings	$	(7,517	)	$	(6,033	)	$	(18,127	)	$	(15,739	)

The Company has no stock-based compensation arrangements of its own, but Parent has adopted a stock-based compensation plan that permits a maximum of 49,107.44681 options to be issued on Parent's stock under the amended and restated 2004 Stock Option Plan. The stock options have a ten year term and generally step vest in equal amounts from one to three or five years from the date of the grant. Vesting may accelerate for a certain participant if there is a change of control (as defined in the plan). All outstanding options have been granted to employees and one director of the Company. The Company accounts for stock options using the fair value method of accounting and has elected to use the simplified method for estimating the expected term of "plain vanilla" share option grants, as it does not have enough historical experience to provide a reasonable estimate.

The ~~(1)Certain differences in the~~ Company's has recorded ~~investment~~stock-based ~~over~~compensation ~~its~~expense ~~proportional~~of ~~ownership~~$136,000 ~~share~~and ~~are~~$411,000 ~~amortized~~within togeneral ~~equity~~and inadministrative: ~~(earnings)~~other orduring ~~losses over~~ the ~~estimated~~ ~~useful~~thirteen ~~life~~weeks ofended ~~the~~July 1, ~~underlying~~2010, ~~assets~~and July 2, or2009, ~~liabilities~~respectively. The ~~recorded~~Company's ~~equity~~financial instatements ~~earnings~~reflect ofan ~~NCM~~increase onto ~~common~~additional ~~membership units owned immediately following the IPO of NCM, Inc. (Tranche 1 Investment) does not include undistributed equity~~ paid-in ~~earnings.~~capital ~~The~~related ~~Company~~to ~~considered~~stock-based ~~the~~compensation ~~excess~~for ~~distribution~~all ~~received~~outstanding ~~following~~options ~~NCM~~of $136, ~~Inc.'s~~000 ~~IPO~~during asfiscal ~~an advance on NCM's future earnings~~2011. As aof ~~result~~July 1, ~~the~~2010, ~~Company~~there ~~will~~was ~~not~~approximately ~~recognize~~$2,030,000 ~~any~~of ~~undistributed~~total ~~equity~~estimated inunrecognized ~~earnings~~compensation ofcost ~~NCM~~related onto ~~the~~nonvested ~~original~~stock-based ~~common~~compensation ~~membership~~arrangements under ~~units~~the ~~(Tranche 1 Investment) until NCM~~Parent's ~~future~~plan ~~net~~expected ~~earnings equal~~to ~~the~~be ~~amount~~recognized ofover ~~the~~approximately ~~excess distribution~~4 years.

~~The~~On ~~Company~~July 8, ~~recorded~~2010, ~~equity~~the inBoard ~~earnings~~approved ~~from~~a ~~NCM~~grant of $71,~~440,000~~023 ~~and~~non-qualified ~~$9,081,000~~stock ~~during~~options ~~the~~to ~~thirteen~~a ~~weeks~~certain ~~ended~~employee ~~December 31,~~of ~~2009~~the ~~and~~Company ~~January 1,~~under ~~2009,~~the ~~respectively~~amended and ~~$20,706,000~~ ~~and~~restated ~~$18,957,000~~2004 ~~during~~Stock ~~the~~Option Plan. ~~thirty-nine~~These ~~weeks~~options ~~ended~~vest ~~December~~ratably over 5 ~~31,~~years ~~2009~~with ~~and~~an ~~January 1,~~exercise ~~2009,~~price ~~respectively~~of $752 per share. AsExpense offor ~~December 31,~~this ~~2009,~~award will be recognized over the ~~Company~~vesting ~~owns 18~~period,~~821,114~~ ~~units,~~beginning orin anthe 18second quarter of fiscal 2011.~~53%~~ ~~interest,~~See in2010 ~~NCM~~Equity ~~accounted~~Incentive Plan below for ~~using~~further ~~the~~information ~~equity~~regarding ~~method~~assumptions ofused ~~accounting.~~in ~~The~~determining fair ~~market~~ value. On ofJuly 23, 2010, the ~~units~~Board indetermined ~~National~~that ~~CineMedia, LLC~~the ~~was~~Company ~~approximately $311,866,000,~~would ~~based~~no onlonger agrant ~~price~~any ~~for~~awards of shares of ~~National~~common ~~CineMedia, Inc.~~stock onof ~~December 31,~~the ~~2009~~Company ofunder ~~$16.57~~the ~~per~~amended ~~share~~and restated 2004 Stock Option Plan on and after July 23, 2010.

~~As of~~ ~~December 31,~~2010 ~~2009~~Equity ~~and~~Incentive April 2, 2009, the Company has recorded $1,613,000 and $1,342,000 respectively, of amounts due from NCM related to on-screen advertising revenue. As of December 31, 2009 and April 2, 2009, the Company had recorded $1,666,000 and $1,657,000 respectively, of amounts due to NCM related to the ESA and the Loews Screen Integration Agreement. The Company recorded revenues for advertising from NCM of $5,121,000 and $4,450,000 during the thirteen weeks ended December 31, 2009 and January 1, 2009, respectively and $15,336,000 and $14,475,000 during the thirty-nine weeks ended December 31, 2009 and January 1, 2009, respectively. The Company recorded advertising expenses related to a beverage advertising agreement paid to NCM of $3,075,000 and $3,822,000 during the thirteen weeks ended December 31, 2009 and January 1, 2009, respectively and $9,068,000 and $12,331,000 during the thirty-nine weeks ended December 31, 2009 and January 1, 2009, respectively. Plan

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

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

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MARQUEE HOLDINGS INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

~~December~~July 311, ~~2009~~2010

(Unaudited)

NOTE 65—~~INVESTMENTS~~STOCKHOLDER'S EQUITY (Continued)

~~The~~award, ~~Company~~(ii) the ~~recorded~~withholding ~~the~~of ~~following~~such ~~changes~~shares in ~~the~~satisfaction ~~carrying~~of ~~amount~~applicable taxes or (iii) the settlement of ~~its~~all ~~investment~~or ina ~~NCM~~portion ~~and~~of ~~equity~~an award in ~~(earnings)~~cash, ~~losses~~then ofsuch ~~NCM~~shares ~~during~~will ~~the~~again ~~thirty-nine~~be ~~weeks ended~~available ~~December 31,~~for ~~2009:~~issuance under the Plan.

(in thousands)	Investment in NCM(1)			Deferred Revenue(2)			Due to NCM(3)			Cash Received (Paid)			Equity in (Earnings) Losses			Advertising (Revenue)
Beginning balance April 2, 2009	$	26,733		$	(253,164	)	$	(81	)	$	—		$	—		$	—
Receipt under Tax Receivable Agreement		—			—			—			4,328			(4,328	)		—
Receipt of excess cash distribution		(1,142	)		—			—			15,977			(14,835	)		—
Payment on Loews Screen Integration Agreement		—			—			81			(81	)		—			—
Amortization of deferred revenue		—			2,274			—			—			—			(2,274	)
Equity in earnings(4)		1,543			—			—			—			(1,543	)		—
Ending balance December 31, 2009	$	27,134		$	(250,890	)	$	—		$	20,224		$	(20,706	)	$	(2,274	)

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

•: Non-Qualified Stock Option Award Agreement: 25% of the options will vest on each of the first four anniversaries of the date of grant; provided, however, that the options will become fully vested and exercisable if within one year following a Change of Control (as defined in the Plan), the participant's service is terminated by the Company without cause.
•: Restricted Stock Award Agreement (Time Vesting): The restricted shares will become vested on the fourth anniversary of the date of grant; provided, however, that the restricted shares will become fully vested if within one year following a Change of Control, the participant's service is terminated by the Company without cause.
•: Restricted Stock Award Agreement (Performance Vesting): 25% of the restricted shares will become vested in each year over a four-year period upon the Company meeting certain pre-established annual performance targets; provided, however, that the restricted shares will become fully vested if within one year following a Change of Control, the participant's service is terminated by the Company without cause.

On the ~~(1)Represents AMC's~~date ~~investment~~the inBoard ~~939~~adopted the Plan,~~853~~ ~~common~~the ~~membership~~Board ~~units~~approved ~~originally~~the ~~valued~~grants atof ~~March 27~~5,399 ~~2008~~non-qualified ~~and~~stock ~~406~~options,~~371~~ ~~common membership units originally valued at March 17~~5,399 ~~2009~~shares ~~received~~of ~~under~~restricted ~~the~~stock ~~Common~~(time ~~Unit~~vesting), ~~Adjustment~~and ~~Agreement~~5,404 ~~dated as~~ shares of ~~February 13,~~restricted ~~2007~~stock (~~Tranche 2~~performance ~~Investments~~vesting). ~~AMC's~~to ~~investment~~certain inof ~~17,474,890~~its ~~common membership~~employees. ~~units~~The ~~(Tranche 1~~estimated ~~Investment)~~fair isvalue ~~carried~~of atthe ~~zero~~stock ~~cost. (2)Represents~~ at the ~~unamortized~~grant ~~portion~~date ofwas ~~the~~$752 ~~Exhibitors~~per ~~Services~~share ~~Agreement~~and ~~(ESA)~~was ~~modifications~~based ~~payment~~upon ~~received~~a ~~from~~contemporaneous ~~NCM.~~valuation ~~(3)Represents the~~reflecting ~~amount~~market ~~due~~conditions. toExpense ~~NCM~~for ~~under~~these ~~the~~awards ~~Loews~~will ~~Screen~~be ~~Integration~~recognized ~~Agreement~~over ~~that~~the ~~was~~respective ~~fully~~performance ~~paid~~and investing ~~April~~periods, ~~2009. (4)Represents equity~~beginning in ~~earnings~~the onsecond ~~the~~quarter ~~Tranche 2~~of ~~Investments~~fiscal ~~only~~2011.

The following ~~NOTE~~table ~~7—FAIR~~reflects ~~VALUE~~the OFweighted ~~FINANCIAL~~average ~~INSTRUMENTS~~ fair value per option granted under the amended and restated 2004 Option Plan and the 2010 Equity Incentive Plan during the second quarter of fiscal 2011, as well as the significant assumptions used in determining weighted average fair value using the Black-Scholes option-pricing model:

Fair value refers to the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the market in which the entity transacts. The inputs used to develop these fair value measurements are established in a hierarchy, which ranks the quality and reliability of the information used to determine the fair values. The fair value classification

	2010 Plan			2004 Plan

Weighted average fair value of options on grant date	$	293.72		$	300.91
Risk-free interest rate		2.50	%		2.58	%
Expected life (years)		6.25			6.50
Expected volatility(1)		35.0	%		35.0	%
Expected dividend yield		—			—

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

Table of Contents

MARQUEE HOLDINGS INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

~~December~~July 311, ~~2009~~2010

(Unaudited)

NOTE 76—~~FAIR VALUE OF FINANCIAL INSTRUMENTS (Continued)~~ INVESTMENTS

is ~~based~~ Investments onin ~~levels~~non-consolidated affiliates and certain other investments accounted for following the equity method generally include all entities in which the Company or its subsidiaries have significant influence, but not more than 50% voting control. Investments in non-consolidated affiliates as of ~~inputs~~July 1, 2010, include a 23.05% ~~Assets~~interest ~~and~~in ~~liabilities~~National CineMedia, LLC ~~that~~("NCM"), ~~are~~a ~~carried~~50% atinterest ~~fair~~in ~~value~~three ~~are~~U.S. ~~classified~~motion picture theatres, a 26% equity interest in Movietickets.com ("MTC"), a 50% interest in Midland Empire Partners, LLC ("MEP") and ~~disclosed~~a 29% interest in ~~one~~Digital ofCinema ~~the~~Implementation ~~following~~Partners, LLC ~~categories:~~("DCIP").

Level 1:		Quoted market prices in active markets for identical assets or liabilities.
Level 2:		Observable market based inputs or unobservable inputs that are corroborated by market data.
Level 3:		Unobservable inputs that are not corroborated by market data.

Condensed financial information of our non-consolidated equity method investments is shown below. Amounts are presented under U.S. GAAP for the periods of ownership by the Company.

~~The~~Operating ~~following table summarizes the fair value hierarchy of the Company's financial assets and liabilities carried at fair value on a recurring basis~~Results(1):

					Fair Value Measurements at December 31, 2009 Using
(In thousands)			Total Carrying Value at December 31, 2009		Quoted prices in active market (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Assets:
	Money market mutual funds		$	500,544	$	500,544	$	—	$	—
	Equity securities, available-for-sale:
		Deferred compensation plan assets		3,469		3,469		—		—
		Non-qualified defined benefit plan assets		111		111		—		—
Total assets at fair value			$	504,124	$	504,124	$	—	$	—
Liabilities:
Total liabilities at fair value			$	—	$	—	$	—	$	—

For the thirteen weeks ended July 1, 2010

Valuation Techniques. The Company's money market mutual funds are invested in funds that seek to preserve principal, are highly liquid, and therefore are recorded on the balance sheet at the principal amounts deposited, which equals fair value. The equity securities primarily consist of mutual funds invested in equity, fixed income, and international funds. The money market funds are classified within Level 1 of the valuation hierarchy. The deferred compensation plan and non-qualified defined benefit plan assets are measured at fair value using quoted market prices and are classified within Level 1 of the valuation hierarchy. The amortized cost basis of the equity securities held as of December 31, 2009 is $3,204,000.

(In thousands)	NCM		DCIP			Other			Total

Revenues	$	98,998	$	5,286		$	10,688		$	114,972
Operating costs and expenses		71,452		23,440			10,455			105,347

Net earnings (loss)	$	27,546	$	(18,154	)	$	233		$	9,625

The Company's recorded equity in earnings (loss)	$	3,458	$	(5,169	)	$	(55	)	$	(1,766	)

For the thirteen weeks ended July 2, 2009

(In thousands)	NCM		DCIP			Other			Total

Revenues	$	92,898	$	—		$	10,606		$	103,504
Operating costs and expenses		60,438		2,513			11,085			74,036

Net earnings (loss)	$	32,460	$	(2,513	)	$	(479	)	$	29,468

The Company's recorded equity in earnings (loss)	$	7,366	$	(838	)	$	(266	)	$	6,262

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

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

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

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MARQUEE HOLDINGS INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

~~December~~July 311, ~~2009~~ 2010

(Unaudited)

NOTE 76—~~FAIR~~INVESTMENTS ~~VALUE OF FINANCIAL INSTRUMENTS~~ (Continued)

~~The~~and ~~Company~~April 1, is2010, ~~required to disclose~~ the ~~fair~~Company ~~value~~had ofrecorded ~~financial~~$1,911,000 ~~instruments~~and ~~that~~$1,502,000 ~~are~~respectively, ~~not recognized in the statement~~ of ~~financial~~amounts ~~position,~~due ~~for~~to ~~which~~NCM itrelated ~~is practicable~~ to ~~estimate that value. At December 31, 2009,~~ the ~~carrying~~Exhibitors ~~amount~~Services ofAgreement. ~~the~~The Company's ~~liabilities~~recorded revenues for advertising ~~corporate~~from ~~borrowings~~NCM ~~was~~of ~~approximately~~ $25,~~074~~419,~~922,~~000 and ~~the fair value was approximately~~ $25,~~083~~416,~~256,~~000. ~~At April 2,~~during ~~2009,~~ the ~~carrying~~thirteen ~~amount~~weeks ofended ~~the corporate borrowings was approximately $~~July 1,~~928,736,000~~ 2010 and ~~the~~July 2, ~~fair value of was approximately $1~~2009,~~699,681,000~~ respectively. ~~Quoted~~The ~~market~~Company ~~prices~~recorded ~~were~~advertising ~~used~~expenses related to ~~value~~a ~~publicly~~beverage ~~held~~advertising ~~corporate~~agreement ~~borrowings.~~paid ~~The~~to ~~carrying~~NCM ~~value~~ of ~~cash~~$3,264,000 and ~~equivalents~~$3,206,000 ~~approximates~~during ~~fair~~the ~~value~~thirteen ~~because~~weeks ofended ~~the~~July 1, ~~short~~2010 ~~duration~~and ofJuly 2, ~~those~~2009, ~~instruments~~respectively.

The Company ~~NOTE~~recorded ~~8—THEATRE~~the ~~AND~~following ~~OTHER~~changes ~~CLOSURE~~in ~~AND~~the ~~DISPOSITION~~carrying OFamount ~~ASSETS~~ of its investment in NCM and equity in (earnings) losses of NCM during the thirteen weeks ended July 1, 2010:

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

(In thousands)	Investment in NCM(1)			Deferred Revenue(2)			Cash Received (Paid)		Equity in (Earnings) Losses			Advertising (Revenue)

Beginning balance April 1, 2010	$	28,826		$	(252,322	)	$	—	$	—		$	—
Receipt of Common Units(3)		111,520			(111,520	)		—		—			—
Receipt of excess cash distribution		(148	)		—			1,920		(1,772	)		—
Amortization of deferred revenue		—			932			—		—			(932	)
Equity in earnings(4)		1,686			—			—		(1,686	)		—

Ending balance July 1, 2010	$	141,884		$	(362,910	)	$	1,920	$	(3,458	)	$	(932	)

		Theatre and Other
		Thirty-nine Weeks Ended December 31, 2009			Thirty-nine Weeks Ended January 1, 2009
Beginning balance		$	7,386		$	10,844
	Theatre and other closure (income) expense		2,183			(2,064	)
	Transfer of property tax liability		715			7
	Transfer of deferred rent liability		2,112			2,828
	Cash payments		(5,354	)		(3,035	)
Ending balance		$	7,042		$	8,580

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

The ending balance is included with accrued expenses and other liabilities in the accompanying consolidated balance sheets.

NOTE 9—INCOME TAXES

Effective income tax rate

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

	Thirty-nine Weeks Ended
	December 31, 2009			January 1, 2009
Federal statutory rate		35.0	%		35.0	%
Valuation allowance		(15.2	)		(34.3	)
State income taxes, net of federal tax benefit		(27.0	)		(3.5	)
Permanent items		7.5			(0.7	)
Other, net		(0.3	)		(0.1	)
Effective tax rate		0.0	%		(3.6	)%

Table of Contents

MARQUEE HOLDINGS INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

~~December~~July 311, ~~2009~~ 2010

(Unaudited)

NOTE 97—~~INCOME~~FAIR ~~TAXES~~VALUE ~~(Continued)~~ MEASUREMENTS

~~The~~ ~~accounting~~ Fair ~~for~~value ~~income~~refers ~~taxes~~to ~~requires~~the price that ~~deferred~~would ~~tax~~be ~~assets~~received ~~and~~to ~~liabilities~~sell bean ~~recognized,~~asset ~~using~~or ~~enacted~~paid ~~tax~~to ~~rates,~~transfer ~~for~~a ~~the~~liability ~~tax~~in ~~effect~~an oforderly ~~temporary~~transaction ~~differences~~ between market participants in the ~~financial~~ ~~reporting~~market ~~and~~in ~~tax~~which ~~bases~~the entity oftransacts. ~~recorded~~The ~~assets~~inputs ~~and~~used ~~liabilities.~~to ~~Deferred~~develop ~~tax~~these ~~assets~~fair value measurements are ~~reduced~~established byin a ~~valuation~~hierarchy, ~~allowance~~which ifranks itthe quality and reliability of the information used to determine the fair values. The fair value classification is ~~more~~based ~~likely~~on ~~than~~levels ~~not~~of inputs. Assets and liabilities that ~~some~~are orcarried ~~all~~at offair ~~the~~value ~~deferred~~are ~~tax~~classified ~~assets will~~and ~~not~~disclosed bein ~~realized.~~one of the following categories:

Parent completed the repurchase of certain term loans under the Parent Term Loan Facility in fiscal 2010, which generated cancellation of debt income. Based upon the historical tax sharing arrangement, Parent will utilize the Company's net operating losses in future years. During fiscal 2009, the Company reversed $31,000,000 of its valuation allowance through Goodwill in anticipation of future utilization by Parent. During fiscal 2010, the Company reversed an additional $1,150,000 of valuation allowance through income tax expense in anticipation of future utilization by Parent. The Company continues to record a valuation allowance against its remaining net deferred tax assets due to the uncertainty regarding the ultimate realization of these assets in all taxing jurisdictions.


	Level 1:		Quoted market prices in active markets for identical assets or liabilities.
	Level 2:		Observable market based inputs or unobservable inputs that are corroborated by market data.
	Level 3:		Unobservable inputs that are not corroborated by market data.

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

The Company or one of its subsidiaries files income tax returns in the U.S. federal jurisdiction, and various state and foreign jurisdictions. An IRS examination of the tax years February 28, 2002 through December 31, 2003 of the former Loews Cineplex Entertainment Corporation and subsidiaries was concluded during fiscal 2007. An IRS examination for the tax years ended March 31, 2005 and March 30, 2006 was completed during 2009. Generally, tax years beginning after March 28, 2002 are still open to examination by various taxing authorities. Additionally, the Company has net operating loss ("NOL") carryforwards for tax years ended October 31, 2000 through March 28, 2002 in the U.S. and various state jurisdictions which have carryforwards of varying lengths of time. These NOLs are subject to adjustment based on the statute of limitations of the return in which they are utilized, not the year in which they are generated. Various state, local and foreign income tax returns are also under examination by taxing authorities. The Company does not believe that the outcome of any examination will have a material impact on its financial statements.

					Fair Value Measurements at July 1, 2010 Using

(In thousands)			Total Carrying Value at July 1, 2010		Quoted prices in active market (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
*Assets:*
	Money Market Mutual Funds		$	864	$	864	$	—	$	—
	Equity securities, available-for-sale:
		RealD Inc. Common Stock		6,522		—		6,522		—
		Mutual Fund International		2,193		2,193		—		—
		Mutual Fund Large U.S. Equity		128		128		—		—
		Mutual Fund Small/Mid U.S. Equity		208		208		—		—
		Mutual Fund Other Equity		21		21		—		—
		Mutual Fund Fixed Income		323		323		—		—

Total assets at fair value			$	10,259	$	3,737	$	6,522	$	—

*Liabilities:*
Total liabilities at fair value			$	—	$	—	$	—	$	—

Valuation Techniques. The Company's ~~has~~money ~~reviewed~~market ~~all~~mutual offunds ~~its~~are ~~historical~~invested ~~tax~~in ~~positions~~funds asthat ~~well~~seek asto ~~new~~preserve ~~positions~~principal, ~~adopted~~are ~~during~~highly ~~fiscal~~liquid, and ~~2010~~therefore are recorded on the balance sheet at the principal amounts deposited, which equals fair value. The ~~net~~equity ~~change~~securities primarily consist of common stock and mutual funds invested in equity, fixed income, and international funds. The money market funds are classified within Level 1 of the ~~reserve~~valuation ~~for~~hierarchy. ~~uncertain~~The ~~tax~~deferred ~~positions~~compensation ~~from~~plan and non-qualified defined benefit ~~April~~plan assets are measured at fair value using quoted market prices and are classified within Level 31 of the valuation hierarchy. The fair value of the RealD common stock was determined using RealD's initial public offering price, ~~2009~~which tofalls ~~December~~under Level ~~31,~~2 ~~2009~~of isthe avaluation ~~net~~hierarchy. ~~increase~~The amortized cost basis of ~~approximately~~the ~~$700,000~~equity ~~related~~securities toheld ~~current~~as ~~positions~~of ~~adopted~~July 1, 2010 is $9,250,000.

NOTE 10—EMPLOYEE BENEFIT PLANS

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

Table of Contents

MARQUEE HOLDINGS INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

~~December~~July 311, ~~2009~~2010

(Unaudited)

NOTE 107—~~EMPLOYEE~~FAIR ~~BENEFIT~~VALUE ~~PLANS~~MEASUREMENTS (Continued)

~~The~~In connection with the RealD Inc. motion picture license agreement, the Company ~~made~~received ~~pension~~a ~~contributions~~ten-year option to purchase 1,222,782 shares of RealD Inc. common stock at approximately $0.00667 per share. The stock options vest in 3~~,486,000~~ ~~during~~tranches upon the ~~second~~achievement ~~quarter~~of ~~and~~screen ~~$79,000~~installation ~~during~~targets. During the ~~third~~first quarter of fiscal ~~2010. In addition~~2011, the Company ~~expects~~vested toin ~~make~~the ~~pension~~first ~~contributions~~tranche and has exercised its option to purchase 407,594 shares of ~~approximately~~RealD Inc. ~~$351~~common stock. The stock is accounted for an equity security,~~000~~ available for sale, and is recorded in the consolidated ~~fourth~~balance ~~quarter~~sheet in other long term assets with an offsetting entry recorded to other long term liabilities. Any recurring fair value adjustments will be recorded to other long term assets with an offsetting entry to accumulated other comprehensive loss. The amount recorded in other long term liabilities will be amortized on a straight-line basis to reduce RealD license expense recorded in the statement of ~~fiscal~~operations ~~2010~~under operating expense.

~~Net~~The ~~periodic~~Company ~~benefit~~is ~~cost~~required ~~(income)~~to disclose the fair value of financial instruments that are not recognized ~~for~~in the ~~plans~~statement ~~during~~of ~~the~~financial ~~thirteen~~position ~~weeks~~for ~~ended~~which ~~December~~it is practicable to estimate that value. At July 311, ~~2009~~2010, the carrying amount of the Company's liabilities for corporate borrowings was approximately $2,072,310,000 and ~~January~~the fair value was approximately $2,076,589,000. At April 1, ~~2009~~2010, ~~consists~~the carrying amount of the ~~following:~~corporate borrowings was approximately $2,073,649,000 and the fair value of was approximately $2,146,362,000. Quoted market prices were used to value publicly held corporate borrowings. The carrying value of cash and equivalents approximates fair value because of the short duration of those instruments.

		Pension Benefits						Other Benefits
(In thousands)		December 31, 2009			January 1, 2009			December 31, 2009			January 1, 2009
Components of net periodic benefit cost:
	Service cost	$	45		$	98		$	53		$	59
	Interest cost		1,101			1,166			324			312
	Expected return on plan assets		(748	)		(1,274	)		—			—
	Amortization of gain		(8	)		(404	)		(70	)		(23	)
	Amortization of prior service credit		—			—			(135	)		(136	)
	Amortization of transition obligation		—			8			—			—
Net periodic benefit cost (income)		$	390		$	(406	)	$	172		$	212

NOTE 8—INCOME TAXES

~~Net~~ ~~periodic~~ The ~~benefit~~difference ~~cost~~between ~~(income)~~the ~~recognized~~effective ~~for~~tax ~~the~~rate ~~plans~~on ~~during~~earnings ~~the~~(loss) ~~thirty-nine~~from ~~weeks~~continuing ~~ended~~operations ~~December 31,~~before ~~2009~~income taxes and ~~January 1,~~the ~~2009~~U.S. ~~consists~~federal ofincome ~~the~~tax ~~following~~statutory rate is as follows:

			Pension Benefits						Other Benefits
		Thirteen Weeks Ended
(In thousands)			December 31, 2009			January 1, 2009			December 31, 2009			January 1, 2009
		July 1, 2010			July 2, 2009
Components of net periodic benefit cost:
Income tax expense at the federal statutory rate			3,200			500
	Service cost		$	135		$	324		$	157		$	343
Effect of:
	Interest cost			3,303			3,365			972			799
State income taxes			4,600			950
	Expected return on plan assets			(2,243	)		(3,823	)		—			—
Permanent items			(100	)		100
	Amortization of (gain) loss			141			(1,210	)		(208	)		(46	)
Valuation allowance			(1,100	)		(500	)
	Amortization of prior service credit			—			—			(407	)		(272	)
Other, net			—			(50	)
	Amortization of transition obligation			—			28			—			—
Income tax expense			6,600			1,000
Net periodic benefit cost (income)			$	1,336		$	(1,316	)	$	514		$	824
Effective income tax rate			73.1	%		70.4	%

The accounting ~~NOTE~~for ~~11—CORPORATE~~income ~~BORROWINGS~~ taxes requires that deferred tax assets and liabilities be recognized, using enacted tax rates, for the tax effect of temporary differences between the financial reporting and tax bases of recorded assets and liabilities. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that some or all of the deferred tax assets will not be realized.

On June 9, 2009, AMCE completed the offering of $600,000,000 aggregate principal amount of its 8.75% Senior Notes due 2019 (the "Notes due 2019"). Concurrently with the initial notes offering, AMCE launched a cash tender offer and consent solicitation for any and all of its then outstanding $250,000,000 aggregate principal amount 85/8% Senior Notes due 2012 (the "Fixed Notes due 2012") at a purchase price of $1,000 plus a $30 consent fee for each $1,000 of principal amount of currently outstanding Fixed Notes due 2012 validly tendered and accepted by AMCE on or before the early tender date (the "Cash Tender Offer"). AMCE used the net proceeds from the issuance of the Notes

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MARQUEE HOLDINGS INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

~~December~~July 311, ~~2009~~2010

(Unaudited)

NOTE 119—~~CORPORATE~~EMPLOYEE ~~BORROWINGS~~BENEFIT ~~(Continued)~~ PLANS

~~due~~ ~~2019~~ The toCompany ~~pay~~sponsors ~~the~~frozen ~~consideration~~non-contributory ~~for~~qualified ~~the~~and ~~Cash~~non-qualified ~~Tender~~defined ~~Offer~~benefit ~~plus~~pension ~~accrued~~plans ~~and~~generally ~~unpaid~~covering ~~interest~~all onemployees ~~the $238~~who,~~065,000~~ ~~principal~~prior ~~amount~~to of the ~~Fixed~~freeze, were ~~Notes~~age ~~due~~21 ~~2012.~~or ~~AMCE~~older ~~recorded~~and ahad ~~loss~~completed onat ~~extinguishment related~~least ~~to the Cash Tender Offer of $10~~1,~~826,~~000 ~~in Other expense during the thirty-nine weeks ended December~~ ~~31,~~hours ~~2009,~~of ~~which~~service ~~included~~in ~~previously~~their ~~capitalized~~first ~~deferred~~twelve ~~financing~~months ~~fees~~ of $3employment,~~312,000,~~ aor ~~consent~~in ~~fee~~a ~~paid~~calendar toyear ~~the~~ending ~~holders of $7~~thereafter,~~142,000~~ and ~~other~~who ~~expenses~~were ofnot ~~$372,000.~~covered Onby ~~August 15, 2009, AMCE redeemed the remaining $11,935,000 of Fixed Notes due 2012 at~~ a collective ~~price~~bargaining ~~of $1,021~~agreement.56 ~~per~~The ~~$1,000~~Company ~~principal~~also inoffers ~~accordance~~eligible ~~with~~retirees the ~~terms~~opportunity ofto ~~the~~participate ~~indenture.~~in ~~AMCE recorded~~ a ~~loss~~health ofplan ~~$450,000~~(medical inand ~~Other~~dental). ~~expense~~Certain ~~related~~employees toare ~~the~~eligible ~~extinguishment~~for ofsubsidized postretirement ~~the~~medical ~~remaining~~benefits. ~~Fixed~~The ~~Notes~~eligibility ~~due~~for ~~2012 principal~~these ~~during~~benefits ~~the~~is ~~thirty-nine~~based ~~weeks~~upon ~~ended~~a ~~December 31,~~participant's ~~2009,~~age ~~which~~and ~~included~~service ~~previously~~as ~~capitalized deferred financing fees~~ of ~~$157~~January 1,~~000,~~ ~~consent~~2009. ~~fee~~The ~~paid~~Company toalso ~~the~~sponsors ~~holders~~a ofnonqualified deferred ~~$257,000~~compensation ~~and other expenses of $36,000~~plan.

The ~~Notes~~Company ~~due~~expects ~~2019 mature on June 1, 2019, pursuant~~ to anmake ~~indenture~~pension ~~dated~~contributions as of ~~June 9,~~approximately ~~2009~~$390,000 ~~among~~per ~~AMCE,~~quarter ~~the~~for Guarantors named therein and U.S. Bank National Association, as trustee (the "Indenture"). The Indenture provides that the Notes due 2019 are general unsecured senior obligations of AMCE and are fully and unconditionally guaranteed on a ~~joint~~total ~~and several senior unsecured basis by all~~ of ~~its~~approximately ~~existing~~$1,560,000 ~~and~~during ~~future~~fiscal ~~domestic restricted subsidiaries that guarantee its other indebtedness~~2011.

~~AMCE~~Net ~~will~~periodic ~~pay~~benefit ~~interest~~cost on(income) ~~the~~recognized ~~Notes~~for ~~due~~the ~~2019~~plans atduring ~~8.75%~~the ~~per~~thirteen ~~annum,~~weeks ~~semi-annually~~ended ~~in arrears on June~~July 1, 2010 and ~~December~~July 12, ~~commencing~~2009 onconsists ~~December 1,~~of ~~2009.~~the following:

AMCE may redeem some or all of the Notes due 2019 at any time on or after June 1, 2014, at the redemption prices set forth in the Indenture. AMCE may redeem the Notes on or after June 1, 2017 at a price equal to 100% of the principal amount of the Notes due 2019 plus accrued and unpaid interest to the redemption date. In addition, AMCE may redeem up to 35% of the aggregate principal amount of the Notes due 2019 using net proceeds from certain equity offerings completed prior to June 1, 2012.

		Pension Benefits						Other Benefits

(In thousands)		July 1, 2010			July 2, 2009			July 1, 2010			July 2, 2009
Components of net periodic benefit cost:
	Service cost	$	46		$	45		$	38		$	52
	Interest cost		1,151			1,101			319			324
	Expected return on plan assets		(996	)		(748	)		—			—
	Amortization of (gain) loss		154			158			—			(69	)
	Amortization of prior service credit		—			—			(216	)		(136	)

Net periodic benefit cost		$	355		$	556		$	141		$	171

AsEffective ~~of December~~July 3129, ~~2009~~2010, the Company was inable ~~compliance~~to ~~with~~determine ~~all~~it ~~financial~~will ~~covenants~~no ~~relating~~longer be obligated to ~~the~~contribute ~~Senior~~to ~~Secured~~one ~~Credit~~of ~~Facility,~~its ~~the~~union ~~Notes~~sponsored ~~due~~pension ~~2016,~~plans ~~the~~under ~~Notes~~a ~~due~~new ~~2014,~~union contract ~~Discount~~triggering ~~Notes~~a ~~due~~complete ~~2014,~~withdrawal from the plan. The Company expects to record a liability and pension cost related to the ~~Notes~~complete ~~due~~withdrawal ~~2019~~of approximately $2,660,000 in the second quarter of fiscal 2011.

NOTE 1210—COMMITMENTS AND CONTINGENCIES

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

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

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MARQUEE HOLDINGS INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

~~December~~July 311, ~~2009~~ 2010

(Unaudited)

NOTE 1210—COMMITMENTS AND CONTINGENCIES (Continued)

Assought todeclaratory ~~line-of-sight matters, the trial court entered summary judgment in favor of the Justice Department as to both liability~~ and asinjunctive torelief ~~the~~regarding ~~appropriate~~existing ~~remedy. On December 5, 2008, the Ninth Circuit Court of Appeals reversed the trial court as to the appropriate remedy~~ and ~~remanded~~future ~~the~~theatres ~~case back to the trial court for findings consistent~~ with ~~its decision. AMCE is negotiating the extent of betterments related to the remaining remedies required for line~~stadium-~~of-sight~~style violations consistent with the Ninth Circuit's decision. The improvements will be made over a 5 year term. The Justice Department moved for reconsideration on the line-of-sight matters and was denied on June 8seating, ~~2009~~compensatory ~~by the~~damages ~~Ninth~~in ~~Circuit Court of Appeals. The case reverts to~~ the ~~trial~~approximate ~~court~~amount ~~this spring. AMCE has recorded a liability~~ of ~~approximately~~ $~~349~~75,000 ~~for~~and ~~estimated~~a ~~fines~~civil ~~related~~penalty toof ~~this matter~~$110,000.

As to ~~the non-~~line-of-sight ~~aspects of the case~~matters, ~~on January 21, 2003,~~ the trial court entered summary judgment in favor of the Justice Department ~~on matters such~~ as ~~parking~~to ~~areas,~~both ~~signage,~~liability ~~ramps,~~and ~~location~~as ofto ~~toilets,~~the ~~counter~~appropriate ~~heights~~remedy. On December 5, ~~ramp slopes~~2008, ~~companion seating and~~ the ~~location~~Ninth ~~and~~Circuit ~~size~~Court of ~~handrails.~~Appeals Onreversed ~~December 5, 2003,~~ the trial court ~~entered~~ aas ~~consent~~to ~~order~~the ~~and~~appropriate ~~final~~remedy ~~judgment~~and onremanded ~~non-line-of-sight~~the ~~issues~~case ~~under~~back ~~which AMCE agreed~~ to ~~remedy~~the ~~certain~~trial ~~violations~~court atfor ~~its~~findings ~~stadium-style~~consistent ~~theatres~~with ~~and at~~its ~~certain~~decision. ~~theatres~~The itCompany ~~may~~is ~~open~~negotiating in the ~~future.~~extent ~~Currently~~of ~~AMCE~~betterments ~~estimates~~related ~~that~~to ~~these~~the ~~betterments~~remaining ~~will~~remedies be required atfor ~~approximately 140 stadium~~line-~~style~~of-sight ~~theatres.~~violations ~~AMCE~~consistent ~~estimates~~with ~~that~~ the ~~total~~Ninth ~~cost~~Circuit's decision. ofThe ~~these betterments~~improvements will be ~~approximately~~made ~~$54,000,000,~~over ~~and~~a ~~through December~~5 ~~31,~~year ~~2009~~term. ~~AMCE~~The ~~has~~Justice ~~incurred~~Department ~~approximately~~moved ~~$29,816,000~~for ofreconsideration ~~these~~on ~~costs.~~the ~~The~~line-of-sight ~~estimate~~matters isand ~~based~~was denied on June 8, ~~actual~~2009 ~~costs~~by ~~incurred~~the ~~on remediation~~Ninth ~~work~~Circuit ~~completed~~Court toof ~~date~~Appeals. The ~~actual~~case ~~costs~~has ofreverted ~~betterments~~to ~~may~~the ~~vary~~trial ~~based~~court. onThe ~~the~~Company ~~results~~has ofrecorded ~~surveys~~a liability of ~~the~~approximately ~~remaining~~$349,000 ~~theatres~~for estimated fines related to this matter.

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

Michael Bateman v. American Multi-Cinema, Inc. (No. CV07-00171). In January 2007, a class action complaint was filed against the Company in the Central District of the United States District Court of California (the "District Court") alleging violations of the Fair and Accurate Credit Transactions Act ("FACTA"). FACTA provides in part that neither expiration dates nor more than the last 5 numbers of a credit or debit card may be printed on receipts given to customers. FACTA imposes significant penalties upon violators where the violation is deemed to have been willful. Otherwise damages are limited to actual losses incurred by the card holder. On October 24, 2008, the District Court denied plaintiff's renewed motion for class certification. Plaintiff has appealed this decision and the case is stayed pending this appeal.

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

~~Union~~ In addition ~~Sponsored~~to ~~Pension~~the ~~Plan. On~~cases ~~November 7,~~noted ~~2008~~above, the Company ~~received~~is ~~notice~~also ofcurrently a ~~written~~party ~~demand~~to ~~for~~various ~~payment~~ordinary ofcourse aclaims ~~partial withdrawal liability assessment~~ from avendors ~~collectively~~(including ~~bargained~~concession ~~multiemployer~~suppliers, ~~pension~~and ~~plan~~motion ~~that~~picture distributors), ~~covers~~landlords ~~certain~~and ofsuppliers ~~its~~and ~~unionized~~other ~~theatre~~legal ~~employees~~proceedings. ~~Based~~If onmanagement abelieves ~~payment schedule~~ that ~~the~~a ~~Company~~loss ~~received~~arising from ~~this plan~~these inactions ~~December 2008, the Company began making quarterly payments on January 1, 2009 related to the $5,279,000 in partial withdrawal liability. In the~~

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MARQUEE HOLDINGS INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

~~December~~July 311, ~~2009~~2010

(Unaudited)

NOTE 1210—COMMITMENTS AND CONTINGENCIES (Continued)

~~second~~is ~~quarter~~probable ofand ~~fiscal~~can ~~2010~~reasonably be estimated, the Company ~~made~~records athe ~~complete~~amount ~~withdrawal~~of ~~from~~ the ~~plan~~loss, ~~which~~or ~~triggered~~the anminimum ~~additional~~estimated liability when the loss is estimated tousing bea ~~$1,400,000.~~range ~~However,~~and ~~the~~no ~~Company~~point ~~also~~is ~~estimates~~more ~~that~~probable than ~~approximately~~another. ~~$2,839,000~~As ofadditional ~~the~~information ~~total~~becomes available, any potential liability ~~was~~related ~~discharged~~to inthese ~~bankruptcy~~actions byis ~~companies~~assessed itand ~~acquired~~the estimates are revised, if necessary. AsExcept ofas ~~December 31~~described above, ~~2009~~management believes that the ultimate outcome of such other matters, individually and in the ~~Company~~aggregate, ~~has~~will ~~recorded~~not have a ~~liability~~material ~~related~~adverse toeffect ~~this~~on ~~matter~~the Company's financial position or overall trends in ~~the~~ ~~amount~~results of operations. $4However,~~440,000~~ litigation and ~~has~~claims ~~made~~are ~~contributions~~subject ofto ~~approximately~~inherent ~~$2,421,000~~uncertainties and unfavorable outcomes could occur. ~~The~~An ~~final~~unfavorable ~~withdrawal~~outcome ~~liability~~could ~~amount~~include ~~may~~monetary bedamages. ~~adjusted~~If ~~based~~an onunfavorable aoutcome were ~~legal~~to ~~review~~occur, ofthere exists the ~~plan's~~possibility ~~assessment,~~of a material adverse impact on the ~~Company's records~~results ~~and~~of ~~ensuing~~operations ~~discussions~~in ~~with~~the period in which the ~~plan's~~outcome ~~trustees~~occurs or in future periods.

~~Kerasotes~~ ~~Acquisition. On~~NOTE ~~December 9,~~11—RELATED ~~2009,~~PARTY the Company entered into a definitive agreement with Kerasotes ShowPlace Theatres, LLC ("Kerasotes") pursuant to which the Company will acquire substantially all of the assets of Kerasotes. Kerasotes operates 96 theatres and 973 screens in mid-sized, suburban and metropolitan markets, primarily in the Midwest. More than three quarters of the Kerasotes theatres feature stadium seating and almost 90 percent have been newly built since 1994. Completion of the acquisition is subject to the satisfaction of customary closing conditions for transactions of this type, including Department of Justice antitrust approval. The Company's estimated cash outlays for the acquisition of Kerasotes are anticipated to be up to $275,000,000. TRANSACTIONS

In addition to the cases noted above, the Company is also currently a party to various ordinary course claims from vendors (including concession suppliers, software technology vendors, and motion picture distributors), landlords and suppliers and other legal proceedings. If management believes that a loss arising from these actions is probable and can reasonably be estimated, the Company records the amount of the loss, or the minimum estimated liability when the loss is estimated using a range and no point is more probable than another. As additional information becomes available, any potential liability related to these actions is assessed and the estimates are revised, if necessary. Except as described above, management believes that the ultimate outcome of such other matters, individually and in the aggregate, will not have a material adverse effect on the Company's financial position or overall trends in results of operations. However, litigation and claims are subject to inherent uncertainties and unfavorable outcomes could occur. An unfavorable outcome could include monetary damages. If an unfavorable outcome were to occur, there exists the possibility of a material adverse impact on the results of operations in the period in which the outcome occurs or in future periods.

NOTE 13—NEW ACCOUNTING PRONOUNCEMENTS

In January 2010, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2010-06, Fair Value Measurements and Disclosures (Topic 820)—Improving Disclosures about Fair Value Measurements, ("ASU 2010-06"). This Update provides a greater level of disaggregated information and enhanced disclosures about valuation techniques and inputs to fair value measurements. ASU 2010-06 is effective for interim and annual reporting periods beginning after December 15, 2009 and is effective for the Company as of the end of fiscal 2010 except for certain disclosure requirements. Disclosures about purchases, sales, issuances, and settlements in the roll forward of activity in Level 3 fair value measurements are effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years and is effective for the Company as of the beginning of fiscal 2011. The Company is currently evaluating the enhanced disclosure requirements of this pronouncement.

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MARQUEE HOLDINGS INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

December 31, 2009

(Unaudited)

NOTE 13—NEW ACCOUNTING PRONOUNCEMENTS (Continued)

In October 2009, the FASB issued ASU No. 2009-13, Revenue Recognition (Topic 605)—Multiple-Deliverable Revenue Arrangements-A Consensus of the FASB Emerging Issues Task Force, ("ASU 2009-13"). This Update provides amendments to the criteria in Subtopic 605-25 that addresses how to separate multiple-deliverable arrangements and how to measure and allocate arrangement consideration to one or more units of accounting. In addition, this amendment significantly expands the disclosure requirements related to multiple-deliverable revenue arrangements. ASU 2009-13 will be effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010 and is effective for the Company as of the beginning of fiscal 2012. Early adoption is permitted. The Company is in the process of evaluating the impact ASU 2009-13 will have on its financial statements.

In June 2009, the FASB amended guidance for determining whether an entity is a variable interest entity and requires an analysis to determine whether the variable interest gives a company a controlling financial interest in the variable interest entity. This guidance is included in ASC 810, Consolidation, which will require an ongoing reassessment and eliminates the quantitative approach previously required for determining whether a company is the primary beneficiary. This guidance is effective as of the beginning of the first fiscal year beginning after November 15, 2009 and is effective for the Company in the first quarter of fiscal 2011. The Company is in the process of determining what effects the application of this guidance may have on its consolidated financial position, including its investments currently accounted for following the equity method of accounting.

In April 2009, the FASB issued ASC 825-10-65, guidance for interim disclosures about fair value of financial instruments. This guidance was amended to require an entity to provide disclosures about fair value of financial instruments in interim financial statements. The Company adopted this provision in the first quarter of fiscal 2010. See Note 7—Fair Value of Financial Instruments for required disclosures.

In December 2008, the FASB issued ASC 715-20-65, guidance for employers' disclosures about postretirement benefit plan assets, which requires additional fair value disclosures about employers' defined benefit pension or other postretirement plan assets. Specifically, employers will be required to disclose information about how investment allocation decisions are made, the fair value of each major category of plan assets and information about the inputs and valuation techniques used to develop the fair value measurements of plan assets. This guidance is effective for financial statements issued for fiscal years ending after December 15, 2009 and is effective for the Company in fiscal 2010. The Company will include the disclosures required in its annual consolidated financial statements and notes for the fiscal year ending April 1, 2010.

In April 2008, the FASB issued ASC 350-30, guidance for the determination of the useful life of intangible assets. This guidance amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset. In developing assumptions about renewal or extension, an entity should consider its own historical experience (or, if no experience, market participant assumptions) adjusted for entity specific factors. The guidance for determining the useful life of a recognized intangible asset shall be applied prospectively to intangible assets acquired after the effective date and expands the disclosure requirements. The guidance became

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MARQUEE HOLDINGS INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

December 31, 2009

(Unaudited)

NOTE 13—NEW ACCOUNTING PRONOUNCEMENTS (Continued)

effective for the Company in the first quarter of fiscal 2010 and did not have a material impact on the Company's consolidated financial position.

In December 2007, the FASB revised ASC 805, Business Combinations, which addresses the accounting and disclosure for identifiable assets acquired, liabilities assumed, and noncontrolling interests in a business combination. This statement requires all business combinations completed after the effective date to be accounted for by applying the acquisition method (previously referred to as the purchase method); expands the definition of transactions and events that qualify as business combinations; requires that the acquired assets and liabilities, including contingencies, be recorded at the fair value determined on the acquisition date and changes thereafter reflected in income, not goodwill; changes the recognition timing for restructuring costs; and requires acquisition costs to be expensed as incurred rather than being capitalized as part of the cost of acquisition. This standard became effective in the first quarter of fiscal 2010. The Company changed its accounting treatment for business combinations on a prospective basis. In addition, the reversal of valuation allowance for deferred tax assets related to business combinations will flow through the Company's income tax provision, on a prospective basis, as opposed to goodwill.

NOTE 14—RELATED PARTY TRANSACTIONS

Amended and Restated Fee Agreement

In connection with the merger with LCE Holdings Inc., Holdings, AMCE and the Sponsors entered into an Amended and Restated Fee Agreement, which provides for an annual management fee of $5,000,000, payable quarterly and in advance to each Sponsor, on a pro rata basis, until the earliest of (i) the twelfth anniversary from December 23, 2004; (ii) such time as the sponsors own less than 20% in the aggregate of Parent; and (iii) such earlier time as Holdings, AMCE and the Requisite Stockholder Majority agree. In addition, the fee agreement provided for reimbursements by AMCE to the Sponsors for their out-of-pocket expenses and to Holdings of up to $3,500,000 for fees payable by Holdings in any single fiscal year in order to maintain AMCE's and its corporate existence, corporate overhead expenses and salaries or other compensation of certain employees. The Amended and Restated Fee Agreement terminated on June 11, 2007, the date of the holdco merger, and was superseded by a substantially identical agreement entered into by AMC Entertainment Holdings, Inc., Holdings, AMCE, the Sponsors and Holdings' other stockholders.

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

The fee agreement also provides that ~~AMCE~~the Company will indemnify the Sponsors against all losses, claims, damages and liabilities arising in connection with the management services provided by the Sponsors under the fee agreement.

2220

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MARQUEE HOLDINGS INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

December 31, 2009

(Unaudited)

NOTE 14—RELATED PARTY TRANSACTIONS (Continued)

Control Arrangement

The Sponsors have the ability to control the Company's affairs and policies and the election of directors and appointment of management. Reference is made to Note 17—Related Party Transactions in the Company's annual report on Form 10-K for the year (52 weeks) ended April 2, 2009 for additional disclosures about its governance agreements with the Sponsors.

Market Making Transactions

On August 18, 2004, Holdings sold $304,000,000 in aggregate principal amount at maturity of its 12% Senior Discount Notes due 2014 (the "Holdco Notes"). On June 9, 2009, AMCE sold $600,000,000 in aggregate principal amount of its 8.75% Senior Notes due 2019. On January 26, 2006, AMCE sold $325,000,000 in aggregate principal amount of its 11% Senior Subordinated Notes due 2016. JP Morgan Securities Inc., an affiliate of J.P. Morgan Partners, LLC which owns approximately 20.8% of Holdings, was an initial purchaser of these notes. Credit Suisse Securities (USA) LLC, whose affiliates own approximately 1.6% of Parent, was also an initial purchaser of these notes.

Holdings Dividends to Parent

During April and May of 2009, Holdings made dividend payments to its stockholder, Parent, totaling $300,000,000, which were treated as a reduction of additional paid-in capital. Parent made payments to purchase term loans and reduce the principal balance of its Parent Term Loan Facility from $466,936,000 to $193,290,000 with a portion of the dividend proceeds.

During September of 2009, Holdings used cash on hand to pay a dividend distribution to Parent in an aggregate amount of $723,000. Parent used the available funds to pay corporate overhead expenses incurred in the ordinary course of business.

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

Forward Looking Statements

In addition to historical information, this Report on Form 10-Q contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, or the "Securities Act," and Section 21E of the Securities Exchange Act of 1934, as amended, or the "Exchange Act." The words "forecast," "estimate," "project," "intend," "expect," "should," "believe" and similar expressions are intended to identify forward-looking statements. These forward-looking statements involve known and unknown risks, uncertainties, assumptions and other factors, including those discussed in "Management's Discussion and Analysis of Financial Condition and Results of Operations of ~~AMC~~Marquee ~~Entertainment~~Holdings Inc.," which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to, the following:

•: national, regional and local economic conditions that may affect the markets in which we or our joint venture investees operate;
•: the levels of expenditures on entertainment in general and movie theatres in particular;
•: increased competition within movie exhibition or other competitive entertainment mediums;
•: technological changes and innovations, including alternative methods for delivering movies to consumers;
•: the popularity of theatre attendance and major motion picture releases;
•: shifts in population and other demographics;
•: our ability to renew expiring contracts at favorable rates, or to replace them with new contracts that are comparably favorable to us;
•: our ability to integrate Kerasotes Showplace Theatres, LLC ("Kerasotes") and achieve anticipated synergies with minimal disruption to our business;
•: our need for, and ability to obtain, additional funding for acquisitions and operations;
•: risks and uncertainties relating to our significant indebtedness;
•: fluctuations in operating costs;
•: capital expenditure requirements;
•: changes in interest rates; and
•: changes in accounting principles, policies or guidelines.

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

Readers are urged to consider these factors carefully in evaluating the forward-looking statements. For further information about these and other risks and uncertainties, see Item 1A. "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended April 21, ~~2009~~2010 and in this Quarterly Report on Form 10-Q.

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

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

Significant Event

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

Overview

We are one of the world's leading theatrical exhibition companies. During the thirty-nine weeks ended December 31, 2009, we opened one new managed theatre with 6 screens in the U.S. pursuant to a joint venture arrangement and closed nine theatres with 90 screens in the U.S. As of ~~December~~July 311, ~~2009~~2010, we owned, operated or had interests in 382 ~~299~~ theatres and 45,~~528~~342 screens, with 99%, or 45,~~473~~287, of our screens in the U.S. and Canada and 1%, or 55, of our screens in China (Hong Kong), France and the United Kingdom.

~~Our~~During ~~principal~~the ~~direct~~thirteen ~~and~~weeks ~~indirect~~ended ~~owned~~July 1, ~~subsidiaries~~2010, ~~are~~we ~~AMC~~acquired ~~Entertainment Inc~~92 theatres with 928 screens from Kerasotes in the U.S. ~~("AMCE")~~In ~~and~~connection ~~AMC~~with ~~Entertainment~~the ~~International~~acquisition of Kerasotes, ~~Inc.~~ ~~("AMCEI")~~we divested of nine theatres with 116 screens as required by the Antitrust Division of the United States Department of Justice and acquired two theatres with 26 screens that were received in exchange for three of the divested theatres above with 43 screens. We ~~conduct~~also ~~our~~closed ~~theatrical exhibition~~one ~~business~~theatre ~~through~~with ~~AMCE~~15 ~~and~~screens ~~its~~in ~~subsidiaries~~the U.S. and ~~AMCEI~~acquired ~~and~~one ~~its~~theatre ~~subsidiaries~~with 6 screens in the U.S. in the ordinary course of business.

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

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

Concessions sales are our second largest source of revenue after box office admissions. Concessions items include popcorn, soft drinks, candy, hot dogs and other products. We negotiate prices for our concessions products and supplies directly with concessions vendors on a national or regional basis to obtain high volume discounts or bulk rates and marketing incentives.

Our revenues are dependent upon the timing and popularity of motion picture releases by distributors. The most marketable motion pictures are usually released during the summer and the year-end holiday seasons. Therefore, our business can be seasonal, with higher attendance and revenues ~~generally occurring during the summer months and holiday seasons. Our results of operations may vary significantly from quarter to quarter.~~

During fiscal 2009, films licensed from our 6 largest distributors based on revenues accounted for approximately 81% of our admissions revenues. Our revenues attributable to individual distributors may vary significantly from year to year depending upon the commercial success of each distributor's motion pictures in any given year. 22

During the period from 1990 to 2008, the annual number of first-run motion pictures released by distributors in the United States ranged from a low of 370 in 1995 to a high of 606 in 2008, according to Motion Picture Association 2008 MPA Market Statistics.

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Wegenerally ~~continually~~occurring ~~upgrade~~during the ~~quality~~summer ofmonths ~~our theatre circuit by adding new screens through new builds (including expansions)~~ and ~~acquisitions,~~holiday ~~converting existing screens to 3D and IMAX and by disposing of older screens through closures and sales~~seasons. WeOur ~~are~~results ~~an industry leader in the development and operation~~ of ~~megaplex~~operations ~~theatres,~~may ~~typically~~vary ~~defined~~significantly asfrom aquarter ~~theatre having 14 or more screens and offering amenities~~ to ~~enhance the movie-going experience, such as stadium seating providing unobstructed viewing, digital sound and enhanced seat design~~quarter. We have increased our 3D screens by 247 screens and our IMAX screens by 46 screens since January 1, 2009; and as of December 31, 2009, approximately 8.0% of our screens were 3D screens and 1.7% of our screens were IMAX screens.

OnDuring ~~May 2,~~fiscal ~~2008~~2010, ~~our~~films ~~Board~~licensed offrom ~~Directors~~our ~~approved~~six ~~revisions~~largest todistributors ~~our~~based ~~Post~~on ~~Retirement~~revenues ~~Medical~~accounted ~~and~~for ~~Life~~approximately ~~Insurance~~84% ~~Plan~~of ~~effective~~our ~~January 1,~~U.S. ~~2009~~ and onCanada ~~July 3,~~admissions ~~2008~~revenues. ~~the~~Our revenues ~~changes~~attributable ~~were communicated~~ to ~~the~~individual ~~plan~~distributors ~~participants.~~may Asvary asignificantly ~~result~~from ofyear ~~these~~to ~~revisions,~~year wedepending ~~recorded~~upon athe ~~negative~~commercial ~~prior~~success ~~service cost~~ of ~~$5,969,000~~each ~~through~~distributor's ~~other~~motion ~~comprehensive~~pictures ~~income~~in toany begiven ~~amortized over eleven years based on expected future service of the remaining participants~~year.

OnDuring ~~December 29,~~the ~~2008,~~period wefrom ~~sold~~1990 ~~all~~to ~~of our interests in Grupo Cinemex~~2009, ~~S.A.~~ dethe ~~C.V.~~annual ~~("Cinemex"),~~number ~~which~~of ~~then~~first-run ~~operated~~motion 44pictures ~~theatres~~released ~~with~~by ~~493~~distributors ~~screens primarily~~ in the ~~Mexico~~United ~~City Metropolitan~~States ~~Area,~~ranged tofrom ~~Entretenimiento~~a GMlow ~~de Mexico S.A. de C.V. ("Entretenimiento"). The purchase price received at the date~~ of ~~the~~370 ~~sale and~~ in ~~accordance~~1995 ~~with the Stock Purchase Agreement was $248,141,000 and costs related~~ to ~~the~~a ~~disposition were $4,178,000. During the thirty-nine weeks ended December 31, 2009, we received payments~~ high of ~~$4,342,000~~633 ofin ~~purchase price related to tax payments and refunds~~2008, ~~and~~according ~~a working capital calculation and post closing adjustments. Additionally, we estimate that we are contractually entitled~~ to ~~receive~~Motion anPicture ~~additional~~Association ~~$9,866,000~~ of ~~the purchase~~America ~~price~~2009 ~~related~~MPAA toTheatrical ~~tax~~Market ~~payments and refunds~~Statistics. ~~While~~The wenumber ~~expect~~of todigital ~~ultimately~~3D ~~recover~~films ~~all~~released ~~amounts~~increased ~~we are contractually entitled~~ to ~~from~~a ~~Cinemex,~~high ~~the collection may require prolonged resolution~~ of ~~various~~ ~~amounts.~~20 ~~As of December 31, 2009, the amount due~~ from ~~Cinemex~~a ~~for~~low ~~tax payments and refunds associated with the sale was $9,866,000,~~ of ~~which~~0 ~~$9,332,000~~during ~~has been classified by us as a~~this ~~long-term~~same ~~asset~~time period.

We ~~acquired~~continually ~~Cinemex~~upgrade inthe ~~January~~quality ~~2006~~of asour ~~part~~theatre ofcircuit aby ~~larger~~adding ~~acquisition~~new screens through new builds (including expansions) and acquisitions and by disposing of ~~Loews~~older ~~Cineplex~~screens ~~Entertainment~~through closures ~~Corporation~~and sales. We doare ~~not~~an ~~operate~~industry ~~any~~leader ~~other~~in the development and operation of megaplex theatres, intypically ~~Mexico~~defined as a theatre having 14 or more screens and ~~have~~offering ~~divested~~amenities ofto enhance the ~~majority~~movie-going ofexperience, ~~our~~such ~~other~~as ~~investments~~stadium inseating ~~international~~providing ~~theatres~~unobstructed ~~in Japan~~viewing, ~~Hong~~digital ~~Kong,~~sound ~~Spain,~~and ~~Portugal,~~enhanced ~~Sweden,~~seat ~~Argentina,~~design. ~~Brazil,~~We ~~Chile,~~have increased our 3D screens by 467 to 628 screens and ~~Uruguay~~our ~~over~~IMAX ~~the~~screens ~~past~~by 29 ~~several~~to ~~years~~85 screens since July 2, 2009; and as ~~part~~of July 1, 2010, approximately 11.8% of our ~~overall business~~screens ~~strategy~~were 3D screens and 1.6% were IMAX screens.

The operations and cash flows of the Cinemex theatres have been eliminated from our ongoing operations as a result of the disposal transaction. We will not have any significant continuing involvement in the operations of the Cinemex theatres after the disposition. The results of operations of the Cinemex theatres have been classified as discontinued operations for all periods presented.

On June 9, 2009, AMCE completed the offering of $600,000,000 aggregate principal amount of our 8.75% Senior Notes due 2019 (the "Notes due 2019"). Concurrently with the initial notes offering, AMCE launched a cash tender offer and consent solicitation for any and all of our then outstanding $250,000,000 aggregate principal amount of 85/8% Senior Notes due 2012 (the "Fixed Notes due 2012") at a purchase price of $1,000 plus a $30 consent fee for each $1,000 of principal amount of currently outstanding Fixed Notes due 2012 validly tendered and accepted by us on or before the early tender date (the "Cash Tender Offer"). AMCE used the net proceeds from the issuance of the Notes due 2019 to pay the consideration for the Cash Tender Offer plus accrued and unpaid interest on the $238,065,000 principal amount of the Fixed Notes due 2012. AMCE recorded a loss on extinguishment related to the Cash Tender Offer of $10,826,000 in Other expense during the thirty-nine weeks ended December 31, 2009, which included previously capitalized deferred financing fees of $3,312,000, consent fee paid to holders of $7,142,000, and other expenses of $372,000. On August 15, 2009, AMCE redeemed the remaining $11,935,000 of Fixed Notes due 2012 at a price of $1,021.56 per $1,000 principal in accordance with the terms of the indenture. AMCE recorded a loss of $450,000 in Other

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expense related to the extinguishment of the remaining Fixed Notes due 2012 principal during the thirty-nine weeks ended December 31, 2009, which included previously capitalized deferred financing fees of $157,000, consent fee paid to the holder of $257,000 and other expenses of $36,000.

On December 9, 2009, we entered into a definitive agreement with Kerasotes pursuant to which we will acquire substantially all of the assets of Kerasotes. Kerasotes operates 96 theatres and 973 screens in mid-sized, suburban and metropolitan markets, primarily in the Midwest. More than three quarters of the Kerasotes theatres feature stadium seating and almost 90 percent have been newly built since 1994. Completion of the acquisition is subject to the satisfaction of customary closing conditions for transactions of this type, including Department of Justice antitrust approval. Our estimated cash outlays for the acquisition of Kerasotes are anticipated to be up to $275,000,000.

Stock-Based Compensation

We account for stock-based employee compensation arrangements using the fair value method. The fair value of each stock option was estimated on the grant date using the Black-Scholes option pricing model using the following assumptions: common stock value on the grant date, risk-free interest rate, expected term, expected volatility, and dividend yield. We have elected to use the simplified method for estimating the expected term of "plain vanilla" share option grants as we do not have enough historical experience to provide a reasonable estimate. Compensation cost is calculated on the date of the grant and then amortized over the vesting period.

We granted 38,876.72873 options on December 23, 2004, 600 options on January 26, 2006, 15,980.45 options on March 6, 2009, and 4,786 options on May 28, 2009 to employees to acquire our common stock. The fair value of these options on their respective grant dates was $22,373,000, $138,000, $2,069,000, and $650,000, respectively. All of these options currently outstanding are equity classified.

The common stock value used to estimate the fair value of each option on the December 23, 2004 grant date was based upon a contemporaneous third party arms-length transaction on December 23, 2004 in which we sold 769,350 shares of our common stock for $1,000 per share to unrelated parties. The common stock value used to estimate the fair value of each option on the March 6, 2009 grant date was based upon a contemporaneous valuation reflecting market conditions as of January 1, 2009, a purchase of 2,542 shares by Parent for $323.95 per share from our former Chief Executive Officer pursuant to his Separation and General Release Agreement dated February 23, 2009 and a sale of 385.862 shares by Parent to our current Chief Executive Officer pursuant to his Employment Agreement dated February 23, 2009 for $323.95 per share.

On June 11, 2007, Marquee Merger Sub Inc. ("merger sub"), a wholly-owned subsidiary of AMC Entertainment Holdings, Inc. ("Parent"), merged with and into Holdings, with Holdings continuing as the surviving corporation (the "holdco merger"). In connection with this, Parent adopted an amended and restated 2004 stock option plan (formerly known as the 2004 Stock Option Plan of Marquee Holdings Inc.). The option exercise price per share of $1,000 was adjusted to $491 pursuant to the antidilution provisions of the 2004 Stock Option Plan to give effect to the payment of a one time non-recurring dividend paid by Parent on June 15, 2007 of $652,800,000 to the holders of its 1,282,750 shares of common stock. The Company determined that there was no incremental value transferred as a result of the modification and as a result, no additional compensation cost to recognize.

The common stock value of $339.59 per share used to estimate the fair value of each option on the May 28, 2009 grant date was based upon a valuation prepared by management on behalf of the Compensation Committee of the Board of Directors. Management chose not to obtain a contemporaneous valuation performed by an unrelated valuation specialist as management believed that the valuation obtained at January 1, 2009 and the subsequent stock sales and purchases were recent and could easily be updated and rolled forward without engaging a third party and incurring

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additional costs. Additionally, management considered that the number of options granted generated a relatively low amount of annual expense over 5 years ($130,100) and that any differences in other estimates of fair value would not be expected to materially impact the related annual expense. The common stock value was estimated based on current estimates of annual operating cash flows multiplied by the current average peer group multiple for similar publicly traded competitors of 6.7x less net indebtedness, plus the current fair value of our investment in NCM. Management compared the estimated stock value of $339.59 per share with the $323.95 value per share discussed above related to the March 6, 2009 option grant and noted the overall increase in value was primarily due the following:

March 6, 2009 grant value per share	$	323.95
Decline in net indebtedness		20.15
Increase in value of investment in NCM		37.10
Increase due to peer group multiple		47.89
Decrease in annual operating cash flows		(89.50	)
May 28, 2009 grant value per share	$	339.59

Certain Critical Accounting Estimates Impacted by Capital and Credit Market Crisis

Certain accounting estimates identified below are critical to our business operations and the understanding of our results of operations. The impact of, and any associated risks related to, these estimates on our business operations are discussed throughout this Management's Discussion and Analysis of Financial Condition and Results of Operations where such estimates affect our reported and expected financial results. For a detailed discussion on the application of these estimates and other accounting policies, see the notes to our consolidated financial statements included in our Annual Report on Form 10-K. The methods and judgments we use in applying our accounting estimates have a significant impact on the results we report in our financial statements. Some of our accounting estimates require us to make difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain. Certain of our most critical accounting estimates include the assessment of recoverability of long-lived assets, including intangibles, which impacts impairment of long-lived assets when we impair assets or accelerate their depreciation; recoverability of goodwill, which creates the potential for write-offs of goodwill; and recognition and measurement of net periodic benefit costs for our pension and other defined benefit programs, which impacts general and administrative expense. Below, we discuss these areas further, as well as the estimates and judgments involved and how they may be impacted in the future.

Impairments. We review long-lived assets, including intangibles and investments in unconsolidated subsidiaries accounted for under the equity method, marketable equity securities and internal use software for impairment as part of our annual budgeting process and whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. We identify impairments related to internal use software when management determines that the remaining carrying value of the software will not be realized through future use. We review internal management reports on a quarterly basis as well as monitor current and potential future competition in the markets where we operate for indicators of triggering events or circumstances that indicate impairment of individual theatre assets. We evaluate theatres using historical and projected data of theatre level cash flow as our primary indicator of potential impairment and consider the seasonality of our business when evaluating theatres for impairment. We perform our annual impairment analysis during the fourth quarter because Christmas and New Year's holiday results comprise a significant portion of our operating cash flow and the actual results from this period, which are available during the fourth quarter of each fiscal year, are an integral part of our impairment analysis. We performed an interim impairment analysis during the third quarter of fiscal 2009 as a result of the downturns in the economic operating environment related

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to the credit and capital market crisis. Under these analyses, if the sum of the estimated future cash flows, undiscounted and without interest charges, are less than the carrying amount of the asset, an impairment loss is recognized in the amount by which the carrying value of the asset exceeds its estimated fair value. Assets are evaluated for impairment on an individual theatre basis, which we believe is the lowest level for which there are identifiable cash flows. The impairment evaluation is based on the estimated cash flows from continuing use until the expected disposal date or the fair value of furniture, fixtures and equipment. The expected disposal date does not exceed the remaining lease period unless it is probable the lease period will be extended and may be less than the remaining lease period when we do not expect to operate the theatre to the end of its lease term. The fair value of assets is determined as either the expected selling price less selling costs (where appropriate) or the present value of the estimated future cash flows. The fair value of furniture, fixtures and equipment has been determined using similar asset sales and in some instances the assistance of third party valuation studies. The discount rate used in determining the present value of the estimated future cash flows was based on management's expected return on assets during fiscal 2009.

There is considerable management judgment necessary to determine the future cash flows, fair value and the expected operating period of our theatre and other long-lived assets, and, accordingly, actual results could vary significantly from such estimates. We have recorded impairments of long-lived assets of $73,547,000, $8,933,000, and $10,686,000 during fiscal 2009, 2008, and 2007, respectively.

Goodwill and Other Intangible Assets. Our recorded goodwill was $1,836,731,000 as of December 31, 2009 and April 2, 2009, and unamortized trademark intangible assets were $74,000,000 as of December 31, 2009 and April 2, 2009. We evaluate goodwill and our trademark for impairment annually as of the beginning of the fourth fiscal quarter and any time an event occurs or circumstances change that would more likely than not reduce the fair value for a reporting unit below its carrying amount. Our goodwill is recorded in our U.S. and Canada operating segment which represents 99% of the screens in our Theatrical Exhibition operating segment used for financial reporting purposes. The reporting unit for purposes of evaluating recorded goodwill for impairment is our U.S. and Canada operating segment. If the carrying value of the reporting unit exceeds its fair value we are required to reallocate the fair value of the reporting unit as if the reporting unit had been acquired in a business combination and the fair value of the reporting unit was the price paid to acquire the reporting unit. We determine fair value by using an enterprise valuation methodology determined by using the income approach and the market approach as discussed below which we believe are appropriate methods to determine fair value. There is considerable management judgment with respect to cash flow estimates and appropriate multiples and discount rates to be used in determining fair value.

We performed an interim impairment analysis during the third quarter of fiscal 2009 as a result of downturns in the economic operating environment related to the credit and capital market crisis and declines in equity values for our publicly traded peer group competitors. While the fair value of our Theatrical Exhibition operations exceeded the carrying value at the time and management does not believe that impairment is probable, the performance of our Theatrical Exhibition operations requires continued improvement in future periods to sustain its carrying value and small changes in certain assumptions can have a significant impact on fair value. In the future, if the carrying value of our reporting unit exceeds the estimated fair value, we are required to reallocate the fair value of the reporting unit as if the reporting unit had been acquired in a business combination and the fair value of the reporting unit was the price paid to acquire the reporting unit for purposes of measuring goodwill. As a result of this hypothetical allocation, the carrying value of goodwill could be reduced to the hypothetically recomputed amount. If the performance of our Theatrical Exhibition operations does not continue to improve, a future impairment could result for a portion or all of the goodwill or trademark intangibles noted previously.

We evaluated our enterprise value for fiscal 2009 and 2008 based on a contemporaneous valuation reflecting market conditions as of January 1, 2009 and December 27, 2007, respectively. Two valuation

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approaches were utilized; the income approach and the market approach. The income approach provides an estimate of enterprise value by measuring estimated annual cash flows over a discrete projection period and applying a present value rate to the cash flows. The present value of the cash flows is then added to the present value equivalent of the residual value of the business to arrive at an estimated fair value of the business. The residual value represents the present value of the projected cash flows beyond the discrete projection period. The discount rate is carefully determined using a rate of return deemed appropriate for the risk of achieving the projected cash flows. The market approach used publicly traded peer companies and reported transactions in the industry. Due to market conditions and the relatively few sale transactions, the market approach was used to provide additional support for the value achieved in the income approach.

Key rates used in the income approach for fiscal 2009 and 2008 follow:

Description
Discount rate	10.0	%	8.5	%
Market risk premium	6.0	%	5.0	%
Hypothetical capital structure: Debt/Equity	40%/60	%	40%/60	%

The discount rate is an estimate of the weighted average cost of debt and equity capital. The required return on common equity was estimated by adding the risk-free required rate of return, the market risk premium (which is adjusted for the Company's estimated market volatility, or beta), and small stock premium. The discount rate used for fiscal 2008 was 8.5% as compared to the 10.0% discount rate used for the fiscal 2009 impairment test. The higher discount rate was due to a number of factors, such as an increase in corporate bond yields, increase in betas, and increase in market risk premiums, given current market conditions.

The aggregate annual cash flows were determined based on management projections on a theatre-by-theatre basis further adjusted by non-theatre cash flows. The projections considered various factors, including theatre lease terms, a reduction in attendance, and a reduction in capital investments in new theatres, given current market conditions and the resulting difficulty with obtaining contracts for new-builds. Because Cinemex was sold in December 2008, cash flows for the fiscal 2009 study did not include results from Cinemex. Cash flows were projected through fiscal 2015 and it was assumed revenues would increase approximately 1.7% annually primarily due to projected increases in ticket and concession pricing. The residual value is a function of the estimated cash flow for fiscal 2016 divided by a capitalization rate (discount rate less long-term growth rate of 2%), then discounted back to represent the present value of the cash flows beyond the discrete projection period.

As the expectations of the average investor are not directly observable, the market risk premium must be inferred. One approach is to use the long-run historical arithmetic average premiums that investors have historically earned over and above the returns on long-term Treasury bonds. The premium obtained using the historical approach is sensitive to the time period over which one calculates the average. Depending on the time period chosen, the historical approach yields an average premium in a range of 5.0% to 8.0%. Another approach is to look at projected rates of return obtained from analysts who follow the stock market. Again, this approach will lead to differing estimates depending upon the source. The published expected returns from firms such as Merrill Lynch, Value Line, and Greenwich Associates collectively tend to indicate a premium in a range of 3.0% to 5.0%. Under normal market conditions, we have utilized a market risk premium of 5.0%; however, given the current economic conditions, we utilized a market risk premium of 6.0% for fiscal 2009.

There was no goodwill impairment as of April 2, 2009. Based on the results of the study conducted at the end of the third quarter of fiscal 2009, our fair value exceeded the book value by 0.6%.

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Following, for illustrative purposes, are the percentages at which our fair value exceeds the carrying value assuming hypothetical reductions in the fair value as of January 1, 2009 (in thousands):

Carrying Value $ 2,660,361

Hypothetical Reduction of Fair Value	Fair Value
0.0%	$	2,676,365	0.6	%
2.5%		2,609,520	(1.9	)%
5.0%		2,542,675	(4.4	)%
7.5%		2,475,830	(6.9	)%
10.0%		2,408,985	(9.4	)%

During the calendar year 2009, the equity values of our publicly traded peer group competitors increased by an average of approximately 67% from the third fiscal quarter ended on January 1, 2009.

Pension and Postretirement Assumptions. Pension and postretirement benefit obligations and the related effects on operations are calculated using actuarial models. Two critical assumptions, discount rate and expected return on assets, are important elements of plan expense and/or liability measurement. We evaluate these critical assumptions at least annually. In addition, medical trend rates are an important assumption in projecting the medical claim levels for our postretirement benefit plan. The assumptions affecting our pension and postretirement obligations involve demographic factors such as retirement, expected increases in compensation, mortality and turnover. These assumptions are evaluated periodically and are updated to reflect our experience. Actual results in any given year will often differ from actuarial assumptions because of economic and other factors. Reference is made to our Annual Report on Form 10-K Part II Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations for additional discussion about our pension and postretirement assumptions under the heading Critical Accounting Estimates.

We believe that the oversight of the investments held under our frozen defined benefit pension plans is rigorous and that the investment strategies are prudent. The market value of the investments within the frozen pension plan trusts declined by approximately 36% during the fifteen months ended April 2, 2009, which was partially offset by an increase of approximately 23% during the nine months ended December 31, 2009. The benefit plan assets and obligations of our frozen plans are remeasured annually and any future reductions in plan assets from investment losses will result in an increase to the plans' unfunded status and a decrease in stockholder's equity upon actuarial revaluation of the plan for the upcoming year. Changes in the value of our frozen plan assets (during fiscal 2010) will not have an impact on the income statement for fiscal 2010; however, any additional reductions in benefit plan assets will result in increased benefit costs in future years and may increase the amount and accelerate the timing of required future funding contributions. We have recorded net periodic benefit cost (income) for our pension and postretirement plans of $(1,890,000), $1,461,000, and $(4,454,000) during the periods ended April 2, 2009, April 3, 2008, and March 29, 2007, respectively and expect to record net periodic benefit expense for our pension and post retirement plans of $2,412,000 during fiscal 2010.

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Operating Results

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

		Thirteen Weeks Ended								~~Thirty-nine Weeks Ended~~
		December 31, 2009			January 1, 2009		% Change			December 31, 2009			January 1, 2009			% Change
		July 1, 2010			July 2, 2009		% Change
		(Dollars in thousands, except operating data)
(In thousands)
Revenues
	Admissions	$	444,420		$	376,917		17.9	%	$	1,281,145		$	1,198,365			6.9	%
Theatrical exhibition
	Concessions		166,867			148,757		12.2	%		487,908			478,507			2.0	%
	Admissions	$	448,597		$	446,227		0.5	%
	Other theatre		15,895			13,261		19.9	%		44,493			44,292			0.5	%
	Concessions		175,959			173,660		1.3	%
	Total revenues	$	627,182		$	538,935		16.4	%	$	1,813,546		$	1,721,164			5.4	%
	Other theatre		16,396			15,425		6.3	%
Cost of Operations
	Total revenues	$	640,952		$	635,312		0.9	%
	Film exhibition costs	$	239,275		$	196,439		21.8	%	$	696,704		$	646,551			7.8	%
Cost of Operations
	Concession costs		18,378			16,000		14.9	%		53,448			51,017			4.8	%
Theatrical exhibition
	Operating expense		153,399			141,330		8.5	%		445,179			435,411			2.2	%
	Film exhibition costs	$	238,823		$	249,101		-4.1	%
	Rent		110,423			111,724		-1.2	%		331,107			336,873			-1.7	%
	Concession costs		20,496			19,165		6.9	%
	Preopening expense		1,247			1,481		-15.8	%		2,681			4,541			-41.0	%
	Operating expense		147,641			150,177		-1.7	%
	Theatre and other closure (income) expense		1,568			269		*	%		2,183			(2,064	)		*	%
	Rent		114,554			112,373		1.9	%
			524,290			467,243		12.2	%		1,531,302			1,472,329			4.0	%
			521,514			530,816		-1.8	%
General and administrative expense:
	Merger, acquisition and transaction costs		~~485~~5,756			~~306~~281		~~58.5~~*	%		~~809~~			~~558~~			~~45.0~~	%
	Management Fee		1,250			1,250		—	%		~~3,750~~			~~3,750~~			—	%
	Other		1413,~~709~~071			1013,~~741~~083		36-0.91	%		~~40,867~~			~~33,878~~			~~20.6~~	%
Depreciation and amortization			4748,~~472~~603			5048,~~464~~788		-50.94	%		~~142,949~~			~~151,520~~			~~-5.7~~	%
Impairment of long-lived assets			—			73,547		*	%		—			73,547			*	%
	Total costs and expenses	$	590,194		$	594,218		-0.7	%
Disposition of assets and other (gains) losses			(617	)		219		*	%		(878	)		(136	)		*	%
	Total costs and expenses	$	587,589		$	603,770		-2.7	%	$	1,718,799		$	1,735,446			-1.0	%

*: Percentage change in excess of 100%

*Percentage change in excess of 100% 23

		Thirteen Weeks Ended				Thirty-nine Weeks Ended
		December 31, 2009		January 1, 2009		December 31, 2009		January 1, 2009
Operating Data—Continuing Operations (at period end):
	Screen additions		—		23		6		83
	Screen dispositions		46		7		90		61
	Average screens—(1)		4,462		4,554		4,501		4,546
	Number of screens operated(2)						4,528		4,628
	Number of theatres operated						299		309
	Screens per theatre						15.1		15.0
	Attendance—(1) (in thousands)		51,662		46,608		152,147		149,457

(1)Includes consolidated theatres only. (2)Includes 364 3D screens and 78 IMAX screens as of December 31, 2009 and 117 3D screens and 32 IMAX screens as of January 1, 2009.

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A reconciliation of earnings (loss) from continuing operations before income taxes to Adjusted EBITDA is as follows (in thousands):

		Thirteen Weeks Ended

		July 1, 2010		July 2, 2009
Operating Data—Continuing Operations (at period end):
	New theatre screens		—		6
	Screens acquired		960		—
	Screen dispositions		131		8
	Average screens—continuing operations(1)		4,834		4,534
	Number of screens operated		5,342		4,610
	Number of theatres operated		382		307
	Screens per theatre		14.0		15.0
	Attendance (in thousands)—continuing operations(1)		51,619		53,703

(1): Includes consolidated theatres only.

			Thirteen Weeks Ended						Thirty-nine Weeks Ended
			December 31, 2009			January 1, 2009			December 31, 2009			January 1, 2009
Earnings (loss) from continuing operations before income taxes			$	8,257		$	(94,486	)	$	(6,826	)	$	(100,378	)
Plus:
	Interest expense			41,024			38,500			120,168			115,138
	Depreciation and amortization			47,472			50,464			142,949			151,520
	Impairment of long-lived assets			—			73,547			—			73,547
	Preopening expense			1,247			1,481			2,681			4,541
	Theatre and other closure expense (income)			1,568			269			2,183			(2,064	)
	Disposition of assets and other (gains) losses			(617	)		219			(878	)		(136	)
	Equity in earnings of non-consolidated entities			(7,517	)		(6,033	)		(18,127	)		(15,739	)
	Investment income			(36	)		(927	)		(168	)		(1,510	)
	Other expense(1)			—			—			11,276			—
	General and administrative expense:
		Merger and acquisition costs		485			306			809			558
		Management fee		1,250			1,250			3,750			3,750
		Stock-based compensation expense		410			774			1,248			2,323
Adjusted EBITDA			$	93,543		$	65,364		$	259,065		$	231,550

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

(1)Other expense is comprised of the loss on extinguishment of indebtedness related to the Cash Tender Offer and remaining redemption.

			Thirteen Weeks Ended

(In thousands)			July 1, 2010			July 2, 2009
Earnings from continuing operations			$	2,429		$	420
Plus:
	Income tax provision			6,600			1,000
	Interest expense			41,952			37,262
	Depreciation and amortization			48,603			48,788
	Certain operating expenses(1)			(9,475	)		956
	Equity in (earnings) loss of non-consolidated entities			1,766			(6,262	)
	Investment income			(50	)		(99	)
	Other (income) expense(2)			—			10,826
	General and administrative expense—unallocated:
		Merger, acquisition and transaction costs		5,756			281
		Management fee		1,250			1,250
		Stock-based compensation expense		136			411

Adjusted EBITDA(3)			$	98,967		$	94,833

(1): Amounts represent preopening expense, theatre and other closure expense, deferred digital equipment rent expense, and disposition of assets and other gains included in operating expenses.
(2): Other expense for fiscal 2010 is comprised of the loss on extinguishment of indebtedness related to the redemption of our 8⁵/8% Senior Notes due 2012.
(3): The acquisition of Kerasotes contributed approximately $10,000,000 in Adjusted EBITDA during the thirteen weeks ended July 1, 2010.

Adjusted EBITDA ~~Thirteen~~is ~~Weeks~~a ~~Ended~~non-GAAP ~~December 31,~~financial ~~2009~~measure commonly used in our industry and ~~January 1,~~should ~~2009~~ not be construed as an alternative to net earnings (loss) as an indicator of operating performance or as

Revenues. Total revenues increased 16.4%, or $88,247,000, during the thirteen weeks ended December 31, 2009 compared to the thirteen weeks ended January 1, 2009. Admissions revenues increased 17.9%, or $67,503,000, during the thirteen weeks ended December 31, 2009 compared to the thirteen weeks ended January 1, 2009, due to a 10.8% increase in attendance and a 6.3% increase in average ticket prices. Admissions revenues at comparable theatres (theatres opened on or before the third quarter of fiscal 2009) increased 19.0%, or $70,821,000, during the thirteen weeks ended December 31, 2009 from the comparable period last year. Attendance was positively impacted by more favorable IMAX and 3D film product during the thirteen weeks ended December 31, 2009 as compared to the thirteen weeks ended January 1, 2009, as well as by an increase in the number of IMAX and 3D screens that we operate. The increase in average ticket price was primarily due to increases in attendance from IMAX and 3D film product where we are able to charge more per ticket than for a standard 2D film, as well as our practice of periodically reviewing ticket prices and making selective adjustments based upon such factors as general inflationary trends and conditions in local markets. Based upon available industry sources, box office revenues of our comparable theatres outperformed the overall industry comparable theatres in the markets where we operate. We believe our outperformance is primarily due to a year-over-year change in product genre including IMAX and 3D film product and the increase in the number of IMAX and 3D screens that we operate which was more favorable in the current year period. Concessions revenues increased 12.2%, or $18,110,000, during the thirteen weeks ended December 31, 2009 compared to the thirteen weeks ended January 1, 2009, due 24

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toan ~~the~~alternative ~~increase~~to incash ~~attendance~~flow ~~and~~provided aby ~~1.3%~~operating ~~increase~~activities inas ~~average~~a ~~concessions~~measure ~~per~~of ~~patron.~~liquidity ~~The~~(as ~~increase~~determined in ~~concessions~~accordance ~~per~~with ~~patron~~GAAP). ~~includes~~Adjusted ~~the~~EBITDA ~~impact~~may ofnot ~~concession~~be ~~price~~comparable ~~and~~to ~~size~~similarly ~~increases~~titled ~~placed in effect~~measures ~~during~~reported ~~the~~by ~~thirteen~~other ~~weeks ended December 31, 2009~~companies. ~~Other~~We ~~theatre~~have ~~revenues~~included ~~increased~~Adjusted ~~19.9%,~~EBITDA orbecause ~~$2,634,000~~we ~~during~~believe ~~the~~it ~~thirteen~~provides ~~weeks~~management ~~ended~~and ~~December 31,~~investors ~~2009~~with ~~compared~~additional information to ~~the~~measure ~~thirteen~~our ~~weeks ended~~performance ~~January 1,~~and ~~2009~~liquidity, ~~primarily~~estimate ~~due~~our value toand ~~increases~~evaluate inour ~~on-line~~ability ~~ticket~~to ~~fees,~~service ~~non-presentment~~debt. ~~income~~In ~~from package ticket sales~~addition, ~~and~~we ~~merchandise~~use ~~sales,~~Adjusted ~~partially~~EBITDA ~~offset~~for ~~by decreases~~incentive incompensation ~~theatre rentals~~purposes.

~~Costs and expenses. Total costs and expenses decreased 2.7%, or $16,181,000, during the thirteen weeks ended December 31, 2009~~ Adjusted ~~compared~~EBITDA tohas ~~the thirteen~~important ~~weeks~~limitations ended January 1, 2009. Film exhibition costs increased 21.8%, or $42,836,000, during the thirteen weeks ended December 31, 2009 compared to the thirteen weeks ended January 1, 2009 due to the increase in admissions revenues and the increase in film exhibition costs as aan ~~percentage~~analytical ~~of admissions revenues. As a percentage of admissions revenues~~tool, ~~film exhibition costs were 53.8% in the current period~~ and ~~52.1%~~you inshould ~~the~~not ~~prior~~consider ~~year~~it ~~period primarily due to an increase~~ in ~~admission revenues on higher grossing films~~isolation, ~~which typically carry a higher film cost as a percentage of admissions revenues. Concession costs increased 14.9%,~~ or ~~$2,378,000, during the thirteen weeks ended December 31, 2009 compared to the thirteen weeks ended January 1, 2009 due to an increase in concession revenues and an increase in concession costs~~ as a ~~percentage~~substitute offor ~~concessions~~analysis ~~revenues. As a percentage~~ of ~~concessions~~our ~~revenues,~~results ~~concession costs were 11.0% in the current period compared with 10.8% in the prior period. As a percentage of revenues, operating expense was 24.5% in the current period~~ as ~~compared~~reported ~~to 26.2% in the prior period. Rent~~under ~~expense decreased 1~~U.2%, or $1,301,000, during the thirteen weeks ended December 31, 2009 compared to the thirteen weeks ended January 1, 2009 primarily due to rent reductions resulting from co-tenancy provisions in certain lease agreements not being met in certain locationsS. Rent reductions related to co-tenancy may not continue should our landlords meet the related co-tenancy provisions in the future. Preopening expense decreased $234,000 during the thirteen weeks ended December ~~31, 2009 due to a decline in screen additions~~GAAP. ~~During~~For ~~the thirteen weeks ended December 31~~example, ~~2009,~~ weAdjusted ~~recognized~~EBITDA: ~~$1,568,000 of theatre and other closure expense due primarily to the closure of one theatre and accretion of the closure liability related to theatres closed during prior periods.~~

•: does not reflect our capital expenditures, future requirements for capital expenditures or contractual commitments;
•: does not reflect changes in, or cash requirements for, our working capital needs;
•: does not reflect the significant interest expenses, or the cash requirements necessary to service interest or principal payments, on our debt;
•: excludes tax payments that represent a reduction in cash available to us;
•: does not reflect any cash requirements for the assets being depreciated and amortized that may have to be replaced in the future; and
•: does not reflect management fees that may be paid to our sponsors.

~~General~~Thirteen Weeks Ended July 1, 2010 and ~~Administrative~~July 2, ~~Expense:~~2009

~~Merger~~Revenues. Total revenues increased 0.9%, or $5,640,000, during the thirteen weeks ended July 1, 2010 compared to the thirteen weeks ended July 2, 2009. This increase included approximately $35,700,000 of additional revenues resulting from the acquisition ~~and~~of ~~transaction~~Kerasotes. ~~costs~~Admissions revenues increased 0. ~~Merger~~5%, or $2,370,000, during the thirteen weeks ended July 1, 2010 compared to the thirteen weeks ended July 2, 2009, due to the acquisition of Kerasotes and ~~transaction~~a ~~costs~~4.6% increase in average ticket prices, partially offset by a 3.9% decrease in attendance. The decrease in attendance and increase in admissions revenues includes the increased attendance and admissions revenues of approximately $~~179~~24,000,000 from Kerasotes. The increase in average ticket price was primarily due to an increase in attendance from IMAX and 3D film product where we are able to charge more per ticket than for a standard 2D film. Admissions revenues at comparable theatres (theatres opened on or before the first quarter of fiscal 2010) decreased 3.8%, or $16,462,000, during the thirteen weeks ended July 1, 2010 from the comparable period last year. Attendance was negatively impacted by less popular film product during the thirteen weeks ended July 1, 2010 as compared to the thirteen weeks ended July 2, 2009. Concessions revenues increased 1.3%, or $2,299,000, during the thirteen weeks ended July 1, 2010 compared to the thirteen weeks ended July 2, 2009, due to the acquisition of Kerasotes and a 5.6% increase in average concessions per patron, partially offset by the decrease in attendance. The increase in concession revenues includes approximately $11,200,000 from Kerasotes. The increase in concessions per patron includes the impact of concession price and size increases placed in effect during the thirteen weeks ended December 31, 2009. Other theatre revenues increased 6.3%, or $971,000, during the thirteen weeks ended July 1, 2010 compared to the thirteen weeks ended ~~January~~July 12, 2009, primarily due to increases in on-line ticket fees, non-presentment income from package ticket sales, and merchandise sales, partially offset by decreases in arcade sales. The increase in other theatre revenues includes $500,000 from Kerasotes.

~~Management~~Costs ~~fees~~and expenses. ~~Management~~Total ~~fees~~costs ~~were~~and ~~unchanged~~expenses decreased 0.7%, or $4,024,000, during the thirteen weeks ended ~~December~~July 311, 2010 compared to the thirteen weeks ended July 2, 2009. ~~Management~~The ~~fees~~effect of the acquisition of Kerasotes was an increase in total costs and expenses of approximately $134,~~250~~000,000 ~~are~~. ~~paid quarterly,~~Film inexhibition ~~advance,~~costs todecreased ~~our~~4.1%, ~~Sponsors~~or $10,278,000, induring ~~exchange~~the ~~for~~thirteen ~~consulting~~weeks ~~and~~ended ~~other~~July 1, ~~services.~~2010 compared

Other. Other general and administrative expense increased 36.9%, or $3,968,000, during the thirteen weeks ended December 31, 2009 compared to the thirteen weeks ended January 1, 2009 due primarily to increases in expected annual incentive compensation, salaries expense and net periodic pension expense, partially offset by a decrease in expense related to a union-sponsored pension plan. During the thirteen weeks ended January 1, 2009, we recorded $2,839,000 of expense related to our partial withdrawal liability for a union-sponsored pension plan. 25

Depreciation and Amortization. Depreciation and amortization decreased 5.9%, or $2,992,000, compared to the prior period due primarily to the impairment of long-lived assets in fiscal 2009.

Impairment of Long-Lived Assets. During the thirteen weeks ended January 1, 2009, we recognized non-cash impairment losses of $73,547,000 related to theatre fixed assets, internal use software and assets held for sale. We recognized an impairment loss of $65,636,000 on 34 theatres with 520 screens (in Arizona, California, Canada, Florida, Georgia, Illinois, Maryland, Massachusetts,

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~~Michigan,~~to ~~New~~the ~~York,~~thirteen ~~North~~weeks ~~Carolina,~~ended ~~Ohio~~July 2, ~~Texas~~2009 due to the decrease in film exhibition costs as a percentage of admissions revenues, ~~Virginia~~partially offset by the increase in admissions revenues. As a percentage of admissions revenues, ~~Washington~~film exhibition costs were 53.2% in the current period and ~~Wisconsin)~~55.8% Ofin the ~~theatre~~prior ~~charge~~year period. Film exhibition costs in the prior year period were higher in comparison primarily due to admissions revenues on higher grossing films, which typically carry a higher film cost as a percentage of admissions revenues. Concession costs increased 6.9%, or $1,~~365~~331,000, ~~was~~during the ~~related~~thirteen toweeks ~~intangible~~ended ~~assets~~July 1, ~~net~~2010 compared to the thirteen weeks ended July 2, 2009 due to an increase in concession costs as a percentage of concession revenues and ~~$64~~the increase in concession revenues. As a percentage of concessions revenues,~~271~~ concession costs were 11.6% in the current period compared with 11.0% in the prior period,~~000~~ ~~was~~primarily ~~related~~due to ~~property,~~the concession price and size ~~net~~increases. WeAs ~~recognized~~a anpercentage ~~impairment~~of ~~loss~~revenues, operating expense was 23.0% in the current period as compared to 23.6% in the prior period. A gain was recorded on ~~internal~~disposition ~~use~~of ~~software~~assets during the thirteen weeks ended July 1, ~~recorded~~2010 which reduced operating expenses by approximately $10,056,000, primarily due to the sale of a divested legacy AMC theatre in ~~other~~conjunction ~~long-term~~with ~~assets~~the acquisition of Kerasotes. Rent expense increased 1.9%, or $72,~~125~~181,000, ~~when~~during ~~management~~the ~~determined~~thirteen ~~that~~weeks ended July 1, 2010 compared to the ~~carrying~~thirteen ~~value~~weeks ~~would~~ended ~~not~~July 2, be2009 ~~realized through~~primarily ~~future~~due ~~use;~~to ~~and~~increased ~~adjusted~~rent as a result of the ~~carrying~~acquisition ~~value~~of Kerasotes of ~~our~~approximately ~~assets~~$4,300,000, ~~held~~partially ~~for~~offset ~~sale~~by todispositions ~~reflect~~and ~~the~~closures ~~subsequent~~of ~~sales~~theatres ~~proceeds~~and ~~received~~rent reductions from landlords related to their failure to meet co-tenancy provisions in ~~January~~certain ~~2009~~lease agreements and ~~declines~~renegotiations inon ~~fair~~more ~~value~~favorable ~~which~~terms. ~~resulted~~Rent inreductions related to co-tenancy may not continue should our landlords meet ~~impairment~~the ~~charges~~related ofco-tenancy ~~$786,000~~provisions in the future.

Disposition of Assets and Other (Gains) Losses. Disposition of assets and other (gains) losses were $(617,000) in the current period compared to $219,000 in the prior period.

Other (Income) Expense. Other (income) expense includes $(2,079,000) and $(1,889,000) of income related to the derecognition of gift card liabilities, as to which we believe future redemption to be remote, during the thirteen weeks ended December 31, 2009 and January 1, 2009, respectively.

Interest Expense. Interest expense increased 6.6%, or $2,524,000, primarily due to an increase in interest expense related to the issuance of the Notes due 2019, partially offset by a decrease in interest rates on the Senior Secured Credit Facility and extinguishment of debt from the Cash Tender Offer.

Equity in Earnings of Non-Consolidated Entities. Equity in earnings of non-consolidated entities was $7,517,000 in the current period compared to $6,033,000 in the prior period. Equity in earnings related to our investment in National CineMedia, LLC were $7,440,000 and $9,081,000 for the thirteen weeks ended December 31, 2009 and January 1, 2009, respectively. We recognized an impairment loss of $2,742,000 related to an equity method investment in one U.S. motion picture theatre during the thirteen weeks ended January 1, 2009.

Investment Income. Investment income was $36,000 for the thirteen weeks ended December 31, 2009 compared to $927,000 for the thirteen weeks ended January 1, 2009. The thirteen weeks ended January 1, 2009 includes a gain of $2,383,000 from the May 2008 sale of our investment in Fandango, which was the result of receiving the final distribution from the general claims escrow account. During the thirteen weeks ended January 1, 2009, we recognized an impairment loss of $1,512,000 related to unrealized losses previously recorded in accumulated other comprehensive income on marketable securities related to one of our deferred compensation plans when we determined the decline in fair value below historical cost to be other than temporary.

Income Tax Provision. The income tax provision from continuing operations was $0 for the thirteen weeks ended December 31, 2009 and $1,982,000 for the thirteen weeks ended January 1, 2009.

Earnings from Discontinued Operations, Net. On December 29, 2008, we sold our operations in Mexico, including 44 theatres and 493 screens. The results of operations of the Cinemex theatres have been classified as discontinued operations for all periods presented. See Note 2—Discontinued Operations for the components of the earnings from discontinued operations.

Net Earnings (Loss). Net earnings (loss) were $8,751,000 and $(94,383,000) for the thirteen weeks ended December 31, 2009 and January 1, 2009, respectively. Net earnings were favorably impacted by the increase in attendance during the thirteen weeks ended December 31, 2009. Net loss for the thirteen weeks ended January 1, 2009 was primarily due to impairment charges of $73,547,000.

Thirty-nine Weeks Ended December 31, 2009 and January 1, 2009

Revenues. Total revenues increased 5.4%, or $92,382,000, during the thirty-nine weeks ended December 31, 2009 compared to the thirty-nine weeks ended January 1, 2009. Admissions revenues increased 6.9%, or $82,780,000, during the thirty-nine weeks ended December 31, 2009 compared to the thirty-nine weeks ended January 1, 2009, due to a 5.0% increase in average ticket prices and a 1.8% increase in attendance. Admissions revenues at comparable theatres (theatres opened on or

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before the first quarter of fiscal 2009) increased 7.0%, or $81,944,000, during the thirty-nine weeks ended December 31, 2009 from the comparable period last year. The increase in average ticket price was primarily due to increases in attendance from IMAX and 3D film product where we are able to charge more per ticket than for a standard 2D film, as well as our practice of periodically reviewing ticket prices and making selective adjustments based upon such factors as general inflationary trends and conditions in local markets. Attendance was positively impacted by more favorable IMAX and 3D film product during the thirty-nine weeks ended December 31, 2009 as compared to the thirty-nine weeks ended January 1, 2009, as well as by an increase in the number of IMAX and 3D screens that we operate. Based upon available industry sources, box office revenues of our comparable theatres outperformed the overall industry comparable theatres in the markets where we operate. We believe our outperformance is primarily due to a year-over-year change in product genre including IMAX and 3D film product and the increase in the number of IMAX and 3D screens that we operate which was more favorable in the current year period. Concessions revenues increased 2.0%, or $9,401,000, during the thirty-nine weeks ended December 31, 2009 compared to the thirty-nine weeks ended January 1, 2009, due primarily to the increase in attendance. Other theatre revenues increased 0.5%, or $201,000, during the thirty-nine weeks ended December 31, 2009 compared to the thirty-nine weeks ended January 1, 2009, primarily due to increases in non-presentment income from package ticket sales and on-line ticket fees, partially offset by a reduction in theatre rentals.

Costs and expenses. Total costs and expenses decreased 1.0%, or $16,647,000 during the thirty-nine weeks ended December 31, 2009 compared to the thirty-nine weeks ended January 1, 2009. Film exhibition costs increased 7.8%, or $50,153,000, during the thirty-nine weeks ended December 31, 2009 compared to the thirty-nine weeks ended January 1, 2009 due to the increase in admissions revenues. As a percentage of admissions revenues, film exhibition costs were 54.4% in the current period and 54.0% in the prior year period. Concession costs increased 4.8%, or $2,431,000, during the thirty-nine weeks ended December 31, 2009 compared to the thirty-nine weeks ended January 1, 2009 due to an increase in concession revenues and an increase in concession costs as a percentage of concessions revenues. As a percentage of concessions revenues, concession costs were 11.0% in the current period compared with 10.7% in the prior period. As a percentage of revenues, operating expense was 24.5% in the current period as compared to 25.3% in the prior period. Rent expense decreased 1.7%, or $5,766,000, during the thirty-nine weeks ended December 31, 2009 compared to the thirty-nine weeks ended January 1, 2009 primarily due to rent reductions from landlords related to co-tenancy provisions in certain lease agreements. Rent reductions related to co-tenancy may not continue should our landlords meet the related co-tenancy provisions in the future. Preopening expense decreased $1,860,000 during the thirty-nine weeks ended December 31, 2009 due to a decline in screen additions. During the thirty-nine weeks ended December 31, 2009, we recognized $2,183,000 of theatre and other closure expense due primarily to the closure of one theatre and accretion of the closure liability related to theatres closed during prior periods.

General and Administrative Expense:

Merger, acquisition and transaction costs. Merger, acquisition and transaction costs increased $~~251~~5,475,000 during the ~~thirty-nine~~thirteen weeks ended ~~December~~ July 311, ~~2009~~2010 compared to the ~~thirty-nine~~thirteen weeks ended ~~January~~July 12, 2009. Current year costs primarily consist of costs related to the acquisition of Kerasotes.

Management fees. Management fees were unchanged during the ~~thirty-nine~~thirteen weeks ended ~~December~~July 311, ~~2009~~2010. Management fees of $1,250,000 are paid quarterly, in advance, to our Sponsors in exchange for consulting and other services.

Other. Other general and administrative expense ~~increased~~decreased 200.61%, or $612,~~989,~~000, during the ~~thirty-nine~~thirteen weeks ended ~~December~~July 311, ~~2009~~ ~~compared~~2010 compared to the thirteen ~~thirty-nine~~ weeks ended ~~January~~July 12, 2009. ~~due primarily to expected annual incentive compensation, salaries expense, and net periodic pension~~

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

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

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

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

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~~expense,~~losses ~~partially offset by a decrease in expense~~ related to aour ~~union-sponsored~~investment ~~pension~~in ~~plan.~~Digital ~~During~~Cinema ~~the~~Implementation ~~thirty-nine weeks ended January 1~~Partners, LLC ~~2009,~~("DCIP") wewere ~~recorded~~ $5,~~279~~169,000 ofand ~~expense related~~$838,000 ~~to our partial withdrawal liability~~ for ~~a union-sponsored pension plan. During~~ the ~~thirty-nine~~thirteen weeks ended ~~December~~July 311, ~~2009,~~2010 weand ~~recorded $1~~July 2,~~400,000~~ ~~of expense related to~~2009, ~~our estimated complete withdrawal from the union-sponsored pension plan~~respectively.

~~Depreciation~~ Investment ~~and Amortization~~Income. ~~Depreciation~~Investment ~~and~~income ~~amortization~~was ~~decreased 5.7%, or~~ $850,~~571,~~000, ~~compared~~for to the ~~prior~~thirteen ~~period~~weeks ~~due~~ended ~~primarily to~~July 1, ~~the impairment~~2010 ofcompared ~~long-lived~~to ~~assets~~$99,000 infor ~~fiscal~~the thirteen weeks ended July 2, 2009.

~~Impairment~~Income ofTax ~~Long-Lived Assets~~Provision. ~~During~~The ~~the~~income ~~thirty-nine~~tax ~~weeks~~provision ~~ended~~from ~~January 1,~~continuing ~~2009,~~operations wewas ~~recognized non-cash impairment losses of~~ $736,~~547~~600,000 ~~related to theatre fixed assets, internal use software and assets held~~ for ~~sale.~~the Wethirteen ~~recognized~~weeks anended ~~impairment loss of $65~~July 1,~~636,000~~ ~~on 34 theatres~~2010 ~~with 520 screens (in Arizona, California, Canada, Florida, Georgia, Illinois, Maryland, Massachusetts, Michigan, New York, North Carolina, Ohio, Texas, Virginia, Washington~~ and ~~Wisconsin). Of the~~ ~~theatre charge,~~ $1,~~365,~~000 ~~was related to intangible assets~~, ~~net, and $64,271,~~000 was related to property, net. We recognized an impairment loss on abandonment of internal use software, recorded in other long-term assets of $7,125,000 when management determined that the carrying value would not be realized through future use; and adjusted the carrying value of our assets held for ~~sale~~ ~~to reflect~~ the ~~subsequent~~thirteen ~~sales~~weeks ~~proceeds~~ended ~~received~~July 2, ~~in January~~ 2009. ~~and~~See ~~declines~~Note 8—Income inTaxes ~~fair~~for ~~value~~further ~~which resulted in impairment charges of $786,000~~information.

~~Disposition~~Earnings of(Loss) ~~Assets~~from ~~and~~Discontinued ~~Other~~Operations, ~~Gains~~Net. ~~Disposition~~On ofDecember 29, ~~assets~~2008, ~~and~~we ~~other~~sold ~~gains~~our ~~were~~operations ~~$878~~in Mexico,~~000~~ inincluding ~~the~~44 ~~current~~theatres and ~~period~~493 screens. ~~compared~~The toresults ~~$136,000~~of in operations of the ~~prior period~~Cinemex theatres have been classified as discontinued operations for all periods presented.

~~Other~~Net ~~(Income) Expense~~Earnings. ~~Other~~Net ~~(income)~~earnings ~~expense~~were ~~includes~~ $~~(11~~2,~~501~~412,000) and $~~(11~~1,~~793~~143,000) offor ~~income~~the ~~related~~thirteen toweeks ~~the~~ended ~~derecognition~~July 1, of2010 ~~gift~~and July 2, 2009, ~~card~~respectively. Net ~~liabilities,~~earnings asduring tothe ~~which~~thirteen weweeks ~~believe~~ended ~~future~~July 1, ~~redemption~~2010 towere bepositively ~~remote,~~impacted ~~during~~by ~~the~~a ~~thirty-nine~~gain ~~weeks~~on ~~ended~~disposition ~~December 31,~~of ~~2009~~a ~~and~~theatre ~~January 1,~~for ~~2009~~approximately $10,056,000 ~~respectively.~~and ~~Other~~negatively ~~(income) expense~~impacted ~~includes~~by amerger ~~loss~~and acquisition costs of approximately $115,~~276~~756,000 related to the ~~Cash~~acquisition ~~Tender~~of ~~Offer~~Kerasotes and increased interest expense of $4,690,000. Net earnings during the ~~thirty-nine~~thirteen weeks ended ~~December~~July 312, 2009 were negatively impacted by an expense of $10,826,000 related to the redemption of our 85/8% Senior Notes due 2012.

Interest Expense. Interest expense increased 4.4%, or $5,030,000, primarily due to an increase in interest expense related to the issuance of the Notes due 2019, partially offset by a decrease in interest rates on the Senior Secured Credit Facility and extinguishment of debt from the Cash Tender Offer.

Equity in Earnings of Non-Consolidated Entities. Equity in earnings of non-consolidated entities was $18,127,000 in the current period compared to $15,739,000 in the prior period. Equity in earnings related to our investment in National CineMedia, LLC were $20,706,000 and $18,957,000 for the thirty-nine weeks ended December 31, 2009 and January 1, 2009, respectively. We recognized an impairment loss of $2,742,000 related to an equity method investment in one U.S. motion picture theatre during the thirty-nine weeks ended January 1, 2009.

Investment Income. Investment income was $168,000 for the thirty-nine weeks ended December 31, 2009 compared to $1,510,000 for the thirty-nine weeks ended January 1, 2009. The thirty-nine weeks ended January 1, 2009 includes a gain of $2,383,000 from the May 2008 sale of our investment in Fandango, which was the result of receiving the final distribution from the general claims escrow account. During the thirty-nine weeks ended January 1, 2009, we recognized an impairment loss of $1,512,000 related to unrealized losses previously recorded in accumulated other comprehensive income on marketable securities related to one of our deferred compensation plans when we determined the decline in fair value below historical cost to be other than temporary.

Income Tax Provision. The income tax provision from continuing operations was $0 for the thirty-nine weeks ended December 31, 2009 and $3,600,000 for the thirty-nine weeks ended January 1, 2009. See Note 9—Income Taxes for our effective income tax rate reconciliation.

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Net Loss. Net losses were $5,740,000 and $95,061,000 for the thirty-nine weeks ended December 31, 2009 and January 1, 2009, respectively. Net loss was impacted by an expense of $11,276,000 related to the Cash Tender Offer during the thirty-nine weeks ended December 31, 2009. Net loss for the thirty-nine weeks ended January 1, 2009 was primarily due to impairment charges of $73,547,000.

LIQUIDITY AND CAPITAL RESOURCES

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

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

Holding Company Status

Marquee Holdings Inc. is a holding company with no operations of its own and has no ability to service interest or principal on its indebtedness or pay dividends other than through any dividends it may receive from its subsidiaries. Under certain circumstances, ~~AMC~~AMCE ~~Entertainment~~ is restricted from paying dividends to Holdings by the terms of the indentures relating to its notes and its ~~Senior~~senior ~~Secured~~secured ~~Credit~~credit ~~Facility~~facility. ~~AMC Entertainment~~AMCE's ~~Senior~~senior ~~Secured~~secured ~~Credit~~credit ~~Facility~~facility and note indentures contain provisions which limit the amount of dividends and advances which it may pay or make to Holdings. Under the most restrictive of these provisions, set forth in the note indenture for the ~~11%~~Notes ~~Senior Subordinated notes~~ due 2016, ~~(the~~ ~~"Notes due 2016")~~ the amount of loans and dividends which ~~AMC Entertainment~~ AMCE could make to Holdings may not exceed approximately $~~320~~361,~~187~~139,000 in the aggregate as of ~~December~~July 311, ~~2009~~2010. Under the note indentures, a loan to Holdings would have to be on terms no less favorable to ~~AMC~~AMCE ~~Entertainment~~ than could be obtained in a comparable transaction on an arm's length basis with an unaffiliated third party and be in the best interest of ~~AMC Entertainment~~AMCE. Provided no event of default has occurred or would result, the ~~Senior~~senior ~~Secured~~secured ~~Credit~~credit ~~Facility~~facility also permits ~~AMC~~AMCE ~~Entertainment~~ to pay cash dividends to Holdings for specified purposes, including indemnification claims, taxes, up to $4,000,000 annually for operating expenses, repurchases of equity awards to satisfy tax withholding obligations, specified management fees, fees and expenses of permitted equity and debt offerings and to pay for the repurchase of stock from employees, directors and consultants under benefit plans up to specified amounts. Depending on the net senior secured leverage ratio, as defined in the senior secured credit facility, AMC Entertainment may also pay Holdings a portion of net cash proceeds from specified assets sales.

~~Cash Flows provided by Operating Activities~~ 27

Cash flows provided by operating activities, as reflected in the Consolidated Statements of Cash Flows, were $231,755,000 and $190,168,000 during the thirty-nine weeks ended December 31, 2009 and January 1, 2009, respectively. The increase in cash flows provided by operating activities for the thirty-nine weeks ended December 31, 2009 was primarily due to an increase in accounts payables and accrued expenses and other liabilities as a result of an increase in revenues. Cash flows during the thirty-nine weeks ended December 31, 2009 include consent fee payments of $7,399,000 related to the

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~~Cash~~annually ~~Tender~~for ~~Offer~~operating expenses, ~~which~~repurchases ~~reduced~~of ~~our~~equity ~~cash~~awards ~~flows~~to ~~from~~satisfy ~~operating~~tax ~~activities.~~withholding Weobligations, ~~had~~specified ~~working~~management ~~capital surplus as of December 31~~fees, ~~2009~~fees and ~~April 2,~~expenses ~~2009~~ of ~~$140,046,000~~permitted equity and ~~$257,714,000, respectively.~~debt ~~Working~~offerings ~~capital~~and ~~includes~~to ~~$148,753,000~~pay ~~and~~for the ~~$121,628,000~~repurchase of ~~deferred~~stock ~~revenues~~from ~~as of December 31~~employees, ~~2009~~directors and ~~April 2,~~consultants ~~2009,~~under ~~respectively.~~benefit Weplans ~~have~~up ~~the ability~~ to ~~borrow~~specified ~~against our~~amounts. ~~credit~~Depending ~~facility~~on tothe ~~meet~~net ~~obligations~~senior assecured ~~they~~leverage ~~come~~ratio, ~~due~~as ~~(subject~~defined toin ~~limitations on~~ the ~~incurrence~~senior ofsecured credit ~~indebtedness~~facility, inAMCE ~~our~~may ~~various~~also ~~debt~~pay ~~instruments)~~Holdings ~~and~~a ~~could~~portion ~~incur indebtedness~~ of ~~$187,154,000~~net oncash ~~our Credit~~proceeds ~~Facility~~from tospecified ~~meet~~assets ~~these obligations as of December 31, 2009~~sales.

Cash Flows provided by ~~(used~~Operating ~~in) Investing~~ Activities

Cash flows provided by ~~(used~~operating ~~in) investing~~ activities, as reflected in the ~~consolidated~~Consolidated ~~statements~~Statements of ~~cash~~Cash ~~flows~~Flows, were $~~(59~~35,~~682~~299,000~~) and~~ and $~~133~~107,~~062~~060,000, during the ~~thirty-nine~~thirteen weeks ended ~~December~~July 311, ~~2009~~2010 and ~~January~~July 12, 2009, respectively. The decrease in cash flows provided by operating activities for the thirteen weeks ended July 1, 2010 was primarily due to an increase in payments on accounts payables and accrued expenses and other liabilities, net of any additions related to the Kerasotes acquisition. Cash ~~outflows~~flows during the thirteen weeks ended July 2, 2009 include consent fee payments of $7,142,000 related to the redemption of our 85/8% Senior Notes due 2012, which reduced our cash flows from ~~investing~~operating activities. ~~include~~We had working capital ~~expenditures~~(deficit) surplus as of July 1, 2010 and April 1, 2010 of $59(73,~~482~~059,000) and $91141,~~606~~685,000, ~~during~~respectively. ~~the~~Working ~~thirty-nine~~capital ~~weeks~~includes ~~ended~~$124,735,000 ~~December 31~~and $125,842,000 ~~2009~~of deferred revenues as of July 1, 2010 and ~~January~~April 1, ~~2009~~2010, respectively. We ~~expect~~have ~~that~~the ability to borrow against our ~~gross~~credit ~~capital~~facility ~~expenditures~~to ~~cash~~meet obligations as they come due (subject to limitations on the incurrence of indebtedness in our ~~outflows~~various ~~will~~debt beinstruments) ~~approximately~~and could incur indebtedness of $~~100~~187,~~000~~324,000 on our Credit Facility to ~~$110,000,000~~meet ~~for~~these ~~fiscal~~obligations as of July 1, 2010.

~~We received~~ ~~$224,686,000~~Cash ~~from~~Flows ~~the~~used sale of Cinemex during the thirty-nine weeks ended January 1, 2009. We have received an additional $4,342,000 of purchase price related to the tax payments and refunds and a working capital calculation and post closing adjustments during the thirty-nine weeks ended December 31, 2009, which are included in ~~our~~ ~~gain~~Investing ~~on disposition from the sale of Cinemex.~~ Activities

~~During~~Cash flows used in investing activities, as reflected in the Consolidated Statements of Cash Flows, were $234,895,000 and $9,248,000, during the ~~thirty-nine~~thirteen weeks ended ~~December~~July 311, 2010 and July 2, 2009, werespectively. ~~made~~Cash ~~partnership~~outflows ~~investments~~from ininvesting ~~non-consolidated~~activities ~~entities~~include ~~accounted~~capital ~~for~~expenditures ~~under~~of ~~the~~$13,988,000 ~~equity~~and ~~method~~$7,307,000 ofduring the thirteen weeks ended July 1, 2010 and July 2, 2009, respectively. We expect that our gross capital expenditures cash outflows will be approximately $6130,~~024~~000,000 to $160,000,000 for fiscal 2011.

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

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

We fund the costs of constructing new theatres using existing cash balances; cash generated from operations or borrowed funds, as necessary. We generally lease our theatres pursuant to long-term non-cancelable operating leases which may require the developer, who owns the property, to reimburse us for the construction costs. We may decide to own the real estate assets of new theatres and, following construction, sell and leaseback the real estate assets pursuant to long-term non-cancelable operating leases.

Cash Flows used in Financing Activities

Cash flows used in financing activities, as reflected in the ~~consolidated~~Consolidated ~~statement~~Statement of ~~cash~~Cash ~~flows~~Flows, were $~~(173~~10,~~210~~447,000) and $~~(22~~157,~~095~~611,000) during the ~~thirty-nine~~thirteen weeks ended ~~December~~July 311, ~~2009~~2010 and ~~January~~July 12, 2009, respectively.

During the ~~thirty-nine~~thirteen weeks ended ~~December~~July 312, 2009 ~~and January 1~~, ~~2009,~~we ~~AMCE~~ made dividend payments toof ~~Holdings and Holdings made dividend payments to its stockholder, Parent, totaling~~ $300,~~723~~000,000 into ~~fiscal 2010~~Parent, which was treated as a reduction of additional paid-in capital. ~~Parent made payments to purchase term loans and reduced the principal balance of its Parent Term Loan Facility from $466,936,000 to $193,290,000 with a portion of the dividend proceeds.~~

Proceeds from the issuance of the Notes due 2019 were $585,492,000 and deferred financing costs paid related to the issuance of the Notes due 2019 were $16,257,000 during the thirty-nine weeks ended December 31, 2009. 28

During the thirty-nine weeks ended December 31, 2009, we made principal payments of $250,000,000 in connection with the Cash Tender Offer and additional redemption and repaid $185,000,000 of borrowings under our revolving credit facility.

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

~~On June 9, 2009, AMCE issued $600,000,000 aggregate principal amount of~~ During the ~~Notes~~thirteen ~~due~~weeks ~~2019,~~ended ~~which mature on June~~July 12, ~~2019~~2009, ~~pursuant~~ towe anmade ~~indenture,~~principal ~~dated~~payments as of ~~June 9~~$238, ~~2009~~065,000 ~~among~~in ~~AMCE,~~connection ~~the~~with ~~Guarantors named therein and U.S. Bank National Association, as trustee (~~the ~~"Indenture").~~redemption ~~The~~of ~~Indenture~~our ~~provides~~85/8% ~~that~~Senior ~~the~~ Notes due ~~2019~~2012 ~~are general unsecured senior obligations of AMCE~~ and repaid ~~are~~$185,000,000 ~~fully and unconditionally guaranteed on a joint and several senior unsecured basis by all~~ of ~~our~~borrowings ~~existing~~under ~~and future domestic restricted subsidiaries that guarantee~~ our ~~other~~revolving ~~indebtedness~~credit facility.

~~AMCE~~Reference ~~will~~is ~~pay~~made ~~interest~~to Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources in our Annual Report on Form 10-K for the fiscal year ended April 1, 2010 for certain information about our Senior Secured Credit Facility, our 8% Senior Subordinated Notes atdue 2014 (the "Notes due 2014"), 11% Senior Subordinated Notes due 2016 (the "Notes due 2016"), our 8.75% ~~per~~Senior ~~annum~~Notes due 2019 (the "Notes due 2019"), ~~semi-annually~~our in12% ~~arrears~~Senior onDiscount ~~June 1~~Notes due 2014 (the "Discount Notes due 2014") and ~~December 1,~~for ~~commencing~~certain oninformation ~~December 1,~~about ~~2009~~Parent's Term Loan Facility.

~~AMCE~~The ~~may~~indentures ~~redeem~~relating ~~some~~to orour ~~all~~notes of(Notes ~~the~~due 2014, Notes due ~~2019~~2016, atNotes ~~any~~due ~~time~~2019, onand orDiscount ~~after~~Notes ~~June 1,~~due 2014,) atand the ~~redemption~~Parent ~~prices~~Term ~~set~~Loan ~~forth~~Facility inallow ~~the~~us ~~Indenture~~to incur specified permitted indebtedness (as defined therein) without restriction. ~~AMCE~~The ~~may~~indentures ~~redeem~~and the ~~Notes~~Parent onTerm orLoan ~~after June 1,~~Facility ~~2017~~also atallow aus ~~price~~to ~~equal~~incur toany ~~100%~~amount of ~~the~~additional ~~principal~~debt, ~~amount~~including borrowings under the revolving portion of our Senior Secured Credit Facility, as long as we can satisfy the ~~Notes~~applicable ~~due~~coverage ~~2019~~ratio ~~plus~~of ~~accrued~~each ~~and~~indenture, ~~unpaid~~after ~~interest~~giving effect to the ~~redemption~~event ~~date~~on a pro forma basis. InUnder ~~addition~~the indentures relating to the Discount Notes due 2014, ~~AMCE~~we ~~may~~could ~~redeem~~borrow upapproximately to$295,200,000 ~~35%~~(assuming an interest rate of 9.00% per annum on the additional indebtedness) in addition to specified permitted ~~aggregate~~indebtedness. ~~principal~~If ~~amount~~we ofcannot satisfy the ~~Notes~~applicable ~~due~~coverage ~~2019~~ratios, ~~using~~generally ~~net~~we ~~proceeds~~can ~~from~~incur ~~certain~~no ~~equity~~more ~~offerings~~than ~~completed~~$100,000,000 ~~prior~~of new "permitted indebtedness" under the terms of the indentures relating to ~~June 1,~~our notes ~~2012~~and the Parent Term Loan Facility.

~~The~~As ~~Indenture~~of ~~contains covenants that limit our (and our restricted subsidiaries') ability to~~July 1, ~~among other things: (i) incur additional indebtedness~~2010, ~~including~~we ~~additional~~were ~~senior indebtedness; (ii) pay dividends on or make other distributions~~ in ~~respect~~compliance ~~of our capital stock or prepay subordinated obligations; (iii) purchase or redeem capital stock; (iv) enter into certain transactions~~ with ~~our affiliates; (v) incur liens on property or assets that are securing indebtedness; and (vi) merge or consolidate with other companies or transfer~~ all orfinancial ~~substantially all of our assets. These~~ covenants ~~are~~relating ~~subject~~ to athe ~~number~~Senior ofSecured ~~important~~Credit ~~limitations~~Facility, ~~and~~the ~~exceptions.~~Notes ~~The~~due ~~Indenture also provides for events of default~~2016, ~~which,~~the ifNotes ~~any~~due ~~of them occurs~~2014, ~~would permit or require~~ the ~~principal,~~Notes ~~premium,~~due ~~if any~~2019, ~~interest~~ and ~~any other monetary obligations on all~~ the ~~then~~Discount ~~outstanding~~ Notes due ~~2019 to be due and payable immediately~~2014.

~~Reference is~~ ~~made~~Investment ~~to Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources~~ in ~~our Annual Report on Form~~NCM 10-K for the fiscal year ended April 2, 2009 for certain information about our Senior Secured Credit Facility, AMCE's 8% Senior Subordinated Notes due 2014 (the "Notes due 2014"), and 11% Senior Subordinated Notes due 2016 (the "Notes due 2016") and for certain information about Holdings' Discount Notes due 2014 and Parent's Term Loan Facility. LLC

~~The Senior~~We ~~Secured~~hold ~~Credit~~an ~~Facility~~investment isin ~~with~~23.05% aof ~~syndicate~~NCM ofLLC ~~banks~~accounted ~~and~~for ~~other~~following ~~financial~~the ~~institutions~~equity ~~and~~method ~~provides~~as ~~financing~~of July 1, 2010. The fair market value of upthese toshares is approximately $~~850~~442,~~000~~216,000, ~~consisting~~as of aJuly 1, ~~$650~~2010. Because we have little tax basis in these units,~~000,000~~ ~~term~~the ~~loan facility~~sale ~~maturing~~of onall ~~January~~these units at July 261, ~~2013~~2010 ~~and~~would arequire us to report taxable income of approximately $~~200~~458,000,000, ~~revolving~~including ~~credit~~distributions ~~facility~~received ~~maturing~~from onNCM ~~January 26,~~LLC ~~2012~~that were previously deferred. ~~The~~Our ~~revolving credit~~investment ~~facility~~in ~~includes~~NCM ~~borrowing~~LLC ~~capacity~~is ~~available~~a source of liquidity for ~~letters~~us and we expect that any sales we may make of ~~credit~~NCM ~~and~~LLC ~~for~~units ~~swingline~~would ~~borrowings~~be onmade ~~same-day~~in ~~notice~~such a manner to most efficiently manage any related tax liability. AsWe ofhave ~~December~~available net operating loss carryforwards which could reduce any related tax liability. On August 319, ~~2009~~2010, we ~~had~~announced noour ~~borrowings~~intent, ~~under~~subject ~~the revolving~~to ~~credit~~market ~~facility~~ and ~~$624~~other conditions,~~000~~ to redeem 6,500,000 ~~was~~common ~~outstanding~~membership ~~under~~units of NCM LLC for a like number of shares of National CineMedia, Inc.'s ("NCM Inc.") common stock and then resell such shares of common stock in a registered underwritten public offering. NCM Inc. is the ~~term~~managing ~~loan~~member ~~facility~~and atowner of 38.3% of NCM LLC. We intend to grant the underwriters an ~~interest~~option ~~rate~~for 30 days to purchase up to 812,500 additional shares of 1NCM Inc.~~74%~~ common stock after conversion of NCM LLC common membership units by us to cover over-allotments, if any. The expected proceeds would be used for general corporate purposes including repaying indebtedness and to pursue accretive acquisitions as they become available.

Borrowings under the Senior Secured Credit Facility bear interest at a rate equal to an applicable margin plus, at our option, either a base rate or LIBOR. On March 13, 2007, we amended the Senior Secured Credit Facility to, among other things, lower the interest rates related to our term loan, reduce our unused commitment fee and amend the change of control definition so that an initial public offering and related transactions would not constitute a change of control. The current applicable margin for borrowings under the revolving credit facility is 0.50% with respect to base rate borrowings and 1.50% with respect to LIBOR borrowings, and the current applicable margin for borrowings under the term loan facility is 0.50% with respect to base rate borrowings and 1.50% with respect to LIBOR borrowings. In addition to paying interest on outstanding principal under the Senior Secured Credit 29

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Facility, AMC Entertainment is required to pay a commitment fee to the lenders under the revolving credit facility in respect of the unutilized commitments thereunder at a rate equal to 0.25%. It will also pay customary letter of credit fees. AMC Entertainment may voluntarily repay outstanding loans under the Senior Secured Credit Facility at any time without premium or penalty, other than customary "breakage" costs with respect to LIBOR loans. AMC Entertainment is required to repay $1,625,000 of the term loan quarterly, beginning March 30, 2006 through September 30, 2012, with any remaining balance due on January 26, 2013.

The indentures relating to our notes (Discount Notes due 2014, Notes due 2014, Notes due 2016 and Notes due 2019) and the Parent Term Loan Facility allow us to incur specified permitted indebtedness (as defined therein) without restriction. The indentures and the Parent Term Loan Facility also allow us to incur any amount of additional debt, including borrowings under the revolving portion of AMCE's Senior Secured Credit Facility, as long as we can satisfy the applicable coverage ratio of each indenture, after giving effect to the event on a pro forma basis. Under the Senior Discount Notes due 2014 indenture, we could borrow approximately $281,100,000 (assuming an interest rate of 8.25% per annum on the additional indebtedness) in addition to specified permitted indebtedness. If we cannot satisfy the applicable coverage ratios, generally we can incur no more than $100,000,000 of new "permitted indebtedness" under the terms of the indentures relating to our notes and the Parent Term Loan Facility. In addition, the indenture relating to our Notes due 2019 limits our ability to incur liens, which limits our ability to secure any new indebtedness.

The indentures relating to the above-described notes also contain covenants limiting dividends, purchases or redemptions of stock, transactions with affiliates, and mergers and sales of assets, and require us to make an offer to purchase the notes upon the occurrence of a change in control, as defined in the indentures. Upon a change of control (as defined in the indentures), we would be required to make an offer to repurchase all of the outstanding Notes due 2019, Notes due 2016, and Notes due 2014, at a price equal to 101% of the principal amount thereof plus accrued and unpaid interest to the date of repurchase. The Sponsors are considered Permitted Holders as defined in each of the indentures and as such could create certain voting arrangements that would not constitute a change of control under the indentures.

Upon a change of control (as defined in the indentures), we would be required to make an offer to repurchase all of the outstanding Discount Notes due 2014 at a price equal to 101% of the principal amount thereof plus accrued and unpaid interest.

Upon a change of control (as defined in the Parent Term Loan Facility), Lenders have the right to request Parent to prepay the Parent Term Loan Facility at a price equal to 101% of the principal amount thereof plus accrued and unpaid interest. The Sponsors are considered Permitted Holders as defined in the Parent Term Loan Facility and as such could create certain voting arrangements that would not constitute a change of control under the Parent Term Loan Facility.

As of December 31, 2009, we were in compliance with all financial covenants relating to the Senior Secured Credit Facility, the Notes due 2016, the Notes due 2014, the Notes due 2019, and the Discount Notes due 2014.

We believe that cash generated from operations and existing cash and equivalents will be sufficient to fund operations and planned capital expenditures and acquisitions for at least the next twelve months and enable us to maintain compliance with covenants related to the Senior Secured Credit Facility and the notes. We are considering various options with respect to the utilization of cash and equivalents on hand in excess of our anticipated operating needs. Such options might include, but are not limited to, acquisitions of theatres or theatre companies, repayment of corporate borrowings of AMCE, Holdings and Parent and payment of dividends.

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Investment in NCM

We hold an investment in 18.53% of NCM accounted for following the equity method. The fair market value of the common membership units is approximately $311,866,000 as of December 31, 2009. Because we have little tax basis in these units and because the sale of all these units would require us to report taxable income of $410,882,000 including distributions received from NCM that were previously deferred, we expect that any sales of these units would be made ratably over a period of time to most efficiently manage any related tax liability. We have available net operating loss carryforwards which could reduce any related tax liability.

Commitments and Contingencies

WeMinimum ~~have~~annual ~~commitments~~cash ~~and~~payments ~~contingencies~~required ~~that~~under ~~were~~existing ~~summarized~~capital inand afinancing ~~table~~lease inobligations, ~~our~~maturities ~~Form 10-K~~of ~~for~~corporate ~~the year ended April 2~~borrowings, future ~~2009.~~minimum ~~The~~rental ~~only~~payments ~~material~~under ~~change~~existing inoperating ~~our~~leases, ~~commitments since April 2~~furniture, ~~2009~~fixtures ~~has~~and ~~been~~equipment asand aleasehold ~~result~~purchase ofprovisions, ~~the~~ADA ~~issuance~~related ofbetterments ~~the~~and ~~Notes~~pension ~~due~~funding ~~2019,~~that ~~the~~have ~~Cash~~initial or ~~Tender~~remaining ~~Offer,~~non-cancelable ~~repayment~~terms ofin ~~amounts~~excess ~~borrowed~~of ~~under~~one ~~the~~year ~~revolving~~for ~~credit~~fiscal ~~facility~~years ~~and~~2011 ~~entry~~through ~~into~~2015 aand ~~definitive~~thereafter ~~agreement~~are ~~for~~as ~~the~~follows: ~~acquisition of Kerasotes.~~

Presented below on a pro forma basis to give effect to the financing arrangements described above are minimum annual cash payments required under existing capital and financing lease obligations, maturities of corporate borrowings, future minimum rental payments under existing operating leases, FF&E and leasehold purchase provisions, ADA related betterments and pension funding that have initial or remaining non-cancelable terms in excess of one year as of April 2, 2009:

(In thousands)	Minimum Capital and Financing Lease Payments		Principal Amount of Corporate Borrowings(1)		Interest Payments on Corporate Borrowings(2)		Minimum Operating Lease Payments		Acquisitions and Capital Related Betterments(3)		Pension Funding(4)		Total Commitments

2011	$	10,096	$	6,500	$	153,521	$	436,448	$	18,234	$	4,754	$	629,553
2012		8,894		6,500		153,391		438,158		10,323		976		618,242
2013		7,926		609,375		151,250		425,731		—		—		1,194,282
2014		7,612		300,000		139,145		399,275		—		—		846,032
2015		7,683		240,795		99,086		395,984		—		—		743,548
Thereafter		76,304		925,000		252,917		2,500,207		—		—		3,754,428

Total	$	118,515	$	2,088,170	$	949,310	$	4,595,803	$	28,557	$	5,730	$	7,786,085

(1): Represents cash requirements for the payment of principal on corporate borrowings. Total amount does not equal carrying amount due to unamortized discounts on issuance.
(2): Interest expense on the term loan portion of our senior secured credit facility was estimated at 2.00% based upon the interest rate in effect as of July 1, 2010.
(3): Includes committed capital expenditures and acquisitions including the estimated cost of ADA related betterments. Does not include planned, but non-committed capital expenditures.
(4): Historically, we fund our pension plan such that the plan is approximately 90% funded. The plan has been frozen effective December 31, 2006. The funding requirement has been estimated based upon our expected funding amount. Also included are payments due under a withdrawal liability for a union sponsored plan. The retiree health plan is not funded.

(In thousands)	Minimum Capital and Financing Lease Payments		Principal Amount of Corporate Borrowings(1)		Interest Payments on Corporate Borrowings(2)		Minimum Operating Lease Payments		Acquisitions and Capital Related Betterments(3)		Pension Funding(4)		Total Commitments (Pro forma)
2010	$	9,075	$	6,500	$	153,855	$	393,452	$	19,645	$	6,396	$	588,923
2011		9,225		6,500		153,723		393,321		287,754		1,937		852,460
2012		8,023		6,500		153,592		379,991		—		437		548,543
2013		7,055		609,375		151,408		367,166		—		—		1,135,004
2014		6,706		300,000		139,145		345,761		—		—		791,612
Thereafter		68,628		1,165,795		352,002		2,298,514		—		—		3,884,939
Total	$	108,712	$	2,094,670	$	1,103,725	$	4,178,205	$	307,399	$	8,770	$	7,801,481

(1)Represents cash requirements for the payment of principal on corporate borrowings. Total amount does not equal carrying amount due to unamortized discounts or premiums on issuance. (2)Interest expense on the term loan was estimated at 2.021% based upon the interest rates in effect as of April 2, 2009. (3)Includes committed capital expenditures and acquisitions including the estimated cost of ADA related betterments. Does not include planned, but non-committed capital expenditures. Our estimated cash outlays for the acquisition of Kerasotes are anticipated to be up to $275,000,000. (4)Historically we fund our pension plan such that the plan is 90% funded. The plan has been frozen effective December 31, 2006. The funding requirement has been estimated based upon our expected funding amount. Also included are estimated payments due under a partial withdrawal liability for a union sponsored plan. The retiree health plan is not funded.

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As discussed in Note 10—Income Taxes in our Form 10-K for the year ended April 2, 2009, we adopted the accounting for uncertainty in income tax guidance provided in Accounting Standards Codification 740, Income Taxes. At April 2, 2009, we had a liability for unrecognized benefits for $33,500,000. There are currently unrecognized tax benefits which we anticipate will be resolved in the next 12 months; however, we are unable at this time to estimate what the impact on our unrecognized tax benefits will be. Any amounts related to these items are not included in the table above.

NEW ACCOUNTING PRONOUNCEMENTS

See Note 13—New Accounting Pronouncements to these condensed consolidated financial statements for further information regarding recently issued accounting standards.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

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

Market risk on variable-rate financial instruments. We maintain an $850,000,000 Senior Secured Credit Facility, comprised of a $200,000,000 revolving credit facility and a $650,000,000 term loan facility, which permits borrowings at a rate equal to an applicable margin plus, at our option, either a base rate or LIBOR. Increases in market interest rates would cause interest expense to increase and earnings before income taxes to decrease. The change in interest expense and earnings before income taxes would be dependent upon the weighted average outstanding borrowings during the reporting period following an increase in market interest rates. We had no borrowings on our revolving credit facility as of ~~December~~ July 311, ~~2009~~2010 and had $~~624~~620,~~000~~750,000 outstanding under the term loan facility on ~~December~~July 311, ~~2009~~2010. A 100 basis point change in market interest rates would have increased or decreased interest expense on the Senior Secured Credit Facility by $41,~~972~~573,000 during the thirteen ~~thirty-nine~~ weeks ended ~~December~~July 311, ~~2009~~2010.

Market risk on fixed-rate financial instruments. Included in long-term debt are principal amounts of $325,000,000 of our Notes due 2016, $300,000,000 of our Notes due 2014, $600,000,000 of our Notes due 2019, and $240,795,000 of our Discount Notes due 2014. Increases in market interest rates would generally cause a decrease in the fair value of the Notes due 2016, Notes due 2014, Notes due 2019, and Discount Notes due 2014 and a decrease in market interest rates would generally cause an increase in fair value of the Notes due 2016, Notes due 2014, Notes due 2019, and Discount Notes due 2014.

Foreign currency exchange rates. We currently operate theatres in Canada, France and the United Kingdom. As a result of these operations, we have assets, liabilities, revenues and expenses denominated in foreign currencies. The strengthening of the U.S. dollar against the respective currencies causes a decrease in the carrying values of assets, liabilities, revenues and expenses denominated in such foreign currencies and the weakening of the U.S. dollar against the respective currencies causes an increase in the carrying values of these items. The increases and decreases in assets, liabilities, revenues and expenses are included in accumulated other comprehensive income. Changes in foreign currency exchange rates also impact the comparability of earnings in these countries on a year-to-year basis. As the U.S. dollar strengthens, comparative translated earnings decrease, and as the U.S. dollar weakens, comparative translated earnings from foreign operations increase. A 10% fluctuation in the value of the U.S. dollar against all foreign currencies of countries where we currently operate theatres would either increase or decrease earnings before income taxes and accumulated other comprehensive income (loss) by approximately $537,000 and $8,459,000, respectively, as of December 31, 2009. 30

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due ~~Item 4T. Controls~~2019, and ~~Procedures~~Discount Notes due 2014 and a decrease in market interest rates would generally cause an increase in fair value of the Notes due 2016, Notes due 2014, Notes due 2019, and Discount Notes due 2014.

Foreign currency exchange rates. We currently operate theatres in Canada, France and the United Kingdom. As a result of these operations, we have assets, liabilities, revenues and expenses denominated in foreign currencies. The strengthening of the U.S. dollar against the respective currencies causes a decrease in the carrying values of assets, liabilities, revenues and expenses denominated in such foreign currencies and the weakening of the U.S. dollar against the respective currencies causes an increase in the carrying values of these items. The increases and decreases in assets, liabilities, revenues and expenses are included in accumulated other comprehensive loss. Changes in foreign currency exchange rates also impact the comparability of earnings in these countries on a year-to-year basis. As the U.S. dollar strengthens, comparative translated earnings decrease, and as the U.S. dollar weakens, comparative translated earnings from foreign operations increase. A 10% increase in the value of the U.S. dollar against all foreign currencies of countries where we currently operate theatres would increase earnings before income taxes by approximately $253,000 and decrease accumulated other comprehensive loss by approximately $8,060,000, respectively, as of July 1, 2010. A 10% decrease in the value of the U.S. dollar against all foreign currencies of countries where we currently operate theatres would increase earnings before income taxes by approximately $29,000 and increase accumulated other comprehensive loss by approximately $9,852,000, respectively, as of July 1, 2010.

Item 4. Controls and Procedures.

(a) Evaluation of disclosure controls and procedures.

The Company maintains a set of disclosure controls and procedures designed to ensure that material information required to be disclosed in its filings under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms and that material information is accumulated and communicated to the Company's management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. The Company's Chief Executive Officer and Chief Financial Officer have evaluated these disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q and have determined that such disclosure controls and procedures were effective.

(b) Changes in internal controls.

There has been no change in our internal control over financial reporting during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II—OTHER INFORMATION

Item 1. Legal Proceedings

Reference is made to Part I. Item 3. Legal Proceedings in our Annual Report on Form 10-K for the fiscal year ended April 21, ~~2009~~2010 for information on certain litigation to which we are a party.

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

The Justice Department moved for reconsideration on the line-of-sight matters and was denied on June 8, 2009 by the Ninth Circuit Court of Appeals. The case reverts to the trial court this spring.

We are a party to various other legal proceedings in the ordinary course of business, none of which is expected to have a material adverse effect on us.

Item 1A. Risk Factors

Reference is made to Part I Item 1A. Risk Factors in our Annual Report on Form 10-K for the fiscal year ended April 21, ~~2009~~2010.

~~We depend on motion picture production and performance.~~ 32

Our ability to operate successfully depends upon the availability, diversity and appeal of motion pictures, our ability to license motion pictures and the performance of such motion pictures in our markets. We mostly license first-run motion pictures, the success of which has increasingly depended on the marketing efforts of the major studios. Poor performance of, or any disruption in the production of (including by reason of a strike) these motion pictures, or a reduction in the marketing efforts of the major studios, could hurt our business and results of operations. In addition, a change in the type and breadth of movies offered by studios may adversely affect the demographic base of moviegoers.

The master contract between film producers and the Screen Actors Guild ("SAG") expired at the beginning of July 2008. A new 2 year contract was reached on June 9, 2009, which will expire on June 20, 2011.

Item 4. Submission of Matters to a Vote of Security Holders

On December 8, 2009, the Requisite Stockholder Majority of AMC Entertainment Holdings, Inc. unanimously approved the Unit Purchase Agreement of Kerasotes ShowPlace Theatres, LLC. The Company's estimated cash outlays for the acquisition of Kerasotes are anticipated to be up to $275,000,000. The agreement is subject to regulatory approvals.

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Item 6. Exhibits.

EXHIBIT INDEX

EXHIBIT NUMBER			DESCRIPTION
	2.1		Agreement and Plan of Merger, dated June 20, 2005, by and among Marquee Holdings Inc. and LCE Holdings, Inc. (incorporated by reference from Exhibit 2.1 to AMCE's Current Report on Form 8-K (File No. 1-8747) filed on June 24, 2005).
	2.2		Agreement and Plan of Merger, dated as of July 22, 2004 by and among Marquee Holdings Inc., Marquee Inc. and AMCE (incorporated by reference from Exhibit 2.1 to AMCE's Current Report on Form 8-K (File No. 1-8747) filed on July 23, 2004).
	2.3		Agreement and Plan of Merger, dated June 11, 2007, by and among AMC Entertainment Holdings, Inc., Marquee Holdings Inc., and Marquee Merger Sub Inc. (incorporated by reference from Exhibit 2.1 to the Company's Form 8-K filed on June 13, 2007).
	3.1		Third Amended and Restated Certificate of Incorporation of Marquee Holdings Inc. (incorporated by reference from Exhibit 3.1 to the Company's Form 8-K filed on June 13, 2007).
	3.2		Third Amended and Restated Bylaws of Marquee Holdings Inc. (incorporated by reference from Exhibit 3.2 to the Company's Form 8-K filed on June 13, 2007).
	4.1		Indenture, dated as of June 9, 2009, respecting AMCE's 8.75% Senior Notes due 2019, by and among AMCE, a Delaware corporation, the Guarantors party thereto from time to time and U.S. Bank National Association, as Trustee (incorporated by reference from Exhibit 4.1 to AMCE's Current Report on Form 8-K (File No. 001-08747) filed on June 9, 2009).
	*4.1		Fourth Supplemental Indenture dated June 24, 2010, respecting AMC Entertainment Inc.'s 8% Senior Subordinated Notes due 2014.
	4.2		Registration Rights Agreement, dated as of June 9, 2009, respecting AMCE's 8.75% Senior Notes due 2019, by and among AMCE, the Guarantors party thereto from time to time, Credit Suisse Securities (USA) LLC, for itself and on behalf of the other Initial Purchasers, and J.P. Morgan Securities Inc., as Market Maker (incorporated by reference from Exhibit 4.2 to AMCE's Current Report on Form 8-K (File No. 001-08747) filed on June 9, 2009).
	*4.2		Second Supplemental Indenture dated June 24, 2010, respecting AMC Entertainment Inc.'s 11% Senior Subordinated Notes due 2016.
	4.3		Fourth Supplemental Indenture, dated as of June 9, 2009, respecting AMC Entertainment Inc.'s 85/8% Senior Notes due 2012, by and among AMC Entertainment Inc., the Guarantor's party thereto and HSBC Bank USA, National Association, as trustee (incorporated by reference from Exhibit 4.3 to AMCE's Current Report on Form 8-K (File No. 001-08747) filed on June 9, 2009).
	*4.3		First Supplemental Indenture, dated as of June 24, 2010, respecting AMC Entertainment Inc.'s 8.75% Senior Notes due 2019.
	4.4		First Supplemental Indenture dated June 12, 2007, respecting Marquee Holding Inc.'s 12% Senior Discount Notes due 2014 (incorporated by reference from Exhibit 4.1 to the Company's Form 8-K Filed on June 13, 2007).
	*31.1		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Acts of 2002.
	*31.2		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Acts of 2002.
	*32.1		Section 906 Certifications of Gerardo I. Lopez (Chief Executive Officer) and Craig R. Ramsey (Chief Financial Officer) furnished in accordance with Securities Act Release 33-8212.

*: Filed herewith

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

				MARQUEE HOLDINGS INC.
		Date: February 8, 2010		/s/ GERARDO I. LOPEZ Gerardo I. Lopez Chief Executive Officer, Director and President
		Date: August 10, 2010		/s/ GERARDO I. LOPEZ Gerardo I. Lopez Chief Executive Officer, Director and President
		Date: February 8, 2010		/s/ CRAIG R. RAMSEY Craig R. Ramsey Executive Vice President and Chief Financial Officer
		Date: August 10, 2010		/s/ CRAIG R. RAMSEY Craig R. Ramsey Executive Vice President and Chief Financial Officer

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