AMC Entertainment Holdings, Inc.
Q3 2020 Earnings Call Transcript

Published: 2 Nov 2020

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[Operator:]

Greetings and welcome to the AMC Entertainment third quarter TWENTY TWENTY earnings conference call. At this time, all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator or technical assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, John Meriwether, Vice President of Investor Relations. Thank you, sir. You may begin.

[John Merriwether:]

Thank you, Victor. Good afternoon. I'd like to welcome everyone to AMC's third quarter Twenty twenty earnings conference call. With me this afternoon is Adam Aaron, our president and chief executive officer, and Shaun Goodman, our chief financial officer. Before I turn the call over to Adam, let me remind everyone that some of the comments made by management during this conference call may contain looking statements are based on management's current expectations. Numerous risks, uncertainties and other factors may cause actual results to differ materially from those that might be expressed today. Many of these risks and uncertainties are discussed in our public filings, including our most recently filed 10K and 10. Q Several of the factors that will determine the company's future results are beyond the ability of the company to control or predict. In light of the uncertainties inherent in any forward looking statements, listeners were cautioned to not place undue reliance on these statements. The company undertakes no obligation to revise or update any forward looking statements, whether as a result of new information for future events on this call, we may reference measures such as adjusted EBITDA free cash flow, adjusted free cash flow and constant currency, among others, which are non-cash financial measures for a full reconciliation of our non-GAAP measures to gap results. Please see our earnings release posted in the investor relations section of our Web site earlier today. After our prepared remarks, there will be a question and answer session. This afternoon's call is being recorded in a webcast. Replay will be available in the Investor Relations section of our website at AMC Theaters Dotcom later today. With that, I'll turn the call over to Adam.

[Adam Aron:]

Thank you, John. Good afternoon, everyone, and thank you for joining us today. Let me begin today, the same way I began our Q1 and Q2 earnings calls by expressing my wishes that you and your families are all in good health in these difficult times. In starting today's call may also note the death of the legendary Oscar winning actor Sean Connery this past weekend at the wonderful age of 90. In his honor, we will be showing Goldfinger and the Hunt for Red October at AMC Theaters all across the country this coming weekend. Come join us and see for yourself how spotlessly clean our theaters are all across the nation. Similar to the second quarter, covid-19 continues to significantly impact the financial performance of companies across multiple sectors, with the movie theater industry being among the very hardest hit, AMC certainly included thanks to our efforts in partnership with Clorox and in consultation with current and former faculty of Harvard University's prestigious School of Public Health. We have made great strides at AMC to safely open our theaters. We're permitted by governments to do so. Attendance has been minimal, though, of course, stemming from virus concerns, but perhaps more importantly, due to the fact that only two major new films have been released theatrically since mid-March. But even so, as we sit here today, since our theaters have reopened after the March closures, people have attended movies at AMC, U.S. and international theaters almost 10 million times. And we have not heard of even one instance where the coronavirus was spread in our cinemas.

[Sean Goodman:]

Thank you, Adam. And thank you, everyone, for joining us this afternoon. I do hope that you and your families have been safe and well during these continued difficult and unprecedented times. Has that in mentioned our results for the quarter were once again severely impacted by the covid-19 crisis, which necessitated the suspension of Aufiero operations in the US for nearly two thirds of the third quarter and significantly impacted our operations in international markets. This quarter was characterized by a dearth of new phone content and historically low attendance levels across all markets. Overall, domestic attendance was 97 percent below the previous quarter and our international attendance was 82 percent below the prior year, third quarter. Of course, this includes time periods when our theaters were closed. But even as theaters reopened with a scarcity of big new titles, attendance levels in the US hovered between 10 and 20 percent of last year's levels, while attendance numbers in Europe were only somewhat better. A bright spot for us so far in Twenty twenty, we have tripled our theater caught in the Middle East and we expect to at least double that again in the coming half years. Similar to our second quarter results, international average ticket price and food and beverage spend per person were again encouraging, holding up nicely with an average ticket price up more than 16 percent or 10 percent in constant currency and food and beverage revenues increasing by more than 15 percent or nine percent in constant currency compared to last year. U.S. ticket prices and food and beverage results in the third quarter showed some of the encouraging trends, with both food and beverage revenue per patron, an average ticket price broadly in line with last year. These statistics are impressive when you consider the discounted pricing on library content and food and beverage promotions offered during the quarter. It's very clear, based on our operating metrics, including customer satisfaction scores, that guests returning to the movies are extremely confident in our AMC safe and clean protocols and are comfortable with their theater experience and enjoying our food and beverage offerings. However, with such extremely low overall attendance levels, our bottom line financial performance for the third quarter is once again almost irrelevant. More important is how we performed against our priorities and what we are doing to successfully navigate through these troubled times. From a liquidity point of view, as of September 30th, Twenty twenty, we had four hundred and eighteen million dollars of cash, plus 11 million dollars of restricted cash. Our total cash burn for the third quarter was three hundred and twenty four million dollars. This number normalizes for the debt exchange and capital raising in July. It was a normalizes for the thirty seven point five dollars million of partial proceeds received from the sale of our Baltic cities and two point eight dollars million of net cash raised from our ATM program during the second quarter. The average monthly cash burn in Q3 was one hundred million dollars. This is slightly above the approximately one hundred million dollars monthly cash burn during the second quarter. This increased cash burn is due to costs associated with theater openings, including our AMC Safe and Clean Protocols and increased rent payments as theaters began to reopen for business. Many have questioned whether it is financially wise to keep their doors open with such very low attendance levels that we are currently experiencing. So this is something that we have to analyze very carefully, and I can tell you that we have very sophisticated operational initiatives in place to align their opening hours to attendance levels. For example, about half of our U.S. theaters are open for weekend showtimes only, and all of our theaters, when they're open, are averaging between one and two Showtime's Daily instead of the normal four.

[Adam Aron:]

Thank you, Sean. So, everybody, it all really comes down to one thing. We believe that we will need to raise more capital to assure ourselves that we can lengthen our financial runway, at least in the next summer. The simple question becomes, will we raise that needed capital or not? We've had considerable success in creatively raising money so far this year, and our shoulders are the grindstone yet again. Medical experts are telling us that in the Western world, our populations will be well vaccinated before next summer. Studios are telling us that they have boatloads of blockbuster titles for us before next summer as well. By our count, while some movies have been shifted or sold off the streamers, some forty four major film titles have been deferred from Twenty twenty and will be rescheduled to play theatrically in 2021. Instead, in the words to me privately from one major studio CEO, he said. Your LaGuardia Airport, Adam, in a big thunderstorm and there are zillions of planes in the air circling and they all have to land, we've got to get the movies that we've already made and which already are in the can out into the market for movie goers to buy tickets and go see. He paused for effect and then said in your theaters. When I relate his comment to another major studio CEO this very weekend, he said, and I quote, Wait a second, he stole my line. I've been saying for months now that you're an airport in a storm and there's tons of planes circling overhead, unquote. So at AMC, it is our considered opinion that there is good news down the road. Once the movies start flowing next year, there will be a new big title almost every single week. To that end, and capital raising efforts and cash conservation efforts, because every dollar we save is offsets one dollar that we would not need to raise. Those capital raising efforts and those cash conservation efforts are in full swing. We are currently seeking to raise additional equity capital right now. We have commenced discussions with Kelam, more than a dozen strategic investors, about they're taking an equity interest in AMC. We're also talking with our existing lenders to gauge their interest in further bolstering, bolstering our liquidity as they did this past summer, and we've started a dialog with many of our landlords, again, about helping us abate or defer rent, as they also did in the spring, when movie titles are still few in number and one theater traffic is light, it is too early to know whether these efforts will bear fruit and if so, where should I say and when, so by how much? But our days and nights are busy ones at AMC and we absolutely are not sitting on our hands bemoaning the lousy hand of cards that the coronaviruses dollars, instead we're out trying to raise money, something at which we're quite skilled, as we have demonstrated on multiple occasions so far this year. Onto a completely separate subject. Lest you think we're distractive, distracted from innovating in how we market to consumers, we know that some portion of the populace is concerned about sitting intermixed with strangers. So a few weeks back, we soft launched a private theater rental program where consumers can book an auditorium all of themselves and use up to 20 tickets in that auditorium for a fixed price of between ninety nine dollars and three hundred and forty nine dollars plus tax, depending upon the movie, the format and the market. We've already had more than 80000 inquiries from potential guests about private theater rentals, and that number will grow markedly once we formally announced the program with a press release and marketing support, which should launch later this month. Before we open the call for your questions, I'd like to take a moment to recognize the truly exceptional achievements of the AMC management team. Just seven months ago, many were predicting that AMC would not survive past spring. They underestimated the sheer will of our management to power through this crisis, if that is at all humanly possible. And even I am incredibly impressed by the skill of our theater teams who have first shot and then reopened the world's largest collection of movie theaters with extraordinarily with extraordinary professionalism and commitment. To ensure that this leadership team continues to have incentives that are meaningful and which completely align the interests of all our senior officers and junior officers with those of our shareholders, we have detailed in the TENGKU about to be filed that our board has decided to use its discretion to vest in this current fourth quarter, some previously granted AMC equity. However, that new vesting includes a one year lockup that prevents the sale of such equity until a full year from now. Our entire officer corps has substantial incentives, therefore, to keep and to increase the equity value inherent in AMC shares. In addition, our board also wanted to recognize and reward some 2000 AMC managers across our system in the U.S. and abroad, almost all of whom took between 20 percent and 100 percent salary reductions for almost half a year. And who all are leading our theaters and our company in a time of considerable, considerable duress, they're also doing more with much less in the way of resources to get leaner.Almost incredibly, we have reduced by about one third. The number of management staff on our payroll, both in our headquarters operations and at our theaters. Then we had at the beginning of last year. With a goal of retaining our team managers so they do not abandon AMC at the most crucial time when we need them the most, are our board further authorized the creation of a modest bonus pool in lieu of the formal twenty twenty annual incentive plan? It's equal to approximately 30 percent of their annual bonus targets. Individual awards will range from 20 percent to 50 percent of target, depending upon the individual. The most common award will be 20 percent. We believe this will bias considerable loyalty among our strongest and most needed performers and at a most critical time. With that, let us leave you with a laser like focus on that which matters most to AMC at the moment, the need for us to increase our liquidity, to raise new cash or to conserve cash spending that will allow us to bridge from this moment to much deeper into Twenty twenty. What we do, after all, have our Churchillian charge. We shall fight on the beaches. We shall fight on the landing grounds. We shall fight in the fields and in the streets. We shall fight in the hills. And may I remind you all not to forget that Great Britain was on the winning side of that war. Thank you. And we now look forward to taking your questions. Operator?

[Operator:]

Ladies and gentlemen, we will now have our question and answer session. If you'd like to ask a question, please. Press star one on your telephone keypad. The confirmation tone will indicate that your line is in the question queue for participants using speaker equipment. It may be necessary for you to pick up your handset before pressing the star keys. One moment, please, when we now call for questions. Our first question comes from Eric Wold B. Riley FBR. Please proceed with your question.

[Eric Wold:]

Thank you. Good afternoon, Adam. It seems that we've seen more of a willingness of exhibitors to bite the bullet and open deals in less than optimal conditions. I guess the most recent being San Francisco with a lot of concessions from the conversation you had with those studio heads that view as negotiations, so to speak. Is there a point where they started taking some risk, taking it upon themselves well, before, you know, a vaccine or something meaningful that right.

[Adam Aron:]

Yes. And it's already happening here. So universal specifically because of our deal with them, is going to release crude's a new age just before Thanksgiving. That's accompanied by five other Universal Films, only one of which has already been released. So Universal's got five more coming out in November and December. We've had significant conversations with Warner. We know that they're definitely trying to hold on to their Christmas release of Wonderwoman. And with all these studios, we're expressing our desire and eagerness to lean in and do whatever we can to support their movies and to be flexible in how we consider various strategies for not only us to prosper, but for our studio partners to prosper as they release release movies as well. So, yes, it's already happening. And with respect to San Francisco, I would point out we actually opened Philadelphia and Boston without food. And within three to four weeks, those municipalities agreed to let us go forward with concessions as well. So it's a very fast evolving landscape as to what individual jurisdictions are allowing us to do, and we're going to continue to fight the fight.

[Eric Wold:]

For one problem, and we've been operating under a lot of restrictions around capacity in film and films. Is there any way to. Can I give you a sense of the percentage of the circuit that has reopened, this can only do so, you know, positive figure a little cash flow. You know what that attendance kind of, you know, breaking point is that, look, like we said in the last call, that for theaters to have individual profitability at a theater level, we need about 25 percent attendance to to be generating cash rather than losing cash.

[Adam Aron:]

I can tell you that, number one, the capacity restrictions, which in most cases are 40 percent. Of available seats, which is AMC, impose constraints. We have a lot of jurisdictions that are letting us go to 50 percent, but we've chosen to stay at 40 percent. I don't think we've lost a single customer because we're limited to 40 percent of our seat capacity. We should be so thrilled to to be anxious about losing the 40 first or 50 percent of our seat capacity. As Sean said, we're hovering down between 10 and 20 percent at those theaters that are open in the United States were higher than that in Europe and the Middle East. But where we need to get to is around 25 percent. And then those theaters are generating cash rather than burning cash. So that assumes that we're paying rent. And we already did say on this call that not only did we defer, innovate, rent in Q2 and move a lot of rents in Q3, the percentage of revenues. But we are going to be going back to our landlord community again and talking about further abating and deferring rent, given low attendance. But why don't we assume that we get up to 25 percent or more so that that that we are generating cash? Remember that? And I've said this on multiple occasions. Movie theaters are not sports stadiums that typically sell out or Broadway theaters that typically have received full movie theaters or more like churches built for Easter Sunday. Last year, AMC, this is 2019, all covered. AMC sold more tickets for movie theaters than anybody else on the planet, and we only sold 17 one seven 17 percent of our available seats. So this notion that seat limitation is going to cripple us is just wrong. We modeled that even a 50 percent seat limitation, which we will move to once demand rises to levels where we need more than 40 percent of our seats would cost us only single digit attendance. And that's before people spread themselves around Tippex available showtimes on different days with better seating availability. So the seat constraints are not the issue. The issue is demand on the one hand related to virus fares. But I think even more than that is the availability of movie titles. That's the thing that we need. We you know, I've said on TV interviews that we're a new car dealership and we're in the business of selling new cars. And Detroit stopped shipping us new cars seven months ago. The showroom is a little bare. It's pretty hard to sell new cars when there are no showroom, no cars on the showroom floor.

[Eric Wold:]

Got to think that.

[Operator:]

Thank you. Our next question comes from Jim Glaus with Barrington Research. Please proceed with your question.

[Jim Goss:]

Thanks, Ed, I'm wondering, hi, how are you doing? Good. Challenging time, no doubt, but we got all we got to do is raise a little money, will be just fine. Well, do you have any thoughts or analysis and those films that so far have shifted from a theatrical run such as a couple of the Disney films in terms of their ability to recapture what they might have had if they did have a theatrical release in terms of how that might strengthen your argument against casting up any further situations like that?

[Adam Aron:]

So I do have a lot of thoughts, but I think it's more appropriate for the studios to talk about the success or lack of success of their shifting titles to streaming or video. But let me say this. The conversations that we're having with every major studio. Is that AMC, as we proved with the universal deal? If not stuck back in 1955. We are willing to consider alternate models. We understand that the world of streaming is upon us. We believe that it optimizes our profitability and studio profitability if they can have a combination of theatrical releases and streaming. That that combo is far more lucrative for them and certainly for us. Then if they pick streaming only and ignore the 43 billion dollars. Forty three billion dollars of revenues that movie theaters generated globally last year were the makers of film. And we also understand, though, that the combination of theatrical and streaming will be more lucrative them, but could also be more lucrative for us if we can somehow get participation in that streaming world, as we did with Universal. So, look, I think there's a very compelling case to be made that is in the studios best financial interests. Not to choose the streaming world over the theatrical world, but to figure out intelligently a creative path that lets them navigate towards being able to benefit from both at the same time. And AMC has clearly expressed a willingness and an eagerness to play in that arena.

[Jim Goss:]

Along the lines of what you're suggesting, the larger the movie and the bigger the budget and the Pinay, the less likely it is to be vulnerable to streaming fate. But but as you go down that continuum, you hit some smaller films that might be more susceptible to that. Do you have any sense as to where those lines might be drawn?

[Adam Aron:]

No, but talking about a small movie, Universal released a movie called Millionaire, last month. I think it's theatrical run with single digit millions of counts in your world as a small movie. They took that movie first theatrically and then PVD 17 days. And we AMC made more money with that theatrical streaming combo or the appropriate combo than we would have if it had just exclusively been in theaters with seventy four day window.

[Jim Goss:]

Maybe just one other one. You got it very much. They got all that. No, now this is they just want to ask questions. So is there any thought or capability to sell any of your theater properties and be able to exit leases in a favorable way, as you do try to look at ways to raise funds?

[Adam Aron:]

Yes, number one, we did in the quarter sell nine theaters in the Baltics for seventy seven million dollars at a nine point three multiple, which is a lot more than we're getting being given credit for on Wall Street of our budget and even let alone the infinite multiple of our actually. But we have a number of leases of nonproductive theaters that. Expire every year and very quietly, although I did tell you a couple of conference calls back. This was our plan, we probably ducked out of 40 theaters within the United States and Europe. Where we were losing money. And so as opposed to being behind so we didn't renew those leases were ahead and we will continue to have conversations with landlords about getting out of unproductive agreements.

[Eric Wold:]

Ok, and but you generally would have a certain number of theaters, leases expiring every year, so you have that choice. Are there any other issues beyond that that you would look at as potential sources of funds?

[Adam Aron:]

Yes, and we already have, but it's probably not appropriate for me to quantify it on this phone call. But yes, conversations have been held with multiple of our landlords about getting out of theater leases. Of where we think it's in our interest to do so and where the landlord might have a higher and better use for the real estate.

[Jim Goss:]

All right, thank you very much, appreciate it and good luck.

[Operator:]

Our next question comes from Eric Handler with K.M. Partners. Please proceed with your question.

[Eric Handler:]

Yes, thank you very much and good evening. A few questions for you on liquidity. Any chance you could update us about where you ended October in terms of cash?

[Sean Goodman:]

Very good, Sean, I cannot say to you as to where we ended October, October obviously just ended last week, but I can give you some guidance on liquidity for the remainder of Q4, which hopefully will be somewhat helpful. And I think the way to look at it is probably the best way to look at it is look at it in a worst case scenario, in a worst case scenario, where the current level of attendance continues. Right. So we have no new movies released and we just continue with the current level of attendance. In that scenario, our monthly cash burn during Q4 will be a little bit higher than during Q3. And the reason it will be a little bit higher is really one thing. It's the additional lease costs that we have in Q4 versus Q3 based on the current arrangements that we have with our landlords. But if you just look at that and it'll be higher, you know, and just to quantify that, to be even more helpful, there is if you think about our cash burn in July and August, around one hundred and fifteen million a month to be closer to that number than the average that we were for the quarter, maybe around five to 10 percent higher than that. It just depends. And this is the key point that's based on worst case scenario, current agreements with landlords. But, you know, if you're forecasting our cash position based on that, I can tell you right now you're going to get it wrong, because as we said in our prepared remarks, we have already raised through the ATM equity program 95 million dollars that came during the month of October. We've already got additional Postle proceeds from the Baltic sale. That's about eight million dollars. We've been selling real estate. We've sold about seven billion dollars of real estate during October. We plan, as Adam said, to be back in the market with the ATM process. We're in discussions with landlords, et cetera, et cetera. So so really giving you the worst case scenario. But all these actions that we're taking will offset that worst case scenario.

[Adam Aron:]

Plus, I did not mention that also that assumes that we have that we stay at today's level, lieutenants, if the Christmas movies hold. Then our level of attendance should increase and our revenues should increase as well. So I knew it was in the press release. We had four hundred eighteen million dollars of cash at the end of September. Obviously, we we want much more than that, we need much more than that, we extent we we have a goal of extending our financial runway deep into Twenty twenty one, not early into Twenty twenty one.

[Sean Goodman:]

Yeah, thanks to Adam. And that that actually clarifies our internal forecast would be much better cashpoint than that, because we're basing it on the foam slide as it currently stands and we believe we'll hold.

[Eric Handler:]

But that's helpful, and then I assume that that whatever that burn rate is in excess of 100 million, what is your it's on average your monthly cash interest expense of that?

[Adam Aron:]

That's included. That's included in the numbers Sean just gave you.

[Eric Handler:]

Right. And how much is that?

[Adam Aron:]

Well, look, and it's very Armande cash interest expense right now is going to just take the. Running around 20 million dollars a month, but that is included in the numbers.

[Eric Handler:]

Great, thank you. And the last question. The the equity, the equity shelf that you filed today. Do you already have a sponsor in place like you did with Goldman and Citi for for the ATM deal? Or are you are you negotiating with others? And then secondly, along with that, why just 20 million? I mean, right now, 20 million shares will get you a little over 40 million dollars. You would probably need much more than that. Why not do a larger share of offering?

[Adam Aron:]

Eric, to avert gun jumping concerns, we can't make any comment at all on the filing made this morning with the FCC.

[Eric Handler:]

Ok, thank you.

[Adam Aron:]

Thank you. Not me, not not wanting to duck your question, but being ordered by the government, the United States, to duck your question.

[Eric Handler:]

Understood. Thank you. Thanks. Our.

[Operator:]

Our next question comes from Alan Gould with Loopt Capital. Please proceed with your question.

[Alan Gould:]

Thanks for taking my questions. Hello, Adam. Hello, Sean. I've got a few questions. First, there was some trade speculation on your sale of your European theaters, not the Baltics, but the the bulk of the remainder of the European theater, geodon chain, et cetera. Is there any comment you can make about about that?

[Adam Aron:]

Nope, we do not comment on rumors and speculation.

[Alan Gould:]

Ok, my next one for Sean, I believe your debt covenant waver with the banks expires in March. Have you already started discussions there? And, you know, can you remind us what the what the Covenant returns to after March?

[Sean Goodman:]

Sure, absolutely. So, as you rightly say, we have a dead covenant holiday through March, actually the first time that we'll have to calculate that covid numbers is at the end of June. So that'll be after the second quarter and after the second quarter, the debt covenant will be calculated by taking two's number multiplied, multiplying it by force. So it's annualization of Q2. So everything's in terms of where we sit relative to that debt covenant will depend on the performance in Q2. The Covenant is six times secured leverage, six times EBITDA secured leverage ratio. The amount of secured debt that we have at the moment is three point seven billion. I will point out that the EBITDA that we use for the debt covenant calculation that's in the credit agreements is different to the EBITDA that is disclosed for financial reporting point of view. It tends to be higher. And so, you know, that's going to be our situation with the debt covenant. It's all going to be dependent on Q2 twenty twenty one's performance.

[Alan Gould:]

Ok, and Adam, when will we know when was a better idea of whether or not Warner is going to release Wonderwoman 1984 on Christmas one, would they have to start marketing it? I guess that would be our first sign of whether we know the exact date that it's going to come about.

[Adam Aron:]

They're going to start the look, I can tell you categorically they want to release on schedule, their marketing will begin sometime this month, I would guess. When will we know? Exactly, that Wonder Woman is opening on December 19th through December 20th, I think on December 19th of December 20th.

[Alan Gould:]

Ok, and then my last question for Sean, how much higher are the fixed costs today than they were, say, pre covered? So if we come out of this to the other and how much higher is are the fixed cost for the company? I know your rent is less. Your interest. Expense is more. I'm just trying to put it all together. Maybe your rent is more when you start having to pay back the deferred.

[Sean Goodman:]

Look, I think in general. That a couple of things I'll say. One is to start with, fixed cost is going to be pretty similar. But firstly, the rent is probably going to be lower based on the negotiations that we've had with landlords. Right. The second thing is what I mentioned in my prepared remarks is the actions that we are taking, looking at every single cost area that we've had that we have in the organization. And we do see significant benefits there. We're targeting between three and four hundred million dollars of cash benefits there. That's cash benefits. That includes reducing our capex. So there's significant benefits on that side. Cash rent does go up, but only in Twenty twenty to right because of the interest that we have in Twenty twenty one.

[Alan Gould:]

Ok, thanks for taking the questions.

[Operator:]

Thank you. Our next question comes from Meghan Durkin with Credit Suisse. Please proceed with your question.

[Meghan Durkin:]

Hi. Good afternoon, guys. One for Sean. I wanted to know if you could give us a breakdown of where the cash burn is overseas versus the U.S. and is there a minimum level of cash that you need on hand to keep running the business? And then I just one more on market shares. How are things holding up where you are open? Has regal clothing helped you take share in those areas? How's that going?

[Adam Aron:]

I baggages. Sean, just talking about the split of the cash burn between domestic and international, it's pretty normal for the spread of the size of the business. There's nothing dramatically different there. And what we're seeing on both sides of the Atlantic, and I think the second part of your question was, is there a minimum level of cash? There clearly is a minimal level of cash, but it's low. And that minimum level of cash is more in Europe just because of the structure of the European organization. But we can run at pretty low levels of cash of overall.

[Sean Goodman:]

And Megan, yes, our market share obviously has increased, given the closure of lots of other theaters. But as Sean said in his prepared remarks, we've bottled this thing extensively. And those theaters where we're open and half of them in the United States are only open weekends. Most of our theaters are only getting one or two showtimes a day, not the normal four. So we're really pulling operating hours down, which is saving a ton of expense. It's not really much different financially for us to be open managing tightly the way we are then closed. But the benefits are that we're still giving the sense to consumers that our theaters are open, that they can see movies when they primarily want to see them, which is weekends currently. And also it's much less stressful on the buildings to have them open every single week than to have them closed for a couple of months on end when you try to reopen a building after it's been completely buttoned down for months on end. There's a lot of extra expense that comes from starting back up from a dead stop. So we think we're doing it the right way and we are benefiting in the marketplace because our share is rising. Ok, I'll leave it at that. Thanks. Thank you.

[Operator:]

Thank you. Our next question comes from Jason Bazinet with Citi. Please proceed with your question.

[Jason Bazinet:]

Thanks so much. I just had two questions. Have there been any studios that have been willing to give you, let's say, 100 percent of the ticket value, at least until you get through this crunch period and sort of maybe come up the difference in arrears and pay it back to the studios at some later date? And my second question is, is there any sort of wild card here in terms of government assistance to sort of help you through this crunch period? Thanks.

[Adam Aron:]

Thanks. So on your first question, we have been able you know, I've yet to find a studio that would like to graciously give us 100 percent of the ticket sales. But I will tell you that studio has been very flexible on payment schedules. So we've been able to hold on to money a lot longer, in some cases, an incredibly a lot longer than would be the norm, which helps our liquidity. As for the wild card. Given that there's an election tomorrow, I don't think anybody can predict anything right now, but I do know that there has been discussion among certain political leaders of certain parties that if they're in power post-election, they might step up their activity to support industry. But I think it's it's premature to get a sense of whether that will bear any fruit for our industry or our company, since nobody really knows what's going to happen tomorrow until tomorrow comes that we may not even know tomorrow. Fair enough. Thank you. Thank you. Our next question comes from Chad Beynon with Macquarie. Please proceed with your question.

[Chad Beynon:]

Good afternoon, this is Jordan Bender in for Chad, so hopefully we get a vaccine here and return to normal somewhat soon once things do start to normalize. What's the CapEx environment going to look like? Are you going to have to kind of front load some of this maintenance capex into these theaters that you've pushed back over the last two quarters?

[Adam Aron:]

Thanks so much, the military, since it's sort of let me hit your premise, so we are in touch with medical experts quite directly, both through the Harvard University School of Public Health. And I separately have had contact as recently as this past week with the former head of the FDA and members of the boards of directors of certain pharmaceutical companies are working on vaccines. I think there is a lot of confidence that there will be a vaccine approved by the U.S. government in November or December, but inoculations will begin in December or January and that a sizable percentage of the U.S. population could be vaccinated as early as March or April. Whether those predictions pan out to be true. Only time will tell. But people who are very knowledgeable in the fields are telling us those are all likely scenarios in terms of capex of. You know, back when we were spending 500 million dollars a year, we said if we ever needed to return CapEx off, we could do it on a dime. And boy, did we prove that to be the case. And if you ignore projects that were committed. In prior years. We haven't even spent 50 million dollars of CapEx on maintenance this year. I think you should assume. That we will continue to button down CapEx. To the lowest conceivable number. Potentially under a hundred million dollars. As we go forward. If that's what is required to maintain the liquidity of the company, so is there any deferred maintenance that we're nervous about that's going to suddenly unleash a flood of CapEx spending? Absolutely not. It's the other way around. We're just not going to spend any money until we're out of the woods.

[Chad Beynon:]

Okay, perfect. Thanks for the color, Adam.

[Adam Aron:]

Remember, as I said before, a dollar of cash conserved is of equal value to AMC of an extra dollar raised. So, operator, I think that's the last question, is that correct?

[Operator:]

Yes, sir, that is the last question I'd like to turn the floor back over to you for any closing remarks you may have.

[Adam Aron:]

Very brief. Thank you, everybody. As we close this call, I remind you that. Goldfinger and the Hunt for Red October with Sean Connery. We'll be at AMC all weekend. And remember this. We shall fight on the beaches, we shall fight on the landing grounds, we shall fight on the fields and in the streets, we shall fight in the hills. Thank you for joining us today. Ladies and gentlemen, this concludes today's Web conference. You may now disconnect your lines at this time. Thank you for your participation and have a great day.