| STOCKHOLDERS' EQUITY |
NOTE 7—STOCKHOLDERS’ EQUITY Stock-Based Compensation The following table presents the stock-based compensation expense recorded within general and administrative: other: | | | | | | | | | | | | | | | Three Months Ended | | Six Months Ended | | | June 30, | | June 30, | | June 30, | | June 30, | (In millions) | | 2022 | | 2021 | | 2022 | | 2021 | Board of director stock award expense | | $ | — | | $ | — | | $ | 0.8 | | $ | 0.9 | Restricted stock unit expense | | | 3.5 | | | 3.5 | | | 6.3 | | | 5.7 | Performance stock unit expense | | | 15.9 | | | 3.4 | | | 18.8 | | | 4.2 | Special performance stock unit expense | | | — | | | 1.5 | | | — | | | 3.0 | Total stock-based compensation expense | | $ | 19.4 | | $ | 8.4 | | $ | 25.9 | | $ | 13.8 |
As of June 30, 2022, the estimated remaining unrecognized compensation cost related to stock-based compensation arrangements was approximately $50.6 million, which reflects assumptions related to attainment of performance targets based on the scales as described below. The weighted average period over which this remaining compensation expense is expected to be recognized is approximately 0.9 years. Awards Granted in 2022 During the six months ended June 30, 2022, AMC’s Board of Directors approved awards of stock, restricted stock units (“RSUs”), and performance stock units (“PSUs”) to certain of the Company’s employees and directors under the 2013 Equity Incentive Plan. The grant date fair value of these awards during the six months ended June 30, 2022 was based on the closing price of AMC’s Class A common stock (“Common Stock” or “Common Shares”) on February 16, 2022 of $19.67 per share, March 7, 2022 of $15.21 per share, and May 3, 2022 of $15.51 per share. Each RSU and PSU held by a participant as of a dividend record date is entitled to a dividend equivalent equal to the amount paid with respect to one share of Common Stock underlying the unit. Any such accrued dividend equivalents are paid to the holder upon vesting of the units. Each unit represents the right to receive one share of Common Stock at a future date. The 2022 award agreements generally had the following features: | ● | Stock Award Agreement: During the six months ended June 30, 2022, the Company granted awards of 41,650 fully vested shares of Common Stock to its independent members of AMC’s Board of Directors with a grant date fair value of $0.8 million. |
| ● | Restricted Stock Unit Award Agreement: During the six months ended June 30, 2022, the Company granted RSU awards of 697,135 to certain members of management with a grant date fair value of $13.6 million. The Company records stock-based compensation expense on a straight-line recognition method over the requisite vesting period. Each RSU represents the right to receive one share of Common Stock at a future date. The RSUs vest over three years, with one-third vesting in each year. These RSUs will be settled within 30 days of vesting. |
| ● | Performance Stock Unit Award Agreement: During the six months ended June 30, 2022, total PSUs of 697,135 were awarded (“2022 PSU award”) to certain members of management and executive officers, with the total PSUs divided into three separate year tranches, with each tranche allocated to a fiscal year within the performance period (“Tranche Year”). The PSUs within each Tranche Year are further divided between two performance targets; the Adjusted EBITDA performance target and free cash flow performance target. The 2022 PSU awards will vest based on achieving 80% to 120% of the performance targets, with the corresponding vested unit amount ranging from 50% to 200%. If the performance targets are met at 100%, the 2022 PSU awards will vest at 697,135 units in the aggregate. No PSUs will vest for each Tranche Year if the Company does not achieve 80% of the Tranche Year’s Adjusted EBITDA and free cash flow targets. |
The Compensation Committee establishes the annual performance targets at the beginning of each year. Therefore, the grant date (and fair value measurement date) for each Tranche Year is the date at the beginning of each year when a mutual understanding of the key terms and conditions are reached per ASC 718, Compensation – Stock compensation. The 2022 PSU award grant date fair value for the 2022 Tranche Year award of 232,270 units was approximately $4.5 million and the 2021 PSU award grant date fair value for the 2022 Tranche Year award of 878,540 units was approximately $17.3 million, measured using performance targets at 100%. The 2020 PSU award for the 2022 Tranche Year was previously granted in year 2020, and was subsequently modified on October 30, 2020 where the grant date fair value was not determined until February 16, 2022 when the performance targets were established. As a result, the 2020 PSU award grant date fair value for the 2022 Tranche Year award of 429,683 units was approximately $8.5 million, measured using performance targets at 100%. At June 30, 2022, the Company estimated that 2022 Tranche Year target performance conditions for the annual Adjusted EBITDA and free cash flow are expected to be achieved at 200% and 120%, respectively. The following table represents the nonvested RSU and PSU activity for the six months ended June 30, 2022: | | | | | | | | | | Weighted | | | | | Average | | | Shares of RSU | | Grant Date | | | and PSU | | Fair Value | Nonvested at January 1, 2022 (1) | | 7,841,733 | | $ | 7.92 | Granted (2) | | 2,778,132 | | | 19.59 | Vested | | (2,799,845) | | | 7.17 | Forfeited | | (336,960) | | | 11.62 | Cancelled (3) | | (2,358,278) | | | 7.16 | Nonvested at June 30, 2022 | | 5,124,782 | | $ | 14.77 | Tranche Years 2023 and 2024 awarded under the 2022 PSU award and Tranche Year 2023 awarded under the 2021 PSU award with grant date fair values to be determined in years 2023 and 2024, respectively | | 1,267,959 | | | | Total Nonvested at June 30, 2022 | | 6,392,741 | | | |
| (1) | Includes awards modified during 2020 where grant date fair value was not determined until 2022. |
| (2) | The number of PSU shares granted under the Tranche Year 2022 assumes the Company will attain a performance target at 200% for the Adjusted EBITDA target and 120% for the free cash flow target. The PSUs vest ratably based on a scale ranging from 80% to 120% of the performance target with the vested amount ranging from 50% to 200% for Tranche Year 2022 awards granted under the 2022, 2021 and 2020 PSU awards. |
| (3) | Represents vested RSUs and PSUs surrendered in lieu of taxes and cancelled awards returned to the 2013 Equity Incentive plan. As a result, the Company paid taxes for restricted unit withholdings of approximately $52.2 million during the six months ended June 30, 2022. |
Condensed Consolidated Statements of Stockholders’ Deficit For the Six Months Ended June 30, 2022 | | | | | | | | | | | | | | | | | | | | | | | | Accumulated | | | | | | | Class A Voting | | Additional | | Other | | | | Total | | | Common Stock | | Paid-in | | Comprehensive | | Accumulated | | Stockholders’ | (In millions, except share and per share data) | | Shares | | Amount | | Capital | | Loss | | Deficit | | Equity (Deficit) | Balances December 31, 2021 | | 513,979,100 | | $ | 5.1 | | $ | 4,857.5 | | $ | (28.1) | | $ | (6,624.0) | | $ | (1,789.5) | Net loss | | — | | | — | | | — | | | — | | | (337.4) | | | (337.4) | Other comprehensive loss | | — | | | — | | | — | | | (5.8) | | | — | | | (5.8) | Taxes paid for restricted unit withholdings | | — | | | — | | | (52.2) | | | — | | | — | | | (52.2) | Stock-based compensation (1) | | 2,841,495 | | | 0.1 | | | 6.5 | | | — | | | — | | | 6.6 | Balances March 31, 2022 | | 516,820,595 | | $ | 5.2 | | $ | 4,811.8 | | $ | (33.9) | | $ | (6,961.4) | | $ | (2,178.3) | Net loss | | — | | | — | | | — | | | — | | | (121.6) | | | (121.6) | Other comprehensive income | | — | | | — | | | — | | | (46.3) | | | — | | | (46.3) | Stock-based compensation | | — | | | — | | | 19.4 | | | — | | | — | | | 19.4 | Balances June 30, 2022 | | 516,820,595 | | $ | 5.2 | | $ | 4,831.2 | | $ | (80.2) | | $ | (7,083.0) | | $ | (2,326.8) |
| (1) | Includes 41,650 shares awarded to Board of Directors and 2,799,845 vested RSUs and PSUs. |
Condensed Consolidated Statements of Stockholders’ Deficit For the Six Months Ended June 30, 2021 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Accumulated | | | | | | | | | | | Class A Voting | | Class B Voting | | Additional | | | | Other | | | | Total AMC | | | | | | | Common Stock | | Common Stock | | Paid-in | | Treasury Stock | | Comprehensive | | Accumulated | | Stockholders’ | | Noncontrolling | | Total | (In millions, except share and per share data) | | Shares | | Amount | | Shares | | Amount | | Capital | | Shares | | Amount | | Income (Loss) | | Deficit | | Equity (Deficit) | | Interests | | Deficit | Balances December 31, 2020 | | 172,563,249 | | $ | 1.8 | | 51,769,784 | | $ | 0.5 | | $ | 2,465.6 | | 3,732,625 | | $ | (56.4) | | $ | 38.7 | | $ | (5,335.3) | | $ | (2,885.1) | | $ | 26.9 | | $ | (2,858.2) | Net loss | | — | | | — | | — | | | — | | | — | | — | | | — | | | — | | | (566.9) | | | (566.9) | | | (0.3) | | | (567.2) | Other comprehensive loss | | — | | | — | | — | | | — | | | — | | — | | | — | | | (51.0) | | | — | | | (51.0) | | | (0.2) | | | (51.2) | Baltics noncontrolling capital contribution | | — | | | — | | — | | | — | | | 0.2 | | — | | | — | | | — | | | — | | | 0.2 | | | (4.0) | | | (3.8) | Class A common stock, accrued dividend equivalent adjustment | | — | | | — | | — | | | — | | | — | | — | | | — | | | — | | | (0.1) | | | (0.1) | | | — | | | (0.1) | Class A common stock issuance | | 187,066,293 | | | 1.8 | | — | | | — | | | 579.8 | | — | | | — | | | — | | | — | | | 581.6 | | | — | | | 581.6 | Wanda conversion of Class B shares to Class A shares | | 46,103,784 | | | 0.5 | | (46,103,784) | | | (0.5) | | | — | | — | | | — | | | — | | | — | | | — | | | — | | | — | Convertible Notes due 2026 stock conversion | | 44,422,860 | | | 0.4 | | — | | | — | | | 606.1 | | — | | | — | | | — | | | — | | | 606.5 | | | — | | | 606.5 | Wanda forfeit and cancellation of Class B shares | | — | | | — | | (5,666,000) | | | — | | | — | | — | | | — | | | — | | | — | | | — | | | — | | | — | Stock-based compensation | | 124,054 | | | — | | — | | | — | | | 5.4 | | — | | | — | | | — | | | — | | | 5.4 | | | — | | | 5.4 | Balances March 31, 2021 | | 450,280,240 | | $ | 4.5 | | — | | $ | — | | $ | 3,657.1 | | 3,732,625 | | $ | (56.4) | | $ | (12.3) | | $ | (5,902.3) | | $ | (2,309.4) | | $ | 22.4 | | $ | (2,287.0) | Net loss | | — | | | — | | — | | | — | | | — | | — | | | — | | | — | | | (343.6) | | | (343.6) | | | (0.4) | | | (344.0) | Other comprehensive income | | — | | | — | | — | | | — | | | — | | — | | | — | | | 21.4 | | | — | | | 21.4 | | | — | | | 21.4 | 100% liquidation of Baltics | | — | | | — | | — | | | — | | | — | | — | | | — | | | (0.9) | | | — | | | (0.9) | | | (22.0) | | | (22.9) | Class A common stock, accrued dividend equivalent adjustment | | — | | | — | | — | | | — | | | — | | — | | | — | | | — | | | (0.2) | | | (0.2) | | | — | | | (0.2) | Class A common stock issuance | | 54,550,000 | | | 0.5 | | — | | | — | | | 951.6 | | (3,732,625) | | | 56.4 | | | — | | | (19.3) | | | 989.2 | | | — | | | 989.2 | Class A common stock issuance to Mudrick | | 8,500,000 | | | 0.1 | | — | | | — | | | 230.3 | | — | | | — | | | — | | | — | | | 230.4 | | | — | | | 230.4 | Stock-based compensation | | — | | | — | | — | | | — | | | 8.4 | | — | | | — | | | — | | | — | | | 8.4 | | | — | | | 8.4 | Balances June 30, 2021 | | 513,330,240 | | $ | 5.1 | | — | | $ | — | | $ | 4,847.4 | | — | | $ | — | | $ | 8.2 | | $ | (6,265.4) | | $ | (1,404.7) | | $ | — | | $ | (1,404.7) |
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