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

FORM 10-Q

(Mark One)

[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended January 1, 2004

[ ] 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 1-8747

AMC ENTERTAINMENT INC.

(Exact name of registrant as specified in its charter)

Delaware		43-1304369
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

920 Main Kansas City, Missouri	64105
(Address of principal executive offices)	(Zip 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 x No ____

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act)

Yes x No ____

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 January 1, 2004
Common Stock, 66 2/3 ¢ par value		33,810,870
Class B Stock, 66 2/3 ¢ par value		3,051,597

AMC ENTERTAINMENT INC. AND SUBSIDIARIES

INDEX

			Page Number
		PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements			3

	Consolidated Statements of Operations			3

	Consolidated Balance Sheets			4

	Consolidated Statements of Cash Flows			5

	Notes to Consolidated Financial Statements			7

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations			17

Item 3.	Quantitative and Qualitative Disclosures About Market Risk			29

Item 4.	Controls and Procedures			30

	PART II - OTHER INFORMATION

Item 1.	Legal Proceedings			30

Item 6.	Exhibits and Reports on Form 8-K			33

	Signatures			35

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

AMC ENTERTAINMENT INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)

	Thirteen Weeks Ended			Thirty-nine Weeks Ended
	January 1,	December 26,		January 1,	December 26,
	2004	2002		2004	2002
	(Unaudited)			(Unaudited)
Revenues
Admissions	$ 321,783		$290,756	$ 942,799		$ 905,457
Concessions	119,776		109,585	356,159		355,322
Other theatre	14,839		13,403	39,821		36,579
NCN and other	15,204		16,836	41,319		43,284
Total revenues	471,602		430,580	1,380,098		1,340,642
Expenses
Film exhibition costs	170,727		157,788	510,675		500,811
Concession costs	13,138		12,370	39,948		41,828
Theatre operating expense	104,795		105,782	316,488		326,040
Rent	78,640		74,708	234,904		221,730
NCN and other	12,803		14,017	35,511		38,369
General and administrative expense:
Stock-based compensation	533		504	1,702		1,516
Other	16,511		10,554	39,914		51,981
Preopening expense	1,734		1,630	3,165		2,878
Theatre and other closure expense	2,078		4,066	3,812		5,296
Depreciation and amortization	32,405		31,830	89,619		93,239
Loss (gain) on disposition of assets	(525)		390	(2,481)		(1,032)
Total costs and expenses	432,839		413,639	1,273,257		1,282,656
Interest expense
Corporate borrowings	16,253		14,905	48,182		48,263
Capital and financing lease obligations	2,512		3,215	8,022		8,645
Investment income	(461)		(738)	(1,723)		(2,523)
Total other expense	18,304		17,382	54,481		54,385
Earnings (loss) from continuing operations before income taxes	20,459		(441)	52,360		3,601
Income tax provision (benefit)	8,000		(1,900)	21,900		5,200
Earnings (loss) from continuing operations	12,459		1,459	30,460		(1,599)
Loss from discontinued operations, net of income tax benefit	(741)		(128)	(1,331)		(726)
Net earnings (loss)	$ 11,718		$ 1,331	$ 29,129		$ (2,325)
Preferred dividends	11,074		6,250	28,527		20,897
Net earnings (loss) for common shares	$ 644		$ (4,919)	$ 602		$ (23,222)
Basic and diluted earnings (loss) per share:
Earnings (loss) from continuing operations	$ .04		$ (.13)	$ .05		$ (.62)
Loss from discontinued operations	$ (.02)		$ (.01)	$ (.03)		$ (.02)
Earnings (loss) per share	$ .02		$ (.14)	$ .02		$ (.64)
Average shares outstanding:
Basic	36,822		36,302	36,666		36,294
Diluted	36,997		36,302	36,857		36,294

See Notes to Consolidated Financial Statements.

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AMC ENTERTAINMENT INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)

					January 1,		April 3,
					2004		2003
					(Unaudited)
ASSETS
Current assets
Cash and equivalents		$ 310,772				$ 244,412
Receivables, net of allowance for doubtful accounts of $1,790
as of January 1, 2004 and $1,581 as of April 3, 2003					48,576	27,545
Other current assets					66,045	50,732
Total current assets					425,393	322,689

Property, net					871,250	856,463
Intangible assets, net					25,263	30,050
Goodwill					68,484	60,698
Deferred income taxes					148,703	171,152
Other long-term assets					52,461	50,646

Total assets					$1,591,554	$1,491,698

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable					$ 146,301	$ 116,269
Accrued expenses and other liabilities			137,864			112,217
Deferred revenues and income			75,472			67,176
Current maturities of capital and financing lease obligations					2,579	2,565
Total current liabilities					362,216	298,227

Corporate borrowings					668,932	668,661
Capital and financing lease obligations					59,941	56,536
Other long-term liabilities					167,247	176,370
Total liabilities				1,258,336		1,199,794

Commitments and contingencies

Stockholders’ equity:
Series A Convertible Preferred Stock, 66 2/3¢ par value; 294,513 shares issued and outstanding as of January 1, 2004 and 280,107 shares issued and outstanding as of April 3, 2003 (aggregate liquidation preference of $299,477 as of January 1, 2004 and $284,828 as of April 3, 2003)					196	187
Common Stock, 66 2/3¢ par value; 33,888,753 shares issued as of January 1, 2004
and 33,286,173 shares issued as of April 3, 2003					22,592	22,191
Convertible Class B Stock, 66 2/3¢ par value; 3,051,597 shares
issued and outstanding as of January 1, 2004 and April 3, 2003					2,035	2,035
Additional paid-in capital				469,274		464,663
Accumulated other comprehensive loss					(1,178)	(8,773)
Accumulated deficit	(158,688)						(187,817)
Common Stock in treasury, at cost, 77,883 shares as of
January 1, 2004 and 35,387 shares as of April 3, 2003					(1,013)	(582)

Total stockholders’ equity					333,218	291,904

Total liabilities and stockholders’ equity					$1,591,554	$1,491,698

See Notes to Consolidated Financial Statements.

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AMC ENTERTAINMENT INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

	Thirty-nine Weeks Ended
	January 1,		December 26,
	2004		2002
	(Unaudited)
INCREASE IN CASH AND EQUIVALENTS
Cash flows from operating activities:
Net earnings (loss)	$ 29,129				$ (2,325)
Adjustments to reconcile net earnings (loss) to net cash provided by operating activities:
Depreciation and amortization	89,619				93,239
Non-cash portion of special and stock-based compensation	1,702				12,054
Non-cash portion of pension and post-retirement expense	4,679				2,615
Deferred income taxes	16,090				2,900
Gain on disposition of assets	(2,481)				(1,032)
Loss on sale - discontinued operations	5,591				-
Change in assets and liabilities, net of effects from acquisition of GC Companies, Inc. and Megastar Cinemas, L.L.C.:
Receivables	(15,663)				(13,349)
Other current assets	(15,219)				(1,449)
Accounts payable	35,818				3,292
Accrued expenses and other current liabilities	32,630				18,298
Other, net	3,594				(370)
Net cash provided by operating activities	185,489				113,873

Cash flows from investing activities:
Capital expenditures		(72,636)		(76,057)
Proceeds from sale/leasebacks		-		43,665
Construction project costs:
Reimbursable by landlord		-		(33,386)
Reimbursed by landlord		-		11,352
Acquisition of MegaStar Cinemas L.L.C., net of cash acquired		(13,049)		-
Acquisition of GC Companies, Inc., net of cash acquired and proceeds from sale of venture capital investments		-		(47,409)
Additional costs related to Gulf States acquisition		-		(738)
Purchase of leased furniture, fixtures and equipment		(15,812)		(7,052)
Payment on disposal - discontinued operations		(5,252)		-
Proceeds from disposition of long-term assets		1,946		4,877
Other, net		(9,105)		(1,189)

Net cash used in investing activities		(113,908)		(105,937)

Cash flows from financing activities:
Construction project costs reimbursed by landlord		-		17,855
Principal payments under capital and financing lease obligations		(1,937)		(1,934)
Change in cash overdrafts		(495)		(1,640)
Change in construction payables		(5,291)		(1,099)
Proceeds from exercise of stock options		3,888		-
Treasury stock purchases and other		(440)		(336)
Net cash provided by (used in) financing activities		(4,275)		12,846
Effect of exchange rate changes on cash and equivalents		(946)		950

Net increase in cash and equivalents		66,360		21,732

Cash and equivalents at beginning of period		244,412		219,432

Cash and equivalents at end of period		$ 310,772		$ 241,164

Table of Contents

AMC ENTERTAINMENT INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
(in thousands)

			Thirty-nine Weeks Ended
					January 1,		December 26,
		2004							2002
						(Unaudited)
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
	Cash paid during the period for:
	Interest (including amounts capitalized of $2,423 and $2,933)			$ 41,428				$ 41,829
	Income taxes paid (refunded)			11,430				(9,858)

	Schedule of non-cash investing and financing activities:
	Preferred dividends			$ 28,527				$ 20,897

See Note 2 - Acquisitions for information about the non-cash components of the acquisition of MegaStar Cinemas, L.L.C.

The following is a summary of the allocation of the purchase price as of December 26, 2002 to the assets and liabilities of GC Companies, Inc. based on management’s estimates of fair value:

(In thousands)
Cash and equivalents			$ 10,725
Current assets			11,503
Property, net			142,402
Intangible assets			27,699
Goodwill			32,869
Deferred income taxes			27,500
Other long-term assets			7,738
Current liabilities			(34,756)
Other long-term liabilities			(57,188)
Total purchase price			$ 168,492

See Notes to Consolidated Financial Statements.

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AMC ENTERTAINMENT INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
January 1, 2004
(Unaudited)

NOTE 1 - BASIS OF PRESENTATION

AMC Entertainment Inc. ("AMCE") is a holding company which, through its direct and indirect subsidiaries, including American Multi-Cinema, Inc. ("AMC") and its subsidiaries, AMC Entertainment International, Inc. (“AMCEI”) and National Cinema Network, Inc. ("NCN") (collectively with AMCE, unless the context otherwise requires, the "Company"), is principally involved in the theatrical exhibition business throughout North America and in China (Hong Kong), Japan, France, Portugal, Spain and the United Kingdom. The Company's North American theatrical exhibition business is conducted through AMC and AMCEI. The Company's International theatrical exhibition business is conducted through AMCEI. The Company is also involved in the business of providing on-screen advertising and other services to AMC and other theatre circuits through a wholly owned subsidiary, NCN.

The accompanying unaudited consolidated financial statements have been prepared in response to the requirements of Form 10-Q and should be read in conjunction with the Company's annual report on Form 10-K for the year (53 weeks) ended April 3, 2003. In the opinion of management, these interim financial statements reflect all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the Company's financial position and results of operations. Due to the seasonal nature of the Company's business, results for the thirty-nine weeks ended January 1, 2004 are not necessarily indicative of the results to be expected for the fiscal year (52 weeks) ending April 1, 2004.

The April 3, 2003 consolidated balance sheet data was derived from the audited balance sheet, but does not include all disclosures required by generally accepted accounting principles.

Certain amounts have been reclassified from prior period consolidated financial statements to conform with the current period presentation.

NOTE 2 - ACQUISITIONS

On December 18, 2003, the Company acquired certain of the operations and related assets of MegaStar Cinemas, L.L.C. (“MegaStar”) for an estimated cash purchase price of $14,950,000. In connection with the acquisition, the Company assumed leases on three theatres with 48 screens in Minneapolis and Atlanta. All three of the theatres feature stadium seating and have been built since 2000. The seller may elect for up to 180 days to have the Company purchase the assets and assume the lease with respect to one additional theatre in Springfield, Massachusetts, subject to certain inspections by the Company. Should the seller elect to exercise its option, the estimated total purchase price would decline by $1 million. As of January 1, 2004, $1,861,000 of the estimated total purchase price was unpaid. The results of operations are included in the Consolidated Statements of Operations from December 18, 2003. The following is a summary of the preliminary allocation of the purchase price to the assets acquired from MegaStar based on management estimates of fair value which could change depending on the results of an independent third party valuation study that is currently being performed:

(In thousands)
Cash and equivalents		$ 40
Current assets		94
Property		6,946
Other long-term assets		84
Goodwill		7,786
Total purchase price		$ 14,950

Table of Contents

Amounts recorded for goodwill are not subject to amortization, were recorded at the Company’s North American theatrical exhibition operating segment (the reporting unit) and are expected to be deductible for tax purposes.

NOTE 3 - DISCONTINUED OPERATIONS

On December 4, 2003, the Company sold its only theatre in Sweden and incurred a loss on sale of $5,591,000 which included a $5,252,000 payment to the purchaser to release the Company from future lease obligations related to the theatre. The Company opened its theatre in Sweden during fiscal 2001 and since that time the Company has incurred pre-tax losses of $17,210,000, including a $4,668,000 impairment charge in fiscal 2002 and a $5,591,000 loss on sale in fiscal 2004.

The operations and cash flows of the Sweden theatre have been eliminated from the Company’s ongoing operations as a result of the disposal transaction and the Company does not have any significant continuing involvement in the operations of the Sweden theatre after the disposal transaction. The results of operations of the Sweden theatre have been classified as discontinued operations, and information presented for all periods reflects the new classification. The operations of the Sweden theatre were previously reported in the Company’s International operating segment. Components