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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

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FORM 10-K

(MARK ONE)



/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934


FOR THE FISCAL YEAR ENDED MARCH 30, 2000
OR



/ / 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

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AMC ENTERTAINMENT INC.

(Exact name of registrant as specified in its charter)



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

106 WEST 14TH STREET, 64121-9615
P. O. BOX 219615, (Zip Code)
KANSAS CITY, MISSOURI
(Address of principal executive
offices)


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

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Securities registered pursuant to Section 12(b) of the Act:



NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
- ---------------------------- ----------------------------
Common Stock, 66 2/3 CENTS
par value American Stock Exchange,
Inc.
Pacific Stock Exchange, Inc.


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Securities registered pursuant to Section 12(g) of the Act: None.

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 if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. / /

The aggregate market value of the registrant's voting stock held by
non-affiliates as of May 12, 2000, computed by reference to the closing price
for such stock on the American Stock Exchange on such date, was $83,257,382.



NUMBER OF SHARES
TITLE OF EACH CLASS OF COMMON OUTSTANDING AS OF MAY 12,
STOCK 2000
- ----------------------------- -----------------------------
Common Stock, 66 2/3 CENTS
par value 19,427,098
Class B Stock, 66 2/3 CENTS
par value 4,041,993


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PART I

ITEM 1. BUSINESS.

(A) GENERAL DEVELOPMENT OF BUSINESS

AMC Entertainment Inc. ("AMCE") is a holding company. AMCE's principal
subsidiaries are American Multi-Cinema, Inc. ("AMC"), AMC Entertainment
International, Inc., National Cinema Network, Inc. and AMC Realty, Inc. Unless
the context otherwise requires, references to "AMCE" or the "Company" refer to
AMC Entertainment Inc. and its subsidiaries. All of the Company's U.S.
theatrical exhibition business is conducted through AMC. The Company is
developing theatres outside the U.S. through AMC Entertainment
International, Inc. and its subsidiaries. The Company engages in the on-screen
advertising business through National Cinema Network, Inc.

The Company's predecessor was founded in Kansas City, Missouri in 1920. AMCE
was incorporated under the laws of the state of Delaware on June 13, 1983 and
maintains its principal executive offices at 106 West 14(th) Street, P.O. Box
219615, Kansas City, Missouri 64121-9615. Its telephone number at such address
is (816) 221-4000.

(B) FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS

For information about the Company's operating segments and geographic areas,
see Note 15 to the Consolidated Financial Statements on page 53.

(C) NARRATIVE DESCRIPTION OF BUSINESS

GENERAL

The Company is one of the leading theatrical exhibition companies in the
world, based on revenues. In the fiscal year ended March 30, 2000, the Company
had revenues of $1.17 billion. As of March 30, 2000, the Company operated 211
theatres with a total of 2,903 screens located in 22 states, the District of
Columbia, Portugal, Japan, Spain, China (Hong Kong), France and Canada.
Approximately 55% of the Company's screens are located in Florida, California,
Texas, Arizona and Missouri, and approximately 72% of its U.S. screens are
located in areas among the 20 largest "Designated Market Areas" (television
market areas as defined by Nielsen Media Research).

The Company is an industry leader in the development and operation of
"megaplex" and "multiplex" theatres, primarily in large metropolitan markets.
Megaplexes are theatres with predominantly stadium-style seating (seating with
an elevation between rows to provide unobstructed viewing) and other amenities
to enhance the movie-going experience. Multiplexes are theatres generally
without stadium-style seating. All but three of the Company's megaplexes have 14
or more screens. The Company believes that its strategy of developing megaplexes
has prompted the current theatrical exhibition industry trend in the United
States and Canada toward the development of larger theatre complexes. This trend
has accelerated the obsolescence of many existing movie theatres, including
certain multiplexes, by setting new standards for moviegoers, who have
demonstrated their preference for the more attractive surroundings, wider
variety of films, better customer services and more comfortable seating typical
of megaplexes.

In addition to providing a superior entertainment experience, megaplexes
generally realize economies of scale by serving more patrons from common support
facilities. The Company's megaplexes have consistently ranked among its top
grossing facilities on a per screen basis and many are among the top grossing
theatres in North America.

2

The following table provides information about the Company's North America
megaplexes and multiplexes (those open at the beginning of fiscal 2000) for the
year ended March 30, 2000:



MEGAPLEXES MULTIPLEXES
---------- -----------

Attendance per screen.................................. 66,400 46,200
Average revenue per patron............................. $ 7.57 $ 6.96
Operating cash flow before rent as a percentage of
revenues............................................. 36% 32%


Operating cash flow before rent excludes non-theatre level revenues and
expenses, including all corporate overhead. The Company uses operating cash flow
before rent as an internal statistic to measure theatre level performance.

As of March 30, 2000, 1,782 screens, or 61% of the Company's total screens,
were located in megaplexes and the average number of total screens per theatre
was 13.8. The average number of screens per theatre for the ten largest North
American theatrical exhibition companies (based on number of screens) was 8.1
and the average for all North American theatrical exhibition companies was 6.7,
based on the listing of exhibitors in the National Association of Theatre Owners
1999-00 Encyclopedia of Exhibition, as of June 1, 1999.

The Company continually upgrades its theatre circuit by opening new theatres
(megaplexes), adding new screens to existing theatres and selectively closing or
disposing of unprofitable multiplexes. From April 1996 through March 30, 2000,
the Company opened 77 new theatres with 1,679 screens, representing 57.8% of its
current number of screens, acquired four multiplexes with 29 screens in
strategic film zones, added 44 screens to existing theatres and closed or
disposed of 96 theatres and 568 screens. Of the 1,679 screens opened during the
period, 1,646 screens were located in a total of 73 megaplexes. As of March 30,
2000, the Company had 4 megaplexes under construction with a total of 87
screens.

Revenues for the Company are generated primarily from box office admissions
and theatre concessions sales, which accounted for 65% and 28%, respectively, of
the Company's fiscal 2000 revenues. The balance of the Company's revenues are
generated primarily by its on-screen advertising business, video games located
in theatre lobbies and the rental of theatre auditoriums.

STRATEGY

The Company's strategy is to expand its theatre circuit primarily by
developing new megaplexes in major markets in the United States and select
international markets. New theatres will primarily be megaplexes which will be
equipped with SONY Dynamic Digital Sound-TM- (SDDS-TM-) and AMC
LoveSeat(-Registered Trademark-) style seating (plush, high-backed seats with
retractable armrests). Other amenities may include auditoriums with TORUS-TM-
Compound Curved Screens and High Impact Theatre Systems-TM- (HITS-TM-), which
enhance picture and sound quality, respectively.

The Company's megaplex strategy enhances attendance and concessions sales by
enabling it to exhibit concurrently a variety of motion pictures attractive to
different segments of the movie-going public. Megaplexes also allow the Company
to match a particular motion picture's attendance patterns to the appropriate
auditorium size (ranging from approximately 90 to 450 seats), thereby extending
the run of a motion picture and providing superior theatre economics. The
Company believes that megaplexes enhance its ability to license commercially
popular motion pictures and to economically access prime real estate sites due
to its desirability as an anchor tenant.

The Company believes that opportunities exist for development of megaplexes
in select international markets. The theatrical exhibition business has become
increasingly global, and box office receipts from international markets exceed
those of the North American market. In addition, the production and distribution
of feature films and demand for American motion pictures are increasing in many
countries.

3

Presently, the Company's activities in international markets are directed toward
selected countries in Asia and Western Europe.

The Company believes there are opportunities to increase ancillary revenues.
Where appropriate, it may consider partnerships or joint ventures to share risk
and leverage resources. Such ventures may include interests in projects that
include restaurant, retail, the Internet and other concepts. During fiscal 2000,
the Company formed MOVIETICKETS.COM, INC an Internet ticketing joint venture
with Hollywood.com, Inc., National Amusements, Inc., Famous Players, Marcus
Theatres and CBS Corporation. MOVIETICKETS.COM is an Internet site dedicated to
the sale of movie tickets, with additional content to assist users with their
movie-going plans. MOVIETICKETS.COM was launched May 24, 2000 and services
approximately 5,500 screens. MOVIETICKETS.COM will generate revenues from
advertising and sponsorship of the web site and possibly from ticketing fees in
the future.

The Company believes that the megaplex format has started a new replacement
cycle for the industry. The new format raises moviegoers' expectations by
providing superior viewing lines, comfort, picture and sound quality as well as
increased choices of films and start times. The Company believes that consumers
are increasingly choosing theatres based on the quality of the movie-going
experience rather than simply upon the location of the theatre. As a result, the
Company believes that older, smaller theatres generally have become obsolete.

The Company is evaluating its future plans for many of its multiplexes,
which may include selling theatres, subleasing properties to other exhibitors or
for other uses or closing theatres and terminating the leases. During fiscal
2000, the Company closed or sold 42 multiplexes with 279 screens. Closure or
other dispositions of certain multiplexes may result in expenses related to
payments to landlords to terminate leases. The Company anticipates that it will
close approximately 350 multiplex screens over the next two years. The Company
has improved the profitability of certain of its older theatres by converting
them to "dollar houses" which display second-run movies and charge lower
admission prices (ranging from $1.00 to $1.75). It operated 8 such theatres with
59 screens as of March 30, 2000 (2.0% of the Company's total screens).

THEATRE CIRCUIT

The following table sets forth information concerning additions and
dispositions of theatres and screens during, and the number of theatres and
screens operated as of the end of, the last five fiscal years. The Company adds
and disposes of theatres based on industry conditions and its business strategy.

CHANGES IN THEATRES OPERATED



TOTAL THEATRES
ADDITIONS DISPOSITIONS OPERATED
------------------------- --------------------- ---------------------
NUMBER OF NUMBER OF NUMBER OF NUMBER OF NUMBER OF NUMBER OF
FISCAL YEAR ENDED THEATRES SCREENS THEATRES SCREENS THEATRES SCREENS
- ----------------- ------------- --------- --------- --------- --------- ---------

March 28, 1996.................... 7 150 13 61 226 1,719
April 3, 1997..................... 17 314 15 76 228 1,957
April 2, 1998..................... 24 608 23 123 229 2,442
April 1, 1999..................... 20 380 16 87 233 2,735
March 30, 2000.................... 20 450 42 282 211 2,903
-- ----- --- ---
Total......................... 88 1,902 109 629
== ===== === ===


4

As of March 30, 2000, the Company operated 80 megaplexes having an aggregate
of 1,782 screens, representing 61% of its screens. The following table provides
greater detail with respect to the Company's theatre circuit as of such date.



THEATRES
TOTAL TOTAL --------------------
SCREENS THEATRES MULTIPLEX MEGAPLEX
-------- -------- --------- --------

NORTH AMERICA
Florida.................................................. 494 40 30 10
California............................................... 463 32 20 12
Texas.................................................... 355 21 11 10
Arizona.................................................. 158 10 4 6
Missouri................................................. 135 11 7 4
Georgia.................................................. 132 9 5 4
Michigan................................................. 131 13 11 2
Pennsylvania............................................. 119 13 12 1
Ohio..................................................... 86 5 3 2
Virginia................................................. 79 7 6 1
Colorado................................................. 70 5 2 3
Illinois................................................. 60 2 -- 2
New Jersey............................................... 50 5 4 1
Oklahoma................................................. 50 3 1 2
Kansas................................................... 50 3 1 2
North Carolina........................................... 46 2 -- 2
Maryland................................................. 42 5 5 --
Washington............................................... 34 4 3 1
Nebraska................................................. 24 1 -- 1
Louisiana................................................ 20 3 3 --
District of Columbia..................................... 9 1 1 --
New York................................................. 8 1 1 --
Massachusetts............................................ 4 1 1 --
Canada................................................... 122 5 -- 5
----- --- --- --
Total North America.................................... 2,741 202 131 71
----- --- --- --
INTERNATIONAL
Japan.................................................... 63 4 -- 4
Spain.................................................... 48 2 -- 2
Portugal................................................. 20 1 -- 1
France................................................... 20 1 -- 1
China (Hong Kong)........................................ 11 1 -- 1
----- --- --- --
Total International.................................... 162 9 -- 9
----- --- --- --
Total Theatre Circuit.................................... 2,903 211 131 80
===== === === ==


5

FILM LICENSING

The Company predominantly licenses "first-run" motion pictures from
distributors owned by major film production companies and from independent
distributors that generally acquire licensing rights from smaller production
companies. Films are licensed on a film-by-film and theatre-by-theatre basis.
The Company obtains these licenses either by negotiations directly with, or by
submitting bids to, distributors. Negotiations with distributors are based on
several factors, including theatre location, competition, season of the year and
motion picture content. Rental fees are paid by the Company under a negotiated
license and are made on either a "firm terms" basis, where final terms are
negotiated at the time of licensing, or on a settlement basis, where terms are
adjusted subsequent to the exhibition of a motion picture. Firm term fee
arrangements generally are more favorable to the distributor than settlement fee
arrangements with respect to the percentage of admissions revenue ultimately
paid to license a motion picture.

North American film distributors typically establish geographic film
licensing zones and allocate available film to one theatre within that zone.
Film zones generally encompass a radius of three to five miles in metropolitan
and suburban markets, depending primarily upon population density. In film zones
where the Company is the sole exhibitor, the Company obtains film licenses by
selecting a film from among those offered and negotiating directly with the
distributor. In film zones where there is competition, a distributor will either
require the exhibitors in the zone to bid for a film or will allocate its films
among the exhibitors in the zone. When films are allocated, a distributor will
choose which exhibitor is offered a film and then that exhibitor will negotiate
film rental terms directly with the distributor for the film. While the
allocation of films among exhibitors may differ from film to film, patterns of
film distribution have developed over time when competing theatres are
comparable in size and quality. The Company believes these allocation patterns
may change as the megaplex concept matures.

When motion pictures are licensed through a bidding process, the distributor
decides whether to accept bids on a previewed basis or a non-previewed
("blind-bid") basis, subject to certain state law requirements. In most cases,
the Company licenses its motion pictures on a previewed basis. When a film is
bid on a previewed basis, exhibitors are permitted to review the film before
bidding, whereas they are not permitted to do so when films are licensed on a
non-previewed or "blind-bid" basis. In the past few years, bidding has been used
less frequently by the industry. Presently, the Company licenses substantially
all of its films on a negotiated basis.

Licenses entered into through both negotiated and bid processes typically
state that rental fees shall be based on the higher of a gross receipts formula
or a theatre admissions revenue sharing formula. Under a gross receipts formula,
the distributor receives a specified percentage of box office receipts, with the
percentages declining over the term of the run. Under a theatre admissions
revenue formula, the distributor receives a specified percentage of the excess
of admissions revenues over a negotiated allowance for theatre expenses.
First-run motion picture rental fees are generally the greater of (i) 70% of box
office admissions, gradually declining to as low as 30% over a period of four to
seven weeks, and (ii) a specified percentage (i.e., 90%) of the excess of box
office receipts over a negotiated allowance for theatre expenses (commonly known
as a " 90/10" clause). Second-run motion picture rental fees typically begin at
35% of box office admissions and often decline to 30% after the first week. The
Company may pay non-refundable guarantees of film rentals or make advance
payments of film rentals, or both, in order to obtain a license in a negotiated
or bid process, subject, in some cases, to a per capita minimum license fee.

The Company licenses films through film buyers who enable the Company to
capitalize on local trends and to take into account actions of local competitors
in the Company's negotiation and bidding strategies. Criteria considered in
licensing each motion picture include cast, director, plot, performance of
similar motion pictures, estimated motion picture rental costs and expected
rating by the Motion Picture Association of America. Successful licensing
depends greatly upon knowledge of the tastes of the residents in markets served
by each theatre and insight into the trends in those tastes, as well as the
availability of

6

commercially popular motion pictures. The Company at no time licenses any one
motion picture for all of its theatres.

The Company's business is dependent upon the availability of marketable
motion pictures. There are several distributors which provide a substantial
portion of quality first-run motion pictures to the exhibition industry. These
include Buena Vista Pictures (Disney), Paramount Pictures, Universal Pictures,
Warner Bros. Distribution, New Line Cinema, SONY Pictures Releasing (Columbia
Pictures and Tri-Star Pictures), Miramax and Twentieth Century Fox. According to
information sourced from ACNielson EDI., Inc., these distributors accounted for
91% of industry admissions revenues from January 3, 2000 through June 18, 2000.
From year to year, the Company's revenues attributable to individual
distributors may vary significantly depending upon the commercial success of
each distributor's motion pictures in any given year. In fiscal 2000, no single
distributor accounted for more than 15% of the motion pictures licensed by the
Company or for more than 17% of the Company's box office admissions. Poor
relationships with distributors, poor performance of motion pictures or
disruption in the production of motion pictures by the major studios and/or
independent producers may have an adverse effect upon the business of the
Company.

During the period from January 1, 1990 to December 31, 1999, 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 490 in 1998, according to
the Motion Picture Association of America. If a motion picture still has
substantial potential following its first-run, the Company may license it for a
"sub-run." Although average daily sub-run attendance is often less than average
daily first-run attendance, sub-run film rentals are also generally lower than
first-run film rentals. Sub-runs enable the Company to exhibit a variety of
motion pictures during periods in which there are few new film releases.

CONCESSIONS

Concessions sales are the second largest source of revenue for the Company
after box office admissions. Concessions items include popcorn, soft drinks,
candy and other products. The Company's strategy emphasizes prominent and
appealing concessions counters designed for rapid service and efficiency.

The Company's primary concessions products are various sizes of popcorn,
soft drinks, candy and hot dogs, all of which the Company sells at each of its
theatres. However, different varieties of candy and soft drinks are offered at
theatres based on preferences in that particular geographic region. The Company
has also implemented "combo-meals" for children which offer a pre-selected
assortment of concessions products.

Newer megaplexes are designed to have more concessions service capacity per
seat than multiplexes with concessions stands that have multiple service
stations to make it easier to serve larger numbers of customers. In addition,
they generally feature the "pass-through" concept, which provides a staging area
behind the concessions equipment to prepare concessions products. This permits
the concessionist serving patrons to simply sell concessions items instead of
also preparing them, thus providing more rapid service to customers. Strategic
placement of large concessions stands within theatres heightens their
visibility, aids in reducing the length of concessions lines and improves
traffic flow around the concessions stands.

The Company negotiates prices for its concessions products and supplies
directly with concessions vendors on a national or regional basis to obtain high
volume discounts or bulk rates.

THEATRICAL EXHIBITION INDUSTRY OVERVIEW

Motion picture theatres are the primary initial distribution channel for new
motion picture releases and the Company believes that the theatrical success of
a motion picture is often the most important factor in establishing its value in
the cable television, videocassette/DVD and other ancillary markets. The

7

Company further believes that the emergence of alternative motion picture
distribution channels has not adversely affected attendance at theatres and that
these distribution channels do not provide an experience comparable to that of
viewing a movie in a theatre. The Company believes that alternative motion
picture distribution channels have provided additional revenue sources for
filmed entertainment product which have stimulated production. The Company
believes that the public will continue to recognize the value of viewing a movie
on a large screen with superior audio and visual quality, while enjoying a
variety of concessions and sharing the experience with a larger audience.

Annual domestic theatre attendance has averaged approximately one billion
persons since the early 1960s. Since 1990, attendance for the industry has
increased at an average annual compound growth rate of 3.4%. During 1999,
domestic attendance was 1.47 billion, according to information obtained from the
Motion Picture Association of America. Variances in year-to-year attendance are
primarily related to the overall popularity and supply of motion pictures.

The following table represents information obtained from the Motion Picture
Association of America on attendance, average ticket prices and box office sales
for the most recent five years.



U.S. BOX
ATTENDANCE AVERAGE OFFICE SALES
YEAR (IN MILLIONS) TICKET PRICE (IN MILLIONS)
- ---- ------------- ------------ -------------

1995....................................... 1,263 $4.35 $5,493
1996....................................... 1,339 $4.41 $5,911
1997....................................... 1,388 $4.59 $6,366
1998....................................... 1,481 $4.69 $6,949
1999....................................... 1,465 $5.08 $7,448


COMPETITION

The Company competes against both local and national exhibitors, some of
which may have substantially greater financial resources. There are over 500
companies competing in the North American theatrical exhibition industry,
approximately 290 of which operate four or more screens. Industry participants
vary substantially in size, from small independent operators to large
international chains. In fiscal 1999, four of the industry's largest companies
merged, and there may be additional mergers in the future. According to the
Motion Picture Association of America, the number of indoor screens in the
United States was 36,448 at the end of 1999. Based on the June 1, 1999 listing
of exhibitors in the National Association of Theatre Owners 1999-00 Encyclopedia
of Exhibition, the Company believes that the ten largest exhibitors (in terms of
number of screens) operated approximately 56% of such number of screens, with
one exhibitor operating 11.5% of the total screens. Information concerning the
ten largest exhibitors does not reflect changes in screens operated by them
between the date of the National Association of Theatre Owners information and
the date of the Motion Picture Association of America information.

The Company's theatres are subject to varying degrees of competition in the
geographic areas in which they operate. Competitors may be national circuits,
regional circuits or smaller independent exhibitors. Competition is often
intense with respect to the following factors.

- ATTRACTING PATRONS. The competition for patrons is dependent upon factors
such as the availability of popular motion pictures, the location and
number of theatres and screens in a market, the comfort and quality of the
theatres and pricing. Many of the Company's competitors have sought to
increase the number of screens that they operate. Competitors have built
or may be planning to build theatres in certain areas where the Company
operates, which could result in excess capacity and increased competition
for patrons.

8

- LICENSING MOTION PICTURES. The Company believes that the principal
competitive factors with respect to film licensing include licensing
terms, seating capacity and the location and condition of an exhibitor's
theatres.

- FINDING NEW THEATRES SITES. The Company must compete with exhibitors and
others in its efforts to locate and acquire attractive sites for the
Company's theatres.

The Company expects that in the long term the addition of new megaplexes
will help it obtain more favorable allocations of film product and other
licensing terms from distributors than its competitors. However, competition
from theatres that have established relationships with distributors initially
may negatively impact the earnings of new megaplexes. As with other exhibitors,
the Company's smaller multiplexes are subject to deteriorating financial
performance and to being rendered obsolete through the introduction of new,
competing megaplexes by the Company and other exhibitors.

The Company also faces similar competition in the international markets in
which it operates.

The theatrical exhibition industry faces competition from other distribution
channels for filmed entertainment, such as cable television, pay per view and
home video systems, as well as from all other forms of entertainment.

REGULATORY ENVIRONMENT

The distribution of motion pictures is in large part regulated by federal
and state antitrust laws and has been the subject of numerous antitrust cases.
The consent decrees resulting from one of those cases, to which the Company was
not a party, have a material impact on the industry and the Company. Those
consent decrees bind certain major motion picture distributors and require the
motion pictures of such distributors to be offered and licensed to exhibitors,
including the Company, on a film-by-film and theatre-by-theatre basis.
Consequently, the Company cannot assure itself of a supply of motion pictures by
entering into long-term arrangements with major distributors, but must compete
for its licenses on a film-by-film and theatre-by-theatre basis.

Bids for new motion picture releases are made, at the discretion of the
distributor (subject to state law requirements), either on a previewed basis or
blind-bid basis. Certain states have enacted laws regulating the practice of
blind-bidding. Management believes that it may be able to make better business
decisions with respect to film licensing if it is able to preview motion
pictures prior to bidding for them, and accordingly believes that it may be less
able to capitalize on its expertise in those states which do not regulate
blind-bidding.

The Company's theatres must comply with Title III of the Americans with
Disabilities Act of 1990 (the "ADA"). Compliance with the ADA requires that
public accommodations "reasonably accommodate" individuals with disabilities and
that new construction or alterations made to "commercial facilities" conform to
accessibility guidelines unless "structurally impracticable" for new
construction or technically infeasible for alterations. Non-compliance with the
ADA could result in the imposition of injunctive relief, fines, awards of
damages to private litigants or additional capital expenditures to remedy such
noncompliance. Although the Company believes that its theatres are in
substantial compliance with the ADA, in January 1999, the Civil Rights Division
of the Department of Justice filed suit against the Company alleging that
certain of its megaplex theatres with stadium-style seating violate the ADA. See
Item 3. Legal Proceedings on page 11.

As the Company expands internationally, it becomes subject to regulation by
foreign governments. There are significant differences between the theatrical
exhibition industry regulatory environment in the United States and in
international markets. Regulatory barriers affecting such matters as the size of
theatres, the issuance of licenses and the ownership of land may restrict market
entry. Vertical integration of production and exhibition companies in
international markets may also have an adverse effect on the Company's ability
to license motion pictures for international exhibition. Quota systems used by
some

9

countries to protect their domestic film industry may adversely affect revenues
from theatres that the Company develops in such markets. Such differences in
industry structure and regulatory and trade practices may adversely affect the
Company's ability to expand internationally or to operate at a profit following
such expansion.

SEASONALITY

As with other exhibitors, the Company's business is seasonal in nature, with
the highest attendance and revenues generally occurring during the summer months
and holiday seasons. See Statements of Operations by Quarter (Unaudited) on page
57.

EMPLOYEES

As of March 30, 2000, the Company had approximately 2,100 full-time and
10,700 part-time employees. Approximately 4% of the part-time employees were
minors paid the minimum wage.

Fewer than one percent of the Company's employees, consisting primarily of
motion picture projectionists, are represented by a union, the International
Alliance of Theatrical Stagehand Employees and Motion Picture Machine Operators.
The Company believes that its relationship with this union is satisfactory.

As an employer covered by the ADA, the Company must make reasonable
accommodations to the limitations of employees and qualified applicants with
disabilities, provided that such reasonable accommodations do not pose an undue
hardship on the operation of the Company's business. In addition, many of the
Company's employees are covered by various government employment regulations,
including minimum wage, overtime and working conditions regulations.

ITEM 2. PROPERTIES.

Of the Company's 211 theatres and 2,903 screens operated as of March 30,
2000, American Multi-Cinema, Inc. was the owner or lessee of 194 theatres with
2,575 screens, and AMC Entertainment International, Inc. and its subsidiaries
leased 14 theatres with 284 screens. American Multi-Cinema, Inc. also operated
three theatres with 44 screens owned by third parties.

Of the 211 theatres operated by the Company as of March 30, 2000, 10
theatres with 156 screens were owned, 10 theatres with 97 screens were leased
pursuant to ground leases, 188 theatres with 2,606 screens were leased pursuant
to building leases and three theatres with 44 screens were managed. The
Company's leases generally have initial terms ranging from 13 to 25 years, with
options to extend the lease for up to 20 additional years. The leases typically
require escalating minimum annual rent payments and additional rent payments
based on a percentage of the leased theatre's revenue above a base amount and
require the Company to pay for property taxes, maintenance, insurance and
certain other property-related expenses.

In some cases, the Company's rights as tenant are subject and subordinate to
the mortgage loans of lenders to its lessors, so that if a mortgage were to be
foreclosed, the Company could lose its lease. Historically, this has never
occurred.

The majority of the concessions, projection, seating and other equipment
required for each of the Company's theatres is owned.

The Company leases its corporate headquarters, located in Kansas City,
Missouri and a film licensing office is leased in Woodland Hills, California
(Los Angeles).

10

ITEM 3. LEGAL PROCEEDINGS.

On January 29, 1999, the Department of Justice ("DOJ") filed suit against
the Company in the United States District Court for the Central District of
California, United States of America v. AMC Entertainment Inc. and American
Multi-Cinema, Inc. The complaint alleges that the Company has designed,
constructed and operated two of its motion picture theatres in the Los Angeles
area and unidentified theatres elsewhere that have stadium-style seating in
violation of DOJ regulations implementing Title III of the ADA and related
"Standards for Accessible Design" (the "Standards"). The complaint alleges
various types of non-compliance with the DOJ's Standards, but relates primarily
to issues relating to lines of sight. The DOJ seeks declaratory and injunctive
relief regarding existing and future theatres with stadium-style seating,
compensatory damages and a civil penalty.

The current DOJ position appears to be that theatres must provide wheelchair
seating locations and transfer seats with viewing angles to the screen that are
at the median or better, counting all seats in the auditorium. Heretofore, the
Company has attempted to conform to the evolving standards imposed by the DOJ
and believes its theatres are in substantial compliance with the ADA. However,
the Company believes that the DOJ's current position has no basis in the ADA or
related regulations and is an attempt to amend the ADA regulations without
complying with the Administrative Procedures Act. The Company has filed an
answer denying the allegations and asserting that the DOJ is engaging in
unlawful rulemaking. A similar claim has been made by another exhibitor,
Cinemark USA, Inc. v. United States Department of Justice, United States
District Court for the Northern District of Texas, Case No. 399CV0183-L.
Although no assurances can be given, based on existing precedent involving
stadiums or stadium seating, the Company believes that an adverse decision in
this matter is not likely to have a material adverse effect on its financial
condition, liquidity or results of operations. However, there have been only a
few cases involving stadiums or stadium seating.

On March 4, 1999, William P. Storrs filed a purported class action lawsuit
in the United States District Court for the Southern District of Texas, William
P. Storrs v. AMC Entertainment Inc., Case No. H-99-061, alleging that sight
lines at a Houston area megaplex violate the Americans with Disabilities Act and
Chapter 121 of the Texas Human Resources Code. The suit seeks injunctive,
declaratory and monetary relief. The Court has stayed the suit pending
resolution of the Department of Justice litigation filed in California referred
to above.

On November 30, 1998, Cyndi Soto filed suit in the United States District
Court for the Central District of California, Cyndi Soto v. American
Multi-Cinema, Inc. and JANSS/TYS Long Beach Associates, CV989547SLRNBX, alleging
that one of the Company's theatres violated the ADA and California law by
failing to remove certain barriers to access. The suit seeks an unspecified
amount of general, special and punitive damages under California law and an
injunction requiring the Company to remove the alleged barriers.

On July 27, 1998, in the United States District Court for the Northern
District of California, Drexler Technology Corporation filed actions against
each of Sony Corporation and its affiliated companies and Dolby
Laboratories, Inc., and has included as defendants various motion picture
distributors and exhibitors, including AMC, Drexler Technology Corp. v. Sony
Corp. et al, C98-02936, and Drexler Technology Corp. v. Dolby Labs. et al,
C98-02935. These actions allege infringement of two patents relating to optical
data storage and retrieval systems, which are allegedly infringed by the
encoding of digital sound on motion picture films. These infringement
allegations are based on the production, distribution and exhibition of film
with Sony Dynamic Digital Sound (SDDS) or Dolby Digital technology. AMC
currently utilizes SDDS systems with respect to 2,300 of its screens and owns
159 portable systems employing Dolby Digital technology. Plaintiff seeks an
injunction against continued use of this technology and also seeks damages. AMC
has filed counter claims alleging that plaintiff's patents are invalid. The
court has ordered that the issues of liability and damages be tried separately.

11

AMC is the beneficiary of indemnification arrangements with respect to these
actions. Pursuant to AMC's contractual arrangements with Sony Cinema Products
Corporation ("Sony Cinema"), a subsidiary of Sony Corporation of America, Sony
Cinema is obligated to indemnify, defend and hold harmless AMC from and against
any and all liabilities, damages, losses, costs and expenses (including
attorneys' fees) suffered or incurred by AMC in connection with any third party
claim for alleged infringement of any patent, trademark or similar right
relating to the SDDS systems. The agreement with Sony Cinema provides that Sony
Cinema at its expense and option, shall (i) settle or defend against such a
claim, (ii) procure for AMC the right to use the SDDS systems in a manner that
will cause them to perform as originally intended under the agreement between
AMC and Sony Cinema; (iii) replace or modify the SDDS systems to avoid
infringement; or (iv) remove the SDDS systems from AMC's facilities (at such
time and in such manner as to not disrupt AMC's business operations) and refund
to AMC the purchase price less depreciation. Dolby Laboratories has agreed
(i) to defend, indemnify and hold AMC harmless from any losses arising out of
the Drexler v. Dolby Labs action and (ii) in the event the Dolby Digital
technology is found to infringe on one or more of the Drexler patents, to
procure for AMC at Dolby's expense the right to make, use and sell the Dolby
Digital technology or to modify it so that it is non-infringing. As a result,
although no assurance can be given, the Company believes that these actions will
not have a material adverse effect on the Company's financial condition,
liquidity or results of operations.

Two cases, Nonoy Mendoza, et al. v. AMC Entertainment Inc., American
Multi-Cinema, Inc., Neil Katcher, Michael Johannes, Susan Navarro, Nancy Garcia
and Matt Quinn filed on July 1, 1999 in the Probate Court of Dallas County,
Texas ("Mendoza"), and Mabayoje Erinkitola, et al. v. AMC Entertainment Inc.,
American Multi-Cinema, Inc., Neil Katcher, Michael Johannes, Susan Navarro,
Nancy Garcia and Matt Quinn filed on July 15, 1999 in the Probate Court of
Dallas County, Texas, arise out of the murders of two patrons, Roxanne Mendoza
and Foluke Erinkitola, in the parking lot of the Grand Theatre in Dallas, Texas
on August 13, 1997. The defendants are being sued on various theories related to
allegations of improper or inadequate security. Each complaint seeks the
recovery of damages for wrongful death, survival damages and exemplary damages,
although neither complaint states specific monetary demands. A plaintiff in the
Mendoza lawsuit also seeks abatement of the theatre as a public nuisance. The
Company has answered both lawsuits and has removed both cases to the United
States District Court of Texas, Dallas Division, as of August 13, 1999, where
the two cases have been combined. Discovery in the combined case has been
completed, but the court has not yet set a trial date.

On December 16, 1999, Alberta Rose Investments, Inc. filed suit in Court of
Queen's Bench of Alberta (Canada), Judicial District of Edmonton, Alberta Rose
Investments, Inc. v. AMC Theatres of Canada, Inc. and AMC Entertainment Inc.,
Action Number: 9903-23494, alleging a breach of a lease agreement concerning a
proposed theatre in Edmonton, Alberta. The suit originally sought damages in
excess of $CAN25 million, but the plaintiff voluntarily amended its claim of
damages to approximately $CAN4.5 million (approximately $US3.1 million). The
Company has answered the plaintiff's claim denying its allegations, asserting
numerous defenses and seeking dismissal with costs.

The Company is party to various legal proceedings in the ordinary course of
business, none of which is expected to have a material adverse effect on the
Company.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

There has been no submission of matters to a vote of security holders during
the thirteen weeks ended March 30, 2000.

12

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

AMC Entertainment Inc. Common Stock is traded on the American and Pacific
Stock Exchanges under the symbol AEN. There is no established public trading
market for Class B Stock.

The table below sets forth, for the periods indicated, the high and low
closing prices of the Common Stock as reported on the American Stock Exchange
composite tape.



FISCAL 2000 FISCAL 1999
----------------------- -----------------------
HIGH LOW HIGH LOW
-------- -------- -------- --------

First Quarter............................... $19 1/4 $14 $23 3/4 $16 13/16
Second Quarter.............................. 19 12 3/16 19 7/8 11 1/4
Third Quarter............................... 13 15/16 8 9/16 21 1/16 10 3/4
Fourth Quarter.............................. 11 5/16 5 20 3/16 13 9/16


STOCK OWNERSHIP

On May 12, 2000, there were 497 stockholders of record of Common Stock and
one stockholder of record (the 1992 Durwood, Inc. Voting Trust dated
December 12, 1992) of Class B Stock.

The Company's Certificate of Incorporation provides that holders of Common
Stock and Class B Stock shall receive, pro rata per share, such cash dividends
as may be declared from time to time by the Board of Directors. Certain
provisions of the Indentures respecting the Company's 9 1/2% Senior Subordinated
Notes due 2009, the Company's 9 1/2% Senior Subordinated Notes due 2011 and the
Company's $425 million revolving credit facility (the "Credit Facility")
restrict the Company's ability to declare or pay dividends on and purchase
capital stock. Presently, under these provisions of the Notes due 2009 and the
Notes due 2011, the Company is prohibited from paying dividends or purchasing
capital stock. Except for a $1.14 per share dividend declared in connection with
a recapitalization that occurred in August 1992, the Company has not declared a
dividend on shares of Common Stock or Class B Stock since fiscal 1989. Any
payment of cash dividends on Common Stock in the future will be at the
discretion of the Board and will depend upon such factors as compliance with
debt covenants, earnings levels, capital requirements, the Company's financial
condition and other factors deemed relevant by the Board. Currently, the Company
does not contemplate declaring or paying any dividends in respect of its Common
Stock.

13

ITEM 6. SELECTED FINANCIAL DATA.



YEARS ENDED(1)(6)
---------------------------------------------------------------------
MARCH 30, APRIL 1, APRIL 2, APRIL 3, MARCH 28,
(IN THOUSANDS, EXCEPT PER SHARE AND OPERATING DATA) 2000 1999 1998 1997 1996
- --------------------------------------------------- ---------- ---------- -------- -------- ---------

STATEMENT OF OPERATIONS DATA:
Total revenues................................. $1,166,942 $1,023,456 $850,750 $751,664 $657,526
Film exhibition costs.......................... 417,736 358,437 299,926 258,809 227,780
Concession costs............................... 50,726 48,687 42,062 36,748 30,417
Theatre operating expense...................... 290,072 260,145 219,593 189,908 158,833
Rent........................................... 198,762 165,370 106,383 80,061 64,813
Other.......................................... 44,619 30,899 25,782 18,354 13,805
General and administrative..................... 47,407 52,321 47,860 52,422 48,750
Preopening expense............................. 6,795 2,265 2,243 2,414 573
Theatre closure expense(4)..................... 16,661 2,801 -- -- --
Restructuring charge........................... 12,000 -- -- -- --
Depreciation and amortization.................. 95,974 89,221 70,117 52,572 42,087
Impairment of long-lived assets................ 5,897 4,935 46,998 7,231 1,799
(Gain) loss on disposition of assets........... (944) (2,369) (3,704) 84 222
---------- ---------- -------- -------- --------
Total costs and expenses....................... 1,185,705 1,012,712 857,260 698,603 589,079
Operating income (loss)........................ (18,763) 10,744 (6,510) 53,061 68,447
Interest expense............................... 62,703 38,628 35,679 22,022 28,828
Investment income.............................. 219 1,368 1,090 856 7,052
---------- ---------- -------- -------- --------
Earnings (loss) before income taxes and cumulative
effect of an accounting change and extraordinary
item......................................... (81,247) (26,516) (41,099) 31,895 46,671
Income tax provision........................... (31,900) (10,500) (16,600) 12,900 19,300
---------- ---------- -------- -------- --------
Earnings (loss) before cumulative effect of an
accounting change and extraordinary item..... (49,347) (16,016) (24,499) 18,995 27,371
Cumulative effect of an accounting change(2)... (5,840) -- -- -- --
Extraordinary item(3).......................... -- -- -- -- (19,350)
---------- ---------- -------- -------- --------
Net earnings (loss)............................ $ (55,187) $ (16,016) $(24,499) $ 18,995 $ 8,021
========== ========== ======== ======== ========
Preferred dividends............................ -- -- 4,846 5,907 7,000
---------- ---------- -------- -------- --------
Net earnings (loss) for common shares.......... $ (55,187) $ (16,016) $(29,345) $ 13,088 $ 1,021
========== ========== ======== ======== ========
Net earnings (loss) per share before cumulative
effect of an accounting change and extraordinary
item:
Basic........................................ $ (2.10) $ (.69) $ (1.59) $ .75 $ 1.23
Diluted...................................... (2.10) (.69) (1.59) .74 1.15
Net earnings (loss) per share:
Basic........................................ $ (2.35)(2) $ (.69) $ (1.59) $ .75 $ .06(3)
Diluted...................................... (2.35) (.69) (1.59) .74 .34
Average shares outstanding:
Basic........................................ 23,469 23,378 18,477 17,489 16,513
Diluted...................................... 23,469 23,378 18,477 17,784 23,741

BALANCE SHEET DATA (AT PERIOD END):
Cash, equivalents and investments............ $ 119,305 $ 13,239 $ 9,881 $ 24,715 $ 10,795
Total assets................................. 1,188,805 975,730 795,780 719,055 483,458
Corporate borrowings......................... 754,105 561,045 348,990 315,072 126,150
Capital and financing lease obligations...... 68,506 48,575 54,622 58,652 62,022
Stockholders' equity......................... 58,669 115,465 139,455 170,012 158,918


14




YEARS ENDED(1)(6)
---------------------------------------------------------------------
MARCH 30, APRIL 1, APRIL 2, APRIL 3, MARCH 28,
(IN THOUSANDS, EXCEPT PER SHARE AND OPERATING DATA) 2000 1999 1998 1997 1996
- --------------------------------------------------- ---------- ---------- -------- -------- ---------

OTHER FINANCIAL DATA:
Capital expenditures......................... $ 274,932 $ 260,813 $389,217 $253,380 $120,796
Proceeds from sale/leasebacks and financing lease
obligations................................ 98,313 -- 283,800 -- --
Adjusted EBITDA(5)........................... 117,620 107,597 109,144 115,362 113,128

OPERATING DATA (AT PERIOD END):
Number of megaplexes operated................ 80 60 44 19 5
Number of megaplex screens operated.......... 1,782 1,335 987 379 98
Number of multiplexes operated............... 131 173 185 209 221
Number of multiplex screens operated......... 1,121 1,400 1,455 1,578 1,621
Screens per theatre circuit wide............. 13.8 11.7 10.7 8.6 7.6


- --------------------------

(1) Fiscal 1997 consists of 53 weeks. All other fiscal years have 52 weeks.

(2) Fiscal 2000 includes a $5,840 cumulative effect of an accounting change (net
of income tax benefit of $4,095) which reduced earnings per share by $.25
per common share.

(3) Fiscal 1996 includes a $19,350 extraordinary loss on early extinguishment of
debt (net of income tax benefit of $13,400) equal to $1.17 per common share.

(4) Theatre closure expense relates to actual and estimated lease exit costs on
multiplex theatres.

(5) Represents net earnings (loss) plus interest, income taxes, depreciation and
amortization and adjusted for restructuring charge, impairment losses,
preopening expense, theatre closure expense, gain (loss) on disposition of
assets, equity in earnings of unconsolidated affiliates and extraordinary
item. Management of the Company has included Adjusted EBITDA because it
believes that Adjusted EBITDA provides lenders and stockholders additional
information for estimating the Company's value and evaluating its ability to
service debt. Management of the Company believes that Adjusted EBITDA is a
financial measure commonly used in the Company's industry and should not be
construed as an alternative to operating income (as determined in accordance
with GAAP). Adjusted EBITDA as determined by the Company may not be
comparable to EBITDA as reported by other companies. In addition, Adjusted
EBITDA is not intended to represent cash flow (as determined in accordance
with GAAP) and does not represent the measure of cash available for
discretionary uses.

(6) There were no cash dividends declared on Common Stock during the last five
fiscal years.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.

This report contains certain "forward-looking statements" intended to
qualify for the safe harbor from liability established by the Private Securities
Litigation Reform Act of 1995. These forward-looking statements generally can be
identified by use of statements that include words or phrases such as the
Company or its management "believes," "expects," "anticipates," "intends,"
"plans," "foresees" or other words or phrases of similar import. Similarly,
statements that describe the Company's objectives, plans or goals also are
forward-looking statements. All such forward-looking statements are subject to
certain risks and uncertainties that could cause actual results to differ
materially from those contemplated by the relevant forward-looking statement.
Important factors that could cause actual results to differ materially from the
expectations of the Company include, among others: (i) the Company's ability to
enter into various financing programs; (ii) the performance of films licensed by
the Company; (iii) competition; (iv) construction delays; (v) the ability to
open or close theatres and screens as currently planned; (vi) general economic
conditions, including adverse changes in inflation and prevailing interest
rates; (vii) demographic changes; (viii) increases in the demand for real
estate; (ix) changes in real estate, zoning and tax laws; and (x) unforeseen
changes in operating requirements. Readers are urged to consider these factors
carefully in evaluating the forward-looking statements. The Company undertakes
no obligation to publicly update such forward-looking statements to reflect
subsequent events or circumstances.

15

OPERATING RESULTS
YEARS (52 WEEKS) ENDED MARCH 30, 2000 AND APRIL 1, 1999



52 WEEKS ENDED 52 WEEKS ENDED
(DOLLARS IN THOUSANDS) MARCH 30, 2000 APRIL 1, 1999 % CHANGE
- ---------------------- -------------- -------------- ---------

REVENUES
North America theatrical exhibition
Admissions.......................................... $ 714,340 $ 630,242 13.3%
Concessions......................................... 319,725 300,374 6.4
Other theatre....................................... 28,709 20,841 37.8%
---------- ---------- -----
1,062,774 951,457 11.7%
International theatrical exhibition
Admissions.......................................... 48,743 31,919 52.7
Concessions......................................... 10,130 6,973 45.3
Other theatre....................................... 1,304 925 41.0
---------- ---------- -----
60,177 39,817 51.1
On-screen advertising and other....................... 43,991 32,182 36.7
---------- ---------- -----
Total revenues.................................... $1,166,942 $1,023,456 14.0%
========== ========== =====
COST OF OPERATIONS
North America theatrical exhibition
Film exhibition costs............................... $ 392,414 $ 341,523 14.9%
Concession costs.................................... 47,218 46,434 1.7
Theatre operating expense........................... 272,886 249,916 9.2
Rent................................................ 183,214 157,282 16.5
Preopening expense.................................. 5,392 1,783 *
Theatre closure expense............................. 16,661 2,801 *
---------- ---------- -----
917,785 799,739 14.8

International
Film exhibition costs............................... 25,322 16,914 49.7
Concession costs.................................... 3,508 2,253 55.7
Theatre operating................................... 17,186 10,229 68.0
Rent................................................ 15,548 8,088 92.2
Preopening expense.................................. 1,403 482 *
---------- ---------- -----
62,967 37,966 65.9
On-screen advertising and other....................... 44,619 30,899 44.4
General and administrative............................ 47,407 52,321 (9.4)
Restructuring charge.................................. 12,000 -- --
Depreciation and amortization......................... 95,974 89,221 7.6
Impairment of long-lived assets....................... 5,897 4,935 19.5
Gain on disposition of assets......................... (944) (2,369) (60.2)
---------- ---------- -----
Total costs and expenses.......................... $1,185,705 $1,012,712 17.1%
========== ========== =====


- ------------------------

* Percentage change in excess of 100%.

REVENUES. Total revenues increased 14.0% during the year (52 weeks) ended
March 30, 2000 compared to the year (52 weeks) ended April 1, 1999.

16

North America theatrical exhibition revenues increased 11.7% from the prior
year. Admissions revenues increased 13.3% due to a 13.4% increase in average
ticket price. The increase in average ticket prices was due to a strategic
initiative implemented by the Company to selectively increase ticket and
concession prices and to the growing number of megaplexes (theatres with
predominantly stadium style seating) in the Company's theatre circuit, which
yield higher average ticket prices than multiplexes (theatres generally without
stadium-style seating). Attendance at multiplexes decreased due to the closure
or sale of 42 multiplexes with 279 screens since April 1, 1999 and a 14.6%
decrease in attendance at comparable multiplexes (theatres opened before fiscal
1999). The decline in attendance at comparable multiplexes was related to
certain multiplexes experiencing competition from new megaplexes operated by the
Company and other competing theatre circuits, a trend the Company generally
anticipates will continue. Attendance at megaplexes increased as a result of the
addition of 15 new megaplexes with 342 screens since April 1, 1999. Attendance
at comparable megaplexes decreased 1.3%, due to a decline in the popularity of
film product during the year (52 weeks) ended March 30, 2000 as compared with
the prior year. Concessions revenues increased 6.4% due to a 6.5% increase in
average concessions per patron. The increase in average concessions per patron
was attributable to selective price increases and the increasing number of
megaplexes in the Company's theatre circuit, where concession spending per
patron is higher than in multiplexes.

International theatrical exhibition revenues increased 51.1% from the prior
year. Admissions revenues increased 52.7% due to an increase in attendance from
the addition of 4 new megaplexes with a total of 78 screens since April 1, 1999.
Attendance at comparable megaplexes decreased 11.4% due to a decline in the
popularity of film product in Japan in the current year as compared with the
prior year and competition from new theatrical exhibitors in Japan. Concession
revenues increased 45.3% due primarily to the increase in total attendance.
International revenues were positively impacted by a weaker U.S. dollar,
although this did not contribute materially to consolidated net loss.

On-screen advertising and other revenues increased 36.7% from the prior year
due to increased sales of rolling stock advertising at the Company's on-screen
advertising business.

COSTS AND EXPENSES. Total costs and expenses increased 17.1% during the
year (52 weeks) ended March 30, 2000 compared to the year (52 weeks) ended
April 1, 1999.

North America theatrical exhibition costs and expenses increased 14.8% from
the prior year. Film exhibition costs increased 14.9% due to higher admissions
revenues and an increase in the percentage of admissions paid to film
distributors. As a percentage of admissions revenues, film exhibition costs were
54.9% in the current year as compared with 54.2% in the prior year. The increase
in film exhibition costs as a percentage of admissions revenues was primarily
due to STAR WARS EPISODE I: THE PHANTOM MENACE, a film whose audience appeal led
to higher than normal film rental terms. Concession costs increased 1.7% due to
the increase in concessions revenues offset by a decrease in concession costs as
a percentage of concessions revenues. As a percentage of concessions revenues,
concession costs were 14.8% in the current year compared with 15.5% in the prior
year, due to the concession price increases. As a percentage of revenues,
theatre operating expense was 25.7% in the current year as compared to 26.3% in
the prior year. Rent expense increased 16.5% due to the higher number of screens
in operation and the growing number of megaplexes in the Company's theatre
circuit, which generally have higher rent per screen than multiplexes. During
the year, the Company incurred $16,661,000 of theatre closure expenses primarily
comprised of expected payments to landlords to terminate leases related to the
closure of 35 multiplexes with 242 screens. The Company closed these theatres as
a result of negative operating cash flows which were not expected to improve in
the future. The Company anticipates that it will incur approximately $8 to
10 million of costs related to the closure of up to 175 screens in fiscal 2001.
The Company anticipates similar screen closures and expense in fiscal 2002.

International theatrical exhibition costs and expenses increased 65.9% from
the prior year. Film exhibition costs increased 49.7% primarily due to higher
admission revenues, offset by a decrease in the

17

percentage of admissions paid to film distributors. Rent expense increased 92.2%
and theatre operating expense increased 68.0% from the prior year, due to the
increased number of screens in operation. International theatrical exhibition
costs and expenses were negatively impacted by a weaker U.S. dollar, although
this did not contribute materially to consolidated net loss.

On-screen advertising and other costs and expenses increased 44.4% due
primarily to an increase in costs associated with the increased sales of rolling
stock advertising at the Company's on-screen advertising business. The Company
anticipates that these costs as a percentage of the related advertising revenues
will decline as sales of rolling stock advertising continue to grow.

General and administrative expenses decreased 9.4% from the prior year due
to cost savings associated with the consolidation of the Company's divisional
operations discussed below. The Company also incurred $2.5 million of
non-recurring relocation costs related to this consolidation. As a percentage of
total revenues, recurring general and administrative expenses declined from 5.1%
in the prior year to 3.8% in the current year.

On September 30, 1999, the Company recorded a restructuring charge of
$12,000,000 ($7,200,000 after tax or $.31 per share) related to the
consolidation of its three U.S. divisional operations offices into its corporate
headquarters and a decision to discontinue direct involvement with
pre-development activities associated with certain retail/entertainment projects
conducted through its wholly-owned subsidiary, Centertainment, Inc. Included in
this total are severance and other employee related costs of $5,300,000, lease
termination costs of $700,000 and the write-off of capitalized pre-development
costs of $6,000,000. As a result of the restructuring, the Company realized
general and administrative expense reductions of approximately $5.5 million in
fiscal 2000 and anticipates it will realize approximately $15 million of
incremental savings in fiscal 2001. Unforeseen changes in operating requirements
and other factors referred to in the first paragraph of this Item 7 could cause
actual general and administrative expense reductions to differ materially from
anticipated reductions.

Depreciation and amortization increased 7.6%, or $6,753,000, during the year
(52 weeks) ended March 30, 2000. This increase was caused by an increase in
depreciation of $12,930,000 related to the Company's new theatres, which was
partially offset by a $8,728,000 decrease in amortization due to a change in
accounting for start-up activities.

During the fourth quarter of the current year, the Company recognized a
non-cash impairment loss of $5,897,000 ($3,479,000 after tax, or $.15 per share)
on 13 multiplexes with 111 screens in 6 states (primarily Florida, Michigan and
Louisiana) including a loss of $690,000 associated with one theatre that was
included in impairment losses recognized in previous periods. The estimated
future cash flows of these theatres, undiscounted and without interest charges,
were less than the carrying value of the theatre assets. The Company is
evaluating its future plans for many of its multiplexes, which may include
selling theatres, subleasing properties to other exhibitors or for other uses,
or closing theatres and terminating the leases. Closure or other dispositions of
certain multiplexes will result in expenses which are primarily comprised of
expected payments to landlords to terminate leases.

During the fourth quarter of fiscal 1999, the Company recognized a non-cash
impairment loss of $4,935,000 ($2,912,000 after tax, or $.13 per share) on 24
multiplexes with 186 screens in 11 states (primarily Georgia, Ohio, Texas and
Colorado) including a loss of $937,000 associated with 7 theatres that were
included in impairment losses recognized in previous periods.

Gain on disposition of assets decreased from a gain of $2,369,000 in the
prior year to a gain of $944,000 during the current year. Current year results
include a gain on the sale of real estate held for investment and gains related
to the sales of the real estate assets associated with two multiplex theatres.
Prior year results include gains related to the sales of real estate assets
associated with three multiplex theatres.

18

INTEREST EXPENSE. Interest expense increased 62.3% during the year (52
weeks) ended March 30, 2000 compared to the prior year, due to an increase in
average outstanding borrowings and interest rates. The increase in average
interest rates was primarily due to the issuance of $225,000,000 of 9 1/2%
Senior Subordinated Notes due 2011 on January 27, 1999.

INCOME TAX PROVISION. The provision for income taxes decreased to a benefit
of $31,900,000 during the current year from a benefit of $10,500,000 in the
prior year. The effective tax rate was 39.3% for the current year compared to
39.6% for the previous year.

NET EARNINGS. Net earnings decreased during the year (52 weeks) ended
March 30, 2000 to a loss of $55,187,000 from a loss of $16,016,000 in the prior
year. Net loss per share was $2.35 compared to a loss of $.69 in the prior year.
Current year results include the cumulative effect of an accounting change of
$5,840,000 (net of income tax benefit of $4,095,000) and a restructuring charge
of $12,000,000 ($7,200,000 net of income tax benefit of $4,800,000), which
reduced earnings per share by $.25 and $.31, respectively, for the year (52
weeks) ended March 30, 2000.

19

OPERATING RESULTS
YEARS (52 WEEKS) ENDED APRIL 1, 1999 AND APRIL 2, 1998



52 WEEKS ENDED 52 WEEKS ENDED
(DOLLARS IN THOUSANDS) APRIL 1, 1999 APRIL 2, 1998 % CHANGE
- ---------------------- -------------- -------------- --------

REVENUES
North America theatrical exhibition
Admissions.............................................. $ 630,242 $530,653 18.8%
Concessions............................................. 300,374 251,025 19.7
Other theatre........................................... 20,841 16,052 29.8
---------- -------- -----
951,457 797,730 19.3
International theatrical exhibition
Admissions.............................................. 31,919 22,918 39.3
Concessions............................................. 6,973 4,992 39.7
Other theatre........................................... 925 59 *
---------- -------- -----
39,817 27,969 42.4
On-screen advertising and other........................... 32,182 25,051 28.5
---------- -------- -----
Total revenues........................................ $1,023,456 850,750 20.3%
========== ======== =====
COST OF OPERATIONS
North America theatrical exhibition
Film exhibition costs................................... $ 341,523 287,516 18.8%
Concession costs........................................ 46,434 40,109 15.8
Theatre operating expense............................... 249,916 213,413 17.1
Rent.................................................... 157,282 100,928 55.8
Preopening expense...................................... 1,783 2,243 (20.5)
Theatre closure expense................................. 2,801 -- --
---------- -------- -----
799,739 644,209 24.1
International
Film exhibition costs................................... 16,914 12,410 36.3
Concession costs........................................ 2,253 1,953 15.4
Theatre operating....................................... 10,229 6,180 65.5
Rent.................................................... 8,088 5,455 48.3
Preopening expense...................................... 482 -- --
---------- -------- -----
37,966 25,998 46.0

On-screen advertising and other........................... 30,899 25,782 19.8
General and administrative................................ 52,321 47,860 9.3
Depreciation and amortization............................. 89,221 70,117 27.2
Impairment of long-lived assets........................... 4,935 46,998 (89.5)
Gain on disposition of assets............................. (2,369) (3,704) (36.0)
---------- -------- -----
Total costs and expenses.............................. $1,012,712 $857,260 18.1%
========== ======== =====


REVENUES. Total revenues increased 20.3% during the year (52 weeks) ended
April 1, 1999 compared to the year (52 weeks) ended April 2, 1998.

North America theatrical exhibition revenues increased 19.3% from the prior
year. Admissions revenues increased 18.8% due to a 14.9% increase in attendance
and a 3.4% increase in average ticket price. Attendance at megaplexes increased
as a result of the addition of 13 new megaplexes with 300 screens since
April 2, 1998, offset by a 3.5% decrease in attendance at comparable megaplexes
(theatres opened before fiscal 1998). Attendance at multiplexes decreased due to
a 11.7% decrease in attendance at

20

comparable multiplexes and the closure or sale of 15 multiplexes with 83 screens
since April 2, 1998. The decline in attendance at comparable multiplexes was
related to certain multiplexes experiencing competition from new megaplexes
operated by the Company and other competing theatre circuits, a trend the
Company generally anticipates will continue. The increase in average ticket
prices was due to price increases and to the growing number of megaplexes in the
Company's theatre circuit, which yield higher average ticket prices than
multiplexes. Concessions revenues increased 19.7% due to the increase in total
attendance and a 4.1% increase in average concessions per patron. The increase
in average concessions per patron was attributable to price increases and the
increasing number of megaplexes in the Company's theatre circuit, where
concession spending per patron is higher than in multiplexes.

International theatrical exhibition revenues increased 42.4% from the prior
year. Admissions revenues increased 39.3% due to an increase in attendance from
the addition of 3 new megaplexes with a total of 51 screens since April 2, 1998.
Attendance at comparable megaplexes increased 7.7%. Concession revenues
increased 39.7% due to the increase in total attendance. International revenues
were negatively impacted by a stronger U.S. dollar, although this did not
contribute materially to consolidated net loss.

On-screen advertising and other revenues increased 28.5% from the prior year
due to an increase in the number of screens served, offset by a change in the
number of periods included in the results of operations for the Company's
on-screen advertising business.

COSTS AND EXPENSES. Total costs and expenses increased 18.1% during the
year (52 weeks) ended April 1, 1999 compared to the year (52 weeks) ended
April 2, 1998.

North America theatrical exhibition costs and expenses increased 24.1% from
the prior year. Film exhibition costs increased 18.8% due to higher admissions
revenues. As a percentage of admissions revenues, film exhibition costs were
54.2% in the current year and in the prior year. Concession costs increased
15.8% due to increase in concessions revenues offset by a decrease in concession
costs as a percentage of concessions revenues. As a percentage of concessions
revenues, concession costs were 15.5% in the current year compared with 16.0% in
the prior year. As a percentage of revenues, theatre operating expense was 26.3%
in the current year as compared to 26.8% in the prior year. Rent expense
increased 55.8% due to the higher number of screens in operation and the growing
number of megaplexes in the Company's theatre circuit, which generally have
higher rent per screen than multiplexes, and the sale and lease back during the
third and fourth quarters of the prior year of the real estate assets associated
with 13 megaplexes, including seven theatres opened during fiscal 1998, to
Entertainment Properties Trust ("EPT"), a real estate investment trust (the
"Sale and Lease Back Transaction"). During the year (52 weeks) ended April 1,
1999, the Company incurred $2,801,000 of theatre closure expense related to
multiplex closures.

International theatrical exhibition costs and expenses increased 46.0% from
the prior year. Film exhibition costs increased 36.3% due to higher admission
revenues, offset by a decrease in the percentage of admissions paid to film
distributors. Rent expense increased 48.3% and theatre operating expense
increased 65.5% from the prior year, due to the increased number of screens in
operation. International theatrical exhibition costs and expenses were
positively impacted by a stronger U.S. dollar, although this did not contribute
materially to consolidated net loss.

On-screen advertising and other costs and expenses increased 19.8% due to an
increase in the number of screens served, offset by a change in the number of
periods included in the results of operations of the Company's on-screen
advertising business.

General and administrative expenses increased 9.3% during the year (52
weeks) ended April 1, 1999. As a percentage of total revenues, general and
administrative expenses declined from 5.6% in the prior year to 5.1% in the
current year.

Depreciation and amortization increased 27.2%, or $19,104,000, during the
year (52 weeks) ended April 1, 1999. This increase was caused by an increase in
employed theatre assets resulting from the

21

Company's expansion plan, which is partially offset by lower depreciation and
amortization as a result of the reduced carrying amounts of impaired multiplex
assets.

During the fourth quarter of the current year, the Company recognized a
non-cash impairment loss of $4,935,000 ($2,912,000 after tax, or $.13 per share)
on 24 multiplexes with 186 screens in 11 states (primarily Georgia, Ohio, Texas
and Colorado) including a loss of $937,000 associated with 7 theatres that were
included in impairment losses recognized in previous periods. The estimated
future cash flows of these theatres, undiscounted and without interest charges,
were less than the carrying value of the theatre assets. The Company is
evaluating its future plans for many of its multiplexes, which may include
selling theatres, subleasing properties to other exhibitors or for other uses,
retrofitting certain theatres to the standards of a megaplex or closing theatres
and terminating the leases.

During the second quarter of the prior year, the Company recognized a
non-cash impairment loss of $46,998,000 ($27,728,000 after tax, or $1.50 per
share) on 59 multiplexes with 412 screens in 14 states (primarily California,
Texas, Missouri, Arizona and Florida) including a loss of $523,000 associated
with 10 theatres that were included in impairment losses recognized in previous
periods. The estimated future cash flows of these theatres, undiscounted and
without interest charges, were less than the carrying value of the theatre
assets.

Gain on disposition of assets decreased from a gain of $3,704,000 in the
prior year to a gain of $2,369,000 during the current year. The prior and
current year results both include the sales of three of the Company's
multiplexes.

INTEREST EXPENSE. Interest expense increased 8.3% during the year (52
weeks) ended April 1, 1999 compared to the prior year, primarily due to an
increase in average outstanding borrowings and interest rates.

INCOME TAX PROVISION. The provision for income taxes increased to a benefit
of $10,500,000 during the current year from a benefit of $16,600,000 in the
prior year. The effective tax rate was 39.6% for the current year compared to
40.4% for the previous year.

NET EARNINGS. Net earnings improved by $8,483,000 during the year (52
weeks) ended April 1, 1999 to a loss of $16,016,000 from a loss of $24,499,000
in the prior year. Net loss per common share, after deducting preferred
dividends, was $.69 compared to a loss of $1.59 in the prior year.

LIQUIDITY AND CAPITAL RESOURCES

The Company's revenues are collected in cash, principally through box office
admissions and theatre concessions sales. The Company has an operating "float"
which partially finances its operations and which generally permits the Company
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 30 to 45 days
following receipt of box office admissions revenues. The Company is only
occasionally required to make advance payments or non-refundable guaranties of
film rentals. Film distributors generally release during the summer and holiday
seasons the films which they anticipate will be the most successful.
Consequently, the Company typically generates higher revenues during such
periods. Cash flows from operating activities, as reflected in the Consolidated
Statements of Cash Flows, were $89,027,000, $67,167,000 and $91,322,000 in
fiscal years 2000, 1999 and 1998, respectively.

The Company continues to expand its North American and International theatre
circuits. During the current fiscal year, the Company opened 19 megaplexes with
420 screens and began operating one theatre with 30 screens pursuant to a joint
venture agreement. In addition, the Company closed 42 multiplexes with 279
screens and returned 3 screens to the landlord at an existing megaplex for
conversion to

22

alternative use, resulting in a circuit total of 80 megaplexes with 1,782
screens and 131 multiplexes with 1,121 screens as of March 30, 2000.

The costs of constructing new theatres are funded by the Company through
internally generated cash flow or borrowed funds. The Company generally leases
its theatres pursuant to long-term non-cancelable operating leases which require
the developer, who owns the property, to reimburse the Company for a portion of
the construction costs. However, the Company 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. During
fiscal 2000, 17 new theatres with 372 screens were leased from developers.
Historically, the Company has owned and paid for the equipment necessary to
fixture a theatre. However, the Company entered into master lease agreements, in
fiscal 2000 and 1999 for up to $21,200,000 and $25,000,000, respectively, of
equipment necessary to fixture certain theatres. The master lease agreements
have an initial term of six years and include early termination and purchase
options. The Company classifies these leases as operating leases.

As of March 30, 2000, the Company had construction in progress of
$78,681,000 and reimbursable construction advances (amounts due from developers
on leased theatres) of $10,955,000. The Company had two megaplexes in the U.S.
with a total of 49 screens, one megaplex in Canada with 22 screens and one
megaplex in Japan with 16 screens under construction on March 30, 2000. During
the fifty-two weeks ended March 30, 2000, the Company had capital expenditures
of $274,932,000. The Company expects that the net cash requirements for capital
expenditures in 2001 will approximate $90 to 120 million. Included in these
amounts are projections of the expected proceeds from the sales of real estate
assets which the Company plans to place into sale and leaseback or other
comparable financing programs. The Company expects proceeds from sale and
leaseback transactions of up to $30 million for fiscal 2001. Consummation of
sale and leaseback or other comparable financing programs is dependent upon
favorable market conditions.

On January 27, 1999, the company sold $225 million aggregate principal
amount of 9 1/2% Senior Subordinated Notes due 2011 (the "Notes due 2011") in a
private offering. As required by the Indenture to the Notes due 2011, the
Company consummated a registered offer on May 10, 1999 to exchange the Notes due
2011 for notes of the Company with terms identical in all material respects to
the Notes due 2011. Net proceeds from the issuance of the Notes due 2011
(approximately $219.3 million) were used to reduce borrowings under the Credit
Facility.

The Notes due 2011 bear interest at the rate of 9 1/2% per annum, payable in
February and August. The Notes due 2011 are redeemable at the option of the
Company, in whole or in part, at any time on or after February 1, 2004 at
104.75% of the principal amount thereof, declining ratably to 100% of the
principal amount thereof on or after February 1, 2007, plus in each case
interest accrued to the redemption date. The Notes due 2011 are subordinated to
all existing and future senior indebtedness (as defined in the Indenture) of the
Company. The Notes due 2011 are unsecured senior subordinated indebtedness of
the Company ranking equally with the Company's 9 1/2% Senior Subordinated Notes
due 2009.

The Company's Credit Facility permits borrowings at interest rates based on
either the bank's base rate or LIBOR and requires an annual commitment fee based
on margin ratios that could result in a rate of .375% or .500% on the unused
portion of the commitment. The Credit Facility matures on April 10, 2004. The
commitment thereunder will be reduced by $25 million on each of December 31,
2002, March 31, 2003, June 30, 2003 and September 30, 2003 and by $50 million on
December 31, 2003. The total commitment under the Credit Facility is
$425 million, but the facility contains covenants that limit the Company's
ability to incur debt (whether under the Credit Facility or from other sources).
As of March 30, 2000, the Company had outstanding borrowings of $330,000,000
under the Credit Facility at an average interest rate of 8.7% per annum, and
approximately $85,000,000 was available for borrowing under the Credit Facility.
The Company's available borrowings under the Credit Facility and existing cash
balances provide the Company with approximately $204,000,000 in available funds
as of March 30, 2000.

23

Covenants under the Credit Facility impose limitations on indebtedness,
creation of liens, change of control, transactions with affiliates, mergers,
investments, guaranties, asset sales, dividends, business activities and
pledges. In addition, the Credit Facility contains certain financial covenants.
Covenants under the Indentures relating to the Company's 9 1/2% Senior
Subordinated Notes due 2009 and the Company's Senior Subordinated Notes due 2011
are substantially the same and impose limitations on the incurrence of
indebtedness, dividends, purchases or redemptions of stock, transactions with
affiliates, and mergers and sales of assets, and require the Company 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), the Company will be required to make an offer to repurchase each
holder's Notes due 2009 and Notes due 2011 at a price equal to 101% of the
principal amount thereof plus accrued and unpaid interest to the date of
repurchase. As of March 30, 2000, the Company was in compliance with all
financial covenants relating to the Credit Facility, the Notes due 2009 and the
Notes due 2011. However, as of such date, under provisions of the Notes due 2009
and the Notes due 2011, the Company is currently prohibited from incurring
additional indebtedness other than additional borrowings under the Credit
Facility and other permitted indebtedness, as defined in the Indentures, and
paying dividends or making distributions in respect of its capital stock.

During fiscal 1998, the Company sold the real estate assets associated with
13 megaplex theatres, including seven theatres opened during fiscal 1998, to
Entertainment Properties Trust ("EPT"), a real estate investment trust, for an
aggregate purchase price of $283,800,000. Proceeds from the Sale and Lease Back
Transactions were applied to reduce indebtedness under the Company's Credit
Facility. The Company leased the real estate assets associated with the theatres
from EPT pursuant to non-cancelable operating leases with terms ranging from 13
to 15 years with options to extend for up to an additional 20 years. During
fiscal 2000, the Company sold the building and improvements associated with one
of its megaplex theatres to EPT for proceeds of $17,600,000 under terms similar
to the above Sale and Leaseback Transactions. The Company has granted an option
to EPT to acquire the land at this megaplex theatre for the cost to the Company.
In addition, for a period of five years subsequent to November 1997, EPT will
have a right of first refusal and first offer to purchase and lease back to the
Company the real estate assets associated with any megaplex theatre and related
entertainment property owned or ground-leased by the Company, exercisable upon
the Company's intended disposition of such property. As of March 30, 2000, the
Company had four open megaplexes that would be subject to EPT's right of first
refusal and first offer to purchase should the Company seek to dispose of such
megaplexes. The leases are triple net leases that require the Company to pay
substantially all expenses associated with the operation of the theatres, such
as taxes and other governmental charges, insurance, utilities, service,
maintenance and any ground lease payments.

The Company believes that cash generated from operations, existing cash and
equivalents, amounts received from sale and leaseback transactions, expected
reimbursements from developers and the available commitment amount under its
Credit Facility will be sufficient to fund operations and planned capital
expenditures for the next 12 months. However, the performance of films licensed
by the Company and unforeseen changes in operating requirements could affect the
Company's ability to continue its expansion plan as well as comply with certain
financial covenants in the Credit Facility.

During the fifty-two weeks ended April 1, 1999, various holders of the
Company's Convertible Preferred Stock converted 1,796,485 shares into 3,097,113
shares of Common Stock at a conversion rate of 1.724 shares of Common Stock for
each share of Convertible Preferred Stock. On April 14, 1998, the Company
redeemed the remaining 3,846 shares of Convertible Preferred Stock at a
redemption price of $25.75 per share plus accrued and unpaid dividends.

24

DEFERRED TAX ASSETS

Readers are cautioned that forward looking statements contained in this
section should be read in conjunction with the Company's disclosures under the
heading "forward looking statements". The following special factors could
particularly affect the Company's ability to achieve the required level of
future taxable income to enable it to realize its deferred tax assets:
(i) competition; (ii) the ability to open or close screens as currently planned;
(iii) the performance of films licensed by the Company; and (iv) future megaplex
attendance levels.

The Company has recorded net current and non-current deferred tax assets in
accordance with Statement of Financial Accounting Standards No. 109, ACCOUNTING
FOR INCOME TAXES, of $97 million as of March 30, 2000 and estimates that it must
generate at least $248 million of future taxable income to realize those
deferred tax assets. To achieve this level of future taxable income, the Company
intends to pursue its current strategy that includes expansion of its megaplex
theatre circuit and closing less profitable multiplexes.

The table below reconciles loss before income taxes and cumulative effect of
an accounting change for financial statement purposes with taxable income (loss)
for income tax purposes:



(ESTIMATED)
52 WEEKS ENDED 52 WEEKS ENDED 52 WEEKS ENDED
(DOLLARS IN THOUSANDS) MARCH 30, 2000 APRIL 1, 1999 APRIL 2, 1998
- ---------------------- -------------- -------------- --------------

Loss before income taxes and cumulative effect of
an accounting change............................ $(81,247) $(26,516) $(41,099)

Cumulative effect of an accounting change......... (9,935) -- --
Reserve for future dispositions................... 15,289 (421) (202)
Depreciation and amortization..................... (7,902) (17,790) (11,309)
Gain on disposition of assets..................... (4,657) -- 16,471
Gain on sale to EPT............................... (1,258) (1,247) 16,238
Impairment of long-lived assets................... (4,187) 3,542 41,540
Foreign corporation activity...................... 5,779 4,274 --
Other............................................. 12,013 4,807 354
-------- -------- --------
Taxable income (loss), before special deductions
and net operating loss carrybacks............... $(76,105) $(33,351) $ 21,993
======== ======== ========


The Company's foreign subsidiaries have net operating loss carryforwards in
Portugal, Spain and the United Kingdom aggregating $9.7 million, $0.3 million of
which may be carried forward indefinitely and the balance of which expires from
2004 through 2007. The Company's Federal income tax loss carryforward of
$76.1 million expires in 2020. The Company's state income tax loss carryforwards
of $106.6 million may be used over various periods ranging from 5 to 20 years.

The Company anticipates that net temporary differences should reverse and
become available as tax deductions as follows: during 2001, $48 million; 2002,
$24 million; 2003, $17 million; 2004, $30 million; 2005, $52 million;
thereafter, $153 million.

YEAR 2000

The Company has not experienced, nor does it anticipate that it will
experience, any material information technology or embedded systems disruptions
or failures associated with the Year 2000, or any Year 2000 related performance
issues of its material business partners.

25

EURO CONVERSION

A single currency called the euro was introduced in Europe on January 1,
1999. Certain member countries of the European Union adopted the euro as their
common legal currency on that date. Fixed conversion rates between these
participating countries' existing currencies (the "legacy currencies") and the
Euro were established as of that date. The transition period for the
introduction of the Euro is scheduled to continue until January 1, 2002, with
the legacy currencies being completely removed from circulation on July 1, 2002.
During this transition period, parties may pay for items using either the euro
or a participating country's legacy currency.

The Company currently operates one theatre in Portugal, two theatres in
Spain and one in France. These countries are member countries that adopted the
Euro as of January 1, 1999. The Company has implemented necessary changes to
accounting, operational, and payment systems to accommodate the introduction of
the Euro. The Company does not anticipate that the conversion will have a
material impact on its consolidated financial position, results of operations or
cash flows.

IMPACT OF INFLATION

Historically, the principal impact of inflation and changing prices upon the
Company has been to increase the costs of the construction of new theatres, the
purchase of theatre equipment and the utility and labor costs incurred in
connection with continuing theatre operations. Film exhibition costs, the
largest cost of operations of the Company, is customarily paid as a percentage
of admissions revenues and hence, while the film exhibition costs may increase
on an absolute basis, the percentage of admissions revenues represented by such
expense is not directly affected by inflation. Except as set forth above,
inflation and changing prices have not had a significant impact on the Company's
total revenues and results of operations.

NEW ACCOUNTING PRONOUNCEMENTS

In April of 1998, the American Institute of Certified Public Accountants
issued Statement of Position 98-5 ("SOP 98-5"), REPORTING ON THE COSTS OF
START-UP ACTIVITIES. SOP 98-5 requires costs of start-up activities to be
expensed when incurred. The Company previously capitalized such costs and
amortized them over a two-year period. The Company adopted this statement in
fiscal 2000, which resulted in a cumulative effect adjustment to the Company's
results of operations and financial position of $5,840,000 (net of tax benefit
of $4,095,000).

During fiscal 1999, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 133 ("SFAS 133"), ACCOUNTING FOR
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES which was amended by Statement of
Financial Accounting Standards No. 138 issued in June 2000. The statement
requires companies to recognize all derivatives as either assets or liabilities,
with the instruments measured at fair value. The accounting for changes in fair
value of a derivative depends on the intended use of the derivative and the
resulting designation. The statement is effective for all fiscal years beginning
after June 15, 2000. The statement will become effective for the Company in
fiscal 2002. Adoption of this statement is not expected to have a material
impact on the Company's consolidated financial position, results of operations
or cash flows.

During fiscal 1999, the Emerging Issues Task Force ("EITF") released Issue
No. 97-10, THE EFFECT OF LESSEE INVOLVEMENT IN ASSET CONSTRUCTION. Issue
No. 97-10 is applicable to entities involved on behalf of an owner-lessor with
the construction of an asset that will be leased to the lessee when construction
of the asset is completed. Historically, the Company has been responsible for
the construction of leased theatres and for paying project costs that were in
excess of an agreed upon amount to be reimbursed from the developer. Issue
No. 97-10 requires the Company to be considered the owner (for accounting
purposes) of these types of projects during the construction period. As a
result, the Company has recorded $31,055,000 as a financing lease obligation on
its Balance Sheet related to these types of projects. The consensus reached in
Issue

26

No. 97-10 applies to construction projects committed to after May 21, 1998 and
also to those projects that were committed to on May 21, 1998 if construction
did not commence by December 31, 1999.

In December 1999, the Securities and Exchange Commission ("SEC") issued
Staff Accounting Bulletin No. 101 ("SAB 101"), REVENUE RECOGNITION IN FINANCIAL
STATEMENTS. SAB 101 draws upon the existing accounting rules and explains those
rules, by analogy, to other transactions that the existing rules do not
specifically address. The Company has reviewed its revenue recognition policies
and will make a final evaluation of the impact, if any, of SAB 101 after
additional guidance is made public by the SEC staff. Additionally, SAB 101
requires that gains and losses on sale of assets be recorded as a component of
operating income. The Company's practice has been to classify these gains and
losses as other income and expense. The Company has reclassified gains of
$944,000, $2,369,000 and $3,704,000 from other income and expense to be included
as a component of operating income in fiscal 2000, 1999 and 1998, respectively.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

The Company is exposed to various market risks including interest rate risk
and foreign currency exchange rate risk. The Company does not hold any
derivative financial instruments.

MARKET RISK ON VARIABLE RATE FINANCIAL INSTRUMENTS: The Company maintains a
$425 million credit facility (the "Credit Facility"), which permits borrowings
at interest rates based on either the bank's 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. Based on the Company's current outstanding borrowings under the Credit
Facility at an average interest rate of 8.7% per annum, a 100 basis point
increase in market interest rates would increase interest expense and decrease
earnings before income taxes by approximately $3.3 million.

MARKET RISK ON FIXED-RATE FINANCIAL INSTRUMENTS: Included in long-term debt
are $200 million of 9 1/2% Senior Subordinated Notes due 2009 and $225 million
of 9 1/2% Senior Subordinated Notes due 2011. Increases in market interest rates
would generally cause a decrease in the fair value of the Notes due 2009 and the
Notes due 2011 and a decrease in market interest rates would generally cause an
increase in fair value of the Notes due 2009 and the Notes due 2011.

FOREIGN CURRENCY EXCHANGE RATES: The Company currently operates theatres in
Canada, Portugal, Spain, France, Japan and China (Hong Kong) and is currently
developing theatres in other international markets. As a result of these
operations, the Company has 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.
Although the Company does not currently hedge against foreign currency exchange
rate risk, it does not currently intend to repatriate funds from the operations
of its Asian and European theatres but instead intends to use them to fund
additional expansion. A 10% fluctuation in the value of the U.S. dollar against
all foreign currencies of countries where the Company currently operates
theatres would either increase or decrease earnings before income taxes and
accumulated other comprehensive income by approximately $2.6 million and
$11.1 million, respectively.

27

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

RESPONSIBILITY FOR PREPARATION OF FINANCIAL STATEMENTS
AMC ENTERTAINMENT INC.

TO THE STOCKHOLDERS OF AMC ENTERTAINMENT INC.

The accompanying consolidated financial statements and related notes of AMC
Entertainment Inc. and subsidiaries were prepared by management in conformity
with generally accepted accounting principles appropriate in the circumstances.
In preparing the financial statements, management has made judgments and
estimates based on currently available information. Management is responsible
for the information; representations contained elsewhere in this Annual Report
are consistent with the financial statements.

The Company has a formalized system of internal accounting controls designed
to provide reasonable assurance that assets are safeguarded and that its
financial records are reliable. Management monitors the system for compliance to
measure its effectiveness and recommends possible improvements. In addition, as
part of their audit of the consolidated financial statements, the Company's
independent accountants review and test the internal accounting controls on a
selected basis to establish a basis of reliance in determining the nature,
extent and timing of audit tests to be applied.

The Audit Committee of the Board of Directors (consisting solely of
Directors from outside the Company) reviews the process involved in the
preparation of the Company's annual audited financial statements, and in this
regard meets (jointly and separately) with the independent accountants,
management and internal auditors to review matters relating to financial
reporting and accounting procedures and policies, the adequacy of internal
controls and the scope and results of the audit performed by the independent
accountants.

/s/ Craig R. Ramsey
Senior Vice President, Finance
Chief Financial Officer and
Chief Accounting Officer

28

REPORT OF INDEPENDENT ACCOUNTANTS

TO THE BOARD OF DIRECTORS AND STOCKHOLDERS OF
AMC ENTERTAINMENT INC.
KANSAS CITY, MISSOURI

In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of operations, stockholders' equity and cash flows
present fairly, in all material respects, the financial position of AMC
Entertainment Inc. and subsidiaries (the "Company") at March 30, 2000 and
April 1, 1999, and the results of their operations and their cash flows for each
of the three fiscal years in the period ended March 30, 2000, in conformity with
accounting principles generally accepted in the United States. These financial
statements are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these statements in accordance with
auditing standards generally accepted in the United States which require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for the opinion expressed above.

/s/ PRICEWATERHOUSECOOPERS LLP

Kansas City, Missouri
May 31, 2000

29

CONSOLIDATED STATEMENTS OF OPERATIONS

AMC ENTERTAINMENT INC.



52 WEEKS ENDED 52 WEEKS ENDED 52 WEEKS ENDED
(IN THOUSANDS, EXCEPT PER SHARE DATA) MARCH 30, 2000 APRIL 1, 1999 APRIL 2, 1998
- ------------------------------------- -------------- -------------- --------------

Revenues
Admissions............................................ $ 763,083 $ 662,161 $553,571
Concessions........................................... 329,855 307,347 256,017
Other theatre......................................... 30,013 21,766 16,111
Other................................................. 43,991 32,182 25,051
---------- ---------- --------
Total revenues...................................... 1,166,942 1,023,456 850,750
Expenses
Film exhibition costs................................. 417,736 358,437 299,926
Concession costs...................................... 50,726 48,687 42,062
Theatre operating expense............................. 290,072 260,145 219,593
Rent.................................................. 198,762 165,370 106,383
Other................................................. 44,619 30,899 25,782
General and administrative............................ 47,407 52,321 47,860
Preopening expense.................................... 6,795 2,265 2,243
Theatre closure expense............................... 16,661 2,801 --
Restructuring charge.................................. 12,000 -- --
Depreciation and amortization......................... 95,974 89,221 70,117
Impairment of long-lived assets....................... 5,897 4,935 46,998
Gain on disposition of assets......................... (944) (2,369) (3,704)
---------- ---------- --------
Total costs and expenses............................ 1,185,705 1,012,712 857,260
---------- ---------- --------
Operating income (loss)............................. (18,763) 10,744 (6,510)

Other expense (income)
Interest expense
Corporate borrowings................................ 54,088 30,195 26,353
Capital and financing lease obligations............. 8,615 8,433 9,326
Investment income..................................... (219) (1,368) (1,090)
---------- ---------- --------
Loss before income taxes and cumulative effect of an
accounting change..................................... (81,247) (26,516) (41,099)
Income tax provision.................................... (31,900) (10,500) (16,600)
---------- ---------- --------
Loss before cumulative effect of an accounting change... (49,347) (16,016) (24,499)
Cumulative effect of an accounting change (net of income
tax benefit of $4,095)................................ (5,840) -- --
---------- ---------- --------
Net loss................................................ $ (55,187) $ (16,016) $(24,499)
========== ========== ========
Preferred dividends..................................... -- -- 4,846
---------- ---------- --------
Net loss for common shares.............................. $ (55,187) $ (16,016) $(29,345)
========== ========== ========
Loss per share before cumulative effect of an accounting
change:
Basic................................................. $ (2.10) $ (0.69) $ (1.59)
========== ========== ========
Diluted............................................... $ (2.10) $ (0.69) $ (1.59)
========== ========== ========
Loss per share
Basic................................................. $ (2.35) $ (0.69) $ (1.59)
========== ========== ========
Diluted............................................... $ (2.35) $ (0.69) $ (1.59)
========== ========== ========


SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

30

CONSOLIDATED BALANCE SHEETS

AMC ENTERTAINMENT INC.



MARCH 30, APRIL 1,
(IN THOUSANDS, EXCEPT SHARE DATA) 2000 1999
- --------------------------------- ---------- --------

ASSETS
Current assets:
Cash and equivalents...................................... $ 119,305 $ 13,239
Receivables, net of allowance for doubtful accounts of
$3,576 as of March 30, 2000 and $540 as of April 1,
1999.................................................... 18,468 18,325
Reimbursable construction advances........................ 10,955 22,317
Other current assets...................................... 45,275 48,707
---------- --------
Total current assets.................................... 194,003 102,588

Property, net............................................... 822,295 726,025
Intangible assets, net...................................... 15,289 18,723
Other long-term assets...................................... 157,218 128,394
---------- --------
Total assets............................................ $1,188,805 $975,730
========== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable.......................................... $ 99,466 $ 69,381
Construction payables..................................... 6,897 24,354
Accrued expenses and other liabilities.................... 114,037 77,304
Current maturities of corporate borrowings and capital and
financing lease obligations............................. 3,205 18,017
---------- --------
Total current liabilities............................... 223,605 189,056
Corporate borrowings........................................ 754,105 547,045
Capital and financing lease obligations..................... 65,301 44,558
Other long-term liabilities................................. 87,125 79,606
---------- --------
Total liabilities....................................... 1,130,136 860,265

Stockholders' equity:
Common Stock, 66 2/3 CENTS par value; 19,447,598 shares
issued as of March 30, 2000 and April 1, 1999........... 12,965 12,965
Convertible Class B Stock, 66 2/3 CENTS par value;
4,041,993 shares issued and outstanding as of March 30,
2000 and April 1, 1999.................................. 2,695 2,695
Additional paid-in capital................................ 106,713 106,713
Accumulated other comprehensive income.................... (3,812) (2,690)
Retained earnings (deficit)............................... (50,161) 5,026
---------- --------
68,400 124,709

Less:
Employee notes for Common Stock purchases................. 9,362 8,875
Common Stock in treasury, at cost, 20,500 shares as of
March 30, 2000 and April 1, 1999........................ 369 369
---------- --------
Total stockholders' equity.............................. 58,669 115,465
---------- --------
Total liabilities and stockholders' equity.............. $1,188,805 $975,730
========== ========


SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

31

CONSOLIDATED STATEMENTS OF CASH FLOWS

AMC ENTERTAINMENT INC.



52 WEEKS ENDED 52 WEEKS ENDED 52 WEEKS ENDED
(IN THOUSANDS, EXCEPT PER SHARE DATA) MARCH 30, 2000 APRIL 1, 1999 APRIL 2, 1998
- ------------------------------------- --------------- --------------- ---------------

INCREASE (DECREASE) IN CASH AND EQUIVALENTS

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss.................................................. $(55,187) $(16,016) $(24,499)
Adjustments to reconcile net loss to net cash provided by
operating activities:
Restructuring charge.................................... 5,629 -- --
Depreciation and amortization........................... 95,974 89,221 70,117
Impairment of long-lived assets......................... 5,897 4,935 46,998
Deferred income taxes................................... (28,090) 2,562 (37,325)
Gain on disposition of long-term assets................... (944) (2,369) (3,704)
Cumulative effect of an accounting change............... 5,840 -- --
Change in assets and liabilities:
Receivables........................................... (1,999) (5,307) (3,180)
Other current assets.................................. 4,839 (19,694) (4,835)
Accounts payable...................................... 15,798 (1,736) 6,066
Accrued expenses and other liabilities................ 26,993 15,118 42,231
Liabilities for theatre closure....................... 8,804 -- --
Other, net.............................................. 5,473 453 (547)
-------- -------- --------
Net cash provided by operating activities................. 89,027 67,167 91,322
-------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures...................................... (274,932) (260,813) (389,217)
Proceeds from sale/leasebacks............................. 69,647 -- 283,800
Investments in real estate................................ -- (8,935) (4,349)
Change in reimbursable construction advances.............. 13,984 36,171 (25,295)
Preopening expenditures................................... -- (8,049) (10,026)
Proceeds from disposition of long-term assets............. 6,862 10,255 18,111
Other, net................................................ (13,953) (7,946) (6,761)
-------- -------- --------
Net cash used in investing activities..................... (198,392) (239,317) (133,737)
-------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings (repayments) under Credit Facility......... 207,000 (27,000) 40,000
Principal payments under corporate borrowings............. (14,000) -- --
Proceeds from issuance of 9 1/2% Senior Subordinated Notes
due 2011................................................ -- 225,000 --
Proceeds from financing lease obligations................. 28,666 -- --
Principal payments under capital and financing lease
obligations
and other............................................... (3,146) (6,047) (9,202)
Change in cash overdrafts................................. 14,287 (1,516) 4,691
Change in construction payables........................... (17,457) (234) (1,903)
Funding of employee notes for Common Stock purchases,
net..................................................... -- (8,579) --
Proceeds from exercise of stock options................... -- -- 647
Dividends paid on $1.75 Preferred Stock................... -- -- (5,064)
Deferred financing costs and other........................ (248) (6,556) (1,466)
-------- -------- --------
Net cash provided by financing activities................. 215,102 175,068 27,703
-------- -------- --------
Effect of exchange rate changes on cash and equivalents... 329 440 (122)
-------- -------- --------
NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS............. 106,066 3,358 (14,834)
CASH AND EQUIVALENTS AT BEGINNING OF YEAR................... 13,239 9,881 24,715
-------- -------- --------
CASH AND EQUIVALENTS AT END OF YEAR......................... $119,305 $ 13,239 $ 9,881
======== ======== ========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

CASH PAID (REFUNDED) DURING THE PERIOD FOR:
Interest (net of amounts capitalized of $7,899, $7,040 and
$8,264)................................................. $ 62,642 $ 40,928 $ 42,901
Income taxes, net......................................... (9,531) 3,267 22,287
SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Mortgage note incurred directly for investments in real
estate.................................................. $ -- $ 14,000 --
Receivable from sale/leaseback included in reimbursable
construction advances................................... 2,622 -- --


SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

32

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
AMC ENTERTAINMENT INC.



$1.75 CUMULATIVE CONVERTIBLE
PREFERRED STOCK COMMON STOCK CLASS B STOCK
---------------------- ---------------------- -----------------------
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
- ----------------------------------------------- ----------- -------- ----------- -------- ------------ --------

Balance, April 4, 1997............................ 3,303,600 $ 2,202 6,604,469 $ 4,403 11,157,000 $7,438
Comprehensive Income:
Net loss........................................ -- -- -- -- -- --
Foreign currency translation adjustment......... -- -- -- -- -- --
Comprehensive Loss................................
Exercise of options on Common Stock............... -- -- 39,400 26 -- --
$1.75 Preferred Stock conversions (1,503,269) (1,002) 2,591,614 1,728 -- --
Dividends declared: $1.75 Preferred Stock......... -- -- -- -- -- --
Cancellation of Common and Class B Stock owned by
Durwood, Inc.................................... -- -- (2,641,951) (1,762) (11,157,000) (7,438)
Issuance of Common and Class B Stock.............. -- -- 8,783,289 5,856 5,015,657 3,344
----------- ------- ----------- ------- ------------ ------
Balance, April 2, 1998............................ 1,800,331 1,200 15,376,821 10,251 5,015,657 3,344
Comprehensive Income:
Net loss........................................ -- -- -- -- -- --
Foreign currency translation adjustment......... -- -- -- -- -- --
Comprehensive Loss................................
$1.75 Preferred Stock conversions (1,800,331) (1,200) 3,097,113 2,065 -- --
Class B Stock conversions......................... -- -- 973,664 649 (973,664) (649)
Issuance of employee notes for Common Stock
purchases....................................... -- -- -- -- -- --
----------- ------- ----------- ------- ------------ ------
Balance, April 1, 1999............................ -- -- 19,447,598 12,965 4,041,993 2,695
Comprehensive Income:
Net loss........................................ -- -- -- -- -- --
Foreign currency translation adjustment......... -- -- -- -- -- --
Unrealized loss on marketable securities (net of
income tax benefit of $44).................... -- -- -- -- -- --
Comprehensive Loss................................
Accrued interest on employee notes for Common
Stock purchases................................. -- -- -- -- -- --
----------- ------- ----------- ------- ------------ ------
Balance, March 30, 2000........................... -- $ -- 19,447,598 $12,965 4,041,993 $2,695
=========== ======= =========== ======= ============ ======


EMPLOYEE
ACCUMULATED NOTES FOR COMMON STOCK
ADDITIONAL OTHER RETAINED COMMON IN TREASURY
PAID-IN COMPREHENSIVE EARNINGS STOCK -------------------
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) CAPITAL INCOME (DEFICIT) PURCHASES SHARES AMOUNT
- ----------------------------------------------- ---------- -------------- --------- --------- -------- --------

Balance, April 4, 1997............................ $107,781 $(2,048) $ 50,605 $ -- 20,500 $(369)
Comprehensive Income:
Net loss........................................ -- -- (24,499) -- -- --
Foreign currency translation adjustment......... -- (1,641) -- -- -- --

Comprehensive Loss................................

Exercise of options on Common Stock............... 621 -- -- -- -- --
$1.75 Preferred Stock conversions (726) -- -- -- -- --
Dividends declared: $1.75 Preferred Stock......... -- -- (5,064) -- -- --
Cancellation of Common and Class B Stock owned by
Durwood, Inc.................................... -- -- -- -- -- --
Issuance of Common and Class B Stock.............. -- -- -- -- -- --
-------- ------- -------- ------- ------- -----
Balance, April 2, 1998............................ 107,676 (3,689) 21,042 -- 20,500 (369)
Comprehensive Income:
Net loss........................................ -- -- (16,016) -- -- --
Foreign currency translation adjustment......... -- 999 -- -- -- --

Comprehensive Loss................................

$1.75 Preferred Stock conversions (963) -- -- -- -- --
Class B Stock conversions......................... -- -- -- -- -- --
Issuance of employee notes for Common Stock
purchases....................................... -- -- -- (8,875) -- --
-------- ------- -------- ------- ------- -----
Balance, April 1, 1999............................ 106,713 (2,690) 5,026 (8,875) 20,500 (369)
Comprehensive Income:
Net loss........................................ -- -- (55,187) -- -- --
Foreign currency translation adjustment......... -- (1,059) -- -- -- --
Unrealized loss on marketable securities (net of
income tax benefit of $44).................... -- (63) -- -- -- --

Comprehensive Loss................................

Accrued interest on employee notes for Common
Stock purchases................................. -- -- -- (487) -- --
-------- ------- -------- ------- ------- -----
Balance, March 30, 2000........................... $106,713 $(3,812) $(50,161) $(9,362) 20,500 $(369)
======== ======= ======== ======= ======= =====



TOTAL
STOCKHOLDERS'
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) EQUITY
- ----------------------------------------------- -------------

Balance, April 4, 1997............................ $170,012
Comprehensive Income:
Net loss........................................ (24,499)
Foreign currency translation adjustment......... (1,641)
--------
Comprehensive Loss................................ (26,140)
--------
Exercise of options on Common Stock............... 647
$1.75 Preferred Stock conversions --
Dividends declared: $1.75 Preferred Stock......... (5,064)
Cancellation of Common and Class B Stock owned by
Durwood, Inc.................................... (9,200)
Issuance of Common and Class B Stock.............. 9,200
--------
Balance, April 2, 1998............................ 139,455
Comprehensive Income:
Net loss........................................ (16,016)
Foreign currency translation adjustment......... 999
--------
Comprehensive Loss................................ (15,017)
--------
$1.75 Preferred Stock conversions (98)
Class B Stock conversions......................... --
Issuance of employee notes for Common Stock
purchases....................................... (8,875)
--------
Balance, April 1, 1999............................ 115,465
Comprehensive Income:
Net loss........................................ (55,187)
Foreign currency translation adjustment......... (1,059)
Unrealized loss on marketable securities (net of
income tax benefit of $44).................... (63)
--------
Comprehensive Loss................................ (56,309)
--------
Accrued interest on employee notes for Common
Stock purchases................................. (487)
--------
Balance, March 30, 2000........................... $(58,669)
========


SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

33

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AMC ENTERTAINMENT INC.

YEARS (52 WEEKS) ENDED MARCH 30, 2000, APRIL 1, 1999 AND
APRIL 2, 1998

NOTE 1--THE COMPANY AND SIGNIFICANT ACCOUNTING POLICIES

AMC Entertainment Inc. ("AMCE") is a holding company which, through its
direct and indirect subsidiaries, including American Multi-Cinema, Inc. ("AMC")
(collectively with AMCE, unless the context otherwise requires, the "Company"),
is principally involved in the theatrical exhibition business throughout North
America and in Portugal, Spain, France, Japan, and China (Hong Kong). 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, National Cinema Network, Inc., and in miscellaneous ventures through
other wholly-owned subsidiaries.

USE OF ESTIMATES: The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Although these estimates are based on
management's knowledge of current events and actions it may undertake in the
future, they may ultimately differ from actual results.

PRINCIPLES OF CONSOLIDATION: The consolidated financial statements include
the accounts of AMCE and all subsidiaries. All significant intercompany balances
and transactions have been eliminated.

FISCAL YEAR: The Company has a 52/53 week fiscal year ending on the
Thursday closest to the last day of March. The 2000, 1999 and 1998 fiscal years
reflect a 52 week period. Fiscal year 2001 will reflect a 52 week period.

REVENUES AND FILM EXHIBITION COSTS: Revenues are recognized when admissions
and concessions sales are received at the theatres. Film exhibition costs are
recognized based on the applicable box office receipts and the terms of the film
licenses.

CASH AND EQUIVALENTS: Cash and equivalents consist of cash on hand and
temporary cash investments with original maturities of three months or less. The
Company invests excess cash in deposits with major banks and in temporary cash
investments. Such investments are made only in instruments issued or enhanced by
high quality financial institutions (investment grade or better). Amounts
invested in a single institution are limited to minimize risk.

Under the Company's cash management system, checks issued but not presented
to banks frequently result in overdraft balances for accounting purposes and are
classified within accounts payable in the balance sheet. The amount of these
checks included in accounts payable as of March 30, 2000 and April 1, 1999 was
$28,637,000 and $14,350,000, respectively.

REIMBURSABLE CONSTRUCTION ADVANCES: Reimbursable construction advances
consist of amounts due from developers to fund a portion of the construction
costs of new theatres that are to be operated by the Company pursuant to lease
agreements. The amounts are repaid by the developers either during construction
or shortly after completion of the theatre.

34

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

AMC ENTERTAINMENT INC.

YEARS (52 WEEKS) ENDED MARCH 30, 2000, APRIL 1, 1999 AND
APRIL 2, 1998

NOTE 1--THE COMPANY AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
PROPERTY: Property is recorded at cost. The Company uses the straight-line
method in computing depreciation and amortization for financial reporting
purposes and accelerated methods, with respect to certain assets, for income tax
purposes. The estimated useful lives are generally as follows:



Buildings and improvements.................................. 3 to 40 years
Leasehold improvements...................................... 1 to 20 years
Furniture, fixtures and equipment........................... 3 to 10 years


Expenditures for additions (including interest during construction), major
renewals and betterments are capitalized, and expenditures for maintenance and
repairs are charged to expense as incurred. The cost of assets retired or
otherwise disposed of and the related accumulated depreciation and amortization
are eliminated from the accounts in the year of disposal. Gains or losses
resulting from property disposals are credited or charged to operations
currently.

INTANGIBLE ASSETS: Intangible assets are recorded at cost and are comprised
of lease rights, amounts assigned to theatre leases assumed under favorable
terms, and location premiums on acquired theatres, each of which are being
amortized on a straight-line basis over the estimated remaining useful lives of
the theatres. Accumulated amortization on intangible assets was $33,586,000 and
$37,341,000 as of March 30, 2000 and April 1, 1999, respectively.

OTHER LONG-TERM ASSETS: Other long-term assets are comprised principally of
long-term deferred income taxes; investments in real estate and costs incurred
in connection with the issuance of debt securities which are being amortized
over the respective lives of the issuances.

PREOPENING EXPENSE: Preopening expense consists primarily of advertising
and other start-up costs incurred prior to the operation of new theatres which
are expensed as incurred.

THEATRE CLOSURE EXPENSE: Theatre closure expense is primarily related to
payments made or expected to be made to landlords to terminate leases on certain
of the Company's closed multiplex theatres. Expected payments to landlords are
based on actual or discounted amounts. During fiscal 2000, the Company
recognized $16,661,000 of theatre closure expense on 35 multiplexes with 242
screens.

IMPAIRMENT OF LONG-LIVED ASSETS: As part of the Company's annual budgeting
process, management reviews long-lived assets, including intangibles, for
impairment or whenever events or changes in circumstances indicate that the
carrying amount of the assets may not be fully recoverable. Management will
periodically review internal management reports as well as monitor current and
potential future competition in its markets for indicators of changes in events
or circumstances that indicate impairment of individual theatre assets.
Management evaluates its theatres using historical and projected data of theatre
level cash flow as its primary indicator of potential impairment. As a result of
this analysis, if the sum of the estimated future cash flows, undiscounted and
without interest charges, is less than the carrying amount of the asset, an
impairment loss is recognized on 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 management believes 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
plus the expected terminal value. The fair value of assets is determined as
either the expected selling price less

35

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

AMC ENTERTAINMENT INC.

YEARS (52 WEEKS) ENDED MARCH 30, 2000, APRIL 1, 1999 AND
APRIL 2, 1998

NOTE 1--THE COMPANY AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
selling costs or the present value of the estimated future cash flows. There is
considerable management judgment necessary to determine the future cash flows of
a theatre, and accordingly, actual results could vary significantly from such
estimates.

If theatres currently have sufficient estimated future cash flows to realize
the related carrying amount of theatre assets, but management believes that it
is not likely the theatre will be operated to the end of its lease term, the
estimated economic life of the theatre assets are revised to reflect
management's best estimate of the economic life of the theatre assets for
purposes of recording depreciation.

During fiscal 2000, the Company recognized a non-cash impairment loss of
$5,897,000 ($3,479,000 after tax, or $.15 per share) on 13 multiplexes with 111
screens. The Company expects the future cash flows from these theatres to
decline as they face competition from newer megaplexes and plans on closing many
of these theatres over the next two years. In fiscal 1999, the Company
recognized a non-cash impairment loss of $4,935,000 ($2,912,000 after tax, or
$.13 per share) on 24 multiplexes with 186 screens, while in fiscal 1998, the
Company recognized an impairment loss of $46,998,000 ($27,728,000 after tax, or
$1.50 per share) on 59 multiplexes with 412 screens.

FOREIGN CURRENCY TRANSLATION: Operations outside the United States are
generally measured using the local currency as the functional currency. Assets
and liabilities are translated at the rates of exchange at the balance sheet
date. Income and expense items are translated at average rates of exchange. The
resultant translation adjustments are included in foreign currency translation
adjustment, a separate component of accumulated other comprehensive income.
Gains and losses from foreign currency transactions, except those intercompany
transactions of a long-term investment nature, are included in net earnings and
have not been material.

EARNINGS PER SHARE: Basic earnings per share is computed by dividing net
earnings (loss) for common shares by the weighted-average number of common
shares outstanding. Diluted earnings per share includes the effects of the
conversion of the $1.75 Cumulative Convertible Preferred Stock, outstanding
stock options and contingently issuable shares, if dilutive.

STOCK-BASED COMPENSATION: The Company accounts for stock-based awards using
the intrinsic value-based method.

INCOME TAXES: The Company accounts for income taxes in accordance with
Statement of Financial Accounting Standards No. 109 ("SFAS 109"), ACCOUNTING FOR
INCOME TAXES. Under SFAS 109, deferred income tax effects of transactions
reported in different periods for financial reporting and income tax return
purposes are recorded by the liability method. This method gives consideration
to the future tax consequences of deferred income or expense items and
immediately recognizes changes in income tax laws upon enactment. The income
statement effect is generally derived from changes in deferred income taxes on
the balance sheet.

NEW ACCOUNTING PRONOUNCEMENTS: In April of 1998, the American Institute of
Certified Public Accountants issued Statement of Position 98-5 ("SOP 98-5"),
REPORTING ON THE COSTS OF START-UP ACTIVITIES. SOP 98-5 requires costs of
start-up activities to be expensed when incurred. The Company previously
capitalized such costs and amortized them over a two-year period. The Company
adopted this statement in fiscal 2000,

36

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

AMC ENTERTAINMENT INC.

YEARS (52 WEEKS) ENDED MARCH 30, 2000, APRIL 1, 1999 AND
APRIL 2, 1998

NOTE 1--THE COMPANY AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
which resulted in a cumulative effect adjustment to the Company's results of
operations and financial position of $5,840,000 (net of tax benefit of
$4,095,000).

During fiscal 1999, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 133 ("SFAS 133"), ACCOUNTING FOR
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES which was amended by Statement of
Financial Accounting Standards No. 138 issued in June 2000. The statement
requires companies to recognize all derivatives as either assets or liabilities,
with the instruments measured at fair value. The accounting for changes in fair
value of a derivative depends on the intended use of the derivative and the
resulting designation. The statement is effective for all fiscal years beginning
after June 15, 2000. The statement will become effective for the Company in
fiscal 2002. Adoption of this statement is not expected to have a material
impact on the Company's consolidated financial position, results of operations
or cash flows.

During fiscal 1999, the Emerging Issues Task Force ("EITF") released Issue
No. 97-10, THE EFFECT OF LESSEE INVOLVEMENT IN ASSET CONSTRUCTION. Issue
No. 97-10 is applicable to entities involved on behalf of an owner-lessor with
the construction of an asset that will be leased to the lessee when construction
of the asset is completed. Historically, the Company has been responsible for
the construction of leased theatres and for paying project costs that were in
excess of an agreed upon amount to be reimbursed from the developer. Issue
No. 97-10 requires the Company to be considered the owner (for accounting
purposes) of these types of projects during the construction period. As a
result, the Company has recorded $31,055,000 as a financing lease obligation on
its Balance Sheet related to these types of projects. The consensus reached in
Issue No. 97-10 applies to construction projects committed to after May 21, 1998
and also to those projects that were committed to on May 21, 1998 if
construction did not commence by December 31, 1999.

In December 1999, the Securities and Exchange Commission ("SEC") issued
Staff Accounting Bulletin No. 101 ("SAB 101"), REVENUE RECOGNITION IN FINANCIAL
STATEMENTS. SAB 101 draws upon the existing accounting rules and explains those
rules, by analogy, to other transactions that the existing rules do not
specifically address. The Company has reviewed its revenue recognition policies
and will make a final evaluation of the impact, if any, of SAB 101 after
additional guidance is made public by the SEC staff. Additionally, SAB 101
requires that gains and losses on sale of assets be recorded as a component of
operating income. The Company's practice has been to classify these gains and
losses as other income and expense. The Company has reclassified gains of
$944,000, $2,369,000 and $3,704,000 from other income and expense to be included
as a component of operating income in fiscal 2000, 1999 and 1998, respectively.

PRESENTATION: Certain amounts have been reclassified from prior period
consolidated financial statements to conform with the current year presentation.
General and administrative expenses of the Company's on-screen advertising
business have been combined with the costs and expenses of the on-screen
advertising business on the consolidated statements of operations.

NOTE 2--MERGER WITH PARENT

Effective August 15, 1997, the Company completed a merger with its majority
stockholder, Durwood, Inc. ("DI"), with the Company remaining as the surviving
entity (the "Merger"). In connection with the Merger, 2,641,951 shares of the
Company's Common Stock and 11,157,000 shares of the

37

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

AMC ENTERTAINMENT INC.

YEARS (52 WEEKS) ENDED MARCH 30, 2000, APRIL 1, 1999 AND
APRIL 2, 1998

NOTE 2--MERGER WITH PARENT (CONTINUED)
Company's Class B Stock owned by DI were canceled and the Company issued
8,783,289 shares of its Common Stock and 5,015,657 shares of its Class B Stock
to the DI stockholders. The Merger was accounted for as a corporate
reorganization and the recorded balances for consolidated assets, liabilities,
total stockholders' equity and results of operations were not affected. During
fiscal 1998, a company affiliated with Mr. Stanley H. Durwood, then Chairman of
the Board of Directors, Chief Executive Officer and majority voting stockholder,
and members of his family reimbursed the Company $1,000,000 for expenses related
to the Merger.

In connection with the Merger, the DI stockholders granted a proxy to the
Company to vote their shares of the Company's Common Stock for each candidate
for the Company's Board of Directors in the same proportion as the aggregate
votes cast in such elections by all other holders of the Company's Common Stock
not affiliated with the Company, its directors and officers. The proxy will
remain in effect until August 15, 2000.

NOTE 3--PROPERTY

A summary of property is as follows:



(IN THOUSANDS) 2000 1999
- -------------- ---------- ----------

Property owned:
Land............................................... $ 49,164 $ 38,465
Buildings and improvements......................... 207,119 157,331
Leasehold improvements............................. 384,142 346,809
Furniture, fixtures and equipment.................. 545,423 514,548
---------- ----------
1,185,848 1,057,153
Less-accumulated depreciation and amortization..... 376,277 347,692
---------- ----------
809,571 709,461

Property leased under capital leases:
Buildings and improvements......................... 44,555 61,825
Less-accumulated amortization...................... 31,831 45,261
---------- ----------
12,724 16,564
---------- ----------
$ 822,295 $ 726,025
========== ==========


Included in property is $78,681,000 and $97,688,000 of construction in
progress as of March 30, 2000 and April 1, 1999, respectively.

38

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

AMC ENTERTAINMENT INC.

YEARS (52 WEEKS) ENDED MARCH 30, 2000, APRIL 1, 1999 AND
APRIL 2, 1998

NOTE 4--SUPPLEMENTAL BALANCE SHEET INFORMATION

Other assets and liabilities consist of the following:



(IN THOUSANDS) 2000 1999
- -------------- -------- --------

Other current assets:
Prepaid rent.......................................... $ 16,498 $ 16,531
Deferred income taxes................................. 15,226 13,819
Income taxes receivable............................... 6,428 12,149
Other................................................. 7,123 6,208
-------- --------
$ 45,275 $ 48,707
======== ========
Other long-term assets:
Investments in real estate............................ $ 34,671 $ 34,059
Deferred financing costs.............................. 12,443 13,399
Deferred income taxes................................. 81,955 51,133
Preopening costs...................................... -- 9,935
Other................................................. 28,149 19,868
-------- --------
$157,218 $128,394
======== ========
Accrued expenses and other liabilities:
Taxes other than income............................... $ 22,938 $ 16,303
Interest.............................................. 11,777 5,198
Payroll and vacation.................................. 6,082 5,853
Casualty claims and premiums.......................... 6,028 4,817
Deferred income....................................... 41,104 36,896
Accrued bonus......................................... 2,799 3,981
Theatre closure....................................... 16,989 --
Other................................................. 6,320 4,256
-------- --------
$114,037 $ 77,304
======== ========


39

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

AMC ENTERTAINMENT INC.

YEARS (52 WEEKS) ENDED MARCH 30, 2000, APRIL 1, 1999 AND
APRIL 2, 1998

NOTE 5--CORPORATE BORROWINGS AND CAPITAL AND FINANCING LEASE OBLIGATIONS

A summary of corporate borrowings and capital and financing lease
obligations is as follows:



(IN THOUSANDS) 2000 1999
- -------------- -------- --------

$425 million Credit Facility due 2004................... $330,000 $123,000
9 1/2% Senior Subordinated Notes due 2011............... 225,000 225,000
9 1/2% Senior Subordinated Notes due 2009............... 199,105 199,045
Capital and financing lease obligations, interest
ranging from 7 1/4% to 20%............................ 68,506 48,575
9% Mortgage Note due July 30, 1999...................... -- 14,000
-------- --------
822,611 609,620
Less-current maturities................................. 3,205 18,017
-------- --------
$819,406 $591,603
======== ========


The Company maintains a $425 million credit facility (the "Credit
Facility"), which permits borrowings at interest rates based on either the
bank's base rate or LIBOR and requires an annual commitment fee based on margin
ratios that could result in a rate of .375% or .500% on the unused portion of
the commitment. The Credit Facility matures on April 10, 2004. The commitment
thereunder will be reduced by $25 million on each of December 31, 2002,
March 31, 2003, June 30, 2003 and September 30, 2003 and by $50 million on
December 31, 2003. The total commitment under the Credit Facility is
$425 million; however, the Credit Facility contains covenants that limit the
Company's ability to incur debt. As of March 30, 2000, the Company had
outstanding borrowings of $330,000,000 under the Credit Facility at an average
interest rate of 8.7% per annum, and approximately $85,000,000 was available for
borrowing under the Credit Facility.

Covenants under the Credit Facility impose limitations on indebtedness,
creation of liens, change of control, transactions with affiliates, mergers,
investments, guaranties, asset sales, dividends, business activities and
pledges. In addition, the Credit Facility contains certain financial covenants.
As of March 30, 2000, the Company was in compliance with all financial covenants
relating to the Credit Facility.

Costs related to the establishment of the Credit Facility were capitalized
and are charged to interest expense over the life of the Credit Facility.
Unamortized issuance costs of $2,449,000 as of March 30, 2000 are included in
other long-term assets.

On March 19, 1997, the Company sold $200 million of 9 1/2% Senior
Subordinated Notes due 2009 (the "Notes due 2009"). As required by the Indenture
to the Notes due 2009, the Company consummated a registered offer on August 5,
1997 to exchange the Notes due 2009 for notes of the Company with terms
identical in all material respects to the Notes due 2009. The Notes due 2009
bear interest at the rate of 9 1/2% per annum, payable in March and September.
The Notes due 2009 are redeemable at the option of the Company, in whole or in
part, at any time on or after March 15, 2002 at 104.75% of the principal amount
thereof, declining ratably to 100% of the principal amount thereof on or after
March 15, 2006, plus in each case interest accrued to the redemption date. Upon
a change of control (as defined in the Indenture), each holder of the Notes due
2009 will have the right to require the Company to repurchase such holder's
Notes due 2009 at a price equal to 101% of the principal amount thereof plus
accrued and

40

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

AMC ENTERTAINMENT INC.

YEARS (52 WEEKS) ENDED MARCH 30, 2000, APRIL 1, 1999 AND
APRIL 2, 1998

NOTE 5--CORPORATE BORROWINGS AND CAPITAL AND FINANCING LEASE OBLIGATIONS
(CONTINUED)
unpaid interest to the date of repurchase. The Notes due 2009 are subordinated
to all existing and future senior indebtedness, as defined in the Indenture, of
the Company.

The Indenture to the Notes due 2009 contains certain covenants that, among
other things, restrict the ability of the Company and its subsidiaries to incur
additional indebtedness and pay dividends or make distributions in respect of
their capital stock. If the Notes due 2009 attain "investment grade status", the
covenants in the Indenture limiting the Company's ability to incur additional
indebtedness and pay dividends will cease to apply. As of March 30, 2000, the
Company was in compliance with all financial covenants relating to the Notes due
2009; however, as of such date, the Company is prohibited from incurring
additional indebtedness other than additional borrowings under the Credit
Facility and other permitted indebtedness, as defined in the Indenture, and
paying dividends or making distributions in respect of its capital stock.

The discount on the Notes due 2009 is being amortized to interest expense
following the interest method. Costs related to the issuance of the Notes due
2009 were capitalized and are charged to interest expense, following the
interest method, over the life of the securities. Unamortized issuance costs of
$4,770,000 as of March 30, 2000 are included in other long-term assets.

On January 27, 1999, the Company sold $225 million of 9 1/2% Senior
Subordinated Notes due 2011 (the "Notes due 2011") in a private offering. As
required by the Indenture to the Notes due 2011, the Company consummated a
registered offer on May 10, 1999 to exchange the Notes due 2011 for notes of the
Company with terms identical in all material respects to the Notes due 2011. The
Notes due 2011 bear interest at the rate of 9 1/2% per annum, payable in
February and August. The Notes due 2011 are redeemable at the option of the
Company, in whole or in part, at any time on or after February 1, 2004 at
104.75% of the principal amount thereof, declining ratably to 100% of the
principal amount thereof on or after February 1, 2007, plus in each case
interest accrued to the redemption date. Upon a change of control (as defined in
the Indenture), the Company will be required to make an offer to repurchase each
holder's notes at a price equal to 101% of the principal amount thereof plus
accrued and unpaid interest to the date of repurchase. The Notes due 2011 are
subordinated to all existing and future senior indebtedness of the Company. The
Notes due 2011 are unsecured senior subordinated indebtedness of the Company
ranking equally with the Company's Notes due 2009.

The Indenture to the Notes due 2011 contains certain covenants that, among
other things, restrict the ability of the Company and its subsidiaries to incur
additional indebtedness and pay dividends or make distributions in respect of
their capital stock. If the Notes due 2011 attain "investment grade status", the
covenants in the Indenture limiting the Company's ability to incur additional
indebtedness and pay dividends will cease to apply. As of March 30, 2000, the
Company was in compliance with all financial covenants relating to the Notes due
2011; however, as of such date, the Company is prohibited from incurring
additional indebtedness other than additional borrowings under the Credit
Facility and other permitted indebtedness, as defined in the Indenture, and
paying dividends or making distributions in respect of its capital stock.

41

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

AMC ENTERTAINMENT INC.

YEARS (52 WEEKS) ENDED MARCH 30, 2000, APRIL 1, 1999 AND
APRIL 2, 1998

NOTE 5--CORPORATE BORROWINGS AND CAPITAL AND FINANCING LEASE OBLIGATIONS
(CONTINUED)
Costs related to the issuance of the Notes due 2011 were capitalized and are
charged to interest expense, following the interest method, over the life of the
securities. Unamortized issuance costs of $5,224,000 as of March 30, 2000 are
included in other long-term assets.

Historically, the Company has been responsible for the construction of
leased theatres and for paying project costs that were in excess of an agreed
upon amount to be reimbursed from the developer. EITF Issue No. 97-10 requires
the Company to be considered the owner (for accounting purposes) of these types
of projects during the construction period. As a result, the Company has
recorded $31,055,000 as financing lease obligations on its Balance Sheet related
to these types of projects.

Minimum annual payments required under existing capital and financing lease
obligations (net present value thereof) and maturities of corporate borrowings
as of March 30, 2000, are as follows:



CAPITAL AND FINANCING LEASE
OBLIGATIONS
------------------------------
MINIMUM NET
LEASE LESS PRESENT CORPORATE
(IN THOUSANDS) PAYMENTS INTEREST VALUE BORROWINGS TOTAL
- -------------- -------- -------- -------- ---------- --------

2001........................ $ 12,531 $ 9,326 $ 3,205 $ -- $ 3,205
2002........................ 12,545 8,763 3,782 -- 3,782
2003........................ 12,302 8,113 4,189 -- 4,189
2004........................ 12,296 7,374 4,922 -- 4,922
2005........................ 11,121 6,566 4,555 -- 4,555
Thereafter.................. 93,566 45,713 47,853 754,105 801,958
-------- ------- ------- -------- --------
Total....................... $154,361 $85,855 $68,506 $754,105 $822,611
======== ======= ======= ======== ========


The Company maintains a letter of credit in the normal course of its
business. The unused portion of the letter of credit was $5,729,000 as of
March 30, 2000.

NOTE 6--STOCKHOLDERS' EQUITY

The authorized common stock of AMCE consists of two classes of stock. Except
for the election of directors, each holder of Common Stock (66 2/3 CENTS par
value; 45,000,000 shares authorized) is entitled to one vote per share, and each
holder of Class B Stock (66 2/3 CENTS par value; 30,000,000 shares authorized)
is entitled to 10 votes per share. Common stockholders voting as a class are
presently entitled to elect two of the five members of AMCE's Board of Directors
with Class B stockholders electing the remainder.

Holders of the Company's stock have no pre-emptive or subscription rights.
Holders of Common Stock have no conversion rights, but holders of Class B Stock
may elect to convert at any time on a share-for-share basis into Common Stock.

During fiscal 1999, various holders of the Company's $1.75 Cumulative
Convertible Preferred Stock (the "Convertible Preferred Stock") converted
1,796,485 shares into 3,097,113 shares of Common Stock at a conversion rate of
1.724 shares of Common Stock for each share of Convertible Preferred Stock. On

42

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

AMC ENTERTAINMENT INC.

YEARS (52 WEEKS) ENDED MARCH 30, 2000, APRIL 1, 1999 AND
APRIL 2, 1998

NOTE 6--STOCKHOLDERS' EQUITY (CONTINUED)
April 14, 1998, the Company redeemed the remaining 3,846 shares of Convertible
Preferred Stock at a redemption price of $25.75 per share plus accrued and
unpaid dividends.

The Company has authorized 10,000,000 shares of Preferred Stock
(66 2/3 CENTS par value), of which no shares are currently issued and
outstanding.

During fiscal 1999, the Company and its then Co-Chairman and Chief Executive
Officer, Mr. Stanley H. Durwood, together with his six children (the "Durwood
Family Stockholders") completed a registered secondary offering of 3,300,000
shares of Common Stock (the "Secondary Offering") owned by the Durwood Family
Stockholders. In connection with the Secondary Offering, Mr. Stanley H. Durwood
converted 500,000 shares of Convertible Class B Stock to 500,000 shares of
Common Stock. Additionally, pursuant to an agreement with his children,
Mr. Stanley H. Durwood converted 473,664 shares of Convertible Class B Stock to
Common Stock for delivery to his children. During fiscal 1999, a company
affiliated with the Durwood Family Stockholders reimbursed the Company $698,000
for expenses related to the Secondary Offering.

During fiscal 1999, the Company loaned one of its executive officers
$5,625,000 to purchase 375,000 shares of Common Stock of the Company in the
Secondary Offering. On September 14, 1998, the Company loaned $3,765,000 to
another of its executive officers to purchase 250,000 shares of Common Stock of
the Company. The 250,000 shares were purchased in the open market and unused
proceeds of $811,000 were repaid to the Company leaving a remaining unpaid
principal balance of $2,954,000. The loans are unsecured and are due in August
and September of 2003, respectively, may be prepaid in part or full without
penalty, and are represented by promissory notes which bear interest at a rate
(6% per annum) at least equal to the applicable federal rate prescribed by
Section 1274 (d) of the Internal Revenue Code in effect on the date of such
loans, payable at maturity. Accrued interest on the loans as of March 30, 2000
was $783,000.

STOCK-BASED COMPENSATION

In November 1994, AMCE adopted a stock option and incentive plan (the "1994
Plan"). This plan, which expired in 1999 except as to outstanding awards,
provided for three basic types of awards: (i) grants of stock options which are
either incentive or non-qualified stock options, (ii) grants of stock awards,
which may be either performance or restricted stock awards, and
(iii) performance unit awards. The number of shares of Common Stock which may
have been sold or granted under the plan may not have exceeded 1,000,000 shares.
The 1994 Plan provided that the exercise price for stock options may not have
been less than the fair market value of the stock at the date of grant and
unexercised options expire no later than ten years after date of grant. Options
issued under the 1994 Plan during fiscal 2000 vest 50% at issuance and 50% one
year from issuance; options issued under the 1994 Plan during fiscal 1999 vested
immediately; and all other options issued under the 1994 Plan vest two years
from the date of issuance.

In December 1999, AMCE adopted a stock option and incentive plan for Outside
Directors (the "1999 Outside Directors Plan"). This plan provided for a one-time
grant to outside directors of non-qualified stock options and permits directors
to receive up to all of their annual cash retainer in options in lieu of cash.
The number of shares of Common Stock which may be sold or granted under the plan
may not exceed 200,000 shares. The 1999 Outside Directors Plan provides that the
exercise price for

43

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

AMC ENTERTAINMENT INC.

YEARS (52 WEEKS) ENDED MARCH 30, 2000, APRIL 1, 1999 AND
APRIL 2, 1998

NOTE 6--STOCKHOLDERS' EQUITY (CONTINUED)
stock options be equal to the fair market value of the stock at the date of
grant and unexercised options expire no later than ten years after date of
grant. Options issued under the 1999 Outside Directors Plan during fiscal 2000
vest one year from the date of issuance.

In December 1999, AMCE adopted a stock option and incentive plan (the "1999
Plan"). This plan provides for three basic types of awards: (i) grants of stock
options which are either incentive or non-qualified stock options (ii) grants of
stock awards, which may be either performance or restricted stock awards, and
(iii) performance unit awards. The number of shares of Common Stock which may be
sold or granted under the plan may not exceed 2,100,000 shares. The 1999 Plan
provides that the exercise price for stock options may not be less than the fair
market value of the stock at the date of grant and unexercised options expire no
later than ten years after date of grant. No options have been issued under the
1999 Plan.

The Company has adopted the disclosure-only provisions of Statement of
Financial Accounting Standards No. 123, ACCOUNTING FOR STOCK-BASED COMPENSATION.
Accordingly, no compensation expense has been recognized for the Company's
stock-based compensation other than for performance-based stock awards. In
fiscal 1997 and 1996, the Company granted stock awards to certain individuals
which were issuable at the end of a performance period ended April 2, 1998 based
on certain performance criteria. No performance-based stock awards were earned
at the end of the performance period. The Company recognized compensation
expense for performance stock awards of ($1,358,000) in 1998. Had compensation
expense for the Company's stock options and awards been determined based on the
fair value at the grant dates, the Company's net loss and net loss for common
shares would have been the following:



(IN THOUSANDS, EXCEPT PER SHARE DATA) 2000 1999 1998
- ------------------------------------- -------- -------- --------

Net loss before cumulative effect of an
accounting change:
As reported.................................. $(49,347) $(16,016) $(24,499)
Pro forma.................................... $(51,193) $(17,877) $(26,007)
Net loss per common share before cumulative
effect
of an accounting change:
As reported.................................. $ (2.10) $ (.69) $ (1.59)
Pro forma.................................... $ (2.18) $ (.76) $ (1.67)


The following table reflects the weighted average fair value per option
granted during the year, as well as the significant weighted average assumptions
used in determining fair value using the Black-Scholes option-pricing model:



2000 1999 1998
-------- -------- --------

Fair value on grant date............................ $7.84 $8.07 $9.69
Risk-free interest rate............................. 6.0% 5.2% 6.0%
Expected life (years)............................... 5 5 5
Expected volatility................................. 46.2% 42.7% 42.0%
Expected dividend yield............................. -- -- --


44

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

AMC ENTERTAINMENT INC.

YEARS (52 WEEKS) ENDED MARCH 30, 2000, APRIL 1, 1999 AND
APRIL 2, 1998

NOTE 6--STOCKHOLDERS' EQUITY (CONTINUED)
A summary of stock option activity under all plans is as follows:



2000 1999 1998
-------------------------- -------------------------- --------------------------
WEIGHTED WEIGHTED WEIGHTED
AVERAGE AVERAGE AVERAGE
NUMBER EXERCISE PRICE NUMBER EXERCISE PRICE NUMBER EXERCISE PRICE
OF SHARES PER SHARE OF SHARES PER SHARE OF SHARES PER SHARE
--------- -------------- --------- -------------- --------- --------------

Outstanding at beginning of
year........................... 894,850 $14.92 519,850 $12.69 558,500 $12.47
Granted.......................... 538,690 $16.23 375,000 $18.01 2,250 $21.21
Canceled......................... (5,250) -- -- -- (1,500) $26.38
Exercised........................ -- -- -- -- (39,400) $ 9.49
--------- ------ ------- ------ ------- ------
Outstanding at end of year....... 1,428,290 $15.41 894,850 $14.92 519,850 $12.69
========= ====== ======= ====== ======= ======
Exercisable at end of year....... 1,124,600 $15.38 893,725 $14.91 487,975 $11.90
========= ====== ======= ====== ======= ======
Available for grant at end of
year........................... 2,231,310 470,750 845,750
========= ======= =======


The following table summarizes information about stock options as of
March 30, 2000:



OUTSTANDING STOCK OPTIONS
----------------------------------------------- EXERCISABLE STOCK OPTIONS
WEIGHTED-AVERAGE ----------------------------
RANGE OF NUMBER REMAINING WEIGHTED-AVERAGE NUMBER WEIGHTED-AVERAGE
EXERCISE PRICES OF SHARES CONTRACTUAL LIFE EXERCISE PRICE OF SHARES EXERCISE PRICE
- --------------- --------- ---------------- ---------------- --------- ----------------

$9.25 to $12.50.......... 517,290 4.8 years $ 9.84 423,600 $ 9.66
$14.50 to $20.75......... 820,500 8.7 years $17.79 610,500 $17.82
$22.13 to $26.38......... 90,500 6.1 years $25.49 90,500 $25,50
--------- --------- ------ --------- ------
$9.25 to $26.38.......... 1,428,290 7.1 years $15.40 1,124,600 $15.36
========= ========= ====== ========= ======


NOTE 7--EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted earnings
per share:



(IN THOUSANDS, EXCEPT PER SHARE DATA) 2000 1999 1998
- ------------------------------------- -------- -------- --------

Numerator:
Net loss before cumulative effect of an accounting
change.................................................. $(49,347) $(16,016) $(24,499)
Less: Preferred dividends................................. -- -- 4,846
-------- -------- --------
Net loss for basic and diluted earnings per share......... $(49,347) $(16,016) $(29,345)
======== ======== ========
Denominator:
Shares for basic and diluted earnings per share--average
shares outstanding...................................... 23,469 23,378 18,477
======== ======== ========
Basic loss per share before cumulative effect of an
accounting change......................................... $ (2.10) $ (.69) $ (1.59)
======== ======== ========
Diluted earnings per share before cumulative effect of an
accounting change......................................... $ (2.10) $ (.69) $ (1.59)
======== ======== ========


45

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

AMC ENTERTAINMENT INC.

YEARS (52 WEEKS) ENDED MARCH 30, 2000, APRIL 1, 1999 AND
APRIL 2, 1998

In 1998, dividends and shares from conversion of Convertible Preferred Stock
were excluded from the diluted earnings per share calculation because they were
anti-dilutive. Shares from options to purchase shares of Common Stock were
excluded from the diluted earnings per share calculation because they were
anti-dilutive. In 1998, contingently issuable shares were excluded from the
diluted earnings per share calculation because the conditions necessary for
their issuance were not satisfied.

NOTE 8--INCOME TAXES

Income tax provision reflected in the Consolidated Statements of Operations
for the three years ended March 30, 2000 consists of the following components:



(IN THOUSANDS) 2000 1999 1998
- -------------- -------- -------- --------

Current:
Federal................................................... $ (1,485) (11,776) $ 15,600
Foreign................................................... -- -- --
State..................................................... (2,325) (1,286) 5,125
-------- -------- --------
Total current........................................... (3,810) (13,062) 20,725

Deferred:
Federal................................................... (26,395) 4,149 (31,860)
Foreign................................................... (2,419) (1,589) --
State..................................................... (3,371) 2 (5,465)
-------- -------- --------
Total deferred.......................................... (32,185) 2,562 (37,325)
-------- -------- --------
Total provision............................................. (35,995) (10,500) (16,600)
Tax benefit of cumulative effect of an accounting change.... 4,095 -- --
-------- -------- --------
Total provision before cumulative effect of an accounting
change.................................................... $(31,900) $(10,500) $(16,600)
======== ======== ========


The difference between the effective tax rate on earnings (loss) before
income taxes and the U.S. federal income tax statutory rate is as follows:



2000 1999 1998
-------- -------- --------

Federal statutory rate...................................... (35.0)% (35.0)% (35.0)%
State income taxes, net of federal tax benefit.............. (4.6) (6.0) (6.2)
Other, net.................................................. .3 1.4 .8
----- ----- -----
Effective tax rate.......................................... (39.3)% (39.6)% (40.4)%
===== ===== =====


46

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

AMC ENTERTAINMENT INC.

YEARS (52 WEEKS) ENDED MARCH 30, 2000, APRIL 1, 1999 AND
APRIL 2, 1998

NOTE 8--INCOME TAXES (CONTINUED)
The significant components of deferred income tax assets and liabilities as
of March 30, 2000 and April 1, 1999 are as follows:



2000 1999
---------------------- ----------------------
DEFERRED INCOME TAX DEFERRED INCOME TAX
(IN THOUSANDS) ASSETS LIABILITIES ASSETS LIABILITIES
- -------------- -------- ----------- -------- -----------

Property............................................... $ 976 $ -- $19,196 $ --
Capital lease obligations.............................. 9,816 -- 12,928 --
Accrued reserves and liabilities....................... 24,707 -- 12,368 --
Deferred rents......................................... 12,193 -- 11,562 --
Alternative minimum tax credit carryover............... 10,853 -- 7,532 --
Preopening costs....................................... -- -- -- 3,821
Net operating loss carryforward........................ 33,031 -- -- --
Other.................................................. 6,863 928 5,932 745
------- ---- ------- ------
Total.................................................. 98,439 928 69,518 4,566
Less: Valuation allowance.............................. 330 -- -- --
------- ---- ------- ------
Net.................................................... 98,109 928 69,518 4,566
Less: Current deferred income taxes.................... 15,226 -- 13,819
------- ---- ------- ------
Total noncurrent deferred income taxes................. $82,883 $928 $55,699 $4,566
======= ==== ======= ======
Net noncurrent deferred income taxes................... $81,955 $51,133
======= =======


The Company's foreign subsidiaries have net operating loss carryforwards in
Portugal, Spain and the United Kingdom aggregating $9,700,000, $320,000 of which
may be carried forward indefinitely and the balance of which expires from 2004
through 2007. The Company's Federal income tax loss carryforward of $76,105,000
expires in 2020. The Company's state income tax loss carryforwards of
$106,600,000 may be used over various periods ranging from 5 to 20 years.

Management believes it is more likely than not that the Company will realize
future taxable income sufficient to utilize its deferred tax assets, however, as
of March 30, 2000, management believed it was more likely than not that certain
deferred tax assets related to state tax net operating loss carryforwards would
not be realized due to uncertainties as to the timing and amounts of future
taxable income. Accordingly a valuation allowance of $330,000 was established.
The amount of the deferred tax asset considered realizable could be reduced in
the near term if estimates of future taxable income during the carryforward
period are reduced.

NOTE 9--LEASES

The majority of the Company's operations are conducted in premises occupied
under lease agreements with initial base terms ranging generally from 13 to
25 years, with certain leases containing options to extend the leases for up to
an additional 20 years. The leases provide for fixed rentals and/or rentals
based on revenues with a guaranteed minimum. The majority of the leases provide
that the Company will pay all, or substantially all, taxes, maintenance,
insurance and certain other operating expenses. Assets held under capital lease
obligations are included in property.

47

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

AMC ENTERTAINMENT INC.

YEARS (52 WEEKS) ENDED MARCH 30, 2000, APRIL 1, 1999 AND
APRIL 2, 1998

NOTE 9--LEASES (CONTINUED)
During fiscal 1998, the Company sold the real estate assets associated with
13 megaplexes to Entertainment Properties Trust ("EPT"), a real estate
investment trust, for an aggregate purchase price of $283,800,000 (the "Sale and
Lease Back Transaction"). The Company leased the real estate assets associated
with the theatres from EPT pursuant to non-cancelable operating leases with
terms ranging from 13 to 15 years at an initial lease rate of 10.5% with options
to extend for up to an additional 20 years. The leases are triple net leases
that require the Company to pay substantially all expenses associated with the
operation of the theatres, such as taxes and other governmental charges,
insurance, utilities, service, maintenance and any ground lease payments. The
Company has accounted for this transaction as a sale and leaseback in accordance
with Statement of Financial Accounting Standards No. 98, ACCOUNTING FOR LEASES.
The land and building and improvements have been removed from the Balance Sheet
and a gain of $15,130,000 on the sales has been deferred and is being amortized
to rent expense over the life of the leases. The Company leases four additional
theatres from EPT under the same terms as those included in the Sale and Lease
Back Transaction. Annual rentals for these four theatres are based on an
estimated fair value of $95,100,000 for the theatres.

During fiscal 2000, the Company sold the building and improvements
associated with one of its megaplex theatres to EPT for proceeds of $17,600,000
under terms similar to the above Sale and Leaseback Transaction. The Company has
granted an option to EPT to acquire the land at this theatre for the cost to the
Company. In addition, for a period of five years subsequent to November 1997,
EPT will have a right of first refusal and first offer to purchase and lease
back to the Company the real estate assets associated with any theatre and
related entertainment property owned or ground-leased by the Company,
exercisable upon the Company's intended disposition of such property.

The Chairman of the Board, Chief Executive Officer and President of AMCE is
also the Chairman of the Board of Trustees of EPT.

During fiscal 2000 and 1999, the Company entered into master lease
agreements for approximately $21,200,000 and $25,000,000, respectively, of
equipment necessary to fixture certain theatres. The master lease agreements
have a term of six years and include early termination and purchase options. The
Company classifies these leases as operating leases.

Following is a schedule, by year, of future minimum rental payments required
under existing operating leases that have initial or remaining non-cancelable
terms in excess of one year as of March 30, 2000:



(IN THOUSANDS)
- --------------

2001........................................................ $ 197,816
2002........................................................ 198,310
2003........................................................ 196,771
2004........................................................ 195,254
2005........................................................ 193,772
Thereafter.................................................. 2,039,242
----------
Total minimum payments required............................. $3,021,165
==========


48

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

AMC ENTERTAINMENT INC.

YEARS (52 WEEKS) ENDED MARCH 30, 2000, APRIL 1, 1999 AND
APRIL 2, 1998

NOTE 9--LEASES (CONTINUED)
The Company has also entered into agreements to lease space for the
operation of theatres not yet fully constructed. The scheduled completion of
construction and theatre openings are at various dates during fiscal 2001. The
future minimum rental payments required under the terms of these leases total
approximately $385 million.

The Company records rent expense on a straight-line basis over the term of
the lease. Included in long-term liabilities as of March 30, 2000 and April 1,
1999 is $35,001,000 and $28,201,000, respectively, of deferred rent representing
pro rata future minimum rental payments for leases with scheduled rent
increases.

Rent expense is summarized as follows:



(IN THOUSANDS) 2000 1999 1998
- -------------- -------- -------- --------

Minimum rentals............................... $176,315 $150,891 $ 94,103
Common area expenses.......................... 17,318 14,087 12,011
Percentage rentals based on revenues.......... 2,899 2,783 2,869
Furniture, fixtures and equipment rentals..... 5,109 469 --
-------- -------- --------
$201,641 $168,230 $108,983
======== ======== ========


NOTE 10--EMPLOYEE BENEFIT PLANS

The Company sponsors a non-contributory defined benefit pension plan
covering, after a minimum of one year of employment, all employees age 21 or
older who have completed 1,000 hours of service in their first twelve months of
employment or in a calendar year and who are not covered by a collective
bargaining agreement.

The plan calls for benefits to be paid to eligible employees at retirement
based primarily upon years of credited service with the Company (not exceeding
thirty-five) and the employee's highest five year average compensation.
Contributions to the plan reflect benefits attributed to employees' services to
date, as well as services expected to be earned in the future. Plan assets are
invested in pooled separate accounts with an insurance company pursuant to which
the plan's benefits are paid to retired and terminated employees and the
beneficiaries of deceased employees.

The Company also sponsors two non-contributory deferred compensation plans
which provide certain employees additional pension benefits.

The Company currently offers eligible retirees the opportunity to
participate in a health plan (medical and dental) and a life insurance plan.
Substantially all employees may become eligible for these benefits provided that
the employee must be at least 55 years of age and have 15 years of credited
service at retirement. The health plan is contributory, with retiree
contributions adjusted annually; the life insurance plan is noncontributory. The
accounting for the health plan anticipates future modifications to the
cost-sharing provisions to provide for retiree premium contributions of
approximately 20% of total premiums, increases in deductibles and co-insurance
at the medical inflation rate and coordination with Medicare. Retiree health and
life insurance plans are not funded. The Company is amortizing the transition
obligation on the straight-line method over a period of 20 years.

49

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

AMC ENTERTAINMENT INC.

YEARS (52 WEEKS) ENDED MARCH 30, 2000, APRIL 1, 1999 AND
APRIL 2, 1998

NOTE 10--EMPLOYEE BENEFIT PLANS (CONTINUED)

Net periodic benefit cost for the plans consists of the following:



PENSION BENEFITS OTHER BENEFITS
------------------------------ ------------------------------
(IN THOUSANDS) 2000 1999 1998 2000 1999 1998
- -------------- -------- -------- -------- -------- -------- --------

Components of net periodic benefit cost:
Service cost......................................... $ 2,118 $ 1,910 $1,739 $257 $234 $229
Interest cost........................................ 1,905 1,612 1,344 232 247 218
Expected return on plan assets....................... (1,257) (1,118) (932) -- -- --
Recognized net actuarial (gain) loss................. 103 -- (36) (21) -- --
Amortization of unrecognized transition obligation... 231 231 231 50 50 50
------- ------- ------ ---- ---- ----
Net periodic benefit cost............................ $ 3,100 $ 2,635 $2,346 $518 $531 $497
======= ======= ====== ==== ==== ====


The following tables set forth the plans' change in benefit obligations and plan
assets and the accrued liability for benefit cost included in the Consolidated
Balance Sheets for the years ended March 30, 2000 and April 1, 1999:



PENSION BENEFITS OTHER BENEFITS
---------------------- ----------------------
(IN THOUSANDS) 2000 1999 2000 1999
- -------------- -------- -------- -------- --------

Change in benefit obligation:
Benefit obligation at beginning of
year................................... $29,622 $23,301 $3,105 $3,328
Service cost............................. 2,118 1,910 257 234
Interest cost............................ 1,905 1,612 232 247
Plan participants' contributions......... -- -- 23 23
Actuarial (gain) loss.................... (9,366) 3,590 650 (695)
Benefits paid............................ (1,387) (791) (68) (32)
------- ------- ------ ------
Benefit obligation at end of year........ $22,892 $29,622 $4,199 $3,105
======= ======= ====== ======




PENSION BENEFITS OTHER BENEFITS
------------------- -------------------
(IN THOUSANDS) 2000 1999 2000 1999
- -------------- -------- -------- -------- --------

Change in plan assets:
Fair value of plan assets at beginning
of year............................... $ 15,043 $ 12,991 $ -- $ --
Actual return on plan assets............ 755 1,527 -- --
Employer contribution................... 1,352 1,316 45 9
Plan participants' contributions........ -- -- 23 23
Benefits paid........................... (1,387) (791) (68) (32)
-------- -------- ------- -------
$ 15,763 $ 15,043 $ -- $ --
======== ======== ======= =======
Accrued liability for benefit cost:
Funded status........................... $ (7,129) $(14,579) $(4,199) $(3,105)
Unrecognized net actuarial (gain)
loss.................................. (5,143) 3,823 221 (500)
Unrecognized prior service cost......... 1,523 1,753 497 597
-------- -------- ------- -------
Accrued benefit cost.................... $(10,749) $ (9,003) $(3,481) $(3,008)
======== ======== ======= =======


50

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

AMC ENTERTAINMENT INC.

YEARS (52 WEEKS) ENDED MARCH 30, 2000, APRIL 1, 1999 AND
APRIL 2, 1998

NOTE 10--EMPLOYEE BENEFIT PLANS (CONTINUED)
The accumulated benefit obligation and fair value of plan assets for the
pension plans with accumulated benefit obligations in excess of plan assets were
$22,892,000 and $15,763,000, respectively, as of March 30, 2000; and $29,622,000
and $15,043,000, respectively, as of April 1, 1999.

The assumptions used in computing the preceding information are as follows:



PENSION
BENEFITS OTHER BENEFITS
---------------------- ----------------------
(IN THOUSANDS) 2000 1999 2000 1999
- -------------- -------- -------- -------- --------

Weighted-average assumptions:
Discount rate................................... 7.25% 6.50% 8.00% 7.00%
Expected return on plan assets.................. 8.50% 8.50% -- --
Rate of compensation increase................... 6.00% 6.00% 6.50% 6.50%


For measurement purposes, the annual rate of increase in the per capita cost
of covered health care benefits assumed for 2000 was 12.0% for medical and 4.25%
for dental. The rates were assumed to decrease gradually to 5.0% for medical and
3.0% for dental at 2014 and remain at that level thereafter. The health care
cost trend rate assumption has a significant effect on the amounts reported.
Increasing the assumed health care cost trend rates by one percentage point in
each year would increase the accumulated postretirement benefit obligation as of
March 30, 2000 by $893,000 and the aggregate of the service and interest cost
components of postretirement expense for fiscal 2000 by $167,000. Decreasing the
assumed health care cost trend rates by one percentage point in each year would
decrease the accumulated postretirement expense for fiscal 2000 by $731,000 and
the aggregate service and interest cost components of postretirement expense for
fiscal 2000 by $129,000.

The Company sponsors a voluntary thrift savings plan covering the same
employees eligible for the pension plan. Since inception of the savings plan,
the Company has matched 50% of each eligible employee's elective contributions,
limited to 3% of the employee's salary. The Company's expense under the thrift
savings plan was $1,373,000, $1,319,000, and $1,308,000 for fiscal 2000, 1999
and 1998, respectively.

NOTE 11--CONTINGENCIES

The Company, in the normal course of business, is party to various legal
actions. 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.

NOTE 12--THEATRE CLOSURE AND DISPOSITION OF ASSETS

The Company has provided reserves for estimated losses from theatres which
have been closed and from discontinuing the operation of fast food restaurants.

During fiscal 2000, the Company discontinued operation of 35 multiplexes
with 242 screens. As of March 30, 2000, the Company has reserved $16,989,000
related to 19 of these multiplexes with 142 screens for which lease terminations
have not been consummated. The Company is obligated under long-term

51

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

AMC ENTERTAINMENT INC.

YEARS (52 WEEKS) ENDED MARCH 30, 2000, APRIL 1, 1999 AND
APRIL 2, 1998

NOTE 12--THEATRE CLOSURE AND DISPOSITION OF ASSETS (CONTINUED)
lease commitments with remaining terms of up to nine years. As of March 30,
2000, the base rents aggregated approximately $5,246,000 annually, and
$22,191,000 over the remaining terms of the leases.

In conjunction with the opening of certain new theatres in 1986 through
1988, the Company expanded its food services by leasing additional space
adjacent to those theatres to operate specialty fast food restaurants. The
Company discontinued operating the restaurants due to unprofitability. The
Company continues to sub-lease or convert to other uses the space leased for
these restaurants. The Company is obligated under non-cancelable long-term lease
commitments with remaining terms of up to 11 years. As of March 30, 2000, the
base rents aggregated approximately $956,000 annually, and $6,641,000 over the
remaining terms of the leases. As of March 30, 2000, the Company had subleased
approximately 55% of the space with remaining terms ranging from three months to
129 months. Non-cancelable subleases aggregated approximately $701,000 annually,
and $3,482,000 over the remaining terms of the subleases.

NOTE 13--RESTRUCTURING CHARGE

On September 30, 1999, the Company recorded a restructuring charge of
$12,000,000 ($7,200,000 after tax or $.31 per share) related to the
consolidation of its three U.S. divisional operations offices into its corporate
headquarters and a decision to discontinue direct involvement with
pre-development activities associated with certain retail/entertainment projects
conducted through its wholly-owned subsidiary, Centertainment, Inc. Included in
this total are severance and other employee related costs of $5,300,000, lease
termination costs of $700,000 and the write-down of property of $6,000,000. As
of September 30, 1999, the Company recorded $7,200,000 in accrued expenses and
other liabilities related to these charges. The Company anticipates that all of
the remaining restructuring costs will be paid in fiscal 2001.

The severance and other employee related costs result from a workforce
reduction of 128 employees primarily at the Company's divisional offices and at
its corporate headquarters. Lease termination costs were incurred in connection
with the closure of the three divisional operations offices prior to their lease
expiration dates. The write down of property was related to capitalized
pre-development costs for certain retail/entertainment projects.

The activity impacting the accrual for restructuring charge is summarized
below:



SEVERANCE AND LEASE
OTHER EMPLOYEE PRE-DEVELOPMENT TERMINATION
RELATED COSTS COSTS COSTS TOTAL
-------------- --------------- ----------- --------

Balance as of September 30,
1999....................... $5,233 $1,331 $667 $7,231
Cash Payments................ (4,805) (1,212) (354) (6,371)
Expense...................... 122 (119) (3) --
------ ------ ---- ------
Balance as of March 30,
2000....................... $ 550 $ -- $310 $ 860
====== ====== ==== ======


NOTE 14--FAIR VALUE OF FINANCIAL INSTRUMENTS

The following methods and assumptions were used to estimate the fair value
of each class of financial instruments for which it was practicable to estimate
that value.

52

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

AMC ENTERTAINMENT INC.

YEARS (52 WEEKS) ENDED MARCH 30, 2000, APRIL 1, 1999 AND
APRIL 2, 1998

NOTE 14--FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)
The carrying value of cash and equivalents approximates fair value because
of the short duration of those instruments. The fair value of publicly held
corporate borrowings was based upon quoted market prices. For other corporate
borrowings, the fair value was based upon rates available to the Company from
bank loan agreements or rates based upon the estimated premium over U.S.
treasury notes with similar average maturities. The fair values of Employee
Notes for Common Stock purchases are based upon the current applicable federal
rate prescribed by Section 1274(d) of the Internal Revenue Code.

The estimated fair values of the Company's financial instruments are as
follows:



2000 1999
------------------- -------------------
CARRYING FAIR CARRYING FAIR
(IN THOUSANDS) AMOUNT VALUE AMOUNT VALUE
- -------------- -------- -------- -------- --------

Financial assets:
Cash and equivalents.................. $119,305 $119,305 $13,239 $13,239
Employee Notes for Common Stock
purchases........................... 9,362 8,938 8,875 8,875
Financial liabilities:
Cash overdrafts....................... $ 28,637 $ 28,637 $14,350 $14,350
Corporate borrowings.................. 754,105 549,410 561,045 545,000


NOTE 15--OPERATING SEGMENTS

The Company has identified three reportable segments around differences in
products and services and geographical areas. North America and International
theatrical exhibition operations are identified as separate segments based on
dissimilarities in international markets from North America. On-screen
advertising and other are identified as a separate segment due to differences in
products and services offered.

The Company evaluates the performance of its segments and allocates
resources based on several factors, of which the primary measure is net earnings
(loss) before income taxes, cumulative effect of an accounting change, interest,
depreciation and amortization and adjusted for impairment losses, restructuring
charge, preopening expense, theatre closure expense, gain (loss) on disposition
of assets and equity in earnings of unconsolidated affiliates ("Adjusted
EBITDA"). The Company evaluates Adjusted EBITDA generated by its segments in a
number of manners, of which the primary measure is a comparison of segment
Adjusted EBITDA to segment property.

The Company's segments follow the same accounting policies as discussed in
Note 1 to the Consolidated Financial Statements on page 34.

53

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

AMC ENTERTAINMENT INC.

YEARS (52 WEEKS) ENDED MARCH 30, 2000, APRIL 1, 1999 AND
APRIL 2, 1998

NOTE 15--OPERATING SEGMENTS (CONTINUED)
Information about the Company's operations by operating segment is as
follows:



REVENUES (IN THOUSANDS) 2000 1999 1998
- ----------------------- ---------- ---------- --------

North American theatrical exhibition....... $1,062,774 $ 951,457 $797,730
International theatrical exhibition........ 60,177 39,817 27,969
On-screen advertising and other............ 43,991 32,182 25,051
---------- ---------- --------
Total revenues............................. $1,166,942 $1,023,456 $850,750
========== ========== ========




ADJUSTED EBITDA (IN THOUSANDS) 2000 1999 1998
- ------------------------------ -------- -------- --------

North American theatrical exhibition.......... $167,042 $156,302 $155,764
International theatrical exhibition........... (1,387) 2,333 1,971
On-screen advertising and other............... (628) 1,283 (731)
-------- -------- --------
Total segment Adjusted EBITDA................. 165,027 159,918 157,004
General and administrative.................... 47,407 52,321 47,860
-------- -------- --------
Total Adjusted EBITDA......................... $117,620 $107,597 $109,144
======== ======== ========




PROPERTY (IN THOUSANDS) 2000 1999 1998
- ----------------------- ---------- ---------- --------

North American theatrical exhibition....... $1,018,272 $ 919,185 $758,391
International theatrical exhibition........ 75,153 51,779 17,320
On-screen advertising and other............ 12,812 11,081 10,938
---------- ---------- --------
Total segment property..................... 1,106,237 982,045 786,649
Construction in progress................... 78,681 97,688 76,698
Corporate.................................. 45,485 39,245 32,402
---------- ---------- --------
Total property(1).......................... $1,230,403 $1,118,978 $895,749
========== ========== ========




CAPITAL EXPENDITURES (IN THOUSANDS) 2000 1999 1998
- ----------------------------------- -------- -------- --------

North American theatrical exhibition.......... $193,994 $144,835 $337,197
International theatrical exhibition........... 22,989 30,560 3,121
On-screen advertising and other............... 1,733 1,884 2,968
-------- -------- --------
Total segment capital expenditures............ 218,716 177,279 343,286
Construction in progress...................... 44,713 79,351 45,084
Corporate..................................... 11,503 4,183 847
-------- -------- --------
Total capital expenditures.................... $274,932 $260,813 $389,217
======== ======== ========


- ------------------------

(1) Property is comprised of land, buildings and improvements, leasehold
improvements and furniture, fixtures and equipment.

54

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

AMC ENTERTAINMENT INC.

YEARS (52 WEEKS) ENDED MARCH 30, 2000, APRIL 1, 1999 AND
APRIL 2, 1998

NOTE 15--OPERATING SEGMENTS (CONTINUED)

A reconciliation of loss before income taxes to Adjusted EBITDA is as
follows:



(IN THOUSANDS) 2000 1999 1998
- -------------- --------- --------- ---------

Loss before income taxes and cumulative effect of an
accounting change......................................... $ (81,247) $ (26,516) $ (41,099)

Plus:
Interest expense.......................................... 62,703 38,628 35,679
Depreciation and amortization............................. 95,974 89,221 70,117
Impairment of long-lived assets........................... 5,897 4,935 46,998
Restructuring charge...................................... 12,000 -- --
Preopening expense........................................ 6,795 2,265 2,243
Theatre closure expense................................... 16,661 2,801 --
Gain on disposition of assets............................. (944) (2,369) (3,704)
Investment income......................................... (219) (1,368) (1,090)
--------- --------- ---------

Total Adjusted EBITDA....................................... $ 117,620 $ 107,597 $ 109,144
========= ========= =========


Information about the Company's revenues and assets by geographic area is as
follows:



REVENUES (IN THOUSANDS) 2000 1999 1998
- ----------------------- ---------- ---------- --------

United States.............................................. $1,087,765 $ 980,911 $822,781
Canada..................................................... 19,000 2,728 --
Japan...................................................... 31,295 25,174 20,101
China (Hong Kong).......................................... 8,723 2,098 --
Portugal................................................... 8,538 8,855 7,868
Spain...................................................... 10,161 3,690 --
France..................................................... 1,460 -- --
---------- ---------- --------

Total revenues............................................. $1,166,942 $1,023,456 $850,750
========== ========== ========




PROPERTY (IN THOUSANDS) 2000 1999 1998
- ----------------------- ---------- ---------- --------

United States.............................................. $1,101,533 $1,028,663 $870,621
Canada..................................................... 42,528 30,930 1,695
Japan...................................................... 32,395 15,587 5,898
China (Hong Kong).......................................... 10,993 10,353 1,318
Portugal................................................... 11,731 13,019 12,532
Spain...................................................... 23,652 20,426 3,685
France..................................................... 6,333 -- --
Taiwan..................................................... 1,238 -- --
---------- ---------- --------

Total property............................................. $1,230,403 $1,118,978 $895,749
========== ========== ========


55

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

AMC ENTERTAINMENT INC.

YEARS (52 WEEKS) ENDED MARCH 30, 2000, APRIL 1, 1999 AND
APRIL 2, 1998

NOTE 16--RELATED PARTY TRANSACTIONS

As a Successor Trustee of the Durwood Voting Trust established under the
1992 Durwood, Inc. Voting Trust Agreement dated December 12, 1992, as amended
and restated as of August 12, 1997 (the "Voting Trust"), with shared voting
powers over shares held in the Voting Trust, Mr. Raymond F. Beagle, Jr. may be
deemed to beneficially own all of the Company's Convertible Class B Stock.
Mr. Beagle serves as general counsel to the Company under a retainer agreement
which provides for annual payments of $360,000. The agreement provides for
severance payments equal to three times the annual retainer upon termination of
the agreement by the Company or a change in control approved by Common
Stockholders. The agreement also provides for deferred payments from a
previously established rabbi trust in a formula amount ($28,285 monthly as of
March 30, 2000) for a period of twelve years after termination of services or a
change in control. During fiscal 2000, the Company approved a $250,000
discretionary deferred bonus which has been paid to the rabbi trust.

Lathrop & Gage L.C., a law firm of which Mr. Raymond F. Beagle, Jr. is a
member, renders legal services to the Company and its subsidiaries. During
fiscal 2000, the Company paid Lathrop & Gage L.C. $2,617,000 for such services.

56

STATEMENTS OF OPERATIONS BY QUARTER
AMC ENTERTAINMENT INC.



(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) JULY 1, JULY 2, SEPTEMBER 30, OCTOBER 1, DEC. 30, DEC. 31, MAR. 30,
(UNAUDITED) 1999 1998 1999 1998 1999 1998 2000
- ---------------------------------------- -------- -------- ------------- ---------- -------- -------- --------

Admissions........................... $187,882 $155,020 $219,749 $188,739 $183,800 $165,812 $171,652
Concessions.......................... 83,713 73,817 95,499 88,745 78,420 77,436 72,223
Other theatre........................ 5,089 4,362 6,849 4,689 9,627 7,032 8,448
Other................................ 9,876 6,917 11,588 8,023 13,126 9,417 9,401
-------- -------- -------- -------- -------- -------- --------
Total revenues....................... 286,560 240,116 333,685 290,196 284,973 259,697 261,724
Film exhibition costs................ 109,548 85,208 121,545 104,196 98,693 88,839 87,950
Concession costs..................... 12,691 11,450 14,898 13,693 11,406 13,356 11,731
Theatre operating expense............ 67,009 64,107 71,123 65,078 70,787 65,578 81,153
Rent................................. 47,877 37,952 48,636 39,450 49,594 41,663 52,655
Other................................ 10,695 6,366 11,794 6,997 11,606 8,999 10,524
General and administrative........... 13,211 13,145 12,284 14,136 12,873 12,753 9,039
Preopening expense................... 1,273 385 2,024 388 1,914 1,209 1,584
Theatre closure expense.............. 9,646 -- 2,046 2,801 2,251 -- 2,718
Restructuring charge................. -- -- 12,000 -- -- -- --
Depreciation and amortization........ 20,657 20,342 23,029 21,030 24,620 23,100 27,668
Impairment of long-lived assets...... -- -- -- -- -- -- 5,897
(Gain) loss on disposition of assets... (183) (1,393) (144) 35 (635) (901) 18
-------- -------- -------- -------- -------- -------- --------
Total costs and expenses............. 292,424 237,562 319,235 267,804 283,109 254,596 290,937
-------- -------- -------- -------- -------- -------- --------
Operating income (loss).............. (5,864) 2,554 14,450 22,392 1,864 5,101 (29,213)
Interest expense..................... 13,471 8,546 14,401 8,322 16,630 9,349 18,201
Investment income (loss)............. 486 286 (386) 365 (311) 434 430
-------- -------- -------- -------- -------- -------- --------
Earnings (loss) before income taxes and
cumulative effect of an accounting
change............................. (18,849) (5,706) (337) 14,435 (15,077) (3,814) (46,984)
Income tax provision................. (7,700) (2,650) (135) 6,550 (6,165) (2,100) (17,900)
-------- -------- -------- -------- -------- -------- --------
Earnings (loss) before cumulative effect
of an accounting change............ (11,149) (3,056) (202) 7,885 (8,912) (1,714) (29,084)
Cumulative effect of an accounting
change (net of income tax benefit of
$4,095)............................ (5,840) -- -- -- -- -- --
-------- -------- -------- -------- -------- -------- --------
Net earnings (loss).................. $(16,989) $ (3,056) $ (202) $ 7,885 $ (8,912) $ (1,714) $(29,084)
======== ======== ======== ======== ======== ======== ========
Earnings (loss) per share before
cumulative effect of an accounting
change:
Basic................................ $ (0.48) $ (0.13) $ (0.01) $ 0.34 $ (0.38) $ (0.07) $ (1.24)
======== ======== ======== ======== ======== ======== ========
Diluted.............................. $ (0.48) $ (0.13) $ (0.01) $ 0.33 $ (0.38) $ (0.07) $ (1.24)
======== ======== ======== ======== ======== ======== ========
Earnings (loss) per share:
Basic................................ $ (0.72) $ (0.13) $ (0.01) $ 0.34 $ (0.38) $ (0.07) $ (1.24)
======== ======== ======== ======== ======== ======== ========
Diluted.............................. $ (0.72) $ (0.13) $ (0.01) $ 0.33 $ (0.38) $ (0.07) $ (1.24)
======== ======== ======== ======== ======== ======== ========


FISCAL YEAR
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) APRIL 1, -----------------------
(UNAUDITED) 1999 2000 1999
- ---------------------------------------- -------- ---------- ----------

Admissions........................... $152,590 $ 763,083 $ 662,161
Concessions.......................... 67,349 329,855 307,347
Other theatre........................ 5,683 30,013 21,766
Other................................ 7,825 43,991 32,182
-------- ---------- ----------
Total revenues....................... 233,447 1,166,942 1,023,456
Film exhibition costs................ 80,194 417,736 358,437
Concession costs..................... 10,188 50,726 48,687
Theatre operating expense............ 65,382 290,072 260,145
Rent................................. 46,305 198,762 165,370
Other................................ 8,537 44,619 30,899
General and administrative........... 12,287 47,407 52,321
Preopening expense................... 283 6,795 2,265
Theatre closure expense.............. -- 16,661 2,801
Restructuring charge................. -- 12,000 --
Depreciation and amortization........ 24,749 95,974 89,221
Impairment of long-lived assets...... 4,935 5,897 4,935
(Gain) loss on disposition of assets... (110) (944) (2,369)
-------- ---------- ----------
Total costs and expenses............. 252,750 1,185,705 1,012,712
-------- ---------- ----------
Operating income (loss).............. (19,303) (18,763) 10,744
Interest expense..................... 12,411 62,703 38,628
Investment income (loss)............. 283 219 1,368
-------- ---------- ----------
Earnings (loss) before income taxes and
cumulative effect of an accounting
change............................. (31,431) (81,247) (26,516)
Income tax provision................. (12,300) (31,900) (10,500)
-------- ---------- ----------
Earnings (loss) before cumulative effect
of an accounting change............ (19,131) (49,347) (16,016)
Cumulative effect of an accounting
change (net of income tax benefit of
$4,095)............................ -- (5,840) --
-------- ---------- ----------
Net earnings (loss).................. $(19,131) $ (55,187) $ (16,016)
======== ========== ==========
Earnings (loss) per share before
cumulative effect of an accounting
change:
Basic................................ $ (0.82) $ (2.10) $ (0.69)
======== ========== ==========
Diluted.............................. $ (0.82) $ (2.10) $ (0.69)
======== ========== ==========
Earnings (loss) per share:
Basic................................ $ (0.82) $ (2.35) $ (0.69)
======== ========== ==========
Diluted.............................. $ (0.82) $ (2.35) $ (0.69)
======== ========== ==========


57

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURES.

None.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

The Directors and Executive Officers of the Company are as follows:



NAME AGE(1) POSITIONS
- ---- -------- ------------------------------------------------------------

Peter C. Brown....... 41 Chairman of the Board, Chief Executive Officer and Director
(AMCE and AMC); President (AMCE)

Charles J. Egan, 67 Director (AMCE)
Jr...................

W. Thomas Grant, II.. 49 Director (AMCE)

Charles S. Paul...... 51 Director (AMCE)

Paul E. Vardeman..... 70 Director (AMCE)

Philip M. 53 Executive Vice President (AMCE); President, Chief Operating
Singleton............ Officer and Director (AMC)

John D. McDonald..... 42 Executive Vice President, North American Operations (AMC)

Mark A. McDonald..... 41 Executive Vice President, International Operations (AMC
Entertainment International, Inc.)

Richard M. Fay....... 50 President (AMC Film Marketing, a division of AMC)

Richard T. Walsh..... 46 Executive Vice President, Film Operations (AMC Film
Marketing,
a division of AMC)

Craig R. Ramsey...... 48 Senior Vice President, Finance, Chief Financial Officer and
Chief Accounting Officer (AMCE and AMC); Director (AMC)

James V. Beynon...... 52 Senior Vice President and Treasurer (AMCE and AMC)


- ------------------------

(1) As of May 12, 2000.

All directors are elected annually and each holds office until his successor
has been duly elected and qualified or his earlier resignation or removal. There
are no family relationships between any Director and any Executive Officer of
the Company.

All current Executive Officers of AMCE and its subsidiaries hold such
offices at the pleasure of AMCE's Board of Directors, subject, in the case of
Messrs. Brown, Singleton, John D. McDonald, Mark A. McDonald, Fay, Walsh and
Ramsey, to rights under their respective employment agreements. There are no
family relationships between any Executive Officers except that
Messrs. John D. McDonald and Mark A. McDonald are brothers.

Mr. Peter C. Brown has served as a Director of AMCE and AMC since
November 12, 1992. Mr. Brown was elected Chairman of the Board and Chief
Executive Officer of AMCE on July 15, 1999 and Chairman of the Board and Chief
Executive Officer of AMC on September 29, 1999. Mr. Brown served as Co-Chairman
of the Board of AMCE from May 15, 1998 through July 14, 1999. Mr. Brown was
elected President of AMCE on January 10, 1997. Mr. Brown served as Executive
Vice President of AMCE from August 3, 1994 to January 10, 1997 and as Executive
Vice President of AMC from August 3, 1994 to September 28, 1999. Mr. Brown also
serves as Chairman of the Board of Trustees of Entertainment Properties Trust, a
real estate investment trust, and serves on the Board of Directors of
LabONE, Inc. Mr. Brown also serves as a member of the Board of Trustees of
Rockhurst High School, serves on the Board of Directors of the Greater Kansas
City Chamber of Commerce and is a member of the Board of

58

Advisors for the University of Kansas School of Business. Mr. Brown is also a
member of the Civic Council of Greater Kansas City. Mr. Brown is a graduate of
the University of Kansas.

Mr. Charles J. Egan, Jr. has served as a Director of AMCE since October 30,
1986. Mr. Egan is Vice President of Hallmark Cards, Incorporated, and was
General Counsel of such company until December 31, 1996. Hallmark Cards,
Incorporated is primarily engaged in the business of greeting cards and related
social expressions products, Crayola crayons and the production of movies for
television. Mr. Egan is a Trustee of the Durwood Voting Trust. Mr. Egan also
serves as a member of the Board of Trustees, Treasurer and Chairman of the
Finance Committee of the Kansas City Art Institute. Mr. Egan holds an A.B.
degree from Harvard University and an LL.B. degree from Columbia University.

Mr. W. Thomas Grant, II has served as a Director of AMCE since November 14,
1996. Mr. Grant is Chairman of the Board, Chief Executive Officer, President and
a Director of LabONE, Inc. LabONE, Inc. provides risk appraisal laboratory
services for the insurance industry, clinical testing services for the
healthcare industry and substance abuse testing services for employers.
Mr. Grant also serves on the Boards of Directors of Commerce Bancshares, Inc.,
Business Men's Assurance Company of America, Kansas City Power & Light Company
and Response Oncology, Inc. Mr. Grant holds a B.A. degree from the University of
Kansas and an M.B.A. degree from the Wharton School of Finance at the University
of Pennsylvania.

Mr. Charles S. Paul has served as a Director of AMCE since December 2, 1999.
Mr. Paul is Chairman of the Board of IFILM Corp., an online global film
destination for film fans, filmmakers and industry professionals. Prior thereto,
Mr. Paul was Chairman and Co-Founder of Sega GameWorks L.L.C. Mr. Paul was an
Executive Vice President and director of MCA, Inc. from 1989 through March 1996
and served as President of MCA Enterprises, a division of the company, from 1986
through March 1996. Mr. Paul also serves on the Boards of Directors of National
Golf Properties, Inc. and Interplay Entertainment. Mr. Paul holds an
undergraduate degree from Stanford University and is a graduate of the
University of Santa Clara School of Law.

Mr. Paul E. Vardeman has served as a Director of AMCE since June 14, 1983.
Mr. Vardeman was a director, officer and shareholder of the law firm of
Polsinelli, White, Vardeman & Shalton, P.C., Kansas City, Missouri from 1982
until his retirement from such firm in November 1997. Prior thereto,
Mr. Vardeman served as a Judge of the Circuit Court of Jackson County, Missouri.
Mr. Vardeman holds undergraduate and J.D. degrees from the University of
Missouri-Kansas City.

Mr. Philip M. Singleton was elected President of AMC on January 10, 1997 and
has served as Chief Operating Officer of AMC since November 14, 1991.
Mr. Singleton has served as Executive Vice President of AMCE since August 3,
1994. Mr. Singleton has served as a Director of AMC since November 12, 1992.

Mr. John D. McDonald has served as Executive Vice President, North American
Operations of AMC since October 1, 1998. Prior thereto, Mr. McDonald served as
Senior Vice President, corporate operations from November 9, 1995 until his
promotion to Executive Vice President on October 1, 1998. Mr. McDonald served as
Vice President, corporate operations from September 22, 1992 through
November 9, 1995.

Mr. Mark A. McDonald has served as Executive Vice President, International
Operations of AMC Entertainment International, Inc., a subsidiary of AMCE, since
December 7, 1998. Prior thereto, Mr. McDonald served as Senior Vice President,
Asia Operations from November 9, 1995 until his appointment as Executive Vice
President in December 1998. Mr. McDonald previously served as Vice President,
Finance of AMC from October 1, 1992 to November 9, 1995.

Mr. Richard M. Fay has served as President, AMC Film Marketing, a division
of AMC, since September 8, 1995. Previously, Mr. Fay served as Senior Vice
President and Assistant General Sales Manager of Sony Pictures from 1994 until
joining AMC.

59

Mr. Richard T. Walsh has served as Executive Vice President, Film
Operations, AMC Film Marketing, a division of AMC, since September 29, 1999.
Prior thereto, Mr. Walsh served as Senior Vice President in charge of operations
for the West Division of AMC from July 1, 1994.

Mr. Craig R. Ramsey has served as Chief Financial Officer of AMCE and AMC
since January 24, 2000 and as Senior Vice President, Finance of AMCE and AMC
since August 20, 1998. Mr. Ramsey was elected Chief Accounting Officer of AMCE
and AMC effective October 15, 1999. Prior thereto, Mr. Ramsey served as Vice
President, Finance from January 17, 1997 and as Director of Information Systems
and Director of Financial Reporting since joining AMC on February 1, 1995.

Mr. James V. Beynon has served as Senior Vice President of AMCE and AMC
since September 29, 1999. Prior thereto, Mr. Beynon served as Vice President of
AMCE and AMC from September 19, 1994. Mr. Beynon has served as Treasurer of AMCE
and AMC since September 19, 1994.

ITEM 11. EXECUTIVE COMPENSATION.

COMPENSATION OF MANAGEMENT

The following table provides certain summary information concerning
compensation paid or accrued by the Company to or on behalf of the Company's
Chief Executive Officer and each of the four other most highly compensated
Executive Officers of the Company (determined as of the end of the last fiscal
year and hereafter referred to as the "Named Executive Officers") for the last
three fiscal years ended March 30, 2000, April 1, 1999 and April 2, 1998,
respectively.

SUMMARY COMPENSATION TABLE



LONG-TERM
ANNUAL COMPENSATION COMPENSATION
------------------------------------- AWARDS--SECURITIES
FISCAL OTHER ANNUAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(1) OPTIONS/SARS COMPENSATION(2)
- --------------------------- -------- -------- -------- --------------- ------------------ ---------------

Peter C. Brown............... 2000 $471,244 $ -- N/A $ -- $9,462
Chief Executive Officer 1999 409,241 -- N/A 125,000 5,334
and President 1998 296,444 -- N/A -- 4,960

Stanley H. Durwood(3)........ 2000 152,656 -- N/A -- --
Chief Executive Officer 1999 567,008 -- N/A 150,000 --
1998 536,558 -- N/A -- --

Philip M. Singleton.......... 2000 375,145 -- N/A -- 7,789
Chief Operating Officer 1999 383,702 -- N/A 100,000 5,317
1998 316,679 -- N/A -- 4,896

Richard M. Fay............... 2000 285,473 -- N/A -- 8,550
President--AMC Film 1999 298,075 -- N/A -- 4,503
Marketing 1998 286,982 45,000 N/A -- 4,676

Richard T. Walsh............. 2000 270,089 -- N/A -- 8,058
Executive Vice President, 1999 238,666 -- N/A -- 4,639
Film Operations, AMC 1998 226,441 60,000 N/A -- 4,805
Film Marketing

John D. McDonald............. 2000 256,308 -- N/A -- 7,685
Executive Vice President, 1999 217,695 -- N/A -- 8,308
North American Operations 1998 199,442 60,000 N/A -- 6,883


- ------------------------

(1) For the years presented perquisites and other personal benefits did not
exceed the lesser of $50,000 or 10% of total annual salary and bonus.

60

(2) For fiscal 2000, 1999 and 1998, All Other Compensation is comprised of AMC's
contributions under AMC's 401(k) Savings Plan and Non-Qualified Deferred
Compensation Plan, both of which are defined contribution plans.

(3) Mr. Stanley H. Durwood died on July 14, 1999.

OPTION GRANTS

The following table provides certain information concerning individual
grants of stock options made during the last completed fiscal year under the
1994 Plan to each of the Named Executive Officers. There were no grants of stock
options made during the last fiscal year under the 1999 Plan.

OPTION/SAR GRANTS IN LAST FISCAL YEAR



% OF TOTAL POTENTIAL REALIZABLE VALUE
NUMBER OF OPTIONS/SARS AT ASSUMED ANNUAL RATES OF
SECURITIES GRANTED TO STOCK PRICE APPRECIATION FOR
UNDERLYING EMPLOYEES EXERCISE OR OPTION TERM(2)
OPTIONS/SARS IN FISCAL BASE PRICE EXPIRATION ----------------------------
NAME GRANTED(1) YEAR ($/SHARE) DATE 5% ($) 10% ($)
- ---- ------------ ------------ ----------- ---------- ---------- ------------

Peter C. Brown.............. -- -- $ -- -- $ -- $ --
Stanley H. Durwood(3)....... -- -- -- -- -- --
Philip M. Singleton......... -- -- -- -- -- --
Richard M. Fay.............. 42,750 9.10% 17.69 06/18/09 475,546 1,205,127
Richard T. Walsh............ 15,500 3.30% 17.69 06/18/09 172,420 436,947
John D. McDonald............ 50,500 10.80% 17.69 06/18/09 561,756 1,423,601


- ------------------------

(1) The stock options granted during the fiscal year ended March 30, 2000 are
50% vested.

(2) These columns show the hypothetical gains of "option spreads" of the
outstanding options granted based on assumed annual compound stock
appreciation rates of 5% and 10% over the options' terms. The 5% and 10%
assumed rates of appreciation are mandated by the rules of the Securities
and Exchange Commission (the "SEC") and do not represent the Company's
estimate or projections of the future prices of the Company's Common Stock.

(3) Mr. Stanley H. Durwood died on July 14, 1999.

61

OPTION EXERCISES AND HOLDINGS. The following table provides information
with respect to the Named Executive Officers concerning the exercise of options
during the last fiscal year and unexercised options held as of March 30, 2000.

AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION/SAR VALUES



VALUE OF
NUMBER OF UNEXERCISED
SECURITIES UNDERLYING IN-THE-MONEY
UNEXERCISED OPTIONS/ OPTIONS/SARS AT
SARS AT FY-END FY-END(1)
SHARES ACQUIRED --------------------------- ---------------------------
NAME ON EXERCISE VALUE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- --------------- -------------- ----------- ------------- ----------- -------------

Peter C. Brown............. -- $ -- 284,000 -- $ -- $ --
Stanley H. Durwood(2)...... -- -- 237,500 -- -- --
Philip M. Singleton........ -- -- 233,600 -- -- --
Richard M. Fay............. -- -- 23,625 21,375 -- --
Richard T. Walsh........... -- -- 37,250 7,750 -- --
John D. McDonald........... -- -- 29,750 25,250 -- --


- ------------------------

(1) Values for "in-the-money" outstanding options represent the positive spread
between the respective exercise prices of the outstanding options and the
value of AMCE's Common Stock as of March 30, 2000. There were no
in-the-money options outstanding as of March 30, 2000.

(2) Mr. Stanley H. Durwood died July 14, 1999.

DEFINED BENEFIT RETIREMENT AND SUPPLEMENTAL EXECUTIVE RETIREMENT PLANS. AMC
sponsors a defined benefit retirement plan (the "Retirement Plan") which
provides benefits to certain employees of AMC and its subsidiaries based upon
years of credited service and the highest consecutive five-year average annual
remuneration for each participant. For purposes of calculating benefits, average
annual compensation is limited by Section 401(a)(17) of the Internal Revenue
Code (the "Code"), and is based upon wages, salaries and other amounts paid to
the employee for personal services, excluding certain special compensation. A
participant earns a vested right to an accrued benefit upon completion of five
years of vesting service.

AMC also sponsors a Supplemental Executive Retirement Plan to provide the
same level of retirement benefits that would have been provided under the
Retirement Plan had the federal tax law not been changed in the Omnibus Budget
Reconciliation Act of 1993, which reduced the amount of compensation which can
be taken into account in a qualified retirement plan from $235,840 (in 1993),
the old limit, to $170,000 (in 2000).

The following table shows the total estimated annual pension benefits
(without regard to minimum benefits) payable to a covered participant under
AMC's Retirement Plan and the Supplemental Executive Retirement Plan, assuming
retirement in calendar 2000 at age 65 payable in the form of a single life

62

annuity. The benefits are not subject to any deduction for Social Security or
other offset amounts. The following table assumes the old limit would have been
increased to $275,000 in 2000.



HIGHEST CONSECUTIVE YEARS OF CREDITED SERVICE
FIVE YEAR AVERAGE ----------------------------------------------------
ANNUAL COMPENSATION 15 20 25 30 35
- ------------------------------- -------- -------- -------- -------- --------

$125,000....................... $17,510 $23,347 $29,184 $35,021 $41,857
150,000........................ 21,260 28,347 35,434 42,521 50,607
175,000........................ 25,010 33,347 42,684 50,021 58,357
200,000........................ 28,760 38,347 48,934 57,521 67,107
225,000........................ 32,510 43,347 54,184 65,021 76,857
250,000........................ 36,260 48,347 60,434 72,521 85,607
275,000........................ 40,010 53,347 66,684 80,021 93,357


As of March 30, 2000, the years of credited service under the Retirement
Plan for each of the Named Executive Officers were: Mr. Peter C. Brown, nine
years, Mr. Philip M. Singleton, 26 years, Mr. Richard M. Fay, four years;
Mr. Richard T. Walsh, 25 years; and Mr. John D. McDonald, 25 years.

AMC has established a Retirement Enhancement Plan ("REP") for the benefit of
officers who from time to time may be designated as eligible participants
therein by the Board of Directors. The REP is a non-qualified deferred
compensation plan designed to provide an unfunded retirement benefit to an
eligible participant in an amount equal to (i) sixty percent (60%) of his or her
average compensation (including paid and deferred incentive compensation) during
the last three full years of employment, less (ii) the sum of (A) such
participant's benefits under the Retirement Plan and Social Security, and
(B) the amount of a straight life annuity commencing at the participant's normal
retirement date attributable to AMC's contributions under the Supplemental
Executive Retirement Plan, the 401(k) Savings Plan, the Non-Qualified Deferred
Compensation Plan and the Executive Savings Plan. The base amount in clause (i)
will be reduced on a pro rata basis if the participant completes fewer than
twenty-five (25) years of service. The REP benefit vests upon the participant's
attainment of age 55 or completion of fifteen (15) years of service, whichever
is later, and may commence to a vested participant retiring on or after age 55
(who has participated in the plan for at least 5 years) on an actuarially
reduced basis (6 2/3% for each of the first five years by which commencement
precedes age 65 and an additional 3 1/3% for each year by which commencement
precedes age 60). Benefits commence at a participant's normal retirement date
(I.E., the later of age 65 or the participant's completion of five years of
service with AMC) whether or not the participant continues to be employed by
AMC. The accrued benefit payable upon total and permanent disability is not
reduced by reason of early commencement. Participants become fully vested in
their rights under the REP if their employment is terminated without cause or as
a result of a change in control, as defined in the REP. No death, disability or
retirement benefit is payable prior to a participant's early retirement date or
prior to the date any severance payments to which the participant is entitled
cease.

Mr. Peter C. Brown, Mr. Stanley H. Durwood and Mr. Philip M. Singleton have
been designated as eligible to participate in the REP. The amount paid to
Mr. Durwood with respect to fiscal 2000 under the REP was $345,000 and is not
included in the Summary Compensation Table. The estimated monthly amounts that
Mr. Brown and Mr. Singleton will be eligible to receive under the REP at age 65
are $41,000 and $15,000, respectively; such amounts are based on certain
assumptions respecting their future compensation amounts and the amounts of AMC
contributions under other plans. Actual amounts received by such individuals
under the REP may be different than those estimated.

COMPENSATION OF DIRECTORS

Prior to December 2, 1999, each of AMCE's non-employee directors received an
annual fee of $32,000 for service on the Board of Directors and, in addition,
$1,500 for each Board meeting and $1,000

63

for each Board committee meeting which they attended. Effective December 2,
1999, each non-employee director receives $65,000 for service on the Board of
Directors and, in addition, $1,500 for each Board meeting and $1,000 for each
Board committee meeting which they attend.

Pursuant to the 1999 Stock Option Plan for Outside Directors, which was
approved by stockholders at the annual meeting in December, 1999, the
non-employee directors are permitted to elect to receive up to all of their
annual $65,000 fee in the form of stock options. The number of options which may
be received is determined by dividing the amount of the fee taken in the form of
options by 30% of the fair market value of the Company's Common Stock on the
effective date of the grant, which is the first business day after the annual
meeting. Under the plan, each non-employee director also received a one-time
grant of options whose value (estimated under the plan for this purpose at 30%
of the fair market value of the Company's stock) was $14,000. Options generally
become exercisable one year after grant and terminate ten years after grant.
However, exercisability is accelerated upon the occurrence of a change in
control, as defined in the plan, death, disability or retirement upon or after
reaching age 70, and options will terminate prior to the tenth anniversary date
of grant within specified periods following termination of service as a
director. Directors may elect to pay any required withholding taxes in
connection with the exercise of an option by having the Company withhold shares
otherwise issuable upon exercise. The maximum number of shares issuable under
the plan is 200,000, and no director may receive more than 50,000 shares under
the plan.

For the fiscal year ended March 30, 2000, the non-employee directors
received the following for their service as directors under the Company's
compensation arrangements for non-employee directors: Charles J. Egan, Jr.:
$85,000; 4,670 options; W. Thomas Grant, II: $15,000; 26,340 options; Paul E.
Vardeman: $57,000; 11,340 options; Charles S. Paul: $5,801; 26,340 options; and
John P. Mascotte: $13,000; 0 options.

EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL
ARRANGEMENTS

Mr. Stanley H. Durwood had an employment agreement with AMCE and AMC dated
January 26, 1996 retaining him as Chairman and Chief Executive Officer and
President. It provided for an annual base salary of no less than $500,000, plus
payments and awards under AMC's Executive Incentive Program ("EIP"), the 1994
Option and other bonus plans in effect for Executive Officers at a level
reflecting his position, plus such other amounts as may be paid under any other
compensatory arrangement as determined in the sole discretion of the
Compensation Committee. Mr. Durwood's annual base salary at the date of his
death was $567,000. The Company had also agreed to use its best efforts to
provide Mr. Durwood up to $5,000,000 in life insurance and to pay the premiums
thereon and taxes resulting from such payment. Mr. Durwood's employment
agreement had a term of three years and was automatically extended one year on
its anniversary date, January 26, so that as of such date each year the
agreement had a three-year term. The employment agreement was terminable without
severance if he engaged in intentional misconduct or a knowing violation of law
or breached his duty of loyalty to the Company. The agreement provided for
severance payments in the event of Mr. Durwood's death equal to three times the
sum of his annual base salary in effect at the time of termination plus the
average of annual incentive or discretionary cash bonuses paid during the three
fiscal years preceding the year of termination. The Company could elect to pay
such severance payments in monthly installments over a period of three years or
in a lump sum after discounting such amount to its then present value. On
July 26, 1999, the Company paid $1,509,000 in settlement of Mr. Durwood's
employment agreement.

Messrs. Peter C. Brown, Philip M. Singleton, Richard M. Fay, Richard T.
Walsh and John D. McDonald have entered into employment agreements with the
Company providing for annual base salaries of no less than the following
amounts: Mr. Brown-$400,000; Mr. Singleton-$375,000; Mr. Fay-$285,000;
Mr. Walsh-$285,000 and Mr. McDonald-$210,000. The agreements also provide for
discretionary bonuses, an automobile allowance, reimbursement of reasonable
travel and entertainment expenses and other benefits offered from time to time
to other executive officers. The employment

64

agreements of Mr. Brown and Mr. Singleton have terms of three years and those of
Mr. Fay, Mr. Walsh and Mr. McDonald have terms of two years. On the anniversary
date of each agreement, one year shall be added to its term, so that each
employment agreement shall always have a three-year or two-year term, as the
case may be, as of each anniversary date. Each employment agreement terminates
generally without severance if such employee is terminated for cause, as defined
in the employment agreement, or upon such employee's resignation, death or
disability as defined in his employment agreement. Pro rata bonus payments will
be made upon termination by reason of disability or death. If either Mr. Brown
or Mr. Singleton is terminated without cause or terminates his agreement
following a material breach by the Company or a change in control, as defined in
the agreement, he will be entitled to receive (i) a lump sum cash payment equal
to the lesser of 4.5 times current base salary or 2.99 times average annual W-2
earnings for the prior five years and (ii) the value of all outstanding employee
stock options held by such employee. If either Mr. Fay, Mr. Walsh or
Mr. McDonald is terminated without cause or terminates his agreement subsequent
to specified changes in his responsibilities, base salary or benefits following
a change in control, as defined in the agreement, he will be entitled to receive
a lump sum cash payment equal to two years base salary. In addition, if either
Mr. Brown or Mr. Singleton dies, is terminated without cause or terminates his
agreement following a material breach by the Company or a change in control, the
Company will redeem shares previously purchased by him with the proceeds of a
loan from the Company. (Mr. Brown financed the purchase of 375,000 shares with
such a loan and Mr. Singleton financed the purchase of 250,000 shares with such
a loan). In such event, if the employee's obligations under the note to the
Company exceed the value of the stock which he acquired with the note proceeds,
the Company will forgive a portion of such excess in an amount based on a
formula set forth in the agreement. The amounts payable to the Named Executive
Officers under these employment agreements, assuming termination by reason of a
change of control as of March 30, 2000 were as follows: Mr. Brown-$1,094,000;
Mr. Singleton-$1,375,000; Mr. Fay-$570,000; Mr. Walsh-$570,000; and
Mr. McDonald-$480,000. The value of outstanding employee stock options payable
to the Named Executive Officers under these employment agreements, assuming
termination by reason of a change of control as of March 30, 2000 were, as
follows: Mr. Brown-$0 and Mr. Singleton-$0. The amount of note proceeds and
interest that would be forgiven by the Company assuming termination by reason of
a change of control as of March 30, 2000 were as follows: Mr. Brown-$4,274,000
and Mr. Singleton-$1,963,000.

As permitted by the 1994 and 1999 Stock Option and Incentive Plans, stock
options granted to participants thereunder provide for acceleration upon the
termination of employment within one year after the occurrence of certain change
in control events, whether such termination is voluntary or involuntary, or with
or without cause. In addition, the Compensation Committee may permit
acceleration upon the occurrence of certain extraordinary transactions which may
not constitute a change of control.

AMC maintains a severance pay plan for full-time salaried nonbargaining
employees with at least 90 days of service. For an eligible employee who is
subject to the Fair Labor Standards Act ("FLSA") overtime pay requirements (a
"nonexempt eligible employee"), the plan provides for severance pay in the case
of involuntary termination of employment due to layoff of the greater of two
weeks' basic pay or one week's basic pay multiplied by the employee's full years
of service up to no more than twelve weeks' basic pay. There is no severance pay
for a voluntary termination, unless up to two weeks pay is authorized in lieu of
notice. There is no severance pay for an involuntary termination due to an
employee's misconduct. Only two weeks' severance pay is paid for an involuntary
termination due to substandard performance. For an eligible employee who is
exempt from the FLSA overtime pay requirements, severance pay is discretionary
(at the Department Head/Supervisor level), but will not be less than the amount
that would be paid to a nonexempt eligible employee.

65

ITEM 12. SECURITY OWNERSHIP OF BENEFICIAL OWNERS.

The following table sets forth certain information as of May 12, 2000, with
respect to principal owners of each class of the Company's voting securities:



NUMBER OF SHARES PERCENT
TITLE OF CLASS BENEFICIAL OWNER BENEFICIALLY OWNED OF CLASS
- --------------------- ------------------------------------------------ ------------------ ----------

Common Stock Brian H. Durwood(1) 1,123,480(1)(2) 5.8%(1)(2)
c/o Kopple & Klinger
2029 Century Park East, Ste 3290
Los Angeles, CA 90067

Peter J. Durwood(1) 1,123,480(1) 5.8%(1)
c/o Kopple & Klinger
2029 Century Park East, Ste 3290
Los Angeles, CA 90067

Thomas A. Durwood(1) 1,123,480(1)(3) 5.8%(1)(3)
P.O. Box 7208
Rancho Santa Fe, CA 92067

Elissa D. Grodin(1) 1,123,480(1) 5.8%(1)
c/o Kopple & Klinger
2029 Century Park East, Ste 3290
Los Angeles, CA 90067

Syufy Century Corporation(4) 1,407,000(4) 7.2%(6)
150 Pelican Way
San Rafael, CA 94901

EnTrust Capital Inc.(5) 1,035,729(5) 5.3%(4)
650 Madison Ave.
New York, NY 10022

Wellington Management Company, LLP(6) 1,022,300(6) 5.3%(5)
75 State Street
Boston, MA 02109

Class B Stock Raymond F. Beagle, Jr.(1) 4,041,993(1) 100%(1)
2345 Grand Blvd.
Kansas City, MO 64108

Charles J. Egan Jr.(1) 4,041,993(1) 100%(1)
106 West 14(th) Street
Kansas City, MO 64105


- ------------------------

(1) Mrs. Carol D. Journagan, Mr. Edward D. Durwood, Mr. Thomas A. Durwood,
Mrs. Elissa D. Grodin, Mr. Brian H. Durwood and Mr. Peter J. Durwood are the
children (the "Durwood Children") of Mr. Stanley H. Durwood, the Company's
founder who died on July 14, 1999. Mr. Stanley H. Durwood and the Durwood
Children (collectively, the "Durwood Family Stockholders") formerly held
their stock in the Company through a holding company, Durwood, Inc. ("DI"),
and acquired their shares on August 15, 1997 pursuant to the Merger of the
Company and DI. Collectively, the Durwood Children beneficially own
6,038,457 shares of Common Stock representing 31% of the outstanding shares
of such class.

The Company's Class B Stock formerly beneficially owned by Mr. Stanley H.
Durwood is now held under the Revocable Trust and the Voting Trust. The
Voting Trust is the record owner and the

66

Revocable Trust is the holder of certificates of beneficial interest
respecting the shares reported as beneficially owned above. The Trustees of
the Voting Trust and of the Revocable Trust are Mr. Raymond F. Beagle, Jr.,
the Company's general counsel, and Mr. Charles J. Egan, Jr., a Director of
the Company. The Voting Trust, the Revocable Trust and Messrs. Beagle and
Egan, as Trustees, may be deemed to beneficially own all of the outstanding
shares of the Company's Class B Stock. Messrs. Beagle and Egan each disclaim
such beneficial ownership of any of such shares attributable to him solely
by reason of his position as Trustee. Under the terms of the Voting Trust,
the Trustees (or their successors and any additional trustees whom they
might appoint) have all voting powers with respect to shares held therein,
and exercise such rights by majority vote. Unless otherwise terminated or
extended in accordance with its terms, the Voting Trust will terminate in
2030.

The 4,041,993 shares of the Company's Class B Stock constitute 100% of the
outstanding shares of such class. The Trustees of the Revocable Trust and
the Voting Trust share voting power and investment power over all of these
shares. The Company's Class B Stock and Common Stock held by the Revocable
Trust and the Voting Trust represent 67.5% of the voting power of the
Company's stock other than in the election of directors. Were all the shares
of the Company's Class B Stock converted into Common Stock, there would be
approximately 23,469,091 shares of Common Stock outstanding, of which the
Revocable Trust and the Voting Trust would hold 4,042,143 shares (assuming
such conversion and disregarding the exercise of outstanding options) or
17.2% of the outstanding number of shares of Common Stock. This voting
control may be diluted if the Revocable Trust and the Voting Trust are
obligated to dispose of shares to honor tax and other indemnity obligations
made by Mr. Stanley H. Durwood and the Company in connection with the Merger
and other related transactions, or if additional shares of Common Stock are
issued under the Company's employee benefit plans.

For a period ending on August 15, 2000, the Durwood Children have agreed to
give an irrevocable proxy to the Secretary and each Assistant Secretary of
the Company to vote their shares of Common Stock in the election of
directors for each candidate in the same proportionate manner as the
aggregate votes cast in such elections by other holders of Common Stock not
affiliated with the Company.

(2) Mr. Brian H. Durwood directly owns 1,120,183 shares of the Common Stock and
indirectly owns 3,297 shares of Common Stock for the benefit of his three
minor children under the Uniform Transfer to Minors Act.

(3) Mr. Thomas A. Durwood directly owns 969,466 shares of the Common Stock and
indirectly owns 154,014 shares of Common Stock through The Thomas A. and
Barbara F. Durwood Family Investment Partnership, a California limited
partnership. Each of Mr. Thomas A. Durwood and his wife serve as trustees of
The Thomas A. Durwood and Barbara F. Durwood Family Trust, which is the
general partner of this partnership.

(4) As reported in its Schedule 13D dated January 4, 2000. Syufy Century
Corporation reports that it has sole voting power and sole dispositive power
with respect to 1,407,000 shares.

(5) As reported in its Schedule 13G dated February 11, 2000. Of these shares,
EnTrust Capital Inc. reports that it has sole voting power with respect to
107,300 shares, shares voting power with respect to 683,309 shares and
shares dispositive power with respect to 928,429 shares.

(6) As reported in its Schedule 13G dated February 9, 2000. Of these shares,
Wellington Management Company, LLP reports that it shares voting power with
respect to 239,300 shares and shares dispositive power with respect to
1,022,300 shares.

67

BENEFICIAL OWNERSHIP BY DIRECTORS AND OFFICERS

The following table sets forth certain information as of May 12, 2000, with
respect to beneficial ownership by Directors and Executive Officers of AMCE's
Common Stock and Class B Stock. The amounts set forth below include the vested
portion of 782,600 shares of Common Stock subject to options under AMCE's 1983
and 1984 Stock Option Plans and the 1994 Stock Option and Incentive Plan held by
Executive Officers. Unless otherwise indicated, the persons named are believed
to have sole voting and investment power over the shares shown as beneficially
owned by them.



AMOUNT AND NATURE PERCENT
TITLE OF CLASS NAME OF BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP OF CLASS
- -------------- ------------------------------------- ----------------------- --------

Common Stock................... Peter C. Brown 659,000(1) 3.3%
Philip M. Singleton 498,600(1) 2.5%
Richard T. Walsh 45,050(1) *
Richard M. Fay 47,683(1) *
John D. McDonald 55,100(1) *
W. Thomas Grant, II 1,738 *
Charles S. Paul 20,000 *
Paul E. Vardeman 300 *
All Directors and Executive Officers
as a group (12 persons, including the
individuals named above) 1,447,471(1) 7.3%

Class B Stock.................. Charles J. Egan, Jr.(2) 4,041,993(2) 100.0%


- ------------------------

* Less than one percent.

(1) Includes shares subject to presently exercisable options to purchase Common
Stock under the Company's 1983 and 1984 Stock Option Plans and the 1994
Stock Option and Incentive Plan, as follows: Mr. Peter C. Brown--284,000
shares; Mr. Philip M. Singleton--233,600 shares; Mr. Richard M. Fay--45,000
shares; Mr. Richard T. Walsh--45,000 shares; Mr. John D. McDonald--55,000
shares; and all Executive Officers as a group--782,600 shares.

(2) See Note(1) under "Security Ownership of Certain Beneficial Owners."

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
Executive Officers and Directors, and persons who own more than 10% of the
Company's Common Stock, to file reports of ownership and changes in ownership
with the SEC and the American Stock Exchange. Executive Officers, Directors and
greater-than-10% beneficial owners are required by SEC regulations to furnish
the Company with copies of all Section 16(a) forms they file. Based solely on a
review of the copies of such forms furnished to the Company, or written
representations that no Forms 5 were required, the Company believes that during
fiscal 2000 its Executive Officers, Directors and greater-than-10% beneficial
owners complied with all Section 16(a) filing requirements except that
Mr. Grant failed to timely report on Form 4 two transactions attributable to
him. Mr. Grant's spouse purchased 233 shares of the Company's Common Stock in
fiscal 2000 and also purchased 5 shares of the Company's Common Stock in fiscal
2000 as custodian for their minor son. These transactions were reported on a
Form 5, which was timely filed.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

Since their formation and until August 15, 1997, AMCE and AMC were members
of an affiliated group of companies (the "DI affiliated group") beneficially
owned by Mr. Stanley H. Durwood and members of his family. Prior to the
August 15, 1997 Merger of AMCE and DI referred to below, Mr. Stanley H. Durwood
was President, Treasurer and the sole Director of DI and Chairman of the Board,

68

Chief Executive Officer and a Director of AMCE and AMC. There have been
transactions involving AMCE or its subsidiaries and the DI affiliated group in
prior years. AMCE sought to ensure that all transactions with DI or other
related parties were fair, reasonable and in the best interests of AMCE. In that
regard, the Audit Committee of the Board of Directors of AMCE reviewed all
material proposed transactions between AMCE and DI or other related parties to
determine that, in their best business judgment, such transactions met that
standard. AMCE believes that all transactions described below with DI or other
related parties were on terms at least as favorable to AMCE as could have been
obtained from an unaffiliated third party. The Audit Committee consisted of
Messrs. Egan, Grant and Mascotte prior to December 2, 1999 and Messrs. Egan,
Grant and Paul after December 2, 1999, none of whom are or were officers or
employees of AMCE nor stockholders, directors, officers or employees of DI. Set
forth below is a description of significant transactions which have occurred
since April 2, 1999 or involve receivables that remain outstanding as of
March 30, 2000.

THE MERGER

Effective August 15, 1997, AMCE completed the Merger with its majority
stockholder, DI. In connection with the Merger, 2,641,951 shares of AMCE's
Common Stock and 11,157,000 shares of AMCE's Class B Stock owned by DI were
canceled and AMCE issued 8,783,289 shares of its Common Stock and 5,015,657
shares of its Class B Stock to the DI stockholders. The Merger was accounted for
as a corporate reorganization and the recorded balances for consolidated assets,
liabilities, total stockholders' equity and results of operations were not
affected.

In connection with the Merger, the Durwood Family Stockholders and Delta
entered into an agreement (the "Indemnification Agreement") agreeing to
indemnify AMCE from certain losses and expenses and the Company agreed to
indemnify the Durwood Children from losses resulting from any breach by the
Company of any representation, warranty, covenant or agreement made by it in the
Merger Agreement. The foregoing indemnification obligations generally lapsed on
March 31, 2000. Pursuant to this agreement and as promptly as practicable after
March 31, 2000, AMCE will pay Mr. Stanley H. Durwood's estate an amount equal to
certain credit amounts resulting from net tax benefits realized by AMCE from the
utilization by AMCE of DI's alternative minimum tax credit carryforwards and
Missouri operating loss carryforwards. Any credit amount that arises after
March 31, 2000 also will be paid promptly to Mr. Stanley H. Durwood's estate.
The maximum amount of credit amounts that could be paid Mr. Durwood's estate or
could be used to offset his responsibilities to AMCE is approximately
$1,100,000. At this time, the Company has not realized any of DI's net tax
benefits on the tax returns it has filed for fiscal years 1999 and 1998. As a
condition to the Merger, AMCE and the Durwood Family Stockholders entered into a
registration agreement (the "Registration Agreement") pursuant to which the
Durwood Family Stockholders agreed to sell at least 3,000,000 shares of Common
Stock in a registered secondary offering, not more than twelve months and not
less than six months after the Merger. A registered secondary offering of
3,300,000 shares was completed on August 11, 1998. AMCE's expenses in the
offering were approximately $698,000, which expenses have been reimbursed to
AMCE by Delta Properties, Inc. ("Delta"), a former subsidiary of DI.

As a condition precedent to the Merger, the Durwood Family Stockholders
entered into an agreement (the "Stock Agreement") which, for three years, limits
the ability of the Durwood Children to deposit shares in a voting trust, solicit
proxies, participate in election contests or make a proposal concerning an
extraordinary transaction involving AMCE. Under the Stock Agreement, the Durwood
Children have also agreed, among other matters, for a period of three years,
(i) to grant an irrevocable proxy to the Secretary and each Assistant Secretary
of AMCE to vote their shares of Common Stock for each candidate to AMCE's Board
of Directors in the same proportion as the aggregate votes cast by all other
stockholders not affiliated with AMCE, its directors or officers and (ii) that
AMCE will have a right of first refusal with respect to any such shares the
Durwood Children wish to sell in a transaction exempt from registration, except
for such shares sold in brokers' transactions. These obligations expire on
August 15, 2000.

69

OTHER MATTERS

As a Successor Trustee of the Voting Trust with shared voting powers over
shares held in the Voting Trust, Mr. Raymond F. Beagle, Jr. may be deemed to
beneficially own in excess of 5% of the Company's voting securities. Mr. Beagle
serves as general counsel to the Company under a retainer agreement which
provides for annual payments of $360,000. The agreement provides for severance
payments equal to three times the annual retainer upon termination of the
agreement by the Company or a change in control approved by Common Stockholders.
The agreement also provides for deferred payments from a previously established
rabbi trust in a formula amount of $28,285 monthly as of March 30, 2000, for a
period of twelve years after termination of services or a change in control.
During fiscal 2000, the Company approved a $250,000 discretionary deferred bonus
which has been paid to the rabbi trust.

Pursuant to a program recommended by the Compensation Committee and approved
by AMCE's Board of Directors, the Company loaned Mr. Peter C. Brown $5,625,000
to purchase 375,000 shares of AMCE's Common Stock. Mr. Brown purchased such
shares on August 11, 1998. Under such program AMCE also loaned Mr. Philip M.
Singleton $3,765,000 to purchase 250,000 shares of AMCE's Common Stock.
Mr. Singleton purchased such shares from September 11 to September 15, 1998 and
unused proceeds of $811,000 were repaid to AMCE leaving a remaining unpaid
principal balance of $2,954,000. Such loans are unsecured and bear interest at a
rate at least equal to the applicable federal rate prescribed by Section 1274
(d) of the Internal Revenue Code in effect on the date of such loan (6% per
annum for the loans to Messrs. Brown and Singleton). Interest on these loans
accrues and is added to principal annually on the anniversary date of such loan,
and the full principal amount and all accrued interest is due and payable on the
fifth anniversary of such loan. On March 30, 2000, the principal amount of the
loan to Mr. Brown was $5,939,000 and the principal amount of the loan to
Mr. Singleton was $3,119,000. Accrued interest on the loans as of March 30, 2000
was $304,000.

Periodically, the Company and DI or Delta reconciled any amounts owed by one
company to the other. Charges to the intercompany account have included payments
made by the Company on behalf of DI or Delta. The largest balance owed by DI or
Delta to the Company during fiscal 2000 was $11,322. This balance was reimbursed
by Delta on June 7, 2000.

Ms. Marjorie D. Grant, sister of Mr. Stanley H. Durwood, is employed as a
Vice President of AMC. Ms. Grant's current annual base salary is $110,000.

During fiscal 1998, the Company sold the real estate assets associated with
13 megaplexes to Entertainment Properties Trust ("EPT"), a real estate
investment trust, for an aggregate purchase price of $283,800,000. The Company
leased the real estate assets associated with the theatres from EPT pursuant to
non-cancelable operating leases with terms ranging from 13 to 15 years at an
initial lease rate of 10.5% with options to extend for up to an additional
20 years. The Company leases four additional theatres from EPT under the same
terms as those included in the Sale and Lease Back Transaction. Annual rentals
for these four theatres are based on an estimated fair value of $95,100,000 for
the theatres. The Company has granted an option to EPT to acquire the land at a
theatre for the cost to the Company. In addition, for a period of five years
subsequent to November 1997, EPT will have a right of first refusal and first
offer to purchase and lease back to the Company the real estate assets
associated with any theatre and related entertainment property owned or
ground-leased by the Company, exercisable upon the Company's intended
disposition of such property. Mr. Peter C. Brown, Chairman of the Board, Chief
Executive Officer and President of AMCE is also the Chairman of the Board of
Trustees of EPT.

For a description of certain employment agreements between the Company and
Messrs. Stanley H. Durwood, Peter C. Brown, Philip M. Singleton, Richard M. Fay,
Richard T. Walsh and John D. McDonald, see "Employment Contracts, Termination of
Employment and Change in Control Arrangements."

Lathrop & Gage L.C., a law firm of which Mr. Raymond F. Beagle, Jr. is a
member, renders legal services to AMCE and its subsidiaries. During fiscal 2000,
the Company paid Lathrop & Gage, L.C. $2,617,000 for such services.

70

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.

(a)(1) The following financial statements are included in Part II, Item 8.:



PAGE
--------

Report of Independent Accountants........................... 29

Consolidated Statements of Operations--Fiscal years
(52 weeks) ended March 30, 2000, April 1, 1999 and
April 2, 1998............................................. 30

Consolidated Balance Sheets--March 30, 2000 and April 1,
1999...................................................... 31

Consolidated Statements of Cash Flows--Fiscal years
(52 weeks) ended March 30, 2000, April 1, 1999 and
April 2, 1998............................................. 32

Consolidated Statements of Stockholders' Equity--Fiscal
years (52 weeks) ended March 30, 2000, April 1, 1999 and
April 2, 1998............................................. 33

Notes to Consolidated Financial Statements--Fiscal years
(52 weeks) ended March 30, 2000, April 1, 1999 and
April 2, 1998............................................. 34

Statements of Operations By Quarter (Unaudited)--Fiscal
years (52 weeks) ended March 30, 2000 and April 1,
1999...................................................... 57


(a)(2) Financial Statement Schedules--Not applicable.

(b) Reports on Form 8-K

No reports on Form 8-K were filed or required to be filed during the
thirteen weeks ended March 30, 2000.

(c) Exhibits

A list of exhibits required to be filed as part of this report on Form 10-K
is set forth in the Exhibit Index, which immediately precedes such exhibits, and
is incorporated herein by reference.

71

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.



AMC ENTERTAINMENT INC.

By: /s/ PETER C. BROWN
---------------------------------------
Peter C. Brown
CHAIRMAN OF THE BOARD

Date: June 27, 2000


Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.



/s/ PETER C. BROWN Chairman of the Board, June 27, 2000
------------------------------------------- Chief Executive Officer and
Peter C. Brown President

/s/ CHARLES J. EGAN, JR. Director June 27, 2000
-------------------------------------------
Charles J. Egan, Jr.

/s/ W. THOMAS GRANT, II Director June 27, 2000
-------------------------------------------
W. Thomas Grant, II

/s/ PAUL E. VARDEMAN Director June 27, 2000
-------------------------------------------
Paul E. Vardeman

/s/ CHARLES S. PAUL Director June 27, 2000
-------------------------------------------
Charles S. Paul

/s/ CRAIG R. RAMSEY Senior Vice President, June 27, 2000
------------------------------------------- Finance, Chief Financial
Craig R. Ramsey Officer and Chief
Accounting Officer


72

EXHIBIT INDEX



EXHIBIT NUMBER DESCRIPTION
- --------------------- ------------------------------------------------------------

2.1 Agreement and Plan of Merger dated as of March 31, 1997
between AMC Entertainment Inc. and Durwood, Inc. (together
with Exhibit A, "Pre-Merger Action Plan") (Incorporated by
reference from Exhibit 2.1 to the Company's Registration
Statement on Form S-4 (File No. 333-25755) filed April 24,
1997).

2.2 Stock Agreement among AMC Entertainment Inc. and Stanley H.
Durwood, his children: Carol D. Journagan, Edward D.
Durwood, Thomas A. Durwood, Elissa D. Grodin, Brian H.
Durwood and Peter J. Durwood (the "Durwood Children"), The
Thomas A. and Barbara F. Durwood Family Investment
Partnership (the "TBD Partnership") and Delta
Properties, Inc. (Incorporated by reference from
Exhibit 99.3 to Amendment No. 2 to Schedule 13D of Stanley
H. Durwood filed September 30, 1997).

2.3 Registration Agreement among AMC Entertainment Inc. and the
Durwood Children and Delta Properties, Inc. (Incorporated by
reference from Exhibit 99.2 to Amendment No. 2 to Schedule
13D of Stanley H. Durwood filed September 30, 1997).

2.4(a) Indemnification Agreement dated as of March 31, 1997 among
AMC Entertainment Inc., the Durwood Family Stockholders and
Delta Properties, Inc., together with Exhibit B thereto
(Escrow Agreement) (Incorporated by reference from
Exhibit 2.4(a) to the Company's Registration Statement on
Form S-4 (File No. 333-25755) filed April 24, 1997).

2.4(b) Durwood Family Settlement Agreement (Incorporated by
reference from Exhibit 99.1 to Schedule 13D of
Durwood, Inc. and Stanley H. Durwood filed May 7, 1996).

2.4(c) First Amendment to Durwood Family Settlement Agreement
(Incorporated by reference from Exhibit 2.4(c) to the
Company's Registration Statement on Form S-4 (File No.
333-25755) filed April 24, 1997).

2.4(d) Second Amendment to Durwood Family Settlement Agreement
dated as of August 15, 1997, among Stanley H. Durwood, the
Durwood Children and the TBD Partnership (Incorporated by
reference from Exhibit 99.7 to Amendment No. 2 to Schedule
13D of Stanley H. Durwood filed September 30, 1997).

3.1 Amended and Restated Certificate of Incorporation of AMC
Entertainment Inc. (as amended on December 2, 1997)
(Incorporated by reference from Exhibit 3.1 to AMCE's Form
10-Q (File No. 1-8747) dated January 1, 1998).

3.2 Bylaws of AMC Entertainment Inc. (Incorporated by reference
from Exhibit 3.3 to AMCE's Form 10-Q (File No. 0-12429) for
the quarter ended December 26, 1996).

4.1(a) Amended and Restated Credit Agreement dated as of April 10,
1997, among AMC Entertainment Inc., as the Borrower, The
Bank of Nova Scotia, as Administrative Agent, and Bank of
America National Trust and Savings Association, as
Documentation Agent, and Various Financial Institutions, as
Lenders, together with the following exhibits thereto:
significant subsidiary guarantee, form of notes, form of
pledge agreement and form of subsidiary pledge agreement
(Incorporated by reference from Exhibit 4.3 to the Company's
Registration Statement on Form S-4 (File No. 333-25755)
filed April 24, 1997).


73




EXHIBIT NUMBER DESCRIPTION
- --------------------- ------------------------------------------------------------

4.1(b) Second Amendment, dated January 16, 1998, to Amended and
Restated Credit Agreement dated as of April 10, 1997
(Incorporated by Reference from Exhibit 4.2 to the Company's
Form 10-Q (File No. 1-8747) for the quarter ended
January 1, 1998).

4.1(c) Third Amendment, dated March 15, 1999, to Amended and
Restated Credit Agreement dated as of April 10, 1997
(Incorporated by reference from Exhibit 4 to the Company's
Form 8-K (File No. 1-8747) dated March 25, 1999).

*4.1(d) Fourth Amendment, dated March 29, 2000, to Amended and
Restated Credit Agreement dated as of April 10, 1997.

4.2(a) Indenture dated March 19, 1997, respecting AMC Entertainment
Inc.'s 9 1/2% Senior Subordinated Notes due 2009
(Incorporated by reference from Exhibit 4.1 to the Company's
Form 8-K (File No. 1-8747) dated March 19, 1997).

4.2(b) First Supplemental Indenture respecting AMC Entertainment
Inc.'s 9 1/2% Senior Subordinated Notes due 2009
(Incorporated by reference from Exhibit 4.4(b) to Amendment
No. 2. to the Company's Registration Statement on Form S-4
(File No.333-29155) filed August 4, 1997).

4.3 Indenture, dated January 27, 1999, respecting AMC
Entertainment Inc's 9 1/2% Senior Subordinated Notes due
2011 (Incorporated by reference from Exhibit 4.3 to the
company's 10-Q (File No. 1-8747) for the quarter ended
December 31, 1998).

4.4 Registration Rights Agreement, dated January 27, 1999,
respecting AMC Entertainment Inc.'s 9 1/2% Senior
Subordinated Notes due 2011 (Incorporated by reference from
Exhibit 4.4 to the Company's 10-Q (File No. 1-8747) for the
quarter ended December 31, 1998).

4.5 In accordance with Item 601(b)(4)(iii)(A) of Regulation S-K,
certain instruments respecting long-term debt of the
Registrant have been omitted but will be furnished to the
Commission upon request.

10.1 AMC Entertainment Inc. 1983 Stock Option Plan (Incorporated
by reference from Exhibit 10.1 to AMCE's Form S-1 (File No.
2-84675) filed June 22, 1983).

10.2 AMC Entertainment Inc. 1984 Employee Stock Purchase Plan
(Incorporated by reference from Exhibit 28.1 to AMCE's Form
S-8 (File No. 2-97523) filed July 3, 1984).

10.3(a) AMC Entertainment Inc. 1984 Employee Stock Option Plan
(Incorporated by reference from Exhibit 28.1 to AMCE's S-8
and S-3 (File No. 2-97522) filed July 3, 1984).

10.3(b) AMC Entertainment Inc. 1994 Stock Option and Incentive Plan,
as amended (Incorporated by reference from Exhibit 10.5 to
AMCE's Form 10-Q (File No. 1-8747) for the quarter ended
December 31, 1998).

10.3(c) Form of Non-Qualified (NON-ISO) Stock Option Agreement
(Incorporated by reference from Exhibit 10.2 to AMCE's Form
10-Q (File No. 0-12429) for the quarter ended December 26,
1996).

10.3(d) AMC Entertainment Inc. 1999 Stock Option and Incentive Plan,
as amended. (Incorporated by reference from Exhibit 4.3 to
the Company's Registration Statement on Form S-8 (File No.
333-92615) filed December 13, 1999).


74




EXHIBIT NUMBER DESCRIPTION
- --------------------- ------------------------------------------------------------

10.3(e) AMC Entertainment Inc. 1999 Stock Option Plan for Outside
Directors (Incorporated by reference from Exhibit 4.3 to the
Company's Registration Statement on Form S-8 (File No.
333-92617) filed December 13, 1999.

10.4 American Multi-Cinema, Inc. Savings Plan, a defined
contribution 401(k) plan, restated January 1, 1989, as
amended (Incorporated by reference from Exhibit 10.6 to
AMCE's Form S-1 (File No. 33-48586) filed June 12, 1992, as
amended).

10.5(a) Defined Benefit Retirement Income Plan for Certain Employees
of American Multi-Cinema, Inc. dated January 1, 1989, as
amended (Incorporated by reference from Exhibit 10.7 to
AMCE's Form S-1 (File No. 33-48586) filed June 12, 1992, as
amended).

10.5(b) AMC Supplemental Executive Retirement Plan dated
January 1,1994 (Incorporated by reference from Exhibit
10.7(b) to AMCE's Form 10-K (File No. 0-12429) for the
fiscal year ended March 30, 1995).

10.6 Employment Agreement between American Multi-Cinema, Inc. and
Philip M. Singleton (Incorporated by reference from Exhibit
10.2 to the Company's Form 10-Q (File No. 1-8747) for the
quarter ended December 31, 1998).

10.7 Employment Agreement between American Multi-Cinema, Inc. and
Peter C. Brown (Incorporated by reference from Exhibit 10.2
to to the Company's Form 10-Q (File No.1-8747) for the
quarter ended December 31, 1998).

10.8 Disability Compensation Provisions respecting Stanley H.
Durwood (Incorporated by reference from Exhibit 10.12 to
AMCE's Form S-1 (File No. 33-48586) filed June 12, 1992, as
amended).

10.9 Executive Medical Expense Reimbursement and Supplemental
Accidental Death or Dismemberment Insurance Plan, as
restated effective as of February 1, 1991 (Incorporated by
reference from Exhibit 10.13 to AMCE's Form S-1 (File
No. 33-48586) filed June 12, 1992, as amended).

10.10 Division Operations Incentive Program (incorporated by
reference from Exhibit 10.15 to AMCE's Form S-1 (File
No. 33-48586) filed June 12, 1992, as amended).

10.11 Partnership Interest Purchase Agreement dated May 28, 1993,
among Exhibition Enterprises Partnership, Cinema
Enterprises, Inc., Cinema Enterprises II, Inc., American
Multi-Cinema, Inc., TPI Entertainment, Inc. and TPI
Enterprises, Inc. (Incorporated by reference from Exhibit
10.29 to AMCE's Form 10-K (File No. 1-8747) for the fiscal
year ended April 1, 1993).

10.12 Mutual Release and Indemnification Agreement dated May 28,
1993, among Exhibition Enterprises Partnership, Cinema
Enterprises, Inc., American Multi-Cinema, Inc., TPI
Entertainment, Inc. and TPI Enterprises, Inc. (Incorporated
by reference from Exhibit 10.30 to AMCE's Form 10-K (File
No. 1-8747) for the fiscal year ended April 1, 1993).

10.13 Assignment and Assumption Agreement between Cinema
Enterprises II, Inc. and TPI Entertainment, Inc.
(Incorporated by reference from Exhibit 10.31 to AMCE's Form
10-K (File No. 1-8747) for the fiscal year ended April 1,
1993).

10.14 Confidentiality Agreement dated May 28, 1993, among TPI
Entertainment, Inc., TPI Enterprises, Inc., Exhibition
Enterprises Partnership, Cinema Enterprises, Inc., Cinema
Enterprises II, Inc. and American Multi-Cinema, Inc.
(Incorporated by reference from Exhibit 10.32 to AMCE's Form
10-K (File No. 1-8747) for the fiscal year ended April 1,
1993).


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EXHIBIT NUMBER DESCRIPTION
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10.15 Termination Agreement dated May 28, 1993, among TPI
Entertainment, Inc., TPI Enterprises, Inc. Exhibition
Enterprises Partnership, American Multi-Cinema, Inc.,
Cinema Enterprises, Inc., AMC Entertainment Inc., Durwood,
Inc., Stanley H. Durwood and Edward D. Durwood (Incorporated
by reference from Exhibit 10.33 to AMCE's Form 10-K (File
No. 1-8747) for the fiscal year ended April 1, 1993).

10.16 Promissory Note dated June 16, 1993, made by Thomas L. Velde
and Katherine G. Terwilliger, husband and wife, payable to
American Multi-Cinema, Inc. (Incorporated by reference from
Exhibit 10.34 to AMCE's Form 10-K (File No. 1-8747) for the
fiscal year ended April 1, 1993).

10.17 Second Mortgage dated June 16, 1993, among Thomas L. Velde,
Katherine G. Terwilliger and American Multi-Cinema, Inc.
(Incorporated by reference from Exhibit 10.35 to AMCE's Form
10-K (File No. 1-8747) for the fiscal year ended April 1,
1993).

10.18 Summary of American Multi-Cinema, Inc. Executive Incentive
Program (Incorporated by reference from Exhibit 10.36 to
AMCE's Registration Statement on Form S-2 (File No.
33-51693) filed December 23, 1993).

10.19 AMC Non-Qualified Deferred Compensation Plans (Incorporated
by reference from Exhibit 10.37 to Amendment No. 2 to AMCE's
Registration Statement on Form S-2 (File No. 33-51693) filed
February 18, 1994).

10.20 Employment Agreement between AMC Entertainment Inc.,
American Multi-Cinema, Inc. and Stanley H. Durwood
(Incorporated by reference from Exhibit 10.32 to AMCE's Form
10-K (File No. 0-12429) for the fiscal year ended March 28,
1996).

10.21 Real Estate Contract dated November 1, 1995 among Richard M.
Fay, Mary B. Fay and American Multi-Cinema, Inc.
(Incorporated by reference from Exhibit 10.33 to AMCE's Form
10-K (File No. 0-12429) for the fiscal year ended March 28,
1996).

10.22 American Multi-Cinema, Inc. Retirement Enhancement Plan
(Incorporated by reference from Exhibit 10.26 to AMCE's
Registration Statement on Form S-4 (File No. 333-25755)
filed April 24, 1997).

10.23 Employment Agreement between American Multi-Cinema, Inc. and
Richard M. Fay (Incorporated by reference from Exhibit 10.3
to AMCE's Form 10-Q (File No. 1-8747) for the quarter ended
December 31, 1998).

10.24 American Multi-Cinema, Inc. Executive Savings Plan
(Incorporated by reference from Exhibit 10.28 to AMCE's
Registration Statement on Form S-4 (File No. 333-25755)
filed April 24, 1997).

10.25 Limited Partnership Agreement of Planet Movies Company, L.P.
dated October 17, 1997. (Incorporated by reference from
Exhibit 10.25 to the Company's Form 10-K (file No. 1-8747)
for the fiscal year ended April 2, 1998).

10.26 Agreement of Sale and Purchase dated November 21, 1997 among
American Multi-Cinema, Inc. and AMC Realty, Inc., as Seller,
and Entertainment Properties Trust, as Purchaser
(Incorporated by reference from Exhibit 10.1 of the
Company's Current Report on Form 8-K (File No. 1-8747) filed
December 9, 1997).

10.27 Option Agreement dated November 21, 1997 among American
Multi-Cinema, Inc. and AMC Realty, Inc., as Seller, and
Entertainment Properties Trust, as Purchaser (Incorporated
by reference from Exhibit 10.2 of the Company's Current
Report on Form 8-K (File No. 1-8747) filed December 9,
1997).


76




EXHIBIT NUMBER DESCRIPTION
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10.28 Right to Purchase Agreement dated November 21, 1997, between
AMC Entertainment Inc., as Grantor, and Entertainment
Properties Trust as Offeree (Incorporated by reference from
Exhibit 10.3 of the Company's Current Report on Form 8-K
(File No. 1-8747) filed December 9, 1997.)

10.29 Lease dated November 21, 1997 between Entertainment
Properties Trust, as Landlord, and American
Multi-Cinema, Inc., as Tenant (Incorporated by reference
from Exhibit 10.4 of the Company's Current Report on Form
8-K (File No. 1-8747) filed December 9, 1997). (Similar
leases have been entered into with respect to the following
theatres: Mission Valley 20, Promenade 16, Ontario Mills 30,
Lennox 24, West Olive 16, Studio 30, Huebner Oaks 24, First
Colony 24, Oak View 24, Leawood Town Center 20, South
Barrington 30, Gulf Pointe 30, Cantera 30, Mesquite 30,
Hampton Town Center 24 and Palm Promenade 24.

10.30 Guaranty of Lease dated November 21, 1997 between AMC
Entertainment, Inc., as Guarantor, and Entertainment
Properties Trust, as Owner (Incorporated by reference from
Exhibit 10.5 of the Company's Current Report on Form 8-K
(File No. 1-8747) filed December 9, 1997, (Similar
guaranties have been entered into with respect to the
following theatres: Mission Valley 20, Promenade 16, Ontario
Mills 30, Lennox 24, West Olive 16, Studio 30, Huebner Oaks
24, First Colony 24, Oak View 24, Leawood Town Center 20,
South Barrington 30, Gulf Pointe 30, Cantera 30, Mesquite
30, Hampton Town Center 24 and Palm Promenade 24.

10.31 Promissory Note dated August 11, 1998, made by Peter C.
Brown, payable to AMC Entertainment Inc. (Incorporated by
reference from Exhibit 10.1 to the Company's Form 10-Q (File
No. 1-8747) for the quarter ended October 1, 1998).

10.32 Promissory Note dated September 4, 1998, made by Philip M.
Singleton, payable to AMC Entertainment Inc. (Incorporated
by reference from Exhibit 10.2 to the Company's Form 10-Q
(File No. 1-8747) for the quarter ended October 1, 1998).

10.33* Employment agreement between AMC Entertainment Inc.,
American Multi-Cinema, Inc. and Richard T. Walsh dated
October 1, 1999.

10.34 Form of Non-Qualified (Non-ISO) Stock Option Agreement used
in November 13, 1998 option grants to Mr. Stanley H.
Durwood, Mr. Peter C. Brown and Mr. Philip M. Singleton
(Incorporated by reference from Exhibit 10.6 to the
Company's Form 10-Q (File No. 1-8747) for the quarter ended
December 31, 1998).

10.35 Retainer agreement with Raymond F. Beagle, Jr. (Incorporated
by reference from the Company's Form 10-Q (File No. 1-8747)
for the quarter ended September 30, 1999.

10.36 Non-Qualified (Non-ISO) Stock Option Agreement used in
June 18, 1999 option grants to Mr. Richard M. Fay and
Mr. Richard T. Walsh. (Incorporated by reference from
exhibit 10.1 to the Company's Form 10-Q (File No. 1-8747)
for the quarter ended July 1, 1999.

10.37* Employment agreement between AMC Entertainment Inc.,
American Multi-Cinema, Inc. and John D. McDonald dated
February 1, 1999.

10.38* Form of Option Agreement under 1999 Stock Option Plan for
Outside Directors used in December 3, 1999 option grants to
Mr. Chares J. Egan, Jr., Mr. W. Thomas Grant, II,
Mr. Charles S. Paul and Mr. Paul E. Vardeman.

10.39* Non-Qualified (Non-ISO) Stock Option Agreement used in
June 18, 1999 option grant to Mr. John D. McDonald.


77




EXHIBIT NUMBER DESCRIPTION
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16 Letter regarding change in certifying accountant
(Incorporated by reference from Exhibit 19.6 to AMCE's Form
10-Q (File No. 0-12429) for the quarter ended July 2,
1992).

*21. Subsidiaries of AMC Entertainment Inc.

*23. Consent of PricewaterhouseCoopers LLP to the use of their
report of independent accountants included in Part II, Item
8. of this annual report.

*27. Financial Data Schedule

99 Durwood Voting Trust (Amended and Restated 1992
Durwood, Inc. voting Trust Agreement dated August 12, 1998).
(Incorporated by reference from exhibit 99.2 to the
Company's Schedule 13D (File No. 5-34911) filed July 22,
1999.


- ------------------------

* Filed herewith

78