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

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 April 1, 1999
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
AMC ENTERTAINMENT INC.
(Exact name of registrant as specified in its charter)
Delaware 43-1304369
(State or other jurisdiction of
incorporation or organization) (I.R.S. Employer
Identification No.)
106 West 14th Street
P. O. Box 419615
Kansas City, Missouri 64141-6615
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (816) 221-4000
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.

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. [ X ]

The aggregate market value of the registrant's voting stock held by non-
affiliates as of May 14, 1999, computed by reference to the closing price
for such stock on the American Stock Exchange on such date, was
$236,048,311.

Number of shares
Title of each class of common stock Outstanding as of May 14, 1999
- ---------------------------------------------------------------------------
Common Stock, 66 2/3 cents par value 19,427,098
Class B Stock, 66 2/3 cents par value 4,041,993

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 in international markets 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 real estate activities are conducted through AMC Realty, Inc. and
its subsidiary, Centertainment, 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 14th Street,
P.O. Box 419615, Kansas City, Missouri 64141-6615. 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 14 to the Consolidated Financial Statements on page 46.
(c) Narrative Description of Business

General

The Company is one of the leading theatrical exhibition companies in
North America, based on revenues. In the fiscal year ended April 1, 1999,
the Company had revenues of $1,026,721,000. As of April 1, 1999, the
Company operated 233 theatres with a total of 2,735 screens located in 23
states, the District of Columbia, Portugal, Japan, Spain, China (Hong Kong)
and Canada. Approximately 60% of the Company's screens are located in
Florida, California, Texas, Arizona and Missouri, and approximately 69% of
its domestic 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 two 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.

The following table provides information about the Company's domestic
megaplexes and multiplexes (those open at the beginning of fiscal 1999) for
the year ended April 1, 1999:


Megaplexes Multiplexes
-------- --------

Attendance per screen 68,000 51,000
Average revenue per patron $ 6.90 $ 6.15
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 April 1, 1999, 1,335 screens, or 48.8% of the Company's total
screens, were located in megaplexes and the average number of total screens
per theatre was 11.7. The average number of screens per theatre for the ten
largest North American theatrical exhibition companies (based on number of
screens) was 7.2 and the average for all North American theatrical
exhibition companies was 6.1, based on the listing of exhibitors in the
National Association of Theatre Owners 1998-99 Encyclopedia of Exhibition,
as of May 1, 1998.

The Company continually upgrades its theatre circuit by opening new
theatres (primarily megaplexes), adding new screens to existing theatres and
selectively closing or disposing of unprofitable multiplexes. From April
1996 through April 1, 1999, the Company opened 57 new theatres with 1,229
screens, representing 44.9% 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 54 theatres and 286 screens. Of
the 1,229 screens opened during the period, 1,196 screens were located in a
total of 53 megaplexes. As of April 1, 1999, the Company had 14 megaplexes
under construction with a total of 316 screens.

Revenues for the Company are generated primarily from box office
admissions and theatre concessions sales, which accounted for 64% and 30%,
respectively, of the Company's fiscal 1999 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 (SDDS) and AMC LoveSeat style
seating (plush, high-backed seats with retractable armrests). Other
amenities may include auditoriums with TORUS Compound Curved Screens and
High Impact Theatre Systems (HITS), 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 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 will increasingly choose 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 will become obsolete as the megaplex concept matures.

The Company believes that significant opportunities exist for
development of modern megaplexes in select international markets. The
theatrical exhibition business has become increasingly global, and box
office receipts from international markets exceed those of the U.S. market.
In addition, the production and distribution of feature films and demand for
American motion pictures are increasing in many countries. The Company
believes that its experience in developing and operating megaplexes provides
it with a significant advantage in developing megaplexes in international
markets, and the Company intends to utilize this experience, as well as its
existing relationships with domestic motion picture studios, to enter select
international markets. The Company's strategy in these markets is to operate
leased theatres. Presently, the Company's activities in international
markets are directed toward selected countries in Asia and Western Europe
and Canada.

The Company intends to consider partnerships or joint ventures, where
appropriate, to share risk and leverage resources. Such ventures may include
interests in projects that include restaurant, retail and other concepts.
The Company has formed a joint venture with Planet Hollywood International,
Inc. that is scheduled to open a Planet Movies facility on June 30, 1999
near Columbus, Ohio. This facility will consist of a 30 screen AMC megaplex,
a Planet Hollywood and Official All Star Cafe restaurant and 30,000 square
foot rotunda featuring memorabilia, entertainment related merchandise and
food kiosks.

Through Centertainment, Inc. and its subsidiaries, the Company plans to
enhance the moviegoing experience of its patrons by creating environments
that combine complementary food, retail and other synergistic uses with the
megaplex concept. Centertainment, Inc. and its subsidiaries presently are
involved in the pre-development of several retail/entertainment projects,
including a project in downtown Kansas City, Missouri, known as the "Power
and Light District."

The Company continually monitors the performance of its theatres and
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 11
such theatres with 71 screens as of April 1, 1999 (2.6% of the Company's
total screens). 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.
Closure or other dispositions of certain multiplexes will result in expenses
which are primarily comprised of expected payments to landlords to terminate
leases or conversion costs. The Company anticipates that it will incur
approximately $15 million of costs related to the closure of approximately
34 multiplexes with 220 screens in fiscal 2000. As of June 3, 1999, the
Company had closed 18 of these multiplexes with 123 screens and recognized
approximately $9 million of theatre closure expense. During fiscal 1999,
the Company closed or sold 16 multiplexes with 87 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
Additions Dispositions Total Theatres Operated
------------------- ------------------ -----------------------
Fiscal Year Ended Number of Number of Number of Number of Number of Number of
Theatres Screens Theatres Screens Theatres Screens
-------- -------- -------- -------- --------- -------

March 30, 1995 3 53 7 26 232 1,630
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
Total 71 1,505 74 373
== ===== == ===

As of April 1, 1999, the Company operated 60 megaplexes having an
aggregate of 1,335 screens, representing 48.8% of its screens. The following
table provides greater detail with respect to the Company's theatre circuit
as of such date.


Total Total Theatres
Domestic Screens Theatres Multiplex Megaplex
-------- -------- -------- --------- -------

Florida 476 42 34 8
California 460 35 24 11
Texas 382 29 21 8
Arizona 172 14 9 5
Missouri 147 13 10 3
Pennsylvania 125 14 13 1
Georgia 116 9 6 3
Michigan 115 15 14 1
Colorado 102 9 6 3
Virginia 87 9 8 1
Oklahoma 66 5 3 2
Illinois 60 2 - 2
Ohio 56 4 3 1
Kansas 53 3 1 2
Maryland 42 5 5 -
New Jersey 30 5 5 -
Nebraska 24 1 - 1
North Carolina 22 1 - 1
Louisiana 20 3 3 -
Washington 20 3 3 -
New York 16 2 2 -
District of Columbia 9 1 1 -
Massachusetts 4 1 1 -
Delaware 3 1 1 -
---- ---- ---- ----
Total Domestic 2,607 226 173 53
----- ---- ---- ----
International
-------------
Portugal 20 1 - 1
Japan 29 2 - 2
Canada 44 2 - 2
China (Hong Kong) 11 1 - 1
Spain 24 1 - 1
---- ---- ---- ----
Total International 128 7 - 7
---- ---- ---- ----
Total Theatre Circuit 2,735 233 173 60
===== ==== ==== ====


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 Pictures 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 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, Warner
Bros. Distribution, SONY Pictures Releasing (Columbia Pictures and Tri-Star
Pictures), Twentieth Century Fox, and New Line Cinema. According to
information sourced from Variety (an industry publication), these
distributors accounted for 73% of industry admissions revenues in 1998. 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 1999, no single
distributor accounted for more than 10% of the motion pictures licensed by
the Company or for more than 20% 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, 1998, 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. Recently, certain distributors
have announced their intention to reduce production of films. 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 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 1988, the industry has
experienced growth, with attendance increasing at a 3.5% compound growth
rate over the period. During 1998, domestic attendance was 1.48 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 1998.


U.S. Box
Attendance Average Office Sales
Year (in millions) Ticket Price (in millions)
- ---- ------------ ------------ ------------

1994 1,292 $4.18 $5,396
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


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 domestic theatrical exhibition industry,
approximately 280 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 Pictures Association of America, the number of
indoor screens in the United States was 33,440 at the end of 1998. Based on
the May 1, 1998 listing of exhibitors in the National Association of Theatre
Owners 1998-99 Encyclopedia of Exhibition, the Company believes that the ten
largest exhibitors (in terms of number of screens) operated approximately
55% of such number of screens, with no one exhibitor operating more than ten
percent 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 Pictures 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.
. 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 established 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 10.

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. The Company's international operations also face the additional
risks of fluctuating currency values. Although the Company does not
currently hedge against foreign currency exchange rate risk, it does not
intend to repatriate funds from the operations of its Japanese and European
theatres but instead intends to use them to fund additional expansion. Quota
systems used by some 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 49.

Employees
As of April 1, 1999, the Company had approximately 2,300 full-time and
10,000 part-time employees. Approximately 18% 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 233 theatres and 2,735 screens operated as of April 1,
1999, American Multi-Cinema, Inc. was the owner or lessee of 224 theatres
with 2,593 screens, and AMC Entertainment International, Inc. leased 5
theatres with 84 screens and its subsidiaries, Actividades Multi-Cinemas E
Espectaculos, LDA, and AMC Entertainment Espana S.A. leased one theatre with
20 screens and one theatre with 24 screens, respectively. American
Multi-Cinema, Inc. also operated two theatres with 14 screens owned by a
third party.

Of the 233 theatres operated by the Company as of April 1, 1999, 11
theatres with 128 screens were owned, 10 theatres with 97 screens were
leased pursuant to ground leases, 210 theatres with 2,496 screens were
leased pursuant to building leases and two theatres with 14 screens were
managed. The Company's leases generally have 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. Division offices are leased in Los Angeles, California;
Clearwater, Florida; and Voorhees, New Jersey (Philadelphia) and a film
licensing office is leased in Woodland Hills, California (Los Angeles).

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.

In an unrelated action filed on March 5, 1998, in the United States
District Court for the District of Arizona, Howard Bell v. AMC 24 Theatres,
CIV 98 0390, a private plaintiff alleged that the Company had violated the
ADA for not dispersing accessible seating or providing accessible signage at
a megaplex located in Phoenix, Arizona. On October 16, 1998, another
private plaintiff filed suit in the United States District Court for the
District of Southern Florida, Barbara Harris v. American Multi-Cinema, Inc.,
CIV 98-2472, alleging that the Company had violated the ADA by failing to
provide comparable seating for wheel chair patrons. Both suits have been
settled for nominal amounts. The Bell suit was dismissed on March 9, 1999
and the Harris case was dismissed on June 1, 1999.

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 remove the
alleged barriers. The Company has filed an answer denying the allegations in
the Soto suit. 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. AMC has filed
its answer denying the allegations and asserting a number of affirmative
defenses. In addition, AMC has asked the Court to stay the suit pending
resolution of the Department of Justice litigation filed in California
referred to above.

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.
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, but has not set a trial date.

AMC currently utilizes SDDS systems with respect to 2,300 of its
screens and owns 159 portable systems employing Dolby Digital technology.
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 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.

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 April 1, 1999.

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 1999 Fiscal 1998
------------- ------------
High Low High Low
---- ---- ---- ----

First Quarter $23 3/4 $16 13/16 $23 3/8 $17 7/8
Second Quarter 19 7/8 11 1/4 20 3/4 17 5/8
Third Quarter 21 1/16 10 3/4 23 18 3/4
Fourth Quarter 20 3/16 13 9/16 27 3/4 21 3/4



Stock Ownership
On May 14, 1999, there were 490 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, it is not anticipated
that the most restrictive of these provisions, which are set forth in the
Credit Facility, will affect the Company's ability to pay dividends in the
foreseeable future should it choose to do so. 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 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 on its Common Stock.

Item 6. Selected Financial Data.



Years Ended (1)(6)
-----------------------------------------------------------
April 1, April 2, April 3, March 28, March 30,

(In thousands, except per
- -------------------------
share and operating data) 1999 1998 1997 1996 1995
- -------------------------- ---- ---- ---- ---- ----


Statement of Operations
Data:
Total revenues $1,026,721 $852,755 $752,904 $658,549 $ 565,410
Total cost of operations 865,771 691,500 583,309 493,935 434,829
General and administrative 58,419 54,354 56,647 52,059 41,639
Depreciation and
amortization 89,221 70,117 52,572 42,087 37,913
Impairment of long-lived
assets 4,935 46,998 7,231 1,799 -
-------- ------- ------- ------- -------
Operating income (loss) 8,375 (10,214) 53,145 68,669 51,029
Interest expense 38,628 35,679 22,022 28,828 35,908
Investment income 1,368 1,090 856 7,052 10,013
Gain (loss) on disposition
of assets 2,369 3,704 (84) (222) (156)
------- ------- ------- ------- -------
Earnings (loss) before
income taxes
and extraordinary item (26,516) (41,099) 31,895 46,671 24,978
Income tax provision (10,500) (16,600) 12,900 19,300 (9,000)
------- ------- ------- ------- -------
Earnings (loss) before
extraordinary item (16,016) (24,499) 18,995 27,371 33,978
Extraordinary item,
net of taxes (2) - - - _(19,350) -
------- ------- ------- ------- -------
Net earnings (loss) $(16,016) $(24,499) $ 18,995 $ 8,021 $ 33,978
======= ======= ======= ======= =======
Preferred dividends - 4,846 5,907 7,000 7,000
------- ------- ------- ------- -------

Net earnings (loss) for
common shares $(16,016)$ (29,345) $ 13,088 $ 1,021 $ 26,978
======= ======= ======= ======= =======
Earnings (loss) per share
before extraordinary item:
Basic $ (.69)$ (1.59)$ .75 $ 1.23 $ 1.64
Diluted (.69) (1.59) .74 1.15 1.45
Earnings (loss) per share:
Basic $ (.69)$ (1.59) $ .75 $ .06(2) $ 1.64
Diluted (.69) (1.59) .74 .34 1.45
Weighted average number
of shares outstanding:
Basic 23,378 18,477 17,489 16,513 16,456
Diluted 23,378 18,477 17,784 23,741 23,489
Balance Sheet Data
(at period end):
Cash, equivalents and
investments $ 13,239 $ 9,881 $ 24,715 $ 10,795 $140,377
Total assets 975,730 795,780 719,055 483,458 522,154
Corporate borrowings 561,045 348,990 315,072 126,150 200,222
Capital lease
obligations 48,575 54,622 58,652 62,022 67,282
Stockholders' equity 115,465 139,455 170,012 158,918 157,388
Other Financial Data:
Capital expenditures $260,813 $389,217 $253,380 $120,796 $ 56,403
Proceeds from
sale/leasebacks - 283,800 - - -
Rent expense 165,370 106,383 80,061 64,813 60,076
Preopening expense (3) 2,265 2,243 2,414 573 -
Theatre closure expense (4) 2,801 - - - -
Adjusted EBITDA (5) 107,597 109,144 115,362 113,128 88,942
Operating Data (at
period end):
Number of megaplexes
operated 60 44 19 5 -
Number of megaplex
screens operated 1,335 987 379 98 -
Number of multiplexes
operated 173 185 209 221 232
Number of multiplex
screens operated 1,400 1,455 1,578 1,621 1,630
Screens per theatre
circuit wide 11.7 10.7 8.6 7.6 7.0




(1)Fiscal 1997 consists of 53 weeks. All other fiscal years have 52 weeks.
(2)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.
(3)Preopening expense is comprised of advertising and promotional expense that
is incurred in connection with the opening of a new theatre. Certain other
preopening costs are capitalized and amortized over a two year period.
In fiscal 2000 (as the result of a new accounting pronouncement), all
capitalized preopening costs will be written off as a cumulative effect
adjustment and all future preopening costs will be expensed as incurred.
(4)Theatre closure expense relates to actual and estimated lease exit costs
on multiplex theatres. The Company anticipates that it will incur
approximately $15 million of costs related to the closure of approximately
34 multiplexes with 220 screens in fiscal 2000.
(5)Represents net earnings (loss) plus interest, income taxes, depreciation and
amortization and adjusted for 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; and (ix) changes in real estate, zoning and tax laws. 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.


OPERATING RESULTS

Years (52 Weeks) Ended April 1, 1999 and April 2, 1998




52 Weeks 52 Weeks
Ended Ended
April 1, April 2,
(Dollars in thousands) 1999 1998 % Change
- --------------------------------------------------------------------------
Revenues

Domestic
Admissions $ 628,373 $530,653 18.4%
Concessions 299,534 251,025 19.3
Other 20,822 16,052 29.7
--------------------------------
948,729 797,730 18.9
International
Admissions 33,788 22,918 47.4
Concessions 7,813 4,992 56.5
Other 944 59 * 42,545 27,969
--------------------------------
42,545 27,969 52.1
On-screen advertising and other 35,447 27,056 31.0
--------------------------------
Total revenues $1,026,721 $852,755 20.4%
================================
Cost of Operations
Domestic
Film exhibition costs $ 340,653 $287,516 18.5%
Concession costs 46,262 40,109 15.3
Rent 156,324 100,928 54.9
Other 252,733 215,656 17.2
--------------------------------
795,972 644,209 23.6
International
Film exhibition costs 17,784 12,410 43.3
Concession costs 2,425 1,953 24.2
Rent 9,046 5,455 65.8
Other 12,478 6,180 *
--------------------------------
41,733 25,998 60.5
On-screen advertising and other 28,066 21,293 31.8
--------------------------------
Total cost of operations $865,771 $691,500 25.2%
================================
* Percentage change in excess of 100%.






52 Weeks 52 Weeks
Ended Ended
April 1, April 2,
(Dollars in thousands) 1999 1998 % Change
- ---------------------------------------------------------------------------

General and Administrative

Corporate and domestic $ 43,958 $ 42,636 3.1%
International 9,770 6,879 42.0
On-screen advertising and other 4,691 4,839 (3.1)
--------------------------------
Total general and administrative $ 58,419 $ 54,354 7.5%
================================
Depreciation and Amortization
Corporate and domestic $ 82,500 $ 65,168 26.6%
International 4,407 2,534 73.9
On-screen advertising and other 2,314 2,415 (4.2)
--------------------------------
Total depreciation and amortization $ 89,221 $ 70,117 27.2%
================================



Revenues. Total revenues increased 20.4%, or $173,966,000, during the year
(52 weeks) ended April 1, 1999 compared to the year (52 weeks) ended April 2,
1998.

Total domestic revenues increased 18.9%, or $150,999,000, from the prior
year. Admissions revenues increased 18.4%, or $97,720,000, due to a 14.5%
increase in attendance, which contributed $77,182,000 of the increase, and a
3.4% increase in average ticket prices, which contributed $20,538,000 of the
increase. Attendance at megaplexes (theatres with predominantly stadium-style
seating) increased as a result of the addition of 11 new megaplexes with 256
screens since April 2, 1998, offset by a 3.5% decrease in attendance at
comparable megaplexes (theatres opened before fiscal 1998). Attendance at
multiplexes (theatres generally without stadium-style seating) decreased due to
a 11.7% decrease in attendance at 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 primarily 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 the growing number of megaplexes in the Company's theatre circuit, which
yield higher average ticket prices than multiplexes. Concessions revenues
increased 19.3%, or $48,509,000, due to the increase in total attendance, which
contributed $36,511,000 of the increase, and a 4.2% increase in average
concessions per patron, which contributed $11,998,000 of the increase. The
increase in average concessions per patron was attributable to the increasing
number of megaplexes in the Company's theatre circuit, where concession spending
per patron is higher than in multiplexes.

Total international revenues increased 52.1%, or $14,576,000, from the
prior year. Admissions revenues increased 47.4%, or $10,870,000, due primarily
to an increase in attendance from the addition of a 24-screen megaplex in Spain,
a 16-screen megaplex in Japan, an 11-screen megaplex in China (Hong Kong) and
two new megaplexes with a total of 44 screens in Canada during the fifty-two
weeks ended April 1, 1999. Attendance at comparable international megaplexes
increased 7.7% for the year ended April 1, 1999 compared to the year ended April
2, 1998. Concession revenues increased 56.5%, or $2,821,000, due primarily to
the increase in total attendance. International revenues were negatively
impacted by a stronger U.S. dollar, although this did not have a material impact
on consolidated net earnings.

On-screen advertising and other revenues increased 31.0%, or $8,391,000,
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 of
the Company's on-screen advertising business.

Cost of Operations. Total cost of operations increased 25.2%, or
$174,271,000, during the year (52 weeks) ended April 1, 1999 compared to the
year (52 weeks) ended April 2, 1998.

Total domestic cost of operations increased 23.6%, or $15,763,000, from the
prior year. Film exhibition costs increased 18.5%, or $53,137,000, due to
higher attendance, which contributed $52,946,000 of the increase, and a slight
increase in the percentage of admissions paid to film distributors, which
increased film exhibition costs by $191,000. As a percentage of admissions
revenues, film exhibition costs were 54.2% in the current and in the prior year.
Concession costs increased 15.3%, or $6,153,000, due to the increase in
concessions revenues, which contributed $7,751,000 of the increase, offset by a
decrease in concession costs as a percentage of concessions revenues, which
produced a decrease in concession costs of $1,598,000. As a percentage of
concessions revenues, concession costs were 15.4% in the current year compared
with 16.0% in the prior year. Rent expense increased 54.9%, or $55,396,000, due
to the higher number of screens in operation, 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"). Other cost of operations increased 17.2%, or $37,077,000,
from the prior year primarily due to the higher number of screens in operation.
Other cost of operations includes $2,801,000 of theatre closure expense related
to actual and estimated costs to close multiplexes during the current year. As
a percentage of revenues, other cost of operations was 26.6% during the current
year as compared with 27.0% in the prior year.

Total international cost of operations increased 60.5%, or $15,735,000,
from the prior year. Film exhibition costs increased 43.3%, or $5,374,000, due
to higher attendance, offset by a decrease in the percentage of admissions paid
to film distributors. Rent expense increased 65.8%, or $3,591,000, and other
cost of operations increased $6,298,000, from the prior year, primarily due to
the increased number of international screens in operation. International cost
of operations were positively impacted by a stronger U.S. dollar, although this
did not have a material impact on consolidated net earnings.

On-screen advertising and other cost of operations increased 31.8%, or
$6,773,000, 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. General and administrative expenses increased
7.5%, or $4,065,000, during the year (52 weeks) ended April 1, 1999.

Corporate and domestic general and administrative expenses increased 3.1%,
or $1,322,000, primarily due to increased payroll and other costs associated
with the Company's expansion program.

International general and administrative expenses increased 42.0%, or
$2,891,000, primarily due to the Company's international expansion program.

On-screen advertising and other general and administrative expenses
decreased 3.1%, or $148,000, primarily due to the change in the number of
periods included in the results of operations for the Company's on-screen
advertising business.

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

Impairment of Long-lived 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. Closure
or other dispositions of certain multiplexes will result in expenses which are
primarily comprised of expected payments to landlords to terminate leases or
conversion costs. The Company anticipates that it will incur approximately $15
million of costs related to the closure of approximately 34 multiplexes with 220
screens in fiscal 2000. As of June 3, 1999, the Company had closed 18 of these
multiplexes with 123 screens and recognized approximately $9 million of theatre
closure expense. During fiscal 1999, the Company closed or sold 16 multiplexes
with 87 screens.

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.

Interest Expense. Interest expense increased 8.3%, or $2,949,000, 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.

Gain on Disposition of 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.

Income Tax Provision. The provision for income taxes decreased $6,100,000
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.


Years (52/53 Weeks) Ended April 2, 1998 and April 3, 1997


52 Weeks Ended 53 Weeks Ended
April 2, April 3,
(Dollars in thousands) 1998 1997 % Change
- --------------------------------------------------------------------------
Revenues

Domestic
Admissions $530,653 $479,629 10.6%
Concessions 251,025 222,945 12.6
Other 16,052 15,763 1.8
--------------------------------
797,730 718,337 11.1
International
Admissions 22,918 13,322 72.0
Concessions 4,992 2,222 *
Other 59 49 20.4
--------------------------------
27,969 15,593 79.4
On-screen advertising and other 27,056 18,974 42.6
--------------------------------
Total revenues $852,755 $752,904 13.3%
================================
Cost of Operations
Domestic
Film exhibition costs $287,516 $251,090 14.5%
Concession costs 40,109 36,045 11.3
Rent 100,928 75,116 34.4
Other 215,656 186,945 15.4
--------------------------------
644,209 549,196 17.3

International
Film exhibition costs 12,410 7,719 60.8
Concession costs 1,953 703 *
Rent 5,455 4,945 10.3
Other 6,180 5,377 14.9
--------------------------------
25,998 18,744 38.7
On-screen advertising and other 21,293 15,369 38.5
--------------------------------
Total cost of operations $691,500 $583,309 18.5%
================================

General and Administrative
Corporate and domestic $ 42,636 $ 45,558 (6.4)%
International 6,879 6,864 .2
On-screen advertising and other 4,839 4,225 14.5
--------------------------------
Total general and administrative $ 54,354 $ 56,647 (4.0)%
================================

Depreciation and Amortization
Corporate and domestic $ 65,168 $ 49,392 31.9%
International 2,534 1,436 76.5
On-screen advertising and other 2,415 1,744 38.5
--------------------------------
Total depreciation and amortization $70,117 $ 52,572 33.4%
================================
* Percentage change in excess of 100%.


Revenues. Total revenues increased 13.3%, or $99,851,000, during the year
(52 weeks) ended April 2, 1998 compared to the year (53 weeks) ended April 3,
1997.

Total domestic revenues increased 11.1%, or $79,393,000, from the prior
year. Admissions revenues increased 10.6%, or $51,024,000, due to a 5.4%
increase in attendance, which contributed $25,960,000 of the increase, and a
5.0% increase in average ticket prices, which contributed $25,064,000 of the
increase. Attendance at megaplexes (theatres with predominantly stadium-style
seating) increased as a result of the addition of 23 new megaplexes with 564
screens since April 3, 1997, offset by a 4.7% decrease in attendance at
comparable megaplexes. Attendance at multiplexes decreased due to a 11.9%
decrease in attendance at comparable multiplexes and the closure or sale of 23
multiplexes with 123 screens since fiscal 1997. The decline in attendance at
comparable multiplexes was related primarily 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 the growing
number of megaplexes in the Company's theatre circuit, which yield higher
average ticket prices than multiplexes. Concessions revenues increased 12.6%,
or $28,080,000, due to a 6.8% increase in average concessions per patron, which
contributed $16,013,000 of the increase, and the increase in total attendance,
which contributed $12,067,000 of the increase. The increase in average
concessions per patron was attributable to the increasing number of megaplexes
in the Company's theatre circuit, where concession spending per patron is higher
than in multiplexes.

Total international revenues increased 79.4%, or $12,376,000, from the
prior year. Admissions revenues increased 72.0%, or $9,596,000, due to an
increase in attendance, offset by a decrease in average ticket prices.
Attendance increased as a result of the opening of the Arrabida 20 in Portugal
during December of fiscal 1997 and improved attendance at the Canal City 13 in
Japan. Concessions revenues increased $2,770,000 due to the increase in total
attendance, offset by a decrease in average concessions per patron. The
decrease in average ticket prices and concessions per patron was due to the
lower ticket and concessions prices at the theatre in Portugal compared to the
theatre in Japan. International revenues were also impacted by the
strengthening of the U.S. dollar relative to the Japanese yen.

On-screen advertising and other revenues increased 42.6%, or $8,082,000,
from the prior year due to an increase in the number of screens served, a result
of an expansion program, and a change in the number of periods included in the
results of operations from the Company's on-screen advertising business.

Cost of Operations. Total cost of operations increased 18.5%, or
$108,191,000, during the year (52 weeks) ended April 2, 1998 compared to the
year (53 weeks) ended April 3, 1997.

Total domestic cost of operations increased 17.3%, or $95,013,000, from the
prior year. Film exhibition costs increased 14.5%, or $36,426,000, due to
higher attendance, which contributed $26,712,000 of the increase, and an
increase in the percentage of admissions paid to film distributors, which
contributed $9,714,000 of the increase. As a percentage of admissions revenues,
film exhibition costs was 54.2% in the current year compared with 52.4% in the
prior year. This increase occurred because more popular films released during
fiscal 1998 were licensed from distributors that generally have higher film
rental terms and because of the concentration of attendance in the early weeks
of several films released during the year, which typically results in higher
film exhibition costs. The 11.3%, or $4,064,000, increase in concession costs
was attributable to the increase in concessions revenues. As a percentage of
concessions revenues, concession costs was 16.0% in the current year compared
with 16.2% in the prior year. Rent expense increased 34.4%, or $25,812,000, due
to the higher number of screens in operation, 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 Transaction. Other cost of
operations increased 15.4%, or $28,711,000, from the prior year due to the
higher number of screens in operation and higher expenses associated with the
Company's theatre management development program.

Total international cost of operations increased 38.7%, or $7,254,000, from
the prior year. Film exhibition costs increased 60.8%, or $4,691,000, due to
higher attendance, offset by a decrease in the percentage of admissions paid to
film distributors. The $1,250,000 increase in concession costs was primarily
attributable to the increase in concessions revenues. Rent expense increased
10.3%, or $510,000, and other cost of operations increased 14.9%, or $803,000,
from the prior year due primarily to the full year of operations of the Arrabida
20, which opened in December of fiscal 1997. International expenses were also
impacted by the strengthening of the U.S. dollar relative to the Japanese yen.

On-screen advertising and other cost of operations increased 38.5%, or
$5,924,000, as a result of the higher number of screens served and a change in
the number of periods included in the results of operations of the Company's on-
screen advertising business.

General and Administrative. General and administrative expenses decreased
4.0%, or $2,293,000, during the year (52 weeks) ended April 2, 1998.

Corporate and domestic general and administrative expenses decreased 6.4%,
or $2,922,000, due primarily to decreases in costs associated with the Company's
development of theatres and the reversal of $1,358,000 of compensation expense
recognized in prior years for performance stock awards which were not earned at
the end of the three-year performance period ended April 2, 1998. These
decreases were partially offset by increases in payroll and related costs and
professional and consulting expenses.

International general and administrative expenses increased .2%, or
$15,000, and on-screen advertising and other general and administrative expenses
increased 14.5%, or $614,000. The increase in on-screen advertising and other
resulted from an increase in costs to support the expansion program at the
Company's on-screen advertising business.

Depreciation and Amortization. Depreciation and amortization increased
33.4%, or $17,545,000, during the year (52 weeks) ended April 2, 1998. This
increase was caused by an increase in employed theatre assets resulting from the
Company's expansion plan, which was partially offset by lower depreciation and
amortization as a result of the reduced carrying amounts of impaired multiplex
assets. The reduced carrying amount of the impaired assets from fiscal 1998
will result in reduced depreciation and amortization in future periods. For
fiscal 1998, depreciation and amortization was reduced by approximately
$10,500,000.

Impairment of Long-lived Assets. During the second quarter of 1998, 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.

The summer of 1997 was the first summer film season, generally the highest
grossing period for the film industry, that a significant number of megaplexes
of the Company and its competitors were operating (the first megaplex, Grand 24,
was opened by the Company in May 1995). During this period, the financial
results of certain multiplexes of the Company were significantly less than
anticipated at the beginning of fiscal 1998 due primarily to competition from
the newer megaplexes. During fiscal 1998, the Company closed or sold 23
multiplexes with 123 screens.

During the year (53 weeks) ended April 3, 1997, the Company recognized a
non-cash impairment loss of $7,231,000 ($4,266,000 after tax, or $.24 per share)
on 18 multiplexes with 82 screens in nine states (primarily Michigan,
Pennsylvania, California, Florida and Virginia).

Interest Expense. Interest expense increased 62.0%, or $13,657,000, during
the year (52 weeks) ended April 2, 1998 compared to the prior year. The
increase in interest expense resulted primarily from an increase in average
outstanding borrowings related to the Company's expansion plan and higher
average interest rates as a result of the issuance of $200,000,000 of 9 1/2%
Senior Subordinated Notes on March 19, 1997.

Gain on Disposition of Assets. Gain on disposition of assets increased
$3,788,000 during the year (52 weeks) ended April 2, 1998 primarily from the
sale of three of the Company's multiplexes during the current year.

Income Tax Provision. The provision for income taxes decreased $29,500,000
to a benefit of $16,600,000 during the current year from an expense of
$12,900,000 in the prior year. The effective tax rate was 40.4% for the current
and the prior year.

Net Earnings. Net earnings decreased
$43,494,000 during the year (52 weeks) ended April 2, 1998 to a loss of
$24,499,000 from earnings of $18,995,000 in the prior year. Net loss per
common share, after deducting preferred dividends, was $1.59 compared to
earnings of $.75 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 $67,167,000, $91,322,000 and $109,339,000 in
fiscal years 1999, 1998 and 1997, respectively.

The Company is currently expanding its domestic theatre circuit and
entering select international markets. During the current fiscal year, the
Company opened 16 megaplexes with 351 screens (including 5 megaplexes with 95
screens in international markets) and acquired four multiplexes with 29 screens
in strategic film zones. In addition, the Company sold three multiplexes with
17 screens, closed 12 multiplexes with 66 screens, closed 3 screens at an
existing megaplex and discontinued operating one managed theatre with one screen
resulting in a circuit total of 60 megaplexes with 1,335 screens and 173
multiplexes with 1,400 screens as of April 1, 1999.

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 1999, 14 new theatres with 301 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 a master lease agreement
in fiscal 1999 for up to $25,000,000 of equipment necessary to fixture certain
theatres. The master lease agreement has an initial term of six years and
includes early termination and purchase options. The Company classifies these
leases as operating leases. As of April 1, 1999, the Company had construction
in progress of $97,688,000 and reimbursable construction advances (amounts due
from developers on leased theatres) of $22,317,000. The Company had 14
megaplexes with 316 screens under construction on April 1, 1999 (including 6
megaplexes with 140 screens in international markets).

During the fifty-two weeks ended April 1, 1999, the Company had capital
expenditures of $260,813,000. The Company estimates that total capital
expenditures for 2000 will aggregate approximately $290 million. Included in
these amounts are real estate assets of approximately $80 million which the
Company plans to place into sale and leaseback or other comparable financing
programs, which will have the effect of reducing the Company's net cash outlays
to approximately $210 million.

On August 11, 1998, the Company loaned one of its executive officers
$5,625,000 to purchase 375,000 shares of Common Stock of the Company in a
registered 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 (5.57% 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.

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 Note 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
April 1, 1999, the Company had outstanding borrowings of $123,000,000 under the
Credit Facility at an average interest rate of 8.00% per annum, and
approximately $162,000,000 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.
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 sale 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 Note
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 April 1, 1999, the Company was in compliance with all
financial covenants relating to the Credit Facility, the Notes due 2009 and the
Notes due 2011.

During fiscal 1998, the Company sold the real estate assets associated with
13 megaplex theatres, including seven theatres opened during fiscal 1998, to EPT
for an aggregate purchase price of $283,800,000. Proceeds from the Sale and
Lease Back Transaction 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.
The Company has granted an option to EPT to acquire one megaplex theatre for the
cost to the Company of developing and constructing such property. 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 April 1, 1999, the Company had one
open megaplex and two megaplexes under construction 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 which may be received from sale and lease back transactions
and the available commitment amount under its Credit Facility will be sufficient
to fund operations and planned capital expenditures for the next 12 months.

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.
Preferred Stock dividend payments decreased $5,064,000 during the fifty-two
weeks ended April 1, 1999 compared to the prior year as a result of the
conversions.

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 $65 million as of April 1, 1999 and estimates that it must
generate at least $176 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 earnings (loss) before income taxes for
financial statement purposes with taxable income (loss) for income tax purposes:


(estimated)
52 Weeks Ended 52 Weeks Ended 53 Weeks Ended
April 1, April 2, April 3,
(Dollars in thousands) 1999 1998 1997
- ---------------------------------------------------------------------------

Earnings (loss) before
income taxes $ (26,516) $ (41,099) $ 31,895

Depreciation & amortization (17,790) (11,309) (15,421)
Gain on disposition of assets - 16,471 (986)
Gain on sale to EPT (1,247) 16,238 -
Impairment of long-lived assets 3,542 41,540 4,612
Other 8,660 152 8,373
--------------------------------------

Taxable income (loss) $ (33,351) $ 21,993 $ 28,473
======================================



The Company's federal income tax net operating loss of $33.4 million for
the fiscal year ended April 1, 1999 will be carried back to the fiscal years
ended April 3, 1997 and April 2, 1998, and fully absorbed in those years. The
Company's foreign subsidiaries have net operating loss carryforwards in
Portugal, Spain, France and the Untied Kingdom aggregating $3.9 million, $2.2
million of which may be carried forward indefinitely and the balance of which
expires in 2006. The Company's state income tax loss carryforwards of $33
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 2000, $34 million; 2001,
$41 million; 2002, $22 million; 2003, $52 million; 2004, $5 million; thereafter,
$22 million.

Year 2000 Readiness Disclosure

Potential Impact on Company. The failure of information technology ("IT")
and embedded, or ("non-IT") systems, because of the Year 2000 issue or
otherwise, could adversely affect the Company's operations.
If not corrected, many
computer-based systems and theatre equipment, such as air conditioning systems
and fire and sprinkler systems, could encounter difficulty differentiating
between the year 1900 and the year 2000 and interpreting other dates, resulting
in system malfunctions, corruption of data or system failure. Additionally, the
Company relies upon outside third parties ("business partners") to supply many
of the products and services that it needs in its business. Such products
include films which it exhibits and concessions products which it sells.
Attendance at the Company's theatres could be severely impacted if one or more
film producers are unable to produce new films because of Year 2000 issues. The
Company could suffer other business disruptions and loss of revenues if any
other types of material business partners fail to supply the goods or services
necessary for the Company's operations.

IT Systems. The Company utilizes a weighted methodology to evaluate the
readiness of its corporate and theatre level IT systems. For this purpose,
corporate and theatre system types include commercial off-the-shelf software,
custom in-house developed software, ticketing system software, concession system
software and hardware systems such as workstations and servers. The Company has
weighted each corporate and theatre system based on its overall importance to
the organization. The Company's readiness is evaluated in terms of a five-phase
process utilized in the Year 2000 strategic plan (the "Plan") with appropriate
weighting given to each phase based on its relative importance to IT system Year
2000 readiness. The phases may generally be described as follows: (i) develop
company-wide awareness; (ii) inventory and assess internal systems and business
partners, and develop contingency plans for systems that cannot be renovated;
(iii) renovate critical systems and contact material business partners; (iv)
validate and test critical systems, analyze responses from critical business
partners and develop contingency plans for non-compliant partners; and (v)
implement renovated systems and contingency plans. The Company has placed a
high level of importance on its corporate and theatre software systems and a
lesser degree of importance on its hardware systems when evaluating Year 2000
readiness. As a result, the Company has focused more of its initial efforts
toward Year 2000 readiness with respect to its software systems than it has with
respect to its hardware systems. Additionally, the Company believes that the
assessment, validation and testing and implementation phases are the most
important phases in its Plan.

Based on the weighting methodology described above, the Company has
assessed 99% of its corporate IT systems and as of April 1, 1999 has renovated
82% of those systems that require renovation as a result of the Year 2000 issue.
Of the renovated systems, 66% have been tested, verified and implemented on a
company-wide basis. In the aggregate, as of April 1, 1999, 79% of the Company's
corporate IT systems have been tested and verified as being Year 2000 ready. The
percentage of corporate IT systems that have been tested and verified as being
Year 2000 ready assumes that a significant component of commercial-off-the-shelf
software, the recently installed Oracle financial applications, is Year 2000
ready. This system was warranted to be Year 2000 ready when purchased. Although
the Company has plans to test and verify the Oracle financial applications to
validate that the implementation is in fact Year 2000 ready, it does not believe
that it has a significant risk with respect to the Oracle financial
applications.

Based on the weighting methodology described above, the Company has
assessed 100% of its theatre IT systems and as of April 1, 1999 has renovated
89% of those systems that require renovation as a result of the Year 2000 issue.
Of the renovated systems, 4% have been tested, verified and implemented on a
company-wide basis. In the aggregate, as of April 1, 1999, 61% of the Company's
theatre IT systems have been tested and verified as being Year 2000 ready.

Overall, the Company has assessed its Plan with respect to IT systems as
being 75% complete as of April 1, 1999. Although, no assurance can be given,
the Company does not believe that it has material exposure to the Year 2000
issue with respect to its internal IT systems.

Non-IT Systems. The Company's non-IT systems are in the final stages of
assessment. Based on budgeted and expended personnel hours, assessment of
critical non-IT systems was approximately 90% complete as of April 1, 1999.
Testing of individual non-IT systems and resultant remediation efforts have
begun. The Company's goal is to complete testing and remediation of critical
individual systems by July 30, 1999, and to complete testing and remediation of
critical systems on an integrated basis by October 30, 1999.

Third Parties. The Company is in the process of identifying and assessing
potential Year 2000 readiness risks associated with its outside business
partners. The inventory of the Company's business partners was complete as of
April 1, 1999. Material business partners have been contacted by the Company.
Evaluation of material business partners' responses and their state of Year 2000
readiness was underway and ongoing as of April 1, 1999.

Contingency Planning. Although the Company presently does not have all
contingency plans in place to address the possibility that either it or its
material business partners may not be Year 2000 ready, it has an ongoing process
to develop such plans as the results of systems testing and remediation and the
status of business partners' Year 2000 readiness become known.

The Company's revised goals are to complete and approve contingency plans
for critical systems and material business partners by July 30, 1999. Changes
to such contingency plans will be implemented as necessary in response to
additional data gathered via testing, remediation, and business partner
contacts.

Costs. Although a definitive estimate of costs associated with required
modifications to address the Year 2000 issue cannot be made until the Company
has at least completed the assessment phase of its Plan, presently management
does not expect such costs to be material to the Company's results of
operations, liquidity or financial condition. The total amount expended from
July 1, 1996 through May 31, 1999 was approximately $480,000. Based on
information presently known, the total amount expected to be expended on the
Year 2000 effort for IT systems is approximately $1,600,000, primarily comprised
of software upgrades and replacement costs, internal personnel hours and
consulting costs. To date, the Year 2000 effort has been funded primarily from
the IT budget.

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". In addition to the factors listed therein
which could cause actual results to be different from those anticipated, the
following special factors could affect the Company's ability to be Year 2000
ready: (i) the Company's ability to implement the Plan, (ii) cooperation and
participation by business partners, (iii) the availability and cost of trained
personnel and the ability to recruit and retain them and (iv) the ability to
locate all system coding requiring correction.

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 and one theatre in
Spain. Both 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

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. 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, 1999. The statement will become effective for the Company in fiscal
2001. However, a recently proposed amendment to SFAS 133 would defer the
effective date for fiscal years beginning after June 15, 2000, or fiscal 2002
for the Company. 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.

Other

A subsidiary of the Company is involved with the pre-development of a
retail/entertainment district in downtown Kansas City, Missouri known as the
"Power & Light District." Under the terms of the subsidiary's agreement with
the Tax Increment Financing Commission of Kansas City, Missouri and the City of
Kansas City, Missouri, the subsidiary is required to meet certain financial and
other conditions in order to receive assistance in financing the project. In
the event that the Company is not successful in meeting those requirements,
carrying costs related to the project will have to be expensed. Carrying costs
related to the project were approximately $3 million as of April 1, 1999.

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 8.0% per annum, a 100 basis point
increase in market interest rates would increase interest expense and decrease
earnings before income taxes by approximately $1.2 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
Portugal, Japan, Spain, China (Hong Kong) and Canada 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 intend to repatriate funds from the
operations of its Japanese 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 $0.8 million and $9.2
million, respectively.

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 Board of Directors oversees financial reporting and internal accounting
control through its Audit Committee. This committee meets (jointly and
separately) with the independent accountants, management and internal auditors
to monitor the proper discharge of responsibilities relative to internal
accounting controls and consolidated financial statements.




/s/ Peter C. Brown
Co-Chairman of the Board,
President and Chief Financial Officer


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 April 1, 1999 and April
2, 1998, and the results of their operations and their cash flows for each of
the three fiscal years in the period ended April 1, 1999, in conformity with
generally accepted accounting principles. 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 generally accepted auditing
standards 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 7, 1999



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

52 Weeks 52 Weeks 53 Weeks
Ended Ended Ended
April 1, April 2, April 3,
1999 1998 1997
------------------------------------
Revenues

Admissions $662,161 $553,571 $492,951
Concessions 307,347 256,017 225,167
Other 57,213 43,167 34,786
---------------------------------
Total revenues 1,026,721 852,755 752,904
Expenses
Film exhibition costs 358,437 299,926 258,809
Concession costs 48,687 42,062 36,748
Other 458,647 349,512 287,752
---------------------------------
Total cost of operations 865,771 691,500 583,309

General and administrative 58,419 54,354 56,647
Depreciation and amortization 89,221 70,117 52,572
Impairment of long-lived assets 4,935 46,998 7,231
---------------------------------
Total expenses 1,018,346 862,969 699,759
---------------------------------
Operating income (loss) 8,375 (10,214) 53,145

Other expense (income)
Interest expense
Corporate borrowings 30,195 26,353 12,016
Capital lease obligations 8,433 9,326 10,006
Investment income (1,368) (1,090) (856)
Loss (gain) on disposition
of assets (2,369) (3,704) 84
---------------------------------
Earnings (loss) before income taxes (26,516) (41,099) 31,895
Income tax provision (10,500) (16,600) 12,900
---------------------------------
Net earnings (loss) $(16,016) $(24,499) $18,995
=================================
Preferred dividends - 4,846 5,907
---------------------------------
Net earnings (loss) for common shares$(16,016) $(29,345) $13,088
=================================

Earnings (loss) per share:
Basic $ (.69) $(1.59) $ .75
==================================
Diluted $ (.69) $(1.59) $ .74
==================================

See Notes to Consolidated Financial Statements.



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


April 1, April 2,
1999 1998
-----------------
ASSETS

Current assets:
Cash and equivalents $ 13,239 $ 9,881
Receivables, net of allowance for doubtful
accounts of $540 as of April 1, 1999
and $706 as of April 2, 1998 18,325 13,018
Reimbursable construction advances 22,317 58,488
Other current assets 48,707 25,736
------------------
Total current assets 102,588 107,123
Property, net 726,025 562,158
Intangible assets, net 18,723 22,066
Other long-term assets 128,394 104,433
------------------

Total assets $975,730 $795,780
==================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 69,381 $ 72,633
Construction payables 24,354 24,588
Accrued expenses and other liabilities 77,304 72,598
Current maturities of corporate borrowings
and capital lease obligations 18,017 4,017
------------------
Total current liabilities 189,056 173,836
Corporate borrowings 547,045 348,990
Capital lease obligations 44,558 50,605
Other long-term liabilities 79,606 82,894
------------------
Total liabilities 860,265 656,325
Stockholders' equity:
$1.75 Cumulative Convertible Preferred
Stock, 66 2/3 par value; 1,800,331
shares issued and outstanding as of
April 2, 1998(aggregate liquidation
preference of $45,008 as of April 2, 1998) - 1,200
Common Stock, 66 2/3 par value; 19,447,598
and 15,376,821 shares issued as of
April 1, 1999 and April 2, 1998, respectively 12,965 10,251
Convertible Class B Stock, 66 2/3
par value; 4,041,993 and 5,015,657 shares
issued and outstanding as of April 1, 1999
and April 2, 1998, respectively 2,695 3,344
Additional paid-in capital 106,713 107,676
Accumulated other comprehensive income (2,690) (3,689)
Retained earnings 5,026 21,042
------------------
124,709 139,824
Less:
Employee notes for Common Stock purchases 8,875 -
Common Stock in treasury, at cost, 20,500
shares as of April 1, 1999 and April 2, 1998 369 369
------------------
Total stockholders' equity 115,465 139,455
------------------
Total liabilities and stockholders' equity $975,730 $795,780

==================

See Notes to Consolidated Financial Statements.



AMC ENTERTAINMENT INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, except per share data)

52 Weeks 52 Weeks 53 Weeks
Ended Ended Ended
April 1, April 2, April 3,
1999 1998 1997
----------------------------------
INCREASE (DECREASE) IN CASH
AND EQUIVALENTS

Cash flows from operating activities:

Net earnings (loss) $(16,016) $(24,499) $18,995
Adjustments to reconcile net
earnings (loss) to net cash
provided by operating activities:
Impairment of long-lived assets 4,935 46,998 7,231
Depreciation and amortization 89,221 70,117 52,572
Deferred income taxes 2,562 (37,325) (2,476)
Loss (gain) on disposition of
long-term assets (2,369) (3,704) 84
Change in assets and liabilities:
Receivables (5,307) (3,180) (1,451)
Other current assets (19,694) (4,835) 1,578
Accounts payable (1,736) 6,066 16,751
Accrued expenses and other
liabilities 15,118 42,231 13,283
Other, net 453 (547) 2,772
--------------------------------
Net cash provided by operating
activities 67,167 91,322 109,339
--------------------------------
Cash flows from investing activities:
Capital expenditures (260,813) (389,217) (253,380)
Proceeds from sale/leasebacks - 283,800 -
Investments in real estate (8,935) (4,349) (7,692)
Net change in reimbursable
construction advances 36,171 (25,295) (21,076)
Preopening expenditures ( 8,049) (10,026) (6,827)
Proceeds from disposition of
long-term assets 10,255 18,111 15,054
Other, net (7,946) (6,761) (9,996)
--------------------------------
Net cash used in investing activities
(239,317) (133,737) (283,917)
--------------------------------
Cash flows from financing activities:
Net borrowings (repayments) under
Credit Facility (27,000) 40,000 (10,000)
Proceeds from issuance of 9 1/2%
Senior Subordinated Notes due 2009 - - 198,938
Proceeds from issuance of 9 1/2%
Senior Subordinated Notes due 2011 225,000 - -
Principal payments under capital
lease obligations and other (6,047) (3,385) (2,835)
Repurchase of 11 7/8% Senior and
12 5/8% Senior Subordinated Notes - (5,817) -
Cash overdrafts (1,516) 4,691 (11,673)
Change in construction payables (234) (1,903) 24,735
Funding of employee notes for Common
Stock purchases, net (8,579) - -
Proceeds from exercise of stock
options - 647 140
Dividends paid on $1.75 Preferred
Stock - (5,064) (5,993)
Deferred financing costs and other (6,556) (1,466) (4,595)
--------------------------------
Net cash provided by financing
activities 175,068 27,703 188,717
--------------------------------
Effect of exchange rate changes on
cash and equivalents 440 (122) (219)
--------------------------------
Net increase (decrease) in cash and
equivalents 3,358 (14,834) 13,920
Cash and equivalents at beginning
of year 9,881 24,715 10,795
--------------------------------
Cash and equivalents at end of year $ 13,239 $ 9,881 $ 24,715
================================

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
- --------------------------------------------------
Cash paid during the period for:
Interest (net of amounts
capitalized of $7,040,
$8,264, and $3,344) $ 40,928 $42,901 $24,188
Income taxes, net 3,267 22,287 6,285
Schedule of non-cash investing and
financing activities:
Mortgage note incurred directly for
investments in real estate $ 14,000 - -




See Notes to Consolidated Financial Statements.

AMC ENTERTAINMENT INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(In thousands, except share and per share data)


Accumulated
$1.75 Cumulative Convertible Additional Other
Preferred Stock Common Stock Class B Stock Paid-in Comprehensive
Shares Amount Shares Amount Shares Amount Capital Income
--------------------------------------------------------------------------------------

Balance, March 29, 1996 4,000,000 $2,667 5,388,880 $3,593 11,157,000 $7,438 $107,986 $-
Comprehensive Income:
Net earnings - - - - - - - -
Foreign currency
translation adjustment - - - - - - - (2,048)
Comprehensive Income
Exercise of options on
Common Stock - - 15,000 10 - - 130 -
Preferred Stock conversions (696,400) (465) 1,200,589 800 - - (335) -
Dividends declared: $1.75
Preferred Stock - - - - - - - -
--------------------------------------------------------------------------------------

Balance, April 3, 1997 3,303,600 2,202 6,604,469 4,403 11,157,000 7,438 107,781 (2,048)
Comprehensive Income:
Net loss - - - - - - - -
Foreign currency
translation adjustment - - - - - - - (1,641)
Comprehensive Loss
Exercise of options on
Common Stock - - 39,400 26 - - 621 -
$1.75 Preferred Stock
conversions (1,503,269) (1,002) 2,591,614 1,728 - - (726) -
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 3,344 107,676 (3,689)
Comprehensive Income:
Net loss - - - - - - - -
Foreign currency
translation adjustment - - - - - - - 999
Comprehensive Loss
$1.75 Preferred Stock
conversions (1,800,331) (1,200) 3,097,113 2,065 - - (963) -
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 $106,713 $(2,690)

=====================================================================================

See Notes to Consolidated Financial Statements.
AMC ENTERTAINMENT INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(In thousands, except share and per share data)

Employee
Notes for

Common Common Stock Total
Retained Stock in Treasury Stockholders'
Earnings Purchases Shares Amount Equity
----------------------------------------------------------

Balance, March 29, 1996 $37,603 $- 20,500 $(369) $158,918
Comprehensive Income:
Net earnings 18,995 - - - 18,995
Foreign currency
translation adjustment - - - - (2,048)
Comprehensive Income 16,947
Exercise of options on
Common Stock - - - - 140
Preferred Stock conversions - - - - -
Dividends declared:
$1.75 Preferred Stock (5,993) - - (5,993)
----------------------------------------------------------


Balance, April 3, 1997 50,605 - 20,500 (369) 170,012
Comprehensive Income:
Net loss (24,499) - - - (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) - - - (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 21,042 - 20,500 (369) 139,455
Comprehensive Income:
Net loss (16,016) - - - (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) - - (8,875)
----------------------------------------------------------

Balance, April 1, 1999 $5,026 $(8,875) 20,500 $(369) $115,465

==========================================================


See Notes to Consolidated Financial Statements.


AMC ENTERTAINMENT INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Year (52 Weeks) Ended April 1, 1999 and April 2, 1998 and
Year (53 Weeks) Ended April 3, 1997

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 the
United States and in Japan, Portugal, Spain, China (Hong Kong) and Canada. 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.

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 1999 and 1998 fiscal years reflect a 52
week period and fiscal year 1997 reflects a 53 week period. Fiscal year 2000
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 less than thirty days. 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 April 1, 1999 and April 2, 1998 was
$14,350,000 and $15,866,000, 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.

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, both of which are being amortized on
a straight-line basis over the estimated remaining useful life of the theatre.
Accumulated amortization on intangible assets was $37,341,000 and $39,381,000 as
of April 1, 1999 and April 2, 1998, respectively.

Other Long-term Assets: Other long-term assets are comprised principally of
long-term deferred income taxes; investments in real estate; costs incurred in
connection with the issuance of debt securities which are being amortized over
the respective life of the issue; and preopening costs related to new theatres
which are being amortized over two years.

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 budgeted 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. In addition, when management considers
closing a theatre, it is reviewed for impairment. 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 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 1997, as a result of expected declines in future cash flows of certain
theatres, the Company recognized a non-cash impairment loss of $7,231,000
($4,266,000 after tax, or $.24 per share) on 18 multiplexes with 82 screens.
During 1998, the financial results of certain multiplexes of the Company were
significantly less than anticipated due primarily to competition from newer
megaplexes. As a result, 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. In 1999, as a result of projected declines in future cash flows of
certain multiplexes due primarily to competition from newer megaplexes and
expected closure of certain multiplexes, 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.

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: During 1999, the Company adopted Statement of
Financial Accounting Standards No. 130 ("SFAS 130"), Reporting Comprehensive
Income, Statement of Financial Accounting Standards No. 131 ("SFAS 131"),
Disclosures About Segments of an Enterprise and Related Information and
Statement of Financial Accounting Standards No. 132 ("SFAS 132"), Employers'
Disclosures about Pensions and Other Postretirement Benefits. SFAS 130 requires
disclosure of comprehensive income and its components in a company's financial
statements, SFAS 131 requires new disclosures of segment information in a
company's financial statements, and SFAS 132 requires disclosures about pension
and other postretirement benefit plans in a company's financial statements.
Adoption of these statements did not impact the Company's consolidated financial
position, results of operations or cash flows.

During 1999, the Company adopted Statement of Position 98-1 ("SOP 98-1"),
Accounting for the Costs of Computer Software Developed or Obtained for Internal
Use. SOP 98-1 requires companies to capitalize certain internal-use software
costs once certain criteria are met. Adoption of this statement did not have a
material impact on the Company's consolidated financial position, results of
operations or cash flows.

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 currently capitalizes such costs and amortizes them over
a two-year period. SOP 98-5 is effective for fiscal years beginning after
December 15, 1998. The Company will adopt this statement in fiscal 2000, which
will result in a cumulative effect adjustment to the Company's results of
operations and financial position of approximately $9.9 million, before taxes.

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
will require the Company to be considered the owner (for accounting purposes) of
these types of projects during the construction period. As a result, the
Company will have to record future leases as indebtedness on its Balance Sheet
unless the Company changes its involvement in the construction of new theatres.
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 does not commence by December 31, 1999.

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

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 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 1998, a company affiliated with Mr.
Stanley H. Durwood, Co-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 for a period of three years commencing on the date of the
Merger.

NOTE 3 - PROPERTY

A summary of property is as follows:




(In thousands) 1999 1998
- ---------------------------------------------------------------------------

Property owned:
Land $ 38,465 $32,102
Buildings and improvements 157,331 115,260
Leasehold improvements 346,809 257,336
Furniture, fixtures and equipment 514,548 427,096
--------------------
1,057,153 831,794
Less-accumulated depreciation and amortization 347,692 288,503
--------------------
709,461 543,291
Property leased under capital leases:
Buildings and improvements 61,825 63,955
Less-accumulated amortization 45,261 45,088
--------------------
16,564 18,867
--------------------
$726,025$ 562,158
====================


Included in property is $97,688,000 and $76,698,000 of construction in progress
as of April 1, 1999 and April 2, 1998, respectively.

NOTE 4 - SUPPLEMENTAL BALANCE SHEET INFORMATION

Other assets and liabilities consist of the following:




(In thousands) 1999 1998
- --------------------------------------------------------------------------

Other current assets:

Prepaid rent $16,531$ 10,843
Deferred income taxes 13,819 10,542
Income taxes receivable 12,149 -
Other 6,208 4,351
-------------------
$48,707 $25,736
===================
Other long-term assets:
Investments in real estate $34,059$ 14,702
Deferred financing costs 13,399 8,098
Deferred income taxes 51,133 56,972
Preopening costs 9,935 10,614
Other 19,868 14,047
-------------------
$ 128,394 $104,433
===================
Accrued expenses and other liabilities:
Taxes other than income $16,303 $ 13,952
Income taxes - 4,180
Interest 5,198 1,498
Payroll and vacation 5,853 5,297
Casualty claims and premiums 4,817 5,295
Deferred income 36,896 31,387
Accrued bonus 3,981 5,621
Other 4,256 5,368
-------------------
$77,304 $ 72,598
===================


NOTE 5 - CORPORATE BORROWINGS AND CAPITAL LEASE OBLIGATIONS

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





(In thousands) 1999 1998
- ---------------------------------------------------------------------------

$425 million Credit Facility due 2004 $123,000 $150,000
9 1/2% Senior Subordinated Notes due 2011 225,000 -
9 1/2% Senior Subordinated Notes due 2009 199,045 198,990
Capital lease obligations, interest ranging
from 7 1/4% to 20% 48,575 54,622
9% Mortgage Note due July 30, 1999 14,000 -
--------------------
609,620 403,612
Less-current maturities 18,017 4,017
--------------------
$591,603 $399,595
===================


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 April 1, 1999, the Company had outstanding borrowings of $123,000,000 under
the Credit Facility at an average interest rate of 8.0% per annum, and
approximately $162,000,000 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 April
1, 1999, 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 $3,152,000 as of April 1, 1999 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 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" (as
defined in the Indenture), the covenants in the Indenture limiting the Company's
ability to incur additional indebtedness and pay dividends will cease to apply.
As of April 1, 1999, the Company was in compliance with all financial covenants
relating to the Notes due 2009.

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
$4,856,000 as of April 1, 1999 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 Note 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 (as
defined in the Note Indenture) 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"
(as defined in the Indenture), the covenants in the Indenture limiting the
Company's ability to incur additional indebtedness and pay dividends will cease
to apply. As of April 1, 1999, the Company was in compliance with all
financial covenants relating to the Notes due 2011.

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 $5,391,000 as of April 1, 1999
are included in other long-term assets.

Minimum annual payments required under existing capital lease obligations (net
present value thereof) and maturities of corporate borrowings as of April 1,
1999, are as follows:


Capital Lease Obligations
-------------------------------
Minimum Net
Lease Less Present Corporate
(In thousands)Payments Interest Value Borrowings Total
- --------------------------------------------------------------------

2000 $ 11,648 $ 7,631 $ 4,017 $ 14,000 $18,017
2001 11,376 6,927 4,449 - 4,449
2002 10,547 6,197 4,350 - 4,350
2003 9,901 5,458 4,443 - 4,443
2004 9,831 4,648 5,183 - 5,183
Thereafter 47,503 21,370 26,133 547,045 573,178
-----------------------------------------------------
Total $100,806 $52,231 $48,575 $561,045 $609,620
=====================================================


The Company maintains a letter of credit in the normal course of its business.
The unused portion of the letter of credit was $8,329,000 as of April 1, 1999.

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 seven 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 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 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.

On August 11, 1998, the Company and its 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 1999, a company affiliated
with the Durwood Family Stockholders reimbursed the Company $698,356 for
expenses related to the Secondary Offering.

On August 11, 1998, 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
(5.57% 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 April 1, 1999
was $296,000.

Stock-Based Compensation

In November 1994, AMCE adopted a stock option and incentive plan (the "1994
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 1,000,000 shares. The 1994
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. Options issued under the
1994 Plan during 1999 vested immediately; all other options issued under the
1994 Plan vest over two years from the date of issuance.

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 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) and $586,000 in 1998 and 1997,
respectively. 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 earnings (loss) and net earnings (loss) for common shares would have been
the following:




(In thousands, except per share data) 1999 1998 1997
- ---------------------------------------------------------------------

Net earnings (loss)
As reported $(16,016) $(24,499) $18,995
Pro forma $(17,877) $(26,007) $18,664
Net earnings (loss) per common share
As reported $ (.69) $ (1.59) $ .75
Pro forma $ (.76) $ (1.67) $ .73


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:




1999 1998 1997
- ---------------------------------------------------------------------

Fair value on grant date $8.07 $9.69 $11.63
Risk-free interest rate 5.2% 6.0% 6.2%
Expected life (years) 5 5 5
Expected volatility 42.7% 42.0 % 42.9 %
Expected dividend yield - - -


A summary of stock option activity under all plans is as follows:



1999 1998 1997
- -------------------------------------------------------------------------------------
Weighted Weighted Weighted
Average Average Average
Number Excercise Price Number Exercise Price Number Exercise Price
of Shares Per Share of Shares Per Share of Shares Per Share
- ------------------------------------------------------------------------------------------


Outstanding at
beginning of
year 519,850 $12.69 558,500 $ 12.47 487,500 $ 9.67
Granted 375,000 $18.01 2,250 $ 21.21 103,250 $ 24.80
Canceled - - (1,500) $ 26.38 (17,250) $ 10.04
Exercised - - (39,400) $ 9.49 (15,000) $ 9.38
--------------------------------------------------------------------------

Outstanding at
end of year 894,850 $14.92 519,850 $ 12.69 558,500 $ 12.47


============================================================================================
Exercisable at
end of year 893,725 $14.91 487,975 $ 11.90 365,875 $ 10.51

============================================================================================


Available for grant at
end of year 470,750 845,750 630,500
======= ======= =======









The following table summarizes information about stock options as of April 1,
1999:


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 $ 11.75 398,600 4.3 years $9.48 398,600 $ 9.48
$14.50 to $ 20.75 404,250 9.2 years $17.89 403,500 $17.88
$22.13 to $ 26.38 92,000 7.1 years $25.47 91,625 $25.49
- ----------------------------------------------------------------------------------------------------
$ 9.25 to $ 26.38 894,850 6.8 years $14.92 893,725 $14.91
====================================================================================================

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) 1999 1998 1997
- -------------------------------------------------------------------------

Numerator:
Net earnings (loss) $(16,016)$ (24,499)$ 18,995
Less: Preferred dividends - 4,846 5,907
----------------------------

Net earnings (loss)
for basic and diluted earnings per share $(16,016)$ (29,345)$ 13,088

============================
Denominator:
Shares for basic earnings per share -
average shares outstanding 23,378 18,477 17,489
Stock options - - 237
Contingently issuable shares - - 58
----------------------------

Shares for diluted earnings per share 23,378 18,477 17,784
============================

Basic earnings per share $ (.69)$ (1.59) $ 0.75
=============================
Diluted earnings per share $ (.69) $ (1.59) $ 0.74
=============================


In 1998 and 1997, dividends and shares from conversion of Convertible Preferred
Stock were excluded from the diluted earnings per share calculation because they
were anti-dilutive. In 1999 and 1998, 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 April 1, 1999 consists of the following components:



(In thousands) 1999 1998 1997
- ---------------------------------------------------------------------------
Current:

Federal $ (11,776) 15,600 $11,418
Foreign - - -
State (1,286) 5,125 3,958
--------------------------------
Total current (13,062) 20,725 15,376

Deferred:
Federal 4,149 (31,860) (2,114)
Foreign (1,589) - -
State 2 (5,465) (362)
---------------------------------
Total deferred 2,562 (37,325) (2,476)
---------------------------------
Total provision $(10,500) $(16,600) $12,900
===================================


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:



1999 1998 1997
- ---------------------------------------------------------------------------

Federal statutory rate (35.0%) (35.0%) 35.0%
State income taxes, net of
federal tax benefit (6.0) (6.2) 7.1
Other, net 1.4 .8 (1.7)
----------------------------------
Effective tax rate (39.6%) (40.4%) 40.4%

==================================



The significant components of deferred income tax assets and liabilities as of
April 1, 1999 and April 2, 1998 are as follows:



1999 1998
--------------------------------------
Deferred Income Tax Deferred Income Tax
(In thousands) Assets Liabilities Assets Liabilities
- ---------------------------------------------------------------------------

Property $19,196 $ - $33,832 $ -
Capital lease obligations 12,928 - 14,660 -
Accrued reserves and
liabilities 12,368 - 14,447 -
Deferred rents 11,562 - 7,533 -
Alternative minimum tax
credit carryover 7,532 - - -
Preopening costs - 3,821 - 4,233
Other 5,932 745 1,862 587
-------------------------------------------
Total 69,518 4,566 72,334 4,820
Less: Current deferred
income taxes 13,819 - 10,542 -
------------------------------------------
Total noncurrent deferred
income taxes $ 55,699 $4,566 $61,792 $ 4,820
============================================
Net noncurrent deferred
income taxes $ 51,133 $56,972
======== ========


The Company's foreign subsidiaries have net operating loss carryforwards in
Portugal, Spain, France and the United Kingdom aggregating $3,900,000,
$2,200,000 of which may be carried forward indefinitely and the balance of which
expires in 2006. The Company's state income tax loss carryforwards of
$33,000,000 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 and,
accordingly, no valuation allowance has been provided as of April 1, 1999 and
April 2, 1998.


NOTE 9 - LEASES

The majority of the Company's operations are conducted in premises occupied
under lease agreements with 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 Company also leases certain
equipment under leases expiring at various dates. 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.

During 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 Consolidated Balance Sheet
and the 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 three
additional theatres from EPT under the same terms as those included in the Sale
and Lease Back Transaction. Annual rentals for these three theatres are based
on an estimated fair value of $77,500,000 for the theatres.

The Company has granted an option to EPT to acquire a theatre for the cost to
the Company of developing and constructing such property. 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 Co-Chairman of the Board, President and Chief Financial Officer of AMCE is
also the Chairman of the Board of Trustees of EPT.

In 1999, the Company entered into a master lease agreement for up to $25,000,000
of equipment necessary to fixture certain theatres. The master lease agreement
has an initial term of six years and includes 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 April 1, 1999:



(In thousands)

2000 $ 161,235
2001 160,550
2002 158,305
2003 154,774
2004 153,043
Thereafter 1,663,115
---------
Total minimum payments required $2,451,022
=========


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 2000. The future minimum
rental payments required under the terms of these leases total approximately
$698 million.

The Company records rent expense on a straight-line basis over the term of the
lease. Included in long-term liabilities as of April 1, 1999 and April 2, 1998
is $28,201,000 and $19,862,000, 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) 1999 1998 1997
- ---------------------------------------------------------------------------

Minimum rentals $151,360 $ 94,103 $ 69,845
Common area expenses 14,087 12,011 10,555
Percentage rentals based on revenues 2,783 2,869 2,278
-----------------------------------
$168,230 $108,983 $ 82,678
===================================


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.

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



Pension Benefits Other Benefits
(In thousands) 1999 1998 1997 1999 1998 1997
- ---------------------------------------------------------------------------

Components of net periodic
benefit cost:
Service cost $ 1,910$ 1,739 $ 1,627 $ 234 $ 229$ 199
Interest cost 1,612 1,344 1,286 247 218 172
Expected return on plan
assets (1,118) (932) (831) - - -
Recognized net actuarial
gain - (36) - - - -
Amortization of unrecognized
transition obligation 231 231 231 50 50 50
------- ------ ------- ----- ----- ---
Net periodic benefit cost $ 2,635 $ 2,346 $ 2,313 $ 531 $ 497$ 421
======= ====== ======= ===== ===== ====



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 April 1, 1999 and April 2, 1998:



Pension Benefits Other Benefits
---------------- -------------
(In thousands) 1999 1998 1999 1998
- --------------------------------------------------------------------
Change in benefit obligation:

Benefit obligation at
beginning of year $23,301 $19,468 $3,328 $2,908
Service cost 1,910 1,739 234 229
Interest cost 1,612 1,344 247 218
Plan participants'
contributions - - 23 -
Actuarial (gain) loss 3,590 1,349 (695) 5
Benefits paid (791) (599) (32) (32)
---- ------ ----- ------
Benefit obligation at
end of year $29,622 $23,301 $3,105 $3,328
====== ====== ===== =====







Pension Benefits Other Benefits
---------------- --------------
(In thousands) 1999 1998 1999 1998
- --------------------------------------------------------------------
Change in plan assets:

Fair value of plan assets
at beginning of year $12,991 $ 10,857 $ - $-
Actual return on plan assets 1,527 1,674 - -
Employer contribution 1,316 1,059 9 14
Plan participants'
contributions - - 23 18
Benefits paid (791) (599) (32) (32)
----- ----- ------ ----
$ 15,043 $ 12,991 $ - $ -
====== ====== ===== =====
Accrued liability for benefit cost:
Funded status $(14,579) $ (10,310)$ (3,105)$ (3,328)
Unrecognized net actuarial
(gain) loss 3,823 641 (500) 195
Unrecognized prior service
cost 1,753 1,985 597 647
------- ------- ----- -----
Accrued benefit cost $ (9,003) $ (7,684)$ (3,008)$ (2,486)
======= ======= ====== ======



The accumulated benefit obligation and fair value of plan assets for the pension
plans with accumulated benefit obligations in excess of plan assets were
$29,622,000 and $15,043,000, respectively, as of April 1, 1999; and $23,301,000
and $12,991,000, respectively, as of April 2, 1998.

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



Pension Benefits Other Benefits
---------------- --------------
(In thousands) 1999 1998 1999 1998
- ----------------------------------------------------------------------

Weighted-average assumptions:
Discount rate 6.50% 7.00% 7.00% 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 1999 was 6.75% 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 2013 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 April 1, 1999 by $842,000 and the aggregate of the service and
interest cost components of postretirement expense for 1999 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 1999 by
$649,000 and the aggregate service and interest cost components of
postretirement expense for 1999 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 $1,319,000, $1,308,000 and $1,270,000 for 1999, 1998 and 1997, 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 - FUTURE DISPOSITION OF ASSETS

The Company has provided reserves for estimated losses from discontinuing the
operation of fast food restaurants, for theatres which have been or are expected
to be closed and for other future dispositions of assets.

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 to convert to other uses the space leased for these
restaurants. The Company is obligated under long-term lease commitments with
remaining terms of up to 12 years. As of April 1, 1999, the base rents
aggregated approximately $1,061,000 annually, and $7,654,000 over the remaining
terms of the leases. As of April 1, 1999, the Company had subleased
approximately 83% of the space with remaining terms ranging from three months to
141 months. Non-cancelable subleases aggregated approximately $821,000
annually, and $4,310,000 over the remaining terms of the subleases.

NOTE 13 - 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.

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 approximates the carrying amounts as their
stated interest rates are similar to the current mid-term applicable federal
rate.

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



1999 1998
---------------------------------
Carrying Fair Carrying Fair
(In thousands) Amount Value Amount Value
- -----------------------------------------------------------------------

Financial assets:
Cash and equivalents $ 13,239 $ 13,239 $ 9,881 $ 9,881
Employee Notes for Common
Stock purchases 8,875 8,875 - -
Financial liabilities:
Cash overdrafts $ 14,350 $ 14,350 $ 15,866 $ 15,866
Corporate borrowings 561,045 545,000 348,990 361,000


NOTE 14- OPERATING SEGMENTS

During fiscal 1999, the Company adopted the provisions of SFAS 131. SFAS 131
requires all public companies to provide financial disclosures and descriptive
information about reportable operating segments. Accordingly, the Company has
identified four reportable segments around differences in products and services
and geographic areas: U.S. theatrical exhibition operations; international
theatrical exhibition operations; on-screen advertising; and other which is
comprised of real estate activities and other miscellaneous ventures.

U.S. and international theatrical exhibition operations are identified as
separate segments based on dissimilarities in international markets from the
U.S. On-screen advertising and other are identified as separate segments
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)
plus interest, income taxes, depreciation and amortization and adjusted for
impairment losses, preopening expense, theatre closure expense, gain (loss) on
disposition of assets, equity in earnings of unconsolidated affiliates and
extraordinary items ("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 33.

Information about the Company's operations by operating segment is as follows:




Revenues (In thousands) 1999 1998 1997
- -----------------------------------------------------------------------

U.S. theatrical exhibition $ 947,297 $ 796,064 $ 716,995
International theatrical exhibition 42,545 27,969 15,593
On-screen advertising 35,038 26,706 18,696
Other (1) 1,841 2,016 1,620
--------------------------------
Total revenues $1,026,721 $ 852,755 $ 752,904
================================

Adjusted EBITDA (In thousands) 1999 1998 1997
- ------------------------------------------------------------------
U.S. theatrical exhibition $ 158,107 $ 156,378 $ 172,041
International theatrical exhibition 1,655 1,971 (2,562)
On-screen advertising (2) 3,024 1,413 (114)
Other (1) (1,461) (1,103) (1,581)
-------------------------------
Total segment Adjusted EBITDA 161,325 158,659 167,784
General and administrative 53,728 49,515 52,422
-------------------------------

Total Adjusted EBITDA $107,597 $ 109,144 $ 115,362
===============================

Property (In thousands) 1999 1998 1997
- ------------------------------------------------------------------
U.S. theatrical exhibition $899,822$ 758,391 $ 667,122
International theatrical exhibition 71,142 17,320 15,905
On-screen advertising 11,081 9,586 6,618
Other (1) 1,260 1,352 11,862
-------------------------------
Total segment property 983,305 786,649 701,507
Construction in progress 97,688 76,698 85,992
Corporate 37,985 32,402 36,400
--------------------------------
Total property (3) $1,118,978 $ 895,749 $ 823,899
================================

Capital expenditures (In thousands) 1999 1998 1997
- ------------------------------------------------------------------
U.S. theatrical exhibition $ 126,993 $337,197 $137,003
International theatrical exhibition 48,398 3,121 17,763
On-screen advertising 1,884 2,968 2,725
Other (1) 4 33 10,856
------------------------------
Total segment capital expenditures 177,279 343,319 168,347
Construction in progress 79,351 45,084 83,685
Corporate 4,183 814 1,348
------------------------------
Total capital expenditures $ 260,813 $ 389,217 $ 253,380
==============================

(1) Other amounts are comprised primarily of real estate
activities and other miscellaneous ventures.
(2) General and administrative expenses of $4,691,000, $4,839,000 and
$4,225,000 have been allocated to on-screen advertising in 1999, 1998
and 1997, respectively.
(3) Property is comprised of land, buildings and improvements, leasehold
improvements and furniture, fixtures and equipment.




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




(In thousands) 1999 1998 1997
- --------------------------------------------------------------------

Earnings (loss) before income
taxes $ (26,516)$ (41,099)$ 31,895

Plus:
Interest expense 38,628 35,679 22,022
Depreciation & amortization 89,221 70,117 52,572
Impairment of long-lived assets 4,935 46,998 7,231
Preopening expense 2,265 2,243 2,414
Theatre closure expense 2,801 - -
Loss (gain) on disposition
of assets (2,369) (3,704) 84
Investment income (1,368) (1,090) (856)
----------------------------

Total Adjusted EBITDA $ 107,597 $ 109,144 $ 115,362
===============================


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

Revenues (In thousands) 1999 1998 1997
- -----------------------------------------------------------------

United States $ 984,176 $ 824,786 $ 737,311
Japan 25,174 20,101 13,471
China (Hong Kong) 2,098 - -
Portugal 8,855 7,868 2,122
Spain 3,690 - -
Canada 2,728 - -
--------------------------------

Total revenues $1,026,721 $ 852,755 $ 752,904
===============================

Property (In thousands) 1999 1998 1997
- -----------------------------------------------------------------

United States $1,028,663 $ 870,621 $ 805,018
Japan 15,587 5,898 5,614
China (Hong Kong) 10,353 1,318 736
Portugal 13,019 12,532 10,867
Spain 20,426 3,685 1,559
Canada 30,930 1,695 105
---------------------------------

Total property $1,118,978 $ 895,749 $ 823,899
===============================



AMC ENTERTAINMENT INC.
STATEMENTS OF OPERATIONS BY QUARTER
(In thousands, except per share amounts) (Unaudited)



Fiscal Year

07/02/98 07/03/97 10/01/98 10/02/97 12/31/98 01/01/98 04/01/99 04/02/98 1999 1998
- --------------------------------------------------------------------------------------------------------------------------------

Total revenues $240,670$196,085 $291,015$220,896 $260,772 $217,309 $234,264 $218,465 $1,026,721 $852,755
Total cost of operations 204,566 161,293 231,959 171,776 218,955 173,778 210,291 184,653 865,771 691,500
General and administrative 14,601 14,755 15,599 12,097 14,517 15,041 13,702 12,461 58,419 54,354
Depreciation and amortization 20,342 16,367 21,030 16,522 23,100 17,227 24,749 20,001 89,221 70,117
Impairment of long-lived assets - - - 46,998 - - 4,935 - 4,935 46,998
-----------------------------------------------------------------------------------------------

Operating income (loss) 1,161 3,670 22,427(26,497) 4,200 11,263 (19,413) 1,350 8,375 (10,214)
Interest expense 8,546 8,245 8,322 9,405 9,349 9,870 12,411 8,159 38,628 35,679
Investment income 286 172 365 509 434 124 283 285 1,368 1,090
Gain (loss) on disposition
of assets 1,393 1,178 (35) 1,318 901 864 110 344 2,369 3,704
-----------------------------------------------------------------------------------------------

Earnings (loss) before
income taxes (5,706) (3,225) 14,435(34,075) (3,814) 2,381 (31,431) (6,180) (26,516) (41,099)
Income tax provision (2,650) (1,386) 6,550(13,714) (2,100) 950 (12,300) (2,450) (10,500) (16,600)
-----------------------------------------------------------------------------------------------

Net earnings (loss) $(3,056)$(1,839) $7,885$(20,361) $(1,714) $1,431$(19,131) $(3,730) $(16,016) $(24,499)

===============================================================================================

Preferred dividends 1,369 - 1,283 - 1,198 - 996 - 4,846
-----------------------------------------------------------------------------------------------

Net earnings (loss) for
common shares $(3,056)$(3,208) $7,885$(21,644) $(1,714) $233$(19,131) $(4,726) $(16,016) $(29,345)

===============================================================================================
Earnings (loss) per share:
Basic $(0.13) $(0.18) $0.34$(1.18) $(0.07) $0.01 $(0.82) $(0.25) $(0.69) $(1.59)

===============================================================================================

Diluted $(0.13) $(0.18) $0.33$(1.18) $(0.07) $0.01 $(0.82) $(0.25) $(0.69) $(1.59)

===============================================================================================



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:
Years
Associated
with the
Name Age(1) Positions Company(1)
- ---- ----- --------- ---------
Stanley H. Durwood 78 Co-Chairman of the
Board, Chief Executive 53(2)
Officer and Director
(AMCE); Chairman of the
Board, Chief Executive
Officer and Director (AMC)
Peter C. Brown 40 Co-Chairman of the Board
and President 7
(AMCE); Executive Vice
President (AMC);
Chief Financial
Officer and Director
(AMCE and AMC)
Philip M. Singleton 52 President (AMC); Executive 24(2)
Vice President (AMCE);
Chief Operating
Officer and Director
(AMCE and AMC)
John D. McDonald 41 Executive Vice
President-North American 23(2)
Operations (AMC)
Charles J. Egan, Jr. 66 Director (AMCE) 12
William T. Grant, II 48 Director (AMCE) 2
John P. Mascotte 59 Director (AMCE) 2
Paul E. Vardeman 69 Director (AMCE) 15(2)
Richard T. Walsh 45 Senior Vice President (AMC) 23(2)
Richard J. King 50 Senior Vice President (AMC) 27(2)
Rolando B. Rodriguez 39 Senior Vice President (AMC) 23(2)
Craig R. Ramsey 47 Senior Vice President-
Finance (AMCE and AMC) 4
Richard L. Obert 59 Senior Vice President-
Chief Accounting
Officer (AMCE and AMC) 10
Charles P. Stilley 44 President
(AMC Realty, Inc.) 17(2)
Richard M. Fay 49 President (AMC Film
Marketing,
a division of AMC) 3
______________________________
- ------------------------------

(1)As of April 1, 1999.

(2)Includes years of service with the predecessor of the Company.

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 the Company hold such offices at the
pleasure of AMCE's Board of Directors, subject in certain instances, to their
rights under employment agreements.

As part of its succession planning and with the approval of Mr. Stanley H.
Durwood, AMCE's Board of Directors appointed the Company's President and Chief
Financial Officer, Mr. Peter C. Brown, as Co-Chairman. Mr. Brown oversees all
Company matters with Mr. Durwood.

Mr. Stanley H. Durwood has served as a Director of AMCE from its organization
on June 14, 1983, and of AMC since August 2, 1968. Mr. Durwood has served as Co-
Chairman of the Board of AMCE since May 15, 1998. Mr. Durwood served as Chairman
of the Board of AMCE from February 1986 until May 15, 1998, and as Chairman of
the Board of AMC since February 1986. Mr. Durwood has served as Chief Executive
Officer of AMCE since June 1983, and of AMC since February 20, 1986. Mr. Durwood
served as President of AMCE (i) from June 1983 through February 20, 1986, (ii)
from May 1988 through June 1989, and (iii) from October 6, 1995 to January 10,
1997. Mr. Durwood served as President of AMC (i) from August 2, 1968 through
February 20, 1986, (ii) from May 13, 1988 through November 8, 1990, and (iii)
from October 6, 1995 to January 10, 1997. Mr. Durwood is a graduate of Harvard
University.

Mr. Peter C. Brown has served as a Director of AMCE and AMC since November
12, 1992 and has served as Co-Chairman of the Board of AMCE since May 15, 1998.
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. Mr.
Brown served as Executive Vice President of AMC from August 3, 1994 to January
10, 1997. Mr. Brown has served as Executive Vice President of AMC since August
3, 1994, and as Chief Financial Officer of AMCE and AMC since November 14, 1991.
Mr. Brown served as Senior Vice President of AMCE and AMC from November 14, 1991
until his appointment as Executive Vice President in August 1994. Mr. Brown
served as Treasurer of AMCE and AMC from September 28, 1992 through September
19, 1994. Mr. Brown also serves as Chairman of the Board of Trustees of
Entertainment Properties Trust, a real estate investment trust. Mr. Brown also
serves as a member of the Board of Trustees of the Kansas City Art Institute and
Rockhurst High School. In addition, Mr. Brown is a member of the Board of
Advisors for the University of Kansas School of Business. Mr. Brown is a
graduate of the University of Kansas.

Mr. Philip M. Singleton has served as a Director of AMCE and AMC since
November 12, 1992. Mr. Singleton was elected President of AMC on January 10,
1997. Mr. Singleton has served as Executive Vice President of AMCE since August
3, 1994 and as Chief Operating Officer of AMCE and AMC since November 14, 1991.
Mr. Singleton served as Executive Vice President of AMC from August 3, 1994 to
January 10, 1997. Mr. Singleton served as Senior Vice President of AMCE and AMC
from November 14, 1991 until his appointment as Executive Vice President in
August 1994. Prior to November 14, 1991, Mr. Singleton served as Vice President
in charge of operations for the Southeast Division of AMC from May 10, 1982. Mr.
Singleton holds an undergraduate degree from California State University,
Sacramento, and an M.B.A. degree from the University of South Florida.

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. 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 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. William T. Grant, II has served as a Director of AMCE since November 14,
1996. Mr. Grant is Chairman of the Board, President, Chief Executive Officer and
a Director of LabONE, Inc. LabONE, Inc. provides risk appraisal laboratory
testing services to the insurance industries in the United States and Canada.
Mr. Grant also serves on the board of directors of Commerce Bancshares, Inc.,
Kansas City Power & Light Company, Business Men's Assurance Company of America,
and Response Oncology, Inc. Mr. Grant is a board member of the Boys and Girls
Clubs of Greater Kansas City. 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. John P. Mascotte has served as a Director of AMCE since November 14,
1996. Mr. Mascotte assumed the duties of President and Chief Executive Officer
of BlueCross BlueShield of Kansas City on July 1, 1997. Prior thereto, Mr.
Mascotte served as Chairman of Johnson & Higgins of Missouri, Inc., a privately
held insurance broker, from January 1996 to June 30, 1997, and as Chairman of
the Board and Chief Executive Officer of The Continental Corporation, a property
- -casualty insurer, from December 1982 through December 1995. Mr. Mascotte also
serves on the board of directors of Hallmark Cards, Incorporated, Hallmark
Entertainment, Inc., Business Men's Assurance Company of America and American
Home Products Corporation, in addition to serving on the boards of BlueCross
BlueShield of Kansas City and the BlueCross and Blue Shield Association. Also,
Mr. Mascotte is Vice Chairman of the Aspen Institute, Chairman of LISC (Local
Initiatives Support Corp.) and a member of the Board of Trustees of Midwest
Research Institute. Mr. Mascotte is a board member of the Hall Family Foundation
and the Greater Kansas City Community Foundation and is Co-Chairman of the Jazz
District Redevelopment Corporation in Kansas City, Missouri. Mr. Mascotte holds
B.S. degrees from St. Joseph's College, Rensselaer, Indiana, and an LL.B. degree
from the University of Virginia. Mr. Mascotte is also a certified public
accountant and a chartered life underwriter.

Mr. Paul E. Vardeman has served as a Director of the Company 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. Richard T. Walsh has served as Senior Vice President in charge of
operations for the West Division of AMC since July 1, 1994. Previously, Mr.
Walsh served as Vice President in charge of operations for the Central Division
of AMC from June 10, 1992, and as Vice President in charge of operations for the
Midwest Division of AMC from December 1, 1988.

Mr. Richard J. King has served as Senior Vice President in charge of
operations for the East Division of AMC since January 4, 1995. Previously, Mr.
King served as Vice President in charge of operations for the East Division of
AMC from June 10, 1992, and as Vice President in charge of operations for the
Southwest Division of AMC from October 30, 1986.

Mr. Rolando B. Rodriguez has served as Senior Vice President in charge of
operations for the South Division of AMC since April 2, 1996. Previously, Mr.
Rodriguez served as Vice President and South Division Operations Manager of AMC
from July 1, 1994, as Assistant South Division Operations Manager of AMC from
February 12, 1993, as South Division Senior Operations Manager from March 29,
1992, and as South Division Operations Manager from August 6, 1989.

Mr. Craig R. Ramsey has served as Senior Vice President-Finance of AMCE and
AMC since August 20, 1998. Prior thereto, Mr. Ramsey served as Vice President of
Finance from January 17, 1997 and as Director of Information Systems and
Director of Financial Reporting since joining AMC on February 1, 1995.
Previously, Mr. Ramsey served as Vice President-Corporate Accounting and Data
Processing for Mid-America Dairymen, Inc.

Mr. Richard L. Obert has served as Senior Vice President-Chief Accounting
Officer of AMCE and AMC since November 9, 1995, and prior thereto served as Vice
President and Chief Accounting Officer of AMCE and AMC from January 9, 1989.

Mr. Charles P. Stilley has served as President of AMC Realty, Inc., a wholly
owned subsidiary of AMCE, since February 9, 1993, and prior thereto served as
Senior Vice President of AMC Realty, Inc. from March 3, 1986.

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. From 1991 to 1994, Mr. Fay served as Vice President and Head Film
Buyer for the eastern division of United Artists Theatre Circuit, Inc.

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 April 1, 1999, April 2, 1998 and April 3, 1997,
respectively.


Summary Compensation Table


Long-Term
Compensation
Awards-Securities
Annual Compensation Underlying
----------------------
Fiscal Other Annual Options/ All Other
Name and Principal Position Year Salary Bonus Compensation(1) SARs Compensation(2)
- --------------------------- ---- ---------- --------- ----------- ------ ----------

Stanley H. Durwood 1999 $567,008 $ - N/A 150,000 $ -
Chief Executive Officer 1998 536,558 - N/A - -
1997 527,322 - N/A 65,000 -

Peter C. Brown 1999 409,241 - N/A 125,000 5,334
President and 1998 296,444 - N/A - 4,960
Chief Financial Officer 1997 71,364 25,500 N/A 4,500 4,976

Philip M. Singleton 1999 383,702 - N/A 100,000 5,317
Chief Operating Officer 1998 316,679 - N/A - 4,896
1997 303,125 28,500 N/A 4,500 5,003

Richard T. Walsh 1999 238,666 - N/A - 4,639
Senior Vice President 1998 226,441 60,000 N/A - 4,805
1997 223,073 41,545 N/A 2,250 4,964

Richard M. Fay 1999 298,075 - N/A - 4,503
President-AMC Film 1998 286,982 45,000 N/A - 4,676
Marketing 1997 294,369 32,650 N/A 2,250 1,464

(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.

(2)For fiscal 1999, 1998 and 1997, 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.


Option Grants
The following table provides certain information concerning individual
grants of stock options made during the last completed fiscal year under the
1994 Incentive Plan to each of the Named Executive Officers.







Option/SAR Grants in Last Fiscal Year


Number of % of Total
Securities Options/SARs Potential Realizable Value at
Underlying Granted to Assumed Annual Rates of
Options/ Employees Exercise or Stock Price Appreciation for
SARs in Fiscal Base Price Expiration Option Term(2)
-----------------------
Name Granted(1) Year ($/share) Date 5% ($) 10% ($)
- -------- --------- ----- ---------- ------ ------ --------

Stanley H.
Durwood 65,000 17.33% $19.125 5/14/08 $781,795 $1,981,221
85,000 22.67% 16.813 11/12/08 898,730 2,277,558
Peter C. Brown 65,000 17.33% 19.125 5/14/08 781,795 1,981,221
60,000 16.00% 16.813 11/12/08 634,397 1,607,688
Philip M.
Singleton 65,000 17.33% 19.125 5/14/08 781,795 1,981,221
35,000 9.34% 16.813 11/12/08 370,065 937,818
Richard T. Walsh - - - - - -
Richard M. Fay - - - - - -

(1) The stock options granted during the fiscal year ended April 1, 1999 are
fully 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.


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 April 1, 1999.




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
Shares Acquired SARs at FY-End FY-End (1)
-------------- ------------
Name on Exercise Value Realized Exercisable Unexercisable
Exercisable Unexercisable
- ------ ----------- -------------- ----------- ------------- ----------- ----------

Stanley H.
Durwood - $ - 237,500 - $ 70,313 $ -

Peter C. Brown - - 284,000 - 857,813 -

Philip M.
Singleton - - 233,600 - 714,938 -

Richard T.
Walsh - - 29,500 - 138,344 -

Richard M. Fay - - 2,250 - - -

(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 April 1, 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 $160,000 (in 1999).

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 1999 at age 65 payable in the form of a single life
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 $270,000 in 1999.



Highest Consecutive
Five year Average
Annual Compensation Years of Credited Service
- ------------------- ---------------------------
15 20 25 30 35
-- -- -- -- --

$125,000 $17,716 $23,621 $29,527 $35,432 $41,337
150,000 21,466 28,621 35,777 42,932 50,087
175,000 25,216 33,621 42,027 50,432 58,837
200,000 28,966 38,621 48,277 57,932 67,587
225,000 32,716 43,621 54,527 65,432 76,337
250,000 36,466 48,621 60,777 72,932 85,087
270,000 39,466 52,621 65,777 78,932 92,087



As of April 1, 1999, the years of credited service under the Retirement
Plan for each of the Named Executive Officers were: Mr. Peter C. Brown, eight
years, Mr. Philip M. Singleton, 25 years, Mr. Richard T. Walsh, 24 years; and
Mr. Richard M. Fay, three years. The estimated annual benefit Mr. Stanley H.
Durwood has accrued under the Supplemental Executive Retirement Plan is $14,400
and is not included in the Summary Compensation Table.

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.

Presently, Mr. Stanley H. Durwood, Mr. Peter C. Brown and Mr. Philip M.
Singleton have been designated as eligible to participate in the REP. The
amount payable to Mr. Durwood with respect to fiscal 1999 under the REP is
$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 $54,000, 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
Each of AMCE's non-employee directors receives an annual fee of $32,000 for
service on the Board of Directors and an additional $4,000 for each committee of
the Board on which he serves and, in addition, receives $1,500 and $1,000,
respectively, for each Board and board committee meeting which he attends.

For the fiscal year ended April 1, 1999, Messrs. Charles J. Egan, Jr.,
William T. Grant, II, John P. Mascotte and Paul E. Vardeman received $68,000,
$72,000, $71,000 and $59,000, respectively, for their services.

The Board of Directors has also authorized that Messrs. Charles J. Egan,
Jr. and Paul E. Vardeman be paid reasonable compensation for their services as
members of a special committee (the "Special Committee") appointed to consider
the Merger. During the fiscal year ended April 1, 1999, Messrs. Charles J.
Egan, Jr. and Paul E. Vardeman each received $50,000 for their services related
to the Special Committee.

Employment Contracts, Termination of Employment and Change in Control
Arrangements
Mr. Stanley H. Durwood has an employment agreement with AMCE and AMC dated
January 26, 1996 retaining him as Chairman and Chief Executive Officer and
President. It provides for an annual base salary of no less than $500,000, plus
payments and awards under AMC's Executive Incentive Program ("EIP"), the 1994
Stock Option and Incentive Plan, as amended 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 current annual
base salary is $567,000. The Company has 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 has a term of three years and is automatically extended one year on
its anniversary date, January 26, so that as of such date each year the
agreement has a three-year term. The employment agreement is terminable without
severance if he engages in intentional misconduct or a knowing violation of law
or breaches his duty of loyalty to the Company. The agreement also is
terminable (i) by Mr. Durwood, in the event of the Company's breach, and (ii) by
the Company, without cause or in the event of Mr. Durwood's death or disability,
in each case with severance payments 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 may 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. The aggregate amount
payable under this employment agreement, assuming termination with severance
occurred as of April 1, 1999, was approximately $1,513,000.

Messrs. Peter C. Brown, Philip M. Singleton, Richard T. Walsh and Richard
M. Fay 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. Walsh-$230,041 and Mr. Fay-$285,031. 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 agreements of Mr. Brown
and Mr. Singleton have terms of three years and those of Mr. Walsh and Mr. Fay
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. Walsh or Mr. Fay 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 April 1, 1999 were as follows: Mr. Brown-$1,045,000; Mr. Singleton
- -$1,398,000; Mr. Walsh-$460,000; and Mr. Fay-$570,000. 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 April 1, 1999 were, as follows: Mr. Brown-$857,813 and Mr. Singleton-
$714,938. The amount of note proceeds that would be forgiven by the Company
assuming termination by reason of a change of control as of April 1, 1999 were
as follows: Mr. Brown $253,875 and Mr. Singleton $0.

As permitted by the 1994 Stock Option and Incentive Plan, 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. Options issued under the 1994 Plan during 1999 vested
immediately.

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
week's 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.


ITEM 12. Security Ownership of Beneficial Owners.

The following table sets forth certain information as of May 14, 1999,
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)

Peter J. Durwood (1) 1,123,480(1) 5.8%(1)

Thomas A. Durwood (1) 1,123,480(1)(3) 5.8%(1)(3)

Elissa D. Grodin (1) 1,123,480(1) 5.8%(1)

EnTrust Capital Inc.(4) 982,559(4) 5.1%(4)
650 Madison Ave.
New York, NY 10022

Class B Stock Stanley H. Durwood (1) 4,041,993 (1) 100%
106 West 14th 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 Co-Chairman of
the Board and Chief Executive Officer of AMCE. Mr. Stanley H. Durwood and the
Durwood Children (collectively, the "Durwood Family Stockholders") formerly held
their stock in AMCE through a holding company, Durwood, Inc. ("DI"), and
acquired their shares on August 15, 1997 pursuant to the Merger of AMCE and DI.
Collectively, the Durwood Children beneficially own 6,153,732 shares of Common
Stock representing 31.7% of the outstanding shares of such class.

Mr. Stanley H. Durwood beneficially owns 4,041,993 shares of AMCE's Class B
Stock, which constitute 100% of the outstanding shares of such class.
Mr. Stanley H. Durwood has sole voting power and sole investment power over
all of these shares. AMCE's Class B Stock and Common Stock presently
beneficially owned by Mr. Stanley H. Durwood represent 67.5% of the voting
power of AMCE's stock other than in the election of directors. Were all the
shares of AMCE's Class B Stock converted into Common Stock, there would be
approximately 23,469,091 shares of Common Stock outstanding, of which
Mr. Stanley H. Durwood would beneficially own 4,042,243 shares (assuming such
conversion and disregarding the exercise of his outstanding options) or 17.2%
of the outstanding number of shares of Common Stock. Mr. Stanley H. Durwood's
voting control may be diluted if he is obligated to dispose of shares to honor
tax and other indemnity obligations made by him and AMCE in connection with
the merger and other related transactions, or if additional shares of Common
Stock are issued under the Company's existing employee benefit plans.

AMCE's Class B Stock beneficially owned by Mr. Stanley H. Durwood is held
under his Revocable Trust Agreement dated April 14, 1989, as amended, and the
1992 Durwood, Inc. Voting Trust dated December 12, 1992 as amended and
restated (the "Voting Trust"). The Voting Trust is the record owner of the
shares reported as beneficially owned, and Mr. Stanley H. Durwood is the
settlor and sole acting trustee of both trusts. The named successor trustees
are Mr. Charles J. Egan, Jr., a Director of AMCE, and Mr. Raymond F. Beagle,
Jr., AMCE's general counsel. Under the terms of his Voting Trust, Mr. Stanley
H. Durwood has all voting powers with respect to shares held therein during
his lifetime. Thereafter, all voting rights with respect to such shares vest
in his successor trustees and any additional trustees whom they might appoint,
who shall exercise such rights by majority vote. Unless revoked by Mr. Stanley
H. Durwood or otherwise terminated or extended in accordance with its terms,
the Voting Trust will terminate in 2030.

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
AMCE 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 AMCE.

(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 13G dated February 9, 1999. Of these shares,
EnTrust Capital, Inc. reports that it has shared voting power with respect to
702,239 shares and shares dispositive power with respect to 982,559 shares.



Beneficial Ownership By Directors and Officers
The following table sets forth certain information as of May 14, 1999, 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 841,600 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 Stanley H. Durwood 237,750(1)(2) 1.2%
Peter C. Brown 659,000(2) 3.3%
Philip M. Singleton 498,600(2) 2.5%
Richard T. Walsh 29,550(2) *
Richard M. Fay 3,663(2) *
William T. Grant, II 1,500 *
John P. Mascotte 2,000 *
Paul E. Vardeman 300 *

All Directors and
Executive Officers
as a group (15 persons,
including the
individuals named above) 1,488,131 7.3%

Class B Stock Stanley H. Durwood 4,041,993(1) 100.0%
____________________________________
- -----------------------------------
*Less than one percent.

(1) See Note 1 under "Security Ownership of Certain Beneficial Owners and
Management". Mr. Stanley H. Durwood beneficially owns 250 shares of AMCE's
Common Stock (including 100 shares owned by his wife, Mrs. Mary Pamela
Durwood) and options that are presently exercisable to acquire 237,500 shares
of AMCE's Common Stock, over which he has sole voting and investment power,
which constitute 1.2% of the outstanding shares of such class.

(2) Includes shares subject to presently exercisable options to purchase Common
Stock under AMCE's 1983 and 1984 Stock Option Plans and the 1994 Stock Option
and Incentive Plan, as follows: Mr. Stanley H. Durwood - 237,500 shares;
Mr. Peter C. Brown - 284,000 shares; Mr. Philip M. Singleton - 233,600 shares;
Mr. Richard T. Walsh - 29,500 shares; Mr. Richard M. Fay - 2,250 shares; and
all Executive Officers as a group - 841,600 shares.


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 and Pacific Stock Exchanges. 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 1999 its Executive Officers, Directors and greater-than-10%
beneficial owners complied with all Section 16(a) filing requirements.

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,
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 consists of
Messrs. Egan, Grant and Mascotte, 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 3, 1998 or involve receivables that remain outstanding as of April 1,
1999.

The Merger
General. 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.

Mr. Stanley H. Durwood has agreed to indemnify AMCE for all losses
resulting from any breach by DI of the Merger Agreement or resulting from any
liability of DI and for all taxes attributable to DI prior to the effective time
of the Merger and all losses in connection therewith.

As promptly as practicable after March 31, 2000, AMCE will pay Mr. Stanley
H. Durwood an amount equal to any credit amounts which have not been used to
offset various of his obligations to AMCE under the Stock Agreement, the
Indemnification Agreement and the Registration Agreement, as such terms are
defined below. If such benefits are realized after such date, the related
credit amounts will be paid to Mr. Stanley H. Durwood when they are realized.
See "The Indemnification Agreement"; "The Stock Agreement" and "The
Registration Agreement; Secondary Offering".

For a period for three years after the Merger, the Durwood Children have
agreed to give an irrevocable proxy to the Secretary and each Assistant
Secretary of AMCE 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 AMCE, its directors and officers. See "The Stock Agreement".

The Registration Agreement; Secondary Offering. 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 $698,356, which expenses have been reimbursed to AMCE by Delta
Properties, Inc. ("Delta"), a former subsidiary of DI.

The Indemnification Agreement. 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.
Pursuant to this agreement, (i) Mr. Stanley H. Durwood agreed to indemnify AMCE
from losses resulting from any breach by DI of its representations, warranties
and covenants in the Merger Agreement or based upon any liability of DI and for
any taxes (or losses incurred by AMCE in connection therewith) attributable to
DI or its subsidiaries for taxable periods prior to the effective time of the
Merger, (ii) each of the Durwood Family Stockholders agreed to (severally and
not jointly) indemnify AMCE for any losses which it might incur as a result of
the breach by such party of certain tax related representations, warranties and
covenants made by such party in the Stock Agreement and (iii) subject to certain
conditions, Mr. Stanley H. Durwood and Delta agreed to indemnify AMCE from and
against all of DI's Merger expenses that were not paid prior to the effective
time of the Merger and 50% of AMCE's Merger expenses.

Mr. Stanley H. Durwood's obligations to AMCE under the Stock Agreement,
Registration Agreement and Indemnification Agreement are subject to offset by
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. The
maximum amount of credit amounts that could be paid Mr. Durwood or could be used
to offset his responsibilities to AMCE is approximately $1,100,000, reduced by
any amounts utilized on separate DI income tax returns for 1996 and the portion
of 1997 prior to the effective time of the Merger.

In connection with the Merger, the Company has 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 will lapse on March 31,
2000.

The Stock Agreement. 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.

Other Matters
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 Code in effect on
the date of such loan (5.57% 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
April 1, 1999, the principal amount of the loan to Mr. Brown was $5,625,000 and
the principal amount of the loan to Mr. Singleton was $2,954,000. Accrued
interest on the loans as of April 1, 1999 was $296,000.

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 1999 was $698,356 owed by Delta. As
of April 1, 1999, Delta had reduced the intercompany account balance to zero.

Ms. Marjorie D. Grant, a Vice President of AMC and the sister of Mr.
Stanley H. Durwood, has an employment agreement with AMCE providing for an
annual base salary of no less than $110,000, an automobile and, at the sole
discretion of the Chief Executive Officer of AMCE, a year-end bonus. Ms.
Grant's current annual base salary is $110,000. Ms. Grant's employment
agreement, executed July 1, 1996, terminates on June 30, 1999, or upon her death
or disability. The agreement provides that in the event Mr. Stanley H. Durwood
fails to control the management of AMCE by reason of its sale, merger or
consolidation, or because of his death or disability, or for any other reason,
then AMCE and Ms. Grant would each have the option to terminate the agreement.
In such event, AMCE would pay to Ms. Grant in cash a sum equal to the aggregate
cash compensation, exclusive of bonus, to the end of the term of her employment
under the agreement, after discounting such amount to its then present value
using a discount rate equal to the prime rate of interest published in The Wall
Street Journal on the date of termination. The aggregate amount payable under
the employment agreement, assuming termination by reason of a change of control
and payment in a lump sum as of April 1, 1999, was approximately $27,000.

Since July 1992, Mr. Jeffery W. Journagan, a son-in-law of Mr. Stanley H.
Durwood, has been employed by a subsidiary of AMCE. Mr. Journagan's current
salary is approximately $100,000 and he received a bonus for fiscal 1999 in the
amount of $26,855.

During fiscal 1999, the Company retained Polsinelli, White, Vardeman &
Shalton, P.C., to provide certain legal services to a subsidiary of AMCE. Mr.
Vardeman, who is a director of AMCE, was a director, officer and shareholder of
that firm until his retirement from such firm in November 1997.

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 three additional theatres from EPT under the same
terms as those included in the Sale and Lease Back Transaction. Annual rentals
for these three theatres are based on an estimated fair value of $77,500,000
for the theatres. The Company has granted an option to EPT to acquire a theatre
for the cost to the Company of developing and constructing such property. 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,
Co-Chairman of the Board, President and Chief Financial Officer 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 T.
Walsh and Richard M. Fay, see "Employment Contracts, Termination of Employment
and Change in Control Arrangements."


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 28
Consolidated Statements of Operations - Fiscal
years (52/53 weeks) ended April 1, 1999,
April 2, 1998 and April 3, 1997 29
Consolidated Balance Sheets - April 1, 1999
and April 2, 1998 30
Consolidated Statements of Cash Flows - Fiscal
years (52/53 weeks) ended April 1, 1999,
April 2, 1998 and April 3, 1997 31
Consolidated Statements of Stockholders'
Equity - Fiscal years (52/53 weeks) ended
April 1, 1999, April 2, 1998 and April 3, 1997 32
Notes to Consolidated Financial Statements - Fiscal
years (52/53 weeks) ended April 1, 1999,
April 2, 1998 and April 3, 1997 33
Statements of Operations By Quarter (Unaudited) - Fiscal
years (52 weeks) ended April 1, 1999
and April 2, 1998 49


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

(b) Reports on Form 8-K

On March 25, 1999, the Company filed a Form 8-K reporting under Item 5
announcing the execution of the Third Amendment, dated March 15, 1999 to the
Company's Amended and Restated Credit Agreement dated as of April 10, 1997.

(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.

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, Co-Chairman of the Board


Date: June 25, 1999

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 Co-Chairman of the Board, President, June 25, 1999
- -----------------------
Peter C. Brown Chief Financial Officer and Director

/s/ Charles J. Egan, Jr. Director June 25, 1999
- -------------------------
Charles J. Egan, Jr.


/s/ William T. Grant, II Director June 25, 1999
- ----------------------------
William T. Grant, II


/s/ John P. Mascotte Director June 25, 1999
- ---------------------
John P. Mascotte


/s/ Paul E. Vardeman Director June 25, 1999
- ----------------------------
Paul E. Vardeman


/s/ Philip M. Singleton Executive Vice President, Chief June 25, 1999
- ----------------------------
Philip M. Singleton Operating Officer and Director


/s/ Richard L. Obert Senior Vice President - Chief June 25, 1999
- ----------------------------
Richard L. Obert Accounting Officer

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).

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).

4.2(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
Subordanted 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).

10.4 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).

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).

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
and Hampton Town Center 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 and Hampton Town Center 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 February 1, 1999
(Incorporated by reference from Exhibit 10.4 to the Company's
Form 10-Q (File No. 1-8747) for the quarter ended December 31,
1998).

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).

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


_______
- -------

* Filed herewith


EXHIBIT 21.
-----------


AMC ENTERTAINMENT INC. AND SUBSIDIARIES
AMC ENTERTAINMENT INC.
American Multi-Cinema, Inc.
AMC Entertainment International, Inc.
AMC Entertainment International Limited
AMC Entertainment Espa?a S.A.
Actividades Multi-Cinemas E Espectaculos, LDA
AMC Theatres of U.K., Limited
AMC De Mexico, S.A., De C.V.
AMC Europe S.A.
AMC Theatres of Canada, Inc.
National Cinema Network, Inc.
AMC Realty, Inc.
Centertainment, Inc.
Centertainment Development, Inc.
Power & Light District, LLC
Pavilion Holdings LLC
AMC License Corp.
AMCPH Holdings, Inc.
PMBA Unit (AMC) L.P.



All subsidiaries are wholly-owned.





EXHIBIT 23.
-----------







CONSENT OF INDEPENDENT ACCOUNTANTS





To the Board of Directors and Stockholders
of AMC Entertainment Inc.
Kansas City, Missouri



We hereby consent to the incorporation by reference in the Registration
Statements on Form S-8 (File Nos. 33-58129, 2-92048, 2-97522 and 2-97523) of
AMC Entertainment Inc. and subsidiaries of our report dated May 7, 1999
relating to the financial statements, which appears in this Form 10-K.



/s/ PricewaterhouseCoopers LLP
Kansas City, Missouri
June 23, 1999

EXHIBIT 27
-----------

FDS SCHEDULE