Operator: Thank you. One moment for our next question. Our next question comes from line of Ki Bin Kim from Truist. Your line is open.
Ki Bin Kim: Thanks, good morning. Just going back to your theatre projections, you made a comment that you think 2025 will be a much bigger year. Can you just provide like a range of outcomes that you’re thinking about, and what you’re seeing that makes you believe that?
Gregory Silvers: Again, Ki Bin, it’s really about titles. And again, when we come to our estimates, we’re using a variety of industry pundits, including for — some of the major theatre analysts that some of the banks who are on the line here. And I think, again, when we say 8 to 8.4, I think, there’s probably no analyst out there that doesn’t have at least 9 to 10 in the 2025 number. And it’s fully — as Greg said, it’s really about the number of titles. So as the production ramps back up from the writers and actor strike, we’re seeing, again — and an acknowledgment, when you combine that with an acknowledgment by all the studios that they need the theatre exhibition business. I mean, almost, I think, other than Netflix, almost all the streamers are losing money on their businesses, and they need the cash flow that’s generated from the theatre exhibition movie, and they’ve all kind of re- kind of committed to that.
And so we’re getting really good visibility into titles right now, beginning right now into 2025, and it looks very strong. And again, that’s not just our numbers. That’s kind of pretty much industry-wide. You see some above 10, but generally, I think everyone is in the range of 9 to 10. So at a midpoint at 9.5, that’s a pretty strong year compared to what we’re seeing this year.
Gregory Zimmerman: Yes, coverage was 1.7 times at 8.8 trailing 12 months. So we’ll be in good shape.
Mark Peterson: To put some numbers, if you look at the chart that we put out, which we probably would have been at $9.4 billion or so forth this year but for the strike. So if you kind of think about that as just a year delayed. The chart suggests that the percentage rent could be another $5 million higher than what we’re guiding to this year at $8.7 million. And of course, the operating profits will go up as well, given if the performance of those theatres follows the box office, which we think it will.
Ki Bin Kim: Yes, you read my mind on the next question. Is that chart still — is that still the base case? There are some rent restructurings from other theatres. So I wasn’t sure if there’s some movement in this…
Gregory Silvers: That’s just Regal in the operating theatre. So we still think it’s the base case that we’re operating under. As Mark said earlier, our operating theatres are a little off that, but we really think that’s a ramping-up period of time that we will we will be there. And our percentage rent number is holding true to that case this coming year.
Ki Bin Kim: Okay. On the AMC ramp bump that’s coming in 2025, can you just remind us what that is?
Gregory Silvers: It’s a 7.5% bump. So again, I don’t have their actual rent number. Mark, do you have that? It’s a 7.5%. Roughly, let’s — we’ll refine this, but I think it’s roughly on $90 million?
Gregory Zimmerman: Every — every 5 year?
Gregory Silvers: Yes, 7.5% on $90 million. So — and that occurs August, July — July or August.
Ki Bin Kim: Okay. And just one more. The executed LOIs or purchase sale agreements for the three of the remaining eight Regals and the one AMC that you have under PSA, just high level, does this mean you’re just assigning a lease and you’re going to get rent in? And if you can just provide some color on what that NOI increase would be…
Gregory Zimmerman: Yes. So for the vacant Regals and vacant AMCs, we are selling them. We’re not going to enter into a lease. They’re vacant. So there’s no lease to assign. And we have a cadence of selling about six a year, and I think that’s probably what it will be this year. A lot of it depends on whether people need to get entitlements, how long that process takes. Of the 16 we’ve sold over the past 3.5 years, roughly 50% are being used — reused as theatres, and the other 50% are not. And as I said many times, we’re agnostic. We just market and take the highest price and move on.
Ki Bin Kim: Okay, thank you.
Operator: Thank you. And I’m not showing any further questions in the queue. I’d like to turn the call back over to Greg Silvers for any closing remarks.
Gregory Silvers: Well, we really appreciate everyone’s time and attention. Look forward to talk to you in the coming year. And thanks, everyone, and appreciate it. Have a great day.
Operator: Thank you for your participation in today’s conference. This does conclude the program. You may now disconnect. Everyone, have a great day.
