Yahoo Finance AMC Entertainment Holdings Inc (AMC) Q2 2019 Earnings Call Transcript
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AMC Entertainment Holdings Inc (NYSE: AMC)
Q2 2019 Earnings Call
Aug 8, 2019, 8:30 a.m. ET
Contents:
Prepared Remarks
Questions and Answers
Call Participants
Prepared Remarks:
Operator
Greetings and welcome to the AMC Entertainment Second Quarter 2019 Earnings Conference Call. [Operator Instructions].
It is now my pleasure to introduce your host, John Merriwether, Vice President, Investor Relations. Please go ahead.
John C. Merriwether -- VP, IR
Thank you. Saatchi. Good morning. I'd like to welcome everyone to AMC second quarter 2019 earnings conference call. With me this morning is Adam Aron, our Chief Executive Officer and President; and Craig Ramsey, our Executive Vice President and Chief Financial Officer.
Before I turn the call over to Adam, let me remind everyone that some of the comments made by management during this conference call may contain forward-looking statements, which are based on management's current expectations. Numerous risks, uncertainties and other factors may cause actual results to differ materially from those that might be expressed today.
Many of these risks and uncertainties are discussed in our public filings, including our most recently filed 10-K and 10-Q. Several of the factors that will determine the company's future results are beyond the ability of the company to control or predict,in light of the uncertainties inherent in any forward-looking statements the listeners are cautioned to not place undue reliance on these statements. The company undertakes no obligation to revise or update any forward-looking statements, whether as a result of new information or future events.
On this call, we may reference measures such as adjusted EBITDA, adjusted free cash flow, constant currency, which are non-GAAP financial measures. For a full reconciliation of our non-GAAP measures to GAAP results, please see our earnings release issued earlier this morning.
In conjunction with our earnings release, we encourage you to review the supplemental financial information for the 2019 second quarter that we published this morning on our website in tandem with the earnings release. After our prepared remarks, there will be a question-and-answer session. This morning's call is being recorded and a webcast replay will be available in the Investor Relations section of our website at amctheatres.com later today.
With that, I'll turn the call over to Adam.
Adam M. Aron -- President, CEO & Director
Thank you, John. Good morning, everybody. Thank you for joining us this morning for a review of AMC's results for the second quarter of 2019, and a progress update on several key initiatives in support of achieving the product, customer engagement and financial targets we laid out for you at our Investor and Analyst Day in April of 2019.
The second quarter of 2019 was a superb one for AMC. We posted strong above consensus results for the quarter and later during this call today, I'll be announcing new positive actions looking forward that you may not be expecting and of which we are quite proud.
Let's start with a look at the industry's impressive performance in the second quarter and AMC's outperformance well ahead of the pack over the same period. The domestic industry box office for the second quarter of 2019 came in as you know, at $3.2 billion, which was 34.2% higher than Q1 of 2019. Reading all the articles from journalists who continually seem to be obsessed by how streaming concepts can or cannot co-exist with brick and mortar movie theaters, it would be easy to miss that not only was 2018 a record year for AMC and a record year for movie going generally, but also the Q2 of 2019 represents the second largest quarter for domestic movie theater revenues of all time.
Let me say that again. Over the 400 calendar quarters over the last 100 years, the domestic industry box office for Q2 of 2019 was the second best quarter ever, not the second best Q2, the second-best quarter of all of them. Admittedly, this year, second quarter industry revenue performance was 3.7% shy of last year's Q2, but remember that quarter Q2 of 2018 was itself up 23% over Q2 of the year prior, and was the single highest quarter in cinema history.
Indeed, the domestic industry box office in Q2 of 2019 was fully 19% higher than that of Q2 2017 and fully 15% higher than that of Q2, 2016.
Why was Q2 2019 such as massive, all studios contributed an often with a welcome return of a greater number of family friendly films in the quarter, but special praise must go to Disney for Avengers Endgame. In the U.S., April was the highest-grossing April ever and May was the second highest grossing May ever, thanks to the formidable strength of the Avenger Endgame now standing at $2.8 billion globally, the highest-grossing film ever.
In Europe too, the industry box office showed real strength in the second quarter of 2019, up 16.6% in the country served by Odeon and up 11.1% in the country served by Nordic, on a constant-currency basis. It's not just that Q2 look good, already in the third quarter, the industry is off to a great start. Sony's Spider-Man: Far From Home, and Disney's The Lion King helped drive the domestic entry box office for July to be some 6.7% ahead of last year's July and as you know just three weeks into its run the Lion King is already the second largest movie of the year.
All-in-all, the cadence of the industry box office in 2019 is tracking exactly as we at AMC predicted, a weak first quarter followed by what we believe will be an impressive stretch in quarters, two, three and four. It's a cadence that we've previously noted, 2019 is expected to be a back-end weighted year, culminating in what we believe will be an exciting fourth quarter to end the year large.
As always, while we're especially encouraged by the industry performance in April, May and July of 2019, and optimistic for the balance of the year. It's important to remember that there are natural fluctuations of box office between weeks, months and quarters within the year due to the timing of film releases.
Our management team tends to focus on our full year results and our performance against our medium and long-term financial targets, rather than on any particular film or intra-year timeframe. We would encourage you to do the same.
Now let's turn to AMC's strong performance with our second quarter results. I've just reviewed how very pleased we were with the industry box office performance in Q2, but what matters more to us than anything else is our delivering solid results within our own company company at AMC. This is why we're even more pleased to be taking you through AMC's Q2 results. In U.S. markets AMC had an excellent quarter, outperforming the industry once again, AMC set a new record in U.S. attendance of 3.1% this quarter to nearly $72 million theater business.
And for the fifth consecutive quarter, AMC handily outperformed the rest of the industry. The rest of the industry being defined as the approximate 75% of the industry that excludes AMC. On an attendance per screen basis, AMC beat the rest of the U.S. industry by approximately 800 basis points. And I repeat that statistic, we beat the pack by some 800 basis points. That attendance growth came from conscious decisions on our part, which we widely discussed starting last year in July and August to create incremental demand by driving attendance through marketing programs like A-List and Discount Tuesdays among others.
Even with a modest intentional sacrifice on pricing per ticket with such a substantial attendance gain we still also outperformed the industry on an admissions of revenue per screen basis by approximately 400 basis points. Market share has been moving our way and AMCs continued outperformance is clear evidence that our carefully crafted strategic initiatives and customer engagement are working.
The story is similar in our international markets not only were the revenue strong because of the Avengers: Endgame, and the large family friendly slate but AMC performed very well internationally too with attendance up a whopping 16.6% year-over-year in the second quarter. On a consolidated basis, AMC generated $1.506 billion of total revenues, an increase of 4.4% compared to last year and up 6% on a constant currency basis. We also set a global attendance record this quarter of 97 million guests up 6.3% versus the year ago quarter.
Notably, we continue to see strong growth in concession spend in our theaters with second quarter consolidated food and beverage revenues per patron growing 3.9% to $5.08 or up 5.1% on a constant currency basis and eclipsing the $5 threshold on a consolidated basis for the first time in AMC's company history. Food and beverage revenues in the United States increased to $5.58 per patron, which was an all-time high for AMC. For sure we're spreading our food and beverage expertise to Europe where food and beverage spend at Odeon and Nordic theaters was impressive with per patron revenue growing by 9.1% quarter-over-quarter to an all-time high on a constant currency basis. In addition to our ongoing food and beverage initiatives, this strength was supported by strategic pricing actions taken back in 2018 and again in 2019 and a food and beverage friendly slate of G and PG-rated films in the current quarter. As we've said previously, while we tend to outsell all other mass cinema operators, we believe that we are still in the early to middle innings of capturing increased food and beverage opportunities and expect to continue improving food and beverage spend in both the United States and in Europe over the coming years.
Accordingly, as a result of achieving company wide attendance records and strong food and beverage spend growth also record setting, AMC generated second quarter total adjusted EBITDA of $237.6 million, which is up 7.3% from the year ago quarter and up 8.6% on a constant currency basis, adjusted for the impact of ASC 842. Furthermore, this year-over-year growth is even more impressive when you remember that Q2 of 2018 last year benefited from a $10.8 million rent adjustment related to a lease modification that did not recur this year.
So in Q2 of 2019, AMC generated $100.1 million of adjusted free cash flow up 68% year-over-year after adjusting for ASC 842 in the year ago quarter. Our strength in particular attendance growth is being driven by a combination of our experiential theater initiatives and enhancements, innovative use of technology and smart promotional pricing globally.
Deserving a particular mention in the United States, AMC is reaping an enormous benefit from the popularity of our website and smartphone apps currently on a pace to be visited some 1 billion times annually. Our voluminous outbound moviegoer communications currently at a pace of around $1.5 billion outbound our customer communications annually, and our AMC Stubs loyalty program now reaching more than 21 million U.S. member households which includes our new A-List subscription tier of AMC Stubs. As we've noted during our Investor and Analyst Day in April and in previous earnings calls, this combination forms what we call the AMC platform, by delivering a personalized and targeted and an experience for our guests, leveraging modern technology interfaces, data driven insights, innovative consumer engagement practices and a state of the art theater experience were creating a positive flywheel effect that encourages incremental attendance and ultimately drives incremental value for our customers, for our studio partners and for AMC.
Looking in the rear view mirror that is our second quarter report. Before moving on to some AMC news that we will make today, as we look at the volatility in AMC share price over the past few months, we would like to call out to you yet again the new lease accounting standards ASC 842. As all of you know on May 8, we reported our first quarter results, which for the first time included the impact of ASC 842 on lease accounting. Those impacts which were all non-cash included among other things, the capitalization of our operating leases onto our balance sheets as operating right of use assets and operating lease liabilities.
The guidance from FASB was clear, these operating leases were operating in nature and not to be considered as debt. Unfortunately, and as many on this call I've already noted in your thinking and in your reports, the financial data provider services including by name Bloomberg, Capital IQ and FactSet in our view erroneously categorize these operating leases as debt. Given the importance of these data providers often serving as the primary source of truth for algorithmic trading platforms as well as for traditional human asset managers. This caused significant confusion in the marketplace. What's more, what we believe is this mistaken reporting by these data services made it appear that the 842 impact doubled our reported debt literally overnight. Even though there was no corresponding adjustment to our cash flows. No change in our interest obligations and no change to our adjusted EBITDA. But the service has made it appear that our leverage ratio increased again literally overnight from about 5 times to over 12 times. Additionally there are misreporting an increase in our debt had the optical and erroneous impact of inflating our total enterprise value and consequently our valuation multiples. In other words as viewed on the data streams of these providers, AMC became wildly over-levered and AMC shares became stunningly expensive.
All of this, despite no change in cash, no change in interest payments and no change in the operations of AMC's business. This is not a problem unique AMC as ASC 842 has broad impact across industries but we have been unnecessarily and significantly impacted. As you would expect, we have been in contact with the various data providers seeking that they rectify their reporting. Based on our conversations, it seems clear that they are in fact intent on resolving these issues. That said any fix will take time as it impacts not only AMC but also thousands of other public companies. In the meantime before correction is going to be reported directly we would encourage investors to take one of two approaches.
When looking at AMC's leverage and valuation ratios to ensure like-for-like comparisons either debt excluding operating leases should be compared to our reported adjusted EBITDA or debt including operating leases should be compared to our reported adjusted EBITDA plus adding back on top-to-EBITDA our rent expense. I would now like to call your attention to seven specific AMC strategies and developments that deserve to be highlighted. First, let's start with A-List and as we have done over the past year given you each quarter for fairly specific updates. We have just now lapped the one-year anniversary of the program, which launched on June 26 of 2018. As of yesterday, we had more than 900,000 A-List members. That's about 300,000 members, who have joined in 2019 since we instituted a considerable price increase and more than 100,000 new members since we last spoke on the first quarter conference call back in May. Compared to our initial 12-month goal of 500,000 members, we have far exceeded our own and all expectations. As for the frequency of movie going by A-Listers you'll recall that in the first quarter of 2019 A-Listers average seeing 2.6 movies per month in admittedly a slow box office quarter. With the second quarter domestic box office being some 34% bigger than that of Q1 some observers feared that A-List frequency might similarly rise by 34% in Q2 to about 3.5 visits per month. It should be no surprise, therefore that we are pleased to inform you that average A-List frequency in Q2 of 2019 was only 2.85 visits per month actually 2.848 visits per month to be precise. We really do watch and analyze this program like a hawk. This frequency of 2.848 was well within our profitability sweet spot of between 2.5 and 3.0 visits per member per month. Importantly, these frequency levels combined with both bring-along attendance at full ticket prices and food and beverage spending on a significant increase in overall movie going as A-List has clearly stimulated demand.
Accordingly, as per our previous commentaries we continue and have increasing confidence to firmly believe that the A-List program is driving incremental attendance for AMC and that this is one of the reasons we are considerably, outpacing the industry's attendance growth. We similarly believe and have increasing confidence that A-List is already contributing to AMC's overall profitability in 2019.
I should note that we are aware that after spotting AMC, a 13-month first mover advantage one of our competitors Regal has finally launched a competitive program. We have -- we fully expected them to do so and are not concerned by their effort. Second, at the end of June starting with the Clever [Phonetic] University movie entitled, yesterday we introduced Artisan Films at AMC, a marketing effort by our company to highlight and promote more specialized movies. With Artisan Films we are curating and then promoting a collection of intriguing cinema product that might get lost in an era where blockbuster movies are deservedly grabbing considerable attention and headlines .
At AMC, we believe that a wide array of storytellers, are making great movies and we are focused on supporting their voices and on selling tickets of their films when they play it our theaters. Indeed, we play hundreds of movies across the AMC footprint each year and more of them will be more successful because of the extra love and attention that Artisan Films will offer .
Third, speaking of blockbuster movies, on August 2nd that would be, last week. AMC started testing a new pricing initiative that will actually charge a small premium for select movies that are of the highest appeal of the moviegoers and which would appear to have the highest consumer demand. Specifically at 30 AMC theaters, across all three of our brands in four cities Boston, Columbus, Indianapolis and San Diego. We are test marketing of $0.50, a $1.0 and a $1.50 per ticket surcharge for a handful of high demand blockbusters. Think of It being applied say to one or two movie titles each month. Just as a couple of years ago we instituted higher pricing on weekend days and lower prices on Tuesday. This again is basic economic theory that goes back to the first microeconomics scores, we all might have taken in college, charge more in peak periods and charge more for high demand products, but charge less in the off-peak. These pricing strategies have been common place across our European theaters for years and industry observers have talked about this idea coming to United States also for years.
Moving from mere talk at AMC we are trying it right now in the United States to determine consumer response. I should point out though that our A-LIsters and Stubbs members, who are discount Tuesday guests will be exempt from these nominally higher ticket prices giving even more value to these two programs. So the concept we rolled out more broadly across the country if the test market is successful. Fourth, we are very close to reaching final agreement on a concept that we have been working on for more than two years. Starting this fall, we hope and expect to be able to broadcast live sporting events, a meaningful number of games on weekend afternoons at a select number of theaters across the country at AMC, across all three of our brands from one of the four major professional sports leagues.
Again if consumers respond favorably to seeing live sports broadcast on say a 30-foot or 40-foot screen as we think they certainly will, this could be the start of considerably more live sports programming at AMC. Fifth, as you recall from our Investor and Analyst Day in April, we provided medium to long-term financial targets as a helpful framework for thinking about our opportunity over time. We set out a goal for you then to improve AMC's operating margins by up to 200 basis points and we ask you to hold our management team accountable to deliver improving and increasing margins.
Accordingly, we are announcing today the launch of a formal profit improvement plan that will go into effect essentially immediately ramping up such that while there will be only modest impact in 2019. We believe we can add $50 million or more to AMC's operating income in 2020. Specifically, we have identified about $25 million of ideas and possible revenue enhancements and some $50 million of ideas in possible cost savings, some ideas are big and some ideas are small, but together they add up, while most of the ideas will be realized, some will not. Some of you may wonder why now, is there any specific significance to our aggressively going after revenue enhancements and cost containments. Actually anytime and all the time is a good time for a company to think creatively about its revenues and its costs. And we signaled to you earlier this year that we are serious about increasing our margin delivery. Think of us as a leaner but not a meaner AMC. This is a healthy exercise for organizations to undergo every few years and will improve our overall operating efficiency at AMC, as well as our baseline margin profile. Six, AMC has been saying for years now that our capital allocation strategy has been to continually balance among three competing and conflicting objectives. Choice 1: reinvest capital back into the business to drive growth. We've done this hyper aggressively in recent years, renovating more theaters with recliner seats, more theaters with premium large format screens and more theaters with enhanced food and both hard and soft beverage options than anyone else. Indeed, we have reinvested more than $2 billion back into our theaters since 2014. Choice 2: return cash to shareholders through dividends and share buybacks. Again since 2014, the time of AMC's first dividend is a publicly traded company, we have returned well over $1 billion to shareholders, including among other methods through meaningful open market buybacks and are paying a handsome and unchanged regular quarterly dividend for 21 consecutive quarters including announcement on Monday just of this week that our dividend policy has continued unchanged once again. We see no change that dividend strategy anytime soon. Choice 3: hold onto our cash, thereby lowering net debt.and as a result, deleveraging. While we have the option to actually pay-down certain debt instruments, we would note that we have already proactively manage our balance sheet to ensure financial strength and flexibility such that we currently have no maturities for the next five years which is a significant advantage for AMC. Again at our Investor Day in April, we address that deleveraging has become our single highest current priority in the allocation of capital. Accordingly, we are updating and issuing new net capex guidance for 2019 and for 2020 respectively. You'll recall the 2018 net capex was approximately $460 million and that we initially guided 2019 net CapEx to be around $450 million. We now believe there'll be more prudent for our 2019 net capex to be in the neighborhood of approximately $415 million, $415 million and approximate $35 million reduction for calendar year '19. More importantly though, we are currently driving our net capital expenditure budget for 2020 to be approximately $300 million, a $150 million reduction over the recent guidance for 2019. We have not yet set a target for 2021 or 2022 net capex, but this all is consistent with our saying at the April Investor and Analyst Day that we wanted to bring down total net capex to $250 million to $300 million over a three to five year time period.
Even with our lowered capex budget, adding in landlord contributions there still will be ample money in 2020 for maintenance capital as well as to invest in growth, funding technology initiatives, further premium large format screen development, more food and beverage initiatives and importantly to go after high return growth projects and renovating theaters across Europe, but especially in the United Kingdom as well as adding new build theaters in the United States, in Europe and in the Middle East.
Fortunately, we are after all nearing the completion of the significant time cycle of reinvestment domestically which organically lessens the capital needed home. Theater renovation projects in the U.S. will not stop per se, but with so many U.S. theaters already having been done recently gradually monies are reducing after the quantity of U.S. theaters being addressed starting in 2020 and in the years ahead.
Not only does this decreased capex spending, help us to deleverage, it also will have the effect of increasing the magnitude of the adjusted free cash flow that AMC is actually generating. We are aware of a mild debate over the years among some shareholders questioning how much of our current capital expenditure investments have been for maintenance purposes versus how much has been for growth. Finally, in 2020 that question should be off the table and any doubt.
And finally the 7th bit of news, I'm pleased to welcome Ambassador Philip Lader and Adam Sussman to the AMC Board of Directors. Ambassador Lader is the former U.S. Ambassador to the Court of St. James's which for the non-diplomatic officials is the United Kingdom. He is also the former longtime Chairman of WPP in the UK, the world's largest network of advertising and marketing agencies. His career has marked by by abundance of business and diplomatic success and he brings with him a global perspective that we believe will be particularly insightful for our European operations, which are headquartered in London. Adam Sussman having served as the Chief Digital Officer of Nike allows us to leverage the significant expertise building digital experiences to help accelerate AMC's efforts to further engage our guests through technology.
Both Phil and Adam have attended their inaugural Board meetings both telephonically and in person and no surprise each are already making contribution to the company. I'm also pleased to note that with their appointments the majority of AMC's Board is now comprised of independent directors.
In summary, AMC had a terrific second quarter and we have exciting innovative plans and actions under way that will improve our company's operating performance as we look ahead, all the while ensuring that the AMC platform continues to deliver the best movie going experience for our guests and puts AMC clearly at the top and in the lead as the clear and undisputed leader among movie theater circuits around the world.
With that operator, we are ready to take questions.
Questions and Answers:
Operator
[Operator Instructions]. The first question is from Eric Wold of B. Riley & Company. Please go ahead.
Eric Wold -- B. Riley & Co -- Analyst
[Indecipherable]
Adam M. Aron -- President, CEO & Director
Eric, we missed the first few words. Can you start again?
Eric Wold -- B. Riley & Co -- Analyst
Yes, just good morning. Missed first few words but then a few questions on Stubs A-List. I guess can you dig in a little bit more about the visitation trends you kind of what you're seeing on order subscribers. If you want to team in initially versus the ones that come in this year as the price increase, any large variability month-to-month and any comments on churn? [Phonetic].
Adam M. Aron -- President, CEO & Director
Sure. We've been tracking this since June of 2018 and we look at everybody's first few weeks of the program. Then we look at their first calendar month in the program. And then we look at their frequency in subsequent months. We do the same, not only on frequency, but also how many people they bring along with them, how much food they buy. We have this quite granularly literally down to an account-by-account analysis. And really there hasn't been that much difference. As you would think in the first few weeks upon joining the program their frequency is intense and high, it is a new toy after all and very quickly it settles down. Such that the average across the membership is where it was in Q1 2.6 and where it was in Q2 it tactically 2.8 since you had round down to 28,48 to 28.
We haven't seen much different activity among the new members who joined with the price increases since January of 2019, then the membership that joined in 2018. Beyond that I mean, so we're giving you frequency data, we've told you this thing profitable. We've told you it's driving incremental attendance. We've told you that our previous commentaries are off, which we've been talking about widely since June of last year.
All are operative but we are going to be careful how much more we say publicly than that because we don't want to be forced into doing a GAAP reconciliation table, which is not so easy to do for the A-List population, but we've got a big hit on our hands that is clear. We know some of you were quite afraid of A-List back in the second half of 2018.
We did say that we're going to have to investment spend in the first few months, which we did, although not nearly as much as we thought we might have to, and clearly this thing is a winner for AMC. We could not be more happy with the program's performance that's based on its incrementality, that's based on this profitability, that's based on the contributions to our operating income that we expected to make going forward.
Eric Handler -- MKM Partners -- Analyst
Yeah, I'm sure Craig would love to put together that GAAP table. And then, quick follow-on, now that the Regal's launched their plan that includes 3D IMAX et cetera for no surcharge versus your plan that I mean they have a surcharge versus your plan that has no surcharge. Do you view that as a competitive advantage to AMC or more of an opportunity kind of equal playing field going forward with the potential price adjustment?
Adam M. Aron -- President, CEO & Director
Well, look, there -- the Regal program has launched, we always knew they're going to launch something. Remember that in the UK, the two circuits that have unlimited program, or Cineworld which is Regal's corporate parent and Odeon, which is our European subsidiary. So we thought if anybody would matters that would be Regal and we're kind of amazed they gave us a 13-month lead. We track departures in the program very carefully. We ask anybody who turns out the program why they're leaving us and we are literally in like such a low number of people who've told us that they're departing, our program for Regal. It's like in the hundreds. It's a really small number. We're just not worried by the Regal program. We think their program will play more to their own clientele than to our clientele. We've had a lot of people lock in their brand loyalty to AMC. What's more, our program has several significant advantages, one we have more theaters, two we are not charging a ticketing convenience fee. They are charging $0.50 a ticket. Three, once you join the program that's the price you pay. You don't have to pay a surcharge. If you then intend to our better theaters a couple of times. Three, we are not charging a surcharge for IMAX Dolby Cinema or 3D or our proprietary house brands PLF's and I will tell you that a substantial number of moviegoers are seeing movies in IMAX, Dolby or 3D formats and within the A-List program. The only real advantages that Regal they only -- Regal says it slightly lower price than ours but when you add in their surcharges it actually can be much more expensive than ours that may actually give us an opportunity to raise price for A-List if we so choose.
But the only real advantage that Regal has is that we are limiting the movie going to three movies per week and Regal's program is essentially unlimited moving going for the month. We went back and check precisely 3-tenths of 1% of A-Listers are seeing more than 10 movies in a month not more than 11, 12 or 13, 10. 3-tenths of 1% 3-tenths of 1% is 2,700 people on 900,000 members. This unlimited feature that they're talking about is a very limited appeal and candidly they can have all of our members who are going to, 10, 11, 12 to 13 members, a month. No matter how much food they buy. That's a lot of movie going, we're paying full rents on each and every one of those visits. Take it all together, we think A-list is already way out in front, is going to stay way out in front. As I said before, we have a smash it winner on our hands and we're going to make sure that continue.
Eric Wold -- B. Riley & Co -- Analyst
All right. And then just final one real quick question of our medium, on the test of the broadcasting live sporting events. If that goes to a full roll-out. It could be on a test. Would it be exclusive to AMC?
Adam M. Aron -- President, CEO & Director
For a while, I think if we prove the concept a league or leagues. We may want to reap the benefit of spreading it wider but I think we start out in front. We'll see how long that lasts.
Eric Wold -- B. Riley & Co -- Analyst
Perfect. Thank you, guys.
Operator
The next question is from Chad Beynon of Macquarie Group. Please go ahead.
Chad Beynon -- Macquarie Group
Hi, good morning. Thanks for taking my question. Great. Second quarter guys. Wanted to ask about the international strength, which is a little bit harder for us to nail down the drivers I guess against your peers even though one of them reported this morning and we'll be able to review that shortly. But do you have a sense of if you gained market share in the quarter and then also, can you kind of update us on what percentage of your screens have been renovated? And then lastly on international, any commentary just in terms of how you're thinking about the back half of the year versus how we're thinking about the U.S? Thanks.
Craig R. Ramsey -- cfo
Well, clearly the the international story was and a big improvement over last year and you might recall that that we had a number of things headwinds last year. Our circuit generally performed in line with the industry at [Indecipherable] wise. And so it's holding up well, and from a competitive perspective, we are seeing as we've talked about before, some, some competition on price, but we're beginning to respond on a very targeted and selective basis.
So.we think that's the right approach. Even though it may be providing some overall headwinds for average ticket prices throughout those industries or throughout those different countries on the international front. But we're very pleased with how our European circuit is performing. And we're seeing I think very importantly, we're seeing the types of returns and types of lift both attendance and pricing from the deployment of our recliner strategy and renovation program on a number of the theater assets in primarily in the UK and Ireland. So--so we're pleased with that and that's driving our results overall as well. There's a lot of the strength that's come from the family product and we had expected that and it's good to see that we're getting some--some lift from the more favorable product. Back half again, I think there is a good sprinkling of family product that should bolster those markets as well as our smaller rural or non-urban markets in the U.S. So the product mix should bode well for the last half in Europe.
Adam M. Aron -- President, CEO & Director
Chad. I would add that remember the stats I gave in my prepared remarks. The overall box office was, Industry box office was up 16.6 %and the Odeon countries went up 11.1% I think and the Nordic countries and attendance in Europe was up 16.6% across the whole of the continent, including the UK and Ireland. So while Craig said, we are in line. We might have picked up a little share, but what's impressive to me is that happen with anywhere from 15 to 20 theaters out of service for renovation, because remember, we closed a significant number of theaters, so that we could put in the recliners. For us to be growing share with a significant number of theaters closed that's also a very good news. As those theaters reemerge. We've told you in prior calls, we're seeing 50% and 75% ROIs in our theater renovation projects in Northern Europe. That's -- it's a very good omen of things to come for us in Europe.
Chad Beynon -- Macquarie Group
Great, thank you. And then separately at your Investor Day you talked about testing, mobile ordering on food and beverage at a small amount of theaters that could potentially provide a nice uplift to CPPs. Can you elaborate on how this is tracking? And then, Adam, has this been included in the revenues for your profit improvement plan or is this initiative separate? Thanks.
Craig R. Ramsey -- cfo
You're right, we announced, actually we announced two changes way back then. April seems a long ago, pre Avengers Endgame. One, we were increasing mobile ordering and extending it the like 8 or 9 cities around the United States, including New York, Boston, LA, San Diego, San Francisco. We're putting in anywhere from a $1 to $2 service charge on every order that's conducted through mobile ordering. So, right there you've got revenue enhancement and we've seen the order size be slightly larger among those who mobile order. Now the pickup rate on mobile ordering is still in its infancy. First of all, it -- has it rolled out across all of the system, and also it's still relatively new. But that is not in our profit improvement plan because that's something we did starting six months ago, and that's sort of embedded in the base case for 2019. That's not a new idea. The second idea that we spread in Q2 of '19, which we completed basically by Memorial Day weekend was to introduce reserve seating across all of the AMC branded theaters and all of the AMC Dine-In branded theaters not at the AMC Classic's.
We're now at something like 95%-97% of those branded theaters. The only theaters that might not be included or theaters we might intend to dispose of or renovate in the near-term. So we would not have spent the money to put in reserve seating. We think reserve seating is a great benefit for our guests. It's something across on a circuitwide basis that is only being done by AMC of the major mass operators. It takes all the anxiety out of going to the movies, because you know what your seat is. So you don't have to get there 20 or 40 minutes early to lock in and snag a high quality seat.
It also tends to drive increased ticketing fees from -- for advance ticketing online, and I'm pleased to report that our advance ticket sales now are in the neighborhood of 50% to 55% that contrasts with 20% of our tickets were being ordered online in advance. three years ago is a huge change, and we've seen significant increases on online ticketing fees.
Chad Beynon -- Macquarie Group
Great. Thank you very much.
Operator
The next question is from James C. Goss of Barrington Research. Please go ahead.
James C. Goss -- Barrington Research -- CFA
Thanks. I was wondering if you have many cases of two or more household members joining the A-List and if not, would you consider as part of your pricing strategy a couples are family test drive pricing structure to encourage attendance or would that come out of the average visits number?
Craig R. Ramsey -- cfo
Yes, we have a significant number of couples and who are friends, who both join A-List because of a quirk in our technology platform, you can only join A-List individual you joined Stubs as the household. But you can only join A-List as individually to have corrected that would have delayed our launch last year by three to six months. We didn't want to wait but when I [Indecipherable] below the 8-bit of news that I didn't put in today's call, it was going to be the one of the points of next quarter's call. But in October, we will be announcing something called AMC Stubs A-List entourage in which couples or groups of friends will be able to join the program individually, but we'll be able to make their A-List reservations for a particular movie collectively, so that you can block seats 8, 6 and 7 for you and your wife, for example, if you're both members of A-List in one single transaction rather than having to do it in two separate transactions and hope that she quickly grabs 8-7 immediately after you grabbed 8-6 and then no one off grab that seat out from underneath the two of you. We are not expecting to reduce price. However, that's, that's a, that's a service enhancement to our guests it's another thing that we think it allow us to charge a price premium rather than have to institute a price decrease. And while we don't intend to charge the price premium we also don't intend to cut price for our new multi-person plan. Again whether it's a couple or it's just for your friends one person in the party can snag seats. Again and we're basically in all reserve circuit within the AMC brand and the AMC Dine-in brand for A-Listers. So that's a very good enhancement of the program is something our members have been asking for, from the day we launched. And as I said, we've, we have addressed and fixed that quirk in our, in our technological platform that will -- that prevented it from happening before and will enable it to happen going forward pretty soon.
Chad Beynon -- Macquarie Group
Okay. And maybe this is too granular, but you might do this, your liability to the studio in terms of your, your rental phase is probably based and the ticket prices charge, so that it might vary by
James C. Goss -- Barrington Research -- CFA
time or age or date, especially as you get in a more variable pricing, does that -- did you try to factor that in, as you're looking at the visits per month calculation?
Adam M. Aron -- President, CEO & Director
We have never publicly before said what are private discussions are with any studio on film rents, other than giving you a collective film exhibition cost number. We continue that view with respect to our A-List agreements with studios. I don't think you should assume that the premise of your question is accurate, but I cannot confirm or deny what we're doing because we've long-felt that our discussions with studios should stay private.
And I might add that we believe today what I believe the day I took the job. We are so disinterested in haggling over film rent split between AMC and our studio partners. Our focus on everything that we've done over the past three and half years, whether it's investing in the theaters or innovative marketing programs has been to drive industry demand, so that the pie is bigger for both our studio partners and for AMC that's a much better strategy and that's the strategy that we've been embarked on for years now and will continue to be embarked on going forward. Our goal is the health of AMC and the health of the industry and the health of the strong bonded loyal to a partnership between AMC and Disney AMC, and Warner AMC and Universal, Sony, Paramount, Lionsgate all the smaller distributors, we want to be their best friends because they are our best friends.
James C. Goss -- Barrington Research -- CFA
All right, I'll let it go at that. Thanks very much, Adam.
Adam M. Aron -- President, CEO & Director
Thanks for the questions.,Jim.
Operator
The next question is from Mike Hickey of the Benchmark Company. Please go ahead.
Mike Hickey
Hey, Adam, Craig, John. Congrats on a strong quarter here. Thanks for taking my questions. Curious on your point three, Adam, but I think its variable pricing, but you're looking to sort of you're testing out sort of I guess premium pricing. And of course you plan that with this down to that I guess you sort of have more variables than you were before.
But curious how fast assuming the 30 theater test here, successful how fast do you intend to roll that out, obviously Q4 there is some pretty big exciting films that are coming out, I'm sure people would not paying a premium for, so curious on that? And then we sort of, if you are successful on your test here and you think on an annual basis on a full roll-out domestically called a book and premium pricing on average. Has there been an impact that would be an your average ticket price? And I will follow-up.
Adam M. Aron -- President, CEO & Director
Sure. Well, you're right. This is there like this is the first time, we're doing this. We did it with weekend pricing where we went up on Friday, Saturday and Sunday actually went up initially on Friday Saturday. Then we went up Friday, Saturday, Sunday and then down on Tuesday's. We know this works because we do it in Europe all the time. We've looked at a whole slew of ideas charging more for large screens, charging more for the best seats in the house maybe charging less for the front row because they're not the best seats in-house, charging more for blockbusters. The other ideas that have surfaced over time may be charging more at the beginning of a movies run, charging less, at the end of a movies run, but the thing about pricing is the whole concept is that the tariffs will be successful if consumers are not offended by a nominal surcharge. Well you can't pile on too many nominal surcharges right on top of each other, or they don't become so nominal anymore. That's why there is about two years, a two-year spread between introducing weekend price increases and are now looking at whether small increases on blockbuster movies one or two movies a month may be an occasional month three movies in a month, but I would say more likely one to two movies in a month. Whether that will be acceptable to U.S. consumers. It is certainly acceptable to European consumers. We have noticed that there are some very large movies coming in the fourth quarter of 2019, which just might be one of the reasons why that test started on August 2nd and we are testing movies from each of the major studios or the largest studios, I should say. So as to get a good read on does this concept work because if it is accepted by U.S. consumers, we could roll it out very quickly. As of the order of magnitude, it is a, if we do believe it's a very low 8-figure number just for AMC if it works, but that assumes that the test will prove successful. And of course, it will be much different number if it's a $0.50 surcharge or if it's a $1 surcharge for example. And remember our studio partners get a big chunk of this money we don't bank at all, but I said earlier to Jim Goss's question we're interested in our bottom line. We're also interested in growing the bottom line of our studio partners. We could roll this out very quickly if it works.
Mike Hickey
Nice. Thanks, Adam. Last question from me, on your point five, your profit improvement plans, the $25 million revenue enhancements, $50 million in cost savings sort of curious how that balances domestic versus international and then international, obviously you enhance the network with recliners maybe now you're enhancing with your profit improvement plan and I guess you're optimizing the model internationally. This also within work, is there an IPO?
Adam M. Aron -- President, CEO & Director
So let's be clear. There is international idea there are international ideas in the profit improvement plan. A lot of them relate to above theater overhead, things that the consumer will never say. When we bought Odeon in Nordic, they had seven different what you might call seasons [Phonetic] of duplicative country overheads, territory after territory after territory, which we think we can prudently rationalize especially since we invested heavily to put in new Oracle accounting systems across Europe and other technologic advances that, in the last two years and that will continue this year to improve the technology platform that we have across Europe. Nothing related to putting recliner seating in Europe, is included in the profit improvement plan because that's not a new idea that we came up with for this profit improvement plan. That's an idea that was the central investment thesis on buying Odeon
in the first place. Similarly, the investment thesis in Nordic of adding new build theaters where we opened a theater in Oslo. It became the highest-grossing theater movie theater in Norway, from the day it opened, We opened a new theater in Helsinki that became one of the highest-grossing theaters in Finland as soon as it open. That's not the profit improvement plan either. To qualify for the profit improvement idea this had to be a new idea that we have been working on all of 2019 and especially since Investor Day of 2019 and especially in the last two months, to hit the list of new ideas to make 2020 more successful than 2019.
Operator
The next question is from Eric Handler of MKM Partners. Please go ahead.
Eric Handler -- MKM Partners -- Analyst
Thank you. Good morning and thanks for the question. wo questions for you. It was very helpful that you gave, what ASC 842 pro forma impact would have been on last year's numbers which essentially show with that your fully consolidated adjusted EBITDA margin increased year-over-year. You didn't give that on a segment basis, So I was wondering if you could give, what would, what would have happened to adjusted EBITDA last year with ASC 842 and what that impact would have meant for on a year-over-year margin basis for this year?
And then secondly with regards to capex lowering that number by $100 million. Very helpful for free cash flow next year, wondering. I'm assuming most of that impact is going to be seen in Europe. Can you talk about where has things just been pushed out, I think there is any investments being canceled, and where it's just, just a matter of just pushing out the reclining seat initiative?
Adam M. Aron -- President, CEO & Director
Eric, we do believe that the ASC 842 Information segment data that you requested is in, is it the CFO note.
Craig R. Ramsey -- cfo
No, it's actually in the...
Adam M. Aron -- President, CEO & Director
in the press release.
Craig R. Ramsey -- cfo
In the press release under the selected second quarter financial results. It's in the third bullet under that section.
Adam M. Aron -- President, CEO & Director
So it's already, so it's there. Secondly, on your second question. Most of the reductions in capex, are domestic reductions. We said back at the April Investor Day that we are and I forgot I think somebody asked the question, I didn't give the number of what the percentage of recliner theaters is we'll dredge that out for you.
But when you look at the domestic circuit from memory, more than 50% of our theaters have been fully recline and we put some recliner seating in more than 75% of our domestic theaters and that, those numbers are based on theater counts. But you have to remember that our AMC Classic theaters at which we have 240 only give us something like 10% to 15% of our visitation. So if you volume adjust the theater count with recliner seats, not as a percent of theaters but as a percentage of our attendance. We are substantially above the 50% and 75% numbers. I think you'd see something more like 60% to 65% by domestic volume and even more by the number of theaters were some auditory has been done, but not all. But because so many of the domestic theaters have already been done there just aren't that many domestic theaters remaining to be done. So where we've reduced may be someone's ambitious plan to keep going with renovation is in the domestic circuit, not the international circuit.
We're going to do is, we still -- we think the low hanging fruit has been seized domestically. We started renovating theaters in the United States in 2011 and 2012. We just started in 2017 in Europe, and that was the very tail end of 2017. So the number of projects that we expect to do in Europe in 2020 is a similar number to what we did in 2019. We renovated in the neighborhood of 15 theaters in 2019 in Europe. We expect to renovate, another 15 theaters in Europe in 2020. We've not slowed down the pace of renovating theaters in Europe. It's an enormous area of opportunity for us. We're continuing the flood of new build theaters in the Middle East, not necessarily with our own capital because our Middle Eastern partner is putting up 90% of the money for our Middle Eastern expansion, which is helpful for us.
So our international growth is still going to be quite robust even with lower capex number. What you'll see it is being at what we think is coming near to the end of the domestic reinvestment cycle from 2011-2012 to 2019-2020, we're kind of getting there. We would also note that nobody else seemed to be renovating theaters in Europe. So, this continues to be a first mover advantage for us in Europe. And other circuits are signaling also in the United States that they're pulling back on domestic U.S. capex investments for the same reason, that we are that they've already renovated a bunch of theaters, they've gotten their low-hanging fruit and they are slowing down. So that's where -- that's how we think we could get there we're still chasing the highest growth ROIs and we still have a substantial amount of growth capital that will be spent if you think that maintenance capex if you pick your number somewhere between $100 million and $200 million probably in the lower half of that range. So we're doing $100 million and $150 million even at a $300 million total capex number. When you add in landlord contributions, we're still going to have in the neighborhood of like $300 million-ish of growth capex to invest in 2020. Now, that's not all coming from us because our landlords in Europe and our landlords in the United States are chipping in profusely but we still have a lot of money. We'll probably spend more money than anybody else.
And growth in -- and pursuing growth initiatives and high return projects in 2020. But $300 million worth of net capex not $450 million and not $550 million like it was two or three years ago which means that our deleveraging priority will be increasingly met and our absolute generation of free cash flow will not only be increasingly that, but be without any kind of doubt or questioning.
Eric Handler -- MKM Partners -- Analyst
Great. So that's just as a point of clarification, that $150 million reduction. That's pretty much because it's domestic you're pretty much looking at a permanent capex reduction there?
Adam M. Aron -- President, CEO & Director
Well I said in my prepared remarks...
Eric Handler -- MKM Partners -- Analyst
[Indecipherable] the permanent as you can get.
Adam M. Aron -- President, CEO & Director
The answer to your question is sort of. We said back in April, we want to get, to get to $250 million to $300 million in three to five years. We're now saying we can get the $300 million in one year. This is net capex. That's a little ahead of schedule from the three to five years. And I specifically said in my remarks that we have not yet set the capex number for '21 and '22. We don't need to make that decision that we can make that decision based on what we learn over the course of the next 16 months or so, 18 months.
So that's a decision for another day. Precisely if I had to give you, is it more likely to be a permanent reduction or more likely to be a one-year aberrations I'd say it's more likely to be a one-year, I'm sorry it's more likely to be a permanent reduction then it's likely to be at one year aberration but we specifically haven't set a '21 target yet. What we said back in April was hold this management team accountable. We are, you know, we shouldn't be [knee jerking based on what last week's box office was, we shouldn't be knee jerking operating in capital strategies. We ought to set medium to long-term targets and then you should hold us accountable to deliver on those targets between the profit improvement plan and the capital expenditure, curtailment we think we're making great progress on both of those goals.
But I'm holding out a little bit of weigh on room for '21 and '22 based on what we learn over the next year and a half. But as I said, we want to get it, we want to delever. It's a high priority. We're not kidding, we're proving it with the agility and the discipline to deliver capex plan for 2020 of approximately $300 million and that sounds like the general neighborhood where we would expect to be going forward although not necessarily, precisely that could be more, could be less depending upon what we learn over the next year and half.
Eric Handler -- MKM Partners -- Analyst
Very helpful, thank you very much.
Adam M. Aron -- President, CEO & Director
Thank you, Eric.
Craig R. Ramsey -- cfo
And I might add, Eric. You've given us a lot of, I mean we read your notes, we read all your notes, not just Eric Handler. A lot of your thinking has been very helpful to this management team as we've crafted these various strategies and thought how best to drive performance going forward.
Eric Handler -- MKM Partners -- Analyst
Thank you.
Operator
The next question is from [Phonetic] Alan Gould of Loop Capital. Please go ahead.
Alan Steven Gould -- Loop Capital
Thank you for taking the question. I've got two. First Adam, are you surprised with the price elasticity of A-List and what do you, in the competition charge for your unlimited programs in Europe?
Adam M. Aron -- President, CEO & Director
So we're not surprised by it actually, I was in the ski resort business and when I got it for 10 years of my life when I got Vail, Colorado we sold 5,000 season pass of the year. When I Vail, Colorado 10 years later we were selling 160,000 season pass of the year. You know I had a couple of year stint as the CEO of my of the NBA team in my hometown .
And we doubled season ticket sales in one year and drove the biggest attendance increase of all 30 teams in the NBA and the biggest revenue, ticket revenue increase of all 30 teams at the NBA in my first season. I think if you're smart about these things they can be massive hits, and long before there was a movie pass, we have been working on a subscription product within AMC. And as we met in conference rooms we actually the launch price at $1,999 or $1,995. We thought that was the perfect level to launch. It was one of the reasons we were so incensed by movie pass coming out at $995 because it was such a joke of a price that was guaranteed to be an economic catastrophe. And we said so loudly on the first day of their announcement. So no we're not surprised, but having launched at $1,995 and with the success of our program, we can go up a little bit and did go up a little bit up 10% in 10 states and the District of Columbia, and up 20% in five states across the country back in January.
I do think there is still we're providing so much value to our guests and especially without the surcharge for IMAX or Dolby or 3D and some of the other features of our program. No, I am not surprised by the price elasticity. I think there is room for us at some point in the future to go up further that's A-List. There was a second part of your question which was in Miami..
Alan Steven Gould -- Loop Capital
in Europe -- in Europe what do you [Multiple Speakers]
Adam M. Aron -- President, CEO & Director
Yeah, one of the reasons that we settled in $1,995 as the launch pricing for A-List was because in Europe we're charging about the equivalent of two movies a month and it is quite successful program for us in Europe. And the frequency in Europe, it's just like it's been the United States is average between 2.5 and 3 movies a month, so like the basic deal.
The basic compact with the consumer is in very round numbers. They were going to one movie a month, charge him for 2 movies a month and let them go to 2.5 to 3 movies a month. It's going to cost us a little bit on film rentals because we're going to have to pay the studios for 2.5 to 3 movie visits at whatever price we've negotiated. But they're not coming along. They're bringing people with them at full ticket prices with much greater frequency than they were coming before and they're buying food on every one of these visits, food and drink on every one of these visits in much greater frequency than they were coming before. And when you add it all up we are ahead of the game.
And like you've seen it right, you've seen our attendance is growing, far faster than the industry. Our price has come down a little bit on a per transaction basis our film rents as a percentage of revenue have gone up a little bit because we're paying film rent on these extra visits, but our total revenues are like through the roof. Why because our, our overall revenue is up because our food and beverage revenue is up, our other revenues are up and that offsets any change in ticket revenues. And we've said in prior calls, you've got to look at all these factors, again got them on all up, some are positive,some are negative. If you take a portfolio approach to the population and we're way ahead.
And that's, that's what we modeled, and that's we hope going into the program. And if anything I take you back to day one. We said it would take us a year to get the 500,000 members. It took us 4.5 months. We said we would investment spend $10.5 million, $10 million to $15 million in the second six months of 2018 on quarter of a million members. We investment spent less than that on the 600,000 members in 2018. We similarly, we said that 2019 would be a breakeven year for A-List and in fact we said on the first quarter call that we thought A-list would be was profitable in Q1.
We've said on this call. It's profitable in the first half and then it would be nicely generative like say handsomely generative by the end of this year way ahead of schedule because it wasn't supposed to anything this year and we didn't originally expect to really generate profits in A-List until 2021 and obviously we're full year ahead of schedule. Sorry wouldn't be profitable until '20 breakeven in '19 and we appear to be now, it's profitable in '19 and it will be much more profitable in '20. We here to be -- we seem to be a full year ahead of schedule.
So that's more in A-List. I understand why it's so many investors were spooked by it because MoviePass and Sinemia went bust but we have a very different program with radically different economics. We're not foolishly charging $995 and we do get the benefit of all to take a long revenue and we do get the benefit of all the food and beverage spending as they did not. So this, and we had years of experience looking at what was done in Europe ins with the data, inside our company and I might add, we remember, we were the, for the first time in the company's history back in 2016 we created what is now a 5-person pricing department. We got a lot of [Indecipherable] inside this company who analyze everything that we do exhaustively. I'm very proud of the capabilities that we've built. And the internal data, we have about the A-List clientele is so extensive. We can do so much analysis and we can Bob and we [Phonetic] with our communications program, the members, based on the profitability of guests to those guests who are most profitable they're getting a lot more communications from us and keep doing it and on and on and on.
So I don't know what more I can say about how powerful the concept A-List has been for this company. Yes, Cinemark has a program, it's not like our program. I think you'll find that ticket counts in our program are significantly higher than theirs, Regal is coming to the party quite late. And if you add up the market share of Regal Cinemark and AMC. It's like 60%. I mean it's 40% of the industry as everybody else. And most of those players do not have any kind of A-List type program or for that matter Stubs program. They're not doing 1.5 billion outbound emails texts and push notifications to moviegoers tailored and customized based on the purchase patterns of moviegoers previously.
So we think we're way out in front and that's why I guess what 800 basis points of attendance per screen advances over the rest of the industry for it domestically in the U.S. 400 basis points of revenue growth per screen ahead of everybody else. The marketing activity at AMC is and the technology efforts at AMC is crushing it right now. By the way off stay until you drop but it's 7-9 Central Time. That means it's 7 of 10 Eastern. So I think we're going to go one more or some of you are going to kill us, because you would like to cover other things going on in the market today. For our last question operator?
Operator
Certainly. Our last question is from Megan Durkin of Credit Suisse. Please go ahead.
Meghan Durkin -- Credit Suisse -- Analyst
Hi, good morning. One for Adam and one for Craig. So Adam have you seen any change to the attendance trends on Tuesdays since you raised that price in May? And then for Craig was there anything unusual in the free cash flow results in the quarter came in light versus my estimates by the EBITDA and capex. So I just wanted to know if there was something in there>
Adam M. Aron -- President, CEO & Director
I'll take Tuesdays Megan and thank you for your initial report on AMC. Yes, something changed on Tuesday. Shockingly, it went from being the least visited day of the week at AMC theaters, hence the reason for it. It is now the second most heavily traffic day of the week at AMC, second only to Saturday. More people are showing up Tuesdays at AMC than Fridays. Now the revenues aren't the second highest revenues of the week. Friday is still the second highest revenue of the week because the ticket prices are down.
But yes, consumers have figured this out and they have -- they're coming to the party that we throw every Tuesday. I might add, very quietly, we really do believe in smart pricing. When we launch Discount Tuesdays, we actually launched the program as $5 Tuesdays. And very quietly earlier this year, we changed the name of the program to Discount Tuesdays, because we noticed that $6 is a 20% price increase over $5 and $6.50 is a 30% price increase, and $7 is a 40% price increase over $5.
So we will continue to look, theater by theater and market by market what the right level of pricing is, to charge on Tuesdays but in any case, it will still be quite a bargain compared to what we charge the rest of the week, offering the consumer great value and driving a significant increase in demand. Craig?
Meghan Durkin -- Credit Suisse -- Analyst
Great. So is there....
Adam M. Aron -- President, CEO & Director
Yeah. Sorry, Megan go ahead.
Meghan Durkin -- Credit Suisse -- Analyst
Is there any impact on the attendance since you lifted the price to the $6 and $6.50 in some theaters?
Adam M. Aron -- President, CEO & Director
It's pretty recent--it's in the last 30 to 90 days. So it's a little too early to know how consumers will respond every time, but we see nothing that scares us yet.
Meghan Durkin -- Credit Suisse -- Analyst
Okay.
Adam M. Aron -- President, CEO & Director
You're paying $6 in Manhattan to go to movie. That's quite a deal.
Meghan Durkin -- Credit Suisse -- Analyst
Yeah, I think so.
Adam M. Aron -- President, CEO & Director
Craig, free cash flow?
Craig R. Ramsey -- cfo
Yeah, on the free cash flow, the only a couple of points I'd make Megan was, would be one last year, the cash flow from ops number was positively impacted by about a $11 million rent inducement that was a one-time--was--we didn't-- didn't recur. We have rent adjustments, but that one was abnormally large I guess, would be the way to describe it, so $11 million positive impact last year. And then last year, you would want to think about the ASC 842 impact about $14 million. There is an impact on rent. There is also an off -- somewhat offsetting impact on interest cost. The net of those two flow through cash flow from operations and we would have a pro forma adjust last year by that $14 million.
Adam M. Aron -- President, CEO & Director
Thank you one and all as we end the call. Obviously we had a second quarter that we're quite proud of but we are, we think we have bold plans under way to make AMC more appealing to our consumers, to deliver increased margins, to deliver free cash flow growth. And again, if you -- yeah, if we left ourselves up out of the ASC 842 mirage [Phonetic] because this will come to a clarification sometime soon we would expect. And you don't think about were the movies in June great or poor, were the movies in July great or poor. If you lift yourself out of the day-to-day, week to week, weekend to weekend box office and you look at AMC over a medium to long-term time frame we think the value creation that we will drive for our shareholders is dramatic, and we think the future for AMC is quite bright. We thank you for joining us today and for your attention to our company all year along. With that we're signing off.
Operator
[Operator Closing Remarks].
Duration: 91 minutes
Call participants:
John C. Merriwether -- VP, IR
Adam M. Aron -- President, CEO & Director
Craig R. Ramsey -- cfo
Mike Hickey
Eric Wold -- B. Riley & Co -- Analyst
Eric Handler -- MKM Partners -- Analyst
Chad Beynon -- Macquarie Group
James C. Goss -- Barrington Research -- CFA
Alan Steven Gould -- Loop Capital
Meghan Durkin -- Credit Suisse -- Analyst
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