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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2023

or

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Commission File Number

Exact Name of Registrant as Specified in its Charter,

Principal Executive Office Address and Telephone Number

State of Incorporation

I.R.S. Employer Identification No.

 

001-33401

Cinemark Holdings, Inc.

3900 Dallas Parkway

Plano, Texas 75093

       (972) 665-1000

 

Delaware

 

20-5490327

 

33-47040

Cinemark USA, Inc.

3900 Dallas Parkway

Plano, Texas 75093

       (972) 665-1000

 

Texas

 

75-2206284

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

 

Title of Each Class

Trading Symbol(s)

Name of each exchange on which registered

Cinemark Holdings, Inc.

("Holdings")

Common stock, par value $.001 per share

CNK

New York Stock Exchange

Cinemark USA, Inc.

("CUSA")

None

None

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.

Cinemark Holdings, Inc. Yes ☒ No ☐

Cinemark USA, Inc. Yes ☐ No ☒

(Note: As a voluntary filer, Cinemark USA, Inc. is not subject to the filing requirements of Section 13 or 15(d) of the Exchange Act. Cinemark USA, Inc. has filed all reports pursuant to Section 13 or 15(d) of the Exchange Act during the preceding 12 months as if it was subject to such filing requirements.)

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Cinemark Holdings, Inc. Yes ☒ No ☐

Cinemark USA, Inc. Yes ☒ No ☐

 

 


 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Cinemark Holdings, Inc.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

 

 

 

 

Emerging growth company

 

Cinemark USA, Inc.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

 

 

 

 

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Cinemark Holdings, Inc. Yes No ☒

Cinemark USA, Inc. Yes No ☒

As of July 28, 2023, 121,633,590 shares of common stock, $0.001 par value per share, of Cinemark Holdings, Inc. were issued and outstanding.

As of July 28, 2023, 1,500 shares of Class A common stock, $0.01 par value per share, and 182,648 shares of Class B common stock, no par value per share, of Cinemark USA, Inc. were outstanding and held by Cinemark Holdings, Inc.

Cinemark USA, Inc. meetS the conditions set forth in General Instructions (H)(1)(a) and (b) of Form 10-Q and IS therefore filing this form with reduced disclosure format pursuant to General Instructions (H)(2).

This combined Form 10-Q is separately filed by Holdings and CUSA. Information contained herein relating to any individual registrant is filed by such registrant on its own behalf. Each registrant makes no representation as to information relating to the other registrant. When this Form 10-Q is incorporated by reference into any filings with the SEC made by Holdings or CUSA, as a registrant, the portions of this Form 10-Q that relate to the other registrant are not incorporated by reference therein.

 


 

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES

CINEMARK USA, INC. AND SUBSIDIARIES

TABLE OF CONTENTS

 

 

 

 

Page

PART I. FINANCIAL INFORMATION

 

 

 

 

 

 

 

 

Item 1.

Cinemark Holdings, Inc. and Subsidiaries Financial Statements (unaudited)

 

 

 

 

Condensed Consolidated Balance Sheets as of June 30, 2023 and December 31, 2022

 

3

 

 

Condensed Consolidated Statements of Income (Loss) for the three and six months ended June 30, 2023 and 2022

 

4

 

 

Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and six months ended June 30, 2023 and 2022

 

5

 

 

Condensed Consolidated Statements of Equity for the three and six months ended June 30, 2023 and 2022

 

6

 

 

Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2023 and 2022

 

8

 

 

Cinemark USA, Inc. and Subsidiaries Financial Statements (unaudited)

 

 

 

 

Condensed Consolidated Balance Sheets as of June 30, 2023 and December 31, 2022

 

9

 

 

Condensed Consolidated Statements of Income (Loss) for the three and six months ended June 30, 2023 and 2022

 

10

 

 

Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and six months ended June 30, 2023 and 2022

 

11

 

 

Condensed Consolidated Statements of Equity for the three and six months ended June 30, 2023 and 2022

 

12

 

 

Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2023 and 2022

 

14

 

 

Cinemark Holdings, Inc. and Cinemark USA, Inc. Notes to Condensed Consolidated Financial Statements

 

15

 

 

 

 

 

 

Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

 

38

 

 

 

 

 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

 

53

 

 

 

 

 

 

Item 4.

Controls and Procedures

 

53

 

 

 

 

 

PART II. OTHER INFORMATION

 

 

 

 

 

 

 

 

Item 1.

Legal Proceedings

 

55

 

 

 

 

 

 

Item 1A.

Risk Factors

 

55

 

 

 

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

 

55

 

 

 

 

 

 

Item 5.

Other Information

 

56

 

 

 

 

 

 

Item 6.

Exhibits

 

61

 

 

 

 

 

SIGNATURES

 

62

 

1


 

Cautionary Statement Regarding Forward-Looking Statements

Certain matters within this Quarterly Report on Form 10-Q include “forward–looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. The “forward-looking statements” include our current expectations, assumptions, estimates and projections about the respective business and industry of Holdings and CUSA. They include statements relating to:

future revenues, expenses and profitability;
currency exchange rate and inflationary impacts;
the future development and expected growth of our business;
projected capital expenditures;
access to capital resources;
attendance at movies generally or in any of the markets in which we operate;
the number and diversity of popular movies released, the length of exclusive theatrical release windows and our ability to successfully license and exhibit popular films;
national and international growth in our industry;
competition from other exhibitors, alternative forms of entertainment and content delivery via streaming and other formats;
determinations in lawsuits in which we are a party; and
the impact of the COVID-19 pandemic on us and the motion picture exhibition industry.

You can identify forward-looking statements by the use of words such as “may,” “should,” “could,” “estimates,” “predicts,” “potential,” “continue,” “anticipates,” “believes,” “plans,” “expects,” “future” and “intends” and similar expressions. These statements are neither historical facts nor guarantees of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions and are, therefore, subject to risks, inherent uncertainties and other factors, some of which are beyond our control and difficult to predict. Such risks and uncertainties could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. For a description of our risk factors, please review the “Risk Factors” section or other sections of, or incorporated by reference to, the Company’s Annual Report on Form 10-K filed February 24, 2023. All forward-looking statements attributable to either Holdings or CUSA or persons acting on our behalf, are expressly qualified in their entirety by such risk factors. Forward-looking statements contained in this Form 10-Q reflect the views of Holdings and CUSA only as of the date of this Form 10-Q. Neither Holdings nor CUSA undertake any obligation, other than as required by law, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Unless the context otherwise requires, all references to “we,” “our,” “us,” "the Company” or “Cinemark” relate to Cinemark Holdings, Inc. and its consolidated subsidiaries, and all references to CUSA relate to Cinemark USA, Inc. and its consolidated subsidiaries. All references to Latin America relate to Brazil, Argentina, Chile, Colombia, Peru, Ecuador, Honduras, El Salvador, Nicaragua, Costa Rica, Panama, Guatemala, Bolivia and Paraguay.

 

2


 

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions, except share and per share data, unaudited)

 

 

June 30,

 

 

December 31,

 

 

 

2023

 

 

2022

 

Assets

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Cash and cash equivalents

 

$

758.0

 

 

$

674.5

 

Inventories

 

 

27.5

 

 

 

23.7

 

Accounts receivable

 

 

86.0

 

 

 

69.6

 

Current income tax receivable

 

 

45.2

 

 

 

45.1

 

Prepaid expenses and other

 

 

58.7

 

 

 

50.7

 

Total current assets

 

 

975.4

 

 

 

863.6

 

Theatre properties and equipment, net of accumulated depreciation of $2,268.7 and $2,165.7

 

 

1,187.9

 

 

 

1,232.1

 

Operating lease right-of-use assets, net

 

 

1,050.4

 

 

 

1,102.7

 

Other long-term assets

 

 

 

 

 

 

Goodwill

 

 

1,255.9

 

 

 

1,250.9

 

Intangible assets, net

 

 

303.9

 

 

 

304.6

 

Investment in NCMI/NCM

 

 

14.9

 

 

 

9.6

 

Investments in affiliates

 

 

23.9

 

 

 

22.6

 

Deferred charges and other assets, net

 

 

34.5

 

 

 

31.6

 

Total other long-term assets

 

 

1,633.1

 

 

 

1,619.3

 

Total assets

 

$

4,846.8

 

 

$

4,817.7

 

Liabilities and equity

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Current portion of long-term debt

 

$

8.1

 

 

$

10.7

 

Current portion of operating lease obligations

 

 

218.7

 

 

 

219.3

 

Current portion of finance lease obligations

 

 

14.7

 

 

 

14.4

 

Current income tax payable

 

 

2.5

 

 

 

3.2

 

Accounts payable and accrued expenses

 

 

500.7

 

 

 

460.9

 

Total current liabilities

 

 

744.7

 

 

 

708.5

 

Long-term liabilities

 

 

 

 

 

 

Long-term debt, less current portion

 

 

2,390.3

 

 

 

2,474.0

 

Operating lease obligations, less current portion

 

 

917.2

 

 

 

970.6

 

Finance lease obligations, less current portion

 

 

80.5

 

 

 

88.0

 

Long-term deferred tax liability

 

 

36.4

 

 

 

33.7

 

Long-term liability for uncertain tax positions

 

 

45.7

 

 

 

47.9

 

NCM screen advertising advances

 

 

333.4

 

 

 

338.2

 

Other long-term liabilities

 

 

43.8

 

 

 

37.3

 

Total long-term liabilities

 

 

3,847.3

 

 

 

3,989.7

 

Equity

 

 

 

 

 

 

Cinemark Holdings, Inc.'s stockholders' equity:

 

 

 

 

 

 

Common stock, $0.001 par value: 300,000,000 shares authorized, 127,566,149 shares issued and 121,631,775 shares outstanding at June 30, 2023 and 126,082,187 shares issued and 120,403,833 shares outstanding at December 31, 2022

 

 

0.1

 

 

 

0.1

 

Additional paid-in-capital

 

 

1,231.8

 

 

 

1,219.3

 

Treasury stock, 5,934,374 and 5,678,354 shares, at cost, at June 30, 2023 and December 31, 2022, respectively

 

 

(97.8

)

 

 

(95.4

)

Accumulated deficit

 

 

(544.6

)

 

 

(660.6

)

Accumulated other comprehensive loss

 

 

(344.8

)

 

 

(353.2

)

Total Cinemark Holdings, Inc.'s stockholders' equity

 

 

244.7

 

 

 

110.2

 

Noncontrolling interests

 

 

10.1

 

 

 

9.3

 

Total equity

 

 

254.8

 

 

 

119.5

 

Total liabilities and equity

 

$

4,846.8

 

 

$

4,817.7

 

The accompanying notes, as they relate to Cinemark Holdings, Inc., are an integral part of the condensed consolidated financial statements.

3


 

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)

(in millions, except per share data, unaudited)

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

Admissions

 

$

478.4

 

 

$

381.9

 

 

$

789.4

 

 

$

617.7

 

Concession

 

 

373.4

 

 

 

286.0

 

 

 

609.2

 

 

 

459.0

 

Other

 

 

90.5

 

 

 

76.2

 

 

 

154.4

 

 

 

127.9

 

Total revenue

 

$

942.3

 

 

$

744.1

 

 

$

1,553.0

 

 

$

1,204.6

 

Cost of operations

 

 

 

 

 

 

 

 

 

 

 

 

Film rentals and advertising

 

 

278.0

 

 

 

222.6

 

 

 

444.7

 

 

 

350.2

 

Concession supplies

 

 

67.4

 

 

 

52.5

 

 

 

111.0

 

 

 

82.5

 

Salaries and wages

 

 

112.1

 

 

 

100.2

 

 

 

198.3

 

 

 

180.0

 

Facility lease expense

 

 

87.0

 

 

 

80.3

 

 

 

166.5

 

 

 

154.0

 

Utilities and other

 

 

120.2

 

 

 

106.5

 

 

 

224.0

 

 

 

193.4

 

General and administrative expenses

 

 

50.0

 

 

 

48.2

 

 

 

96.5

 

 

 

88.9

 

Depreciation and amortization

 

 

52.8

 

 

 

61.0

 

 

 

107.7

 

 

 

122.7

 

Impairment of long-lived and other assets

 

 

9.4

 

 

 

92.3

 

 

 

10.1

 

 

 

92.3

 

Restructuring costs

 

 

 

 

 

(0.2

)

 

 

 

 

 

(0.2

)

Gain on disposal of assets and other

 

 

(3.0

)

 

 

(0.7

)

 

 

(2.7

)

 

 

(7.6

)

Total cost of operations

 

 

773.9

 

 

 

762.7

 

 

 

1,356.1

 

 

 

1,256.2

 

Operating income (loss)

 

 

168.4

 

 

 

(18.6

)

 

 

196.9

 

 

 

(51.6

)

Other income (expense)

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(37.1

)

 

 

(38.1

)

 

 

(73.9

)

 

 

(76.2

)

Interest income

 

 

13.0

 

 

 

3.1

 

 

 

24.9

 

 

 

4.7

 

Loss on debt extinguishment and refinancing

 

 

(10.7

)

 

 

 

 

 

(10.7

)

 

 

 

Foreign currency and other related gain (loss)

 

 

(6.2

)

 

 

(3.1

)

 

 

(8.4

)

 

 

0.1

 

Interest expense - NCM

 

 

(5.7

)

 

 

(5.9

)

 

 

(11.4

)

 

 

(11.7

)

Equity in income (loss) of affiliates

 

 

1.8

 

 

 

(5.5

)

 

 

(0.3

)

 

 

(7.7

)

Unrealized gain on investment in NCMI

 

 

9.2

 

 

 

 

 

 

9.2

 

 

 

 

Total other expense

 

 

(35.7

)

 

 

(49.5

)

 

 

(70.6

)

 

 

(90.8

)

Income (loss) before income taxes

 

 

132.7

 

 

 

(68.1

)

 

 

126.3

 

 

 

(142.4

)

Income tax expense

 

 

12.3

 

 

 

4.7

 

 

 

8.4

 

 

 

2.9

 

Net income (loss)

 

$

120.4

 

 

$

(72.8

)

 

$

117.9

 

 

$

(145.3

)

Less: Net income attributable to noncontrolling interests

 

 

1.3

 

 

 

0.6

 

 

 

1.9

 

 

 

2.1

 

Net income (loss) attributable to Cinemark Holdings, Inc.

 

$

119.1

 

 

$

(73.4

)

 

$

116.0

 

 

$

(147.4

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

119.1

 

 

 

118.2

 

 

 

118.9

 

 

 

118.0

 

Diluted

 

 

151.7

 

 

 

118.2

 

 

 

151.5

 

 

 

118.0

 

Income (loss) per share attributable to Cinemark Holdings, Inc.'s common stockholders

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.98

 

 

$

(0.61

)

 

$

0.96

 

 

$

(1.23

)

Diluted

 

$

0.80

 

 

$

(0.61

)

 

$

0.82

 

 

$

(1.23

)

The accompanying notes, as they relate to Cinemark Holdings, Inc., are an integral part of the condensed consolidated financial statements.

4


 

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in millions, unaudited)

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Net income (loss)

 

$

120.4

 

 

$

(72.8

)

 

$

117.9

 

 

$

(145.3

)

Other comprehensive income (loss), net of tax

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gain (loss) due to fair value adjustments on interest rate swap agreements, net of taxes and settlements

 

 

2.6

 

 

 

4.2

 

 

 

(0.8

)

 

 

22.6

 

Foreign currency translation adjustments

 

 

4.1

 

 

 

(15.7

)

 

 

12.2

 

 

 

(1.3

)

Total other comprehensive income (loss), net of tax

 

$

6.7

 

 

$

(11.5

)

 

$

11.4

 

 

$

21.3

 

Total comprehensive income (loss), net of tax

 

 

127.1

 

 

 

(84.3

)

 

 

129.3

 

 

 

(124.0

)

Comprehensive income attributable to noncontrolling interests

 

 

(1.3

)

 

 

(0.6

)

 

 

(1.9

)

 

 

(2.1

)

Comprehensive income (loss) attributable to Cinemark Holdings, Inc.

 

$

125.8

 

 

$

(84.9

)

 

$

127.4

 

 

$

(126.1

)

The accompanying notes, as they relate to Cinemark Holdings, Inc., are an integral part of the condensed consolidated financial statements.

5


 

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(in millions, unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

Cinemark

 

 

 

 

 

 

 

 

 

Common Stock

 

 

 

 

 

Additional

 

 

 

 

 

Other

 

 

Holdings, Inc's

 

 

 

 

 

 

 

 

 

Shares

 

 

 

 

 

Treasury

 

 

Paid-in-

 

 

Accumulated

 

 

Comprehensive

 

 

Stockholders’

 

 

Noncontrolling

 

 

Total

 

 

 

Issued

 

 

Amount

 

 

Stock

 

 

Capital

 

 

Deficit

 

 

Loss

 

 

Equity

 

 

Interests

 

 

Equity

 

Balance at January 1, 2023

 

 

126.1

 

 

$

0.1

 

 

$

(95.4

)

 

$

1,219.3

 

 

$

(660.6

)

 

$

(353.2

)

 

$

110.2

 

 

$

9.3

 

 

$

119.5

 

Restricted stock forfeitures and stock withholdings related to share based awards that vested during the three months ended March 31, 2023

 

 

 

 

 

 

 

 

(2.1

)

 

 

 

 

 

 

 

 

 

 

 

(2.1

)

 

 

 

 

 

(2.1

)

Issuance of stock upon vesting of performance stock units

 

 

0.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of share based awards and share based awards compensation expense

 

 

1.3

 

 

 

 

 

 

 

5.7

 

 

 

 

 

 

 

 

 

5.7

 

 

 

 

 

 

5.7

 

Net (loss) income

 

 

 

 

 

 

 

 

 

 

 

 

(3.1

)

 

 

 

 

 

(3.1

)

 

 

0.6

 

 

 

(2.5

)

Amortization of accumulated gains for amended swap agreements

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1.5

)

 

 

(1.5

)

 

 

 

 

 

(1.5

)

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4.7

 

 

 

4.7

 

 

 

 

 

 

4.7

 

Balance at March 31, 2023

 

 

127.5

 

 

$

0.1

 

 

$

(97.5

)

 

$

1,225.0

 

 

$

(663.7

)

 

$

(350.0

)

 

$

113.9

 

 

$

9.9

 

 

$

123.8

 

Restricted stock forfeitures and stock withholdings related to share based awards that vested during the three months ended June 30, 2023

 

 

 

 

 

 

 

 

(0.3

)

 

 

 

 

 

 

 

 

 

 

 

(0.3

)

 

 

 

 

 

(0.3

)

Issuance of share based awards and share based awards compensation expense

 

 

0.1

 

 

 

 

 

 

 

 

 

6.8

 

 

 

 

 

 

 

 

 

6.8

 

 

 

 

 

 

6.8

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

119.1

 

 

 

 

 

 

119.1

 

 

 

1.3

 

 

 

120.4

 

Distributions to non-controlling interests

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1.1

)

 

 

(1.1

)

Amortization of accumulated gains for amended swap agreements

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1.5

)

 

 

(1.5

)

 

 

 

 

 

(1.5

)

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6.7

 

 

 

6.7

 

 

 

 

 

 

6.7

 

Balance at June 30, 2023

 

 

127.6

 

 

$

0.1

 

 

$

(97.8

)

 

$

1,231.8

 

 

$

(544.6

)

 

$

(344.8

)

 

$

244.7

 

 

$

10.1

 

 

$

254.8

 

 

 

6


 

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY, CONT’D

(in millions, unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

Cinemark

 

 

 

 

 

 

 

 

 

Common Stock

 

 

 

 

 

Additional

 

 

 

 

 

Other

 

 

Holdings, Inc's

 

 

 

 

 

 

 

 

 

Shares

 

 

 

 

 

Treasury

 

 

Paid-in-

 

 

Accumulated

 

 

Comprehensive

 

 

Stockholders’

 

 

Noncontrolling

 

 

Total

 

 

 

Issued

 

 

Amount

 

 

Stock

 

 

Capital

 

 

Deficit

 

 

Loss

 

 

Equity

 

 

Interests

 

 

Equity

 

Balance at January 1, 2022

 

 

125.1

 

 

$

0.1

 

 

$

(91.1

)

 

$

1,197.8

 

 

$

(389.4

)

 

$

(394.5

)

 

$

322.9

 

 

$

11.6

 

 

$

334.5

 

Restricted stock forfeitures and stock withholdings related to share based awards that vested during the three months ended March 31, 2022

 

 

 

 

 

 

 

 

(1.6

)

 

 

 

 

 

 

 

 

 

 

 

(1.6

)

 

 

 

 

 

(1.6

)

Issuance of stock upon vesting of performance stock units

 

 

0.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of share based awards and share based awards compensation expense

 

 

0.7

 

 

 

 

 

 

 

 

 

5.1

 

 

 

 

 

 

 

 

 

5.1

 

 

 

 

 

 

5.1

 

Net (loss) income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(74.0

)

 

 

 

 

 

(74.0

)

 

 

1.5

 

 

 

(72.5

)

Amortization of accumulated losses for amended swap agreements

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1.1

 

 

 

1.1

 

 

 

 

 

 

1.1

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

32.8

 

 

 

32.8

 

 

 

 

 

 

32.8

 

Balance at March 31, 2022

 

 

125.9

 

 

$

0.1

 

 

$

(92.7

)

 

$

1,202.9

 

 

$

(463.4

)

 

$

(360.6

)

 

$

286.3

 

 

$

13.1

 

 

$

299.4

 

Restricted stock forfeitures and stock withholdings related to share based awards that vested during the three months ended June 30, 2022

 

 

 

 

 

 

 

 

(0.5

)

 

 

 

 

 

 

 

 

 

 

 

(0.5

)

 

 

 

 

 

(0.5

)

Issuance of share based awards and share based awards compensation expense

 

 

0.2

 

 

 

 

 

 

 

 

 

6.0

 

 

 

 

 

 

 

 

 

6.0

 

 

 

 

 

 

6.0

 

Net (loss) income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(73.4

)

 

 

 

 

 

(73.4

)

 

 

0.6

 

 

 

(72.8

)

Distributions to noncontrolling interests

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3.0

)

 

 

(3.0

)

Amortization of accumulated losses for amended swap agreements

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1.1

 

 

 

1.1

 

 

 

 

 

 

1.1

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(11.5

)

 

 

(11.5

)

 

 

 

 

 

(11.5

)

Balance at June 30, 2022

 

 

126.1

 

 

$

0.1

 

 

$

(93.2

)

 

$

1,208.9

 

 

$

(536.8

)

 

$

(371.0

)

 

$

208.0

 

 

$

10.7

 

 

$

218.7

 

The accompanying notes, as they relate to Cinemark Holdings, Inc., are an integral part of the condensed consolidated financial statements.

 

7


 

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions, unaudited)

 

 

Six Months Ended June 30,

 

 

 

2023

 

 

2022

 

Operating activities

 

 

 

 

 

 

Net income (loss)

 

$

117.9

 

 

$

(145.3

)

Adjustments to reconcile net income (loss) to cash provided by (used for) operating activities:

 

 

 

 

 

 

Depreciation

 

 

106.6

 

 

 

121.4

 

Amortization of intangible and other assets

 

 

1.1

 

 

 

1.3

 

Loss on debt extinguishment and refinancing

 

 

10.7

 

 

 

 

Amortization of original issue discount and debt issuance costs

 

 

5.3

 

 

 

5.4

 

Interest accrued on NCM screen advertising advances

 

 

11.4

 

 

 

11.7

 

Amortization of NCM screen advertising advances and other deferred revenue

 

 

(16.2

)

 

 

(16.3

)

Amortization of accumulated (gains) losses for amended swap agreements

 

 

(3.1

)

 

 

2.2

 

Impairment of long-lived and other assets

 

 

10.1

 

 

 

92.3

 

Share based awards compensation expense

 

 

12.5

 

 

 

11.1

 

Gain on disposal of assets and other

 

 

(2.7

)

 

 

(7.6

)

Unrealized gain on investment in NCMI

 

 

(9.2

)

 

 

 

Non-cash rent expense

 

 

(8.4

)

 

 

(4.7

)

Equity in loss of affiliates

 

 

0.3

 

 

 

7.7

 

Deferred income tax expense (benefit)

 

 

2.0

 

 

 

(0.9

)

Distributions from equity investees

 

 

1.6

 

 

 

1.5

 

Changes in assets and liabilities and other

 

 

11.2

 

 

 

(33.7

)

Net cash provided by operating activities

 

 

251.1

 

 

 

46.1

 

 

 

 

 

 

 

 

Investing activities

 

 

 

 

 

 

Additions to theatre properties and equipment

 

 

(54.6

)

 

 

(40.6

)

Proceeds from sale of theatre properties and equipment and other

 

 

 

 

 

11.8

 

Net cash used for investing activities

 

 

(54.6

)

 

 

(28.8

)

 

 

 

 

 

 

 

Financing activities

 

 

 

 

 

 

Proceeds from refinancing of senior secured credit facility

 

 

640.2

 

 

 

 

Repayment of term loan upon refinancing of senior secured credit facility

 

 

(624.9

)

 

 

 

Redemption of 8.75% Secured Notes

 

 

(102.2

)

 

 

 

Payment of debt issuance costs

 

 

(7.5

)

 

 

 

Payment of fees on refinancing of senior secured credit facility

 

 

(2.6

)

 

 

 

Other repayments of long-term debt

 

 

(6.4

)

 

 

(6.9

)

Restricted stock withholdings for payroll taxes

 

 

(2.4

)

 

 

(2.1

)

Payments on finance leases

 

 

(7.1

)

 

 

(7.2

)

Other financing activities

 

 

2.1

 

 

 

(3.0

)

Net cash used for financing activities

 

 

(110.8

)

 

 

(19.2

)

 

 

 

 

 

 

 

Effect of exchange rate changes on cash and cash equivalents

 

 

(2.2

)

 

 

(10.3

)

 

 

 

 

 

 

 

Increase (decrease) in cash and cash equivalents

 

 

83.5

 

 

 

(12.2

)

 

 

 

 

 

 

 

Cash and cash equivalents:

 

 

 

 

 

 

Beginning of period

 

 

674.5

 

 

 

707.3

 

End of period

 

$

758.0

 

 

$

695.1

 

 

The accompanying notes, as they relate to Cinemark Holdings, Inc., are an integral part of the condensed consolidated financial statements.

* * * * * * * *

8


 

CINEMARK USA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions, except share and per share data, unaudited)

 

 

June 30,

 

 

December 31,

 

 

 

2023

 

 

2022

 

Assets

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Cash and cash equivalents

 

$

515.7

 

 

$

427.3

 

Inventories

 

 

27.5

 

 

 

23.7

 

Accounts receivable

 

 

85.3

 

 

 

69.0

 

Current income tax receivable

 

 

45.2

 

 

 

45.1

 

Prepaid expenses and other

 

 

58.7

 

 

 

50.7

 

Accounts receivable from parent

 

 

61.0

 

 

 

53.4

 

Total current assets

 

 

793.4

 

 

 

669.2

 

Theatre properties and equipment, net of accumulated depreciation of $2,268.7 and $2,165.7

 

 

1,187.9

 

 

 

1,232.1

 

Operating lease right-of-use assets, net

 

 

1,050.4

 

 

 

1,102.7

 

Other long-term assets

 

 

 

 

 

 

Goodwill

 

 

1,255.9

 

 

 

1,250.9

 

Intangible assets, net

 

 

303.9

 

 

 

304.6

 

Investment in NCMI/NCM

 

 

14.9

 

 

 

9.6

 

Investments in affiliates

 

 

23.9

 

 

 

22.6

 

Deferred charges and other assets, net

 

 

34.5

 

 

 

31.6

 

Total other long-term assets

 

 

1,633.1

 

 

 

1,619.3

 

Total assets

 

$

4,664.8

 

 

$

4,623.3

 

Liabilities and equity

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Current portion of long-term debt

 

$

8.1

 

 

$

10.7

 

Current portion of operating lease obligations

 

 

218.7

 

 

 

219.3

 

Current portion of finance lease obligations

 

 

14.7

 

 

 

14.4

 

Current income tax payable

 

 

2.5

 

 

 

3.2

 

Accounts payable and accrued expenses

 

 

492.6

 

 

 

452.7

 

Total current liabilities

 

 

736.6

 

 

 

700.3

 

Long-term liabilities

 

 

 

 

 

 

Long-term debt, less current portion

 

 

1,937.6

 

 

 

2,023.0

 

Operating lease obligations, less current portion

 

 

917.2

 

 

 

970.6

 

Finance lease obligations, less current portion

 

 

80.5

 

 

 

88.0

 

Long-term deferred tax liability

 

 

41.1

 

 

 

36.1

 

Long-term liability for uncertain tax positions

 

 

45.7

 

 

 

47.9

 

NCM screen advertising advances

 

 

333.4

 

 

 

338.2

 

Other long-term liabilities

 

 

43.8

 

 

 

37.3

 

Total long-term liabilities

 

 

3,399.3

 

 

 

3,541.1

 

Equity

 

 

 

 

 

 

Cinemark USA, Inc.'s stockholder's equity:

 

 

 

 

 

 

Class A common stock, $0.01 par value: 10,000,000 shares authorized, 1,500 shares issued and outstanding

 

 

 

 

 

 

Class B common stock, no par value: 1,000,000 shares authorized, 239,893 shares issued and 182,648 shares outstanding

 

 

49.5

 

 

 

49.5

 

Treasury stock, 57,245 Class B shares at cost

 

 

(24.2

)

 

 

(24.2

)

Additional paid-in-capital

 

 

1,491.4

 

 

 

1,479.5

 

Accumulated deficit

 

 

(650.0

)

 

 

(775.9

)

Accumulated other comprehensive loss

 

 

(347.9

)

 

 

(356.3

)

Total Cinemark USA, Inc.'s stockholder's equity

 

 

518.8

 

 

 

372.6

 

Noncontrolling interests

 

 

10.1

 

 

 

9.3

 

Total equity

 

 

528.9

 

 

 

381.9

 

Total liabilities and equity

 

$

4,664.8

 

 

$

4,623.3

 

The accompanying notes, as they relate to Cinemark USA, Inc., are an integral part of the condensed consolidated financial statements.

9


 

CINEMARK USA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)

(in millions, unaudited)

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

Admissions

 

$

478.4

 

 

$

381.9

 

 

$

789.4

 

 

$

617.7

 

Concession

 

 

373.4

 

 

 

286.0

 

 

 

609.2

 

 

 

459.0

 

Other

 

 

90.5

 

 

 

76.2

 

 

 

154.4

 

 

 

127.9

 

Total revenue

 

 

942.3

 

 

 

744.1

 

 

 

1,553.0

 

 

 

1,204.6

 

Cost of operations

 

 

 

 

 

 

 

 

 

 

 

 

Film rentals and advertising

 

 

278.0

 

 

 

222.6

 

 

 

444.7

 

 

 

350.2

 

Concession supplies

 

 

67.4

 

 

 

52.5

 

 

 

111.0

 

 

 

82.5

 

Salaries and wages

 

 

112.1

 

 

 

100.2

 

 

 

198.3

 

 

 

180.0

 

Facility lease expense

 

 

87.0

 

 

 

80.3

 

 

 

166.5

 

 

 

154.0

 

Utilities and other

 

 

120.2

 

 

 

106.5

 

 

 

224.0

 

 

 

193.4

 

General and administrative expenses

 

 

49.1

 

 

 

47.5

 

 

 

94.7

 

 

 

87.4

 

Depreciation and amortization

 

 

52.8

 

 

 

61.0

 

 

 

107.7

 

 

 

122.7

 

Impairment of long-lived and other assets

 

 

9.4

 

 

 

92.3

 

 

 

10.1

 

 

 

92.3

 

Restructuring costs

 

 

 

 

 

(0.2

)

 

 

 

 

 

(0.2

)

Gain on disposal of assets and other

 

 

(3.0

)

 

 

(0.7

)

 

 

(2.7

)

 

 

(7.6

)

Total cost of operations

 

 

773.0

 

 

 

762.0

 

 

 

1,354.3

 

 

 

1,254.7

 

Operating income (loss)

 

 

169.3

 

 

 

(17.9

)

 

 

198.7

 

 

 

(50.1

)

Other income (expense)

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(31.0

)

 

 

(32.0

)

 

 

(61.8

)

 

 

(64.1

)

Interest income

 

 

10.1

 

 

 

2.7

 

 

 

19.3

 

 

 

4.3

 

Loss on debt extinguishment and refinancing

 

 

(10.7

)

 

 

 

 

 

(10.7

)

 

 

 

Foreign currency and other related gain (loss)

 

 

(6.2

)

 

 

(3.1

)

 

 

(8.4

)

 

 

0.1

 

Interest expense - NCM

 

 

(5.7

)

 

 

(5.9

)

 

 

(11.4

)

 

 

(11.7

)

Equity in income (loss) of affiliates

 

 

1.8

 

 

 

(5.5

)

 

 

(0.3

)

 

 

(7.7

)

Unrealized gain on investment in NCMI

 

 

9.2

 

 

 

 

 

 

9.2

 

 

 

 

Total other expense

 

 

(32.5

)

 

 

(43.8

)

 

 

(64.1

)

 

 

(79.1

)

Net income (loss) before income taxes

 

 

136.8

 

 

 

(61.7

)

 

 

134.6

 

 

 

(129.2

)

Income tax expense (benefit)

 

 

15.3

 

 

 

3.6

 

 

 

6.8

 

 

 

(2.9

)

Net income (loss)

 

$

121.5

 

 

$

(65.3

)

 

$

127.8

 

 

$

(126.3

)

Less: Net income attributable to noncontrolling interests

 

 

1.3

 

 

 

0.6

 

 

 

1.9

 

 

 

2.1

 

Net income (loss) attributable to Cinemark USA, Inc.

 

$

120.2

 

 

$

(65.9

)

 

$

125.9

 

 

$

(128.4

)

The accompanying notes, as they relate to Cinemark USA, Inc., are an integral part of the condensed consolidated financial statements.

10


 

CINEMARK USA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in millions, unaudited)

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Net income (loss)

 

$

121.5

 

 

$

(65.3

)

 

$

127.8

 

 

$

(126.3

)

Other comprehensive income (loss), net of tax

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gain (loss) due to fair value adjustments on interest rate swap agreements, net of taxes and settlements

 

 

2.6

 

 

 

7.0

 

 

 

(0.8

)

 

 

21.6

 

Foreign currency translation adjustments

 

 

4.1

 

 

 

(15.7

)

 

 

12.2

 

 

 

(1.3

)

Total other comprehensive income (loss), net of tax

 

$

6.7

 

 

$

(8.7

)

 

$

11.4

 

 

$

20.3

 

Total comprehensive income (loss), net of tax

 

 

128.2

 

 

 

(74.0

)

 

 

139.2

 

 

 

(106.0

)

Comprehensive income attributable to noncontrolling interests

 

 

(1.3

)

 

 

(0.6

)

 

 

(1.9

)

 

 

(2.1

)

Comprehensive income (loss) attributable to Cinemark USA, Inc.

 

$

126.9

 

 

$

(74.6

)

 

$

137.3

 

 

$

(108.1

)

The accompanying notes, as they relate to Cinemark USA, Inc., are an integral part of the condensed consolidated financial statements.

11


 

CINEMARK USA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(in millions, unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

 

 

 

 

 

 

Class A

 

 

Class B

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

Cinemark

 

 

 

 

 

 

 

 

 

Common Stock

 

 

Common Stock

 

 

 

 

 

Additional

 

 

 

 

 

Other

 

 

USA, Inc's

 

 

 

 

 

 

 

 

 

Shares

 

 

 

 

 

Shares

 

 

 

 

 

Treasury

 

 

Paid-in-

 

 

Accumulated

 

 

Comprehensive

 

 

Stockholder's

 

 

Noncontrolling

 

 

Total

 

 

 

Issued

 

 

Amount

 

 

Issued

 

 

Amount

 

 

Stock

 

 

Capital

 

 

Deficit

 

 

Loss

 

 

Equity

 

 

Interests

 

 

Equity

 

Balance at January 1, 2023

 

 

 

 

$

 

 

0.2

 

 

$

49.5

 

 

$

(24.2

)

 

$

1,479.5

 

 

$

(775.9

)

 

$

(356.3

)

 

$

372.6

 

 

$

9.3

 

 

$

381.9

 

Share based awards compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5.4

 

 

 

 

 

 

 

 

 

5.4

 

 

 

 

 

 

5.4

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5.7

 

 

 

 

 

 

5.7

 

 

 

0.6

 

 

 

6.3

 

Amortization of accumulated gains for amended swap agreements

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1.5

)

 

 

(1.5

)

 

 

 

 

 

(1.5

)

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4.7

 

 

 

4.7

 

 

 

 

 

 

4.7

 

Balance at March 31, 2023

 

 

 

 

$

 

 

 

0.2

 

 

$

49.5

 

 

$

(24.2

)

 

$

1,484.9

 

 

$

(770.2

)

 

$

(353.1

)

 

$

386.9

 

 

$

9.9

 

 

$

396.8

 

Share based awards compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6.5

 

 

 

 

 

 

 

 

 

6.5

 

 

 

 

 

 

6.5

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

120.2

 

 

 

 

 

 

120.2

 

 

 

1.3

 

 

 

121.5

 

Distributions to noncontrolling interests

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1.1

)

 

 

(1.1

)

Amortization of accumulated gains for amended swap agreements

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1.5

)

 

 

(1.5

)

 

 

 

 

 

(1.5

)

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6.7

 

 

 

6.7

 

 

 

 

 

 

6.7

 

Balance at June 30, 2023

 

 

 

 

$

 

 

 

0.2

 

 

$

49.5

 

 

$

(24.2

)

 

$

1,491.4

 

 

$

(650.0

)

 

$

(347.9

)

 

$

518.8

 

 

$

10.1

 

 

$

528.9

 

The accompanying notes, as they relate to Cinemark USA, Inc., are an integral part of the condensed consolidated financial statements.

 

 

12


 

CINEMARK USA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY, CONT’D

(in millions, unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

 

 

 

 

 

 

Class A

 

 

Class B

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

Cinemark

 

 

 

 

 

 

 

 

 

Common Stock

 

 

Common Stock

 

 

 

 

 

Additional

 

 

 

 

 

Other

 

 

USA, Inc's

 

 

 

 

 

 

 

 

 

Shares

 

 

 

 

 

Shares

 

 

 

 

 

Treasury

 

 

Paid-in-

 

 

Accumulated

 

 

Comprehensive

 

 

Stockholder's

 

 

Noncontrolling

 

 

Total

 

 

 

Issued

 

 

Amount

 

 

Issued

 

 

Amount

 

 

Stock

 

 

Capital

 

 

Deficit

 

 

Loss

 

 

Equity

 

 

Interests

 

 

Equity

 

Balance at January 1, 2022

 

 

 

 

$

 

 

0.2

 

 

$

49.5

 

 

$

(24.2

)

 

$

1,459.0

 

 

$

(544.0

)

 

$

(397.0

)

 

$

543.3

 

 

$

11.6

 

 

$

554.9

 

Share based awards compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4.9

 

 

 

 

 

 

 

 

 

4.9

 

 

 

 

 

 

4.9

 

Net (loss) income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(62.5

)

 

 

 

 

 

(62.5

)

 

 

1.5

 

 

 

(61.0

)

Amortization of accumulated losses for amended swap agreements

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1.1

 

 

 

1.1

 

 

 

 

 

 

1.1

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

29.0

 

 

 

29.0

 

 

 

 

 

 

29.0

 

Balance at March 31, 2022

 

 

 

 

$

 

 

 

0.2

 

 

$

49.5

 

 

$

(24.2

)

 

$

1,463.9

 

 

$

(606.5

)

 

$

(366.9

)

 

$

515.8

 

 

$

13.1

 

 

$

528.9

 

Share based awards compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5.7

 

 

 

 

 

 

 

 

 

5.7

 

 

 

 

 

 

5.7

 

Net (loss) income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(65.9

)

 

 

 

 

 

(65.9

)

 

 

0.6

 

 

 

(65.3

)

Distributions to noncontrolling interests

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3.0

)

 

 

(3.0

)

Amortization of accumulated losses for amended swap agreements

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1.1

 

 

 

1.1

 

 

 

 

 

 

1.1

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(8.7

)

 

 

(8.7

)

 

 

 

 

 

(8.7

)

Balance at June 30, 2022

 

 

 

 

$

 

 

 

0.2

 

 

$

49.5

 

 

$

(24.2

)

 

$

1,469.6

 

 

$

(672.4

)

 

$

(374.5

)

 

$

448.0

 

 

$

10.7

 

 

$

458.7

 

The accompanying notes, as they relate to Cinemark USA, Inc., are an integral part of the condensed consolidated financial statements.

13


 

CINEMARK USA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions, unaudited)

 

 

Six Months Ended June 30,

 

 

 

2023

 

 

2022

 

Operating activities

 

 

 

 

 

 

Net income (loss)

 

$

127.8

 

 

$

(126.3

)

Adjustments to reconcile net income (loss) to cash provided by (used for) operating activities:

 

 

 

 

 

 

Depreciation

 

 

106.6

 

 

 

121.4

 

Amortization of intangible and other assets

 

 

1.1

 

 

 

1.3

 

Loss on debt extinguishment and refinancing

 

 

10.7

 

 

 

 

Amortization of original issue discount and debt issuance costs

 

 

3.5

 

 

 

3.7

 

Interest accrued on NCM screen advertising advances

 

 

11.4

 

 

 

11.7

 

Amortization of NCM screen advertising advances and other deferred revenue

 

 

(16.2

)

 

 

(16.3

)

Amortization of accumulated (gains) losses for amended swap agreements

 

 

(3.1

)

 

 

2.2

 

Share based awards compensation expense

 

 

11.9

 

 

 

10.6

 

Impairment of long-lived and other assets

 

 

10.1

 

 

 

92.3

 

Gain on disposal of assets and other

 

 

(2.7

)

 

 

(7.6

)

Unrealized gain on investment in NCMI

 

 

(9.2

)

 

 

 

Non-cash rent expense

 

 

(8.4

)

 

 

(4.7

)

Equity in loss of affiliates

 

 

0.3

 

 

 

7.7

 

Deferred income tax expense

 

 

4.3

 

 

 

1.0

 

Distributions from equity investees

 

 

1.6

 

 

 

1.5

 

Changes in assets and liabilities and other

 

 

6.3

 

 

 

(42.3

)

Net cash provided by operating activities

 

 

256.0

 

 

 

56.2

 

 

 

 

 

 

 

 

Investing activities

 

 

 

 

 

 

Additions to theatre properties and equipment

 

 

(54.6

)

 

 

(40.6

)

Proceeds from sale of theatre properties and equipment and other

 

 

 

 

 

11.8

 

Net cash used for investing activities

 

 

(54.6

)

 

 

(28.8

)

 

 

 

 

 

 

 

Financing activities

 

 

 

 

 

 

Proceeds from refinancing of senior secured credit facility

 

 

640.2

 

 

 

 

Repayment of term loan upon refinancing of senior secured credit facility

 

 

(624.9

)

 

 

 

Redemption of 8.75% Secured Notes

 

 

(102.2

)

 

 

 

Payment of debt issuance costs

 

 

(7.5

)

 

 

 

Payment of fees on refinancing of senior secured credit facility

 

 

(2.6

)

 

 

 

Repayments of long-term debt

 

 

(6.4

)

 

 

(6.9

)

Restricted stock withholdings for payroll taxes

 

 

(2.4

)

 

 

(2.1

)

Payments on finance leases

 

 

(7.1

)

 

 

(7.2

)

Other financing activities

 

 

2.1

 

 

 

(3.0

)

Net cash used for financing activities

 

 

(110.8

)

 

 

(19.2

)

 

 

 

 

 

 

 

Effect of exchange rate changes on cash and cash equivalents

 

 

(2.2

)

 

 

(10.3

)

 

 

 

 

 

 

 

Decrease in cash and cash equivalents

 

 

88.4

 

 

 

(2.1

)

 

 

 

 

 

 

 

Cash and cash equivalents:

 

 

 

 

 

 

Beginning of period

 

 

427.3

 

 

 

442.7

 

End of period

 

$

515.7

 

 

$

440.6

 

 

 

 

 

 

 

 

The accompanying notes, as they relate to Cinemark USA, Inc., are an integral part of the condensed consolidated financial statements.

14


CINEMARK HOLDINGS, INC. AND SUBSIDIARIES AND

CINEMARK USA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except per share data, unaudited)

1.
The Company and Basis of Presentation

Cinemark Holdings, Inc. (“Holdings”) is a holding company and its wholly-owned subsidiary is Cinemark USA, Inc (“CUSA”). Holdings consolidates CUSA and its subsidiaries for financial statement purposes, and CUSA comprises approximately the entire balance of Holdings’ assets, liabilities and operating cash flows. In addition, CUSA’s operating revenue comprises 100% and its operating expenses comprise nearly 100% of Holdings’ revenue and operating expenses, respectively. As such, the following Notes to Condensed Consolidated Financial Statements relate to Holdings and CUSA and their respective consolidated subsidiaries in all material respects, unless otherwise noted. Where it is important to distinguish between Holdings and CUSA, specific reference is made to either Holdings or CUSA. Otherwise, all references to “we,” “our,” “us,” and “the Company” relate to Cinemark Holdings, Inc. and its consolidated subsidiaries and all references to CUSA relate to CUSA and its consolidated subsidiaries.

We operate in the motion picture exhibition industry, with theatres in the United States (“U.S.”), Brazil, Argentina, Chile, Colombia, Peru, Ecuador, Honduras, El Salvador, Nicaragua, Costa Rica, Panama, Guatemala, Bolivia, and Paraguay. The Company closed its one theatre in Curacao in January 2023 and our theatres in Ecuador are currently held for sale. See Note 6 for a discussion of the Ecuador theatre assets held for sale.

The impact of the COVID-19 pandemic had an unprecedented impact on the theatrical exhibition industry. While the industry has made significant progress in its recovery from the pandemic, its ongoing recovery will be contingent upon several key factors, including the volume of new film content available, the box office performance of new film content released, the duration of the exclusive theatrical release window, and evolving consumer behavior with competition from other forms of in-and-out-of-home entertainment.

The accompanying condensed consolidated balance sheets of Holdings and CUSA as of December 31, 2022, each of which were derived from audited financial statements, and the unaudited condensed consolidated financial statements of Holdings and CUSA, respectively, have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete consolidated financial statements. In the opinion of management, all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation have been included. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and the accompanying notes. Actual results could differ from these estimates. Majority-owned subsidiaries that Holdings or CUSA, as applicable, has control of are consolidated while those investments in entities of which Holdings or CUSA, as applicable, owns between 20% and 50% and does not control, but has significant influence over the investee, are accounted for under the equity method. Investments in entities of which Holdings or CUSA, as applicable, owns between 20% and 50% and does not control or have significant influence over are accounted for under the fair value method. Investments in entities of which Holdings or CUSA, as applicable, owns less than 20% are generally accounted for under the cost method. The results of these subsidiaries and equity method investees are included in the condensed consolidated financial statements of Holdings and CUSA, as applicable, effective from their date of formation or from their date of acquisition. Intercompany balances and transactions are eliminated in consolidation.

These condensed consolidated financial statements of Holdings and CUSA should be read in conjunction with the audited annual consolidated financial statements of Holdings and CUSA and the notes thereto for the year ended December 31, 2022, included in the Company’s Annual Report on Form 10-K filed February 24, 2023 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Operating results for the three and six months ended June 30, 2023 are not necessarily indicative of the results to be achieved for the full year.

2.
New Accounting Pronouncements

Accounting Standards Update (“ASU”) 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, (“ASU 2020-04”), ASU 2021-01, Reference Rate Reform (Topic 848): Scope, (“ASU 2021-01”) and ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848 (“ASU 2022-06”). The purpose of ASU 2020-04 is to provide optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. More specifically, the amendments in ASU 2020-04 provide optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in ASU 2021-01 clarify that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. The amendments in ASU 2022-06 defer the sunset date of Topic 848 from December 31, 2022 to December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic 848. The amendments in ASU 2020-04 and ASU 2021-01 are effective as of March 12, 2020 through December 31, 2024. The Company applied the optional relief guidance prospectively to the modification of the reference rate

15


CINEMARK HOLDINGS, INC. AND SUBSIDIARIES AND

CINEMARK USA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except per share data, unaudited)

in its interest rate swap agreements from LIBOR to Term SOFR during the second quarter of 2023 (see Note 7). The application of the guidance did not have any impact on the Company’s condensed consolidated financial statements.

 

3.
Lease Accounting

The following table represents the Company’s aggregate lease costs, by lease classification, for the periods presented.

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

Lease Cost

Classification

2023

 

 

2022

 

 

2023

 

 

2022

 

Operating lease costs

 

 

 

 

 

 

 

 

 

 

 

 

Equipment (1)

Utilities and other

$

1.3

 

 

$

1.0

 

 

$

2.7

 

 

$

1.6

 

Real Estate (1)

Facility lease expense

 

90.8

 

 

 

81.9

 

 

 

172.9

 

 

 

156.9

 

Total operating lease costs

 

$

92.1

 

 

$

82.9

 

 

$

175.6

 

 

$

158.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Finance lease costs

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of leased assets

Depreciation and amortization

$

3.0

 

 

$

3.2

 

 

$

6.0

 

 

$

6.3

 

Interest on lease liabilities

Interest expense

 

1.3

 

 

 

1.3

 

 

 

2.5

 

 

 

2.7

 

Total finance lease costs

 

$

4.3

 

 

$

4.5

 

 

$

8.5

 

 

$

9.0

 

(1)
Includes short-term lease payments, variable lease payments and office lease payments reflected in general and administrative expense as set forth in the following table for the periods presented:

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

Lease Cost

Classification

2023

 

 

2022

 

 

2023

 

 

2022

 

Operating lease costs

 

 

 

 

 

 

 

 

 

 

 

 

Equipment - Short-term lease payments

Utilities and other

$

1.2

 

 

$

0.9

 

 

$

2.5

 

 

$

1.4

 

Real Estate - Variable lease payments (1)

Facility lease expense

$

20.1

 

 

$

12.2

 

 

$

32.8

 

 

$

18.1

 

Real Estate - Office leases

General and administrative

$

0.3

 

 

$

0.4

 

 

$

0.6

 

 

$

0.7

 

(1) Represents lease payments that are based on a change in index, such as CPI or inflation, variable payments based on revenue or attendance and variable common area maintenance costs

The following table represents the minimum cash lease payments included in the measurement of lease liabilities and the non-cash addition of lease right-of-use assets for the periods presented.

 

 

Six Months Ended

 

 

 

June 30,

 

Other Information

 

2023

 

 

2022

 

Cash paid for amounts included in the measurement of lease liabilities:

 

 

 

 

 

 

Cash outflows for operating leases

 

$

140.3

 

 

$

139.1

 

Cash outflows for finance leases - operating activities

 

$

2.5

 

 

$

2.7

 

Cash outflows for finance leases - financing activities

 

$

7.1

 

 

$

7.2

 

Non-cash amount of right-of-use assets obtained in exchange for:

 

 

 

 

 

 

Operating lease liability additions, net of write-offs

 

$

46.3

 

 

$

57.0

 

As of June 30, 2023, the Company had signed lease agreements with total noncancelable lease payments of approximately $56.4 related to theatre leases that had not yet commenced. The timing of lease commencement is dependent on the completion of construction of the related theatre facility. Additionally, these amounts are based on estimated square footage and costs to construct each facility and may be subject to adjustment upon final completion of each construction project. In accordance with ASC Topic 842, Leases, fixed minimum lease payments related to these theatres are not included in the right-of-use assets and lease liabilities as of June 30, 2023.

 

16


CINEMARK HOLDINGS, INC. AND SUBSIDIARIES AND

CINEMARK USA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except per share data, unaudited)

 

4.
Revenue Recognition

The Company’s patrons have the option to purchase movie tickets well in advance of a movie showtime or right before the movie showtime, or at any point in between those two timeframes depending on seat availability. The Company recognizes such admissions revenue when the showtime for a purchased movie ticket has passed. Concession revenue is recognized when products are sold to the consumer, or if purchased in advance, based on the showtime associated with the customer’s movie ticket. Other revenue primarily consists of screen advertising, screen rental revenue, promotional income, studio trailer placements, revenue from electronic video games located in our theatres, and transactional fees. Except for National CineMedia, LLC (“NCM”) screen advertising advances discussed below in Note 8, these revenues are generally recognized when the Company has met its performance obligations. The Company sells gift cards and discount ticket vouchers called Supersavers, the proceeds from which are recorded as deferred revenue. Deferred revenue for gift cards and discount ticket vouchers is recognized when they are redeemed for concession items or, if redeemed for movie tickets, when the showtime has passed. The Company generally records breakage revenue on gift cards and discount ticket vouchers based on redemption activity and historical experience with unused balances. The Company offers a subscription program in the U.S. whereby patrons can pay a monthly or annual fee to receive a monthly credit for use towards a future movie ticket purchase. The Company records the subscription program fees as deferred revenue and records admissions revenue when the showtime for a movie ticket purchased with a credit has passed. The Company has loyalty programs in the U.S. and many of its international locations that either have a prepaid annual fee or award points to customers as purchases are made. For those loyalty programs that have a prepaid annual fee, the Company recognizes the fee collected as other revenue on a straight-line basis over the annual membership period. For those loyalty programs that award points to customers based on their purchases, the Company records a portion of the original transaction proceeds as deferred revenue based on the number of reward points issued to customers and recognizes the deferred revenue when the customer redeems such points. The value of loyalty points issued is based on the estimated fair value of the rewards offered. The Company records breakage revenue generally upon the expiration of loyalty points and subscription credits as the Company does not yet have sufficient historical data related to the redemption patterns for these programs to estimate breakage. Advances collected on concession and other contracts are deferred and recognized during the period in which the Company satisfies the related performance obligations, which may differ from the period in which the advances are collected.

Accounts receivable as of June 30, 2023 and December 31, 2022 included approximately $38.2 and $22.9, respectively, of receivables related to contracts with customers. The Company did not record any assets related to the costs to obtain or fulfill a contract with customers during the six months ended June 30, 2023.

 

 

17


CINEMARK HOLDINGS, INC. AND SUBSIDIARIES AND

CINEMARK USA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except per share data, unaudited)

Disaggregation of Revenue

The following tables present revenue disaggregated based on major type of good or service and by reportable operating segment.

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30, 2023

 

 

June 30, 2023

 

 

 

U.S.

 

 

International

 

 

 

 

 

U.S.

 

 

International

 

 

 

 

 

 

Operating

 

 

Operating

 

 

 

 

 

Operating

 

 

Operating

 

 

 

 

 

 

Segment (1)

 

 

Segment

 

 

Consolidated

 

 

Segment (1)

 

 

Segment

 

 

Consolidated

 

Admissions revenue

 

$

373.4

 

 

$

105.0

 

 

$

478.4

 

 

$

618.1

 

 

$

171.3

 

 

$

789.4

 

Concession revenue

 

 

296.3

 

 

 

77.1

 

 

 

373.4

 

 

 

483.1

 

 

 

126.1

 

 

 

609.2

 

Screen advertising, screen rental and promotional revenue (2)

 

 

24.7

 

 

 

13.5

 

 

 

38.2

 

 

 

46.5

 

 

 

22.8

 

 

 

69.3

 

Other revenue

 

 

40.5

 

 

 

11.8

 

 

 

52.3

 

 

 

66.3

 

 

 

18.8

 

 

 

85.1

 

Total revenue

 

$

734.9

 

 

$

207.4

 

 

$

942.3

 

 

$

1,214.0

 

 

$

339.0

 

 

$

1,553.0

 

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30, 2022

 

 

June 30, 2022

 

 

 

U.S.

 

 

International

 

 

 

 

 

U.S.

 

 

International

 

 

 

 

 

 

Operating

 

 

Operating

 

 

 

 

 

Operating

 

 

Operating

 

 

 

 

 

 

Segment (1)

 

 

Segment

 

 

Consolidated

 

 

Segment (1)

 

 

Segment

 

 

Consolidated

 

Admissions revenue

 

$

309.7

 

 

$

72.2

 

 

$

381.9

 

 

$

501.5

 

 

$

116.2

 

 

$

617.7

 

Concession revenue

 

 

234.6

 

 

 

51.4

 

 

 

286.0

 

 

 

375.7

 

 

 

83.3

 

 

 

459.0

 

Screen advertising, screen rental and promotional revenue (2)

 

 

21.4

 

 

 

11.3

 

 

 

32.7

 

 

 

40.1

 

 

 

19.4

 

 

 

59.5

 

Other revenue

 

 

35.1

 

 

 

8.4

 

 

 

43.5

 

 

 

55.5

 

 

 

12.9

 

 

 

68.4

 

Total revenue

 

$

600.8

 

 

$

143.3

 

 

$

744.1

 

 

$

972.8

 

 

$

231.8

 

 

$

1,204.6

 

(1)
U.S. segment revenue excludes intercompany transactions with the international operating segment. See Note 16 for the amount of intercompany eliminations for the periods presented.
(2)
Amount includes amortization of NCM screen advertising advances. See Screen Advertising Advances and Other Deferred Revenue below.

The following tables present revenue disaggregated based on timing of recognition and by reportable operating segment.

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30, 2023

 

 

June 30, 2023

 

 

 

U.S.

 

 

International

 

 

 

 

 

U.S.

 

 

International

 

 

 

 

 

 

Operating

 

 

Operating

 

 

 

 

 

Operating

 

 

Operating

 

 

 

 

 

 

Segment (1)

 

 

Segment

 

 

Consolidated

 

 

Segment (1)

 

 

Segment

 

 

Consolidated

 

Goods and services transferred at a point in time

 

$

714.7

 

 

$

192.8

 

 

$

907.5

 

 

$

1,162.5

 

 

$

312.0

 

 

$

1,474.5

 

Goods and services transferred over time (2)

 

 

20.2

 

 

 

14.6

 

 

 

34.8

 

 

 

51.5

 

 

 

27.0

 

 

 

78.5

 

Total

 

$

734.9

 

 

$

207.4

 

 

$

942.3

 

 

$

1,214.0

 

 

$

339.0

 

 

$

1,553.0

 

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30, 2022

 

 

June 30, 2022

 

 

 

U.S.

 

 

International

 

 

 

 

 

U.S.

 

 

International

 

 

 

 

 

 

Operating

 

 

Operating

 

 

 

 

 

Operating

 

 

Operating

 

 

 

 

 

 

Segment (1)

 

 

Segment

 

 

Consolidated

 

 

Segment (1)

 

 

Segment

 

 

Consolidated

 

Goods and services transferred at a point in time

 

$

573.8

 

 

$

129.8

 

 

$

703.6

 

 

$

922.1

 

 

$

208.4

 

 

$

1,130.5

 

Goods and services transferred over time (2)

 

 

27.0

 

 

 

13.5

 

 

 

40.5

 

 

 

50.7

 

 

 

23.4

 

 

 

74.1

 

Total

 

$

600.8

 

 

$

143.3

 

 

$

744.1

 

 

$

972.8

 

 

$

231.8

 

 

$

1,204.6

 

(1)
U.S. segment revenue excludes intercompany transactions with the international operating segment. See Note 16 for the amount of intercompany eliminations for the periods presented.
(2)
Amount includes amortization of NCM screen advertising advances. See Screen Advertising Advances and Other Deferred Revenue below.

 

18


CINEMARK HOLDINGS, INC. AND SUBSIDIARIES AND

CINEMARK USA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except per share data, unaudited)

Screen Advertising Advances and Other Deferred Revenue

The following table presents changes in the Company’s deferred revenue for the six months ended June 30, 2023.

 

 

NCM screen advertising advances (1)

 

 

Other
Deferred
Revenue
(2)

 

Balance at January 1, 2023

 

$

338.2

 

 

$

194.9

 

Amounts recognized as accounts receivable

 

 

 

 

 

0.8

 

Cash received from customers in advance

 

 

 

 

 

143.8

 

Interest accrued related to significant financing component

 

 

11.4

 

 

 

 

Revenue recognized during period

 

 

(16.2

)

 

 

(145.6

)

Foreign currency translation adjustments

 

 

 

 

 

(0.6

)

Balance at June 30, 2023

 

$

333.4

 

 

$

193.3

 

(1)
See Note 8 for the maturity of NCM screen advertising advances as of June 30, 2023.
(2)
Includes liabilities associated with outstanding gift cards and discount ticket vouchers, points or rebates outstanding under the Company’s loyalty and membership programs and revenue not yet recognized for screen advertising and other promotional activities. Amounts are classified as accounts payable and accrued expenses or other long-term liabilities on the condensed consolidated balance sheet.

The table below summarizes the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied as of June 30, 2023 and when the Company expects to recognize this revenue.

 

 

 

Twelve Months Ended June 30,

 

 

 

 

 

 

 

Remaining Performance Obligations

 

 

2024

 

 

2025

 

 

Thereafter

 

 

Total

 

Other deferred revenue

 

 

$

170.9

 

 

$

22.4

 

 

$

 

 

$

193.3

 

 

 

19


CINEMARK HOLDINGS, INC. AND SUBSIDIARIES AND

CINEMARK USA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except per share data, unaudited)

5.
Earnings (Loss) Per Share

The following table presents computations of basic and diluted earnings (loss) per share for Holdings:

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Numerator:

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to Cinemark Holdings, Inc.

 

$

119.1

 

 

$

(73.4

)

 

$

116.0

 

 

$

(147.4

)

(Income) loss allocated to participating share-based awards (1)

 

 

(2.3

)

 

 

1.4

 

 

 

(1.9

)

 

 

2.5

 

Basic net income (loss) attributable to common stockholders

 

$

116.8

 

 

$

(72.0

)

 

$

114.1

 

 

$

(144.9

)

Add: Interest expense on convertible notes, net of tax (3)

 

 

4.6

 

 

 

 

 

 

9.8

 

 

 

 

Diluted net income (loss) attributable to common stockholders

 

$

121.4

 

 

$

(72.0

)

 

$

123.9

 

 

$

(144.9

)

 

 

 

 

 

 

 

 

 

 

 

 

Denominator:

 

 

 

 

 

 

 

 

 

 

 

 

Basic weighted average shares outstanding

 

 

119.1

 

 

 

118.2

 

 

 

118.9

 

 

 

118.0

 

Common equivalent shares for restricted stock units (2)

 

 

0.6

 

 

 

 

 

 

0.6

 

 

 

 

Common equivalent shares for convertible notes (3)

 

 

32.0

 

 

 

 

 

 

32.0

 

 

 

 

Common equivalent shares for warrants (4)

 

 

 

 

 

 

 

 

 

 

 

 

Diluted weighted average shares outstanding

 

 

151.7

 

 

 

118.2

 

 

 

151.5

 

 

 

118.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings (loss) per share attributable to common stockholders

 

$

0.98

 

 

$

(0.61

)

 

$

0.96

 

 

$

(1.23

)

Diluted earnings (loss) per share attributable to common stockholders

 

$

0.80

 

 

$

(0.61

)

 

$

0.82

 

 

$

(1.23

)

(1)
For the three months ended June 30, 2023 and 2022, a weighted average of approximately 2.40 shares and 2.27 shares of restricted stock, respectively, were considered participating securities. For the six months ended June 30, 2023 and 2022, a weighted average of approximately 2.03 shares and 2.03 shares of restricted stock, respectively, were considered participating securities.
(2)
For the three months ended June 30, 2022, 0.25 common equivalent shares for restricted stock units, respectively, were excluded because they were anti-dilutive. For the six months ended June 30, 2022, approximately 0.28 common equivalent shares for restricted stock units, respectively, were excluded because they were anti-dilutive.
(3)
For the three and six months ended June 30, 2022 diluted loss per share excludes the conversion of the 4.50% Convertible Senior Notes into 32.0 shares of common stock, as they would be anti-dilutive. See further discussion below.
(4)
For all periods presented, diluted earnings (loss) per share excludes the warrants, as they would be anti-dilutive.

Share-based awards

Holdings considers its unvested share-based awards, which contain non-forfeitable rights to dividends, participating securities, and includes such participating securities in its computation of earnings (loss) per share pursuant to the two-class method. Basic earnings (loss) per share for the two classes of stock (common stock and unvested restricted stock) is calculated by dividing net income (loss) by the weighted average number of shares of common stock and unvested restricted stock outstanding during the reporting period. Diluted earnings (loss) per share is calculated using the weighted average number of shares of common stock plus the potentially dilutive effect of common equivalent shares outstanding determined under both the two-class method and the treasury stock method.

Convertible notes, hedges and warrants

The 4.50% Convertible Senior Notes, discussed further in Note 14 of the Company’s Annual Report on Form 10-K filed February 24, 2023, may be considered dilutive in periods in which Holdings has net income. The impact of such dilution on earnings per share is calculated under the if-converted method, which requires that all of the shares of Holdings' common stock issuable upon conversion of the 4.50% Convertible Senior Notes be included in the calculation of diluted earnings per share assuming conversion at the beginning of the reporting period. Also, the interest expense, net of tax, related to the 4.50% Convertible Senior Notes is excluded from the calculation of diluted net income (loss) attributable to common stockholders assuming conversion of the 4.50% Convertible Senior Notes at the beginning of the reporting period.

20


CINEMARK HOLDINGS, INC. AND SUBSIDIARIES AND

CINEMARK USA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except per share data, unaudited)

The closing price of Holdings' common stock did not exceed the strike price of $18.66 per share (130% of the initial exercise price of $14.35 per share) during at least 20 of the last 30 trading days of the quarter ended June 30, 2023 and, therefore, the 4.50% Convertible Senior Notes will not be convertible during the third quarter of 2023. The if-converted value of the 4.50% Convertible Senior Notes, based on the weighted average closing price of Holdings common stock for the second quarter of 2023, was $13.5 less than the aggregate outstanding principal value of the notes as of June 30, 2023.

Holdings entered into hedge transactions with counterparties in connection with the issuance of the 4.50% Convertible Senior Notes. The convertible note hedge transactions cover, subject to anti-dilution adjustments substantially similar to those applicable to the 4.50% Convertible Senior Notes, the number of shares of Holdings' common stock underlying the 4.50% Convertible Notes, which initially gives Holdings the option to purchase approximately 32.0 shares of its common stock at a price of approximately $14.35 per share. Concurrently with entering into the convertible note hedge transactions, Holdings also entered into warrant transactions with each option counterparty whereby Holdings sold to such option counterparty warrants to purchase, subject to customary anti-dilution adjustments, up to the same number of shares of Holdings' common stock, which initially gives the option counterparties the option to purchase approximately 32.0 shares at a price of approximately $22.08 per share. The economic effect of these transactions is to effectively raise the strike price of the 4.50% Convertible Senior Notes from approximately $18.66 per share of Holdings' common stock to approximately $22.08 per share.

6.
Theatre Assets Held for Sale

During December 2022, the Company entered into a purchase and sale agreement for the sale of the stock of its Ecuador subsidiary. The transaction is expected to close during 2023, pending customary antitrust and regulatory approvals. See Note 19 for discussion of subsequent event related to this transaction. At June 30, 2023 and December 31, 2022, the assets and liabilities of the Ecuador subsidiary qualified as held for sale upon satisfaction of the criteria set forth in ASC 360-10-45-9 (205-20-45-1E), Property, Plant, and Equipment. The sale of the Ecuador subsidiary does not qualify as discontinued operations since it does not represent a strategic shift in the Company’s operations that will have a major effect on its results and operations. The following table presents the carrying value of Ecuador’s significant assets and liabilities as of the periods presented:

 

June 30,

 

 

December 31,

 

 

2023

 

 

2022

 

Theatre property and equipment, net

$

5.5

 

 

$

5.4

 

Operating lease right-of-use asset, net

 

3.4

 

 

 

2.9

 

Goodwill

 

4.2

 

 

 

4.2

 

 

 

 

 

 

 

Total assets

$

17.1

 

 

$

15.3

 

Total liabilities

$

8.9

 

 

$

8.5

 

The table below summarizes total revenue and operating income for the Ecuador subsidiary for the periods presented:

 

Three Months Ended June 30, 2023

 

 

Six Months Ended June 30, 2023

 

Total revenue

$

6.1

 

 

$

9.6

 

Operating income

$

1.6

 

 

$

1.5

 

 

 

21


CINEMARK HOLDINGS, INC. AND SUBSIDIARIES AND

CINEMARK USA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except per share data, unaudited)

 

7.
Long Term Debt

Long-term debt of Holdings consisted of the following for the periods presented:

 

June 30,

 

 

December 31,

 

 

2023

 

 

2022

 

Cinemark Holdings, Inc. 4.50% convertible senior notes due 2025

$

460.0

 

 

$

460.0

 

Cinemark USA, Inc. term loan due 2030

 

648.4

 

 

 

626.5

 

Cinemark USA, Inc. 8.75% senior secured notes due 2025

 

150.0

 

 

 

250.0

 

Cinemark USA, Inc. 5.875% senior notes due 2026

 

405.0

 

 

 

405.0

 

Cinemark USA, Inc. 5.25% senior notes due 2028

 

765.0

 

 

 

765.0

 

Other

 

8.0

 

 

 

10.1

 

Total long-term debt carrying value (1)

$

2,436.4

 

 

$

2,516.6

 

Less: Current portion

 

8.1

 

 

 

10.7

 

Less: Debt issuance costs and original issue discount, net of accumulated amortization (1)

 

38.0

 

 

 

31.9

 

Long-term debt, less current portion, net of unamortized debt issuance costs and original issue discount (1)

$

2,390.3

 

 

$

2,474.0

 

(1)
The only differences between the long-term debt for Holdings, as presented above, and the long-term debt for CUSA are the $460.0 4.50% Convertible Senior Notes due 2025 and the related debt issuance costs. The following table sets forth, as of the periods indicated, the total long-term debt carrying value, current portion of long-term debt and debt issuance costs, net of amortization, for CUSA.

 

June 30,

 

 

December 31,

 

 

2023

 

 

2022

 

Total long-term debt carrying value

$

1,976.4

 

 

$

2,056.6

 

Less: Current portion

 

8.1

 

 

 

10.7

 

Less: Debt issuance costs and original issue discount, net of accumulated amortization

 

30.7

 

 

 

22.9

 

Long-term debt, less current portion, net of unamortized debt issuance costs and original issue discount

$

1,937.6

 

 

$

2,023.0

 

Senior Secured Credit Facility

On May 26, 2023, CUSA amended and restated its senior secured credit facility (the “Credit Agreement”) to provide for an aggregate principal amount of $775.0, consisting of a $650.0 term loan with a maturity date of May 24, 2030 and a $125.0 revolving credit facility with a maturity date of May 26, 2028. The term loan is subject to a springing maturity date of April 15, 2028 if CUSA’s 5.25% Senior Notes due 2028 have not been paid or refinanced as required under the Credit Agreement prior to such date. The revolving credit facility is subject to springing maturity dates of January 30, 2025, December 14, 2025 and April 15, 2028 if CUSA’s 8.75% Senior Secured Notes due 2025, 5.875% Senior Notes due 2026 and 5.25% Senior Notes due 2028 have not been paid or refinanced as required under the Credit Agreement prior to such dates, as more specifically described in the Credit Agreement.

CUSA used the $632.7 net proceeds of the borrowings under the Credit Agreement to fund the $628.3 repayment of the term loan outstanding under the Credit Agreement prior to the amendment and restatement and accrued interest thereon, and for other general corporate purposes.

Under the Credit Agreement, principal payments of $1.6 are due on the term loan quarterly through March 31, 2030, with a final principal payment of all remaining unpaid principal due on May 24, 2030.

The term loan was issued net of an original issue discount of $9.8. CUSA also incurred a total of approximately $10.1 in debt issuance costs in connection with the amendment, which are reflected in the condensed consolidated financial statements as follows: (i) $7.5 in debt issuance costs were capitalized and are reflected as a reduction of “Long-term debt, less current portion” on the Company’s condensed consolidated balance sheet; and (ii) $2.1 of fees paid to lenders and $0.5 of legal and other fees are included in “Loss on debt extinguishment and refinancing” in the Company’s condensed consolidated statement of income for the three and six months ended June 30, 2023. As a result of the amendment, CUSA also wrote-off $4.7 of unamortized debt issuance costs associated with exiting lenders of the refinanced Credit Agreement.

Interest on the term loan accrues, at CUSA's option, at either (i) a rate determined by reference to the secured overnight financing rate ("SOFR") as published by CME Group Benchmark Administration Limited and identified by Barclay's Bank PLC (the

22


CINEMARK HOLDINGS, INC. AND SUBSIDIARIES AND

CINEMARK USA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except per share data, unaudited)

Administrative Agent) as the forward-looking term rate based on SOFR for a period of 1, 3, or 6 months (depending upon the Interest Period (as defined in the Credit Agreement) chosen by CUSA) (the "Term SOFR Rate"), subject to a floor of 0.50% per annum, plus an applicable margin of 3.75% per annum, or (ii) for any day, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) the Federal Reserve Bank of New York Rate in effect on such day, plus 1/2 of 1.00% and (c) the Term SOFR Rate for a one month Interest Period, as published two U.S. Government Securities Business Days prior to such day (or if such day is not a U.S. Government Securities Business Day, the immediately preceding U.S. Government Securities Business Day), plus 1.00% (this clause (ii), the "Alternate Base Rate"), subject in the case of this clause (ii) to a floor of 1.50% per annum, plus, in the case of this clause (ii), an applicable margin of 2.75%. The average interest rate on outstanding term loan borrowings under the Credit Agreement as of June 30, 2023 was approximately 6.8% per annum, after giving effect to the interest rate swap agreements discussed below.

Interest on revolving credit loans accrues, at CUSA's option, at either (i) the Term SOFR Rate plus an applicable margin that ranges from 3.00% to 3.50% per annum, or (ii) the Alternate Base Rate, subject, in the case of this clause (ii) to a floor of 1.00% per annum, plus, in the case of this clause (ii), an applicable margin that ranges from 2.00% to 2.50%. The applicable margin with respect to revolving credit loans is a function of the Consolidated Net Senior Secured Leverage Ratio as defined in the Credit Agreement. As of June 30, 2023, the applicable margin was 3.50%, however, there were no borrowings outstanding under the revolving line of credit. In addition, CUSA is required to pay a commitment fee on the revolving line of credit that accrues at a rate ranging from 0.20% to 0.375% per annum of the daily unused portion of the revolving line of credit. The commitment fee rate is a function of the Consolidated Net Senior Secured Leverage Ratio.

CUSA’s obligations under the Credit Agreement are guaranteed by Holdings and certain subsidiaries of Holdings other than CUSA (the “Other Guarantors”) and are secured by security interests in substantially all of CUSA’s, Holdings’ and the Other Guarantors’ personal property.

The Credit Agreement contains usual and customary negative covenants for agreements of this type, including, but not limited to, restrictions on the ability of Holdings, CUSA and their subsidiaries to: merge, consolidate, liquidate, or dissolve; sell, transfer or otherwise dispose of assets; create, incur or permit to exist certain indebtedness and liens; pay dividends, repurchase stock and make other Restricted Payments (as defined in the Credit Agreement); prepay certain indebtedness; make investments; enter into transactions with affiliates; and change the nature of their business. At any time that CUSA has revolving credit loans outstanding, it is not permitted to allow the Consolidated Net Senior Secured Leverage Ratio to exceed 3.5 to 1.0. As of June 30, 2023, there were no revolving credit loans outstanding under the revolving line of credit, and CUSA’s Consolidated Net Senior Secured Leverage Ratio was 0.6 to 1.0.

The Credit Agreement also includes customary events of default, including, among other things, payment default, covenant default, breach of representation or warranty, bankruptcy, cross-default, material ERISA events, a change of control, material money judgments and failure to maintain security interests. If an event of default occurs, all commitments under the Credit Agreement may be terminated and all obligations under the Credit Agreement could be accelerated by the Lenders, causing all loans outstanding (including accrued interest and fees payable thereunder) to be declared immediately due and payable.

The Restricted Payments covenant, as defined in the Credit Agreement generally does not limit the ability of Holdings and its subsidiaries to pay dividends and make other Restricted Payments if the Consolidated Net Total Leverage Ratio (as defined in the Credit Agreement) is less than or equal to 2.75 to 1.00. If the Consolidated Net Total Leverage Ratio is greater than 2.75 to 1.00, but no greater than 5.00 to 1.00, Restricted Payments generally may be made in an aggregate amount not to exceed the Available Amount (as defined in the Credit Agreement), which is a function of CUSA’s Consolidated EBITDA minus 1.75 times its Consolidated Interest Expense (as such terms are defined in the Credit Agreement) and certain other factors as specified in the Credit Agreement. As of June 30, 2023, the Consolidated Net Total Leverage Ratio was 2.80 to 1.00. As of June 30, 2023, the Available Amount was $262.5. In addition, the Credit Agreement contains other baskets that allow certain Restricted Payments in excess of the Applicable Amount.

8.75% Secured Notes

On May 1, 2023, CUSA redeemed $100.0 in principal amount of the 8.75% Secured Notes plus accrued interest thereon for $106.6 in cash. Following the redemption, $150.0 in aggregate principal amount of the 8.75% Secured Notes remains outstanding. As a result of the redemption, CUSA recognized a loss on extinguishment of debt totaling $3.4, which includes a $2.2 premium paid on the redemption of bonds and a $1.2 write-off of unamortized debt issuance costs, and is reflected in “Loss on debt extinguishment and refinancing” in the Company’s condensed consolidated statement of income for the three and six months ended June 30, 2023. For additional discussion of the 8.75% Secured Notes, see Note 14 to the Company’s consolidated financial statements for the year ended December 31, 2022, included in the Company’s Annual Report on Form 10-K filed February 24, 2023.

Interest Rate Swap Agreements

The Company’s interest rate swap agreements are used to hedge a portion of the interest rate risk associated with the variable interest rates on the Company’s term loan debt and qualify for cash flow hedge accounting. Effective May 31, 2023, in conjunction with

23


CINEMARK HOLDINGS, INC. AND SUBSIDIARIES AND

CINEMARK USA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except per share data, unaudited)

the amendment of its Credit Agreement, the Company amended its three then existing interest rate swap agreements to update the reference rate from LIBOR to Term SOFR, and the Company applied the optional relief provided in FASB ASC Topic 848 prospectively to account for this modification. Topic 848 provides optional expedients that allow an entity not to dedesignate an existing hedging relationship when critical terms of the agreement are modified, but rather allow an existing hedging relationship to continue when one or more of the critical terms in the existing hedging agreement change because of reference rate reform. Therefore, we did not dedesignate the hedging relationship due to the amendment of our existing interest rate swap agreements on May 31, 2023, and accumulated losses due to the fair value adjustments on the interest rate swaps remained in other comprehensive income.

Below is a summary of the Company's interest rate swap agreements, which are designated as cash flow hedges, as of June 30, 2023:

Notional

 

 

 

 

 

 

 

 

 

 

Estimated

 

Amount

 

 

Effective Date

 

Pay Rate

 

Receive Rate

 

Expiration Date

 

Fair Value (1)

 

$

137.5

 

 

December 31, 2018

 

2.08%

 

1-Month Term SOFR

 

December 31, 2024

 

$

5.9

 

$

175.0

 

 

December 31, 2018

 

2.09%

 

1-Month Term SOFR

 

December 31, 2024

 

 

7.5

 

$

137.5

 

 

December 31, 2018

 

2.15%

 

1-Month Term SOFR

 

December 31, 2024

 

 

5.8

 

 

 

 

 

 

 

 

 

 

Total

 

$

19.2

 

(1)
Approximately $14.3 of the total is included in prepaid expenses and other and $4.9 is included in deferred charges and other assets, net on the condensed consolidated balance sheet as of June 30, 2023.

The fair values of the interest rate swaps are recorded on Holdings' and CUSA's condensed consolidated balance sheets as an asset or liability with the related gains or losses reported as a component of accumulated other comprehensive loss. The changes in fair value are reclassified from accumulated other comprehensive loss into earnings in the same period that the hedged items affect earnings. The valuation technique used to determine fair value is the income approach and, under this approach, the Company used projected future interest rates as provided by counterparties to the interest rate swap agreements and the fixed rates that the Company is obligated to pay under the agreement. Therefore, the Company's measurements use significant unobservable inputs, which fall in Level 2 of the U.S. GAAP hierarchy as defined by FASB ASC Topic 820-10-35.

Fair Value of Long-Term Debt

The Company estimates the fair value of its long-term debt primarily using quoted market prices, which fall under Level 2 of the U.S. GAAP fair value hierarchy as defined by ASC 820, Fair Value Measurement (“ASC Topic 820”). The table below presents the fair value of the Company's long-term debt as of the periods presented:

 

 

As of

 

 

 

June 30, 2023

 

 

December 31, 2022

 

Holdings fair value (1)

 

$

2,496.8

 

 

$

2,210.5

 

CUSA fair value

 

$

1,868.2

 

 

$

1,771.3

 

(1)
The fair value of the 4.50% convertible senior notes was $628.6 and $439.2 as of June 30, 2023 and December 31, 2022, respectively.

24


CINEMARK HOLDINGS, INC. AND SUBSIDIARIES AND

CINEMARK USA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except per share data, unaudited)

8.
Investment in NCMI/NCM

Below is a summary of activity with NCMI and NCM included in each of Holdings' and CUSA's condensed consolidated financial statements:

 

 

Investment
in NCMI/NCM

 

NCM Screen Advertising Advances

 

Equity in
Loss
(2)

 

Other
Revenue
 (3)

 

Interest
Expense - NCM

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance as of January 1, 2023

 

$

9.6

 

$

(338.2

)

$

 

$

 

$

 

Screen rental revenue earned under ESA (1)

 

 

 

 

 

 

 

 

(10.4

)

 

 

Interest accrued related to significant financing component

 

 

 

 

(11.4

)

 

 

 

 

 

11.4

 

Equity in loss (2)

 

 

(3.2

)

 

 

 

(3.2

)

 

 

 

 

Redemption of common units of NCM for common stock of NCMI (4)

 

 

 

 

 

 

 

 

 

 

 

Unrealized gain on fair market value adjustment of investment in NCMI (4)

 

 

9.2

 

 

 

 

 

 

 

 

 

Impairment of investment in NCMI

 

 

(0.7

)

 

 

 

 

 

 

 

 

Amortization of screen advertising advances

 

 

 

 

16.2

 

 

 

 

(16.2

)

 

 

Balance as of and for the six months ended June 30, 2023

 

$

14.9

 

$

(333.4

)

$

(3.2

)

$

(26.6

)

$

11.4

 

(1)
Amounts include the per patron and per digital screen theatre access fees, net of amounts due to NCM for on-screen advertising time provided to the Company's beverage concessionaire of approximately $4.5.
(2)
Equity in loss is recorded one month in arrears. See Investment in National CineMedia below for discussion of accounting for investment in NCMI.
(3)
The Company had a receivable from NCM of $10.4 as of June 30, 2023.
(4)
See Investment in National CineMedia below.

NCM operates a digital in-theatre network in the U.S. for providing cinema advertising. The Company has an investment in NCM’s parent National Cinemedia, Inc. (”NCMI”), and previously held an investment in NCM. See further discussion below under Investment in National CineMedia. The Company entered into an Exhibitor Services Agreement with NCM (“ESA”), pursuant to which NCM primarily provides advertising to our theatres through its branded “Noovie” pre-show entertainment program and also handles lobby promotions and displays for our theatres.

Investment in National CineMedia

On February 17, 2023, the Company delivered a redemption notice to NCM pursuant to the redemption right under its operating agreement with NCM to redeem approximately 42.0 of the Company’s 43.7 common units in NCM in exchange for approximately 42.0 newly issued shares of NCMI common stock, with a redemption date of February 23, 2023 (the “Redemption”). On March 20, 2023, the Company delivered a second redemption notice to NCM to redeem the Company’s remaining 1.7 common units in NCM in exchange for 1.7 newly issued shares of NCMI common stock, with a redemption date of March 23, 2023 (collectively with the February 23, 2023 redemption, the “Redemptions”). NCMI is a holding company and the sole manager of NCM. NCM comprises approximately the entire balance of NCMI’s assets, liabilities and operating cash flows. See Note 19 for discussion of subsequent event related to NCMI.

On April 11, 2023, NCM filed a petition for reorganization under Chapter 11 of the United States Bankruptcy Code. NCMI expects to continue to manage NCM, the “debtor in possession,” under the jurisdiction of the bankruptcy court and in accordance with the applicable bankruptcy laws and orders of the bankruptcy court. In general, as debtor in possession under the Bankruptcy Code, NCM is authorized to continue to operate as an ongoing business but may not engage in transactions outside the ordinary course of business without the prior approval of the bankruptcy court. Due to NCM’s bankruptcy proceedings, the Company reassessed its rights and level of influence over NCM. The Company determined that effective April 11, 2023, the date NCM filed its bankruptcy petition, it no longer had significant influence over NCM and therefore ceased accounting for its investment in NCMI under the equity method of accounting in the second quarter of 2023. The Company now accounts for its investment in NCMI in accordance with the guidance set forth in FASB ASC Topic 321 Investments - Equity Securities, which requires the Company to measure its investment in common stock of NCMI at fair value and recognize unrealized holding gains and losses on its investment in earnings. The Company recognized an unrealized gain of $9.2 on its investment in NCMI in the Company’s condensed consolidated statement of income for the three and six months ended June 30, 2023.

25


CINEMARK HOLDINGS, INC. AND SUBSIDIARIES AND

CINEMARK USA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except per share data, unaudited)

See Note 9 to the Company’s Annual Report on Form 10-K filed February 24, 2023 for additional discussion of the Company's investment in NCM.

Common Unit Adjustments

The Company periodically receives consideration in the form of common units from NCM. Annual adjustments to the common membership units are made primarily based on increases or decreases in the number of theatre screens operated and the impact of these theatres on total attendance. The common units received are recorded at estimated fair value as an increase in the Company's investment in NCM with an offset to NCM screen advertising advances.

In March 2023, NCM provided CUSA notice that is was entitled to 4.8 common units of NCM as part of the annual common unit adjustment. The issuance of these additional common units of NCM was stayed by NCM’s bankruptcy filing on April 11, 2023. In June 2023 the bankruptcy court issued an order cancelling the issuance of these common units of NCM and found that these common units were never issued.

Impairment of NCMI Investment

During the first quarter of 2023, the Company accounted for its investment in NCMI under the equity method of accounting, and therefore assessed its investment for other than temporary impairment. The Company recorded an impairment charge totaling $0.7 on its investment in NCMI during the first quarter of 2023 because the share price of NCMI was significantly below the Company’s carrying value of NCMI per common share and due to the lag in the pace of recovery pace of NCM’s business from the COVID-19 pandemic compared to that of the Company and the movie theatre industry.

Exhibitor Services Agreement

As discussed above, the Company’s domestic theatres are part of the in-theatre digital network operated by NCM, the terms of which are defined in the ESA. The Company receives a monthly theatre access fee for participation in the NCM network and also earns screen advertising or screen rental revenue on a per patron basis. See Note 9 to the Company’s Annual Report on Form 10-K filed February 24, 2023 for further discussion of the accounting for revenue earned under the ESA as well as the accounting related to NCM screen advertising advances.

As discussed in Note 9 to the Company’s Annual Report on Form 10-K filed February 24, 2023, the Company’s ESA with NCM includes an implied significant financing component, as per the guidance in ASC Topic 606, Revenue from Contracts with Customers. As a result of the significant financing component, the Company recognized incremental screen rental revenue and interest expense of $16.2 and $11.4, respectively, during the six months ended June 30, 2023 and incremental screen rental revenue and interest expense of $16.2 and $11.7 respectively, during the six months ended June 30, 2022. The interest expense was calculated using the Company's incremental borrowing rates at the time when the cash and each tranche of common units were received from NCM, which ranged from 4.4% to 8.3%.

The recognition of revenue related to the NCM screen advertising advances is recorded on a straight-line basis over the term of the amended ESA through February 2041. The table below summarizes when the Company expects to recognize this revenue:

 

 

Twelve Months Ended June 30,

 

 

 

 

 

 

 

Remaining Maturity

 

2024

 

 

2025

 

 

2026

 

 

2027

 

 

2028

 

 

Thereafter

 

 

Total

 

NCM screen advertising advances (1)

 

$

10.1

 

 

$

10.8

 

 

$

11.6

 

 

$

12.4

 

 

$

13.3

 

 

$

275.2

 

 

$

333.4

 

(1)
Amounts are net of the estimated interest to be accrued for the periods presented. See discussion of significant financing component below.

26


CINEMARK HOLDINGS, INC. AND SUBSIDIARIES AND

CINEMARK USA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except per share data, unaudited)

9.
Investments in Affiliates

Below is a summary of the activity for each of the Company’s other investees and corresponding changes to the Company's investment balances during the six months ended June 30, 2023. See Note 10 to the consolidated financial statements in the Company’s Annual Report on Form 10-K filed February 24, 2023 for a further discussion of the Company’s investments in affiliates.

 

 

 

AC JV,
LLC

 

DCDC

 

FE Concepts

 

Other

 

Total

 

Balance at January 1, 2023

 

$

4.2

 

$

1.8

 

$

16.5

 

$

0.1

 

$

22.6

 

Cash distributions received

 

 

(1.6

)

 

 

 

 

 

 

 

(1.6

)

Equity income

 

 

1.7

 

 

0.2

 

 

1.0

 

 

 

 

2.9

 

Balance at June 30, 2023

 

$

4.3

 

$

2.0

 

$

17.5

 

$

0.1

 

$

23.9

 

 

Transactions with Other Investees

Below is a summary of transactions with each of the Company’s other investees for the three and six months ended June 30, 2023 and 2022:

 

 

Three Months Ended

 

 

Six Months Ended

 

Investee

Transactions

June 30, 2023

 

 

June 30, 2022

 

 

June 30, 2023

 

 

June 30, 2022

 

AC JV, LLC

Event fees paid (1)

$

4.4

 

 

$

2.7

 

 

$

7.4

 

 

$

4.5

 

DCDC

Content delivery fees paid (1)

$

0.2

 

 

$

0.1

 

 

$

0.3

 

 

$

0.3

 

(1)
Included in film rentals and advertising costs on the condensed consolidated statements of income (loss).
10.
Treasury Stock and Share Based Awards

Treasury Stock - Holdings

Treasury stock represents shares of common stock repurchased by Holdings and not yet retired. The Company has applied the cost method in recording its treasury shares. Below is a summary of Holdings’ treasury stock activity for the six months ended June 30, 2023:

 

 

Number of

 

 

 

 

 

 

Treasury

 

 

 

 

 

 

Shares

 

 

Cost

 

Balance at January 1, 2023

 

 

5.68

 

 

$

95.4

 

Restricted stock withholdings (1)

 

 

0.19

 

 

 

2.4

 

Restricted stock forfeitures (2)

 

 

0.06

 

 

 

 

Balance at June 30, 2023

 

 

5.93

 

 

$

97.8

 

(1)
Holdings withheld shares as a result of the election by certain employees to satisfy their tax liabilities upon vesting in restricted stock and performance stock units. Holdings determined the number of shares to be withheld based upon market values of the common stock of Holdings on the vest dates, which ranged from $11.16 to $18.36 per share.
(2)
Holdings repurchased forfeited restricted shares at a cost of $0.001 per share in accordance with its 2017 Omnibus Plan.

As of June 30, 2023, Holdings had no plans to retire any shares of treasury stock.

27


CINEMARK HOLDINGS, INC. AND SUBSIDIARIES AND

CINEMARK USA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except per share data, unaudited)

Restricted Stock

Below is a summary of restricted stock activity for the six months ended June 30, 2023:

 

 

Shares of

 

 

Weighted
Average

 

 

 

Restricted

 

 

Grant Date

 

 

 

Stock

 

 

Fair Value

 

Outstanding at January 1, 2023

 

 

1.85

 

 

$

20.64

 

Granted

 

 

1.37

 

 

 

12.03

 

Vested

 

 

(0.70

)

 

 

47.33

 

Forfeited

 

 

(0.07

)

 

 

16.27

 

Outstanding at June 30, 2023

 

 

2.45

 

 

 

15.85

 

Unvested restricted stock at June 30, 2023

 

 

2.45

 

 

 

 

 

During the six months ended June 30, 2023, Holdings granted 1.37 shares of its restricted stock to certain CUSA employees and its directors. The fair value of the restricted stock granted was determined based on the closing price of Holdings' common stock on the grant dates, which ranged from $11.19 to $17.14 per share. Holdings assumed forfeiture rates for the restricted stock awards that ranged from 0% to 10%. The restricted stock granted during the six months ended June 30, 2023 vests over periods ranging from one to three years. The recipients of restricted stock are entitled to receive non-forfeitable dividends and to vote their respective shares, however, the sale and transfer of the restricted shares is prohibited during the restriction period.

 

Below is a summary of restricted stock award activity recorded for the periods indicated.

 

 

Six Months Ended
June 30,

 

 

 

2023

 

 

2022

 

Compensation expense recognized during the period:

 

 

 

 

 

 

CUSA employees

 

$

7.7

 

 

$

8.0

 

Holdings directors

 

 

0.6

 

 

 

0.5

 

Total recognized by Holdings

 

$

8.3

 

 

$

8.5

 

 

 

 

 

 

 

 

Fair value of restricted stock that vested during the period:

 

 

 

 

 

 

CUSA employees

 

$

7.9

 

 

$

7.2

 

Holdings directors

 

 

1.3

 

 

 

0.6

 

Holdings total

 

$

9.2

 

 

$

7.8

 

 

 

 

 

 

 

 

Income tax benefit related to vested restricted stock:

 

 

 

 

 

 

CUSA employees

 

$

0.7

 

 

$

1.0

 

Holdings directors

 

 

0.3

 

 

 

0.1

 

Holdings total income tax benefit

 

$

1.0

 

 

$

1.1

 

 

As of June 30, 2023, the estimated remaining unrecognized compensation expense related to unvested restricted stock awards was as follows:

 

 

Estimated

 

 

 

Remaining

 

 

 

Expense

 

CUSA employees (1)

 

$

25.7

 

Holdings directors

 

 

1.3

 

Total remaining - Holdings (1)

 

$

27.0

 

(1)
The weighted average period over which this remaining compensation expense will be recognized by both Holdings and CUSA is approximately 2.0 years.

28


CINEMARK HOLDINGS, INC. AND SUBSIDIARIES AND

CINEMARK USA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except per share data, unaudited)

Performance Stock Units

During the six months ended June 30, 2023, Holdings granted performance awards in the form of performance stock units (“PSU”), formerly referred to as restricted stock units. Each PSU that vests will result in the issuance of one share of Holdings’ common stock. The maximum number of shares issuable under the performance awards is approximately 1.5 shares of Holdings' common stock. The grant date fair value for the units issued was determined based on the closing price of Holdings' common stock on the date of grant, which was $11.68 per share. The performance metrics for these performance awards are based upon Adjusted EBITDA and consolidated cash flows, and payout levels are determined based upon the achievement of pre-established criteria for these metrics as defined in the award agreement. Based upon the terms of the award agreement, PSUs vest based on a combination of performance factors and continued service. The performance measurement period for the PSUs is three years, January 1, 2023 through December 31, 2025 and the service period ends on February 20, 2026. Below is a summary of the performance metrics and measurement period for these performance awards:

Performance Measurement Period

 

Three years with additional service requirement to the third anniversary of the date of the grant

Maximum Performance Target Level

 

200% of target level

Percentage of maximum performance stock units that vest if performance metrics meet the threshold level (1)

 

25% or 0.37 PSUs

Percentage of maximum performance stock units that vest if performance metrics are at target (1)

 

50% or 0.73 PSUs

Percentage of maximum performance stock units that vest if performance metrics are at the maximum (1)

 

100% or 1.47 PSUs

Most likely performance metrics outcome estimated to be achieved at the time performance stock units were issued

 

Target

Assumed forfeiture rate for performance stock unit awards

 

5%

(1)
Number of PSUs that vest based on maximum amount of PSUs that could vest of 1.47.

Below is a summary of performance stock unit activity for the periods presented:

 

 

Six Months Ended June 30,

 

 

 

2023

 

 

2022

 

Number of performance stock units that vested during the period

 

 

0.1

 

 

 

0.1

 

Fair value of performance stock units that vested during the period

 

$

1.4

 

 

$

1.7

 

Accumulated dividends paid upon vesting of performance stock units

 

$

0.2

 

 

$

0.3

 

Compensation expense recognized during the period

 

$

4.2

 

 

$

2.6

 

Income tax (expense) benefit related to performance stock units

 

$

(0.2

)

 

$

0.1

 

As of June 30, 2023, the estimated remaining unrecognized compensation expense related to outstanding performance stock units was $17.10. The weighted average period over which this remaining compensation expense will be recognized is approximately 2.2 years. As of June 30, 2023, Holdings had performance stock units outstanding that represented a total of approximately 1.7 hypothetical shares of common stock, net of forfeitures, reflecting actual certified performance levels for performance stock units granted during 2020 and 2022, and an estimated performance level for the 2023 grant slightly above target.

29


CINEMARK HOLDINGS, INC. AND SUBSIDIARIES AND

CINEMARK USA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except per share data, unaudited)

11.
Goodwill and Other Intangible Assets

A summary of the Company's goodwill is as follows:

 

 

U.S.
Operating
Segment

 

 

International
Operating
Segment

 

 

Total

 

Balance at January 1, 2023 (1)

 

$

1,182.9

 

 

$

68.0

 

 

$

1,250.9

 

Foreign currency translation adjustments

 

 

 

 

 

5.0

 

 

 

5.0

 

Balance at June 30, 2023 (1)

 

$

1,182.9

 

 

$

73.0

 

 

$

1,255.9

 

(1)
Balances are presented net of accumulated impairment losses of $214.0 for the U.S. operating segment and $43.8 for the international operating segment. See discussion of the qualitative impairment analysis performed by the Company as of June 30, 2023 at Note 12.

A summary of the Company's intangible assets is as follows:

 

 

Balance at
January 1, 2023

 

Additions (1)

 

Amortization

 

Foreign Currency Translation Adjustments and Other (2)

 

Balance at June 30, 2023

 

Intangible assets with finite lives:

 

 

 

 

 

 

 

 

 

 

 

Gross carrying amount

 

$

77.7

 

$

 

$

 

$

 

$

77.7

 

Accumulated amortization

 

 

(73.2

)

 

 

 

(1.0

)

 

 

 

(74.2

)

Total net intangible assets with finite lives

 

$

4.5

 

$

 

$

(1.0

)

$

 

$

3.5

 

 

 

 

 

 

 

 

 

 

 

 

Intangible assets with indefinite lives:

 

 

 

 

 

 

 

 

 

 

 

Tradename and other

 

 

300.1

 

 

0.1

 

 

 

 

0.2

 

 

300.4

 

Total intangible assets, net

 

$

304.6

 

$

0.1

 

$

(1.0

)

$

0.2

 

$

303.9

 

(1) Amount represents licenses acquired to sell alcoholic beverages for certain theatres.

(2) Includes foreign currency translation adjustments and the write-off of liquor licenses for closed theatres.

The estimated aggregate future amortization expense for intangible assets is as follows:

 

 

Estimated

 

 

 

Amortization

 

For the six months ended December 31, 2023

 

$

1.0

 

For the twelve months ended December 31, 2024

 

 

2.0

 

For the twelve months ended December 31, 2025

 

 

0.5

 

Total

 

$

3.5

 

 

30


CINEMARK HOLDINGS, INC. AND SUBSIDIARIES AND

CINEMARK USA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except per share data, unaudited)

12.
Impairment of Long-Lived Assets

The Company performed a qualitative impairment analysis on its goodwill and tradename intangible assets as of June 30, 2023. As a result of the qualitative assessment, the Company noted no impairment indicators related to these assets as of June 30, 2023.

The qualitative impairment analysis, by asset class, is described below:

Goodwill – Considers economic and market conditions, industry trading multiples and the impact of recent developments and events on estimated fair values as compared with the most recent quantitative assessment.
Tradename Intangible Assets – Considers recent developments that may impact revenue forecasts and other estimates as compared with the most recent quantitative assessment.

The Company also performed a qualitative impairment analysis on its other long-lived assets, including theatre properties and right of-use assets, as of June 30, 2023 to determine whether indicators of potential impairment existed at the theatre level, which is the level at which the Company tests its other long-lived assets. The qualitative analysis considers relevant market transactions, industry trading multiples and recent developments that would impact the estimates of future cash flows at the theatre level. The Company then performed a quantitative impairment analysis for those theatres for which indicators of potential impairment were identified.

The Company’s quantitative evaluation at the theatre level uses estimated undiscounted cash flows from continuing use through the remainder of the theatre’s useful life. The remainder of the theatre’s useful life for leased properties correlates with the remaining lease period, which includes the probability of the exercise of available renewal periods, and for owned properties represents the lesser of twenty years or the building’s remaining useful life. If the estimated undiscounted cash flows are not sufficient to recover a long-lived asset’s carrying value, the Company then compares the carrying value of the asset group (theatre) with its estimated fair value. Significant judgment is involved in estimating fair value, including management’s estimate of future theatre level cash flows for each of the Company's theatres based on projected box office. Fair value is estimated based on a multiple of cash flows. Management’s estimates, which fall under Level 3 of the U.S. GAAP fair value hierarchy, as defined by FASB ASC Topic 820-10-35, are based on projected operating performance, market transactions and industry trading multiples.

See Note 1 and Note 12 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, filed February 24, 2023, for a further discussion of the Company’s impairment policy and a description of the qualitative and quantitative impairment assessments performed.

The Company’s impairment charges were as follows for the three and six months ended June 30, 2023 and 2022:

 

 

 

 

 

 

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

U.S. Segment

 

 

 

 

 

 

 

 

 

 

 

 

Theatre properties

 

$

3.9

 

 

$

2.5

 

 

$

3.9

 

 

$

2.5

 

Theatre operating lease right-of-use assets

 

 

3.4

 

 

 

2.0

 

 

 

3.4

 

 

 

2.0

 

Investment in NCMI (1)

 

 

 

 

 

86.8

 

 

 

0.7

 

 

 

86.8

 

U.S. total

 

 

7.3

 

 

 

91.3

 

 

 

8.0

 

 

 

91.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

International segment

 

 

 

 

 

 

 

 

 

 

 

 

Theatre properties

 

 

0.6

 

 

 

0.7

 

 

 

0.6

 

 

 

0.7

 

Theatre operating lease right-of-use assets

 

 

1.5

 

 

 

0.3

 

 

 

1.5

 

 

 

0.3

 

International total

 

 

2.1

 

 

 

1.0

 

 

 

2.1

 

 

 

1.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Total Impairment

 

$

9.4

 

 

$

92.3

 

 

$

10.1

 

 

$

92.3

 

(1) See discussion at Impairment of NCMI Investment in Note 8.

 

31


CINEMARK HOLDINGS, INC. AND SUBSIDIARIES AND

CINEMARK USA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except per share data, unaudited)

 

13.
Fair Value Measurements

The Company determines fair value measurements in accordance with ASC Topic 820, which establishes a fair value hierarchy under which an asset or liability is categorized based on the lowest level of input significant to its fair value measurement. The levels of input defined by ASC Topic 820 are as follows:

Level 1 – quoted market prices in active markets for identical assets or liabilities that are accessible at the measurement date;

Level 2 – other than quoted market prices included in Level 1 that are observable for the asset or liability, either directly or indirectly; and

Level 3 – unobservable and should be used to measure fair value to the extent that observable inputs are not available.

Below is a summary of assets and liabilities measured at fair value on a recurring basis under FASB ASC Topic 820 as of June 30, 2023 and December 31, 2022:

 

 

 

 

Carrying

 

 

Fair Value Hierarchy

 

Description

 

As of

 

Value

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

Interest rate swap assets  (1)

 

June 30, 2023

 

$

19.2

 

 

$

 

 

$

19.2

 

 

$

 

Investment in NCMI (2)

 

June 30, 2023

 

$

14.9

 

 

$

14.9

 

 

$

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate swap assets (1)

 

December 31, 2022

 

$

20.4

 

 

$

 

 

$

20.4

 

 

$

 

(1)
See further discussion of interest rate swaps at Note 7.
(2)
See further discussion of investment in NCMI at Note 8.

See additional explanation of fair value measurement techniques used for long-lived assets, goodwill and intangible assets in “Critical Accounting Policies” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, filed February 24, 2023. There were no changes in valuation techniques for the six months ended June 30, 2023. There were no transfers into or out of Level 1, Level 2 or Level 3 during the six months ended June 30, 2023.

14.
Foreign Currency Translation

The accumulated other comprehensive loss account in Holdings’ stockholders’ equity of $344.8 and $353.2 and CUSA’s stockholder's equity of $347.9 and $356.3, as of June 30, 2023 and December 31, 2022, respectively, primarily includes cumulative foreign currency net losses of $377.1 and $389.8 as of June 30, 2023 and December 31, 2022 from translating the financial statements of the Company's international subsidiaries and the cumulative changes in fair value of the interest rate swap agreements that are designated as hedges.

As of June 30, 2023, all foreign countries where the Company has operations are non-highly inflationary, other than Argentina. In non-highly inflationary countries, the local currency is the same as the functional currency and any fluctuation in the currency results in a cumulative foreign currency translation adjustment recorded to accumulated other comprehensive loss. The Company deemed Argentina to be highly inflationary beginning July 1, 2018. A highly inflationary economy is defined as an economy with a cumulative inflation rate of 100 percent or more over a three-year period. If a country’s economy is classified as highly inflationary, the financial statements of the foreign entity operating in that country must be remeasured to the functional currency of the reporting entity. The financial information of the Company’s Argentina subsidiaries was remeasured in U.S. dollars in accordance with ASC Topic 830, Foreign Currency Matters, effective July 1, 2018.

During 2019, the Argentine government instituted exchange controls restricting the ability of entities and individuals to exchange Argentine pesos for foreign currencies and to remit foreign currency out of Argentina. As a result of these currency exchange controls, markets in Argentina developed a legal trading mechanism known as the Blue Chip Swap that allows reporting entities to transfer U.S. dollars out of and into Argentina. In a Blue Chip Swap transaction, a reporting entity buys U.S. dollar denominated securities in Argentina using Argentine pesos, and subsequently sells the securities for U.S. dollars, in Argentina, to access U.S. dollars locally, or outside Argentina, by transferring the securities abroad, prior to being sold (the latter commonly known as Blue Chip Swap Rate). The Blue Chip Swap rate is the implicit exchange rate resulting from the Blue Chip Swap transaction. The Blue Chip Swap rate can diverge significantly from Argentina’s official exchange rate. During the six months ended June 30, 2023, the Company entered into Blue Chip Swap transactions that resulted in a loss of approximately $4.9 which is reflected in Foreign currency and other related gain (loss) in the Company’s condensed consolidated statement of income for the three months ended June 30, 2023.

32


CINEMARK HOLDINGS, INC. AND SUBSIDIARIES AND

CINEMARK USA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except per share data, unaudited)

Below is a summary of the impact of translating the June 30, 2023 and June 30, 2022 financial statements of the Company’s international subsidiaries:

 

 

 

 

 

 

 

 

Other Comprehensive Income (Loss) for

 

 

 

Exchange Rate as of

 

 

Six Months Ended

 

Country

 

June 30, 2023

 

 

December 31, 2022

 

 

June 30, 2023

 

June 30, 2022

 

Brazil

 

 

4.83

 

 

 

5.29

 

 

$

6.6

 

$

2.4

 

Chile

 

 

803.01

 

 

 

852.00

 

 

 

4.1

 

 

(5.2

)

Peru

 

 

3.67

 

 

 

3.81

 

 

 

0.9

 

 

1.0

 

All other

 

 

 

 

 

 

 

 

0.6