cnk-10q_20190331.htm

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

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 March 31, 2019

Commission File Number: 001-33401

CINEMARK HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

Delaware		20-5490327
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

3900 Dallas Parkway
Suite 500
Plano, Texas		75093
(Address of principal executive offices)		(Zip Code)

Registrant's telephone number, including area code: (972) 665-1000

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

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 files). 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.

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). Yes ☐ No ☒

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


Title of Each Class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value $.001 per share	CNK	New York Stock Exchange

As of April 30, 2019, 117,101,510 shares of common stock were issued and outstanding.

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES

TABLE OF CONTENTS

			Page
PART I. FINANCIAL INFORMATION

	Item 1.	Financial Statements	4

		Condensed Consolidated Balance Sheets as of March 31, 2019 and December 31, 2018 (unaudited)	4

		Condensed Consolidated Statements of Income for the three months ended March 31, 2019 and 2018 (unaudited)	6

		Condensed Consolidated Statements of Comprehensive Income for the three months ended March 31, 2019 and 2018 (unaudited)	7

		Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2019 and 2018 (unaudited)	8

		Notes to Condensed Consolidated Financial Statements (unaudited)	9

	Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	30

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	37

	Item 4.	Controls and Procedures	37

PART II. OTHER INFORMATION

	Item 1.	Legal Proceedings	38

	Item 1A.	Risk Factors	38

	Item 6.	Exhibits	39

SIGNATURES			40

Cautionary Statement Regarding Forward-Looking Statements

Certain matters within this Quarterly Report on Form 10Q include “forward–looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The “forward-looking statements” may include our current expectations, assumptions, estimates and projections about our business and our industry. They may include statements relating to future revenues, expenses and profitability, the future development and expected growth of our business, projected capital expenditures, attendance at movies generally or in any of the markets in which we operate, the number or diversity of popular movies released and our ability to successfully license and exhibit popular films, national and international growth in our industry, competition from other exhibitors and alternative forms of entertainment and determinations in lawsuits in which we are defendants. Forward-looking statements can be identified by the use of words such as “may,” “should,” “could,” “estimates,” “predicts,” “potential,” “continue,” “anticipates,” “believes,” “plans,” “expects,” “future” and “intends” and similar expressions. Forward-looking statements may involve known and unknown risks, uncertainties and other factors that may cause the actual results or performance to differ from those projected in the forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond our control and difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements. For a description of the risk factors, please review the “Risk Factors” section or other sections in the Company’s Annual Report on Form 10-K filed February 28, 2019 and quarterly reports on Form 10-Q, filed with the Securities and Exchange Commission. All forward-looking statements are expressly qualified in their entirety by such risk factors. We undertake no 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.

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share data, unaudited)

	March 31,			December 31,
	2019			2018
Assets
Current assets
Cash and cash equivalents	$	425,194		$	426,222
Inventories		18,142			19,319
Accounts receivable		85,062			95,084
Current income tax receivable		4,213			3,288
Prepaid expenses and other		11,895			15,117
Total current assets		544,506			559,030

Theatre properties and equipment		3,213,464			3,404,150
Less: accumulated depreciation and amortization		1,489,011			1,571,017
Theatre properties and equipment, net		1,724,453			1,833,133

Operating lease right-of-use assets		1,443,451			—

Other assets
Goodwill		1,276,753			1,276,324
Intangible assets - net		324,952			330,910
Investment in NCM		272,414			275,592
Investments in and advances to affiliates		157,458			156,766
Long-term deferred tax asset		7,851			9,028
Deferred charges and other assets - net		38,910			41,055
Total other assets		2,078,338			2,089,675

Total assets	$	5,790,748		$	4,481,838

Liabilities and equity

Current liabilities
Current portion of long-term debt	$	7,984		$	7,984
Current portion of operating lease obligations		211,387			—
Current portion of finance and capital lease obligations		14,942			27,065
Current income tax payable		31,855			12,179
Current liability for uncertain tax positions		225			573
Accounts payable and accrued expenses		390,585			426,888
Total current liabilities		656,978			474,689

Long-term liabilities
Long-term debt, less current portion		1,772,304			1,772,627
Operating lease obligations, less current portion		1,284,317			—
Finance and capital lease obligations, less current portion		134,216			232,467
Long-term deferred tax liability		148,665			155,626
Long-term liability for uncertain tax positions		13,546			13,380
Deferred lease expenses		—			39,235
Deferred revenue - NCM		284,944			287,349
Other long-term liabilities		31,992			50,348
Total long-term liabilities		3,669,984			2,551,032

Commitments and contingencies (see Note 18)

Equity
Cinemark Holdings, Inc.'s stockholders' equity:
Common stock, $0.001 par value: 300,000,000 shares authorized, 121,792,137 shares issued and 117,107,057 shares outstanding at March 31, 2019 and 121,456,721 shares issued and 116,830,530 shares outstanding at December 31, 2018		121			121
Additional paid-in-capital		1,158,394			1,155,424
Treasury stock, 4,685,080 and 4,626,191 shares, at cost, at March 31, 2019 and December 31, 2018, respectively		(81,206	)		(79,259	)
Retained earnings		696,267			686,459
Accumulated other comprehensive loss		(321,634	)		(319,007	)
Total Cinemark Holdings, Inc.'s stockholders' equity		1,451,942			1,443,738

Noncontrolling interests		11,844		12,379
Total equity		1,463,786		1,456,117

Total liabilities and equity	$	5,790,748	$	4,481,838

The accompanying notes are an integral part of the condensed consolidated financial statements.

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share data, unaudited)

	Three Months Ended March 31,
	2019			2018
Revenues
Admissions	$	395,540		$	452,624
Concession		251,324			261,772
Other		67,859			65,575
Total revenues		714,723			779,971

Cost of operations
Film rentals and advertising		210,077			240,915
Concession supplies		43,071			40,824
Salaries and wages		96,136			93,158
Facility lease expense		85,613			82,091
Utilities and other		110,637			109,432
General and administrative expenses		37,976			42,384
Depreciation and amortization		64,462			64,395
Impairment of long-lived assets		5,584			591
Loss on disposal of assets and other		3,799			3,939
Total cost of operations		657,355			677,729

Operating income		57,368			102,242

Other income (expense)
Interest expense		(25,141	)		(27,115	)
Loss on debt amendments and refinancing		-			(1,484	)
Interest income		2,691			2,238
Foreign currency exchange gain		22			1,378
Distributions from NCM		4,548			6,358
Interest expense - NCM		(4,782	)		(4,979	)
Equity in income of affiliates		10,404			8,636
Total other expense		(12,258	)		(14,968	)

Income before income taxes		45,110			87,274
Income taxes		11,917			25,097
Net income	$	33,193		$	62,177
Less: Net income attributable to noncontrolling interests		465			156
Net income attributable to Cinemark Holdings, Inc.	$	32,728		$	62,021

Weighted average shares outstanding
Basic		116,179			115,883
Diluted		116,418			116,143

Earnings per share attributable to Cinemark Holdings, Inc.'s common stockholders
Basic	$	0.28		$	0.53
Diluted	$	0.28		$	0.53

The accompanying notes are an integral part of the condensed consolidated financial statements.

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands, unaudited)

	Three Months Ended March 31,
	2019			2018
Net income	$	33,193		$	62,177
Other comprehensive income (loss), net of tax
Unrealized loss due to fair value adjustments on interest rate swap agreements, net of taxes of $1,069, net of settlements		(3,311	)		—
Other comprehensive income (loss) in equity method investments		(71	)		136
Foreign currency translation adjustments		755			204
Total other comprehensive income (loss), net of tax		(2,627	)		340
Total comprehensive income, net of tax		30,566			62,517
Comprehensive income attributable to noncontrolling interests		(465	)		(156	)
Comprehensive income attributable to Cinemark Holdings, Inc.	$	30,101		$	62,361

The accompanying notes are an integral part of the condensed consolidated financial statements.

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands, unaudited)

	Three Months Ended March 31,
	2019			2018
Operating activities
Net income	$	33,193		$	62,177
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation		63,247			63,514
Amortization of intangible and other assets and favorable/unfavorable leases		1,215			881
Amortization of long-term prepaid rents		—			639
Amortization of debt issue costs		1,328			1,590
Loss on debt amendments and refinancing		—			1,484
Amortization of deferred revenues, deferred lease incentives and other		(4,021	)		(5,343	)
Impairment of long-lived assets		5,584			591
Share based awards compensation expense		2,970			3,426
Loss on disposal of assets and other		3,799			3,939
Non-cash rent expense		(819	)		—
Deferred lease expenses		—			(483	)
Equity in income of affiliates		(10,404	)		(8,636	)
Deferred income tax expenses		(10,964	)		(72	)
Distributions from equity investees		14,342			12,323
Changes in assets and liabilities and other		4,814			(52,378	)
Net cash provided by operating activities		104,284			83,652

Investing activities
Additions to theatre properties and equipment		(57,569	)		(80,163	)
Proceeds from sale of theatre properties and equipment and other		57			477
Investment in joint ventures and other, net		—			764
Net cash used for investing activities		(57,512	)		(78,922	)

Financing activities
Dividends paid to stockholders		(39,797	)		(37,346	)
Payroll taxes paid as a result of stock withholdings		(1,947	)		(2,695	)
Repayments of long-term debt		(1,649	)		(1,649	)
Payment of debt issue costs		—			(4,962	)
Fees paid related to debt amendments		—			(704	)
Payments on capital leases		(3,517	)		(6,090	)
Other		(1,000	)		—
Net cash used for financing activities		(47,910	)		(53,446	)

Effect of exchange rate changes on cash and cash equivalents		110			215

Decrease in cash and cash equivalents		(1,028	)		(48,501	)

Cash and cash equivalents:
Beginning of period		426,222			522,547
End of period	$	425,194		$	474,046

Supplemental information (see Note 15)

The accompanying notes are an integral part of the condensed consolidated financial statements.

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share data

1.	The Company and Basis of Presentation

Cinemark Holdings, Inc. and subsidiaries (the “Company”) operates 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, Curacao and Paraguay.

The accompanying condensed consolidated balance sheet as of December 31, 2018, which was derived from audited financial statements, and the unaudited condensed consolidated financial statements 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 the Company has control of are consolidated while those affiliates of which the Company owns between 20% and 50% and does not control are accounted for under the equity method. Those affiliates of which the Company owns less than 20% are generally accounted for under the cost method, unless the Company is deemed to have the ability to exercise significant influence over the affiliate, in which case the Company would account for its investment under the equity method. The results of these subsidiaries and affiliates are included in the condensed consolidated financial statements effective with their formation or from their dates of acquisition. Intercompany balances and transactions are eliminated in consolidation.

These condensed consolidated financial statements should be read in conjunction with the audited annual consolidated financial statements and the notes thereto for the year ended December 31, 2018, included in the Annual Report on Form 10-K filed February 28, 2019 by the Company under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Operating results for the three months ended March 31, 2019 are not necessarily indicative of the results to be achieved for the full year.

2.	New Accounting Pronouncements

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842), (“ASC Topic 842”). The purpose of ASC Topic 842 is to provide financial statement users a better understanding of the amount, timing, and uncertainty of cash flows arising from leases. The adoption of ASU 2016-02 resulted in the recognition of a right-of-use asset and a lease liability for most operating leases. Additionally, new disclosure requirements include qualitative and quantitative information about the amounts recorded in the financial statements. The Company adopted ASC Topic 842 effective January 1, 2019. See Note 3 for further discussion.

3.	Adoption of ASC Topic 842 – Lease Accounting

The Company adopted ASC Topic 842 as of January 1, 2019 under the modified retrospective approach that resulted in the recognition of a cumulative-effect adjustment to the opening balance of retained earnings with an option to elect certain practical expedients. The Company elected the following practical expedients, as allowed by ASC Topic 842:

•

The Company chose not to separate nonlease components from lease components, accounting for lease components and nonlease components associated with a lease as a single lease component. More specifically, for theatre leases, the Company elected not to separate fixed common area maintenance costs from lease costs when calculating lease liabilities and assets.

•

The Company also elected the following practical expedients:

The Company did not reassess whether existing contracts in effect as of the transition date of January 1, 2019 were, or contained, a lease.

The Company did not reassess the classification of existing leases as operating or finance as of the transition date.

The Company did not reassess whether any initial direct costs were incurred for any of its existing leases.

The Company did not elect to apply the recognition requirements of ASC 842 to short-term leases.

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share data

The adoption of ASC Topic 842 included the following primary impacts:

The Company recorded a right-of-use asset and lease liability for all of its operating leases as required by the standard. The lease liability for each lease was determined based on the present value of future minimum lease payments. The right-of-use asset was based on the lease liability value, adjusted for offsets that existed as of adoption, including deferred rent liabilities of ($39,235), net favorable and unfavorable lease intangibles of ($5,780), deferred lease incentive liabilities of ($12,960) and long-term prepaid rents of $7,707. The Company recorded operating lease right-of-use assets of $1,491,245 and operating lease liabilities of $1,545,210 upon adoption.

Certain of the Company’s existing lease assets and liabilities, which were accounted for under prior sale-leaseback accounting guidance, were derecognized in accordance with ASC Topic 842 and reevaluated for classification per the new accounting guidance. Several of these leases have been reestablished as operating leases based on ASC Topic 842.

For those leases that are now classified as operating leases in accordance with ASC Topic 842, approximately $110,442 and $126,376 of lease assets and liabilities, respectively, were recorded as an adjustment to beginning retained earnings. The related net deferred income tax asset for these accounts was also recorded as an adjustment to beginning retained earnings. See additional impact discussed in item 3 below.

The Company recognized finance lease assets and liabilities in the amount of $57,440 as of January 1, 2019 for the remaining leases that were determined to be finance leases under ASC Topic 842.

For the leases noted in item 2a above, the Company will now record the related operating lease payments as facility lease expense, compared to prior periods in which the capitalized asset was depreciated and lease payments were recorded as a reduction of a lease liability and interest expense.

Theatre Leases - The Company conducts a significant part of its theatre operations in leased properties under noncancelable operating and finance leases with terms generally ranging from 10 to 25 years. In addition to the fixed lease payments, some of the leases provide for variable lease payments and some require the payment of taxes, insurance and other costs applicable to the property. Variable lease payments include payments based on a percentage of retail sales over contractual levels or payments adjusted periodically for inflation or changes in attendance. The Company can renew, at its option, a substantial portion of the leases at defined or then market rental rates for various periods. Some leases also provide for escalating rent payments throughout the lease term. The Company recognizes fixed lease expense for the operating leases on a straight-line basis over the lease term. The Company’s theatre lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Equipment Leases - The Company has certain equipment operating leases primarily including projectors, trash compactors and various other equipment used in the day-to-day operation of the business. Certain of the leases require fixed lease payments to be made over the duration of the lease term, while others are variable in nature based on usage or sales. Certain of these leases are month-to-month, while others are noncancelable with terms generally ranging from 5 to 12 years. The Company’s equipment lease agreements do not contain any material residual value guarantees or material restrictive covenants.

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share data

The following table represents the operating and finance right-of-use assets and lease liabilities as of March 31, 2019.

		As of
Leases	Classification	March 31, 2019
Assets ⁽¹⁾
Operating lease assets	Operating lease assets	$	1,443,451
Finance lease assets	Theatre properties and equipment, net of accumulated depreciation and amortization ⁽²⁾		126,854
Total lease assets		$	1,570,305

Liabilities ⁽¹⁾
Current
Operating	Current portion of operating lease obligations	$	211,387
Finance	Current portion of finance lease obligations		14,942
Noncurrent
Operating	Operating lease obligations, less current portion		1,284,317
Finance	Finance lease obligations, less current portion		134,216
Total lease liabilities		$	1,644,862

(1)

The lease right-of-use assets and liabilities recorded on the Company’s condensed consolidated balance sheet generally do not include renewal options that have not yet been executed. The Company does not consider a lease renewal exercise as reasonably certain until immediately before the necessary notification is provided to the landlord.

(2)	Finance lease assets are net of accumulated amortization of $50,503 as of March 31, 2019.

As of March 31, 2019, the Company had signed lease agreements with total noncancelable lease payments of approximately $195,955 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, fixed minimum lease payments related to these theatres are not included in the right of use assets and lease liabilities as of March 31, 2019. There were no significant noncancelable lease agreements signed, but not yet commenced, related to equipment leases.

The following table represents the Company’s aggregate lease costs, by lease classification, for the three months ended March 31, 2019.

		Three Months Ended
Lease Cost	Classification	March 31, 2019
Operating lease costs
Equipment ⁽¹⁾	Utilities and other	$	1,743
Theatres ⁽²⁾⁽³⁾	Facility lease expense		84,785
Total operating lease costs		$	86,528

Finance lease costs
Amortization of leased assets	Depreciation and amortization		3,740
Interest on lease liabilities	Interest expense		2,021
Total finance lease costs		$	5,761

(1)	Includes approximately $620 of short-term lease payments.

(2)	Includes approximately $15,934 of variable lease payments based on a change in index, such as CPI or inflation, variable payments based on revenues or attendance and variable common area maintenance costs.

(3)	Approximately $402 of lease payments are included in general administrative expenses primarily related to office leases.

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share data

The following table represents the maturity of lease liabilities, by lease classification, as of March 31, 2019.

	Operating		Finance
Years Ending	Leases		Leases		Total
2019	$	209,134	$	16,683	$	225,817
2020		265,866		22,373		288,239
2021		248,804		18,661		267,465
2022		219,925		17,925		237,850
2023		189,116		17,236		206,352
After 2023		674,349		101,109		775,458
Total lease payments	$	1,807,194	$	193,987	$	2,001,181
Less: Interest		311,490		44,829		356,319
Present value of lease liabilities	$	1,495,704	$	149,158	$	1,644,862

The following table represents future minimum lease payments under noncancelable operating and capital leases at December 31, 2018 as presented in the Company’s Annual Report on Form 10-K filed February 28, 2019:

	Operating		Capital
Years Ending	Leases		Leases
2019	$	253,323	$	42,434
2020		242,336		41,502
2021		230,396		34,589
2022		204,628		32,462
2023		176,802		28,534
Thereafter		677,091		166,375
Total	$	1,784,576		345,896
Amounts representing interest payments				(86,364	)
Present value of future minimum payments				259,532
Current portion of finance and capital lease obligations				(27,065	)
Capital lease obligations, less current portion			$	232,467

The following table represents the weighted-average remaining lease term and discount rate, disaggregated by lease classification, as of March 31, 2019.

	As of
Lease Term and Discount Rate	March 31, 2019
Weighted-average remaining lease term (years) ⁽¹⁾
Operating leases - equipment		4.5
Operating leases - theatres		8.2
Finance leases - equipment		6.3
Finance leases - theatres		10.9

Weighted-average discount rate ⁽²⁾
Operating leases - equipment		4.3	%
Operating leases - theatres		4.8	%
Finance leases - equipment		5.5	%
Finance leases - theatres		5.3	%

(1)

(2)

The discount rate for each lease represents the incremental borrowing rate that the Company would incur to borrow on a collateralized basis over a similar term and amount equal to lease payments in a similar economic environment.

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share data

The following table represents the minimum cash lease payments included in the measurement of lease liabilities and the non-cash addition of right-of-use assets for the three months ended March 31, 2019.

	Three months ended,
Other Information	March 31, 2019
Cash paid for amounts included in the measurement of lease liabilities
Cash outflows for operating leases	$	69,974
Cash outflows for finance leases - operating activities	$	1,974
Cash outlfows for finance leases - financing activities	$	3,517
Non-cash amount of leased assets obtained in exchange for:
Operating lease liabilities - equipment	$	101
Finance lease liabilities	$	—

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 revenues when the showtime for a purchased movie ticket has passed. Concession revenues are recognized when sales are made at the registers. Other revenues primarily consist of screen advertising, promotional income and transactional fees. Screen advertising revenues are recognized over the period that the related advertising is delivered on-screen or in-theatre. The Company sells gift cards and discount ticket vouchers, the proceeds from which are recorded as current liabilities. Revenues for gift cards and discount ticket vouchers are recognized when they are redeemed for movie tickets or concession items. The Company offers a subscription program in the U.S. whereby patrons can pay a monthly fee to receive a monthly credit for use towards a future movie ticket purchase. The Company records the monthly subscription program fees as current liabilities and records admissions revenues when the showtime for a movie ticket purchased with a credit has passed. The Company also has loyalty programs in many of its locations that either have a prepaid annual membership fee or award points to customers as purchases are made. For those loyalty programs that have an annual membership fee, the Company recognizes the fee collected as other revenues over the term of the membership. For those loyalty programs that award points to customers based on their purchases, the Company records a portion of the original transaction proceeds as liabilities based on the number of reward points issued to customers and recognizes revenues when the customer redeems such points. Advances collected on long-term screen advertising, concession and other contracts are recorded as deferred revenues. In accordance with the terms of the agreements, the advances collected on such contracts are 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. These advances are recognized on either a straight-line basis over the term of the contracts or as the Company has met its performance obligations in accordance with the terms of the contracts.

Accounts receivable as of March 31, 2019 included approximately $34,833 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 three months ended March 31, 2019.

Disaggregation of Revenue

The following table presents revenues for the three months ended March 31, 2019 and 2018, disaggregated based on major type of good or service and by reportable operating segment.

	Three Months Ended
	March 31, 2019
	U.S.		International
	Operating		Operating
Major Goods/Services	Segment ⁽¹⁾		Segment		Consolidated
Admissions revenues	$	308,839	$	86,701	$	395,540
Concession revenues		199,386		51,938		251,324
Screen advertising and promotional revenues		20,580		14,038		34,618
Other revenues		26,011		7,230		33,241
Total revenues	$	554,816	$	159,907	$	714,723

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share data

	Three Months Ended
	March 31, 2018
	U.S.		International
	Operating		Operating
Major Goods/Services	Segment ⁽¹⁾		Segment		Consolidated
Admissions revenues	$	349,352	$	103,272	$	452,624
Concession revenues		203,750		58,022		261,772
Screen advertising and promotional revenues		18,179		14,269		32,448
Other revenues		25,062		8,065		33,127
Total revenues	$	596,343	$	183,628	$	779,971

(1)

U.S. segment revenues include eliminations of intercompany transactions with the international operating segment. See Note 16 for additional information on intercompany eliminations.

The following table presents revenues for the three months ended March 31, 2019, disaggregated based on timing of revenue recognition.

	Three Months Ended
	March 31, 2019
	U.S.		International
	Operating		Operating
	Segment ⁽¹⁾		Segment		Consolidated
Goods and services transferred at a point in time	$	532,183	$	143,109	$	675,292
Goods and services transferred over time		22,633		16,798		39,431
Total	$	554,816	$	159,907	$	714,723

(1)

U.S. segment revenues include eliminations of intercompany transactions with the international operating segment. See Note 16 for additional information on intercompany eliminations.

Deferred Revenues

The following table presents changes in the Company’s deferred revenues for the three months ended March 31, 2019.

	Deferred Revenue - NCM			Other Deferred Revenues ⁽¹⁾			Total
Balance at January 1, 2019	$	287,349		$	106,075		$	393,424
Amounts recognized as accounts receivable		—			5,907			5,907
Cash received from customers in advance		—			40,899			40,899
Common units received from NCM (see Note 8)		1,552			—			1,552
Revenue recognized during period		(3,957	)		(43,760	)		(47,717	)
Foreign currency translation adjustments		—			(318	)		(318	)
Balance at March 31, 2019	$	284,944