cnk-10q_20210630.htm

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

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 ☒

As of July 30, 2021, 119,627,128 shares of common stock were issued and outstanding.

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, including, among others, the impacts of COVID-19. Such risks and uncertainties 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, or incorporated by reference to, the Company’s Annual Report on Form 10-K filed February 26, 2021 and the Current Report on Form 8-K filed March 4, 2021. 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.

	June 30,			December 31,
	2021			2020
Assets
Current assets
Cash and cash equivalents	$	595,884		$	655,338
Inventories		14,440			12,593
Accounts receivable		35,312			25,265
Current income tax receivable		39,381			165,151
Prepaid expenses and other		34,664			34,400
Total current assets		719,681			892,747
Theatre properties and equipment		3,387,203			3,403,103
Less: accumulated depreciation and amortization		1,894,639			1,788,041
Theatre properties and equipment, net		1,492,564			1,615,062
Operating lease right-of-use assets, net		1,229,587			1,278,191
Other assets
Goodwill		1,255,150			1,253,840
Intangible assets, net		312,986			314,195
Investment in NCM		147,629			151,962
Investments in affiliates		23,629			23,726
Deferred charges and other assets, net		31,592			33,199
Total other assets		1,770,986			1,776,922
Total assets	$	5,212,818		$	5,562,922

Liabilities and equity
Current liabilities
Current portion of long-term debt	$	20,910		$	18,056
Current portion of operating lease obligations		211,468			208,593
Current portion of finance lease obligations		14,439			16,407
Current income tax payable		—			5,632
Accounts payable and accrued expenses		404,905			357,753
Total current liabilities		651,722			606,441
Long-term liabilities
Long-term debt, less current portion		2,478,626			2,377,162
Operating lease obligations, less current portion		1,085,539			1,138,142
Finance lease obligations, less current portion		109,327			124,609
Long-term deferred tax liability		45,178			79,525
Long-term liability for uncertain tax positions		42,085			19,225
NCM screen advertising advances		350,362			344,255
Other long-term liabilities		52,241			74,594
Total long-term liabilities		4,163,358			4,157,512
Equity
Cinemark Holdings, Inc.'s stockholders' equity:
Common stock, $0.001 par value: 300,000,000 shares authorized, 124,692,629 shares issued and 119,599,788 shares outstanding at June 30, 2021 and 123,627,080 shares issued and 118,576,099 shares outstanding at December 31, 2020		125			124
Additional paid-in-capital		1,182,540			1,245,569
Treasury stock, 5,092,841 and 5,050,981 shares, at cost, at June 30, 2021 and December 31, 2020, respectively		(87,016	)		(87,004	)
Retained earnings (deficit)		(317,329	)		27,937
Accumulated other comprehensive loss		(391,162	)		(398,653	)
Total Cinemark Holdings, Inc.'s stockholders' equity		387,158			787,973
Noncontrolling interests		10,580			10,996
Total equity		397,738			798,969
Total liabilities and equity	$	5,212,818		$	5,562,922

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

	Three Months Ended June 30,						Six Months Ended June 30,
	2021			2020			2021			2020
Revenues
Admissions	$	153,479		$	37		$	209,600		$	292,499
Concession		109,814			124			149,302			190,480
Other		31,359			8,813			50,111			69,611
Total revenues		294,652			8,974			409,013			552,590
Cost of operations
Film rentals and advertising		76,587			388			99,792			157,005
Concession supplies		18,847			2,379			25,987			37,191
Salaries and wages		50,407			8,864			81,573			96,408
Facility lease expense		67,213			65,202			132,042			147,443
Utilities and other		61,185			34,871			110,329			135,394
General and administrative expenses		37,332			28,001			73,190			69,019
Depreciation and amortization		66,920			63,581			135,080			128,837
Impairment of long-lived assets		—			—			—			16,619
Restructuring costs		(740	)		19,538			(948	)		19,538
Loss on disposal of assets and other		2,358			425			6,863			2,330
Total cost of operations		380,109			223,249			663,908			809,784
Operating loss		(85,457	)		(214,275	)		(254,895	)		(257,194	)
Other income (expense)
Interest expense		(37,034	)		(31,041	)		(73,587	)		(55,707	)
Interest income		3,828			803			4,474			2,887
Loss on extinguishment of debt		(3,924	)		—			(6,527	)		—
Foreign currency exchange gain (loss)		2,327			916			(647	)		(3,932	)
Distributions from NCM		—			690			77			5,914
Interest expense - NCM		(5,962	)		(5,934	)		(11,797	)		(11,825	)
Equity in loss of affiliates		(8,109	)		(20,120	)		(14,915	)		(11,634	)
Total other expense		(48,874	)		(54,686	)		(102,922	)		(74,297	)
Loss before income taxes		(134,331	)		(268,961	)		(357,817	)		(331,491	)
Income taxes		7,950			(98,145	)		(6,693	)		(101,253	)
Net loss	$	(142,281	)	$	(170,816	)	$	(351,124	)	$	(230,238	)
Less: Net income (loss) attributable to noncontrolling interests		186			(427	)		(416	)		(258	)
Net loss attributable to Cinemark Holdings, Inc.	$	(142,467	)	$	(170,389	)	$	(350,708	)	$	(229,980	)

Weighted average shares outstanding
Basic		117,225			116,666			117,200			116,581
Diluted		117,225			116,666			117,200			116,581
Loss per share attributable to Cinemark Holdings, Inc.'s common stockholders
Basic	$	(1.19	)	$	(1.45	)	$	(2.94	)	$	(1.96	)
Diluted	$	(1.19	)	$	(1.45	)	$	(2.94	)	$	(1.96	)

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

	Three Months Ended June 30,						Six Months Ended June 30,
	2021			2020			2021			2020
Net loss	$	(142,281	)	$	(170,816	)	$	(351,124	)	$	(230,238	)
Other comprehensive income (loss), net of tax
Unrealized gain (loss) due to fair value adjustments on interest rate swap agreements, net of taxes of $603, $275, $2,847 and $1,954, net of settlements		746			849			6,450			(23,322	)
Foreign currency translation adjustments		8,259			(3,702	)		(1,206	)		(61,327	)
Total other comprehensive income (loss), net of tax		9,005			(2,853	)		5,244			(84,649	)
Total comprehensive loss, net of tax		(133,276	)		(173,669	)		(345,880	)		(314,887	)
Comprehensive (income) loss attributable to noncontrolling interests		(186	)		427			416			258
Comprehensive loss attributable to Cinemark Holdings, Inc.	$	(133,462	)	$	(173,242	)	$	(345,464	)	$	(314,629	)

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

	Six Months Ended June 30,
	2021			2020
Operating activities
Net loss	$	(351,124	)	$	(230,238	)
Adjustments to reconcile net loss to cash used for operating activities:
Depreciation		133,733			126,387
Amortization of intangible and other assets		1,347			2,450
Amortization of debt issue costs		5,273			2,917
Interest accrued on NCM screen advertising advances		11,797			11,825
Amortization of NCM screen advertising advances and other deferred revenues		(16,094	)		(15,795	)
Amortization of accumulated losses for amended swap agreements		2,247			2,669
Impairment of long-lived assets		—			16,619
Share based awards compensation expense		10,575			8,432
Loss on disposal of assets and other		6,863			2,330
Loss on extinguishment of debt		6,527			—
Non-cash rent expense		(679	)		833
Equity in loss of affiliates		14,915			11,634
Deferred income tax expenses		(13,719	)		3,380
Distributions from equity investees		156			23,284
Changes in assets and liabilities and other		166,766			(120,597	)
Net cash used for operating activities		(21,417	)		(153,870	)

Investing activities
Additions to theatre properties and equipment		(32,819	)		(46,959	)
Proceeds from sale of theatre properties and equipment and other		1,995			198
Investment in joint ventures and other, net		—			(50	)
Net cash used for investing activities		(30,824	)		(46,811	)

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

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


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

			Page
PART I. FINANCIAL INFORMATION

	Item 1.	Financial Statements	4

		Condensed Consolidated Balance Sheets as of June 30, 2021 and December 31, 2020 (unaudited)	4

		Condensed Consolidated Statements of Loss for the three and six months ended June 30, 2021 and 2020 (unaudited)	5

		Condensed Consolidated Statements of Comprehensive Loss for the three and six months ended June 30, 2021 and 2020 (unaudited)	6

		Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2021 and 2020 (unaudited)	7

		Notes to Condensed Consolidated Financial Statements (unaudited)	8

	Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	31

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	45

	Item 4.	Controls and Procedures	45

PART II. OTHER INFORMATION

	Item 1.	Legal Proceedings	46

	Item 1A.	Risk Factors	46

	Item 6.	Exhibits	47

SIGNATURES			48