Quarterly report pursuant to Section 13 or 15(d)

Segments

v3.19.3
Segments
9 Months Ended
Sep. 30, 2019
Segment Reporting [Abstract]  
Segments

16.

Segments

The Company manages its international market and its U.S. market as separate reportable operating segments, with the international segment consisting of operations in Brazil, Argentina, Chile, Colombia, Peru, Ecuador, Honduras, El Salvador, Nicaragua, Costa Rica, Panama, Guatemala, Bolivia, Curacao and Paraguay. Each segment’s revenue is derived from admissions and concession sales and other ancillary revenues. The Company uses Adjusted EBITDA, as shown in the reconciliation table below, as the primary measure of segment profit and loss to evaluate performance and allocate its resources. The Company does not report total assets by segment because that information is not used to evaluate the performance of or allocate resources between segments.

Below is a breakdown of selected financial information by reportable operating segment:

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

$

636,628

 

 

$

585,536

 

 

$

1,941,545

 

 

$

1,897,664

 

International

 

 

188,772

 

 

 

171,960

 

 

 

563,509

 

 

 

535,567

 

Eliminations

 

 

(3,583

)

 

 

(3,261

)

 

 

(10,758

)

 

 

(9,972

)

Total revenues

 

$

821,817

 

 

$

754,235

 

 

$

2,494,296

 

 

$

2,423,259

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

$

132,347

 

 

$

132,652

 

 

$

453,404

 

 

$

476,907

 

International

 

 

37,411

 

 

 

35,740

 

 

 

113,346

 

 

 

106,518

 

Total Adjusted EBITDA

 

$

169,758

 

 

$

168,392

 

 

$

566,750

 

 

$

583,425

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

$

50,679

 

 

$

65,458

 

 

$

148,609

 

 

$

195,104

 

International

 

 

20,664

 

 

 

17,915

 

 

 

37,903

 

 

 

50,858

 

Total capital expenditures

 

$

71,343

 

 

$

83,373

 

 

$

186,512

 

 

$

245,962

 

The following table sets forth a reconciliation of net income to Adjusted EBITDA:

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Net income

 

$

31,955

 

 

$

50,621

 

 

$

167,009

 

 

$

195,262

 

Add (deduct):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income taxes

 

 

14,053

 

 

 

16,169

 

 

 

64,152

 

 

 

59,592

 

Interest expense (1) (2)

 

 

24,967

 

 

 

27,144

 

 

 

75,037

 

 

 

82,725

 

Other income, net (3)

 

 

(9,970

)

 

 

(8,810

)

 

 

(25,079

)

 

 

(15,247

)

Loss on debt amendments and refinancing

 

 

 

 

 

 

 

 

 

 

 

1,484

 

Distributions from DCIP (4)

 

 

2,694

 

 

 

 

 

 

7,912

 

 

 

5,201

 

Other cash distributions from equity investees (5)

 

 

5,804

 

 

 

4,786

 

 

 

20,251

 

 

 

15,840

 

Depreciation and amortization (2)

 

 

67,760

 

 

 

64,971

 

 

 

196,795

 

 

 

193,656

 

Impairment of long-lived assets

 

 

27,304

 

 

 

1,641

 

 

 

45,382

 

 

 

5,020

 

Loss on disposal of assets and other

 

 

2,453

 

 

 

7,826

 

 

 

8,057

 

 

 

28,666

 

Non-cash rent expense (6)

 

 

(1,102

)

 

 

 

 

 

(3,252

)

 

 

 

Deferred lease expenses (2)

 

 

 

 

 

(20

)

 

 

 

 

 

(952

)

Amortization of long-term prepaid rents (2)

 

 

 

 

 

578

 

 

 

 

 

 

1,814

 

Share based awards compensation expense

 

 

3,840

 

 

 

3,486

 

 

 

10,486

 

 

 

10,364

 

Adjusted EBITDA (2)

 

$

169,758

 

 

$

168,392

 

 

$

566,750

 

 

$

583,425

 

 

 

(1)

Includes amortization of debt issue costs.

 

(2)

Amounts for the three and nine months ended September 30, 2019 were impacted by the adoption of ASC Topic 842 and the resulting change in the classification of certain of the Company’s leases.  

 

(3)

Includes interest income, foreign currency exchange loss, equity in income of affiliates and interest expense - NCM and excludes distributions from NCM.

 

(4)

See discussion of cash distributions from DCIP, which were recorded as a reduction of the Company’s investment in DCIP, at Note 9.

 

(5)

Includes cash distributions received from equity investees, other than those from DCIP noted above, that were recorded as a reduction of the respective investment balances (see Notes 8 and 9).  These distributions are reported entirely within the U.S. operating segment.

 

(6)

The adoption of ASC Topic 842 impacted how the Company amortizes lease related assets and liabilities such as deferred lease expenses, favorable and unfavorable lease intangible assets, long-term prepaid rents and deferred lease incentives.  Beginning January 1, 2019, these items are amortized to facility lease expense for theatre operating leases and utilities and other for equipment operating leases.  See Note 3 for discussion of the impact of ASC Topic 842.  

Financial Information About Geographic Areas

Below is a breakdown of selected financial information by geographic area:

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

Revenues

 

2019

 

 

2018

 

 

2019

 

 

2018

 

U.S.

 

$

636,628

 

 

$

585,536

 

 

$

1,941,545

 

 

$

1,897,664

 

Brazil

 

 

79,776

 

 

 

65,152

 

 

 

240,263

 

 

 

218,265

 

Other international countries

 

 

108,996

 

 

 

106,808

 

 

 

323,246

 

 

 

317,302

 

Eliminations

 

 

(3,583

)

 

 

(3,261

)

 

 

(10,758

)

 

 

(9,972

)

Total

 

$

821,817

 

 

$

754,235

 

 

$

2,494,296

 

 

$

2,423,259

 

 

 

 

As of

 

 

As of

 

Theatre Properties and Equipment-net (1)

 

September 30, 2019

 

 

December 31, 2018

 

U.S.

 

$

1,408,052

 

 

$

1,479,603

 

Brazil

 

 

111,297

 

 

 

140,570

 

Other international countries

 

 

163,052

 

 

 

212,960

 

Total

 

$

1,682,401

 

 

$

1,833,133

 

 

(1) See Note 3 for discussion of impact of ASC Topic 842 on capital lease assets.