Cinemark Holdings, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Earnings Per Share

Earnings Per Share

12 Months Ended

Dec. 31, 2020

6.	EARNINGS PER SHARE

The Company considers its unvested share based payment awards, which contain non-forfeitable rights to dividends, participating securities, and includes such participating securities in its computation of earnings per share pursuant to the two-class method. Basic earnings per share for the two classes of stock (common stock and unvested restricted stock) is calculated by dividing net income by the weighted average number of shares of common stock and unvested restricted stock outstanding during the reporting period. Diluted earnings 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.

The following table presents computations of basic and diluted earnings per share under the two class method:

	Year Ended
	December 31,
	2018			2019			2020
Numerator:
Net income (loss) attributable to Cinemark Holdings, Inc.	$	213,827		$	191,386		$	(616,828	)
(Earnings) loss allocated to participating share-based awards ⁽¹⁾		(1,168	)		(1,174	)		4,279
Net income (loss) attributable to common stockholders	$	212,659		$	190,212		$	(612,549	)

Denominator (shares in thousands):
Basic weighted average shares outstanding		116,054			116,306			116,667
Common equivalent shares for restricted stock units ⁽²⁾		288			300			—
Diluted weighted average shares outstanding		116,342			116,606			116,667

Basic earnings (loss) per share attributable to common stockholders	$	1.83		$	1.63		$	(5.25	)
Diluted earnings (loss) per share attributable to common stockholders	$	1.83		$	1.63		$	(5.25	)

(1)

For the years ended December 31, 2018, 2019 and 2020, a weighted average of approximately 640 shares, 721 shares and 815 shares, of unvested restricted stock, respectively, are considered participating securities.

(2)

For the year ended December 31, 2020, approximately 682 common equivalent shares for restricted stock units were excluded because they were anti-dilutive.

The calculations of diluted earnings per share for the year ended December 31, 2020 does not include the impact of the conversation of the 4.50% Convertible Senior Notes, issued August 21, 2020, into 32,051,282 shares of common stock, as it would be anti-dilutive. Additionally, the average price of the Company’s common stock did not exceed $22.08 per share during the reporting period; therefore, additional shares that may be issued related to the recently issued warrants were not included in the calculation of diluted common equivalent shares. See further discussion of the 4.50% Convertible Senior Notes, the convertible note hedges and the warrants at Note 13.