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

Annual report pursuant to Section 13 and 15(d)

INCOME TAXES (Tables)

INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2014

Income before income taxes consisted of the following:


	Year Ended December 31,
	2012		2013		2014
Income before income taxes:
U.S.	$	183,207	$	162,687	$	205,521
Foreign		113,611		101,177		84,542

Total	$	296,818	$	263,864	$	290,063

Current and deferred income taxes were as follows:


	Year Ended December 31,
	2012			2013			2014
Current:
Federal	$	55,399		$	97,467		$	61,732
Foreign		53,964			42,690			27,681
State		8,494			10,951			6,125

Total current expense		117,857			151,108		$	95,538

Deferred:
Federal		12,096			(30,833	)	$	6,322
Foreign		(6,007	)		2,653			(6,437	)
State		1,452			(9,612	)		641

Total deferred taxes		7,541			(37,792	)		526

Income taxes	$	125,398		$	113,316		$	96,064

Reconciliation Between Income Tax Expense and Taxes Computed

A reconciliation between income tax expense and taxes computed by applying the applicable statutory federal income tax rate to income before income taxes follows:


	Year Ended December 31,
	2012			2013			2014
Computed statutory tax expense	$	103,886		$	92,353		$	101,522
Foreign inflation adjustments		(33	)		67			641
State and local income taxes, net of federal income tax impact		7,456			789			4,549
Foreign losses not benefited and other changes in valuation allowance		(711	)		(2,052	)		(275	)
Foreign tax rate differential		(1,545	)		(336	)		(2,125	)
Foreign dividends		10,576			3,294			1,083
Sale of Mexican subsidiaries and related changes in intangible assets		—			21,406			(10,065	)
Changes in uncertain tax positions		13,729			(2,024	)		(1,540	)
Other — net		(7,960	)		(181	)		2,274

Income taxes	$	125,398		$	113,316		$	96,064

Tax Effects of Significant Temporary Differences and Tax Loss and Tax Credit Carryforwards

The tax effects of significant temporary differences and tax loss and tax credit carryforwards comprising the net long-term deferred income tax liabilities as of December 31, 2013 and 2014 consisted of the following:


	December 31,
	2013		2014
Deferred liabilities:
Theatre properties and equipment	$	126,794	$	127,010
Tax impact of items in other comprehensive income (loss)		—		55
Deferred intercompany sales		12,398		—
Intangible asset — other		25,761		29,342
Intangible asset — tradenames		122,129		111,726
Investment in partnerships		113,038		111,328

Total deferred liabilities		400,120		379,461

Deferred assets:
Deferred lease expenses		27,811		27,341
Deferred revenue — NCM		124,408		124,366
Capital lease obligations		79,064		73,306
Tax impact of items in other comprehensive income (loss)		3,183		—
Tax loss carryforwards		7,653		7,764
Alternative minimum tax and other credit carryforwards		20,725		43,384
Other expenses, not currently deductible for tax purposes		33,307		25,807

Total deferred assets		296,151		301,968

Net deferred income tax liability before valuation allowance		103,969		77,493
Valuation allowance against deferred assets — current		—		2,384
Valuation allowance against deferred assets — non-current		25,711		50,489

Net deferred income tax liability	$	129,680	$	130,366

Net deferred tax liability — Foreign	$	21,729	$	12,213
Net deferred tax liability — U.S.		107,951		118,153

Total	$	129,680	$	130,366

Reconciliation of Total Amounts of Unrecognized Tax Benefits Excluding Interest and Penalties

The following is a reconciliation of the total amounts of unrecognized tax benefits excluding interest and penalties, for the years ended December 31, 2012, 2013 and 2014:


	Year Ended December 31,
	2012			2013			2014
Balance at January 1,	$	18,660		$	33,222		$	18,780
Gross increases — tax positions in prior periods		14,462			413			10
Gross decreases — tax positions in prior periods		(3,321	)		—			(2,379	)
Gross increases — current period tax positions		3,672			1,476			1,324
Gross decreases — current period tax positions		—			—			—
Settlements		—			(15,444	)		(963	)
Foreign currency translation adjustments		(251	)		(887	)		(257	)

Balance at December 31,	$	33,222		$	18,780		$	16,515

- Definition

Tabular disclosure of tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities (i.e., uncertain tax positions) and other types of income tax contingencies, including: (1) the policy on classification of interest and penalties; (2) a tabular reconciliation of the total amounts of unrecognized tax benefits at the beginning and end of the period; the total amount(s) of: (3) unrecognized tax benefits that, if recognized, would affect the effective tax rate, and (4) interest and penalties recognized in each of the income statement and balance sheet; (5) for positions for which it is reasonably possible that the total amounts unrecognized will significantly change within 12 months of the reporting date the: (i) nature of the uncertainty, (ii) nature of the event that could occur that would cause the change, and (iii) an estimate of the range of the reasonably possible change or a statement that an estimate of the range cannot be made; and (6) a description of tax years that remain subject to examination by major tax jurisdictions.

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