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, 2013

Income before income taxes consisted of the following:


	Year Ended December 31,
	2011		2012		2013
Income before income taxes:
U.S.	$	114,692	$	183,207	$	162,687
Foreign		90,940		113,611		101,177

Total	$	205,632	$	296,818	$	263,864

Current and deferred income taxes were as follows:


	Year Ended December 31,
	2011			2012			2013
Current:
Federal	$	17,070		$	55,399		$	97,467
Foreign		26,830			53,964			42,690
State		7,099			8,494			10,951

Total current expense		50,999			117,857			151,108

Deferred:
Federal		22,100			12,096			(30,833	)
Foreign		(2,332	)		(6,007	)		2,653
State		2,283			1,452			(9,612	)

Total deferred taxes		22,051			7,541			(37,792	)

Income taxes	$	73,050		$	125,398		$	113,316

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,
	2011			2012			2013
Computed normal tax expense	$	71,972		$	103,886		$	92,353
Foreign inflation adjustments		(1,587	)		(33	)		67
State and local income taxes, net of federal income tax impact		7,310			7,456			789
Foreign losses not benefited and other changes in valuation allowance		(676	)		(711	)		(2,052	)
Foreign tax rate differential		(3,321	)		(1,545	)		(336	)
Foreign dividends		4,173			10,576			3,294
Sale of Mexican subsidiaries		—			—			21,406
Changes in uncertain tax positions		396			13,729			(2,024	)
Other — net		(5,217	)		(7,960	)		(181	)

Income taxes	$	73,050		$	125,398		$	113,316

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, 2012 and 2013 consisted of the following:


	December 31,
	2012		2013
Deferred liabilities:
Theatre properties and equipment	$	96,733	$	126,794
Deferred intercompany sales		14,551		12,398
Intangible asset — other		23,944		25,761
Intangible asset — tradenames		115,939		122,129
Investment in partnerships		113,199		113,038

Total deferred liabilities		364,366		400,120

Deferred assets:
Deferred lease expenses		27,255		27,811
Theatre properties and equipment		5,884		—
Deferred revenue—NCM and Fandango		90,972		124,408
Capital lease obligations		54,551		79,064
Interest rate swap agreements		3,825		3,183
Tax loss carryforwards		7,700		7,653
Alternative minimum tax and other credit carryforwards		6,405		20,725
Other expenses, not currently deductible for tax purposes		30,724		33,307

Total deferred assets		227,316		296,151

Net deferred income tax liability before valuation allowance		137,050		103,969
Valuation allowance against deferred assets		13,326		25,711

Net deferred income tax liability	$	150,376	$	129,680

Net deferred tax liability — Foreign	$	2,488	$	21,729
Net deferred tax liability — U.S.		147,888		107,951

Total	$	150,376	$	129,680

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, 2011, 2012 and 2013:


	Year Ended December 31,
	2011			2012			2013
Balance at January 1,	$	15,197		$	18,660		$	33,222
Gross increases — tax positions in prior periods		3,153			14,462			413
Gross decreases — tax positions in prior periods		—			(3,321	)		—
Gross increases — current period tax positions		3,729			3,672			1,476
Gross decreases — current period tax positions		(633	)		—			—
Settlements		(2,467	)		—			(15,444	)
Foreign currency translation adjustments		(319	)		(251	)		(887	)

Balance at December 31,	$	18,660		$	33,222		$	18,780

- 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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