Our results of operations may be impacted by shrinking video and digital release
Over the last decade, the average video and digital release window, which represents the time that elapses
from the date of a films theatrical release to the date a film is available to consumers at home, has decreased from approximately six months to approximately three to four months. If patrons choose to wait for an in-home release rather than
attend a theatre to view the film, it may adversely impact our business and results of operations, financial condition and cash flows. Film studios occasionally offer consumers a premium video on-demand option for certain films shortly after the
theatrical release. These release windows, which are determined by the studios, may shrink further or be eliminated altogether, which could have an adverse impact on our business and results of operations.
General political, social and economic conditions can adversely affect our attendance.
Our results of operations are dependent on general political, social and economic conditions, and the impact of such conditions on our
theatre operating costs and on the willingness of consumers to spend money at movie theatres. If consumers discretionary income declines as a result of an economic downturn, our operations could be adversely affected. If theatre operating
costs, such as utility costs, increase due to political or economic changes, our results of operations could be adversely affected. Political events, such as terrorist attacks, and health-related epidemics, such as flu outbreaks, could cause people
to avoid our theatres or other public places where large crowds are in attendance. In addition, a natural disaster, such as a hurricane or an earthquake, could impact our ability to operate certain of our theatres, which could adversely affect our
results of operations.
Our foreign operations are subject to adverse regulations, economic instability and currency
We have 160 theatres with 1,177 screens in thirteen countries in Latin America. Brazil represented
approximately 12.7% of our consolidated 2014 revenues. Governmental regulation of the motion picture industry in foreign markets differs from that in the United States. Changes in regulations affecting prices, quota systems requiring the exhibition
of locally-produced films and restrictions on ownership of property may adversely affect our international operations. Our international operations are subject to certain political, economic and other uncertainties not encountered by our domestic
operations, including risks of severe economic downturns and high inflation. We also face risks of currency fluctuations, hard currency shortages and controls of foreign currency exchange and transfers to the U.S., all of which could have an adverse
effect on the results of our international operations.
We have substantial long-term lease and debt obligations, which
may restrict our ability to fund current and future operations and that restrict our ability to enter into certain transactions.
We have, and will continue to have, significant long-term debt service obligations and long-term lease obligations. As of December 31, 2014, we had $1,823.0 million in long-term debt obligations,
$218.5 million in capital lease obligations and $1,814.3 million in long-term operating lease obligations. We incurred interest expense of $113.7 million for the year ended December 31, 2014. We incurred $317.1 million of facility lease expense
under operating leases for the year ended December 31, 2014. Our substantial lease and debt obligations pose risk by:
requiring us to dedicate a substantial portion of our cash flows to payments on our lease and debt obligations, thereby reducing the
availability of our cash flows from operations to fund working capital, capital expenditures, acquisitions and other corporate requirements and to pay dividends;
impeding our ability to obtain additional financing in the future for working capital, capital expenditures, acquisitions and general corporate
subjecting us to the risk of increased sensitivity to interest rate increases on our variable rate debt, including our borrowings under our
amended senior secured credit facility;