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SEC Filings

10-K
CINEMARK HOLDINGS, INC. filed this Form 10-K on 02/27/2015
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Table of Contents

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share data

 

Below is summary financial information for DCIP as of and for the years ended December 31, 2012, 2013 and 2014.

 

     Year ended December 31,  
     2012      2013      2014  

Net operating revenue

   $ 166,017       $ 182,659       $ 170,724   

Operating income

   $ 102,663       $ 116,235       $ 101,956   

Net income

   $ 36,752       $ 48,959       $ 61,293   

 

     As of  
     December 31,
2013
     December 31,
2014
 

Total assets

   $ 1,264,870       $ 1,097,467   

Total liabilities

   $ 1,063,110       $ 845,319   

As a result of the Agreements, the Company installed digital projection systems to a majority of its first run U.S. theatres. The digital projection systems are being leased from Kasima under an operating lease with an initial term of twelve years that contains ten one-year fair value renewal options. The equipment lease agreement also contains a fair value purchase option. Under the equipment lease agreement, the Company pays annual rent of one thousand dollars per digital projection system. The Company may also be subject to various types of other rent if such digital projection systems do not meet minimum performance requirements as outlined in the agreements. Certain of the other rent payments are subject to either a monthly or an annual maximum. As of December 31, 2014, the Company had 3,692 digital projection systems being leased under the master equipment lease agreement with Kasima. The Company made equipment lease payments of approximately $3,756, $3,853 and $4,012 during the years ended December 31, 2012, 2013 and 2014, respectively, which is included in utilities and other costs on the consolidated statements of income.

RealD, Inc.

The Company licenses 3-D systems from RealD. Under its license agreement with RealD, the Company earned options to purchase shares of RealD common stock as it installed a certain number of 3-D systems as outlined in the license agreement. During 2010 and 2011, the Company vested in a total of 1,222,780 RealD options. Upon vesting in these options, the Company recorded an investment in RealD and a deferred lease incentive liability using the estimated fair value of the RealD options at the time of vesting. During March 2011, the Company exercised all of its options to purchase shares of common stock in RealD for $0.00667 per share.

The Company owns 1,222,780 shares of RealD and accounts for its investment in RealD as a marketable security. The Company has determined that its RealD shares are available-for-sale securities in accordance with ASC Topic 320-10-35-1, therefore unrealized holding gains and losses are reported as a component of accumulated other comprehensive loss until realized.

As of December 31, 2014, the estimated fair value of the Company’s investment in RealD was $14,429, which is based on the closing price of RealD’s common stock on December 31, 2014, and falls under Level 1 of the U.S. GAAP fair value hierarchy as defined by ASC Topic 820-10-35.

AC JV, LLC

During December 2013, the Company, Regal, AMC and NCM entered into a series of agreements that resulted in the formation of a new joint venture that now owns the “Fathom Events” division (consisting of

 

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