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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

 

Fathom Events and Fathom Consumer Events) formerly operated by NCM. The Fathom Events business focuses on the marketing and distribution of live and pre-recorded entertainment programming to various theatre operators to provide additional programs to augment their feature film schedule. The Fathom Consumer Events business includes live and pre-recorded concerts featuring contemporary music, opera and symphony, DVD product releases and marketing events, theatrical premieres, Broadway plays, live sporting events and other special events. The joint venture, AC JV, LLC (“AC”), was formed by the Founding Members and NCM. NCM, under a contribution agreement, contributed the assets associated with its Fathom Events division to AC in exchange for 97% ownership of the Class A Units of AC. Under a separate contribution agreement, the Founding Members each contributed cash of approximately $268 to AC in exchange for 1% of the Class A Units of AC.

Subsequently, NCM and the Founding Members entered into a Membership Interest Purchase Agreement, under which NCM sold each of the Founding Members 31% of its Class A Units in AC, the aggregate value of which was determined to be $25,000, in exchange for a six-year Promissory Note. Each of the Founding Members’ Promissory Notes were originally for $8,333, bear interest at 5% per annum and require annual principal and interest payments, with the first of such payments made during December 2014.

As a result of the sale of Class A Units to the Founding Members, NCM recorded a gain (the “Fathom Gain”) during its 2013 fiscal year. Since the Fathom Gain was due to a transaction in which the Company was a counter party, the Company has deferred its portion of the equity earnings in NCM related to the Fathom Gain for the year ended December 31, 2013 of $2,175, by recording this amount as a reduction in its investment basis in AC.

Digital Cinema Distribution Coalition

The Company is a party to a joint venture with certain exhibitors and distributors called Digital Cinema Distribution Coalition (“DCDC”). DCDC operates a satellite distribution network that distributes all digital content to U.S. theatres via satellite. The Company has an approximate 14.6% ownership in DCDC. The Company paid approximately $27 and $741 to DCDC during the years ended December 31, 2013 and 2014 related to content delivery services provided by DCDC, which is included in utilities and other expenses on the consolidated statements of income.

 

8. GOODWILL AND OTHER INTANGIBLE ASSETS — NET

The Company’s goodwill was as follows:

 

     U.S.
Operating
Segment
     International
Operating
Segment
     Total  

Balance at December 31, 2012 (1)

   $ 956,997       $ 193,814       $ 1,150,811   

Acquisition of U.S. theatres (Note 5)

     203,827         —           203,827   

Disposition of U.S. theatres (Note 5)

     (10,353      —           (10,353

Disposition of Mexico theatres (Note 5)

     —           (33,605      (33,605

Foreign currency translation adjustments

     —           (22,590      (22,590
  

 

 

    

 

 

    

 

 

 
        

Balance at December 31, 2013 (1)

   $ 1,150,471       $ 137,619       $ 1,288,090   

Acquisition of U.S. theatres

     6,085         —           6,085   

Other acquisitions

     —           1,108         1,108   

Foreign currency translation adjustments

     —           (17,900      (17,900
  

 

 

    

 

 

    

 

 

 

Balance at December 31, 2014 (1)

   $ 1,156,556       $ 120,827       $ 1,277,383   
  

 

 

    

 

 

    

 

 

 

 

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