Print Page  |  Close Window

SEC Filings

10-Q
CINEMARK HOLDINGS, INC. filed this Form 10-Q on 11/05/2015
Entire Document
 


Table of Contents

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share data

 

10. Goodwill and Other Intangible Assets

The Company’s goodwill was as follows:

 

     U.S.
Operating
Segment
     International
Operating
Segment
     Total  

Balance at January 1, 2015 (1)

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

Acquisition of Brazil theatre

     —           356         356   

Foreign currency translation adjustments

     —           (25,449      (25,449
  

 

 

    

 

 

    

 

 

 

Balance at September 30, 2015 (1)

   $ 1,156,556       $ 95,734       $ 1,252,290   
  

 

 

    

 

 

    

 

 

 

 

(1)  Balances are presented net of accumulated impairment losses of $214,031 for the U.S. operating segment and $27,622 for the international operating segment.

The Company evaluates goodwill for impairment on an annual basis during the fourth quarter or whenever events or changes in circumstances indicate the carrying value of goodwill might exceed its estimated fair value. The Company evaluates goodwill for impairment at the reporting unit level and has allocated goodwill to the reporting unit based on an estimate of its relative fair value. The Company considers the reporting unit to be each of its nineteen regions in the U.S. and seven countries internationally (Honduras, El Salvador, Nicaragua, Costa Rica, Panama and Guatemala are considered one reporting unit). Goodwill impairment has historically been evaluated using a two-step approach requiring the Company to compute the fair value of a reporting unit and compare it with its carrying value. If the carrying value of the reporting unit exceeds the estimated fair value, a second step is performed to measure the potential goodwill impairment. Significant judgment is involved in estimating cash flows and fair value. Management’s estimates, which fall under Level 3 of the U.S. GAAP fair value hierarchy as defined by FASB ASC Topic 820-10-35, are based on historical and projected operating performance, recent market transactions and current industry trading multiples. Fair value is determined based on a multiple of cash flows, which was eight times for the evaluation performed during the fourth quarter of 2014.

No events or changes in circumstances occurred during the nine months ended September 30, 2015 that indicated the carrying value of goodwill might exceed its estimated fair value.

Intangible assets consisted of the following:

 

     Balance at
January 1,
2015
     Amortization      Other (1)      Balance at
September 30,
2015
 

Intangible assets with finite lives:

           

Gross carrying amount

   $ 99,922       $ —         $ 730       $ 100,652   

Accumulated amortization

     (52,232      (4,313      (1,758      (58,303
  

 

 

    

 

 

    

 

 

    

 

 

 

Total net intangible assets with finite lives

   $ 47,690         (4,313      (1,028    $ 42,349   

Intangible assets with indefinite lives:

           

Tradename

     300,334         —           (919      299,415   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total intangible assets — net

   $ 348,024       $ (4,313    $ (1,947    $ 341,764   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

(1)  Includes write-off of intangible assets for closed theatres, write-off of a vendor contract intangible asset, impairment of a favorable lease and foreign currency translation adjustments.

Estimated aggregate future amortization expense for intangible assets is as follows:

 

For the three months ended December 31, 2015

   $ 1,319   

For the twelve months ended December 31, 2016

     5,560   

For the twelve months ended December 31, 2017

     5,027   

For the twelve months ended December 31, 2018

     4,901   

For the twelve months ended December 31, 2019

     4,002   

Thereafter

     21,540   
  

 

 

 

Total

   $ 42,349   
  

 

 

 

 

19