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SEC Filings

10-Q
CINEMARK HOLDINGS, INC. filed this Form 10-Q on 11/05/2015
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Table of Contents

Salaries and wages increased to $57.1 million for the third quarter of 2015 from $49.3 million for the third quarter of 2014 primarily due to increased staffing levels to support the increased attendance, new theatres and increases in minimum wages. Facility lease expense increased to $59.8 million for the third quarter of 2015 from $58.4 million for the third quarter of 2014 due to new theatres. Utilities and other costs increased to $59.1 million for the third quarter of 2015 from $55.8 million for the third quarter of 2014 due to new theatres and increases in utilities expenses, property taxes, and repairs and maintenance expenses.

 

  International. Film rentals and advertising costs were $56.3 million, or 49.6% of admissions revenues, for the third quarter of 2015 compared to $54.4 million, or 48.4% of admissions revenues, for the third quarter of 2014. The increase in the film rentals and advertising rate was primarily due to the solid slate of films released during the third quarter of 2015. Concession supplies expense was $13.1 million, or 21.2% of concession revenues, for the third quarter of 2015 compared to $12.6 million, or 22.6% of concession revenues, for the third quarter of 2014. The decrease in the concession supplies rate was primarily due to the impact of sales price increases.

Salaries and wages increased to $19.5 million for the third quarter of 2015 from $18.6 million for the third quarter of 2014 primarily due to increased staffing levels to support the increased attendance, new theatres and increased wage rates. Facility lease expense decreased to $20.8 million for the third quarter of 2015 from $22.2 million for the third quarter of 2014. Utilities and other costs increased to $25.5 million for the third quarter of 2015 from $23.7 million for the third quarter of 2014, primarily due to new theatres and increases in repairs and maintenance expenses. All of the above-mentioned theatre operating costs were also impacted by changes in foreign currency exchanges rates in certain countries in which we operate.

General and Administrative Expenses. General and administrative expenses increased to $39.1 million for the third quarter of 2015 from $35.8 million for the third quarter of 2014. The increase was primarily due to increased salaries and incentive compensation expense, partially offset by the impact of foreign currency exchange rates in certain countries in which we operate.

Depreciation and Amortization. Depreciation and amortization expense was $47.5 million during the third quarter of 2015 compared to $44.7 million during the third quarter of 2014. The increase was primarily due to depreciation expense related to new theatres.

Impairment of Long-Lived Assets. We recorded asset impairment charges on assets held and used of $0.6 million during the third quarter of 2015 compared to $4.5 million during the third quarter of 2014. The long-lived asset impairment charges recorded during each of the periods presented were specific to theatres that were directly and individually impacted by increased competition, adverse changes in market demographics or adverse changes in the development or the conditions of the areas surrounding the theatre. Impairment charges for the third quarter of 2015 consisted of U.S. theatre properties, impacting two of our twenty-seven reporting units. See Note 11 to our condensed consolidated financial statements.

(Gain) Loss on Sale of Assets and Other. We recorded a gain on sale of assets and other of $0.5 million during the third quarter of 2015 compared to a loss of $2.6 million during the third quarter of 2014. The gain recorded during the third quarter of 2015 was primarily due to a gain on the sale of an investment in a Taiwan joint venture and a gain on the sale of a land parcel in the U.S., partially offset by costs resulting from the replacement of certain theatre assets. The loss recorded during the third quarter of 2014 was primarily due to the replacement of certain theatre assets and lease termination charges recorded for theatre closures.

Interest Expense. Interest costs incurred, including amortization of debt issue costs, were $28.4 million during the third quarter of 2015 compared to $28.3 million during the third quarter of 2014.

Distributions from NCM. We recorded a distribution from NCM of $4.6 million during the third quarter of 2015 compared to $3.5 million during the third quarter of 2014, which were in excess of the carrying value of our Tranche 1 investment. See Note 6 to our condensed consolidated financial statements.

Equity in Income of Affiliates. We recorded equity in income of affiliates of $11.0 million during the third quarter of 2015 compared to $10.3 million during the third quarter of 2014. See Notes 6 and 7 to our condensed consolidated financial statements for information about our equity investments.

Income Taxes. Income tax expense of $30.1 million was recorded for the third quarter of 2015 compared to $25.5 million recorded for the third quarter of 2014. The effective tax rate was approximately 39.2% for the third quarter of

 

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