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SEC Filings

10-Q
CINEMARK HOLDINGS, INC. filed this Form 10-Q on 08/09/2016
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Table of Contents

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share data

 

Below is summary financial information for NCM for the three months ended March 31, 2016 (the financial information for the three and six months ended June 30, 2016 is not yet available) and the three and six months ended July 2, 2015:

 

     Three Months
Ended
     Three Months
Ended
     Six Months
Ended
 
     March 31, 2016      July 2, 2015      July 2, 2015  

Gross revenues

   $ 76,242       $ 121,532       $ 198,399   

Operating income

   $ 5,751       $ 55,387       $ 31,276   

Net earnings (loss)

   $ (7,510    $ 42,403       $ 3,675   

7. Other Investments

The Company had the following other investments at June 30, 2016:

 

Digital Cinema Implementation Partners (“DCIP”), equity method investment

   $  80,727   

AC JV, LLC, equity method investment

     7,397   

Digital Cinema Distribution Coalition (“DCDC”), equity method investment

     3,174   

Other

     1,801   
  

 

 

 

Total

   $ 93,099   
  

 

 

 

Below is a summary of activity for each of the investments for the six months ended June 30, 2016:

 

     DCIP     RealD     AC JV,
LLC
     DCDC      Other      Total  

Balance at January 1, 2016

   $ 71,579      $ 12,900     $ 7,269       $ 2,562      $ 663      $ 94,973   

Cash contributions

     61        —          —           —           1,000         1,061   

Equity in income

     9,622        —          128         612         —           10,362   

Equity in comprehensive loss

     (176     —          —           —           —           (176

Sale of investment (1)

     —          (12,900     —           —           —           (12,900

Other

     (359     —          —           —           138         (221
  

 

 

   

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

Balance at June 30, 2016

   $ 80,727      $ —        $ 7,397       $ 3,174       $ 1,801       $ 93,099   
  

 

 

   

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

 

(1) See further discussion of the sale of the investment held by the Company under RealD, Inc. below.

Digital Cinema Implementation Partners LLC

On February 12, 2007, the Company, AMC and Regal entered into a joint venture known as DCIP to facilitate the implementation of digital cinema in the Company’s theatres and to establish agreements with major motion picture studios for the financing of digital cinema. On March 10, 2010, the Company signed a master equipment lease agreement and other related agreements (collectively the “Agreements”) with Kasima LLC (“Kasima”), which is an indirect subsidiary of DCIP and a related party to the Company. Upon signing the Agreements, the Company contributed the majority of its U.S. digital projection systems to DCIP, which DCIP then contributed to Kasima. The Company has a variable interest in Kasima through the terms of its master equipment lease agreement; however, the Company has determined that it is not the primary beneficiary of Kasima, as the Company does not have the ability to direct the activities of Kasima that most significantly impact Kasima’s economic performance. As of June 30, 2016, the Company had a 33% voting interest in DCIP and a 24.3% economic interest in DCIP. The Company accounts for its investment in DCIP and its subsidiaries under the equity method of accounting.

Below is summary financial information for DCIP for the three and six months ended June 30, 2016 and 2015.

 

     Three Months Ended      Six Months Ended  
     June 30, 2016      June 30, 2015      June 30, 2016      June 30, 2015  

Revenues

   $ 44,757       $ 39,852       $ 85,401       $ 80,593   

Operating income

   $ 27,788       $ 22,996       $ 51,189       $ 46,760   

Net income

   $ 22,276       $ 16,521       $ 40,778       $ 33,965   

 

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