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SEC Filings

10-Q
CINEMARK HOLDINGS, INC. filed this Form 10-Q on 11/03/2017
Entire Document
 

 

Three months ended September 30, 2017 versus September 30, 2016

Revenues. Total revenues decreased $57.8 million to $710.8 million for the three months ended September 30, 2017 (“third quarter of 2017”) from $768.6 million for the three months ended September 30, 2016 (“third quarter of 2016”), representing a 7.5% decrease. The table below, presented by reportable operating segment, summarizes our revenue performance and certain key performance indicators for the three months ended September 30, 2017 and 2016.

 

 

U.S. Operating Segment

 

 

International Operating Segment

 

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Constant

Currency (3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2017

 

 

2016

 

 

%

Change

 

 

2017

 

 

2016

 

 

%

Change

 

 

2017

 

 

%

Change

 

 

2017

 

 

2016

 

 

%

Change

 

Admissions revenues (1)

 

$

312.3

 

 

$

354.9

 

 

 

(12.0

)%

 

$

112.8

 

 

$

118.0

 

 

 

(4.4

)%

 

$

115.4

 

 

 

(2.2

)%

 

$

425.1

 

 

$

472.9

 

 

 

(10.1

)%

Concession revenues (1)

 

$

181.5

 

 

$

197.5

 

 

 

(8.1

)%

 

$

65.6

 

 

$

63.9

 

 

 

2.7

%

 

$

67.0

 

 

 

4.9

%

 

$

247.1

 

 

$

261.4

 

 

 

(5.5

)%

Other revenues (1)(2)

 

$

16.9

 

 

$

16.7

 

 

 

1.2

%

 

$

21.7

 

 

$

17.6

 

 

 

23.3

%

 

$

22.2

 

 

 

26.1

%

 

$

38.6

 

 

$

34.3

 

 

 

12.5

%

Total revenues (1)(2)

 

$

510.7

 

 

$

569.1

 

 

 

(10.3

)%

 

$

200.1

 

 

$

199.5

 

 

 

0.3

%

 

$

204.6

 

 

 

2.6

%

 

$

710.8

 

 

$

768.6

 

 

 

(7.5

)%

Attendance (1)

 

 

40.6

 

 

 

48.0

 

 

 

(15.4

)%

 

 

26.7

 

 

 

28.2

 

 

 

(5.3

)%

 

 

 

 

 

 

 

 

 

 

67.3

 

 

 

76.2

 

 

 

(11.7

)%

Average ticket price (1)

 

$

7.69

 

 

$

7.39

 

 

 

4.1

%

 

$

4.22

 

 

$

4.18

 

 

 

1.0

%

 

$

4.32

 

 

 

3.3

%

 

$

6.32

 

 

$

6.21

 

 

 

1.8

%

Concession revenues per patron (1)

 

$

4.47

 

 

$

4.11

 

 

 

8.8

%

 

$

2.46

 

 

$

2.27

 

 

 

8.4

%

 

$

2.51

 

 

 

10.6

%

 

$

3.67

 

 

$

3.43

 

 

 

7.0

%

 

(1)

Revenues and attendance amounts in millions.  Average ticket price is calculated as admissions revenues divided by attendance.  Concession revenues per patron is calculated as concession revenues divided by attendance.  

(2)

U.S. operating segment revenues include eliminations of intercompany transactions with the international operating segment. See Note 14 to our condensed consolidated financial statements.

(3)

Constant currency revenue amounts, which are non-GAAP measurements, were calculated using the average exchange rate for the corresponding month for 2016. We translate the results of our international operating segment from local currencies into U.S. dollars using currency rates in effect at different points in time in accordance with U.S. GAAP. Significant changes in foreign exchange rates from one period to the next can result in meaningful variations in reported results.   We are providing constant currency amounts for our international operating segment to present a period-to-period comparison of business performance that excludes the impact of foreign currency fluctuations.

U.S. Admissions revenues decreased $42.6 million primarily due to a 15.4% decrease in attendance, partially offset by a 4.1% increase in average ticket price. The decrease in concession revenues of $16.0 million was primarily due to the 15.4% decrease in attendance, partially offset by an 8.8% increase in concession revenues per patron. The decrease in attendance was due to a weaker slate of films in the third quarter of 2017 compared to the third quarter of 2016, partially offset by the favorable impact of luxury lounger conversions and new theatres. The increase in average ticket price was primarily due to price increases. The increase in concession revenues per patron was primarily due to incremental sales, price increases and new theatres.  

International. Admissions revenues decreased $5.2 million as reported primarily due to a 5.3% decrease in attendance, partially offset by a 1.0% increase in average ticket price.  Admissions revenues decreased $2.6 million in constant currency, primarily due to the 5.3% decrease in attendance, partially offset by a 3.3% increase in constant currency average ticket price. Concession revenues increased $1.7 million as reported primarily due to an 8.4% increase in concession revenues per patron, partially offset by the 5.3% decrease in attendance.  Concession revenues increased $3.1 million in constant currency, primarily due to a 10.6% increase in constant currency concession revenues per patron, partially offset by the 5.3% decrease in attendance. The decrease in attendance was driven by a weaker slate of films during the third quarter of 2017 compared to the third quarter of 2016, partially offset by the impact of new theatres.  Average ticket price and concession revenues per patron increased primarily due to price increases, which were predominantly driven by local inflation. Other revenues increased primarily due to incremental screen advertising revenues generated by an expansion of our Flix Media services to affiliates in various countries and increased promotional income.

Cost of Operations. The table below summarizes our theatre operating costs (in millions) by reportable operating segment for the three months ended September 30, 2017 and 2016.

 

 

U.S. Operating Segment

 

 

International Operating Segment

 

 

Consolidated

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

 

Constant

Currency

2017 (1)

 

 

2017

 

 

2016

 

Film rentals and advertising

 

$

171.5

 

 

$

193.6

 

 

$

54.7

 

 

$

56.2

 

 

$

56.2

 

 

$

226.2

 

 

$

249.8

 

Concession supplies

 

 

26.2

 

 

 

28.2

 

 

 

14.0

 

 

 

13.7

 

 

 

14.2

 

 

 

40.2

 

 

 

41.9

 

Salaries and wages

 

 

64.6

 

 

 

63.2

 

 

 

22.7

 

 

 

21.2

 

 

 

23.5

 

 

 

87.3

 

 

 

84.4

 

Facility lease expense

 

 

59.8

 

 

 

60.5

 

 

 

22.2

 

 

 

22.3

 

 

 

22.4

 

 

 

82.0

 

 

 

82.8

 

Utilities and other

 

 

64.0

 

 

 

66.9

 

 

 

28.4

 

 

 

28.1

 

 

 

29.0

 

 

 

92.4

 

 

 

95.0

 

 

(1)

Constant currency expense amounts, which are non-GAAP measurements were calculated using the average exchange rate for the corresponding month for 2016. We translate the results of our international operating segment from local currencies into U.S. dollars using currency rates in effect at different points in time in accordance with U.S. GAAP. Significant changes in foreign exchange rates from one period to the next can result in meaningful variations in reported results. We are providing constant currency amounts for our international operating segment to present a period-to-period comparison of business performance that excludes the impact of foreign currency fluctuations.

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