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SEC Filings

10-K
CINEMARK HOLDINGS, INC. filed this Form 10-K on 02/23/2018
Entire Document
 

Cost of Operations. The table below summarizes certain of our theatre operating costs by reportable operating segment (in millions) for the years ended December 31, 2015 and 2016.

 

 

 

U.S. Operating Segment

 

 

International Operating Segment

 

 

Consolidated

 

 

 

2016

 

 

2015

 

 

2016

 

 

2015

 

 

Constant

Currency

2016 (1)

 

 

2016

 

 

2015

 

Film rentals and advertising

 

$

768.9

 

 

$

744.3

 

 

$

193.8

 

 

$

201.3

 

 

$

228.5

 

 

$

962.7

 

 

$

945.6

 

Concession supplies

 

 

107.3

 

 

 

95.4

 

 

 

47.2

 

 

 

48.9

 

 

 

54.9

 

 

 

154.5

 

 

 

144.3

 

Salaries and wages

 

 

248.2

 

 

 

226.9

 

 

 

77.6

 

 

 

74.2

 

 

 

93.9

 

 

 

325.8

 

 

 

301.1

 

Facility lease expense

 

 

240.7

 

 

 

239.4

 

 

 

80.6

 

 

 

80.3

 

 

 

91.8

 

 

 

321.3

 

 

 

319.7

 

Utilities and other

 

 

250.9

 

 

 

251.9

 

 

 

105.0

 

 

 

104.0

 

 

 

123.4

 

 

 

355.9

 

 

 

355.9

 

 

(1)

Constant currency expense amounts, which are non-GAAP measurements, were calculated using the average exchange rates for the corresponding months for 2015. 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. 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 without the impact of foreign currency fluctuations.

U.S. Film rentals and advertising costs were $768.9 million, or 55.8% of admissions revenues, for 2016 compared to $744.3 million, or 55.6% of admissions revenues, for 2015. The increase in the film rentals and advertising rate was primarily due to the higher concentration of blockbuster films during the 2016 period. Concession supplies expense was $107.3 million, or 14.0% of concession revenues, for 2016 compared to $95.4 million, or 13.4% of concession revenues, for 2015. The increase in the concession supplies rate was primarily due to the impact of our expanded concession offerings.

Salaries and wages increased to $248.2 million for 2016 from $226.9 million for 2015 primarily due to new theatres and increases in minimum wages. Facility lease expense increased to $240.7 million for 2016 from $239.4 million for 2015 primarily due to increased percentage rent expense partially offset by decreased common area maintenance expenses. Utilities and other costs decreased to $250.9 million for 2016 from $251.9 million for 2015 primarily due to a decrease in projection and sound equipment maintenance and monitoring expenses, partially offset by increased security expense.

International. Film rentals and advertising costs were $193.8 million ($228.5 million in constant currency), or 47.2% of admissions revenues, for 2016 compared to $201.3 million, or 47.1 % of admissions revenues, for 2015. Concession supplies expense was $47.2 million ($54.9 million in constant currency), or 20.9% of concession revenues, for 2016 compared to $48.9 million, or 21.5% of concession revenues, for 2015. The decrease in the concession supplies rate was primarily due to price increases.    

Salaries and wages increased to $77.6 million ($93.9 million in constant currency) for 2016 compared to $74.2 million for 2015. The as reported increase was due to incremental staffing to support the 4.1% increase in attendance, increased wage rates and new theatres, partially offset by the impact of changes in foreign currency exchange rates in certain countries in which we operate. Facility lease expense increased to $80.6 million ($91.8 million in constant currency) for 2016 compared to $80.3 million for the 2015 period. The as reported increase was due to increased percentage rent expense as a result of increased constant currency revenues and new theatres, partially offset by the impact of changes in foreign currency exchange rates in certain countries in which we operate. Utilities and other costs increased to $105.0 million ($123.4 million in constant currency) for 2016 compared to $104.0 million for 2015. The as reported increase was primarily due to increased utilities costs, increased projection and sound equipment and monitoring expenses, increased repairs and maintenance expenses and increased janitorial services, partially offset by the impact of changes in foreign currency exchange rates in certain countries in which we operate.

General and Administrative Expenses. General and administrative expenses decreased to $143.4 million for 2016 from $156.7 million for 2015. The decrease was primarily due to the impact of changes in foreign currency exchange rates in certain countries in which we operate, partially offset by increased salaries and incentive compensation expense.

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