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SEC Filings

10-Q
CINEMARK HOLDINGS, INC. filed this Form 10-Q on 05/09/2018
Entire Document
 

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share data

 

 

 

As of

 

 

 

March 31, 2018

 

 

December 31, 2017

 

Current assets

 

$

52,531

 

 

$

56,296

 

Noncurrent assets

 

$

750,571

 

 

$

772,438

 

Current liabilities

 

$

62,251

 

 

$

59,153

 

Noncurrent liabilities

 

$

265,475

 

 

$

296,889

 

Members' equity

 

$

475,376

 

 

$

472,692

 

 

As of March 31, 2018, the Company had 3,817 digital projection systems being leased under the master equipment lease agreement with Kasima LLC, which is an indirect subsidiary of DCIP and a related party to the Company. The Company had the following transactions with DCIP, reflected in utilities and other costs on the condensed consolidated statements of income, during the three months ended March 31, 2018 and 2017:

 

 

 

Three Months Ended

 

 

 

March 31, 2018

 

 

March 31, 2017

 

Equipment lease payments

 

$

1,217

 

 

$

1,369

 

Warranty reimbursements from DCIP

 

$

(2,501

)

 

$

(1,884

)

Management service fees

 

$

194

 

 

$

206

 

 

AC JV, LLC

During December 2013, the Company, Regal, AMC (the “AC Founding Members”) and NCM entered into a series of agreements that resulted in the formation of AC JV, LLC (“AC”), a joint venture that owns “Fathom Events” formerly operated by NCM.  The Fathom Events business focuses on the marketing and distribution of live and pre-recorded entertainment programming to various theatre operators, including concerts, opera and symphony, DVD product releases and marketing events, theatrical premieres, Broadway plays, live sporting events and other special events. The Company paid event fees to AC of $2,571 and $3,369 for the three months ended March 31, 2018 and 2017, respectively, which are included in film rentals and advertising costs on the condensed consolidated statements of income.  Additionally, the remaining outstanding balance of a note payable from the Company to NCM, related to the formation of AC, was $2,778 as of March 31, 2018.

Digital Cinema Distribution Coalition

Digital Cinema Distribution Coalition (“DCDC”) is a joint venture among the Company, Universal, Warner Bros., AMC and Regal.  DCDC operates a satellite distribution network that distributes all digital content to U.S. theatres via satellite. The Company has an approximate 14.6% ownership in DCDC. The Company paid approximately $234 and $278 to DCDC during the three months ended March 31, 2018 and 2017, respectively, related to content delivery services provided by DCDC.  These fees are included in film rentals and advertising costs on the condensed consolidated statements of income.

9.

Treasury Stock and Share Based Awards

Treasury Stock — Treasury stock represents shares of common stock repurchased or withheld by the Company and not yet retired. The Company has applied the cost method in recording its treasury shares.  Below is a summary of the Company’s treasury stock activity for the three months ended March 31, 2018:

 

 

 

Number of

 

 

 

 

 

 

 

Treasury

 

 

 

 

 

 

 

Shares

 

 

Cost

 

Balance at January 1, 2018

 

 

4,525,870

 

 

$

76,354

 

Restricted stock withholdings (1)

 

 

70,010

 

 

 

2,695

 

Restricted stock forfeitures

 

 

11,303

 

 

 

 

Balance at March 31, 2018

 

 

4,607,183

 

 

$

79,049

 

 

(1)

The Company withheld restricted shares as a result of the election by certain employees to satisfy their tax liabilities upon vesting in restricted stock and restricted stock units.  The Company determined the number of shares to be withheld based upon market values ranging from $34.83 to $39.03 per share.

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