CINEMARK HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
In thousands, except share and per share data
Prior to June 15, 2016, Cinemark USA, Inc. may redeem all or any part of the Senior
Subordinated Notes at its option at 100% of the principal amount plus a make-whole premium plus accrued and unpaid interest on the senior subordinated notes to the date of redemption. After June 15, 2016, Cinemark USA, Inc. may redeem the
Senior Subordinated Notes in whole or in part at redemption prices specified in the indenture. In addition, prior to June 15, 2014, Cinemark USA, Inc. may redeem up to 35% of the aggregate principal amount of the Senior Subordinated Notes from
the net proceeds of certain equity offerings at the redemption price set forth in the indenture.
Cinemark USA, Inc. and its
guarantor subsidiaries filed a registration statement with the Securities and Exchange Commission (the Commission) on July 27, 2011 pursuant to which Cinemark USA, Inc. offered to exchange the Senior Subordinated Notes for
substantially similar registered Senior Subordinated Notes. The registration statement became effective August 4, 2011, and approximately $199,500 of the notes were exchanged on September 7, 2011. The registered Senior Subordinated Notes,
issued in the exchange, do not have transfer restrictions. Approximately $500 of the notes were not exchanged as of December 31, 2013.
8.625% Senior Notes
On June 29, 2009, Cinemark USA, Inc.
issued $470,000 aggregate principal amount of 8.625% senior notes due 2019 (the 8.625% Senior Notes), with an original issue discount of $11,468, resulting in proceeds of approximately $458,532. The proceeds were primarily used to fund
the repurchase of the then remaining outstanding $419,403 aggregate principal amount at maturity of Cinemark, Inc.s 9.75% senior discount notes.
On June 24, 2013, Cinemark USA, Inc. redeemed its 8.625% Senior Notes at 112.035% of the principal amount, inclusive of a make-whole premium, plus accrued and unpaid interest, utilizing the proceeds
from the issuance of the 4.875% Senior Notes discussed above. As a result of the redemption, the Company wrote-off approximately $8,054 in unamortized bond discount and $7,634 in unamortized debt issue costs, paid a make-whole premium of
approximately $56,564 and paid other fees of $50, all of which are reflected in loss on early retirement of debt during the year ended December 31, 2013.
Fair Value of Long Term Debt
The Company estimates the fair value
of its long-term debt primarily using quoted market prices, which fall under Level 2 of the U.S. GAAP fair value hierarchy as defined by FASB ASC Topic 820-10-35. The carrying value of the Companys long term debt was $1,832,800 and $1,764,010
as of December 31, 2013 and 2012, respectively. The fair value of the Companys long term debt was $1,815,879 and $1,851,246 as of December 31, 2013 and 2012, respectively.
Covenant Compliance and Debt Maturity
As of December 31, 2013, the Company believes it was in full compliance with all agreements, including related covenants, governing its outstanding debt.