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10-K
CINEMARK HOLDINGS, INC. filed this Form 10-K on 02/28/2014
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Table of Contents

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share data

 

recorded as a component of accumulated other comprehensive loss. Subsequent to the counterparty’s credit rating downgrade, the change in fair value of the interest rate swap was recorded in earnings as a component of interest expense. The Company terminated the interest rate swap agreement during October 2008. The Company determined that the forecasted transactions hedged by this interest rate swap are still probable to occur, thus the total amount previously reported in accumulated other comprehensive loss related to this interest rate swap agreement of $18,147 was amortized on a straight-line basis to interest expense over the period during which the forecasted transactions were expected to occur, which was September 15, 2008 through August 13, 2012. The Company amortized approximately $4,236 and $2,470 to interest expense during the years ended December 31, 2011 and 2012, respectively.

The changes in accumulated other comprehensive loss, net of taxes, related to the Company’s interest rate swap agreements for the years ended December 31, 2011, 2012 and 2013 were as follows:

 

     Interest Rate Swap Liabilities  
     2011     2012     2013  

Beginning balances — January 1

   $ (11,726   $ (12,357   $ (8,867
  

 

 

   

 

 

   

 

 

 

Other comprehensive loss before reclassifications, net of taxes

     (18,759     (11,959     (2,668

Amounts reclassified from accumulated other comprehensive loss to interest expense

     20,165        15,449        5,819   
  

 

 

   

 

 

   

 

 

 

Net other comprehensive income (loss)

     1,406        3,490        3,151   

Loss included in earnings

     (2,037     —          —     
  

 

 

   

 

 

   

 

 

 

Ending balances — December 31

   $ (12,357 )   $ (8,867 )   $ (5,716 )
  

 

 

   

 

 

   

 

 

 

 

14. FAIR VALUE MEASUREMENTS

The Company determines fair value measurements in accordance with FASB ASC Topic 820, which establishes a fair value hierarchy under which an asset or liability is categorized based on the lowest level of input significant to its fair value measurement. The levels of input defined by FASB ASC Topic 820 are as follows:

 

Level 1

      quoted market prices in active markets for identical assets or liabilities that are accessible at the measurement date;

Level 2

      other than quoted market prices included in Level 1 that are observable for the asset or liability, either directly or indirectly; and

Level 3

      unobservable and should be used to measure fair value to the extent that observable inputs are not available.

Below is a summary of assets and liabilities measured at fair value on a recurring basis by the Company under FASB ASC Topic 820 as of December 31, 2013:

 

     Carrying
Value
    Fair Value  

Description

     Level 1      Level 2      Level 3  

Interest rate swap liabilities — current (see Note 13)

   $ (5,367   $ —         $ —         $ (5,367

Interest rate swap liabilities — long term (see Note 13)

   $ (3,809   $ —         $ —         $ (3,809

Investment in RealD (see Note 8)

   $ 10,443      $ 10,443       $ —         $ —     

 

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