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What changed in Cinemark Holdings, Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Cinemark Holdings, Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+399 added−382 removedSource: 10-K (2024-02-16) vs 10-K (2023-02-24)

Top changes in Cinemark Holdings, Inc.'s 2023 10-K

399 paragraphs added · 382 removed · 291 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

91 edited+24 added−29 removed9 unchanged
Biggest changeOur operating philosophy focuses on creating an extraordinary guest experience, maintaining favorable theatre-level economics, controlling operating costs and effectively reacting to economic and market changes. Balanced Approach to Investment and Capital Allocation. Our balanced and disciplined investment approach centers on thoughtfully reinvesting in our existing theatres, building new theatres and acquiring theatres that will complement our circuit.
Biggest changeCompetitive Strengths We believe the following strengths have allowed us to compete effectively in the past and will continue to be our guiding principles: Disciplined Operating Philosophy. Our operating philosophy focuses on creating an extraordinary guest experience, maintaining favorable theatre-level economics, controlling operating costs and effectively reacting to changes in economic and market conditions.
We compete for new theatre sites with other movie theatre exhibitors as well as other entertainment venues. Securing a potential site depends upon factors such as commercial terms, available investment resources, theatre design and capacity, revenue potential and financial stability of developers.
We compete for new theatre sites with other movie theatre exhibitors as well as other entertainment venues. Securing a potential site depends upon factors such as commercial terms, available investment resources, theatre design and capacity, revenue potential and financial stability of developers as well as exhibitors.
We face competition from other forms of out-of-home entertainment competing for the public’s leisure time and disposable income, including family entertainment centers, concerts, theme parks and sporting events. We also face competition for guests from a number of alternative film distribution channels, such as streaming services, digital downloads, video on-demand and network television.
We face competition from other forms of out-of-home entertainment competing for the public’s leisure time and disposable income, including family entertainment centers, concerts, theme parks and sporting events. We also 8 face competition for guests from a number of alternative film distribution channels, such as streaming services, digital downloads, video on-demand and network television.
We are generally able to book films at many of our theatres without regard to the film bookings of other exhibitors. Our success in attracting guests can depend on customer service quality, location, theatre capacity, quality of projection and sound equipment, film showtime availability and ticket prices.
We are generally able to book films at our theatres without regard to the film bookings of other exhibitors. Our success in attracting guests can depend on customer service quality, location, theatre capacity, quality of projection and sound equipment, film showtime availability and ticket prices.
We play mainstream films from many different genres, such as animated films, family films, dramas, comedies, horror and action films. We offer content in both 2-D and 3-D formats in all of our theatres, and in many locations, we offer either our own premium large format, XD or IMAX.
We play mainstream films from many different genres, such as animated films, family films, dramas, comedies, horror and action films. We offer content in both 2-D and 3-D formats in all of our theatres, and in many locations, we offer 5 either our own premium large format, XD or IMAX.
We strive to (i) act with honesty and integrity, respect and care for each other, our guests, communities and partners, (ii) provide a safe environment for our employees and guests, (iii) be the best in what we do and (iv) empower our people to make decisions and take responsibility.
We strive to (i) act with honesty and integrity, respect and care for each other, our guests, communities and partners, (ii) provide a safe environment for our global employees and guests, (iii) be the best in what we do and (iv) empower our people to make decisions and take responsibility.
Through organic and paid marketing efforts, we keep our millions of guests informed through email, social media, website and mobile app updates, and advertising to promote upcoming content and keep Cinemark elevated in the moviegoer consideration set.
Through both organic and paid marketing efforts, we keep our millions of guests informed through email, social media, website and mobile app updates, and advertising to promote upcoming content and keep Cinemark elevated in the moviegoer consideration set.
The timing, quantity and quality of such film releases can have a significant effect on our results of operations, and the results of one quarter are not necessarily indicative of results for the next quarter or for the same period in the following year.
The timing, quantity and quality of film releases can have a significant effect on our results of operations, and the results of one quarter are not necessarily indicative of results for the next quarter or for the same period in the following year.
We first entered Latin America when we opened a theatre in Santiago, Chile in 1993. Since then, through a focused international growth strategy, we have developed one of the most geographically diverse theatre circuits in the region.
We first entered Latin America when we opened a theatre in Santiago, Chile in 1993. Since then, through a focused international growth strategy, we have developed into one of the most geographically diverse theatre circuits in the region.
Our investment in digital marketing and customer experience over the past several years has enabled us to expand our reach to our guests, communicate with them on a consistent basis, and streamline their digital customer journey.
Marketing and Promotions Digital Marketing . Our investment in digital marketing and customer experience over the past several years has enabled us to expand our reach to our guests, communicate with them on a consistent basis, and streamline their digital customer journey.
We offer guests access to movie times, the ability to buy their tickets and reserve their seats in advance and purchase gift cards at our website www.cinemark.com and via our mobile applications.
We offer guests access to movie times, the ability to buy their tickets and reserve their seats in advance, purchase concessions in advance and purchase gift cards at our website www.cinemark.com and via our mobile applications.
We continue to adapt our platforms to engage movie-goers more effectively and make it as compelling and simple as possible for them to purchase their next movie ticket and accompanying concessions from us.
We continue to adapt our platforms to engage movie-goers more effectively and make it as compelling and simple as possible for them to purchase their next movie ticket and concessions from us.
Financial Information About Geographic Areas We currently have operations in the U.S., Brazil, Argentina, Chile, Colombia, Peru, Ecuador, Honduras, El Salvador, Nicaragua, Costa Rica, Panama, Guatemala, Bolivia, Curacao, and Paraguay, which are reflected in the consolidated financial statements. See Note 22 to the consolidated financial statements for segment information and financial information by geographic area.
Financial Information About Geographic Areas We currently have operations in the U.S., Brazil, Argentina, Chile, Colombia, Peru, Honduras, El Salvador, Nicaragua, Costa Rica, Panama, Guatemala, Bolivia, and Paraguay, which are reflected in the consolidated financial statements. See Note 22 to the consolidated financial statements for segment information and financial information by geographic area.
Our food and beverage offerings may vary based on consumer preferences in a particular market. We offer adult beverage options for our guests including beer, wine and cocktails, freshly-made signature Pizza Hut pizzas, burgers and sandwiches, as well as some healthier snack options and diverse ethnic foods based on market demographics.
Our food and beverage offerings may vary in particular markets based on consumer preferences. We offer adult beverage options for our guests including beer, wine and cocktails, freshly-made signature Pizza Hut pizzas, burgers and sandwiches, as well as some healthier snack options and diverse ethnic foods based on market demographics.
We also have membership and loyalty programs in some of our international markets that either allow customers to pay a nominal fee for an annual membership card that provides them with certain admissions and concession discounts or that allows guests to earn loyalty points for each purchase.
We also have membership and loyalty programs in most of our international markets that either allow customers to pay a nominal fee for an annual membership card that provides them with certain admissions and concession discounts or that allows guests to earn loyalty points for each purchase.
We also have auditoriums that offer seats with immersive cinematic motion, which we refer to as motion seats, in 279 auditoriums throughout our circuit. These motion seats are programmed in harmony with the audio and video content of the film and further immerse guests into the on-screen action.
We also have auditoriums that offer seats with immersive cinematic motion, which we refer to as motion seats, in 335 auditoriums throughout our circuit. These motion seats are programmed in harmony with the audio and video content of the film and further immerse guests into the on-screen action.
We interact with moviegoers every day on social media platforms, such as Instagram, Facebook, Snapchat, Twitter and TikTok to provide advanced ticketing, promotions, and event information and to monitor and respond to guests’ questions and feedback. Membership and Loyalty.
We interact with moviegoers every day on social media platforms, such as Instagram, Facebook, Snapchat, X (formerly Twitter) and TikTok to provide advanced ticketing, promotions, and event information and to monitor and respond to guests’ questions and feedback. Membership and Loyalty.
We offer a free domestic loyalty program, named Movie Fan, to our guests in the U.S. Movie Fan allows our moviegoers to earn one point for every dollar they spend. Points can then be redeemed for tickets, concession items and discounts, as well as unique and limited-edition rewards that relate to films currently playing in our theatres.
We offer a free domestic loyalty program, Movie Fan, to our guests in the U.S. Movie Fan allows our moviegoers to earn one point for every dollar they spend. Points can then be redeemed for tickets, concession items and discounts, as well as unique and limited-edition merchandise that relate to films currently playing in our theatres.
We believe our portfolio of modern, high-quality theatres with multiple platforms provides a preferred destination for moviegoers and has contributed to our consistent industry-leading results. As of December 31, 2022, we managed our business under two reportable operating segments: U.S. markets and international markets. See Note 22 to the consolidated financial statements.
We believe our portfolio of high-quality theatres with multiple platforms provides a preferred destination for moviegoers and has contributed to our consistent industry-leading results. As of December 31, 2023, we managed our business under two reportable operating segments: U.S. markets and international markets. See Note 22 to the consolidated financial statements.
Similar to the Movie Fan program, our points-based international programs offer discounts on movie tickets and concessions. Our global loyalty programs put us in direct contact with our moviegoers and provide additional opportunities for us to partner with the studios and our vendors through targeted promotions. Competition We are one of the leaders in the motion picture exhibition industry.
Similar to the Movie Fan program, our points-based international programs offer discounts on movie tickets and concessions. Our global loyalty programs put us in direct contact with our moviegoers and provide opportunities for us to partner with the studios and our suppliers through targeted promotions. Competition We are one of the leaders in the motion picture exhibition industry.
New products and promotions are introduced on a regular basis to increase concession purchase incidence by existing consumers as well as to attract new consumers. In certain international countries and in all of our domestic theatres, we offer a free loyalty program that routinely offers food and beverage promotions.
New products and promotions are introduced on a regular basis to increase concession purchase incidence from existing consumers as well as to attract new consumers. In certain international countries and in all of our domestic theatres, we offer a free loyalty program that routinely offers food and beverage promotions and rewards.
We partner with film distributors on a regular basis to promote upcoming films through local, regional and national programs that are exclusive to our theatres. Social Media. In the evolution of our external communication, we are meeting movie-goers where they are and ensuring we are present as they scroll throughout the day.
We partner with film distributors on a regular basis to promote upcoming films through local, regional and national programs, many of which are exclusive to our theatres. Social Media. In the evolution of our external communication strategy, we are meeting movie-goers where they are and ensuring we are present as they scroll throughout the day.
Transforming the digital customer journey enables us to more effectively reach movie-goers through targeted and refined search engine optimization, and gives the customer a better experience once they are directed to our website or app.
Transforming the digital customer journey has enabled us to more effectively reach movie-goers through targeted and refined search engine optimization, and gives the customer a better experience once they are directed to our website or app.
For the year ended December 31, 2022, we ranked either first or second, based on box office revenues, in 20 of our top 25 U.S. markets, including Dallas, the San Francisco Bay Area, Houston, Salt Lake City, Sacramento, Cleveland, Austin and Las Vegas.
For the year ended December 31, 2023, we ranked either first or second, based on box office revenues, in 21 of our top 25 U.S. markets, including Dallas, the San Francisco Bay Area, Houston, Salt Lake City, Sacramento, Cleveland, Austin and Las Vegas.
We have balanced our risk through a diversified international portfolio, which included theatres in 15 of the 20 largest metropolitan areas in Latin America as of December 31, 2022. We have established significant presence in Brazil and Argentina, where we are the largest exhibitor. We also have significant market presence in Colombia, Peru and Chile.
We have balanced our risk through a diversified international portfolio, which included theatres in 15 of the 20 largest metropolitan areas in Latin America as of December 31, 2023. We are a market leader in Brazil and Argentina, where we are the largest exhibitor. We also have significant market presence in Colombia, Peru and Chile.
We negotiate other film rental rates on a firm terms formula, a percentage of box office receipts negotiated prior to a film’s theatrical run, or a rate that is negotiated after a film’s theatrical run. Food and Beverage Concession sales are our second largest revenue source.
We may also negotiate some film rental rates on a firm terms formula, a percentage of box office receipts negotiated prior to a film’s theatrical run, or a rate that is negotiated after a film’s theatrical run. Food and Beverage Concession sales are our second largest revenue source.
Corporate Operations Our worldwide headquarters, referred to as the Cinemark Service Center, or CSC, is located in Plano, Texas.
Corporate Operations Our global headquarters, referred to as the Cinemark Service Center, or CSC, is located in Plano, Texas.
We compete against local, regional, national and international exhibitors with respect to attracting guests, licensing films and developing new theatre sites. Our primary U.S. competitors include Regal and AMC and our primary international competitors, which vary by country, include Cinépolis, Cine Colombia, CinePlanet, Kinoplex (GSR), Village Cines, SuperCines and Araujo.
We compete against local, regional, national and international exhibitors with respect to attracting guests, licensing films and developing new theatre sites. Our primary U.S. competitors include Regal and AMC and our primary international competitors, which vary by country, include Cinépolis, Cine Colombia, CinePlanet, Kinoplex (GSR), UCI, Royal Films and Araujo.
We have successfully established a significant presence in major cities in Latin America, with theatres in 15 of the 20 largest metropolitan areas in Latin America as of December 31, 2022. We are the largest exhibitor in Brazil and Argentina and have significant market presence in Colombia, Peru and Chile.
We have a significant presence in major cities in Latin America, with theatres in 15 of the 20 largest metropolitan areas in Latin America as of December 31, 2023. We are the largest exhibitor in Brazil and Argentina and have significant market presence in Colombia, Peru and Chile.
To attract and retain the most qualified talent, we offer competitive benefits, including market-competitive compensation, healthcare, paid time off, parental leave, free movie passes and a 401(k) retirement savings and investment plan with generous Company matching. Additionally, many of our CSC employees are eligible to work on a hybrid schedule.
To attract and retain the most qualified talent, we offer competitive benefits, including market-competitive compensation, healthcare, paid time off, parental leave, free movie passes and in the U.S., a 401(k) retirement savings and investment plan with generous Company match. Additionally, many of our CSC employees are eligible to work a hybrid schedule.
In the U.S., we offer advanced mobile concession ordering called Snacks In A Tap at virtually all of our U.S. theatres allowing guests to pre-order for select concession products and pick them up at the concession stand upon arrival or have them delivered to their seat.
In the U.S., we offer advanced mobile concession ordering at virtually all of our U.S. theatres allowing guests to pre-order select concession products and pick them up at the concession stand upon arrival or have them delivered to their seat.
We also have self-service cafeteria-style concession areas in many of our domestic theatres, which allow customers to select their own food and refreshments and proceed to the cash register when they are ready. This design allows for more efficient service, and superior visibility of concession items. We also have lobby bars and VIP lounges in many domestic and international theatres.
We also have 6 self-service cafeteria-style concession areas in many of our domestic theatres, which allow customers to select their own food and refreshments and proceed to the cash register when they are ready. This design allows for more efficient service, and superior visibility of concession items.
Guided by our Cinemark Values, we are committed to creating a company where everyone is included and respected, and where we support each other in reaching our full potential. We take pride in the fact that many of our employees, including executive management, international general managers and field employees, have significant tenure with the Company.
Guided by our Cinemark Values, we are committed to creating a company where everyone is included and respected, and where we support each other in reaching our full potential. We take pride in the fact that many of our employees, ranging from field employees to executive management, have significant tenure with the Company.
The following table summarizes the geographic locations of our theatre circuit as of December 31, 2022.
The following table summarizes the geographic locations of our theatre circuit as of December 31, 2023.
Our U.S. operations are comprised of regions headed by a regional vice president. We have nine regional offices in Latin America responsible for the local management of theatres in 15 countries as of December 31, 2022 (Honduras, El Salvador, Nicaragua, Costa Rica, Panama, Guatemala and Curacao are managed out of one Central American regional office).
Our U.S. operations are comprised of regions headed by a regional vice president. We have eight regional offices in Latin America responsible for the local management of theatres in 13 countries as of December 31, 2023 (Honduras, El Salvador, Nicaragua, Costa Rica, Panama and Guatemala are managed out of one Central American regional office).
We have also incorporated Luxury Lounger recliner seats into all of our recent domestic new builds and have repositioned many of our existing domestic theatres to offer this premium seating feature. We currently feature luxury loungers in 67% of our total domestic circuit.
We have incorporated Luxury Lounger heated recliner seats into all of our recent domestic new builds and have repositioned many of our existing domestic theatres to offer this premium seating feature. We currently feature these heated recliner luxury loungers in 68% of our total domestic circuit.
Human Capital Our business is seasonal and therefore, our headcount can vary throughout the year depending on the timing and success of movie releases. While we do not have unionized employees within our domestic employee base, some of our international locations are subject to union regulations.
Human Capital Our business is seasonal and therefore, our headcount can vary throughout the year depending on the timing and success of movie releases. We do not have unionized employees within our domestic employee base, however many of our international locations are subject to union contracts.
Item 1. Business We are a leader and one of the most geographically diverse operators in the motion picture exhibition industry. As of December 31, 2022, we operated 518 theatres and 5,847 screens in the United States, or “U.S.”, and Latin America.
Item 1. Business We are a leader and one of the most geographically diverse operators in the motion picture exhibition industry. As of December 31, 2023, we operated 501 theatres and 5,719 screens in the United States, or “U.S.”, and Latin America.
Our loyalty programs are closely monitored, and updates are consistently tested to incentivize consumers to prioritize visiting our theatres.
Our loyalty programs are closely monitored, and new strategies are consistently tested to incentivize consumers to prioritize visiting our theatres.
(2) In January 2023, we closed our theatre in Curacao. Content We offer a variety of content at our theatres. We monitor upcoming films and other content and work diligently with film distributors to license content that we believe will be most successful in our theatres.
(2) In January 2023, we closed our theatre in Curacao. (3) In September 2023, we sold our Ecuador subsidiary. Content We offer a wide variety of content at our theatres. We monitor upcoming film releases and other content and work diligently with film distributors to license content that we believe will be most successful in our theatres.
We incorporate self-serve candy cases and bottled drink coolers at our traditional crew-serve theatres to help provide convenience for our guests, drive impulse purchases and increase product visibility for these two core categories.
We incorporate queue lines and self-serve candy cases and bottled drink coolers at our concession stands to help provide convenience for our guests, drive impulse purchases and increase product visibility for these two core categories.
Concession supplies are generally managed through a distribution network, with theatres placing and receiving orders directly. We monitor inventory levels at every theatre to ensure proper stock levels are maintained to appropriately serve our guests. Recent supply chain interruptions and inflationary pressures have impacted costs and limited product availability.
Concession products are generally managed through a distribution network, with theatres placing and receiving orders directly with a distributor. We monitor inventory levels at every theatre to ensure proper stock levels are maintained to appropriately serve our guests. Supply chain interruptions and inflationary pressures may impact costs and limit product availability.
Our theatres are designed to optimize the guest purchase experience at the concession stands, which includes multiple concession counters throughout a theatre to facilitate serving guests in an expedited manner. We strategically place large concession stands within theatres to heighten visibility, reduce the length of concession lines, and improve traffic flow around the concession stands.
Theatre Design. Our theatres are designed to optimize the guest purchase experience at the concession stands to facilitate serving guests in an expedited manner. We strategically design large concession stands to heighten visibility, reduce the length of concession lines, and improve traffic flow around the concession stands.
Our U.S. circuit operated 318 theatres and 4,399 screens and our Latin America circuit operated 200 theatres and 1,448 screens across 15 countries. Our significant and diverse presence in the U.S. and Latin America has made us an important distribution channel for movie studios and other content providers.
Our U.S. circuit operated 309 theatres and 4,324 screens and our Latin America circuit operated 192 theatres and 1,395 screens across 13 countries. Our significant and diverse presence in the U.S. and Latin America has made us an important distribution channel for movie studios and other content providers.
Theatre Operations As of December 31, 2022, we operated 518 theatres and 5,847 screens in 42 U.S. states and 15 Latin American countries. We opened our first theatre in the U.S. in 1984. Our domestic circuit has expanded through acquisitions and more recently through organic growth. We currently have theatres in 105 designated market areas.
Theatre Operations As of December 31, 2023, we operated 501 theatres and 5,719 screens in 42 U.S. states and 13 Latin American countries. We opened our first theatre in the U.S. in 1984. Our domestic circuit has expanded through acquisitions and organic growth, and we currently have theatres in 104 designated market areas.
To foster a corporate culture of transparency and collaboration, our senior management regularly conducts “town-hall” style meetings with employees to share, among other matters, the Company’s performance, business conditions and market challenges, and to respond to employee concerns through question-and-answer sessions. Employees are also encouraged to provide feedback about their experience through periodic employee engagement surveys.
To foster a corporate culture of transparency and collaboration, our senior management regularly conducts “town-hall” style meetings with employees to share, among other matters, the Company’s performance, business conditions and market challenges, strategies and initiatives, and to respond to employee concerns through question-and-answer sessions.
We were one of the first circuits to begin reopening theatres in the U.S. during 2021, gaining market share of the overall North American box office as a result. We retained a meaningful portion of that market share growth throughout 2022.
We were one of the first circuits to begin reopening theatres in the U.S. during 2021, gaining market share of the overall North American box office as a result. We maintained a meaningful portion of these market share gains through 2023.
State-of-the-Art Theatre Circuit. We build new theatres and consistently invest in our existing theatres to maintain a state-of-the-art movie-going experience, which we believe makes our theatres preferred destinations for moviegoers in our markets.
We build new theatres and consistently invest in our existing theatres to maintain a state-of-the-art movie-going experience, which we believe makes our theatres preferred destinations for moviegoers in our markets. Making quality investments in our circuit will continue to be one of our primary objectives.
In both our domestic and international locations, film rental fees are based on a film’s box office receipts. The majority of film rental rates are negotiated on a sliding scale formula, under which the rate is based on a standard rate matrix that is established with each content provider prior to a film’s theatrical run.
The majority of film rental rates are negotiated on a sliding scale formula, under which the rate is based on a standard rate matrix that is established with each content provider prior to a film’s theatrical run.
Food and Drug Administration and certain state laws that require nutrition labels for certain menu items. Our domestic and international theatre operations are also subject to federal, state and local laws governing such matters as data privacy, wages, working conditions, citizenship, health and sanitation requirements and various business licensing and permitting.
Our domestic and international theatre operations are also subject to federal, state and local laws governing such matters as data privacy, wages, working conditions, citizenship, health and sanitation requirements and various business licensing and permitting.
Each regional office is headed by a general manager or a member of our international management team with additional personnel responsible for film licensing, marketing, human resources, information technology, operations and finance. We have divisional chief financial officers in Brazil and Argentina and a regional chief financial officer located in Chile that oversees Chile, Bolivia and Paraguay.
Each regional office is headed by a general manager or a member of our international management team with additional personnel responsible for film licensing, marketing, human resources, information technology, operations and finance. We have divisional or regional chief financial officers in several of the international countries in which we operate.
Country Total Theatres Total Screens United States 318 4,399 Brazil 84 618 Argentina 23 199 Colombia 30 177 Chile 20 142 Central America (1) 17 114 Peru 14 113 Ecuador 8 51 Bolivia 1 13 Paraguay 2 15 Curacao (2) 1 6 Total 518 5,847 (1) Includes Honduras, El Salvador, Nicaragua, Costa Rica, Panama and Guatemala.
Country Total Theatres Total Screens United States 309 4,324 Brazil 85 622 Argentina 23 199 Colombia 30 177 Chile 20 142 Central America (1) 17 114 Peru 14 113 Bolivia 1 13 Paraguay 2 15 Total (2) (3) 501 5,719 (1) Includes Honduras, El Salvador, Nicaragua, Costa Rica, Panama and Guatemala.
Campaigns and Promotions. We market our theatres and special events, including new theatre grand openings, remodel openings and VIP events, using email, digital advertising, and radio and television advertising spots. We 8 exhibit previews of coming attractions and current films as part of our on-screen pre-feature program.
Campaigns and Promotions. We market our theatres and special events, including new theatre grand openings, remodel re-openings and VIP events, using email/in-app push messaging, social media communications, digital advertising, and various forms of traditional media advertising. We exhibit previews of coming attractions and current films as part of our on-screen pre-feature program.
Additionally, our country general managers are local citizens familiar with political, social, cultural and economic factors impacting their country, which enables them to more effectively manage the local business.
Additionally, our country general managers are local citizens familiar with political, social, cultural and economic factors impacting their country, which enables them to more effectively manage the local business. Our global management team has successfully navigated us through many industry and economic cycles over the years.
Our point-of-sale and inventory systems allow our category managers to monitor product sales and make adjustments to product mix on a theatre-by-theatre or market-by-market basis. This program flexibility also allows us to efficiently activate and manage both national or regional product launches and promotional initiatives to further grow food and beverage sales.
We have dedicated category managers that monitor product sales, upcoming content and events, and make adjustments to product mix on a theatre-by-theatre or market-by-market basis. This approach also allows us to efficiently activate and manage both national or regional product launches and promotional initiatives to further grow food and beverage sales.
We offer enhanced food and beverages such as gourmet pizzas, burgers, and sandwiches, and a selection of beers, wine and cocktails, all of which can be enjoyed in the comfort of the auditoriums, at a majority of our theatres. 5 We also offer full bars or dine-in areas in many of our locations and we plan to continue to expand these amenities to additional locations.
We offer enhanced food and beverages such as gourmet pizzas, burgers, and sandwiches, and a selection of beers, wine and cocktails, all of which can be enjoyed in the comfort of the auditoriums, at a majority of our theatres.
We have started a multi-year project to strategically convert our auditoriums to more energy efficient Cinionic RGB laser projectors, which provide greater light output than the current technology, further enhancing the movie-going experience.
We started a multi-year project in 2022 to strategically convert our auditoriums to more energy efficient Barco RGB laser projectors, which provide greater light output than the current technology, further enhancing the 4 movie-going experience. As of December 31, 2023, we have transitioned approximately 14% of our auditoriums to the new laser projectors across our worldwide circuit.
Our food and beverage costs have been especially susceptible to inflationary pressures as several core commodities such as corn, soybean and canola oil experienced elevated inflationary pressures. In an effort to mitigate these higher commodity prices, we have focused on identifying alternative products as well as implementing strategic pricing actions to help offset the impact of these pressures.
Our food and beverage costs have been especially susceptible to inflationary pressures in more recent periods, particularly for core commodities, which recently experienced elevated inflationary pressures. In an effort to mitigate these pressures, we focus on identifying alternative products sourced from a variety of suppliers as well as implementing strategic pricing actions to help offset the impact of these pressures.
We regularly conduct comprehensive analysis of the search and ticket purchase processes on our channels, making updates that reduce clicks and decrease the friction from search to ticket purchase. Regular enhancements result in driving higher traffic volume to our digital channels and drive increased ticket purchases.
We regularly conduct comprehensive analysis of the customer journey on our channels, making updates that reduce clicks and decrease the friction from search to ticket purchase.
We support the continuous development of professional, technical and leadership skills of our employees by offering tuition assistance, skills development courses and leadership development training in partnership with reputed institutions. Employees are encouraged to provide feedback about their experience through periodic employee engagement surveys.
We support the continuous development of professional, technical and leadership skills of our employees by offering tuition assistance, skills development courses and leadership development training in partnership with reputable institutions.
The following table represents the results of a survey by Motion Picture Association, or MPA, published in March 2021, outlining the historical trends in North American box office performance for the five-year period from 2017 through 2021. Box office performance has historically been primarily dependent on the quality, quantity and timing of film product.
The following table represents the results of surveys by Motion Picture Association, or MPA, published in March 2022, and The Cinema Foundation, published in March 2023, outlining the historical trends in North American box office performance for the five-year period from 2018 through 2022.
In an effort to more deeply engage with our guests, the visual identity and physical flow of our theatres are regularly assessed. This includes keeping all signage, merchandise, food and beverage vessels and employee attire updated and reflective of the modern experience. We are currently rolling out such updates across our entire circuit with new theatre designs and remodels.
Ongoing enhancements result in higher traffic volume to our digital channels and increased ticket and concession purchases. 7 In an effort to more deeply engage with our guests, the visual identity and physical flow of our theatres are regularly assessed. This includes keeping all signage, merchandise, food and beverage vessels and employee attire updated and reflective of the modern experience.
The 9 timing of releases, however, has become less pronounced as distributors have begun releasing content more evenly throughout the year. In our Latin American markets, while Hollywood content has similar release dates as in the U.S., the local holidays and seasons can vary. The unexpected emergence of a hit film during other periods can alter this seasonality trend.
In our Latin American markets, while Hollywood content has similar release dates as in the U.S., the local holidays and seasons vary. The unexpected emergence of a hit film during other periods or the failure of an expected success at a key time could alter this seasonality trend.
Local film personnel in our international offices negotiate with local offices of major film distributors, local film distributors and independent content providers to license films for our international theatres. Film distributors determine film release dates and film marketing campaigns, while we are responsible for booking the films at each of our theatres at the optimal showtimes for our guests.
Local film personnel in our international offices negotiate with local offices of major film distributors, local film distributors and independent content providers to license films for our international theatres.
Our geographic diversity makes us an important global distribution channel for the movie studios. While our performance during 2020 and 2021 was impacted by the temporary closure of our theatres, we gained overall market share in Latin America as we reopened all of our theatres during 2021. We have retained a meaningful portion of that market share growth throughout 2022.
Our geographic diversity makes us an important global distribution channel for the movie studios. Similar to the U.S., we gained overall market share in Latin America upon reopening all of our theatres during 2021. We have retained a meaningful portion of that market share through 2023. State-of-the-Art Theatre Circuit.
Additionally, we can stream live events via satellites to every one of our theatres in the U.S. and Latin America. 6 Our joint venture, AC JV, LLC, with Regal Entertainment Group, or Regal, and AMC Entertainment, Inc., or AMC, provides marketing and distribution of live and pre-recorded entertainment programming through Fathom Events to movie theatres to augment theatres’ feature film schedules, which includes the Metropolitan Opera, sports programs, concert events, and other special presentations, that may be live or pre-recorded.
Additionally, we have the functionality and technological infrastructure to live-stream events via satellite network across our portfolio of theatres in the U.S. and Latin America. In addition, our joint venture, AC JV, LLC, with Regal Entertainment Group and AMC Entertainment, Inc. provides marketing and distribution of live and pre-recorded entertainment programming to augment theatres’ feature film schedules.
NCM provides advertising to our theatres through its branded “ Noovie ” pre-show entertainment program and also handles certain lobby promotions and displays for our theatres. We believe that the reach, scope and digital delivery capability of NCM’s network provides an effective platform for national, regional and local advertisers to reach our audience.
We believe that the reach, scope and digital delivery capability of NCM’s network provides an effective platform for national, regional and local advertisers to reach our audiences.
We currently have approximately 18,100 employees in the U.S., approximately 20% of whom are full-time employees and 80% of whom are part-time employees. We have approximately 8,000 employees in our international markets, approximately 59% of whom are full-time employees and approximately 41% of whom are part-time employees.
We currently have approximately 17,500 employees in the U.S., approximately 21% of whom are full-time employees and 79% of whom are part-time employees. We have approximately 9,300 employees in our international markets, approximately 57% of whom are full-time employees and approximately 43% of whom are part-time employees.
These voluntary surveys provide overall and department-specific reports and enable us to improve employee experience and culture. We aspire to provide a safe, open and accountable work environment for our employees. We provide a hotline for all employees to report workplace concerns and violations with the option to report on an anonymous basis.
Employees in the U.S. are also encouraged to provide feedback about their experience through periodic employee engagement surveys. These voluntary surveys provide overall and department-specific reports and 9 enable us to improve employee experience and culture. We aspire to provide a safe, open and accountable work environment for our employees.
The XD experience includes wall-to-wall screens, wrap-around sound, plush seating, reclining seats in 75% of our XD auditoriums and a maximum comfort entertainment environment for an immersive experience. The benefits of our XD auditoriums include program flexibility, as we can show the content of our choice with no additional revenue share component outside of routine film rental.
The benefits of our XD auditoriums include program flexibility, as we can show the content of our choice with no additional revenue share component outside of routine film rental.
Impact of COVID-19 Pandemic The COVID-19 pandemic had a significant impact on the global economy and created a strain on the movie exhibition industry along with widespread social and economic effects. We temporarily closed our theatres in the U.S. and Latin America during March of 2020 at the onset of the COVID-19 outbreak.
Impact of COVID-19 Pandemic The impact of the COVID-19 pandemic had an unprecedented effect on the theatrical exhibition industry. We temporarily closed our theatres in the U.S. and Latin America during March of 2020 at the onset of the COVID-19 outbreak. We reopened theatres as soon as local restrictions and the status of the COVID-19 pandemic would allow.
Our proprietary Snacks in a Tap online concessions ordering capability allows moviegoers to purchase their cinema snacks in advance and have them waiting to be picked up upon arrival or delivered directly to their seat.
We also have lobby bars and VIP lounges in many domestic and international theatres. Our proprietary mobile concessions ordering capability allows moviegoers to purchase their cinema snacks in advance and have them waiting to be picked up upon arrival or delivered directly to their seat. This functionality streamlines the guest experience, adding convenience and enhanced guest service for our customers.
International Preliminary estimates for Latin American box office revenues were approximately $1.8 billion for 2022, up 87% compared with 2021. In addition to the quantity, quality and timing of Hollywood film product, performance in Latin American markets is also impacted by political and social conditions, growing populations, and continued retail development.
International Preliminary estimates for Latin American box office revenues were approximately $2.4 billion for 2023, up more than 33% compared with 2022. Box office performance in Latin America is dependent upon the quantity, quality and timing of Hollywood film product, and to a lesser extent, local film product.
We offer our guests a premium large format experience through our 292 XD auditoriums, which represent the largest exhibitor-branded premium large format footprint in the industry, and 16 IMAX auditoriums across our worldwide circuit. Our XD auditoriums offer a premium experience utilizing the latest in digital projection and enhanced custom sound, including Barco Auro-Max 11.1 sound systems in select locations.
We offer our guests a premium large format experience through our 293 XD auditoriums, which represents the largest exhibitor-branded premium large format footprint in the world, 15 IMAX auditoriums and six ScreenX auditoriums across our worldwide circuit.
We also offer a format that features motion seats and added sensory features. We regularly play art, independent and Bollywood films at many of our U.S. theatres and offer local film product in our Latin American markets, providing a variety of film choices to our guests.
We also offer a format that features motion seats and added sensory features. We offer a variety of alternative entertainment content for our guests. Examples include concert, sporting and gaming events, as well as art, independent, faith-based, and multicultural foreign language films. In certain Latin American markets where we operate, we also offer local film product to our guests.
Regulations The distribution of motion pictures is largely regulated by antitrust laws and was the subject of numerous antitrust cases in the past. The manner in which we can license films from certain major film distributors has been influenced by consent decrees and other court orders resulting from these cases.
The manner in which we can license films from certain major film distributors has been influenced by consent decrees and other court orders resulting from these cases. Consent decrees that bound certain major film distributors expired during 2022. These consent decrees required distributors to offer and license films to exhibitors, including Cinemark, on a theatre-by-theatre and film-by-film basis.
Consent decrees that bound certain major film distributors expired during 2022. These consent decrees required distributors to offer and license films to exhibitors, including Cinemark, on a theatre-by-theatre and film-by-film basis. Consequently, exhibitors have not entered into long-term arrangements with major distributors but must negotiate for licenses on a theatre-by-theatre and film-by-film basis.
Consequently, exhibitors have not entered into long-term arrangements with major distributors but must negotiate for licenses on a theatre-by-theatre and film-by-film basis. While the consent decrees may no longer be in effect, we are still subject to the antitrust laws, and we do not anticipate a material shift in the way films are licensed.
See further discussion in Item 1a. Risk Factors . 2 Motion Picture Exhibition Industry Overview Domestic Preliminary estimates indicate that North American box office revenues were approximately $7.5 billion for 2022, up more than 64% compared with 2021. Industry statistics continued to improve through 2022 as theatres were fully reopened and there was a steadier flow of new films released.
Motion Picture Exhibition Industry Overview Domestic Preliminary estimates indicate that North American box office revenues were approximately $9.1 billion for 2023, up more than 21% compared with 2022 due primarily to an increase in the volume of new films released.
While the consent decrees may no longer be in effect, we are still subject to the antitrust laws, and we do not anticipate a material shift in the way films are licensed. We are subject to various general regulations applicable to our operations including the Americans with Disabilities Act of 1990, or the ADA, and regulations promulgated by the U.S.
We are subject to various general regulations applicable to our operations including the Americans with Disabilities Act of 1990, or the ADA, and regulations promulgated by the U.S. Food and Drug Administration and certain state laws that require nutrition labels for certain menu items.
Additionally, guests in our Latin American locations can pre-pay for select concession products online or at kiosks within the theatre and pick them up at the concession stand. Cost Control. We negotiate prices, volume-based rebates and promotional-based rebates for concession supplies directly with concession vendors.
As of December 31, 2023, mobile concession ordering is available at virtually all of our U.S. theatres. Similarly, guests in our Latin American locations can pre-pay for select concession products online or at kiosks within the theatre and pick them up at the concession stand. Staff Training.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIf we fail to make any required payment under the agreements governing our leases and indebtedness or fail to comply with the financial and operating covenants contained in them, we would be in default, and as a result, our debt holders would have the ability to require that we immediately repay our outstanding indebtedness and the lenders under our senior secured credit facility could terminate their commitments to lend us money and foreclose against the assets securing their borrowings.
Biggest changeAs a result, our debt holders would have the ability to accelerate the repayment of our outstanding indebtedness, and the lenders under our senior secured credit facility could terminate their commitments and foreclose against the assets securing their borrowings. We could be forced into bankruptcy or liquidation.
If Holdings settles the 4.50% Convertible Senior Notes by cash, or by a combination of cash and shares of our common stock, upon a fundamental change as described in the indenture governing the 4.50% Convertible Senior Notes, Holdings will be required to make cash payments with respect to the 4.50% Convertible Senior Notes being converted.
If Holdings settles the 4.50% Convertible Senior Notes with cash, or by a combination of cash and shares of our common stock, upon a fundamental change as described in the indenture governing the 4.50% Convertible Senior Notes, Holdings will be required to make cash payments with respect to the 4.50% Convertible Senior Notes being converted.
Holdings’ exposure will depend on many factors but, generally, the increase in Holdings’ exposure will be correlated to the increase in Holdings’ common stock market price and in the volatility of the market price of Holdings’ common stock.
Holdings’ exposure will depend on many factors but, generally, the increase in Holdings’ exposure will be correlated to the increase in Holdings’ common stock market price and the volatility of the market price of Holdings’ common stock.
Certain provisions of CUSA’s 8.75% secured notes indenture, 5.25% senior notes indenture, CUSA’s 5.875% senior notes indenture and CUSA’s senior secured credit facility may have the effect of delaying or preventing future transactions involving a “change of control.” A “change of control” would require us to make an offer to the holders of each of its 8.75% Secured Notes, 5.25% Senior Notes and 5.875% Senior Notes to repurchase all of the outstanding notes at a purchase price equal to 101% of the aggregate principal amount outstanding plus accrued and unpaid interest 18 to the date of purchase.
Certain provisions of CUSA’s 8.75% secured notes indenture, 5.25% senior notes indenture, CUSA’s 5.875% senior notes indenture and CUSA’s senior secured credit facility may have the effect of delaying or preventing future transactions involving a “change of control.” A “change of control” would require us to make an offer to the holders of each of its 8.75% Secured Notes, 5.25% Senior Notes and 5.875% Senior Notes to repurchase all of the outstanding notes at a purchase price equal to 101% of the aggregate principal amount outstanding plus accrued and unpaid interest to the date of purchase.
Future sales of substantial amounts of Holdings’ common stock in the open market and the issuance of the shares reserved for future issuance under Holdings’ incentive plan, in exchange for outstanding warrants, conversion of outstanding 4.50% Convertible Senior Notes, or in connection with acquisitions or other corporate events, will be dilutive to Holdings’ existing stockholders and could result in a decrease in Holdings’ stock price.
Future sales of substantial amounts of Holdings’ common stock in the open market and the issuance of the shares reserved for potential future issuance under Holdings’ incentive plan, in exchange for outstanding warrants, conversion of outstanding 4.50% Convertible Senior Notes, or in connection with acquisitions or other corporate events, will be dilutive to Holdings’ existing stockholders and could result in a decrease in Holdings’ stock price.
If we are unable to respond to or invest in changes in 19 technology and the technological preferences of our customers, we may not be able to compete with other exhibitors or other entertainment venues, which could adversely affect our results of operations. Legislative or regulatory initiatives related to global warming/climate change concerns may negatively impact our business.
If we are unable to respond to or invest in changes in technology and the technological preferences of our customers, we may not be able to compete with other exhibitors or other entertainment venues, which could adversely affect our results of operations. Legislative or regulatory initiatives related to global warming/climate change concerns may negatively impact our business.
Since NCM's revenues are primarily dependent on theatre attendance, future NCM revenues and future dividends from NCMI will depend on the continued recovery of the motion picture exhibition industry. 17 Regulatory Risks We are subject to various government regulations which could result in substantial costs.
Since NCM's revenues are primarily dependent on theatre attendance, future NCM revenues and future dividends from NCMI will depend on the continued recovery of the motion picture exhibition industry. Regulatory Risks We are subject to various government regulations which could result in substantial costs.
In addition, Holdings’ ability to settle the 4.50% Convertible Senior Notes or to pay cash upon conversion of the 4.50% Convertible Senior Notes is limited by the agreements governing CUSA’s existing indebtedness and may also be limited by law, by regulatory authority or by agreements that will govern future indebtedness.
In addition, Holdings’ ability to settle the 4.50% Convertible Senior Notes or to pay cash upon conversion of the 4.50% Convertible Senior Notes is limited by the agreements governing CUSA’s existing indebtedness and may also be limited by law, by regulatory 14 authority or by agreements that will govern future indebtedness.
We may not be able to take any of these actions, and these actions may not be successful or permit us to meet our scheduled debt service obligations and these actions may be restricted under the terms of our existing or future debt agreements, including our senior secured credit facility.
We may not be able to take any of these actions, and these actions may not be successful or permit us to meet our scheduled debt service obligations. Certain actions may be restricted under the terms of our existing or future debt agreements, including our senior secured credit facility.
The inability to access debt financing on reasonable terms could materially impact our ability to make acquisitions, invest in technology innovations or significantly expand our business in the future. 16 Holdings’ ability to pay dividends may be limited or otherwise restricted.
The inability to access debt financing on reasonable terms could materially impact our ability to make acquisitions, invest in technology innovations or significantly expand our business in the future. Holdings’ ability to pay dividends may be limited or otherwise restricted.
Holdings can also issue shares of its common stock which are authorized but unissued and not reserved for any specific purpose without any action or approval by its stockholders. We may not be able to generate additional revenue or continue to realize value from our investment in NCM.
Holdings can also issue shares of its common stock which are authorized but unissued and not reserved for any specific purpose without any action or approval by its stockholders. We may not be able to generate additional revenue or continue to realize value from our investment in NCMI.
As such, there can be no assurance that these or similar events will not occur in the future or will not have an adverse effect on our business and results of operation.
As such, there can be no assurance that these or similar events will not occur in the future or will not have an adverse effect on our business and results of operations.
Holdings’ and CUSA’s ability to make scheduled payments of principal and interest on their respective indebtedness will depend on our ability to generate positive cash flows and on our future financial results. Our ability to generate positive cash flows is subject to general economic, financial, competitive, regulatory and other factors that are beyond our control.
Holdings’ and CUSA’s ability to make scheduled payments of principal and interest on their respective indebtedness will depend on our ability to generate positive cash flows and on our future financial results. Our ability to generate positive cash flows is subject to general economic, financial, competitive, regulatory and other factors, some of which are beyond our control.
The potential effect, if any, of these transactions and activities on the market price of Holdings’ common stock will depend in part on market conditions and cannot be ascertained at this time. Any of these activities could adversely affect the value of Holdings’ common stock.
The potential effect, if any, of these transactions and activities on the market price of Holdings’ common stock will depend in part on market conditions and cannot be ascertained at this time.
Reduced volume of film releases, poor performance of films, the disruption in the production of films due to events such as a strike by directors, writers or actors, a reduction in financing options for the film distributors, or a reduction in the production and marketing efforts of the film distributors to make and promote their films could have an adverse effect on our business by resulting in fewer patrons and reduced revenue.
Reduced volume of film releases, poor performance of films, the disruption in the production of films due to events such as a strike by directors, writers, actors or other industry related unions or guilds, a reduction in financing options for the film distributors, a reduction in the production and marketing efforts of the film distributors to make and promote their films, or the consolidation of major film distributors could have an adverse effect on our business by resulting in fewer patrons and reduced revenue.
We could be forced into bankruptcy or liquidation. The acceleration of our indebtedness under one agreement may permit acceleration of indebtedness under other agreements that contain cross-default and cross-acceleration provisions. If our indebtedness is accelerated, we may not be able to repay our indebtedness or borrow sufficient funds to refinance it.
The acceleration of our indebtedness under one agreement may permit acceleration of indebtedness under other agreements that contain cross-default and cross-acceleration provisions. If our indebtedness is accelerated, we may not be able to repay our indebtedness or borrow sufficient funds to refinance it.
Cinema advertising is a small component of the U.S. advertising market and therefore, NCM competes with larger, more established and well-known media platforms such as broadcast radio and television, cable and satellite television, outdoor advertising and Internet portals.
NCMI also suspended its dividend. Cinema advertising is a small component of the U.S. advertising market and therefore, NCM competes with larger, more established and well-known media platforms such as broadcast radio and television, cable and satellite television, outdoor advertising and Internet portals.
The substantial lease and debt obligations pose risk by: • requiring us to dedicate a substantial portion of our cash flows to payments on our lease and debt obligations, thereby reducing the availability of our cash flows from operations to fund working capital, capital expenditures, acquisitions and other corporate requirements and to pay dividends on Holdings’ common stock; • impeding our ability to obtain additional financing in the future for working capital, capital expenditures, acquisitions and other purposes; • subjecting us to the risk of increased sensitivity to interest rate increases on our variable rate debt; • limiting our ability to invest in innovations in technology and implement new platforms or concepts in our theatres; and • making us more vulnerable to adverse economic, market and industry conditions, limit our flexibility in planning for, or reacting to, changes in our business operations or to our industry overall, and place us at a disadvantage in relation to our competitors that may have lower debt levels.
The substantial lease and debt obligations could: • require us to dedicate a substantial portion of our cash flows to payments on our lease and debt obligations, thereby reducing the availability of our cash flows from operations to fund working capital, capital expenditures, acquisitions and other corporate requirements and to pay dividends on Holdings’ common stock; • impede our ability to obtain additional financing in the future for working capital, capital expenditures, acquisitions and other purposes; • subject us to the risk of increased sensitivity to interest rate increases on our variable rate debt; • limit our ability to invest in innovations in technology and implement new platforms or concepts in our theatres; and 13 • make us more vulnerable to adverse economic, market and industry conditions, limit our flexibility in planning for, or reacting to, changes in our business operations or to our industry overall, and place us at a disadvantage in relation to our competitors that may have lower debt levels.
Our potential 13 expansion strategy may not result in improvements to our business, financial condition, profitability or cash flows. Further, our expansion programs may require financing above our existing borrowing capacity and operating cash flows. We may not be able to obtain such financing or ensure that such financing will be available to us on acceptable terms, or at all.
Our potential expansion strategy may not result in improvements to our business, financial condition, profitability or cash flows. Further, our expansion programs may require financing above our existing borrowing capacity and operating cash flows. We may not be able to obtain such financing on acceptable terms, or at all.
Those same scope, complexity, reliance, and changing cyber-threat landscape factors could also affect our ability to adapt to and comply with changing regulations and contractual obligations applicable to data security and privacy, which are increasingly demanding, both in the United States and in other jurisdictions where we operate.
These same factors could also affect our ability to adapt to and comply with changing regulations and contractual obligations applicable to data security and privacy, which are increasingly demanding, both in the United States and in other jurisdictions where we operate.
In addition, even if holders do not elect to convert their 4.50% Convertible Senior Notes, Holdings could be required under applicable accounting rules to reclassify all or a portion of the outstanding principal of the 4.50% Convertible Senior Notes as a current rather than long-term liability, which would result in a material reduction of its net working capital. 15 Conversion of the 4.50% Convertible Senior Notes may dilute the ownership interest of existing stockholders, or may otherwise depress the price of Holdings’ common stock.
In addition, even if holders do not elect to convert their 4.50% Convertible Senior Notes, Holdings could be required under applicable accounting rules to reclassify all or a portion of the outstanding principal of the 4.50% Convertible Senior Notes as a current rather than long-term liability, which would result in a material reduction of its net working capital.
Our foreign operations are subject to adverse regulations, economic instability and currency exchange risk. We have 200 theatres with 1,448 screens in fifteen countries in Latin America as of December 31, 2022. Brazil represented approximately 7% of our consolidated 2022 revenues. Governmental regulation of the motion picture industry in foreign markets differs from that in the U.S.
Our foreign operations are subject to adverse regulations, economic instability and currency exchange risk. We had 192 theatres with 1,395 screens in 13 countries in Latin America as of December 31, 2023. Brazil represented approximately 7.6% of our consolidated 2023 revenue. Governmental regulation of the motion picture industry in foreign markets differs from that in the U.S.
As we continue to recover from the COVID-19 pandemic, we may not be able to generate cash flows at historical levels, or guarantee that future borrowings will be available under our senior secured credit facility, in an amount sufficient to enable us to pay our indebtedness.
As our industry recovers from the effects of the COVID-19 pandemic and the recent writers’ and actors’ guild strikes, we may not be able to generate cash flows at historical levels, or guarantee that future borrowings will be available under our senior secured credit facility, in an amount sufficient to enable us to pay our indebtedness.
Our results of operations fluctuate on a seasonal basis. Our results of operations vary from period to period based upon the quantity and quality of the motion pictures that we show in our theatres. The major film distributors generally release the films they anticipate will be most successful during the summer and holiday seasons.
Our results of operations vary from period to period based upon the quantity and quality of the motion pictures that we show in our theatres. The major film distributors generally release the films they anticipate will be most successful during the summer and holiday seasons. Consequently, we typically generate higher revenue during those periods.
Declines in our stock price or market capitalization, declines in our attendance due to increased competition, or economic factors that lead to a decline in attendance could result in impairments of goodwill and our intangible assets.
Declines in our stock price or market capitalization, or declines in our attendance due to increased competition, macroeconomic conditions or other factors could result in impairments of goodwill and our intangible assets.
We also face risks of currency fluctuations, hard currency shortages and controls of foreign currency exchange and cash payments to the U.S., all of which could have an adverse effect on the results of our operations.
We also face risks of currency fluctuations, hard currency shortages and controls of foreign currency exchange and cash payments to the U.S., all of which could have an adverse effect on the results of our operations and liquidity. Tight labor market and loss of key personnel may negatively impact our operations and operating results.
Holdings’ exposure to the credit risk of the Option Counterparties will not be secured by any collateral. If any Option Counterparty becomes subject to insolvency proceedings, Holdings will become an unsecured creditor in those proceedings with a claim equal to its exposure at that time under its transactions with that counterparty.
If any Option Counterparty becomes subject to insolvency proceedings, Holdings will become an unsecured creditor in those proceedings with a claim equal to its exposure at that time under its transactions with that counterparty.
Risks Related to Our Business and Operations Our business depends on film production and performance. Our business depends on both the availability of films for exhibition in our theatres and the success of those films in our markets.
Our business depends on both the availability of films for exhibition in our theatres and the success of those films in our markets.
A deterioration in our relationship with any of the major film distributors could adversely affect our ability to obtain commercially successful films and to negotiate favorable licensing terms for such films, both of which could adversely affect our business and operating results. We face intense competition for patrons and films which may adversely affect our business.
Consequently, we cannot guarantee a supply of films by entering into long-term arrangements with major distributors. A deterioration in our relationship with any of the major film distributors could adversely affect our ability to obtain commercially successful films and to negotiate favorable licensing terms for such films, both of which could adversely affect our business and operating results.
During the years ended December 31, 2020, 2021 and 2022, Holdings and CUSA each recorded approximately $36.0 million, $44.1 million and $52.2 million in other revenue related to NCM, respectively, $14.1 million, $0.2 million and $0 million in cash distributions recorded as a reduction of the investment in NCM, respectively, and $7.0 million, $0.1 million and $0 in cash distributions in excess of the investment in NCM, respectively.
During the years ended December 31, 2021, 2022 and 2023, Holdings and CUSA each recorded approximately $44.1 million, $52.2 million and $53.3 million in other revenue related to NCM, respectively, and $0.3 million, $0 million and $0 million in cash distributions, respectively.
Provisions in Holdings’ corporate documents and certain of CUSA’s agreements, as well as Delaware law, may hinder a change of control. Provisions in the Holdings amended and restated certificate of incorporation and bylaws, as well as provisions of the Delaware General Corporation Law, could discourage unsolicited proposals to acquire us.
Provisions in the Holdings amended and restated certificate of incorporation and bylaws, as well as provisions of the Delaware General Corporation Law, could discourage unsolicited proposals to acquire us.
If studios continue to reduce or eliminate the windows for certain films even after the industry recovers or, if our guests choose to wait for an in-home release rather than attend a theatre to view the film, it may continue to adversely impact our business and results of operations, financial condition and cash flows.
While this trend has largely diminished in 2022 and 2023, studios may reduce or eliminate the windows for certain films. If our guests choose to wait for an in-home release rather than attend a theatre to view the film, our business and results of operations, financial condition and cash flows may be adversely impacted.
During the COVID-19 pandemic, certain studios adopted strategies that reduced, or in some cases eliminated, the release windows. Select studios released certain movie titles to their own streaming platforms either simultaneously with theatrical releases or bypassed theatrical releases altogether.
During the COVID-19 pandemic, certain studios adopted strategies that reduced, or in some cases eliminated, the release windows. While the dynamic release window has coalesced to around 45 days for major films, select studios may release certain movie titles to their own streaming platforms either simultaneously with theatrical releases or bypass theatrical releases altogether.
A 12 significant increase in popularity of these alternative film distribution channels, competing forms of entertainment or improvements in technologies available at home could have an adverse effect on our business and results of operations. Our results of operations may be impacted by the shrinking, or elimination of, video and digital release windows.
We have seen an expansion in some of these distribution channels in recent years. A significant increase in popularity of these alternative film distribution channels, competing forms of entertainment or improvements in technologies available at home could have an adverse effect on our business and results of operations.
Even if we are able to obtain new financing, it may not be on commercially reasonable terms or on terms that are acceptable to us.
Even if we are able to obtain new financing, it may not be on commercially reasonable terms or on terms that are acceptable to us. If our debt holders require immediate payment, we may not have sufficient assets to satisfy our obligations under our indebtedness.
Without proper staffing, wait times to buy tickets and concessions may be extended and operating hours may be reduced. These conditions could result in a poor guest experience, which could adversely affect future attendance. We could face similar challenges with respect to retaining corporate employees.
These conditions could result in a poor guest experience, which could adversely affect future attendance. We could face similar challenges with respect to retaining corporate employees.
The film distribution business is highly concentrated, with five major film distributors accounting for approximately 91.6% of U.S. box office revenues and 46 of the top 50 grossing films during 2022. Film distributors license films to exhibitors on a theatre-by-theatre and film-by-film basis. Consequently, we cannot guarantee a supply of films by entering into long-term arrangements with major distributors.
We rely on the film distributors to supply the films shown in our theatres. The film distribution business is highly concentrated, with six major film distributors accounting for approximately 85% of U.S. box office revenues and 45 of the top 50 grossing films during 2023. Film distributors license films to exhibitors on a theatre-by-theatre and film-by-film basis.
The motion picture exhibition industry is highly competitive. We compete against local, regional, national and international exhibitors in many of our markets. We compete for both patrons and licensing of films. In markets where we do not face nearby competitive theatres, there is a risk of new theatres being built.
We face intense competition for patrons and films which may adversely affect our business. The motion picture exhibition industry is highly competitive. We compete against local, regional, national and international exhibitors in many of our markets. We compete for both patrons and licensing of films.
As a result, future events could have a material impact on our business and adversely affect our financial condition and results of operations. Other General Risks General political, social, health and economic conditions can adversely affect our business.
As a result, future events could have a material impact on our business and adversely affect our financial condition and results of operations. 18 Other General Risks A failure to adapt to future technological innovations could impact our ability to compete effectively and could adversely affect our results of operations.
Holdings is subject to counterparty risk with respect to the 4.50% Convertible Senior Notes Hedge Transactions. The Option Counterparties are financial institutions or affiliates of financial institutions, and Holdings will be subject to the risk that one or more of such Option Counterparties may default under the Hedge Transactions.
The Option Counterparties are financial institutions or affiliates of financial institutions, and Holdings will be subject to the risk that one or more of such Option Counterparties may default under the Hedge Transactions. Holdings’ exposure to the credit risk of the Option Counterparties will not be secured by any collateral.
As of December 31, 2022, Holdings had $2,516.6 million in long-term debt obligations, which included $2,056.6 million of CUSA debt and excludes unamortized debt issuance costs. As of December 31, 2022, Holdings and CUSA had $102.4 million in finance lease obligations and $1,189.9 million in long-term operating lease obligations.
As of December 31, 2023, Holdings had $2,432.1 million in long-term debt obligations, which included $1,972.1 million of CUSA debt and excludes unamortized debt issuance costs and original issue discount. As of December 31, 2023, Holdings and CUSA had $87.8 million in finance lease obligations and $853.3 million in long-term operating lease obligations.
Ratings are always subject to change and there can be no assurance that our current ratings will remain the same for any given period of time.
The credit ratings that are issued are based on the rating agency’s judgment and experience in determining what information should be considered in giving a rating to a particular company. Ratings are always subject to change and there can be no assurance that our current ratings will remain the same for any given period of time.
We are rated by nationally recognized rating agencies. The rating scales and methodologies used to derive individual ratings may vary from agency to agency. Credit ratings are issued by credit rating agencies based on evaluations of our ability to pay back our outstanding debt and the likelihood that we would default on that debt prior to its maturity.
Credit ratings are issued by credit rating agencies based on evaluations of our ability to pay back our outstanding debt and the likelihood that we would default on that debt prior to its maturity. The credit ratings issued by the rating agencies represent the rating agency's evaluation of both qualitative and quantitative information for our company.
Certain studios have reduced the window for video and digital releases or released films directly to alternative distribution channels such as streaming services simultaneous with a theatrical release. In addition, studios may determine that certain types of film content will not be released for theatrical exhibition in the future and will go straight to streaming platforms.
The volume of new films has not, and may not, fully recover to pre-pandemic levels which would materially impact our business. In addition, certain studios have reduced the window for video and digital releases or released films directly to alternative distribution channels such as streaming services simultaneous with a theatrical release.
Labor shortages, increased employee turnover and health care mandates could also increase our labor costs. This in turn could lead us to increase prices, which could impact our sales. Conversely, if competitive pressures or other factors prevent us from offsetting increased labor costs by increases in prices, our results of operations may be adversely impacted.
Labor shortages, increased employee turnover and health care mandates could also increase our labor costs. This in turn could lead us to increase prices, which could impact our sales.
If our debt holders require immediate payment, we may not have sufficient assets to satisfy our obligations under our indebtedness. 14 A lowering or withdrawal of the ratings assigned or a change in outlook to our outstanding debt securities by rating agencies may increase our future borrowing costs and reduce our access to capital.
A lowering or withdrawal of the ratings assigned or a change in outlook to our outstanding debt securities by rating agencies may increase our future borrowing costs and reduce our access to capital. We are rated by nationally recognized rating agencies. The rating scales and methodologies used to derive individual ratings may vary from agency to agency.
As of December 31, 2022, we owned 43.7 common units of NCM, which represented an ownership interest in NCM of approximately 25.4%. CUSA receives monthly theatre access and advertising fees under an Exhibitor Services Agreement with NCM, and CUSA has received quarterly distributions of excess cash from NCM pursuant to NCM’s operating agreement.
CUSA receives monthly theatre access and advertising fees under an Exhibitor Services Agreement with NCM, and CUSA is entitled to receive quarterly distributions of excess cash from NCM pursuant to NCM’s operating agreement.
Distributions of excess cash from NCM to its members, including NCMI, are currently restricted through December 2023 in accordance with the credit agreement amendment NCM entered into with its lenders, and NCMI has suspended its dividend.
NCM emerged from bankruptcy on August 7, 2023, and the Company’s ownership interest in NCMI was reduced to less than 5%. Distributions of excess cash from NCM to its members, including NCMI, were restricted through December 2023 in accordance with the credit agreement amendment NCM entered into with its lenders and as a result of their bankruptcy filing.
An increase in competing forms of entertainment or the use of alternative film distribution channels may reduce movie theatre attendance and limit revenue growth. We compete with other forms of out-of-home entertainment, such as family entertainment centers, concerts, theme parks, gaming and sporting events, for our patrons’ leisure time and disposable income.
We compete with other forms of out-of-home entertainment, such as family entertainment centers, concerts, theme parks, gaming and sporting events, for our patrons’ leisure time and disposable income. We also face competition for patrons from a number of alternative film distribution channels, such as streaming, digital downloads, video on-demand and network television.
The degree of competition for patrons is dependent upon such factors as location, theatre capacity, presentation quality, film showtime availability, customer service quality, products and amenities offered, and ticket prices. The principal competitive factors with respect to film licensing include the theatre’s location and its demographics, the condition, capacity and grossing potential of each theatre, and licensing terms.
In markets where we do not face nearby competitive theatres, there is a risk of new theatres being built. The degree of competition for patrons is dependent upon such factors as location, theatre capacity, presentation quality, film showtime and availability, customer service quality, products and amenities offered, and ticket prices.
The unexpected emergence of a successful film during other periods or the failure of an expected success at a key time could alter this seasonality trend. Due to the dependency on the success of films released from one period to the next, results of operations for one period may not be indicative of the results for future periods.
Due to the dependency on the success of films released from one period to the next, results of operations for one period may not be indicative of the results for future periods. 11 A deterioration in relationships with film distributors could adversely affect our ability to obtain commercially successful films.
Tight labor market and loss of key personnel may negatively impact our operations and operating results Labor shortages may affect our ability to hire and retain employees. The success of our business depends on our ability to recruit and retain our theatre staff.
Labor shortages may affect our ability to hire and retain employees. The success of our business depends on our ability to recruit and retain our theatre staff. Without proper staffing, wait times to buy tickets and concessions 12 may be extended and operating hours may be reduced.
During 2022, the quantity of new film releases available for theatrical exhibition improved as the industry began to recover from the impacts of the COVID-19 pandemic, however studios may continue to determine that certain types of films will not be released for theatrical exhibition and will go straight to streaming platforms, impacting the quantity of films available.
Studios may determine that certain types of film content will not be released for theatrical exhibition in the future and will go straight to streaming platforms, further impacting the quantity of films available. Our results of operations fluctuate on a seasonal basis.
Due to the COVID-19 pandemic, production of films was temporarily halted or delayed and new film releases were postponed, resulting in a reduction in the volume of new films available for theatrical exhibition.
Most recently the Hollywood writers’ and actors’ guild strikes caused film production to be temporarily halted or delayed and new film releases were postponed, resulting in a reduction in the volume of new films available for theatrical exhibition. As a result, we are not currently generating attendance and revenue from admissions at levels comparable to what we had generated historically.
We also face competition from new concept theatres such as dine-in theatres, tavern style theatres and family entertainment centers, that open in close proximity to our conventional theatres. If we are unable to attract patrons or to license successful films, our business may be adversely affected.
The principal competitive factors with respect to film licensing include the theatre’s location and its demographics, the condition, capacity and grossing potential of each theatre, and licensing terms. We also face competition from new concept theatres such as dine-in theatres, tavern style theatres and family entertainment centers that open in close proximity to our conventional theatres.
Consequently, we typically generate higher revenue during these periods. The timing of releases, however, has become less pronounced as distributors have begun releasing content at other times throughout the year. In our Latin American markets, while Hollywood content has similar release dates as in the U.S., the local holidays and seasons vary.
In our Latin American markets, while Hollywood content has similar release dates as in the U.S., the local holidays and seasons vary. The unexpected emergence of a successful film during other periods or the failure of an expected success at a key time could alter this seasonality trend.
Removed
Risks Related to the COVID-19 Pandemic The COVID-19 pandemic has disrupted our industry and our business and could continue to affect our financial condition, liquidity, cash flows, results of operations and ability to service our existing and future indebtedness. The outbreak of the COVID-19 pandemic has disrupted our industry and our business for an extended period of time.
Added
It is not possible to identify all risk factors, and additional risks and uncertainties not presently known to us or that we currently believe to be immaterial that may also materially impact our business operations.
Removed
While all of our theatres have been reopened since December 31, 2021, our business, results of operations, liquidity, cash flows and financial condition continue to be impacted by the COVID-19 pandemic. One of the key factors that has affected our business is the consistent availability of new films for exhibition at our theatres.
Added
Risks Related to Our Business, Economic, Market and Operating Conditions A variety of uncontrollable events may disrupt our businesses, reduce guest attendance, or increase the cost or reduce the profitability of providing our products and services.
Removed
In response to the COVID-19 pandemic federal, state and local governments implemented restrictions that limited in-person gathering and/or movement of guests.
Added
Our results of operations can be significantly and adversely affected in the U.S., Latin America or in specific regions as a result of a variety of factors beyond our control, including: health concerns (including as it was by COVID-19 and could be by future health emergencies, endemics, epidemics and pandemics); adverse weather conditions arising from short-term weather patterns or long-term climate change, including catastrophic events or natural disasters such as hurricanes, typhoons, floods, droughts, wildfires and earthquakes; international, political or military developments, including trade and other international disputes and social unrest; macroeconomic conditions, including a decline in economic activity, inflation, deflation and foreign exchange rate fluctuations; and terrorist attacks.
Removed
Even as restrictions have been lifted, consumers may not yet be comfortable gathering in a large group or within a closed space for a few hours at a time, which could have an adverse effect on our business by resulting in fewer guests and reduced revenue.
Added
These events and others, such as fluctuations in energy costs and computer virus attacks, intrusions, ransom ware or other widespread computing or telecommunications failures, may also damage our ability to provide our services. We may 10 have insurance coverage with respect to some, but not all, of these events.
Removed
The outbreak of COVID-19 has also significantly increased economic and demand uncertainty, and it is possible that it could cause a global recession.
Added
Moreover, the costs of protecting against such incidents reduces the profitability of our operations. For example, the impact of the COVID-19 pandemic had an unprecedented impact on the theatrical exhibition industry.
Removed
For additional information on risks related to a slowdown or recession, and inflationary, supply chain and wage rate pressures, see “—Other General Risks—General political, social, health and economic conditions can adversely affect our business.” 11 To the extent the COVID-19 pandemic adversely affects our business and financial results, it may also have the effect of heightening many of the other risks described in this “Risk Factors” section, including but not limited to those relating to our high level of indebtedness, our need to generate sufficient cash flows to service our indebtedness and our ability to comply with the covenants contained in the agreements that govern our indebtedness.
Added
While the industry has made significant progress in its recovery from the COVID-19 pandemic, our industry and our business continues to be impacted by disruptions in the film production cycle.
Removed
A deterioration in relationships with film distributors could adversely affect our ability to obtain commercially successful films. We rely on the film distributors to supply the films shown in our theatres.
Added
We obtain insurance against the risk of losses relating to some of these events, generally including certain physical damage to our property and resulting business interruption, certain injuries occurring on our property and some liabilities for alleged breach of legal responsibilities. When insurance is obtained it is subject to deductibles, exclusions, terms, conditions and limits of liability.
Removed
We also face competition for patrons from a number of alternative film distribution channels, such as streaming, digital downloads, video on-demand and network television. We have seen an expansion in these distribution channels in recent years.
Added
The types and levels of coverage we obtain vary from time to time depending on our view of the likelihood of specific types and levels of loss compared to the cost of obtaining coverage for such types and levels of loss. We may experience material losses not covered by our insurance. Our business depends on film production and performance.
Removed
The credit ratings issued by the rating agencies represent the rating agency's evaluation of both qualitative and quantitative information for our company. The credit ratings that are issued are based on the rating agency’s judgment and experience in determining what information should be considered in giving a rating to a particular company.
Added
For example, the May 2, 2023 strike by the Writers Guild of America, which lasted for almost five months, and the July 14, 2023 strike by members of SAG-AFTRA, the union representing television and movie actors, which lasted almost four months, together resulted in a decrease in film content released in 2023 and will cause a decrease in 2024 film content due to production delays that have forced studios to push films previously slated to be released in 2023 and 2024 to 2025 and 2026.
Removed
On February 23, 2022, we redeemed substantially all of our common units of NCM for an equal number of common shares in National Cinemedia, Inc. (“NCMI”).
Added
Also, while the quantity of new film releases available for theatrical exhibition continued to improve in 2023 and caused the industry to further recover from the effects of the COVID-19 pandemic, the volume of film content has not reverted to historical levels.
Removed
NCM has a substantial amount of indebtedness and has been significantly impacted by the COVID-19 pandemic. If a bankruptcy case were commenced by or against NCM, it is possible that our Exhibitor Services Agreement would be rejected or renegotiated and it is possible that we may lose all of our equity in NCM.
Added
If we are unable to attract patrons or license successful films, our business may be adversely affected. An increase in competing forms of entertainment or the use of alternative film distribution channels may reduce movie theatre attendance and limit revenue growth.
Removed
Additionally, Cineworld Group plc (“Cineworld”) (the parent company of Regal Entertainment, Inc. (“Regal”)), filed for bankruptcy under Chapter 11 in September 2022. As part of the bankruptcy proceedings, Cineworld has filed motions to reject Regal’s Exhibitor Services Agreement.
Added
Our results of operations may be impacted by the reduction, or elimination of, video and digital release windows.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe Company can renew, at its option, a substantial portion of the leases at defined or then market rental rates for various periods. Some leases also provide for escalating rent payments throughout the lease term.
Biggest changeOther variable lease payments include payments adjusted periodically for inflation, changes in attendance or changes in average ticket price. The Company can renew, at its option, many of its leases at defined or then market rental rates for various renewal periods. Some leases also provide for escalating rent payments throughout the lease term.
We also lease office space in seven regions in Latin America for our local office teams.
We also lease office space in seven regions in Latin America for our local office teams. 20
See Note 4 to the consolidated financial statements for further discussion of our leases. 20 In addition to our theatre properties, we currently own an office building in Plano, Texas, which is our worldwide headquarters. We lease office space in Frisco, Texas and a warehouse in McKinney, Texas.
See Note 4 to the consolidated financial statements for further discussion of our leases. In addition to our theatre properties, we currently own an office building in Plano, Texas, which is our global headquarters. We lease office space in Frisco, Texas and a warehouse in McKinney, Texas.
In addition to fixed lease payments, some of the leases provide for variable lease payments and some require the payment of taxes, insurance, common area maintenance and other costs applicable to the property. Variable lease payments include payments based on a percentage of sales over defined thresholds or payments adjusted periodically for inflation or changes in pricing or attendance.
In addition to fixed lease payments, some of the leases provide for variable lease payments and some require the payment of taxes, insurance, common area maintenance and other costs applicable to the property. Variable lease payments include payments based on a percentage of sales over defined thresholds.
Pr operties The following table sets forth a summary of our theatres in U.S. and international markets as of December 31, 2022: Leased Owned Segment Theatres Theatres U.S. 277 41 International 200 — Total 477 41 See also Item 1, Business – Theatre Operations , for a summary of the geographic locations for our U.S. and international theatre circuit as of December 31, 2022.
Pr operties The following table sets forth a summary of our theatres in U.S. and international markets as of December 31, 2023: Leased Owned Segment Theatres Theatres U.S. 269 40 International 192 — Total 461 40 See also Item 1, Business – Theatre Operations , for a summary of the geographic locations for our U.S. and international theatre circuit as of December 31, 2023.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

5 edited+2 added−1 removed4 unchanged
Biggest changeSee Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operation – Liquidity and Capital Resources – Financing Activities for a discussion of dividend restrictions under CUSA’s debt agreements. See Note 7 to the consolidated financial statements for a detail of dividends paid by Holdings during the year ended December 31, 2020.
Biggest changeSee Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operation – Liquidity and Capital Resources – Financing Activities for a discussion of dividend restrictions under CUSA’s debt agreements. CUSA did not pay any cash dividends to Holdings during the years ended December 31, 2021, 2022 and 2023.
CUSA’s ability to pay dividends is limited by the terms of its senior notes indentures and its senior secured credit facility, which restrict its ability to pay dividends and the ability of certain of its subsidiaries to pay dividends. See Note 14 to the consolidated financial statements for further discussion of our debt agreements.
CUSA’s ability to pay dividends is limited by the terms of its senior notes indentures and its senior secured credit facility, which restrict its ability to pay dividends and the ability of its subsidiaries to pay dividends. See Note 14 to the consolidated financial statements for further discussion of our debt agreements.
The performance graph below sets forth the cumulative total shareholder return (assuming reinvestment of dividends) to Holdings’ stockholders during the five-year period ended December 31, 2022, as well as the corresponding returns on the S&P 500 Index and in each of AMC and IMAX.
The performance graph below sets forth the cumulative total shareholder return (assuming reinvestment of dividends) to Holdings’ stockholders during the five-year period ended December 31, 2023, as well as the corresponding returns on the S&P 500 Index and in each of AMC and IMAX.
Market for Registrant’s Common Equity, Related Sto ckholder Matters and Issuer Purchases of Equity Securities Market Information and Holders of Common Stock Holdings’ common equity consists of common stock, which has traded on the New York Stock Exchange since April 24, 2007 under the symbol “CNK.” As of December 31, 2022, there were 500 holders of record of Holdings’ common stock and there were no other classes of stock issued and outstanding.
Market for Registrant’s Common Equity, Related Sto ckholder Matters and Issuer Purchases of Equity Securities Market Information and Holders of Common Stock Holdings’ common equity consists of common stock, which has traded on the New York Stock Exchange since April 24, 2007 under the symbol “CNK.” As of December 31, 2023, there were approximately 570 holders of record of Holdings’ common stock and there were no other classes of stock issued and outstanding.
Holdings’ stock price performance shown in the graph below may not be indicative of future stock performance. Item 6. [Reserved ] 23
Holdings’ stock price performance shown in the graph below may not be indicative of future stock performance.
Removed
During the year ended December 31, 2020, CUSA paid cash dividends of approximately $42.0 million to Holdings. No such dividends were paid during the years ended December 31, 2021 and 2022.
Added
Purchases of Equity Securities In the fourth quarter of 2023, Holdings purchased shares of its common stock as follows: Total Number of Shares Purchased (1) Average Price Paid per Share Total Number of Shares Purchased As Part of Publicly Announced Plans Approximate Dollar Value of Shares that May Yet Be Purchased Under Publicly Announced Plan October 1 through October 31 — $ — — — November 1 through November 30 17.90 $ 15.42 — — December 1 through December 31 9.53 $ 14.09 — — Total 27.43 — — (1) Represents shares of Holdings’ common stock (in thousands) repurchased by withholding shares in October, November and December of 2023 to satisfy employee tax-withholding obligations upon vesting in restricted stock and performance stock units.
Added
See Note 18 to the consolidated financial statements. Item 6. [Reserved ] 23

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeAs of December 31, 2022, Holding's long-term debt obligations, scheduled interest payments on long-term debt, future minimum lease obligations under non-cancelable operating and finance leases, deferred rent payments due as a result of amended lease terms, scheduled interest payments under finance leases and other obligations for each period indicated are summarized as follows: Payments Due by Period (in millions) Less Than After Contractual Obligations (1) Total One Year 1 - 3 Years 3 - 5 Years 5 Years Long-term debt (2) $ 2,516.6 $ 10.7 $ 1,332.2 $ 407.2 $ 766.5 Scheduled interest payments on long-term debt (3) 470.9 135.2 228.8 86.7 20.2 Operating lease obligations (4) 1,434.9 276.6 459.4 316.9 382.0 Finance lease obligations (4) 124.2 19.0 34.5 24.0 46.7 Purchase and other commitments (5) 46.3 21.3 24.1 0.9 — Liability for uncertain tax positions (6) — — — — — Total obligations $ 4,592.9 $ 462.8 $ 2,079.0 $ 835.7 $ 1,215.4 (1) The only differences between the contractual obligations for Holdings, as presented above, and those for CUSA are incremental long-term debt obligations and scheduled interest payments on long-term debt for Holdings.
Biggest changeThe following table sets forth, as of the periods indicated, the total long-term debt, current portion of long-term debt and debt issuance costs, net of amortization for CUSA: December 31, 2022 2023 Total long-term debt carrying value $ 2,056.6 $ 1,972.1 Less: Current portion 10.7 7.8 Less: Debt issuance costs and original issue discount, net of accumulated amortization 22.9 27.5 Long-term debt, less current portion, net of unamortized debt issuance costs and original issue discount $ 2,023.0 $ 1,936.8 As of December 31, 2023, we had $125.0 million in available borrowing capacity on our revolving line of credit. 36 As of December 31, 2023, Holdings’ long-term debt obligations, scheduled interest payments on long-term debt, future minimum lease obligations under non-cancelable operating and finance leases, scheduled interest payments under finance leases and other obligations for each period indicated are summarized as follows: Payments Due by Period (in millions) Less Than After Contractual Obligations (1) Total One Year 1 - 3 Years 3 - 5 Years 5 Years Long-term debt (2) $ 2,432.1 $ 7.8 $ 1,030.4 $ 780.4 $ 613.5 Scheduled interest payments on long-term debt (3) 539.0 144.1 220.4 152.6 21.9 Operating lease obligations (4) 1,280.0 267.2 437.0 280.4 295.4 Finance lease obligations (4) 105.0 18.0 28.4 23.5 35.1 Purchase and other commitments (5) 72.9 60.1 12.4 0.3 0.1 Liability for uncertain tax positions (6) — — — — — Total obligations $ 4,429.0 $ 497.2 $ 1,728.6 $ 1,237.2 $ 966.0 (1) The only differences between the contractual obligations for Holdings, as presented above, and those for CUSA are incremental long-term debt obligations and scheduled interest payments on long-term debt for Holdings.
Revenue. The table below, presented by reportable operating segment, summarizes our year-over-year revenue performance and certain key performance indicators that impact our revenues. U.S.
The table below, presented by reportable operating segment, summarizes our year-over-year revenue performance and certain key performance indicators that impact our revenues. U.S.
Beginning May 15, 2025, holders may convert their 4.50% Convertible Senior Notes at any time prior to the close of business on the second scheduled trading day immediately preceding the maturity date, or (4) during any calendar quarter commencing after the calendar quarter ending on September 30, 2020 (and only during such calendar quarter), if the last reported sale price of Holdings’ common stock for at least 20 trading days during the period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to $18.66 per share (130% of the initial conversion price of $14.35 per share), on each applicable trading day.
Beginning May 15, 2025, holders may convert their 4.50% Convertible Senior Notes at any time prior to the close of business on the second scheduled trading day immediately preceding the maturity date, or (4) during any calendar quarter commencing after the calendar 37 quarter ending on September 30, 2020 (and only during such calendar quarter), if the last reported sale price of Holdings’ common stock for at least 20 trading days during the period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to $18.66 per share (130% of the initial conversion price of $14.35 per share), on each applicable trading day.
The 5.25% Senior Notes and the guarantees will be CUSA’s and the guarantors’ senior unsecured obligations and (i) rank equally in right of payment to CUSA’s and the guarantors’ existing and future senior debt, including borrowings under CUSA’s Credit Agreement (as defined below) and CUSA’s existing senior notes, (ii) rank senior in right of payment to CUSA’s and the guarantors’ future subordinated debt, (iii) are effectively subordinated to all of CUSA’s and the guarantors’ existing and future secured debt, including all obligations under the Credit Agreement and CUSA’s 8.75% senior secured notes due 2025, in each case to the extent of the value of the collateral securing such debt, (iv) are structurally subordinated to all existing and future debt and other liabilities of CUSA’s non-guarantor subsidiaries, and (v) are structurally senior to the 4.50% convertible senior notes due 2025 issued by Holdings.
The 5.25% Senior Notes and the guarantees will be CUSA’s and the guarantors’ senior unsecured obligations and (i) rank equally in right of payment to CUSA’s and the guarantors’ existing and future senior debt, 40 including borrowings under CUSA’s Credit Agreement (as defined below) and CUSA’s existing senior notes, (ii) rank senior in right of payment to CUSA’s and the guarantors’ future subordinated debt, (iii) are effectively subordinated to all of CUSA’s and the guarantors’ existing and future secured debt, including all obligations under the Credit Agreement and CUSA’s 8.75% senior secured notes due 2025, in each case to the extent of the value of the collateral securing such debt, (iv) are structurally subordinated to all existing and future debt and other liabilities of CUSA’s non-guarantor subsidiaries, and (v) are structurally senior to the 4.50% convertible senior notes due 2025 issued by Holdings.
The significant accounting policies and estimates, which we believe are the most critical to aid in fully understanding and evaluating Holdings’ and CUSA’s reported consolidated financial results, include the following: 25 Revenue and Expense Recognition Our patrons have the option to purchase movie tickets well in advance of a movie showtime or right before the movie showtime, or at any point in between those two timeframes depending on seat availability.
The significant accounting policies and estimates, which we believe are the most critical to aid in fully understanding and evaluating Holdings’ and CUSA’s reported consolidated financial results, include the following: Revenue and Expense Recognition Our patrons have the option to purchase movie tickets well in advance of a movie showtime, right before the movie showtime, or at any point in between those two timeframes depending on seat availability.
Certain of our other theatres require payment of percentage rent in addition to fixed monthly rent if an annual target revenue level is achieved. Percentage rent expense is estimated and recorded for these theatres on a monthly basis if the theatre’s historical performance or forecasted performance indicates that the annual target revenue level will be reached.
Certain of our other theatres require payment of percentage rent in addition to fixed monthly rent if an annual target revenue level is achieved. Percentage rent expense for these annual payments is estimated and recorded for these theatres on a monthly basis if the theatre’s historical performance or forecasted performance indicates that the annual target revenue level will be reached.
A quantitative tradename impairment assessment includes comparing the carrying values of tradename assets to their estimated fair value. Fair values are estimated by applying an estimated market royalty rate that could be charged for 27 the use of our tradenames to forecasted future revenues, with an adjustment for the present value of such royalties.
A quantitative tradename impairment assessment includes comparing the carrying values of tradename assets to their estimated fair value. Fair values are estimated by applying an estimated market royalty rate that could be charged for the use of our tradenames to forecasted future revenues, with an adjustment for the present value of such royalties.
Off-Balance Sheet Arrangements We do not have any off-balance sheet arrangements. 4.50% Convertible Senior Notes On August 21, 2020, Holdings issued $460.0 million 4.50% convertible senior notes (the "4.50% Convertible Senior Notes"). The 4.50% Convertible Senior Notes will mature on August 15, 2025, unless earlier repurchased or converted.
Off-Balance Sheet Arrangements We do not have any off-balance sheet arrangements. 4.50% Convertible Senior Notes On August 21, 2020, Holdings issued $460.0 million of 4.50% convertible senior notes (the "4.50% Convertible Senior Notes"). The 4.50% Convertible Senior Notes will mature on August 15, 2025, unless earlier repurchased or converted.
Utilities and other costs include both fixed and variable costs and primarily consist of utilities, property taxes, janitorial costs, credit card fees, third party ticket sales commissions, repairs and maintenance expenses, security services and projection and sound equipment maintenance expenses.
Utilities and other costs include both fixed and variable costs and primarily consist of utilities, property taxes, janitorial costs, credit card transaction fees, third party ticket sales commissions, repairs and maintenance expenses, security services and projection and sound equipment maintenance expenses.
The Hedge 37 Transactions cover the number of shares of our common stock that will initially underlie the aggregate amount of the 4.50% Convertible Senior Notes, subject to anti-dilution adjustments substantially similar to those applicable to the 4.50% Convertible Senior Notes.
The Hedge Transactions cover the number of shares of our common stock that will initially underlie the aggregate amount of the 4.50% Convertible Senior Notes, subject to anti-dilution adjustments substantially similar to those applicable to the 4.50% Convertible Senior Notes.
See discussion of dividend restrictions and the consolidated net senior secured leverage ratio under the Credit Agreement at Senior Secured Credit Facility above. As of December 31, 2022, we believe we were in full compliance with all agreements, including related covenants, governing our outstanding debt. Ratings We are rated by nationally recognized rating agencies.
See discussion of dividend restrictions and the consolidated net senior secured leverage ratio under the Credit Agreement at Senior Secured Credit Facility above. As of December 31, 2023, we believe we were in full compliance with all agreements, including related covenants, governing our outstanding debt. Ratings We are rated by nationally recognized rating agencies.
We also offer alternative entertainment, such as the Metropolitan Opera, concert events, in-theatre gaming, live and pre-recorded sports programs and other special events in our theatres. NCM provides our domestic theatres with various forms of in-theatre advertising. Our Flix Media subsidiaries provide screen advertising and alternative content for our international circuit and to other international exhibitors.
We also offer alternative entertainment, such as the Metropolitan Opera, concert events, live and pre-recorded sports programs and other special events in our theatres. NCM provides our domestic theatres with various forms of in-theatre advertising. Our Flix Media subsidiaries provide screen advertising and alternative content for our international circuit and other international exhibitors.
See Note 22 to the consolidated financial statements. (2) Average ticket price is calculated as admissions revenue divided by attendance. Concession revenue per patron is calculated as concession revenue divided by attendance. (3) Constant currency revenue amounts, which are non-GAAP measurements, were calculated using the average exchange rate for the corresponding month for 2021.
See Note 22 to the consolidated financial statements. (2) Average ticket price is calculated as admissions revenue divided by attendance. Concession revenue per patron is calculated as concession revenue divided by attendance. (3) Constant currency revenue amounts, which are non-GAAP measurements, were calculated using the average exchange rate for the corresponding month for 2022.
The success of a film can generally be determined a few weeks after a film is released when the initial box office performance of the film is known. If actual settlements are different than those estimates, film rental costs are adjusted at that time.
The success of a film can generally be determined a few weeks after a film is released when the initial box office performance of the film is known. If actual settlements are different than those estimates, film rental cost estimates are adjusted at that time.
Significant judgment including management’s estimate of future theatre level cash flows for each theatre is involved in estimating fair value of a reporting unit. The Company’s estimates, which fall under Level 3 of the U.S.
Significant judgment including management’s estimate of future theatre level cash flows for each theatre is involved in estimating the fair value of a reporting unit. Our estimates, which fall under Level 3 of the U.S.
GAAP fair value hierarchy as defined by FASB ASC Topic 820-10-35, are based on projected operating performance of each reporting unit, relevant market transactions and industry trading multiples. Under ASC Topic 350, Goodwill, Intangibles and Other , we may perform a qualitative impairment assessment or a quantitative impairment assessment of our goodwill.
GAAP fair value hierarchy as defined by FASB ASC Topic 820-10-35, are based on projected operating performance of each reporting unit, recent market transactions and current industry trading multiples. Under ASC Topic 350, Goodwill, Intangibles and Other , we may perform a qualitative impairment assessment or a quantitative impairment assessment of our goodwill.
We assess many factors including the following to determine whether to impair individual theatre assets: • actual theatre level cash flows; • budgeted or forecast theatre level cash flows; • theatre property and equipment carrying values; • operating lease right-of-use asset carrying values; • the age of a recently built theatre; • competitive theatres in the marketplace; • the impact of recent theatre remodels or other substantial improvements; • available lease renewal options; and • other factors considered relevant in our assessment of impairment of individual theatre assets.
We assess many factors to determine whether to impair individual theatre assets, including the following: • actual theatre level cash flows; • budgeted or forecasted theatre level cash flows; • theatre property and equipment carrying values; 26 • operating lease right-of-use asset carrying values; • the age of a recently built theatre; • change in competitive theatres in the marketplace; • the impact of recent theatre remodels or other substantial improvements; • available lease renewal options; and • other factors considered relevant in our assessment of impairment of individual theatre assets.
The table below, presented by reportable operating segment, summarizes certain of our theatre operating costs (in millions) for the years ended December 31, 2021 and 2022. U.S.
The table below, presented by reportable operating segment, summarizes certain of our theatre operating costs (in millions) for the years ended December 31, 2022 and 2023. U.S.
(5) Includes estimated capital expenditures associated with the construction of new theatres to which we were committed as of December 31, 2022, obligations under employment agreements, which are our only contractual human capital costs, and contractual purchase commitments.
(5) Includes estimated capital expenditures associated with the construction of new theatres and other capital expenditures to which we were committed as of December 31, 2023, obligations under employment agreements, which are our only contractual human capital costs, and contractual purchase commitments.
The timing, quantity and quality of such film releases can have a significant effect on our results of operations, and the results of one quarter are not necessarily indicative of results for the next quarter or for the same period in the following year. 41
The timing, quantity and quality of film releases can have a significant effect on our results of operations, and the results of one quarter are not necessarily indicative of results for the next quarter or for the same period in the following year. 42
The remainder of the theatre’s useful life correlates with the remaining lease period, which includes the probability of the exercise of available renewal periods for leased properties, and the lesser of twenty years or the building’s remaining useful life for owned properties.
The remainder of the theatre’s useful life correlates with the remaining lease period, which may include the probability of the exercise of available renewal periods for leased properties, and the lesser of twenty years or the building’s remaining useful life for owned properties.
Theatres and screens opened and closed during the year ended December 31, 2022 were as follows: December 31, 2021 Built Closed December 31, 2022 U.S.
Theatres and screens opened and closed during the year ended December 31, 2023 were as follows: December 31, 2022 Built Closed December 31, 2023 U.S.
The indentures allow CUSA to incur additional indebtedness if it satisfies the coverage ratio specified in the indenture, after giving effect to the incurrence of the additional indebtedness, and in certain other circumstances. The required minimum coverage ratio is 2 to 1 and our actual ratio as of December 31, 2022 was 2.9 to 1.
The indentures allow CUSA to incur additional indebtedness if it satisfies the coverage ratio specified in the indenture, after giving effect to the incurrence of the additional indebtedness, and in certain other circumstances. The required minimum coverage ratio is 2 to 1 and our actual ratio as of December 31, 2023 was 5.5 to 1.
Amounts do not include approximately $54.1 million of payments under signed lease agreements which have not commenced and the timing of which cannot be reasonably estimated. See Note 4 to the consolidated financial statements for discussion of lease obligations.
Amounts do not include approximately $44.8 million of payments under signed lease agreements which have not commenced and the timing of which cannot be reasonably estimated. See Note 4 to the consolidated financial statements for discussion of lease obligations.
(6) The long-term portions of Holdings’ and CUSA’s liability for uncertain tax positions of $47.9 million is not included above because we cannot make a reliable estimate of the timing of the related cash payments. There were no amounts recorded for short-term uncertain tax positions on the consolidated balance sheets of either Holdings or CUSA as of December 31, 2022.
(6) The long-term portions of Holdings’ and CUSA’s liability for uncertain tax positions of $48.0 million is not included above because we cannot make a reliable estimate of the timing of the related cash payments. There were no amounts recorded for short-term uncertain tax positions on the consolidated balance sheets of either Holdings or CUSA as of December 31, 2023.
The first step is recognition: We determine whether it is more likely than not that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position.
The evaluation of an uncertain tax position is a two-step process. The first step is recognition: We determine whether it is more likely than not that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position.
Once annual revenues are known, the timing of which is based on the respective lease agreement, percentage rent expense is adjusted at that time. Theatre properties and equipment are depreciated using the straight-line method over their estimated useful lives.
Once actual annual percentage rent is determinable, the timing of which is based on the respective lease agreement, percentage rent expense estimates are adjusted at that time. Theatre properties and equipment are depreciated using the straight-line method over their estimated useful lives.
The following table sets forth, for the periods indicated, the amounts for general and administrative expense, total cost of operations and operating loss of CUSA: 30 Year Ended December 31, 2020 2021 2022 Operating data (in millions): Cost of operations General and administrative expenses $ 125.4 $ 158.5 $ 174.6 Total cost of operations $ 1,439.1 $ 1,760.4 $ 2,541.5 Operating loss $ (752.8 ) $ (249.9 ) $ (86.8 ) (2) All costs are expressed as a percentage of total revenue, except film rentals and advertising, which are expressed as a percentage of admissions revenue and concession supplies, which are expressed as a percentage of concession revenue.
The following table sets forth, for the periods indicated, the amounts for general and administrative expense, total cost of operations and operating income (loss) of CUSA: 30 Year Ended December 31, 2021 2022 2023 Operating data (in millions): Cost of operations General and administrative expenses $ 158.5 $ 174.6 $ 195.5 Total cost of operations $ 1,760.4 $ 2,541.5 $ 2,700.5 Operating (loss) income $ (249.9 ) $ (86.8 ) $ 366.2 (2) All costs are expressed as a percentage of total revenue, except film rentals and advertising, which are expressed as a percentage of admissions revenue and concession supplies, which are expressed as a percentage of concession revenue.
As of December 31, 2022, CUSA could have distributed up to approximately $3.1 billion to its parent company and sole stockholder, Holdings, under the terms of the indentures, subject to its available cash and other borrowing restrictions outlined in the indentures.
As of December 31, 2023, CUSA could have distributed up to approximately $3,556.8 billion to its parent company and sole stockholder, Holdings, under the terms of the indentures, subject to its available cash and other borrowing restrictions outlined in the indentures.
Tradename intangible assets are tested for impairment at least annually during the fourth quarter or whenever events or changes in circumstances indicate the carrying value may not be fully recoverable. Under ASC Topic 350, we can elect to perform a qualitative or quantitative impairment assessment for our tradename intangible assets.
Tradename intangible assets are tested for impairment at least annually as of November 30 th or whenever events or changes in circumstances indicate the carrying value may not be fully recoverable. Under ASC Topic 350, we can elect to perform a qualitative or quantitative impairment assessment for our tradename intangible assets.
Estimates for the variable rate interest payments were based on interest rates in effect on December 31, 2022. (4) Amounts include both scheduled principal and interest payments on leases commenced prior to December 31, 2022.
(3) Amounts include scheduled interest payments on fixed rate and variable rate debt agreements. Estimates for the variable rate interest payments were based on interest rates in effect on December 31, 2023. (4) Amounts include both scheduled principal and interest payments on leases commenced prior to December 31, 2023.
The common units received (collectively referred to as the Company’s “Tranche 2 Investment”) are recorded at fair value as an increase in the Company’s investment in NCM with an offset to deferred revenue or NCM screen advertising advances.
The common units received are recorded at estimated fair value as an increase in the Company’s investment in NCM with an offset to deferred revenue or NCM screen advertising advances.
Such repurchases or exchanges, if any, will depend on the availability and prices of such debt securities, prevailing market conditions, or liquidity requirements, contractual restrictions and other factors.
Such 35 repurchases or exchanges, if any, will depend on the availability and prices of such debt securities, prevailing market conditions, or liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.
Overview We are a leader in the motion picture exhibition industry, with theatres in the U.S., Brazil, Argentina, Chile, Colombia, Ecuador, Peru, Honduras, El Salvador, Nicaragua, Costa Rica, Panama, Guatemala, Bolivia, Curacao and Paraguay. As of December 31, 2022, we managed our business under two reportable operating segments – U.S. markets and international markets.
Overview We are a leader in the motion picture exhibition industry, with theatres in the U.S., Brazil, Argentina, Chile, Colombia, Peru, Honduras, El Salvador, Nicaragua, Costa Rica, Panama, Guatemala, Bolivia, and Paraguay. As of December 31, 2023, we managed our business under two reportable operating segments – U.S. markets and international markets. See Note 22 to the consolidated financial statements.
Interest on the 5.875% Senior Notes is payable on March 15 and September 15 of each year, beginning September 15, 2021. The 5.875% Senior Notes mature on March 15, 2026. CUSA incurred debt issuance costs of approximately $6.0 million in connection with the issuance, which are recorded as a reduction of long-term debt on the consolidated balance sheets.
The 5.875% Senior Notes mature on March 15, 2026. CUSA incurred debt issuance costs of approximately $6.0 million in connection with the issuance, which are recorded as a reduction of long-term debt on the consolidated balance sheets.
Except for NCM screen advertising advances (see Note 9 to the consolidated financial statements), these revenues are generally recognized when we have performed the related services. We sell gift cards and discount ticket vouchers, the proceeds from which are recorded as deferred revenue.
Except for NCM screen advertising advances (see Note 9 to the consolidated financial statements), these revenues are generally recognized when we have fulfilled our performance obligations by providing the specified services. 25 We sell gift cards and discount ticket vouchers, the proceeds from which are recorded as deferred revenue.
See a summary of the impairment evaluations performed and impairments recorded during the years ended December 31, 2020, 2021 and 2022 in Note 12 to the consolidated financial statements.
See a summary of the impairment charges recorded during the years ended December 31, 2021, 2022 and 2023 in Note 12 to the consolidated financial statements.
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. Film rentals and advertising costs for 2022 were 57.8% of admissions revenue compared with 53.6% for 2021.
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. Film rentals and advertising costs for 2023 were 56.9% of admissions revenue compared with 57.8% for 2022 due to the mix of new film content released.
Pursuant to a Common Unit Adjustment Agreement dated as of February 13, 2007 between NCMI and the Company, AMC and Regal, collectively referred to as the Founding Members, annual adjustments to the common membership units are made primarily based on increases or decreases in the number of theatre screens operated and theatre attendance generated by each Founding 28 Member.
Pursuant to a Common Unit Adjustment Agreement dated as of February 13, 2007 between NCMI and the Company, referred to as the Founding Members, we receive annual adjustments to the common membership units primarily based on increases or decreases in the number of theatre screens operated and theatre attendance generated by us.
In connection with the NCMI initial public offering, the Company amended its operating agreement and the ESA. At the time of the NCM IPO and as a result of amending the ESA, the Company received approximately $174 million in cash consideration from NCM.
On February 13, 2007, NCMI completed an initial public offering (“IPO”) of its common stock. In connection with the NCMI initial public offering, the Company amended its operating agreement and the ESA. At the time of the NCMI IPO and as a result of amending the ESA, the Company received approximately $174 million in cash consideration from NCM.
Film rental costs as a percentage of revenue are generally higher for periods in which more blockbuster films are released. The Company previously received virtual print fees (VPFs) from studios for certain of its international locations, which were included as a contra-expense in film rental and advertising costs on the consolidated statements of income.
The Company previously received virtual print fees (VPFs) from studios for certain of its international locations, which were included as a contra-expense in film rental and advertising costs on the consolidated statements of income.
In addition, prior to July 15, 2024, CUSA may redeem up to 40% of the aggregate principal amount of the 5.25% Senior Notes from the net proceeds of certain equity offerings at the redemption price set forth in the indenture, so long as at least 60% of the principal amount of the 5.25% Senior Notes remains outstanding immediately after each such redemption. 8.75% Secured Notes On April 20, 2020, CUSA issued $250.0 million aggregate principal amount of 8.75% senior secured notes due 2025, or the 8.75% Secured Notes.
In addition, prior to July 15, 2024, CUSA may redeem up to 40% of the aggregate principal amount of the 5.25% Senior Notes from the net proceeds of certain equity offerings at the redemption price set forth in the indenture, so long as at least 60% of the principal amount of the 5.25% Senior Notes remains outstanding immediately after each such redemption.
These expenses, as reported, were also impacted by exchange rates in each of the countries in which we operate. 32 General and Administrative Expense. General and administrative expense for Holdings increased to $177.6 million for 2022 compared with $161.1 million for 2021.
These expenses, as reported, were also impacted by exchange rate fluctuations in each of the countries in which we operate. General and Administrative Expense. General and administrative expense for Holdings increased to $198.8 million for 2023 compared with $177.6 million for 2022.
Year Ended December 31, 2020 2021 2022 Operating data (in millions): Revenue Admissions $ 356.5 $ 780.0 $ 1,246.9 Concession 231.1 561.7 938.3 Other 98.7 168.8 269.5 Total revenue $ 686.3 $ 1,510.5 $ 2,454.7 Cost of operations (1) Film rentals and advertising 186.8 415.0 704.4 Concession supplies 48.6 97.9 169.3 Salaries and wages 145.0 232.9 372.7 Facility lease expense 279.8 280.0 308.3 Utilities and other 229.5 282.9 407.2 General and administrative expenses 127.6 161.1 177.6 Depreciation and amortization 259.8 265.4 238.2 Impairment of long-lived assets 152.7 20.8 174.1 Restructuring costs 20.4 (1.0 ) (0.5 ) (Gain) loss on disposal of assets and other (8.9 ) 8.0 (6.8 ) Total cost of operations 1,441.3 1,763.0 2,544.5 Operating loss $ (755.0 ) $ (252.5 ) $ (89.8 ) Operating data as a percentage of total Revenue: Revenue Admissions 51.9 % 51.6 % 50.8 % Concession 33.7 % 37.2 % 38.2 % Other 14.4 % 11.2 % 11.0 % Total revenue 100.0 % 100.0 % 100.0 % Cost of operations (2) Film rentals and advertising 52.4 % 53.2 % 56.5 % Concession supplies 21.1 % 17.4 % 18.0 % Salaries and wages N/A 15.4 % 15.2 % Facility lease expense N/A 18.5 % 12.6 % Utilities and other N/A 18.7 % 16.6 % General and administrative expenses N/A 10.7 % 7.2 % Depreciation and amortization N/A 17.6 % 9.7 % Impairment of long-lived assets N/A 1.4 % 7.1 % Restructuring costs N/A (0.1 )% 0.0 % (Gain) loss on disposal of assets and other N/A 0.5 % (0.3 )% Total cost of operations N/A 116.7 % 103.7 % Operating loss N/A (16.7 )% (3.7 )% Average screen count (3) N/A 5,890 5,849 Revenue per average screen (in dollars) N/A $ 256,445 $ 419,675 (1) The only difference between components of operating loss for Holdings, as presented above, and those of CUSA is incremental general and administrative expense recognized by Holdings.
Year Ended December 31, 2021 2022 2023 Operating data (in millions): Revenue Admissions $ 780.0 $ 1,246.9 $ 1,555.6 Concession 561.7 938.3 1,192.0 Other 168.8 269.5 319.1 Total revenue $ 1,510.5 $ 2,454.7 $ 3,066.7 Cost of operations (1) Film rentals and advertising 415.0 704.4 865.7 Concession supplies 97.9 169.3 221.3 Salaries and wages 232.9 372.7 403.1 Facility lease expense 280.0 308.3 329.7 Utilities and other 282.9 407.2 466.8 General and administrative expenses 161.1 177.6 198.8 Depreciation and amortization 265.4 238.2 209.5 Impairment of long-lived assets 20.8 174.1 16.6 Restructuring costs (1.0 ) (0.5 ) — Loss (gain) on disposal of assets and other 8.0 (6.8 ) (7.7 ) Total cost of operations 1,763.0 2,544.5 2,703.8 Operating (loss) income $ (252.5 ) $ (89.8 ) $ 362.9 Operating data as a percentage of total Revenue: Revenue Admissions 51.6 % 50.8 % 50.7 % Concession 37.2 % 38.2 % 38.9 % Other 11.2 % 11.0 % 10.4 % Total revenue 100.0 % 100.0 % 100.0 % Cost of operations (2) Film rentals and advertising 53.2 % 56.5 % 55.7 % Concession supplies 17.4 % 18.0 % 18.6 % Salaries and wages 15.4 % 15.2 % 13.1 % Facility lease expense 18.5 % 12.6 % 10.8 % Utilities and other 18.7 % 16.6 % 15.2 % General and administrative expenses 10.7 % 7.2 % 6.5 % Depreciation and amortization 17.6 % 9.7 % 6.8 % Impairment of long-lived assets 1.4 % 7.1 % 0.5 % Restructuring costs (0.1 )% 0.0 % 0.0 % Loss (gain) on disposal of assets and other 0.5 % (0.3 )% (0.3 )% Total cost of operations 116.7 % 103.7 % 88.2 % Operating (loss) income (16.7 )% (3.7 )% 11.8 % Average screen count (3) 5,890 5,849 5,803 Revenue per average screen (in dollars) $ 256,445 $ 419,675 $ 528,463 (1) The only difference between components of operating income (loss) for Holdings, as presented above, and those of CUSA is incremental general and administrative expense recognized by Holdings.
Utilities and other costs increased to $93.5 million as reported, as many of these costs are variable in nature, such as utilities, credit card fees, screen advertising commissions, janitorial costs and repairs and maintenance, and were impacted by the significant increase in attendance for 2022 and inflation.
Utilities and other costs increased to $111.4 million as reported, as many of these costs, such as credit card fees and other transaction fees, repairs and maintenance, janitorial costs, utilities and screen advertising commissions, are variable in nature and were impacted by the significant increase in attendance for 2023 as well as inflationary impacts.
Proceeds, after payment of fees, were used to fund a cash tender offer to purchase any and all of CUSA’s 5.125% Senior Notes (the “5.125% Senior Notes”) and to redeem any of the 5.125% Notes that remained outstanding after the tender offer.
Proceeds, after payment of fees, were used to fund a cash tender offer to purchase any and all of CUSA’s 5.125% Senior Notes (the “5.125% Senior Notes”) and to redeem any of the 5.125% Senior Notes that remained outstanding after the tender offer. Interest on the 5.875% Senior Notes is payable on March 15 and September 15 of each year.
See Note 9 to the consolidated financial statements for further discussion of our investment in NCM and our assessment of its fair market value and other than temporary impairments. 29 Results of Operations The following table sets forth, for the periods indicated, the amounts for certain items reflected in operating loss of Holdings along with each of those items as a percentage of revenue.
See Note 9 to the consolidated financial statements for further discussion of our investment in NCMI and the related accounting. 29 Results of Operations The following table sets forth, for the periods indicated, the amounts for certain items reflected in operating (loss) income of Holdings along with each of those items as a percentage of revenue.
Below is a summary of capital expenditures, disaggregated by new and existing theatres, for the periods indicated (in millions): Year Ended December 31, 2021 2022 New theatres $ 38.0 $ 33.1 Existing theatres 57.5 77.6 Total capital expenditures $ 95.5 $ 110.7 34 We operated 518 theatres with 5,847 screens worldwide as of December 31, 2022.
Below is a summary of capital expenditures, disaggregated by new and existing theatres, for the periods indicated (in millions): Year Ended December 31, 2022 2023 New theatres $ 33.1 $ 9.1 Existing theatres 77.6 140.4 Total capital expenditures $ 110.7 $ 149.5 34 We operated 501 theatres with 5,719 screens worldwide as of December 31, 2023.
Discussion regarding our financial condition and results of operations for 2021 compared with 2020 is included in Item 7 of Holdings’ 2021 Annual Report on Form 10-K filed on February 25, 2022 and CUSA’s 2021 Annual Report on Form 10-K filed on March 9, 2022.
Discussion regarding our financial condition and results of operations for 2022 compared with 2021 is included in Item 7 of the Company’s 2022 Annual Report on Form 10-K filed on February 24, 2023.
The proceeds were recorded as deferred revenue, or NCM screen advertising advances, and are being amortized over the term of the amended and restated ESA, which expires in February 2041.
The proceeds were recorded as deferred revenue, or NCM screen advertising advances, and are being amortized over the term of the amended and restated ESA, which expires in February 2041. The Company also periodically receives consideration in the form of common unit adjustments from NCM.
The amounts involved may be material. 35 Long-term debt for Holdings and CUSA consisted of the following as of December 31, 2021 and 2022 (in millions): December 31, 2021 2022 Cinemark Holdings, Inc. 4.50% convertible senior notes due 2025 $ 460.0 $ 460.0 Cinemark USA, Inc. term loan due 2025 633.1 626.5 Cinemark USA, Inc. 8.75% senior secured notes due 2025 250.0 250.0 Cinemark USA, Inc. 5.875% senior notes due 2026 405.0 405.0 Cinemark USA, Inc. 5.25% senior notes due 2028 765.0 765.0 Other 30.2 10.1 Total long-term debt carrying value (1) $ 2,543.3 $ 2,516.6 Less: Current portion 24.3 10.7 Less: Debt issuance costs, net of accumulated amortization (1) 42.7 31.9 Long-term debt, less current portion, net of unamortized debt issuance costs (1) $ 2,476.3 $ 2,474.0 (1) The only differences between the long-term debt for Holdings, as presented above, and the long-term debt for CUSA are the $460.0 million 4.50% Convertible Senior Notes due 2025 and the related debt issuance costs.
Long-term debt for Holdings and CUSA consisted of the following as of December 31, 2022 and 2023 (in millions): December 31, 2022 2023 Cinemark Holdings, Inc. 4.50% convertible senior notes due 2025 $ 460.0 $ 460.0 Cinemark USA, Inc. term loan due 2030 ( see Senior Secured Credit Facility below ) 626.5 645.1 Cinemark USA, Inc. 8.75% senior secured notes due 2025 250.0 150.0 Cinemark USA, Inc. 5.875% senior notes due 2026 405.0 405.0 Cinemark USA, Inc. 5.25% senior notes due 2028 765.0 765.0 Other 10.1 7.0 Total long-term debt carrying value (1) $ 2,516.6 $ 2,432.1 Less: Current portion 10.7 7.8 Less: Debt issuance costs and original issue discount, net of accumulated amortization (1) 31.9 33.0 Long-term debt, less current portion, net of unamortized debt issuance costs and original issue discount (1) $ 2,474.0 $ 2,391.3 (1) The only differences between the long-term debt for Holdings, as presented above, and the long-term debt for CUSA are the $460.0 million 4.50% Convertible Senior Notes due 2025 and the related debt issuance costs.
The increase in average ticket price in constant currency was primarily due to 31 inflationary and strategic pricing actions and higher premium ticket mix. Concession revenue per patron was $2.76 as reported, $3.06 in constant currency, for 2022 compared with $2.42 in 2021.
The increase in average ticket price in constant currency was primarily due to inflationary pricing actions. Concession revenue per patron was $2.92 as reported, $3.61 in constant currency, for 2023 compared with $2.76 for 2022. The increase in concession revenue per patron in constant currency was primarily 31 due to inflationary pricing actions.
Cash provided by operating activities was $136.0 million for Holdings and $153.4 million for CUSA for the year ended December 31, 2022 compared with $166.2 million for Holdings and $176.4 million for CUSA for the year ended December 31, 2021.
Cash provided by operating activities was $444.3 million for Holdings and $454.8 million for CUSA for the year ended December 31, 2023 compared with $136.0 million for Holdings and $153.4 million for CUSA for the year ended December 31, 2022.
The credits of $(0.5) million and $(1.0) million to restructuring costs during 2022 and 2021, respectively, were primarily due to adjustments based on final facility lease payments for certain closed theatres as compared with recorded amounts. See Note 3 to the consolidated financial statements for further discussion. (Gain) Loss on Disposal of Assets and Other.
See Notes 9 and 12 to the consolidated financial statements. Restructuring costs. The credit of $(0.5) million to restructuring costs during 2022 was primarily due to adjustments based on final facility lease payments for certain closed theatres as compared with recorded amounts. Gain on Disposal of Assets and Other.
We have four interest rate swap agreements that are used to hedge a portion of the interest rate risk associated with the variable interest rates on the term loan outstanding under the Credit Agreement. See Note 14 to the consolidated financial statements for discussion of the interest rate swaps.
We have three interest rate swap agreements that are used to hedge a portion of the interest rate risk associated with the variable interest rates on the term loan outstanding under the Credit Agreement.
Liquidity and Capital Resources Operating Activities We primarily collect our revenue in cash, mainly through box office receipts and the sale of concessions. Our revenue is generally received in cash prior to the payment of related expenses; therefore, we have an operating “float” and historically have not required traditional working capital financing.
Our revenue is generally received in cash prior to the payment of related expenses; therefore, we have an operating “float” and historically have not required traditional working capital financing.
Interest expense for Holdings, which includes amortization of debt issuance costs and amortization of accumulated losses for swap amendments, increased to $155.3 million during 2022 compared with $149.7 million for 2021.
Interest expense for Holdings, which includes amortization of debt issuance costs and original issue discount and amortization of accumulated losses for swap amendments, decreased to $150.4 million during 2023 compared with $155.3 million for 2022.
The timing of payments is subject to change as a result of construction timing or other delays. Actual expenditures for continued theatre development, remodels and acquisitions are subject to change based upon the availability of attractive opportunities.
(2) We expect approximately $21.2 million and $11.4 million to be paid during 2024 and 2025, respectively. The timing of payments is subject to change as a result of construction timing or other delays. Actual expenditures for continued theatre development, remodels and acquisitions are subject to change based upon the availability of attractive opportunities.
Other revenue for 2022 increased 41.6% to $197.0 million compared with $139.1 million for 2021 primarily due to attendance growth, which drove an increase in screen advertising, transaction fees, and promotional revenue. • International .
Other revenue for 2023 increased 15.4% to $227.3 million compared with $197.0 million for 2022 primarily due to attendance growth, which drove an increase in transaction fees, as well as higher screen advertising and promotional revenue. • International .
Utilities and other costs increased to $313.7 million, as many of these costs, such as janitorial costs, utilities costs, credit card fees, repairs and maintenance and security costs, are variable in nature and were impacted by the expansion of operating hours, a significant increase in attendance and inflationary pressures. • International.
Utilities and other costs increased to $355.4 million, as many of these costs, such as credit card transaction fees, repairs and maintenance, utilities costs, security costs and janitorial costs, are variable in nature and were impacted by attendance growth and inflationary pressures.
Depreciation and amortization expense decreased to $238.2 million for 2022 from $265.4 million for 2021 primarily due to the impairment of theatre assets during 2021. Impairment of Long-Lived Assets. We recorded asset impairment charges of $174.1 million during 2022 and $20.8 million during 2021.
Depreciation and Amortization. Depreciation and amortization expense decreased to $209.5 million for 2023 from $238.2 million for 2022 primarily due to the impairment of theatre assets during 2022 and 2023. 32 Impairment of Long-Lived Assets. We recorded asset impairment charges of $16.6 million during 2023.
In addition, we recorded an impairment of $113.2 million for our investment in NCM as NCMI's stock price was significantly below the Company's carrying value of NCM per common unit and due to the prolonged recovery of NCM's business.
Long-lived asset impairment charges of $60.9 were recorded in 2022 primarily due to the prolonged recovery of certain theatres from the COVID-19 pandemic, and an impairment of $113.2 million was recorded for our investment in NCM as NCMI’s stock price was significantly below the Company’s carrying value of NCM per common unit and due to the prolonged recovery of NCM’s business from the COVID-19 pandemic.
At December 31, 2022, there was $626.5 million outstanding under the term loan and no borrowings were outstanding under the $100.0 million revolving line of credit.
As of December 31, 2023, there was $645.1 outstanding under the term loan and no borrowings were outstanding under the $125.0 million revolving line of credit.
General and administrative expense attributable to CUSA increased to $174.6 million for 2022 compared with $158.5 million for 2021. The increase for both Holdings and CUSA is primarily due to higher staffing levels, wages and benefits inflation, higher incentive compensation and professional fees and a shift to cloud-based software. Depreciation and Amortization.
General and administrative expense attributable to CUSA increased to $195.5 million for 2023 compared with $174.6 million for 2022. The increase for both Holdings and CUSA is primarily due to higher corporate headcount, higher incentive and share-based compensation, wages and benefits inflation, higher property and liability insurance, and a continued shift to cloud-based software, partially offset by lower professional fees.
We accrue interest and penalties on uncertain tax positions. See Note 20 to the consolidated financial statements for further discussion of income taxes. Accounting for Investment in National CineMedia, LLC and Related Agreements We have an investment in NCM. NCM operates a digital in-theatre network in the U.S. providing cinema advertising.
We accrue interest and penalties on uncertain tax positions. See Note 20 to the consolidated financial statements for further discussion of income taxes. Accounting for Investment in National CineMedia, Inc. and Related Agreements We have an investment in National CineMedia, Inc., or NCMI. NCMI is a holding company and the sole manager of NCM.
Year ended December 31, 2022 - The North American Industry box office generated approximately $7.5 billion during 2022, which included blockbuster films such as Top Gun: Maverick, Black Panther: Wakanda Forever, Doctor Strange in the Multiverse of Madness, Jurassic World: Dominion, Minions: The Rise of Gru, The Batman, Thor: Love and Thunder, Sonic the Hedgehog 2, Black Adam, Elvis, Uncharted, Nope, Lightyear, Smile, The Lost City, Bullet Train, and the highly anticipated sequel Avatar: The Way of Water , among other films.
Comparison of Years Ended December 31, 2023 and December 31, 2022 Year ended December 31, 2022 - The North American Industry box office totaled approximately $7.5 billion during 2022 which included the carryover of Spider-Man: No Way Home and new blockbuster releases such as Top Gun: Maverick, Black Panther: Wakanda Forever, Doctor Strange in the Multiverse of Madness, Avatar: The Way of Water, Jurassic World Dominion, Minions: The Rise of Gru, The Batman, Thor: Love and Thunder, Puss in Boots: The Last Wish and Sonic the Hedgehog 2, among other films.
The 5.875% Senior Notes and the guarantees are structurally subordinated to all existing and future debt and other liabilities of CUSA’s subsidiaries that do not guarantee the 5.875% Senior Notes.
The 5.875% Senior Notes and the guarantees are structurally subordinated to all existing and future debt and other liabilities of CUSA’s subsidiaries that do not guarantee the 5.875% Senior Notes. CUSA may redeem the 5.875% Senior Notes in whole or in part at redemption prices set forth in the indenture.
Prior to March 15, 2023, CUSA may redeem all or any part of the 5.875% Senior Notes at its option at 100% of the principal amount plus a make-whole premium plus accrued and unpaid interest on the 5.875% Senior Notes to the date of redemption.
On or after March 15, 2024, CUSA may redeem the 5.875% Senior Notes in whole or in part at 101.469% of the principal amount plus accrued and unpaid interest on the 5.875% Senior Notes to the date of redemption.
We recognize such admissions revenue when the showtime for a purchased movie ticket has passed. Concession revenue is recognized when products are sold to the consumer, or if purchased in advance, based on the showtime associated with the customer’s movie ticket. Other revenue primarily consists of screen advertising, screen rental revenue, promotional income, studio trailer placements and transactional fees.
We recognize such admissions revenue when the showtime for a purchased movie ticket has passed. Concession revenue is recognized when products are sold to the consumer, or if purchased in advance, once the showtime associated with the customer’s movie ticket has passed.
The value of loyalty points issued is based on the estimated fair value of the rewards offered. We record breakage revenue on deferred loyalty and subscription revenue generally upon the expiration of points and subscription credits, respectively.
The value of loyalty points issued is based on the estimated fair value of the rewards offered. We record breakage revenue on deferred loyalty and subscription revenue generally upon the expiration of loyalty points and subscription credits, respectively, as we do not yet have sufficient historical data related to the redemption patterns of these programs to estimate breakage.
The Credit Agreement contains usual and customary negative covenants for agreements of this type, including, but not limited to, restrictions on CUSA’s ability, and in certain instances, its subsidiaries’ and Holdings’ ability, to consolidate or merge or liquidate, wind up or dissolve; substantially change the nature of its business; sell, transfer or dispose of assets; create or incur indebtedness; create liens; pay dividends or repurchase stock; and make capital expenditures and investments.
The Credit Agreement contains usual and customary negative covenants for agreements of this type, including, but not limited to, restrictions on the ability of Holdings, CUSA and their subsidiaries to: merge, consolidate, liquidate, or dissolve; sell, transfer or otherwise dispose of assets; create, incur or permit to exist certain indebtedness and liens; pay dividends, repurchase stock and make other Restricted Payments (as defined in the Credit Agreement); prepay certain indebtedness; make investments; enter into transactions with affiliates; and change the nature of their business.
Income Taxes - Holdings. An income tax expense of $3.0 million was recorded for 2022 compared with an income tax benefit of $(16.8) million for 2021. The effective tax rate was approximately (1.1)% for 2022 compared with 3.8% for 2021.
An income tax expense of $29.9 million was recorded for 2023 compared with an income tax expense of $3.0 million for 2022. The effective tax rate was approximately 13.5% for 2023 compared with 33 (1.1)% for 2022.
Attendance increased 94.5% to 63.4 million patrons in 2022 compared with 32.6 million in 2021 due to the lifting of COVID-19 related restrictions as well as a more consistent cadence of new film releases with broad consumer appeal. Average ticket price was $3.73 as reported, $4.08 in constant currency, for 2022 compared with $3.32 for 2021.
Attendance increased 29.5% to 82.1 million patrons in 2023 compared with 63.4 million in 2022 due to a more consistent cadence of new film releases with broad consumer appeal and the box office success of the films released. Average ticket price was $3.89 as reported, $4.79 in constant currency, for 2023 compared with $3.73 for 2022.
Operating Segment International Operating Segment Consolidated 2022 2021 2022 2021 Constant Currency 2022 (1) 2022 2021 Film rentals and advertising $ 584.4 $ 360.0 $ 120.0 $ 55.0 $ 131.7 $ 704.4 $ 415.0 Concession supplies 130.5 79.5 38.8 18.4 42.9 169.3 97.9 Salaries and wages 314.7 198.2 58.0 34.7 64.0 372.7 232.9 Facility lease expense 250.1 242.2 58.2 37.8 62.8 308.3 280.0 Utilities and other 313.7 232.1 93.5 50.8 101.2 407.2 282.9 (1) Constant currency expense amounts, which are non-GAAP measurements, were calculated using the average exchange rates for the corresponding months for 2021.
Operating Segment International Operating Segment Consolidated 2023 2022 2023 2022 Constant Currency 2023 (1) 2023 2022 Film rentals and advertising $ 703.6 $ 584.4 $ 162.1 $ 120.0 $ 202.4 $ 865.7 $ 704.4 Concession supplies 169.1 130.5 52.2 38.8 64.4 221.3 169.3 Salaries and wages 333.8 314.7 69.3 58.0 88.3 403.1 372.7 Facility lease expense 246.6 250.1 83.1 58.2 95.7 329.7 308.3 Utilities and other 355.4 313.7 111.4 93.5 136.7 466.8 407.2 (1) Constant currency expense amounts, which are non-GAAP measurements, were calculated using the average exchange rates for the corresponding months for 2022.
The Company evaluates its investment in NCM for impairment that is other than temporary on a quarterly basis or whenever events or changes in circumstances indicate the current value of the investment may be less than its carrying value.
Through April 11, 2023, we accounted for our investment in NCMI under the equity method of accounting, and therefore evaluated our investment in NCMI/NCM for impairment that is other than temporary on a quarterly basis or whenever events or changes in circumstances indicated the current value of the investment may be less than its carrying value.
Attendance increased 49.7% to 109.3 million patrons in 2022 compared with 73.0 million patrons in 2021 due to the improved state of the COVID-19 pandemic and a more consistent cadence of new film releases with broad consumer appeal.
Attendance increased 16.8% to 127.7 million patrons in 2023 compared with 109.3 million patrons in 2022 due to a more consistent cadence of new film releases with broad consumer appeal and the box office success of the films released.
However, these costs were fully recovered during 2021, and as a result, were not received during 2022 and will not be received in future periods. Advertising costs, which are expensed as incurred, are primarily related to expanding our customer base, increasing the frequency of visits and growing loyalty. These expenses vary depending on the timing and length of such campaigns.
However, these costs were fully recovered during 2021, and as a result, were not received during 2022 and 2023 and will not be received in future periods. Advertising costs, which are expensed as incurred, are primarily related to expanding our reach to our guests, keeping Cinemark elevated in the moviegoer consideration set and growing loyalty.
Financing Activities Cash used for financing activities for Holdings was $52.2 million and $19.9 million for the years ended December 31, 2022 and 2021, respectively. Cash provided by (used for) financing activities for CUSA was $(52.2) million and $100.1 million for the years ended December 31, 2022 and 2021, respectively.
Financing Activities Cash used for financing activities was $125.4 million and $52.2 million for the years ended December 31, 2023 and 2022, respectively.
The increase in the concession supplies rate for 2022 was due to inflationary and supply chain pressures on certain concession categories, partially offset by the impact of strategic pricing initiatives on concession revenue.
Concession supplies expense for 2023 was 17.8% of concession revenue compared with 17.1% of concession revenue for 2022. The concession supplies rate for 2023 was impacted by inflationary pressures on certain concession categories and product mix, partially offset by the impact of strategic pricing initiatives on concession revenue.
We recorded a foreign currency exchange loss of $11.5 million during 2022 and $1.3 million during 2021 primarily related to intercompany transactions and changes in exchange rates from original transaction dates until cash settlement. See Notes 1 and 16 to the consolidated financial statements for discussion of foreign currency translation. Cash and Non-Cash Distributions from DCIP.
Excluding the loss on Blue Chip Swap transactions, the foreign currency exchange loss is primarily related to currency exchange fluctuations from original transaction dates until cash settlement, See Notes 1 and 16 to the consolidated financial statements for discussion of foreign currency translation and Blue Chip Swap transactions. Cash Distributions from DCIP.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeHoldings Debt Expected Maturity for the Years Ending December 31, Average (in millions) Interest 2023 2024 2025 2026 2027 Thereafter Total Fair Value Rate Fixed rate $ — $ — $ 1,160.0 $ 405.0 $ — $ 765.0 $ 2,330.0 $ 2,030.7 5.3 % Variable rate 10.7 7.7 164.5 1.1 1.1 1.5 186.6 179.8 6.1 % Total debt (1) $ 10.7 $ 7.7 $ 1,324.5 $ 406.1 $ 1.1 $ 766.5 $ 2,516.6 $ 2,210.5 (1) Amounts are presented before adjusting for debt issuance costs and debt discounts.
Biggest changeHoldings Debt Expected Maturity for the Years Ending December 31, Average (in millions) Interest 2024 2025 2026 2027 2028 Thereafter Total Fair Value Rate Fixed rate $ — $ 610.0 $ 405.0 $ — $ 765.0 $ 450.0 $ 2,230.0 $ 2,258.2 5.7 % Variable rate 7.8 7.7 7.7 7.7 7.7 163.5 202.1 202.1 8.9 % Total debt (1) $ 7.8 $ 617.7 $ 412.7 $ 7.7 $ 772.7 $ 613.5 $ 2,432.1 $ 2,460.3 (1) Amounts are presented before adjusting for debt issuance costs and debt discounts.
Interest Rate Swap Agreements All of the interest rate swap agreements qualify for cash flow hedge accounting. The fair values of the interest rate swaps are recorded on each of Holdings’ and CUSA’s consolidated balance sheets as an asset or liability with the related gains or losses reported as a component of accumulated other comprehensive loss.
Interest Rate Swap Agreements All of our interest rate swap agreements qualify for cash flow hedge accounting. The fair values of the interest rate swaps are recorded on each of Holdings’ and CUSA’s consolidated balance sheets as an asset or liability with the related gains or losses reported as a component of accumulated other comprehensive loss.
The tables below provide information about Holdings’ fixed rate and variable rate long-term debt agreements as of December 31, 2022, which includes fixed rate and variable rate long-term debt of CUSA which is guaranteed by Holdings.
The tables below provide information about Holdings’ fixed rate and variable rate long-term debt agreements as of December 31, 2023, which includes fixed rate and variable rate long-term debt of CUSA which is guaranteed by Holdings.
Based upon our equity ownership in our international subsidiaries as of December 31, 2022, holding everything else constant, a 10% immediate, simultaneous, unfavorable change in all of the foreign currency 42 exchange rates to which we are exposed, would decrease the aggregate net book value of our investments in our international subsidiaries by approximately $59.1 million and would decrease the aggregate net income of our international subsidiaries for the year ended December 31, 2022 by $3.2 million, respectively.
Based upon our equity ownership in our international subsidiaries as of December 31, 2023, holding everything else constant, a 10% immediate, simultaneous, unfavorable change in all of the foreign currency 43 exchange rates to which we are exposed, would decrease the aggregate net book value of our investments in our international subsidiaries by approximately $67.0 million and would decrease the aggregate net income of our international subsidiaries for the year ended December 31, 2023 by $10.3 million, respectively.
Based on the interest rates in effect on the variable rate debt outstanding at December 31, 2022, a 100 basis point increase in market interest rates would increase our annual interest expense by approximately $1.9 million.
Based on the interest rates in effect on the variable rate debt outstanding at December 31, 2023, a 100 basis point increase in market interest rates would increase our annual interest expense by approximately $2.0 million.
At December 31, 2022, we had an aggregate of $186.6 million of variable rate debt outstanding, after giving effect to the interest rate swap agreements discussed below.
At December 31, 2023, we had an aggregate of $202.1 million of variable rate debt outstanding, after giving effect to the interest rate swap agreements discussed below.
Below is a summary of our interest rate swap agreements as of December 31, 2022: Notional Amount Effective Date Pay Rate Receive Rate Expiration Date $ 137.5 million December 31, 2018 2.122% 1-Month LIBOR December 31, 2024 $ 175.0 million December 31, 2018 2.124% 1-Month LIBOR December 31, 2024 $ 137.5 million December 31, 2018 2.193% 1-Month LIBOR December 31, 2024 $ 450.0 million Foreign Currency Exchange Rate Risk We are also exposed to market risk arising from changes in foreign currency exchange rates as a result of our international operations.
Below is a summary of our interest rate swap agreements as of December 31, 2023: Notional Amount Pay Rate Receive Rate Expiration Date $ 137.5 million 2.15% 1-Month Term SOFR December 31, 2024 $ 137.5 million 2.08% 1-Month Term SOFR December 31, 2024 $ 175.0 million 3.20% 1-Month Term SOFR December 31, 2026 $ 450.0 million Foreign Currency Exchange Rate Risk We are also exposed to market risk arising from changes in foreign currency exchange rates as a result of our international operations.
CUSA Debt Expected Maturity for the Years Ending December 31, Average (in millions) Interest 2023 2024 2025 2026 2027 Thereafter Total Fair Value Rate Fixed rate $ — $ — $ 700.0 $ 405.0 $ — $ 765.0 $ 1,870.0 $ 1,591.5 5.5 % Variable rate 10.7 7.7 164.5 1.1 1.1 1.5 186.6 179.8 6.1 % Total debt (1) $ 10.7 $ 7.7 $ 864.5 $ 406.1 $ 1.1 $ 766.5 $ 2,056.6 $ 1,771.3 (1) Amounts are presented before adjusting for debt issuance costs and debt discounts.
CUSA Debt Expected Maturity for the Years Ending December 31, Average (in millions) Interest 2024 2025 2026 2027 2028 Thereafter Total Fair Value Rate Fixed rate $ — $ 150.0 $ 405.0 $ — $ 765.0 $ 450.0 $ 1,770.0 $ 1,701.7 6.0 % Variable rate 7.8 7.7 7.7 7.7 7.7 163.5 202.1 202.1 8.9 % Total debt (1) $ 7.8 $ 157.7 $ 412.7 $ 7.7 $ 772.7 $ 613.5 $ 1,972.1 $ 1,903.8 (1) Amounts are presented before adjusting for debt issuance costs and debt discounts.
Added
During 2019, the Argentine government instituted exchange controls restricting the ability of entities and individuals to exchange Argentine pesos for foreign currencies and to remit foreign currency out of Argentina.
Added
As a result of these currency exchange controls, markets in Argentina developed a legal trading mechanism known as the Blue Chip Swap that allows entities to transfer U.S. dollars out of and into Argentina.
Added
In a Blue Chip Swap transaction, an entity buys U.S. dollar denominated securities in Argentina using Argentine pesos, and subsequently sells the securities for U.S. dollars, in Argentina, to access U.S. dollars locally, or outside Argentina, by transferring the securities abroad, prior to being sold (the latter commonly known as Blue Chip Swap Rate).
Added
The Blue Chip Swap rate is the implicit exchange rate resulting from the Blue Chip Swap transaction. The Blue Chip Swap rate can diverge significantly from Argentina’s official exchange rate. During the year ended December 31, 2023, the Company entered into Blue Chip Swap transactions that resulted in a loss of approximately $12.4 million.

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