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What changed in Cinemark Holdings, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Cinemark Holdings, Inc.'s 2023 and 2024 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 2024 report.

+435 added−434 removedSource: 10-K (2025-02-19) vs 10-K (2024-02-16)

Top changes in Cinemark Holdings, Inc.'s 2024 10-K

435 paragraphs added · 434 removed · 363 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

92 edited+19 added−16 removed16 unchanged
Biggest changeExamples of amenities include state-of-the-art sight and sound technology, premium large format auditoriums, recliners, and motion seats, as well as expansive food and beverage offerings. We believe our ongoing focus on providing an extraordinary guest experience is a primary factor of our consistent industry-leading results. Maximize Attendance and Box Office While Expanding Revenue Opportunities.
Biggest changeWe believe our ongoing focus on providing an extraordinary guest experience is a primary factor of our consistent industry-leading results. Maximize Attendance and Box Office While Expanding Revenue Opportunities. We actively focus on maximizing attendance and box office results through pricing strategies, sophisticated showtime optimization and planning, and the pursuit of alternative content that appeals to a broad consumer base.
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 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 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.
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. 7 Food and Beverage Concession sales are our second largest revenue source.
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.
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 11 certain state laws that require nutrition labels for certain menu items.
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.
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, purchase concessions 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, and purchase concessions, merchandise and gift cards at our website www.cinemark.com and via our mobile applications.
Additionally, we seek to drive ancillary revenue opportunities through expanding the food, beverage and merchandise products we offer, simplifying speed of service through space management improvements and online mobile ordering, and extending the availability of our offerings beyond our theatres via third-party delivery platforms. Furthermore, we look to monetize our facilities with opportunities including game rooms and private events.
Additionally, we seek to drive ancillary revenue opportunities through expanding the food, beverage and merchandise products we offer, simplifying speed of service through space management improvements and online mobile ordering, and extending the availability of our offerings beyond our theaters via third-party delivery platforms. Furthermore, we look to monetize our facilities with opportunities including game rooms and private events.
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.
Consequently, exhibitors have not entered into long-term arrangements with major distributors but must negotiate for licenses on a theater-by-theater 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.
Maintain a Disciplined Focus on Productivity and Profitability. We remain disciplined in our pursuit of continuous improvement, seeking opportunities to simplify processes, streamline operations, remove inefficiencies, and drive productivity. Areas of emphasis include further enhancing our workforce management tools and processes, strengthening inventory management, optimizing showtime planning, leveraging advanced sourcing strategies, and expanding automation opportunities.
Maintain a Disciplined Focus on Productivity and Profitability. We remain disciplined in our pursuit of continuous improvement, seeking opportunities to simplify processes, streamline operations, remove inefficiencies, and drive productivity. Areas of emphasis include further enhancing our workforce management tools and processes, strengthening inventory management, optimizing showtime planning, leveraging strategic sourcing strategies, and expanding automation opportunities.
We receive a monthly theatre access fee for participation in the NCM network, which includes screen rental revenue on a per patron basis and on a revenue share basis depending on the placement of the advertisement. Throughout our international markets, we have developed our Flix Media brand that handles screen advertising functions in all of our Latin American countries.
We receive a monthly theater access fee for participation in the NCM network, which includes screen rental revenue on a per patron basis and on a revenue share basis depending on the placement of the advertisement. Throughout our international markets, we have developed our Flix Media brand that handles screen advertising functions in all of our Latin American countries.
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.
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 theaters. 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.
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.
For the year ended December 31, 2024, 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 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 compete against local, regional, national and international exhibitors with respect to attracting guests, licensing films and developing new theater 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.
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.
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 21 to the consolidated financial statements for segment information and financial information by geographic area.
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.
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 all of our domestic theaters and certain international countries, we offer a free loyalty program that routinely offers food and beverage promotions and rewards.
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.
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 theater-by-theater and film-by-film basis.
Guests can subscribe to our emails and push notifications to receive information about current and upcoming films and events at their preferred Cinemark theatre(s), including details about upcoming XD movies, advanced ticket sales, screenings, special events, concerts, live broadcasts, contests, promotions, and our latest concessions and merchandise offerings.
Guests can subscribe to our emails and push notifications to receive information about current and upcoming films and events at their preferred Cinemark theater(s), including details about upcoming XD movies, advanced ticket sales, screenings, special events, concerts, live broadcasts, contests, promotions, and our latest concessions and merchandise offerings.
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 also have auditoriums that offer seats with immersive cinematic motion, which we refer to as motion seats, in 429 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 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 compete for new theater sites with other movie theater exhibitors as well as other entertainment venues. Securing a potential site depends upon factors such as commercial terms, available investment resources, theater design and capacity, revenue potential and financial stability of developers as well as exhibitors.
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.
Transforming the digital customer journey has enabled us to more effectively reach movie-goers through targeted and refined search engine optimization and provides the customer a better experience once they are directed to our website or app.
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 interact with moviegoers every day on social media platforms, such as Instagram, Facebook, Snapchat, X and TikTok to provide advanced ticketing, promotions, and event information and to monitor and respond to guests’ questions and feedback. Membership and Loyalty.
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.
We first entered Latin America when we opened a theater in Santiago, Chile in 1993. Since then, through a focused international growth strategy, we have developed into one of the most geographically diverse theater circuits in the region.
Our paid subscription programs allow our guests to receive exclusive concessions discounts. Innovation. W e offer unique movie-themed merchandise to customers both in our theatres and online to enhance their experience and drive incremental revenue.
Our paid subscription programs allow our guests to receive exclusive concessions discounts. Innovation. W e offer unique movie-themed merchandise to customers both in our theaters and online to enhance their experience and drive incremental revenue.
Our domestic subscription membership program, Movie Club, offers guests a standard monthly ticket credit, member-pricing for a companion ticket and concession and other transaction discounts for their choice of a monthly or annual fixed price. Movie Club is a unique option to reward our loyal guests and allows us to stay informed of frequent moviegoers’ preferences.
Our domestic subscription membership program, Movie Club, offers guests a standard monthly ticket credit, waived online fees, member-pricing for a companion ticket and concession and other transaction discounts for their choice of a monthly or annual fixed price. Movie Club is a unique option to reward our loyal guests and allows us to stay informed of frequent moviegoers’ preferences.
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.
In our Latin American markets, while Hollywood content has generally similar release dates as in the U.S., 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 impact this seasonality trend.
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.
We also have self-service cafeteria-style concession areas in many of our domestic theaters, 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 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 membership and loyalty programs in most of our international markets that either allow customers to pay a monthly or annual fee for a membership card that provides them with certain admissions and concession discounts or that allows guests to earn loyalty points for each purchase.
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.
To attract and retain the most qualified talent, we offer competitive benefits, including market-competitive compensation, healthcare benefits, paid time off, parental leave and free movie passes. In the U.S. we also offer a 401(k) retirement savings and investment plan with a generous Company match. Additionally, many of our CSC and international non-theater employees are eligible to work a hybrid schedule.
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.
Concession products are generally managed through a distribution network, with theaters placing and receiving orders directly through a distributor. We monitor inventory levels at every theater 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.
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 have dedicated category managers that monitor product sales, new product variations, upcoming content and events, and make adjustments to product mix on a theater-by-theater 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.
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.
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 theaters.
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 have balanced our risk through a diversified international portfolio, which included theaters in 15 of the 20 largest metropolitan areas in Latin America as of December 31, 2024. 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.
AC JV, LLC, referred to as Fathom Events, is the largest distributor of documentaries and inspirational content as well as classic films and performing arts, such as the Metropolitan Opera. Film Licensing In the U.S., our corporate film department negotiates with film distributors to license films for each of our domestic theatres.
AC JV, LLC, referred to as Fathom Entertainment, is the largest distributor of documentaries and inspirational content as well as classic films and performing arts, such as the Metropolitan Opera. Film and Content Licensing In the U.S., our corporate film department negotiates with film and content distributors to license content for each of our domestic theaters.
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 are generally able to book films at our theaters without regard to the film bookings of other exhibitors. Our success in attracting guests can depend on customer service quality, location, theater capacity, quality of projection and sound equipment, film showtime availability and ticket prices.
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.
We have incorporated Luxury Lounger heated recliner seats into all of our recent domestic new builds and have repositioned many of our existing domestic theaters to offer this premium seating feature. We currently feature these recliner luxury loungers in 69% of our total domestic circuit.
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.
We have a significant presence in major cities in Latin America, with theaters in 15 of the 20 largest metropolitan areas in Latin America as of December 31, 2024. We are the largest exhibitor in Brazil and Argentina and have significant market presence in Colombia, Peru and Chile.
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 theater operations are also subject to federal, state and local laws governing such matters as data privacy, wages, working conditions, citizenship, health and sanitation requirements, trade compliance, and various business licensing and permitting.
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 offer enhanced food and beverages such as gourmet pizzas, burgers, and sandwiches, and a selection of beer, wine and cocktails, all of which can be enjoyed in the comfort of the auditoriums, at a majority of our theaters.
Positive box office growth, aligned with film volume recovery and record-setting results of an expansive range of titles across a wide array of film genres further underscore that experiencing captivating film content in a theatrical setting remains an important part of culture and consumer entertainment agendas. A Theatrical Release Enhances a Film’s Promotional Impact and Overall Asset Value.
Strong box office performance, aligned with film volume recovery and record-setting results of an expansive range of titles across a wide array of film genres further underscores that experiencing captivating film content in a theatrical setting remains an important part of culture and consumer entertainment agendas. A Theatrical Release Enhances a Film’s Promotional Impact and Overall Asset Value.
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.
We market our theaters and special events, including new theater 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.
Our Flix Media marketing personnel work with local agencies and advertisers to coordinate screen advertising in our theatres as well as other theatres in our markets. In addition to screen advertising in our theatres, we continue to expand Flix Media’s services to include, among other things, alternative content, digital media and other synergistic advertising opportunities.
Our Flix Media marketing personnel work with local agencies and advertisers to coordinate screen advertising in our theaters as well as other theaters in our markets. In addition, we continue to expand Flix Media’s services to include, among other things, alternative content, digital media and other synergistic advertising products. Marketing and Promotions Digital Marketing .
Film distributors determine film release dates and plan and fund the related film marketing campaigns, while we are responsible for booking the films at each of our theatres at the optimal showtimes for our guests. In both our domestic and international locations, film rental fees are based on a film’s box office receipts.
Film distributors determine film release dates as well as plan and fund the related film marketing campaigns, while we are responsible for scheduling the films at each of our theaters at the optimal showtimes for our guests. In both our domestic and international locations, film rental fees are based on a film’s box office receipts.
We also provide a hotline for all employees to report workplace concerns and violations with the option to report on an anonymous basis. We address such concerns and take appropriate actions that uphold our Cinemark Values.
In addition to these engagement initiatives, we also provide a hotline for all employees to report workplace concerns and violations with the option to report on an anonymous basis. We address such concerns and take appropriate actions that uphold our Cinemark Values.
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.
We believe our portfolio of high-quality theaters with multiple platforms and amenities provides a preferred destination for moviegoers and has contributed to our consistent industry-leading results. As of December 31, 2024, we managed our business under two reportable segments: U.S. markets and international markets. See Note 21 to the consolidated financial statements.
Employees are continually trained on proper sales techniques, food preparation and handling, and maintaining the quality of our concession product offerings. Many employees are certified in food safety protocols and in serving alcoholic beverages. Cost Control. We negotiate prices, volume-based rebates and promotional-based rebates for concession products directly with our suppliers.
Staff Training. Employees are continually trained on proper sales techniques, food safety, preparation and handling, and maintaining the quality of our concession product offerings. Many employees are also certified in food safety protocols and serving alcoholic beverages. Cost Management. We negotiate concession prices and rebates that are volume or promotional-based directly with our suppliers.
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.
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, 2024, we operated 497 theaters and 5,653 screens in the United States, or “U.S.”, and Latin America.
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.
International Preliminary estimates for Latin American box office revenues were approximately $2.1 billion for 2024, down approximately 12% compared with 2023. 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.
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.
Our U.S. circuit operated 304 theaters and 4,255 screens and our Latin America circuit operated 193 theaters and 1,398 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.
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.
In many markets, we offer enhanced food and beverage options for our guests including beer, wine and cocktails, freshly-made signature Pizza Hut pizzas, burgers, sandwiches and specialty desserts, as well as some healthier snack options and diverse ethnic foods based on market demographics.
The following table summarizes the geographic locations of our theatre circuit as of December 31, 2023.
The following table summarizes the geographic locations of our theater circuit as of December 31, 2024.
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.
We incorporate queue lines, self-serve candy cases, grab-and-go food cases, modern digital menu boards and bottled drink coolers at our concession stands to help provide convenience for our guests, drive impulse purchases and increase product visibility across our core categories.
Movie Club includes a premium tier, Movie Club Platinum, allowing members with a high visit frequency and/or high volume of ticket purchases during the year to earn additional movie ticket credits, receive an increased concessions discount and the ability to purchase additional tickets at a discounted price.
Movie Club includes a premium tier, Movie Club Platinum, allowing members with a high visit frequency and/or high volume of ticket purchases during the year to earn additional movie ticket credits, receive an increased concessions discount and the ability to purchase additional tickets at a discounted price. 9 We offer a free domestic loyalty program, Movie Fan, to our guests in the U.S.
Personnel at the CSC provide oversight and support for our domestic and international theatres and includes our executive team and department heads in charge of film licensing, food and beverage, theatre operations, theatre construction and maintenance, real estate, human resources, marketing, legal, finance, accounting, tax and information technology.
Personnel at the CSC provide oversight and support for our domestic and international theaters and includes our executive team and department heads in charge of film licensing, food and beverage, theater operations, theater construction and maintenance, real estate, human resources, marketing, legal, finance, accounting, tax and information technology. Our U.S. operations are comprised of regions headed by regional vice presidents.
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.
We are in the early stages of a multi-year project 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 movie-going experience. As of December 31, 2024, we have transitioned nearly 20% of our auditoriums globally to the new laser projectors.
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 eight regional offices in Latin America responsible for the local management of theaters in 13 countries as of December 31, 2024 (Honduras, El Salvador, Nicaragua, Costa Rica, Panama and Guatemala are managed out of one Central American regional office).
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 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. Ongoing enhancements result in higher traffic volume to our digital channels and increased ticket and concession purchases.
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.
In the U.S., we offer mobile concession ordering at virtually all of our U.S. theaters 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. In addition, through third-party delivery partnerships, customers are able to order concession favorites to be delivered to their homes.
Furthermore, experiencing content in a shared theatrical environment elevates emotions and engagement with stories and characters, which builds larger brands, franchises, and cultural moments. It also provides an incremental revenue stream, while strengthening performance in downstream distribution channels, including streaming, which enhances overall asset value.
Furthermore, experiencing content in a shared theatrical environment elevates emotions and engagement with stories and characters, which builds larger brands, franchises, and cultural moments. It generates the initial revenue stream, driving performance in downstream distribution channels, including streaming, which enhances overall asset value. Resilient Industry Across Technology Innovations and Economic Cycles.
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.
In an effort to more deeply engage with our guests, the visual identity and physical flow of our theaters are regularly assessed. This includes keeping all signage, merchandise, food and beverage vessels and employee attire updated and reflective of the modern experience. Campaigns and Promotions.
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.
This functionality streamlines the guest experience, adding convenience and enhanced guest service for our customers. As of December 31, 2024, mobile concession ordering is available at all of our U.S. theaters. Similarly, guests in our Latin American locations can pre-pay for select concession products online or at kiosks within the theater and pick them up at the concession stand.
The industry has made significant progress in its recovery from the COVID-19 pandemic; however its ongoing recovery continues to be contingent upon several key factors, including the volume of new film content available, which has also been impacted by the recent writers’ and actors’ guild strikes, the box office performance of new film content released, the duration of the exclusive theatrical release window and evolving consumer behavior with competition from other forms of in-and-out of home entertainment.
Motion Picture Exhibition Industry Overview The success of the theatrical exhibition industry is contingent upon several key factors, including the volume of new film content available, which has been impacted by the effects of the COVID-19 pandemic and more recently the 2023 writers’ and actors’ guild strikes (the “Hollywood strikes”), as well as the box office performance of new film content released, the duration of the exclusive theatrical release window, and evolving consumer behavior with competition from other forms of in-and-out-of home entertainment.
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.
Furthermore, 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.
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.
We also have lobby bars and VIP lounges in many domestic and international theaters that provide guests space to socialize outside of the auditorium. Our proprietary mobile concession 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.
Sustained consumer enthusiasm to view compelling films in a shared, larger-than-life, cinematic environment continues to be demonstrated across all genres of films, segments of audiences, and periods of the year.
Drivers of Continued Industry Success We believe the long-term fundamentals of our industry remain intact: Consumer Enthusiasm for Theatrical Movie-Going Remains Strong. Sustained consumer enthusiasm to view compelling films in a shared, larger-than-life, cinematic environment continues to be demonstrated across all genres 3 of films, segments of audiences, and periods of the year.
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.
NCM provides advertising to our theaters through its branded “ Noovie ” pre-show entertainment program and also handles certain lobby promotions and displays for our theaters. 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.
As such, it has proven resilient to competition for consumers’ leisure spending, as well as inflationary and recessionary periods. For example, North American industry box office grew in six of the last eight recessions. Additionally, theatrical movie-going has demonstrated stable, long-term growth trends across various technological innovations, including VHS, internet, DVD and streaming.
Theatrical movie-going remains one of the most convenient and affordable forms of out-of-home entertainment. As such, it has proven resilient to competition for consumers’ leisure spending, as well as inflationary and recessionary periods. For example, North American industry box office grew in six of the last eight recessions.
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.
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 theaters’ feature film schedules.
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.
A key benefit of our XD strategy includes programming flexibility, as we can show the content of our choice on our XD screens with no additional revenue share component outside of routine film rental. Our ScreenX auditoriums offer a 270-degree viewing experience.
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.
Each regional office is headed by a general manager with additional personnel responsible for film licensing, marketing, human resources, information technology, operations and finance.
We have expanded concession sales by enhancing our offerings and adapting to our customers’ changing preferences, as discussed below. Product Mix. Core concession products offered at all of our theatres include various sizes and types of popcorn, soft drinks, coffees, non-carbonated drinks, candy and quickly-prepared or pre-prepared food, such as hot dogs, pizza, pretzel bites, nachos and ice cream.
Core concession products offered at all of our theaters include various sizes and types of popcorn, soft drinks, frozen carbonated drinks, candy and quickly-prepared or pre-packaged food, such as hot dogs, pizza, pretzel bites, nachos and ice cream. Our food and beverage offerings vary in particular markets based on guest preferences.
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.
Maintaining high-quality assets remains one of our primary objectives going forward and reinforces our dedication to providing an exceptional guest experience. 4 We offer our guests a premium large format experience through our 294 XD auditoriums, which represents the largest exhibitor-branded premium large format footprint in the world, 16 IMAX auditoriums and six ScreenX auditoriums across our worldwide circuit.
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.
Country Total Theaters Total Screens United States 304 4,255 Brazil 84 615 Argentina 23 199 Colombia 31 185 Chile 20 142 Central America (1) 17 114 Peru 15 115 Bolivia 1 13 Paraguay 2 15 Total 497 5,653 (1) Includes Honduras, El Salvador, Nicaragua, Costa Rica, Panama and Guatemala. Content We offer a wide variety of content at our theaters.
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.
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. As a result of these engagement initiatives, the Company was ranked as one of the top 30 companies to work for by Top Workplaces DFW in 2024.
Additionally, we have partnered with key strategic suppliers to create an online store that offers unique merchandise to guests across the country from the comfort of their homes. We are also the first major theatre exhibition company to partner with Door Dash, Grub Hub, and Uber Eats, to allow consumers to have our concession offerings delivered to their homes.
Additionally, we have partnered with strategic suppliers to create an online store that offers unique merchandise to guests across the country from the comfort of their homes.
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.
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. Additionally, we have the functionality and technological infrastructure to live-stream events via satellite network across our portfolio of theaters in the U.S. and Latin America.
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.
We strategically design large concession stands to heighten visibility, reduce the length of concession lines, and improve traffic flow around the concession stands.
We actively focus on maximizing attendance and box office results through pricing strategies, sophisticated showtime planning, and pursuit of alternative content that appeals to a broad consumer base. We also continue to invest in strengthening and leveraging our omni-channel marketing platforms and loyalty programs to expand our audience base, increase moviegoing 3 frequency and strengthen loyalty to our brand.
We also continue to invest in strengthening and leveraging our omni-channel marketing platforms and loyalty programs to expand our audience base, increase moviegoing frequency and strengthen loyalty to our brand.
We also offer mobile concession ordering in all of our Latin American theatres and delivery to seats in a select number of our premier Latin American theatres. Experienced Management. Our global management team has extensive industry experience and proven track records. Many of our key leaders have over 20 years of industry experience.
We also offer mobile concession ordering in all of our Latin American theaters and delivery to seats in a select number of our premier Latin American theaters. Distinctive Global Footprint.
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.
We do not have unionized employees within our domestic employee base, however many of our international locations are subject to union contracts. We currently have approximately 18,800 employees in the U.S., approximately 21% of whom are full-time employees and 79% of whom are part-time employees.
In our Mission, Vision and Values Statement, our employees form the core of our Cinemark Values.
We have approximately 10,400 employees in our international markets, approximately 51% of whom are full-time employees and approximately 49% of whom are part-time employees. In our Purpose, Mission, Vision and Values Statement, our employees form the core of our Cinemark Values.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeCredit 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.
Biggest changeWe 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.
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.
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 may also materially impact our business operations.
In addition, the Option Counterparties or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to Holdings’ common stock and/or purchasing or selling Holdings’ common stock or other securities of Holdings’ in secondary market transactions prior to the maturity of the 4.50% Convertible Senior Notes (and are likely to do so during any observation period related to a conversion of the 4.50% Convertible Senior Notes or following any repurchase of the 4.50% Convertible Senior Notes by us in connection with any fundamental change repurchase date or otherwise).
In addition, the Option Counterparties or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to Holdings’ common stock and/or purchasing or selling Holdings’ common stock or other securities of Holdings in secondary market transactions prior to the maturity of the 4.50% Convertible Senior Notes (and are likely to do so during any observation period related to a conversion of the 4.50% Convertible Senior Notes or following any repurchase of the 4.50% Convertible Senior Notes by us in connection with any fundamental change repurchase date or otherwise).
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.
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 12 business by resulting in fewer patrons and reduced revenue.
The average video and digital release window, which represents the time that elapses from the date of a film’s theatrical release to the date a film is available for DVD, was approximately 90 days and digital purchase for ownership (also known as electronic sell-through) was approximately 74 days for several years prior to the COVID-19 pandemic.
The average video and digital release window, which represents the time that elapses from the date of a film’s theatrical release to the date a film is available for DVD, was approximately 90 days and digital purchase for ownership 13 (also known as electronic sell-through) was approximately 74 days for several years prior to the COVID-19 pandemic.
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.
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 have insurance coverage with respect to some, but not all, of these events.
Changes in regulations affecting prices and quota systems requiring the exhibition of locally-produced films may adversely affect our international operations. Our international operations are subject to certain political, economic and other uncertainties not encountered by our domestic operations, including risks of severe economic downturns and high inflation.
Changes in regulations affecting prices and quota systems requiring the exhibition of locally-produced films may adversely affect our international operations. Our international operations are subject to certain political, economic and other uncertainties generally not encountered by our domestic operations, including risks of severe economic downturns and high inflation.
As federal and state minimum wage rates increase, we may need to increase not only the wages of our minimum wage employees, but also the wages paid to employees at wage rates that are above minimum wage. Labor market conditions have also recently driven increases in wages across our labor base and similar increases may continue in the future.
As federal and state minimum wage rates increase, we may need to increase not only the wages of our minimum wage employees, but also the wages paid to employees at wage rates that are above minimum wage. Labor market conditions have also driven increases in wages across our labor base and similar increases may continue in the future.
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.
Our 14 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 and we may not be able to obtain such financing on acceptable terms, or at all.
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.
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, if any such Hedge Transactions and Warrants fail to become effective, the Option Counterparties or their respective affiliates may unwind their hedge positions with respect to Holdings’ common stock, which could adversely affect the market price of its common stock.
In addition, if any such Hedge Transactions and Warrants fail to become effective, the Option Counterparties or their respective affiliates may unwind their hedge positions with respect to Holdings’ common stock, which could adversely affect the market price of Holdings’ common stock.
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.
The inability to access debt financing on reasonable terms could materially 17 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.
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.
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 A failure to adapt to future technological innovations could impact our ability to compete effectively and could adversely affect our results of operations.
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.
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 theaters; and • 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.
We maintain insurance designed to provide coverage for cyber risks related to what we believe to be adequate and collectible insurance in the event of the theft, loss, fraudulent or unlawful use of customer, employee or company data, but the foregoing events or future events could result in costs and business impacts which may not be covered or may be in excess of any available insurance that we may have procured.
We maintain insurance designed to provide coverage for cyber risks related to what we believe to be adequate and collectible insurance in the event of the theft, loss, fraudulent or unlawful use of customer, employee 19 or company data, but the foregoing events or future events could result in costs and business impacts that may not be covered or may be in excess of any available insurance that we may have procured.
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.
As our industry recovers from the effects of the COVID-19 pandemic and the 2023 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.
Also, compliance of our theatres and accompanying real estate with new and revised environmental, zoning, land-use or building codes, laws, rules or regulations, could have a material and adverse effect on our business. However, we are unable to predict at this time, the potential effects, if any, that any future environmental initiatives may have on our business.
Also, compliance of our theaters and accompanying real estate with new and revised environmental, zoning, land-use or building codes, laws, rules or regulations, could have a material and adverse effect on our business. However, we are unable to predict at this time, the potential effects, if any, that any future environmental initiatives may have on our business.
Therefore, if a theatre is directly and individually impacted by increased competition, adverse changes in market demographics, or adverse changes in the development or condition of the areas surrounding the theatre, we may record impairment charges to reflect the decline in estimated fair value of that theatre. We also have a significant amount of goodwill and tradename intangible assets.
Therefore, if a theater is directly and individually impacted by increased competition, adverse changes in market demographics, or adverse changes in the development or condition of the areas surrounding the theater, we may record impairment charges to reflect the decline in estimated fair value of that theater. We also have a significant amount of goodwill and tradename intangible assets.
In order to address these risks, we have adopted security measures and technology, operate a security program, and work continuously to evaluate and improve our security posture. However, the development and maintenance of these systems and programs are costly and require ongoing monitoring and updating as technologies change and efforts to overcome security measures become more sophisticated.
To address these risks, we have adopted security measures and technology, operate a security program, and work continuously to evaluate and improve our security posture. However, the development and maintenance of these systems and programs are costly and require ongoing monitoring and updating as technologies change and efforts to overcome security measures become more sophisticated.
We are subject to uncertainties relating to future expansion plans, including our ability to identify suitable acquisition candidates or new theatre site locations, and to obtain financing for such activities on favorable terms or at all. We have expanded our operations through targeted worldwide theatre development and acquisitions.
We are subject to uncertainties relating to future expansion plans, including our ability to identify suitable acquisition candidates or new theater site locations, and to obtain financing for such activities on favorable terms or at all. We have expanded our operations through targeted worldwide theater development and acquisitions.
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.
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 theater attendance and limit revenue growth.
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.
If Holdings settles the 4.50% Convertible Senior Notes with cash, or by a combination of cash and shares of its 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.
Compliance with the ADA and similar disability rights laws requires us as a public accommodation to reasonably accommodate individuals with disabilities. This applies to the construction of new theatres, certain renovations, existing theatres, websites and mobile applications and presentations for the blind, deaf and hard of hearing.
Compliance with the ADA and similar disability rights laws requires us as a public accommodation to reasonably accommodate individuals with disabilities. This applies to the construction of new theaters, certain renovations, existing theaters, websites and mobile applications and presentations for the blind, deaf and hard of hearing.
We may be subject to liability under environmental laws and regulations. We own and operate a large number of theatres and other properties within the U.S. and internationally, which may be subject to various foreign, federal, state and local laws and regulations relating to the protection of the environment or human health.
We may be subject to liability under environmental laws and regulations. We own and operate a large number of theaters and other properties within the U.S. and internationally, which may be subject to various foreign, federal, state and local laws and regulations relating to the protection of the environment or human health.
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.
Consequently, we cannot guarantee a supply of content by entering into long-term arrangements with major distributors. A deterioration in our relationship with any of the major content distributors could adversely affect our ability to obtain commercially successful content and to negotiate favorable licensing terms for such content, both of which could adversely affect our business and operating results.
These changes in the legal and regulatory environments in the areas of customer and employee privacy, data security, and cross-border data flows could have a material adverse effect on our business, primarily through the impairment of our marketing and transaction processing activities, the limitation on the types of information that we may collect, process and retain, the resulting costs of complying with such legal and regulatory requirements and potential monetary forfeitures and penalties for noncompliance.
These changes in the legal and regulatory environments in the areas of customer and employee privacy, data security, and cross-border data flows could have a material adverse effect on our business, primarily through the impairment of our marketing and transaction processing activities, the limitation on the types of information that we may collect, process, transfer and retain, the resulting costs of complying with such legal and regulatory requirements and defending legal claims alleging noncompliance, and potential monetary forfeitures and penalties for noncompliance.
We are subject to impairment losses due to potential declines in the fair value of our assets. We have a significant amount of long-lived assets. We evaluate long-lived assets for impairment at the theatre level.
We are subject to impairment losses due to potential declines in the fair value of our assets. We have a significant amount of long-lived assets. We evaluate long-lived assets for impairment at the theater level.
The 4.50% Convertible Senior Notes may from time to time in the future be convertible at the option of their holders prior to their scheduled terms under certain circumstances. Any sales in the public market of the common stock issuable upon such conversion could adversely affect prevailing market prices of its common stock.
The 4.50% Convertible Senior Notes may from time to time be convertible at the option of their holders prior to their scheduled terms under certain circumstances. Any sales in the public market of the common stock issuable upon such conversion could adversely affect prevailing market prices of Holdings’ common stock.
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.
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. A deterioration in relationships with content distributors could adversely affect our ability to obtain commercially successful content.
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.
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 resulting in supply chain interruptions and increased tariffs and other costs; macroeconomic conditions, including a decline in economic activity, inflation, deflation and foreign exchange rate fluctuations; and terrorist attacks.
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.
Certain provisions of CUSA’s 5.25% senior notes indenture, CUSA’s 7.00% 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 5.25% Senior Notes and 7.00% 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.
We continue to pursue a strategy of expansion that involves the development of new theatres and may involve acquisitions of existing theatres and theatre circuits both in the U.S. and internationally. There is significant competition for new site locations and for existing theatre and theatre circuit acquisition opportunities.
We continue to pursue a strategy of expansion that involves the development of new theaters and may involve acquisitions of existing theaters and theater circuits both in the U.S. and internationally. There is significant competition for new site locations and for existing theater and theater circuit acquisition opportunities.
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.
In markets where we do not face nearby competitive theaters, there is a risk of new theaters being built. The degree of competition for patrons is dependent upon such factors as location, theater capacity, presentation quality, film showtime and availability, customer service quality, products and amenities offered, and prices.
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.
Most recently, the 2023 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 may not generate attendance and revenue from admissions at levels comparable to what we had generated historically.
As a result of such competition, we may not be able to acquire attractive new site locations, existing theatres or theatre circuits on terms we consider acceptable. The pace of our growth may also be impacted by delays in site development caused by other parties.
As a result of such competition, we may not be able to secure attractive new site locations or acquire existing theaters or theater circuits on terms we consider acceptable. The pace of our growth may also be impacted by delays in site development caused by other parties.
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.
The principal competitive factors with respect to film licensing include the theater’s location and its demographics, the condition, capacity and grossing potential of each theater, and licensing terms. We also face competition from new concept theaters such as dine-in theaters, tavern style theaters and family entertainment centers that open in close proximity to our conventional theaters.
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.
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 late 2023 and 2024 due to production delays that forced studios to push films to 2025 and 2026.
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.
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 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.
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.
While we continue to invest in technological innovations, such as laser projectors and motion seats, new technological innovations continue to impact our industry.
While we continue to invest in technological innovations, such as laser projectors, motion seats and digital consumer interfaces, new technological innovations continue to impact our industry.
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.
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.
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.
While this trend has largely diminished over the past three years, 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 theater to view the film, our business and results of operations, financial condition and cash flows may be adversely impacted.
Because of the scope and complexity of our information technology systems, our reliance on vendors to provide, support and protect our systems and data, and the constantly evolving cyber-threat landscape, our information technology systems are subject to the risk of disruption, failure, unauthorized access, cyber-terrorism, human error, misuse, tampering, theft, and other cyber-attacks.
Because of the scope and complexity of our information technology systems, our reliance on vendors to provide, support and protect our systems and data, and the constantly evolving cyber-threat landscape, including those involving sophisticated artificial intelligence tools, our information technology systems are subject to the risk of disruption, failure, unauthorized access, cyber-terrorism, human error, misuse, tampering, theft, and other cyber-attacks.
We are also subject to recall by product manufacturers or if the food products become contaminated. Recalls could result in losses due to the cost of the recall, the destruction of the product and lost sales due to the unavailability of the product for a period of time. Item 1B. Unresolv ed Staff Comments None.
We are also subject to recall by product manufacturers or if the food products become contaminated. Recalls could result in losses due to the cost of the recall, the destruction of the product and lost sales due to the unavailability of the product for a period of time.
Losing the services of one or more senior executives, or other key personnel, could adversely affect our ability to execute our business strategies and could have an adverse effect on our business, financial condition, and results of operations, especially if we were unable to timely employ a qualified replacement. Labor shortages could also result in rising wages, affecting our profits.
Losing the services of one or more senior executives, or other key personnel, could adversely affect our ability to execute our business strategies and could have an adverse effect on our business, financial condition, and results of operations, especially if we were unable to timely employ a qualified replacement.
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.
Consequently, we typically generate higher revenue during those periods. In our Latin American markets, while Hollywood content has generally similar release dates as in the U.S., 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 impact this seasonality trend.
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.
Our foreign operations are subject to adverse regulations, economic instability and currency exchange risk. We had 193 theaters with 1,398 screens in 13 countries in Latin America as of December 31, 2024. Brazil represented approximately 8.0% of our consolidated 2024 revenue. Governmental regulation of the motion picture industry in foreign markets differs from that in the U.S.
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.
We rely on content distributors to supply a majority of the content shown in our theaters. The distribution business is highly concentrated, with six major film distributors accounting for approximately 84% of U.S. box office revenues and 43 of the top 50 grossing films during 2024. Content distributors license films to exhibitors on a theater-by-theater and film-by-film basis.
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.
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.
If one or more holders elect to convert their 4.50% Convertible Senior Notes, Holdings may elect to satisfy its conversion obligations by payment and delivery of a combination of cash and shares of its common stock. Settlement of this conversion obligation through the payment of cash could adversely affect Holdings’ and CUSA’s liquidity.
If one or more holders elect to convert their 4.50% Convertible Senior Notes, Holdings may elect to satisfy its conversion obligations by payment and delivery of a combination of cash and shares of its common stock.
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.
For example, the impact of the COVID-19 pandemic had an unprecedented impact on the theatrical exhibition industry. 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.
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.
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 theaters. The major film distributors generally release the films they anticipate will be most successful during the summer and holiday seasons.
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.
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.
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.
As of December 31, 2024, Holdings had $2,363.7 million in long-term debt obligations, which included $1,903.7 million of CUSA debt and excludes unamortized debt issuance costs and original issue discount. As of December 31, 2024, Holdings and CUSA had $125.3 million in finance lease obligations and $784.0 million in long-term operating lease obligations.
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 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.
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.
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. Impairment charges related to our long-lived assets, goodwill or intangible assets could have an adverse effect on our results of operations.
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.
Also, while the quantity of new film releases available for theatrical exhibition has continued to improve and led to further recovery from the effects of the COVID-19 pandemic, the volume of film content has not reverted to historical levels. The volume of new films has not, and may not, fully recover to pre-pandemic levels which would materially impact our business.
The 4.50% Convertible Senior Notes Hedge Transactions and Warrant Transactions (each as defined below) may affect the value of Holdings’ common stock. In connection with the pricing of the 4.50% Convertible Senior Notes, Holdings entered into Hedge Transactions with, and sold Warrants (as defined below) to, Option Counterparties (as defined below).
The 4.50% Convertible Senior Notes Hedge Transactions and Warrant Transactions (each as defined below) may affect the value of Holdings’ common stock.
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.
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.
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.
Settlement of this conversion obligation through the payment of cash could adversely affect Holdings’ and CUSA’s liquidity. 16 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.
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.
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.
We are subject to various federal, state and local laws, regulations and administrative practices in the U.S. and internationally. We must comply with laws regulating, among other things, antitrust activities, employment environment, sale of concession goods, alcoholic beverages, data protection and privacy and Title III of the Americans with Disabilities Act of 1990 ("ADA") and similar state disability rights laws.
We must comply with laws regulating, among other things, antitrust activities, employment environment, sale of goods and services, health and safety, alcoholic beverages, artificial intelligence, data protection and privacy and Title III of the Americans with Disabilities Act of 1990 (“ADA”) and similar state disability rights laws.
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.
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 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.
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.
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.
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. 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.
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.
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. Regulatory Risks We are subject to various government regulations which could result in substantial costs.
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.
Labor shortages, increased employee turnover and health care mandates could also increase our labor costs. This in turn could lead us to increase prices, 18 which could impact our sales. Conversely, if competitive pressures or other factors prevent us from offsetting labor costs by increasing prices, our results of operations may be adversely impacted.
Our business depends on both the availability of films for exhibition in our theatres and the success of those films in our markets.
The costs of protecting against such incidents may reduce the results of our operations. Our business depends on film production and performance. Our business depends on both the availability of films for exhibition in our theaters and the success of those films in our markets.
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.
If our debt holders require immediate payment, we may not have sufficient assets to satisfy our obligations under our indebtedness. 15 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 impact our access to capital.
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.
Tight labor market, loss of key personnel, or inability for our workforce to scale as business evolves 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 theater staff.
Holdings suspended its dividend in March 2020 due to the impacts of the COVID-19 pandemic and it is uncertain when Holdings will resume paying dividends. Future sales of Holdings’ common stock may adversely affect the prevailing market price.
Future sales of Holdings’ common stock may adversely affect the prevailing market price.
Removed
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.
Added
Labor shortages could also result in rising wages, affecting our results of operations. We have historically relied on a lean workforce model. To the extent our employees are unable to sustain productivity levels or scale as our business evolves or grows, we may be required to expand our workforce, which could negatively impact our results of operations.
Removed
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.
Added
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.
Removed
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.
Added
In connection with the pricing of the 4.50% Convertible Senior Notes, Holdings entered into privately negotiated convertible note hedge transactions (the “Hedge Transactions”) with, and sold Warrants (as defined below) to, one or more of the initial purchasers of the 4.50% Convertible Senior Notes or their respective affiliates (the “Option Counterparties”).
Removed
Any of these activities could adversely affect the value of Holdings’ common stock. 15 Holdings is subject to counterparty risk with respect to the 4.50% Convertible Senior Notes Hedge Transactions.
Added
Concurrently with entering into the Hedge Transactions, Holdings also entered into separate privately negotiated warrant transactions with Option Counterparties whereby it sold to the Option Counterparties warrants to purchase (subject to the net share settlement provisions set forth therein) up to the same number of shares of Holdings’ common stock, subject to customary anti-dilution adjustments (the “Warrant Transactions” or “Warrants”).
Removed
As of December 31, 2023, we owned 4.4 million shares of National Cinemedia, Inc. (“NCMI”), which represented an ownership interest in NCM of approximately 4.5%. NCMI is a holding company that serves as the sole manager of NCM. NCM comprises approximately the entire balance of NCMI’s assets, liabilities and operating cash flows.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeAdditionally, in Item 1A Risk Factors , under the heading of Risk Related to Information Security and Business Disruptions, forward-looking cybersecurity threats that could have a material impact on the Company are discussed. Those sections of Item 1A Risk Factors should be read in conjunction with this Item 1C Cybersecurity . Governance .
Biggest changeRisk Factors , under the heading of Risk Related to Information Security and Business Disruptions, forward-looking cybersecurity threats that could have a material impact on the Company are discussed. Those sections of Item 1A. Risk Factors should be read in conjunction with this Item 1C. Cybersecurity . Governance .
Item 1C. Cybersecurity Risk Management and Strategy. The Company has developed an information security program to address material risks from cybersecurity threats. The program includes policies and procedures that identify how security measures and controls are developed, implemented, and maintained. Risk-based analysis and judgment, along with a recognized security framework, are used to select security controls to address risks.
Item 1C. Cybersecurity Risk Management and Strategy. The Company has developed an information security program to address material risks from cybersecurity threats. The program includes policies and procedures that identify how security 20 measures and controls are developed, implemented, and maintained. Risk-based analysis and judgment, along with a recognized security framework, are used to select security controls to address risks.
The 19 Company uses a variety of processes to address cybersecurity threats related to the use of third-party technology and services, including pre-acquisition diligence, imposition of contractual obligations, and performance monitoring. The Company has a written incident response plan and conducts tabletop exercises to enhance incident response preparedness.
The Company uses a variety of processes to address cybersecurity threats related to the use of third-party technology and services, including pre-acquisition diligence, imposition of contractual obligations, and performance monitoring. The Company has a written incident response plan and conducts tabletop exercises to enhance incident response preparedness.
In addition, security controls, no matter how well designed or implemented, may only mitigate and not fully eliminate risks. And events, when detected by security tools or third parties, may not always be immediately understood or acted upon.
In addition, security controls, no matter how well designed or implemented, may only mitigate and not fully eliminate risks. And events, when detected by security tools or third parties, may not always be immediately understood or acted upon. Additionally, in Item 1A.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changePr 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.
Biggest changeItem 2. Pr operties The following table sets forth a summary of our theaters in U.S. and international markets as of December 31, 2024: Leased Owned Segment Theaters Theaters U.S. 264 40 International 193 — Total 457 40 See also Item 1.
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.
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. Some variable lease payments include payments based 21 on a percentage of sales over defined thresholds.
We also lease office space in seven regions in Latin America for our local office teams. 20
We also lease office space in seven regions in Latin America for our local office teams.
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.
See Note 3 to the consolidated financial statements for further discussion of our leases. In addition to our theater 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.
The Company conducts a significant part of its theatre operations in leased properties under noncancelable operating and finance leases with base terms generally ranging from 10 to 25 years.
Business – Theater Operations , for a summary of the geographic locations for our U.S. and international theater circuit as of December 31, 2024. The Company conducts a significant part of its theater operations in leased properties under noncancelable operating and finance leases with base terms generally ranging from 10 to 25 years.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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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.
Biggest changeSee Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operation – Liquidity and Capital Resources – Financing Activities and Note 13 to the consolidated financial statements for further discussion of dividend restrictions under CUSA’s debt agreements. 23 Performance Graph We benchmark our financial performance against AMC Entertainment Holdings, Inc.
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.
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, 2024, 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, 2023, there were approximately 570 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, 2024, there were approximately 640 holders of record of Holdings’ common stock and there were no other classes of stock issued and outstanding.
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.
Purchases of Equity Securities In the fourth quarter of 2024, 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 14.33 $ 31.57 — — December 1 through December 31 — $ — — — Total 14.33 — — (1) Represents shares of Holdings’ common stock (in thousands) repurchased by withholding shares in October, November and December of 2024 to satisfy employee tax-withholding obligations upon vesting in restricted stock and performance stock units.
The declaration of future dividends will depend upon many factors, including CUSA’s results of operations, financial condition, earnings, capital requirements, limitations in our debt agreements and legal requirements. 22 Performance Graph We benchmark our financial performance against AMC Entertainment Holdings, Inc.
The declaration of future dividends will depend upon many factors, including CUSA’s results of operations, financial condition, earnings, capital requirements, limitations in our debt agreements and legal requirements.
See Note 18 to the consolidated financial statements. Item 6. [Reserved ] 23
See Note 17 to the consolidated financial statements. Item 6. [Reserved ] 24
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.
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.
Added
See Note 23 to the consolidated financial statements for details of the dividend declared by Holdings’ board of directors on February 18, 2025. CUSA did not pay any cash dividends to Holdings during the years ended December 31, 2022, 2023 and 2024.

Item 7. Management's Discussion & Analysis

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

173 edited+42 added−39 removed44 unchanged
Biggest changeYear 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.
Biggest changeYear Ended December 31, 2022 2023 2024 Operating data (in millions): Revenue Admissions $ 1,246.9 $ 1,555.6 $ 1,522.5 Concession 938.3 1,192.0 1,197.8 Other 269.5 319.1 329.2 Total revenue $ 2,454.7 $ 3,066.7 $ 3,049.5 Cost of operations (1) Film rentals and advertising 704.4 865.7 859.6 Concession supplies 169.3 221.3 225.4 Salaries and wages 372.7 403.1 401.8 Facility lease expense 308.3 329.7 325.3 Utilities and other 407.2 466.8 459.4 General and administrative expenses 177.6 198.8 218.1 Depreciation and amortization 238.2 209.5 197.5 Impairment of long-lived and other assets 174.1 16.6 1.5 Restructuring costs (0.5 ) — — (Gain) loss on disposal of assets and other (6.8 ) (7.7 ) 1.6 Total cost of operations 2,544.5 2,703.8 2,690.2 Operating (loss) income $ (89.8 ) $ 362.9 $ 359.3 Operating data as a percentage of total Revenue: Revenue Admissions 50.8 % 50.7 % 49.9 % Concession 38.2 % 38.9 % 39.3 % Other 11.0 % 10.4 % 10.8 % Total revenue 100.0 % 100.0 % 100.0 % Cost of operations (2) Film rentals and advertising 56.5 % 55.7 % 56.5 % Concession supplies 18.0 % 18.6 % 18.8 % Salaries and wages 15.2 % 13.1 % 13.2 % Facility lease expense 12.6 % 10.8 % 10.7 % Utilities and other 16.6 % 15.2 % 15.1 % General and administrative expenses 7.2 % 6.5 % 7.2 % Depreciation and amortization 9.7 % 6.8 % 6.5 % Impairment of long-lived and other assets 7.1 % 0.5 % 0.0 % Restructuring costs 0.0 % 0.0 % 0.0 % (Gain) loss on disposal of assets and other (0.3 )% (0.3 )% 0.1 % Total cost of operations 103.7 % 88.2 % 88.2 % Operating (loss) income (3.7 )% 11.8 % 11.8 % Average screen count (3) 5,849 5,803 5,698 Revenue per average screen (in dollars) $ 419,675 $ 528,463 $ 535,199 (1) The only difference between components of operating (loss) income for Holdings, as presented above, and those of CUSA is incremental general and administrative expense recognized by Holdings.
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.
On February 13, 2007, NCMI completed an initial public offering (“IPO”) of its common stock. In connection with the NCMI IPO, 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.
The effective tax rate for 2023 was favorably impacted by the use of certain foreign tax credits for which valuation allowances had been established in prior periods as well as the release of valuation allowances previously recorded against the net deferred tax assets in certain foreign jurisdictions.
The effective tax rate for 2023 was favorably impacted by the use of certain foreign tax credits for which valuation allowances had been established in prior periods as well as the release of valuation allowances previously recorded against the net deferred tax assets in certain foreign jurisdictions.
CUSA’s obligations under the Credit Agreement are guaranteed by Holdings and certain subsidiaries of Holdings other than CUSA (the “Other Guarantors”) and are secured by security interests in substantially all of CUSA’s, Holdings’ and the Other Guarantors’ personal property.
CUSA’s obligations under the Credit Agreement are guaranteed by Holdings and certain subsidiaries of Holdings other than CUSA (the “Other Guarantors”) and are secured by security interests in substantially all of Holdings’ and the Other Guarantors’ personal property.
Holders of the 4.50% Convertible Senior Notes may convert their 4.50% Convertible Senior Notes at their option at any time prior to the close of business on the business day immediately preceding May 15, 2025 only under the following circumstances: (1) during the five business day period after any five consecutive trading day period, or the measurement period, in which the trading price per $1,000 principal amount of notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our common stock and the conversion rate on each such trading day; (2) if Holdings distributes to all or substantially all stockholders (i) rights options or warrants entitling them to purchase shares at a discount to the recent average trading price of its common stock (including due to a stockholder rights plan) or (ii) Holdings’ assets or securities or rights, options or warrants to purchase the same with a per share value exceeding 10% of the trading price of Holdings’ common stock, (3) upon the occurrence of specified corporate events as described further in the indenture.
Holders of the 4.50% Convertible Senior Notes may convert their 4.50% Convertible Senior Notes at their option at any time prior to the close of business on the business day immediately preceding May 15, 2025 only under the following circumstances: (1) during the five business day period after any five consecutive trading day period, or the measurement period, in which the trading price per $1,000 principal amount of notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of Holdings’ common stock and the conversion rate on each such trading day; (2) if Holdings distributes to all or substantially all stockholders (i) rights options or warrants entitling them to purchase shares at a discount to the recent average trading price of its common stock (including due to a stockholder rights plan) or (ii) Holdings’ assets or securities or rights, options or warrants to purchase the same with a per share value exceeding 10% of the trading price of Holdings’ common stock; or (3) upon the occurrence of specified corporate events as described further in the indenture.
The most successful motion pictures have historically been released during summer months in the U.S., extending from May to July, and during the holiday season, extending from November through year-end. In our Latin American markets, while Hollywood content has similar release dates as in the U.S., the local holidays and seasons vary.
The most successful motion pictures have historically been released during summer months in the U.S., extending from May to July, and during the holiday season, extending from November through year-end. In our Latin American markets, while Hollywood content has generally similar release dates as in the U.S., local holidays and seasons vary.
Interest on revolving credit loans accrues, at CUSA's option, at either (i) the Term SOFR Rate plus an applicable margin that ranges from 3.00% to 3.50% per annum, or (ii) the Alternate Base Rate, subject, in the case of this clause (ii) to a floor of 1.00% per annum, plus, in the case of this clause (ii), an applicable margin that ranges from 2.00% to 2.50%.
Interest on revolving credit loans accrues, at CUSA's option, at either (i) the Term SOFR Rate plus an applicable margin that ranges from 3.00% to 3.50% per annum, or (ii) the Alternate Base Rate, subject, in the case of this clause (ii) to a floor of 1.00% per annum, plus, in the case of this clause (ii), an applicable margin that ranges from 2.00% to 40 2.50%.
If an event of default occurs, all commitments under the Credit Agreement may be terminated and all obligations under the Credit Agreement could 39 be accelerated by the Lenders, causing all loans outstanding (including accrued interest and fees payable thereunder) to be declared immediately due and payable.
If an event of default occurs, all commitments under the Credit Agreement may be terminated and all obligations under the Credit Agreement could be accelerated by the Lenders, causing all loans outstanding (including accrued interest and fees payable thereunder) to be declared immediately due and payable.
The Warrants could separately have a dilutive effect to the extent that the market value per share of Holdings common stock exceeds the strike price of the warrants on the applicable expiration dates unless, subject to the terms of the Warrants, Holdings elects to cash settle the Warrants.
The Warrants could separately have a dilutive effect to the extent that the market value per share of Holdings’ common stock exceeds the strike price of the Warrants on the applicable expiration dates unless, subject to the terms of the Warrants, Holdings elects to cash settle the Warrants.
We believe our existing cash and expected cash flows from operations will be sufficient to meet our working capital, capital expenditures, and expected cash requirements from known contractual obligations for the next twelve months and beyond.
We believe our existing cash and expected cash flows from operations will be sufficient to meet our working capital, capital expenditures, and known contractual obligations for the next twelve months and beyond.
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 segment, summarizes our year-over-year revenue performance and certain key performance indicators that impact our revenues. U.S.
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.
We accrue interest and penalties on uncertain tax positions. See Note 19 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.
We translate the results of our international operating segment from local currencies into U.S. dollars using currency rates in effect at different points in time in accordance with U.S. GAAP. Significant changes in foreign exchange rates from one period to the next can result in meaningful variations in reported results.
We translate the results of our international reportable segment from local currencies into U.S. dollars using currency rates in effect at different points in time in accordance with U.S. GAAP. Significant changes in foreign exchange rates from one period to the next can result in meaningful variations in reported results.
We translate the results of our international operating segment from local currencies into U.S. dollars using currency rates in effect at different points in time in accordance with U.S. GAAP. Significant changes in foreign currency exchange rates from one period to the next can result in meaningful variations in reported results.
We translate the results of our international reportable segment from local currencies into U.S. dollars using currency rates in effect at different points in time in accordance with U.S. GAAP. Significant changes in foreign currency exchange rates from one period to the next can result in meaningful variations in reported results.
Year ended December 31, 2023 - The North American Industry box office generated approximately $9.1 billion during 2023, which included the carryover of Avatar: The Way of Water and Puss in Boots: The Last Wish, as well as new blockbuster releases including Barbie, The Super Mario Bros.
Year ended December 31, 2023 - The North American Industry box office totaled approximately $9.1 billion during 2023, which included the carryover of Avatar: The Way of Water and Puss in Boots: The Last Wish, as well as new blockbuster releases including Barbie, The Super Mario Bros.
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.
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. Theater properties and equipment are depreciated using the straight-line method over their estimated useful lives.
Facility lease expense is primarily a fixed cost at the theatre level as most of our facility leases require a fixed monthly minimum rent payment. Certain of our leases are subject to monthly percentage rent only, which is accrued each month based on actual revenues.
Facility lease expense is primarily a fixed cost at the theater level as most of our facility leases require a fixed monthly minimum rent payment. Certain of our leases are subject to monthly percentage rent only, which is accrued each month based on actual revenues.
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.
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.
The 4.50% Convertible Notes rank equally in right of payment with all existing and future unsubordinated debt, including all obligations under the Credit Agreement, which such Credit Agreement is guaranteed by Holdings, and senior in right of payment to any future debt that is expressly subordinated in right of payment to the 4.50% Convertible Senior Notes.
The 4.50% Convertible Senior Notes rank equally in right of payment with all of Holdings’ existing and future unsubordinated debt, including all obligations under the Credit Agreement, which is guaranteed by Holdings, and senior in right of payment to any future debt that is expressly subordinated in right of payment to the 4.50% Convertible Senior Notes.
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 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. 44
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.
See discussion of dividend restrictions and the consolidated net senior secured leverage ratio under the Credit Agreement at Senior Secured Credit Facility above. 43 As of December 31, 2024, 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.
CUSA also incurred a total of approximately $10.1 million in debt issuance costs in connection with the amendment, which are reflected in the consolidated financial statements as follows: (i) $7.5 million in debt issuance costs were capitalized and are reflected as a reduction of “Long-term debt, less current portion” on the Company’s consolidated balance sheet; and (ii) $2.1 million of fees paid to lenders and $0.5 million of legal and other fees are included in “Loss on debt extinguishment and refinancing” in the Company’s consolidated statement of income for the year ended December 31, 2023.
CUSA also incurred a total of approximately $10.1 million in debt issuance costs in connection with the amendment, which are reflected in the consolidated financial statements as follows: (i) $7.5 million in debt issuance costs were capitalized and are reflected as a reduction of “Long-term debt, less current portion” on the Company’s consolidated balance sheet; and (ii) $2.1 million of fees paid to lenders and $0.5 million of legal and other fees are included in “Loss on debt amendments and extinguishments” in the Company’s consolidated statement of income for the year ended December 31, 2023.
In estimating the useful lives of our theatre properties and equipment, we have relied upon our experience with such assets and our historical replacement period. We periodically evaluate these estimates and assumptions and adjust them as necessary.
In estimating the useful lives of our theater properties and equipment, we have relied upon our experience with such assets and our historical replacement period. We periodically evaluate these estimates and assumptions and adjust them as necessary.
When estimated fair value is determined to be lower than the carrying value of the asset group (theatre), the asset group (theatre) is written down to its estimated fair value. Significant judgment is involved in estimating cash flows and fair value. Fair value is determined based on a multiple of cash flows.
When estimated fair value is determined to be lower than the carrying value of the asset group (theater), the asset group (theater) is written down to its estimated fair value. Significant judgment is involved in estimating cash flows and fair value. Fair value is determined based on a multiple of cash flows.
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.
Such 36 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.
(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.
(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, 2024. (4) Amounts include both scheduled principal and interest payments on leases commenced prior to December 31, 2024.
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.
The remainder of the theater’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.
GAAP fair value hierarchy as defined by FASB ASC Topic 820-10-35, are based on historical and projected revenue performance and industry trends. The Company’s qualitative assessment considers industry and market conditions and recent developments that may impact the revenue forecasts and other estimates as compared to its most recent quantitative assessment.
GAAP fair value hierarchy as defined by FASB ASC Topic 820-10-35, are based on historical and projected revenue performance and industry trends. Our qualitative assessment considers industry and market conditions and recent developments that may impact the revenue forecasts and other estimates as compared to our most recent quantitative assessment.
If the estimated undiscounted cash flows are not sufficient to recover a long-lived asset’s carrying value, we then compare the carrying value of the asset group (theatre) with its estimated fair value.
If the estimated undiscounted cash flows are not sufficient to recover a long-lived asset’s carrying value, we then compare the carrying value of the asset group (theater) with its estimated fair value.
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 .
We are providing constant currency amounts for our international reportable segment to present a period-to-period comparison of business performance that excludes the impact of foreign currency fluctuations. • U.S .
Upon conversion of the 4.50% Convertible Senior Notes, Holdings will pay or deliver cash, shares of its common stock or a combination of cash and shares of its common stock, at its election. The initial conversion rate is 69.6767 shares of Holdings’ common stock per one thousand dollars principal amount of the 4.50% Convertible Senior Notes.
Upon conversion of the 4.50% Convertible Senior Notes, Holdings will deliver cash, shares of its common stock or a combination of cash and shares of its common stock, at its election. The current conversion rate is 69.6767 shares of Holdings’ common stock per one thousand dollars principal amount of the 4.50% Convertible Senior Notes.
Covenant Compliance The indentures governing the 5.875% Senior Notes, the 5.25% Senior Notes and the 8.75% Secured Notes ("the indentures") contain covenants that limit, among other things, the ability of CUSA and certain of its subsidiaries to (1) make investments or other restricted payments, including paying dividends, making other distributions or repurchasing subordinated debt or equity, (2) incur additional indebtedness and issue preferred stock, (3) enter into transactions with affiliates, (4) enter new lines of business, (5) merge or consolidate with, or sell all or substantially all of its assets to, another person and (6) create liens.
Covenant Compliance The indentures governing the 5.25% Senior Notes and the 7.00% Senior Notes ("the indentures") contain covenants that limit, among other things, the ability of CUSA and certain of its subsidiaries to (1) make investments or other restricted payments, including paying dividends, making other distributions or repurchasing subordinated debt or equity, (2) incur additional indebtedness and issue preferred stock, (3) enter into transactions with affiliates, (4) enter new lines of business, (5) merge or consolidate with, or sell all or substantially all of its assets to, another person and (6) create liens.
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.
The unexpected emergence of a hit film during other periods or the failure of an expected success at a key time could impact this seasonality trend.
NCM operates a digital in-theatre network in the U.S. for providing cinema advertising. NCM comprises approximately the entire balance of NCMI’s assets, liabilities and operating cash flows. The Company entered into an Exhibitor Services Agreement, or ESA, with NCM pursuant to which NCM primarily provides screen advertising to its domestic theatres.
NCM operates a digital in-theater network in the U.S. for providing cinema advertising. NCM comprises approximately the entire balance of NCMI’s assets, liabilities and operating cash flows. The Company entered into an Exhibitor Services Agreement, or ESA, with NCM pursuant to which NCM primarily provides screen advertising to its domestic theaters.
Effective April 11, 2023, we started to account for our investment in NCMI in accordance with the guidance set forth in FASB ASC Topic 321 Investments - Equity Securities, which requires us to measure our 28 investment in common stock of NCMI at fair value and recognize unrealized holding gains and losses on our investment in earnings.
Effective April 11, 2023, we started to account for our investment in NCMI in accordance with the guidance set forth in FASB ASC Topic 321 Investments - Equity Securities, which requires us to measure our investment in common stock of NCMI at fair value and recognize holding gains and losses on the change in the fair market value of our investment in earnings.
Interest on the term loan accrues, at CUSA's option, at either (i) a rate determined by reference to the secured overnight financing rate ("SOFR") as published by CME Group Benchmark Administration Limited and identified by Barclay's Bank PLC (the Administrative Agent) as the forward-looking term rate based on SOFR for a period of 1, 3, or 6 months (depending upon the Interest Period (as defined in the Credit Agreement) chosen by CUSA) (the "Term SOFR Rate"), subject to a floor of 0.50% per annum, plus an applicable margin of 3.75% per annum, or (ii) for any day, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) the Federal Reserve Bank of New York Rate in effect on such day, plus 1/2 of 1.00% and (c) the Term SOFR Rate for a one month Interest Period, as published two U.S.
Subsequent to the 2024 Amendments noted above, interest on the term loan accrues, at CUSA's option, at either (i) a rate determined by reference to the secured overnight financing rate (“SOFR”) as published by CME Group Benchmark Administration Limited and identified by Barclay's Bank PLC (the Administrative Agent) as the forward-looking term rate based on SOFR for a period of 1, 3, or 6 months (depending upon the Interest Period (as defined in the Credit Agreement) chosen by CUSA) (the “Term SOFR Rate”), subject to a floor of 0.50% per annum, plus an applicable margin of 2.75% per annum, or (ii) for any day, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) the Federal Reserve Bank of New York Rate in effect on such day, plus 1/2 of 1.00% and (c) the Term SOFR Rate for a one month Interest Period, as published two U.S.
As a result of the redemption, CUSA recognized a loss on extinguishment of debt totaling $3.4 million, which includes a $2.2 million premium paid on the redemption of bonds and a $1.2 million write-off of unamortized debt issuance costs, and is reflected in “Loss on debt extinguishment and refinancing” in the Company’s consolidated statement of income for the year ended December 31, 2023.
As a result of the May 1, 2023 redemption, CUSA recognized a loss on extinguishment of debt totaling $3.4 million, which includes a $2.2 million premium paid on the redemption of bonds and a $1.2 million write-off of unamortized debt issuance costs, and is reflected in “Loss on debt amendments and extinguishments” in the Company’s consolidated statement of income for the year ended December 31, 2023.
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.
See Note 8 to the consolidated financial statements for further discussion of our investment in NCMI and the related accounting. 30 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.
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.
Certain of our other theaters 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 theaters on a monthly basis if the theater’s historical performance or forecasted performance indicates that the annual target revenue level will be reached.
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.
Utilities and other costs include both fixed and variable costs and primarily consist of utilities, property taxes, property insurance, janitorial costs, credit card fees, third party ticket sales commissions, gift card commissions, repairs and maintenance expenses, security services and projection and sound equipment maintenance expenses.
However, our working capital position will continue to fluctuate based on seasonality, the timing and volume of new film content, the timing of interest payments on our long-term debt as well as timing of payment of other operating expenses that are paid annually or semi-annually, such as property and other taxes and incentive bonuses.
However, our working capital position will fluctuate based on seasonality, the timing and volume of new film content, the timing of interest payments on our long-term debt as well as timing of payment of other operating expenses that are paid annually or semi-annually, such as property and other taxes and incentive compensation.
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.
See Note 21 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 2023.
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.
We assess many factors to determine whether to impair individual theater assets, including the following: • actual theater level cash flows; • budgeted or forecasted theater level cash flows; • theater property and equipment carrying values; • operating lease right-of-use asset carrying values; • the age of a recently built theater; • change in competitive theaters in the marketplace; • the impact of recent theater remodels or other substantial improvements; • available lease renewal options; and 27 • other factors considered relevant in our assessment of impairment of individual theater assets.
The applicable margin with respect to revolving credit loans is a function of the Consolidated Net Senior Secured Leverage Ratio as defined in the Credit Agreement. As of December 31, 2023, the applicable margin was 3.25%, however, there were no borrowings outstanding under the revolving line of credit.
The applicable margin with respect to revolving credit loans is a function of the Consolidated Net Senior Secured Leverage Ratio as defined in the Credit Agreement. As of December 31, 2024, the applicable margin was 3.00%, however, there were no borrowings outstanding under the revolving line of credit.
General and administrative expenses to support the overall management of the Company are primarily fixed in nature with certain variable components. Fixed expenses include salaries, wages and benefits costs for our corporate office personnel, facility expenses for our corporate and other offices, software license and maintenance costs and audit fees.
General and administrative expenses to support the overall management of the Company are primarily fixed in nature. Fixed expenses include salaries, wages and benefits costs for our corporate office personnel, facility expenses for our corporate and other offices, software license and maintenance costs and audit fees.
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 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, 42 including borrowings under CUSA’s Credit Agreement 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, 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.
Long-lived assets are evaluated for impairment on a theatre level, which we believe is the lowest applicable level for which there are identifiable cash flows. The impairment evaluation is based on the estimated undiscounted cash flows from continuing use through the remainder of the theatre’s useful life.
Long-lived assets are evaluated for impairment on a theater level, which we believe is the lowest applicable level for which there are identifiable cash flows. The impairment evaluation is based on the estimated undiscounted cash flows from continuing use through the remainder of the theater’s useful life.
(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.
(5) Includes estimated capital expenditures associated with the construction of new theaters and other capital expenditures to which we were committed as of December 31, 2024, obligations under employment agreements, which are our only contractual human capital costs, and contractual purchase commitments.
Concurrently with entering into the Hedge Transactions, Holdings also entered into separate privately negotiated warrant transactions with Option Counterparties, or the Warrant Transactions, whereby Holdings sold to Option Counterparties warrants to purchase (subject to the net share settlement provisions set forth therein) up to the same number of shares of Holdings common stock, subject to customary anti-dilution adjustments, or the Warrants.
Concurrently with entering into the Hedge Transactions, Holdings also entered into separate privately negotiated warrant transactions with Option Counterparties (the “Warrant Transactions”), whereby Holdings sold to Option Counterparties warrants to purchase (subject to the net share settlement provisions set forth therein) up to the same number of shares of Holdings’ common stock, subject to customary anti-dilution adjustments (the “Warrants”).
(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.
(6) The long-term portions of Holdings’ and CUSA’s liability for uncertain tax positions of $51.5 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, 2024.
Labor market conditions and inflationary pressures have driven increases in wages across our labor base and similar increases may continue in the future. Facility lease expense is primarily a fixed cost at the theatre level as most of our facility leases require a fixed monthly minimum rent payment.
Labor market conditions and inflationary pressures have driven increases in wage rates across our labor base and similar increases may continue in the future. Facility lease expense is primarily a fixed cost at the theater level as most of our facility leases require a fixed monthly minimum rent payment.
Proceeds, after payment of fees, were used to redeem all of CUSA’s 4.875% $755 million aggregate principal amount of Senior Notes due 2023 (the “4.875% Senior Notes”). Interest on the 5.25% Senior Notes is payable on January 15 and July 15 of each year, beginning January 15, 2022. The 5.25% Senior Notes mature on July 15, 2028.
Proceeds, after payment of fees, were used to redeem all of CUSA’s 4.875% $755.0 million aggregate principal amount of Senior Notes due 2023. Interest on the 5.25% Senior Notes is payable on January 15 and July 15 of each year. The 5.25% Senior Notes mature on July 15, 2028.
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.
Discussion regarding our financial condition and results of operations for 2023 compared with 2022 is included in Item 7 of the Company’s 2023 Annual Report on Form 10-K filed on February 16, 2024.
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.
Overview We are a leader in the motion picture exhibition industry, with theaters in the U.S., Brazil, Argentina, Chile, Colombia, Peru, Honduras, El Salvador, Nicaragua, Costa Rica, Panama, Guatemala, Bolivia, and Paraguay. As of December 31, 2024, we managed our business under two reportable segments – U.S. markets and international markets. See Note 21 to the consolidated financial statements.
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.
Significant judgment, including management’s estimate of future theater level cash flows, is involved in estimating the fair value of a reporting unit. Our estimates, which fall under Level 3 of the U.S.
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.
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.
Upon a change of control, as defined in the indentures, CUSA would be required to make an offer to repurchase the 5.875% Senior Notes, the 5.25% Senior Notes and the 8.75% Secured Notes at a price equal to 101% of the aggregate principal amount outstanding plus accrued and unpaid interest, if any, through the date of repurchase.
Upon a change of control, as defined in the indentures, CUSA would be required to make an offer to repurchase the 5.25% Senior Notes and the 7.00% Senior Notes at a price equal to 101% of the aggregate principal amount outstanding plus accrued and unpaid interest, if any, through the date of repurchase.
Interest on the notes is payable on February 15 and August 15 of each year, beginning on February 15, 2021.
Interest on the notes is payable on February 15 and August 15 of each year.
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.
The table below, presented by reportable segment, summarizes certain of our theater operating costs (in millions) for the years ended December 31, 2024 and 2023. U.S.
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.
See a summary of the impairment charges recorded during the years ended December 31, 2022, 2023 and 2024 in Note 11 to the consolidated financial statements.
Government Securities Business Day), plus 1.00% (this clause (ii), the "Alternate Base Rate"), subject in the case of this clause (ii) to a floor of 1.50% per annum, plus, in the case of this clause (ii), an applicable margin of 2.75%.
Government Securities Business Day), plus 1.00% (this clause (ii), the “Alternate Base Rate”), subject in the case of this clause (ii) to a floor of 1.50% per annum, plus, in the case of this clause (ii), an applicable margin of 1.75%.
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.
Amounts do not include approximately $21.6 million of payments under signed lease agreements which have not commenced and the timing of which cannot be reasonably estimated. See Note 3 to the consolidated financial statements for discussion of lease obligations.
We determined that effective April 11, 2023, the date NCM filed its bankruptcy petition, we no longer had significant influence over NCM and therefore ceased accounting for our investment in NCMI under the equity method of accounting in the second quarter of 2023.
Due to NCM’s bankruptcy proceedings, we reassessed our rights and level of influence over NCM. We determined that effective April 11, 2023, the date NCM filed its bankruptcy petition, we no longer had significant influence over NCM and therefore ceased accounting for our investment in NCMI under the equity method of accounting in the second quarter of 2023.
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.
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.
The 8.75% Secured Notes are fully and unconditionally guaranteed on a joint and several senior basis by certain of CUSA’s subsidiaries that guarantee, assume or in any other manner become liable with respect to any of CUSA’s or its guarantors’ other debt.
The 7.00% Senior Notes are fully and unconditionally guaranteed on a joint and several senior unsecured basis by certain of CUSA’s subsidiaries, or its guarantors, that guarantee, assume or in any other manner become liable with respect to any of CUSA’s or its guarantors’ other debt.
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.
The following table sets forth, for the periods indicated, the amounts for general and administrative expense, total cost of operations and operating (loss) income of CUSA: 31 Year Ended December 31, 2022 2023 2024 Operating data (in millions): Cost of operations General and administrative expenses $ 174.6 $ 195.5 $ 214.4 Total cost of operations $ 2,541.5 $ 2,700.5 $ 2,686.5 Operating (loss) income $ (86.8 ) $ 366.2 $ 363.0 (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 average interest rate on outstanding term loan borrowings under the Credit Agreement as of December 31, 2023 was approximately 7.1% per annum, after giving effect to the interest rate swap agreements discussed below.
The average interest rate on outstanding term loan borrowings under the Credit Agreement as of December 31, 2024 was approximately 6.3% per annum, after giving effect to the interest rate swap agreements discussed below.
The conversion rate will be subject to adjustment upon the occurrence of certain events. If a make-whole fundamental change as defined in the indenture occurs prior to the maturity date, Holdings will, in certain circumstances, increase the conversion rate for a holder who elects to convert its 4.50% Convertible Senior Notes in connection with such make-whole fundamental change.
If a make-whole fundamental change as defined in the indenture governing the 4.50% Convertible Senior Notes occurs prior to the maturity date, Holdings will, in certain circumstances, increase the conversion rate for a holder who elects to convert its 4.50% Convertible Senior Notes in connection with such make-whole fundamental change.
Revenue and Expenses We generate revenue primarily from filmed entertainment box office receipts and concession sales, with additional revenue from screen advertising, screen rental and other revenue streams, such as transactional fees, vendor marketing promotions, studio trailer placements, meeting rentals and electronic video games located in some of our theatres.
Revenue and Expenses We generate revenue primarily from filmed entertainment box office receipts and concession sales, with additional revenue from screen advertising, screen rental and other revenue streams, such as transactional fees, studio trailer placements, meeting rentals and video games located in many of our theaters.
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.
As of December 31, 2024, CUSA could have distributed up to approximately $4.0 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.
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.
The indentures allow Cinemark USA, Inc. to incur additional indebtedness if it satisfies the coverage ratio specified in the indentures, 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, 2024 was 5.7 to 1.
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.
Pursuant to a Common Unit Adjustment Agreement dated as of February 13, 2007 between NCMI and the Company, referred to as the Founding Members, the Company receives annual adjustments to the common membership units primarily based on increases or decreases in the number of theater screens operated and the impact of these theaters on total attendance generated by us.
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.
Theaters and screens opened and closed during the year ended December 31, 2024 were as follows: December 31, 2023 Built Closed December 31, 2024 U.S.
(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.
(2) We expect approximately $21.3 million, $1.2 million, and $4.8 million to be paid during 2025, 2026 and 2027, respectively. The timing of payments is subject to change as a result of construction timing or other delays. Actual expenditures for continued theater development and remodels are subject to change based upon the availability of attractive opportunities.
The commitment fee rate is a function of the Consolidated Net Senior Secured Leverage Ratio and was 0.25% at December 31, 2023.
The commitment fee rate is also a function of the Consolidated Net Senior Secured Leverage Ratio and was 0.20% at December 31, 2024.
As of December 31, 2023, the Consolidated Net Total Leverage Ratio was 2.13 to 1.00 and the Available Amount was $599.1 million. In addition, the Credit Agreement contains other baskets that allow certain Restricted Payments in excess of the Applicable Amount.
As of December 31, 2024, the Consolidated Net Total Leverage Ratio was 1.69 to 1.00 and the Available Amount was $925.5 million. In addition, the Credit Agreement contains other baskets that allow certain Restricted Payments in excess of the Applicable Amount.
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.
Excluding the impact of Blue Chip Swap transactions, the loss on foreign currency exchange is primarily related to currency exchange fluctuations from original transaction dates until cash settlement, See Notes 1 and 15 to the consolidated financial statements for discussion of foreign currency translation and Blue Chip Swap transactions. Equity in Income of Affiliates.
The amount, if any, of the dividends to be paid in the future will depend upon available cash balances, anticipated cash needs, overall financial condition, loan agreement restrictions as discussed below, future prospects for earnings and cash flows, as well as other relevant factors.
The amount of the dividends to be paid in the future, if any, will depend upon available cash balances, anticipated cash needs, overall financial condition, loan agreement restrictions as discussed below, and future prospects for earnings and cash flows, as well as other relevant factors. See further discussion in Recent Developments above and Note 23 to the consolidated financial statements.
The term loan is subject to a springing maturity date of April 15, 2028 if CUSA’s 5.25% Senior Notes due 2028 have not been paid or refinanced as required under the Credit Agreement prior to such date.
The term loan and revolving credit facility are subject to a springing maturity date of April 15, 2028 if CUSA’s 5.25% Senior Notes due 2028 have not been paid or refinanced as required under the Credit Agreement prior to such date, as more specifically described in the Credit Agreement.
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.
As of December 31, 2024, there was $638.7 million outstanding under the term loan and no borrowings were outstanding under the $125.0 million revolving line of credit.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

11 edited+3 added−1 removed7 unchanged
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.
Biggest changeHoldings Debt Expected Maturity for the Years Ending December 31, Average (in millions) Interest 2025 2026 2027 2028 2029 Thereafter Total Fair Value Rate Fixed rate (1) $ 460.0 $ — $ — $ 765.0 $ — $ 950.0 $ 2,175.0 $ 2,713.1 5.6 % Variable rate 6.4 6.4 6.4 6.4 6.4 156.7 188.7 190.6 7.1 % Total debt (2) $ 466.4 $ 6.4 $ 6.4 $ 771.4 $ 6.4 $ 1,106.7 $ 2,363.7 $ 2,903.7 5.8 % (1) Fixed rate amounts include the hedged portion of Holdings’ variable debt.
If a country’s economy is classified as highly inflationary, the financial statements of the foreign entity operating in that country must be remeasured to the functional currency of the reporting entity. The financial statements of the Company’s Argentina subsidiaries has been remeasured in U.S. dollars in accordance with ASC Topic 830, Foreign Currency Matters , effective beginning July 1, 2018.
If a country’s economy is classified as highly inflationary, the financial statements of the foreign entity operating in that country must be remeasured to the functional currency of the reporting entity. The financial statements of the Company’s Argentina subsidiaries have been remeasured in U.S. dollars in accordance with ASC Topic 830, Foreign Currency Matters , effective beginning July 1, 2018.
Currency fluctuations in the countries in which we operate result in us reporting exchange gains (losses) or foreign currency translation adjustments.
Currency 45 fluctuations in the countries in which we operate result in us reporting exchange gains (losses) or foreign currency translation adjustments.
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.
The tables below provide information about Holdings’ fixed rate and variable rate long-term debt agreements as of December 31, 2024, which includes fixed rate and variable rate long-term debt of CUSA which is guaranteed by Holdings.
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.
Below is a summary of our interest rate swap agreements as of December 31, 2024: Notional Amount Pay Rate Receive Rate Expiration Date $ 137.5 million 3.21% 1-Month Term SOFR December 31, 2026 $ 175.0 million 3.20% 1-Month Term SOFR December 31, 2026 $ 137.5 million 3.17% 1-Month Term SOFR December 31, 2027 $ 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.
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.
Based on the interest rates in effect on the variable rate debt outstanding at December 31, 2024, a 100 basis point increase in market interest rates would increase our annual interest expense by approximately $1.9 million.
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 upon our equity ownership in our international subsidiaries as of December 31, 2024, holding everything else constant, a 10% immediate, simultaneous, unfavorable change in all of the foreign currency exchange rates to which we are exposed, would decrease the aggregate net book value of our investments in our international subsidiaries by approximately $63.4 million and would decrease the aggregate net income of our international subsidiaries for the year ended December 31, 2024 by $11.9 million.
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.
At December 31, 2024, we had an aggregate of $188.7 million of variable rate debt outstanding, after giving effect to the interest rate swap agreements discussed below.
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 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. See Note 13 to the consolidated financial statements for further discussion of the interest rate swap agreements.
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.
During the years ended December 31, 2023 and December 31, 2024, the Company entered into Blue Chip Swap transactions that resulted in a loss of approximately $12.4 million and $0.9 million, respectively.
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.
CUSA Debt Expected Maturity for the Years Ending December 31, Average (in millions) Interest 2025 2026 2027 2028 2029 Thereafter Total Fair Value Rate Fixed rate (1) $ — $ — $ — $ 765.0 $ — $ 950.0 $ 1,715.0 $ 1,711.5 5.9 % Variable rate 6.4 6.4 6.4 6.4 6.4 156.7 188.7 190.6 7.1 % Total debt (2) $ 6.4 $ 6.4 $ 6.4 $ 771.4 $ 6.4 $ 1,106.7 $ 1,903.7 $ 1,902.1 6.1 % (1) Fixed rate amounts include the hedged portion of CUSA’s variable debt.
Removed
See Note 14 to the consolidated financial statements for further discussion of the interest rate swap agreements.
Added
See “ Interest Rate Swap Agreements” below. (2) Amounts are presented before adjusting for debt issuance costs and debt discounts.
Added
See “ Interest Rate Swap Agreements” below. (2) Amounts are presented before adjusting for debt issuance costs and debt discounts. Interest Rate Swap Agreements All of our interest rate swap agreements qualify for cash flow hedge accounting.
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.

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