
~~Texas~~Commission File Number	Exact Name of Registrant as Specified in its Charter, Principal Executive Office Address and Telephone Number	~~75-2206284~~State of Incorporation	I.R.S. Employer Identification No.
~~(State or other jurisdiction~~ ~~of incorporation or organization)~~001-33401	Cinemark Holdings, Inc. 3900 Dallas Parkway Plano, Texas75093 (972) 665-1000	~~(I.R.S. Employer~~ ~~Identification No.)~~Delaware	20-5490327
33-47040	Cinemark USA, Inc. 3900 Dallas Parkway Plano, Texas75093 (972) 665-1000	Texas	75-2206284

Securities registered pursuant to Section 12(b) of the Act:


	Title of Each Class	Trading Symbol(s)	Name of each exchange on which registered
~~3900 Dallas Parkway~~Cinemark Holdings, Inc. ("Holdings")	Common stock, par value $.001 per share	CNK	New York Stock Exchange
~~Suite 500~~Cinemark USA, Inc. ("CUSA")	None
~~Plano, Texas~~None		~~75093~~
~~(Address of principal executive offices)~~		~~(Zip Code)~~None


Large accelerated filer	☐☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
~~Non-accelerated filer~~	☒ ~~(Do not check if a smaller reporting company)~~	~~Smaller reporting company~~	☐

Emerging growth company	☐

•

future revenues, expenses and ~~profitability,~~ profitability;

•

currency exchange rate and inflationary impacts;

•

the future development and expected growth of our ~~business,~~ business;

•

projected capital ~~expenditures,~~ expenditures;

•

access to capital resources;

•

attendance at movies generally or in any of the markets in which we ~~operate,~~ operate;

•

the number or diversity of popular movies ~~released~~releases, the length of exclusive theatrical release windows and our ability to successfully license and exhibit popular ~~films,~~ films;

•

national and international growth in our ~~industry,~~ industry;

•

competition from other exhibitors, ~~and~~ alternative forms of entertainment and content delivery via streaming and other formats;

•

determinations in lawsuits in which we are ~~defendants.~~ a party; and

•

the impact of the COVID-19 pandemic on us and the motion picture exhibition industry.

September 30,

December 31,

2017

2016

Assets

Current assets

Cash and cash equivalents

$
469,309

$
561,138

Inventories

16,844

16,961

Accounts receivable

82,647

74,993

Current income tax receivable

4,381

7,367

Prepaid expenses and other

17,010

15,754

Accounts receivable from parent

14,192

10,080

Total current assets

604,383

686,293

Theatre properties and equipment

3,268,653

3,059,754

Less: accumulated depreciation and amortization

1,477,047

1,355,218

Theatre properties and equipment, net

1,791,606

1,704,536

Other assets

Goodwill

1,294,342

1,262,963

Intangible assets - net

335,657

334,899

Investment in NCM

204,347

189,995

Investments in and advances to affiliates

112,878

98,317

Long-term deferred tax asset

2,098

2,051

Deferred charges and other assets - net

40,391

37,555

Total other assets

1,989,713

1,925,780

Total assets

$
4,385,702

$
4,316,609

Liabilities and equity

Current liabilities

Current portion of long-term debt

$
7,099

$
5,671

Current portion of capital lease obligations

24,836

21,139

Current income tax payable

7,893

5,071

Current liability for uncertain tax positions

11,714

10,085

Accounts payable and accrued expenses

340,405

400,836

Total current liabilities

391,947

442,802

Long-term liabilities

Long-term debt, less current portion

1,781,952

1,782,441

Capital lease obligations, less current portion

252,047

234,281

Long-term deferred tax liability

144,740

135,014

Long-term liability for uncertain tax positions

7,801

8,105

Deferred lease expenses

41,291

42,378

Deferred revenue - NCM

354,419

343,928

Other long-term liabilities

44,273

43,580

Total long-term liabilities

2,626,523

2,589,727

Commitments and contingencies (see Note 15)

Equity

Cinemark USA, Inc.'s stockholder's equity:

Class A common stock, $0.01 par value: 10,000,000 shares authorized,

1,500 shares issued and outstanding

—

—

Class B common stock, no par value: 1,000,000 shares authorized,

239,893 shares issued and 182,648 shares outstanding

49,543

49,543

Treasury stock, 57,245 Class B shares at cost

(24,233
)

(24,233
)
Additional paid-in-capital

1,261,545

1,252,715

Retained earnings

311,279

241,926

Accumulated other comprehensive loss

(242,894
)

(247,013
)
Total Cinemark USA, Inc.'s stockholder's equity

1,355,240

1,272,938

Noncontrolling interests

11,992

11,142

Total equity

1,367,232

1,284,080

Total liabilities and equity

$
4,385,702

$
4,316,609

Three Months Ended September 30,

Nine Months Ended September 30,

2017

2016

2017

2016

Revenues

Admissions

$
425,128

$
472,842

$
1,351,477

$
1,364,737

Concession

247,027

261,391

777,573

752,798

Other

38,593

34,341

112,503

100,312

Total revenues

710,748

768,574

2,241,553

2,217,847

Cost of operations

Film rentals and advertising

226,229

249,766

725,603

733,101

Concession supplies

40,178

41,888

124,117

116,999

Salaries and wages

87,305

84,460

261,318

243,833

Facility lease expense

81,919

82,848

248,569

241,904

Utilities and other

92,341

94,999

271,751

265,506

General and administrative expenses

36,512

34,660

111,179

106,986

Depreciation and amortization

58,052

54,187

174,545

155,874

Impairment of long-lived assets

5,026

406

9,600

2,323

Loss on sale of assets and other

8,576

6,940

9,464

10,985

Total cost of operations

636,138

650,154

1,936,146

1,877,511

Operating income

74,610

118,420

305,407

340,336

Other income (expense)

Interest expense

(26,317
)

(26,659
)

(79,208
)

(81,980
)
Loss on debt amendments and refinancing

—

—

(246
)

(13,284
)
Interest income

1,678

1,665

4,391

5,030

Foreign currency exchange gain

584

485

2,018

2,883

Distributions from NCM

2,144

1,381

11,704

10,117

Equity in income of affiliates

10,902

12,390

26,767

24,597

Total other expense

(11,009
)

(10,738
)

(34,574
)

(52,637
)
Income before income taxes

63,601

107,682

270,833

287,699

Income taxes

24,797

41,165

99,167

106,821

Net income

$
38,804

$
66,517

$
171,666

$
180,878

Less: Net income attributable to noncontrolling interests

401

471

1,438

1,454

Net income attributable to Cinemark USA, Inc.

$
38,403

$
66,046

$
170,228

$
179,424

Three Months Ended September 30,

Nine Months Ended September 30,

2017

2016

2017

2016

Net income

$
38,804

$
66,517

$
171,666

$
180,878

Other comprehensive income (loss), net of tax

Unrealized gain due to fair value adjustments on interest rate
   swap agreements, net of settlements, net of taxes of $0, $0,
   $0 and $138

—

—

—

234

Other comprehensive income (loss) in equity method
   investments

(11
)

(7
)

92

(183
)
Foreign currency translation adjustments

9,085

(3,669
)

5,578

34,998

Total other comprehensive income (loss), net of tax

9,074

(3,676
)

5,670

35,049

Total comprehensive income, net of tax

47,878

62,841

177,336

215,927

Comprehensive income attributable to noncontrolling interests

(401
)

(475
)

(1,438
)

(1,478
)
Comprehensive income attributable to Cinemark USA, Inc.

$
47,477

$
62,366

$
175,898

$
214,449

Nine Months Ended September 30,

2017

2016

Operating activities

Net income

$
171,666

$
180,878

Adjustments to reconcile net income to cash provided by operating activities:

Depreciation

173,378

154,308

Amortization of intangible and other assets and favorable/unfavorable leases

1,167

1,566

Amortization of long-term prepaid rents

1,540

1,357

Amortization of debt issue costs

4,619

4,068

Amortization of deferred revenues, deferred lease incentives and other

(12,037
)

(13,017
)
Impairment of long-lived assets

9,600

2,323

Share based awards compensation expense

8,862

9,458

Loss on sale of assets and other

9,464

10,985

Write-off of unamortized debt issue costs associated with early retirement of debt

—

2,369

Deferred lease expenses

(1,019
)

(809
)
Equity in income of affiliates

(26,767
)

(24,597
)
Deferred income tax expenses

9,541

16,382

Distributions from equity investees

17,321

9,660

Changes in assets and liabilities and other

(56,399
)

(77,181
)
Net cash provided by operating activities

310,936

277,750

Investing activities

Additions to theatre properties and equipment and other

(262,730
)

(230,346
)
Acquisitions of theatres in the U.S. and international markets

(41,000
)

(15,300
)
Proceeds from sale of theatre properties and equipment and other

14,816

3,398

Proceeds from sale of marketable securities

—

13,451

Investment in joint ventures and other

(1,178
)

(1,703
)
Net cash used for investing activities

(290,092
)

(230,500
)
Financing activities

Dividends paid to parent

(100,875
)

(93,650
)
Payroll taxes paid as a result of restricted stock withholdings

(2,943
)

(6,828
)
Proceeds from issuance of Senior Notes, net of discount

—

222,750

Retirement of Senior Subordinated Notes

—

(200,000
)
Repayments of long-term debt

(2,855
)

(15,217
)
Payment of debt issue costs

(817
)

(4,504
)
Payments on capital leases

(15,814
)

(14,655
)
Proceeds from financing lease

10,200

—

Other

(620
)

1,282

Net cash used for financing activities

(113,724
)

(110,822
)
Effect of exchange rate changes on cash and cash equivalents

1,051

2,081

Decrease in cash and cash equivalents

(91,829
)

(61,491
)
Cash and cash equivalents:

Beginning of period

561,138

588,503

End of period

$
469,309

$
527,012

1.	~~The Company and Basis of Presentation~~

The Company and Basis of Presentation

Cinemark Holdings, Inc. is a holding company and its wholly-owned subsidiary is Cinemark USA, Inc. Holdings consolidates CUSA for financial statement purposes. CUSA comprises a majority of the balance of Holdings’ assets, liabilities and ~~subsidiaries (the “Company”), a wholly-owned subsidiary~~operating cash flows. In addition, CUSA’s revenue comprises 100% and its operating expenses comprise nearly 100% of Holdings’ revenue and operating expenses, respectively. These Notes to Condensed Consolidated Financial Statements include disclosures for Holdings and CUSA and their respective consolidated subsidiaries. Where it is important to distinguish between the entities, this report either refers specifically to Holdings or CUSA. Otherwise, all references to “we,” “our,” “us,” “the Company” or "Cinemark" relate to Cinemark Holdings, Inc.~~, operates~~ and its consolidated subsidiaries and all references to CUSA relate to CUSA and its consolidated subsidiaries.

The Company and its subsidiaries operate in the motion picture exhibition industry, with theatres in the United States (“U.S.”), Brazil, Argentina, Chile, Colombia, Peru, Ecuador, Honduras, El Salvador, Nicaragua, Costa Rica, Panama, Guatemala, Bolivia, Curacao and Paraguay.

The accompanying condensed consolidated balance ~~sheet~~sheets of Holdings and CUSA as of December 31, ~~2016,~~2021, each of which ~~was~~were derived from audited financial statements, and the unaudited condensed consolidated financial statements ~~have~~of Holdings and CUSA, respectively, has been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete consolidated financial statements. In the opinion of management, all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation have been included. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and the accompanying notes. Actual results could differ from these estimates. Majority-owned subsidiaries ~~that~~over which the Company has control of are consolidated while those ~~affiliates~~investments in entities of which ~~the Company~~Holdings or CUSA, as applicable, owns between ~~20%~~20% and ~~50%~~50% and does not control are accounted for under the equity method. ~~Those~~ ~~affiliates~~Investments in entities of which ~~the Company~~Holdings or CUSA, as applicable, owns less than ~~20%~~20% are generally accounted for under the cost method, unless ~~the Company~~Holdings or CUSA, as applicable, is deemed to have the ability to exercise significant influence over the ~~affiliate,~~entities, in which case ~~the Company~~Holdings or CUSA, as applicable, would account for its investment under the equity method. TheThe results of these subsidiaries and ~~affiliates~~entities are included in the condensed consolidated financial statements effective with their formation or from their dates of acquisition. Intercompany balances and transactions are eliminated in consolidation.

These condensed consolidated financial statements should be read in conjunction with the audited annual consolidated financial statements and the notes thereto for the year ended December 31, ~~2016,~~2021, included in the Annual Report on Form 10-K filed February 25, 2022 by Holdings and the Annual Report on Form 10-K filed March ~~3, 2017~~9, 2022 by ~~the Company~~CUSA, as applicable, each under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Operating results for the three and nine months ended September 30, ~~2017~~2022 are not necessarily indicative of the results to be achieved for the full year.

2.	~~New Accounting Pronouncements~~

~~In May 2014,~~Amounts included in the ~~Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2014-09,~~ ~~Revenue from Contracts~~condensed consolidated financial statements of this Quarterly Report on Form 10-Q are rounded in millions with ~~Customers (Topic 606), (“ASU 2014-09”).~~the exception of per share data. The ~~purpose~~amounts reported in the consolidated financial statements, and the notes thereto, of ~~ASU 2014-09 is to clarify~~ the principles for recognizing revenue and create a common revenue standard for U.S. GAAP and International Financial Reporting Standards. ASU 2014-09 affects any entity that either enters into contracts with customers to transfer goods or services or enters into contractsAnnual Report on Form 10-K for the ~~transfer of nonfinancial assets unless those contracts~~year ended December 31, 2021 filed by Holdings on February 25, 2022 and by CUSA on March 9, 2022 are ~~within the scope of other standards (for example, insurance contracts or lease contracts). The following subsequent Accounting Standards Updates either clarified or revised guidance set forth~~rounded in ~~ASU 2014-09:~~thousands.

~~In August 2015, the FASB issued Accounting Standards Update 2015-14,~~ ~~Revenue from Contracts with Customers (Topic 606): Deferral~~2.

Impact of the ~~Effective Date, (“ASU 2015-14”). ASU 2015-14 deferred~~COVID-19 Pandemic

The COVID-19 pandemic has had an unprecedented impact on the ~~effective date~~world and the movie exhibition industry with widespread social and economic effects. The Company temporarily closed its theatres in the U.S. and Latin America during March of ~~ASU 2014-09.~~2020 at the onset of the COVID-19 outbreak. During that time, the Company implemented various cash preservation strategies, including, but not limited to, temporary personnel and salary reductions, halting non-essential operating and capital expenditures, negotiating modified timing and/or abatement of contractual payments with landlords and other major suppliers, and suspending quarterly dividends paid by Holdings to its shareholders.

Throughout 2020 and 2021 the Company reopened theatres as local restrictions and the status of the COVID-19 pandemic would allow. All of the Company's domestic and international theatres were reopened by the end of the fourth quarter of 2021. The ~~guidance in ASU 2014-09~~industry’s recovery from the COVID-19 pandemic is ~~now effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period.~~

~~In March 2016,~~still underway and is contingent upon the ~~FASB issued Accounting Standards Update 2016-08,~~ ~~Revenue~~volume of new film content available, as well as the box office performance of new film content released, consumer sentiment around movie-going and government restrictions. The industry is also adjusting to the evolution of the exclusive theatrical window, competition from ~~Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenues Gross versus Net), (“ASU 2016-08”). The purpose of ASU 2016-08 is to clarify the implementation of revenue recognition guidance for principal versus agent considerations.~~

~~In April 2016, the FASB issued Accounting Standards Update 2016-10,~~ ~~Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations~~streaming platforms, supply chain constraints, inflationary impacts and ~~Licensing, (“ASU 2016-10”). The purpose of ASU 2016-10 is to clarify certain aspects of identifying performance obligations and licensing implementation guidance.~~other economic factors.

~~In May 2016, the FASB issued Accounting Standards Update 2016-12,~~ ~~Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients~~, (“ASU 2016-12”). The purpose of ASU 2016-12 is to address certain narrow aspects of Accounting Standards Codification (“ASC”) Topic 606 including assessing collectability, presentation of sales taxes, noncash considerations, contract modifications and completed contracts at transition.Restructuring Charges

•

~~In December 2016, the FASB issued Accounting Standards Update 2016-20,~~ ~~Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers~~, (“ASU 2016-20”). The purpose of ASU 2016-20 is to amend certain narrow aspects of the guidance issued in ASU 2014-09 related to the disclosure of performance obligations, as well as other amendments related to loan guarantee fees, contract costs, refund liabilities, advertising costs and the clarification of certain examples.

3.	~~Long Term Debt Activity~~

New Accounting Pronouncements

Accounting Standards Update (“ASU”) 2020-04, Reference Rate Reform (Topic 848): Facilitation of the ~~Company incurred approximately $246~~Effects of Reference Rate Reform on Financial Reporting, (“ASU 2020-04”) and ASU 2021-01, Reference Rate Reform (Topic 848): Scope, (“ASU 2021-01”). The purpose of ASU 2020-04 is to provide optional guidance for a limited period of time to ease the potential burden in ~~legal fees~~accounting for (or recognizing the effects of) reference rate reform on financial reporting. More specifically, the amendments in ASU 2020-04 provide optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in ASU 2021-01 clarify that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are ~~reflected~~affected by the discounting transition. The amendments in ASU 2020-04 and ASU 2021-01 are effective as ~~loss on debt amendments~~of March 12, 2020 through December 31, 2022. The Company does not expect ASU 2020-04 and ~~refinancing~~ASU 2021-01 to have a material impact on the condensed consolidated financial statements of ~~income~~Holdings or CUSA.

ASU 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance, (“ASU 2021-10”). The purpose of ASU 2021-10 is to provide annual disclosure guidance about transactions with a government for which the entity is applying a grant or contribution accounting model by analogy. More specifically, the amendments in ASU 2021-10 require disclosure of a) the nature of the transactions and the related accounting policy used to account for the transactions, b) the line items on the balance sheet and statement of loss, including the amounts applicable to each line item, that are affected by the transactions and c) significant terms and conditions of the transactions, including commitments and contingencies. The amendments in ASU 2021-10 are effective for annual periods beginning after December 15, 2021. The amendments in ASU 2021-10 should be applied either a) prospectively to all transactions at the date of initial application and new transactions that are entered into after the date of initial application or b) retrospectively to those transactions. Holdings and CUSA will provide the disclosures required by ASU 2021-10 in the Form 10-K for the year ended December 31, 2022.

Lease Accounting

Lease Deferrals and Abatements

Upon the temporary closure of theatres in March 2020, the Company began negotiating the deferral of rent and other lease-related payments with its landlords while theatres remained closed. These negotiations resulted in amendments to the leases that involved varying concessions, including the abatement of rent payments during closure, deferral of all or a portion of rent payments to later periods, temporary percentage rent terms and deferrals of rent payments combined with an early exercise of an existing renewal option or extension of the lease term. Total remaining deferred payments as of September 30, 2022 and December 31, 2021 were $5.3 and $31.9, respectively, and are included in accounts payable and accrued expenses in the condensed consolidated balance sheets.

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES AND

CINEMARK USA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except per share data, unaudited)

The following table represents the Company’s aggregate lease costs, by lease classification, for the periods presented.


		Three Months Ended				Nine Months Ended
		September 30,				September 30,
Lease Cost	Classification	2022		2021		2022		2021
Operating lease costs
Equipment (1)	Utilities and other	$	1.0	$	0.7	$	2.6	$	1.6
Real Estate (2)(3)	Facility lease expense		79.5		69.5		236.4		200.9
Total operating lease costs		$	80.5	$	70.2	$	239.0	$	202.5

Finance lease costs
Amortization of leased assets	Depreciation and amortization	$	3.1	$	3.1	$	9.4	$	9.5
Interest on lease liabilities	Interest expense		1.4		1.4		4.1		4.5
Total finance lease costs		$	4.5	$	4.5	$	13.5	$	14.0

(1)

Includes approximately $0.8 and $0.6 of short-term lease payments for the three months ended September 30, 2022 and 2021, respectively. Includes approximately $2.2 and $1.2 of short-term lease payments for the nine months ended September 30, ~~2017.~~2022 and 2021, respectively.

(2)

Includes approximately $9.4 and $1.9 of variable lease payments based on a change in index, such as CPI or inflation, variable payments based on revenue or attendance and variable common area maintenance costs for the three months ended September 30, 2022 and 2021, respectively. Includes approximately $27.5 and $(0.1) of variable lease payments based on a change in index, such as CPI or inflation, variable payments based on revenue or attendance and variable common area maintenance costs for the nine months ended September 30, 2022 and 2021, respectively.

(3)

Approximately $0.3 and $0.3 of lease payments are included in general and administrative expense primarily related to office leases for the three months ended September 30, 2022 and 2021, respectively. Approximately $1.0 and $1.0 of lease payments are included in general and administrative expense primarily related to office leases for the nine months ended September 30, 2022 and 2021, respectively.

The following table represents the minimum cash lease payments included in the measurement of lease liabilities and the non-cash addition of lease right-of-use assets for the periods presented.


	Nine Months Ended
	September 30,
Other Information	2022		2021
Cash paid for amounts included in the measurement of lease liabilities
Cash outflows for operating leases	$	209.3	$	201.4
Cash outflows for finance leases - operating activities	$	4.1	$	4.5
Cash outflows for finance leases - financing activities	$	10.8	$	11.0
Non-cash amount of right-of-use assets obtained in exchange for:
Operating lease liability additions, net of write-offs	$	78.5	$	109.1

As of September 30, 2022, the Company had signed lease agreements with total noncancelable lease payments of approximately $69.3 related to theatre leases that had not yet commenced. The timing of lease commencement is dependent on the completion of construction of the related theatre facility. Additionally, these amounts are based on estimated square footage and costs to construct each facility and may be subject to adjustment upon final completion of each construction project. In accordance with ASC Topic 842, fixed minimum lease payments related to these theatres are not included in the right-of-use assets and lease liabilities as of September 30, 2022.

Revenue Recognition

The Company’s patrons have the option to purchase movie tickets well in advance of a movie showtime or right before the movie showtime, or at any point in between those two timeframes depending on seat availability. The Company recognizes such admissions revenue when the showtime for a purchased movie ticket has passed. Concession revenue is recognized when products are sold to the consumer. Other revenue primarily consists of screen advertising and screen rental revenue, promotional income, studio trailer placements and transactional fees. Except for National CineMedia, LLC. ("NCM") screen advertising advances discussed below in Note 8, these revenues are generally recognized when the Company has performed the related services. The Company sells gift cards and discount ticket vouchers, the proceeds from which are recorded as deferred revenue. Deferred revenue for gift cards and discount ticket vouchers is recognized when they are redeemed for concession items or, if redeemed for movie tickets, when the showtime has passed. The Company generally records breakage revenue on gift cards and discount ticket vouchers based on redemption activity and historical experience with unused balances. The Company offers a subscription program in the U.S. whereby patrons can pay a monthly or annual fee to receive a monthly credit for use towards a future movie ticket purchase. The Company records the subscription program fees as

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES AND

CINEMARK USA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except per share data, unaudited)

deferred revenue and records admissions revenue when the showtime for a movie ticket purchased with a credit has passed. The Company has loyalty programs in the U.S. and many of its international locations that either have a prepaid annual fee or award points to customers as purchases are made. For those loyalty programs that have a prepaid annual fee, the Company recognizes the fee collected as other revenue on a straight-line basis. For those loyalty programs that award points to customers based on their purchases, the Company records a portion of the original transaction proceeds as deferred revenue based on the number of reward points issued to customers and recognizes the deferred revenue when the customer redeems such points. The value of loyalty points issued is based on the estimated fair value of the rewards offered. The Company records breakage revenue on its loyalty and subscription programs generally upon the expiration of loyalty points or subscription credits. Advances collected on other contracts are deferred and recognized during the period in which the Company satisfies the related performance obligations, which may differ from the period in which the advances are collected.

Accounts receivable as of September 30, 2022 and December 31, 2021 included approximately $19.4 and $23.5, respectively, of receivables related to contracts with customers. The Company did not record any assets related to the costs to obtain or fulfill a contract with customers during the nine months ended September 30, 2022.

Disaggregation of Revenue

The following tables present revenue disaggregated based on major type of good or service and by reportable operating segment.


	Three Months Ended						Nine Months Ended
	September 30, 2022						September 30, 2022
	U.S.		International				U.S.		International
	Operating		Operating				Operating		Operating
	Segment (1)		Segment		Consolidated		Segment (1)		Segment		Consolidated
Admissions revenue	$	257.6	$	67.0	$	324.6	$	759.1	$	183.2	$	942.3
Concession revenue		200.8		52.8		253.6		576.5		136.1		712.6
Screen advertising, screen rental and promotional revenue (2)		20.6		11.3		31.9		60.7		30.7		91.4
Other revenue		32.7		7.6		40.3		88.2		20.5		108.7
Total revenue	$	511.7	$	138.7	$	650.4	$	1,484.5	$	370.5	$	1,855.0


	Three Months Ended						Nine Months Ended
	September 30, 2021						September 30, 2021
	U.S.		International				U.S.		International
	Operating		Operating				Operating		Operating
	Segment (1)		Segment		Consolidated		Segment (1)		Segment		Consolidated
Admissions revenue	$	195.3	$	30.2	$	225.5	$	384.4	$	50.7	$	435.1
Concession revenue		142.6		21.6		164.2		275.0		38.5		313.5
Screen advertising, screen rental and promotional revenue (2)		18.0		4.8		22.8		44.5		7.6		52.1
Other revenue		19.5		2.8		22.3		37.9		5.2		43.1
Total revenue	$	375.4	$	59.4	$	434.8	$	741.8	$	102.0	$	843.8

(1)

U.S. segment revenue excludes intercompany transactions with the international operating segment. See Note 16 for the amount of intercompany eliminations for the periods presented.

(2)

Amount includes amortization of NCM screen advertising advances. See NCM Screen Advertising Advances and Other Deferred Revenue below.

The following tables present revenue disaggregated based on timing of recognition and by reportable operating segment.


	Three Months Ended						Nine Months Ended
	September 30, 2022						September 30, 2022
	U.S.		International				U.S.		International
	Operating		Operating				Operating		Operating
	Segment (1)		Segment		Consolidated		Segment (1)		Segment		Consolidated
Goods and services transferred at a point in time	$	478.9	$	123.8	$	602.7	$	1,401.0	$	332.2	$	1,733.2
Goods and services transferred over time (2)		32.8		14.9		47.7		83.5		38.3		121.8
Total	$	511.7	$	138.7	$	650.4	$	1,484.5	$	370.5	$	1,855.0

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES AND

CINEMARK USA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except per share data, unaudited)


	Three Months Ended						Nine Months Ended
	September 30, 2021						September 30, 2021
	U.S.		International				U.S.		International
	Operating		Operating				Operating		Operating
	Segment (1)		Segment		Consolidated		Segment (1)		Segment		Consolidated
Goods and services transferred at a point in time	$	348.4	$	53.3	$	401.7	$	678.4	$	91.5	$	769.9
Goods and services transferred over time (2)		27.0		6.1		33.1		63.4		10.5		73.9
Total	$	375.4	$	59.4	$	434.8	$	741.8	$	102.0	$	843.8

(1)

U.S. segment revenue excludes intercompany transactions with the international operating segment. See Note 16 for the amount of intercompany eliminations for the periods presented.

(2)

Amount includes amortization of NCM screen advertising advances. See NCM Screen Advertising Advances and Other Deferred Revenue below.

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES AND

CINEMARK USA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except per share data, unaudited)

NCM Screen Advertising Advances and Other Deferred Revenue

The following table presents changes in the Company’s NCM screen advertising advances and other deferred revenue for the nine months ended September 30, 2022.


	NCM screen advertising advances (1)			Other Deferred Revenues (2)
Balance at January 1, 2022	$	346.0		$	160.3
Amounts recognized as accounts receivable		—			1.0
Cash received from customers in advance		—			163.5
Common units received from NCM		1.3			—
Interest accrued related to significant financing component		17.5			—
Revenue recognized during period		(24.3	)		(150.9	)
Foreign currency translation adjustments		—			(1.0	)
Balance at September 30, 2022	$	340.5		$	172.9

(1)

See Note 8 for the maturity of NCM screen advertising advances as of September 30, 2022.

(2)

Includes liabilities associated with outstanding gift cards and discount ticket vouchers, points or rebates outstanding under the Company’s loyalty and membership programs and revenue collected but not yet earned for screen advertising, screen rental and other promotional activities. Amounts are classified as accounts payable and accrued expenses or other long-term liabilities on the condensed consolidated balance sheet.

The table below summarizes the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied as of September 30, 2022 and when the Company expects to recognize this revenue.


	Twelve Months Ended September 30,
Remaining Performance Obligations	2023		2024		Thereafter		Total
Other deferred revenue	$	153.3	$	19.6	$	—	$	172.9

Earnings Per Share

The following table presents computations of basic and diluted loss per share for Holdings:


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2022			2021			2022			2021
Numerator:
Net loss attributable to Cinemark Holdings, Inc.	$	(24.5	)	$	(77.8	)	$	(171.9	)	$	(428.5	)
Loss allocated to participating share-based awards (1)		0.4			1.5			2.4			7.6
Net loss attributable to common stockholders	$	(24.1	)	$	(76.3	)	$	(169.5	)	$	(420.9	)

Denominator:
Basic weighted average shares outstanding		118.4			117.3			118.1			117.2
Common equivalent shares for restricted stock units (2)		—			—			—			—
Common equivalent shares for convertible notes and warrants (3)		—			—			—			—
Diluted weighted average shares outstanding		118.4			117.3			118.1			117.2

Basic loss per share attributable to common stockholders	$	(0.20	)	$	(0.65	)	$	(1.43	)	$	(3.59	)
Diluted loss per share attributable to common stockholders	$	(0.20	)	$	(0.65	)	$	(1.43	)	$	(3.59	)

(1)

For the three months ended September 30, 2022 and 2021, a weighted average of approximately 1.90 shares and 2.34 shares of restricted stock, respectively, were considered participating securities. For the nine months ended September 30, 2022 and 2021, a weighted average of approximately 1.69 shares and 2.11 shares of restricted stock, respectively, were considered participating securities.

(2)

For the three months ended September 30, 2022 and 2021, approximately 0.18 and 0.10 common equivalent shares for restricted stock units, respectively, were excluded because they were anti-dilutive. For the nine months ended September 30, 2022 and 2021, approximately 0.39 and 0.10 common equivalent shares for restricted stock units, respectively, were excluded because they were anti-dilutive.

(3)

For the three and nine months ended September 30, 2022 and 2021, diluted loss per share excludes the conversion of the 4.50% Convertible Senior Notes into 32.0 shares of common stock, as well as outstanding warrants, as they would be anti-dilutive. See further discussion below.

Share-based awards

Holdings considers its unvested share-based payment awards, which contain non-forfeitable rights to dividends, participating securities, and includes such participating securities in its computation of loss per share pursuant to the two-class method. Basic loss per share for the two classes of stock (common stock and unvested restricted stock) is calculated by dividing net loss by the weighted average number of shares of common stock and unvested restricted stock outstanding during the reporting period. Diluted loss per share is calculated using the weighted average number of shares of common stock plus the potentially dilutive effect of common equivalent shares outstanding determined under both the two-class method and the treasury stock method.

Convertible notes, hedges and warrants

The 4.50% Convertible Senior Notes, discussed further in Note 13 of Holdings' Annual Report on Form 10-K filed February 26, 2021, may be considered dilutive in future periods in which Holdings has net income. The impact of such dilution on earnings per share will be calculated under the if-converted method, which requires that all of the shares of Holdings' common stock issuable upon conversion of the 4.50% Convertible Senior Notes be included in the calculation of diluted EPS assuming conversion at the beginning of the reporting period. The closing price of Holdings' common stock did not exceed the strike price of $18.65 per share (130% of the initial exercise price of $14.35 per share) during at least 20 of the last 30 trading days of the nine months ended September 30, 2022 and, therefore, the 4.50% Convertible Senior Notes are not convertible during the fourth quarter of 2022. The if-converted value of the 4.50% Convertible Senior Notes exceeded the aggregate outstanding principal value of the notes by $54.3 as of September 30, 2022.

Holdings entered into hedge transactions with counterparties in connection with the issuance of the 4.50% Convertible Senior Notes. The convertible note hedge transactions cover, subject to anti-dilution adjustments substantially similar to those applicable to 4.50% Convertible Senior Notes, the number of shares of Holdings' common stock underlying the 4.50% Convertible Notes, which initially gives Holdings the option to purchase approximately 32.0 shares of its common stock at a price of approximately $14.35 per share. Concurrently with entering into the convertible note hedge transactions, Holdings also entered into warrant transactions with each option counterparty whereby Holdings sold to such option counterparty warrants to purchase, subject to customary anti-dilution adjustments, up to the same number of shares of Holdings' common stock, which initially gives the option counterparties the option to purchase approximately 32.0 million shares at a price of approximately $22.08 per share. The economic effect of these transactions is

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES AND

CINEMARK USA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except per share data, unaudited)

to effectively raise the strike price of the 4.50% Convertible Senior Notes from approximately $18.65 per share of Holdings' common stock to approximately $22.08 per share.

Long Term Debt

Long-term debt of Holdings consisted of the following for the periods presented:


	September 30,		December 31,
	2022		2021
Cinemark Holdings, Inc. 4.500% convertible senior notes due 2025	$	460.0	$	460.0
Cinemark USA, Inc. term loan due 2025		628.2		633.1
Cinemark USA, Inc. 8.750% senior secured notes due 2025		250.0		250.0
Cinemark USA, Inc. 5.875% senior notes due 2026		405.0		405.0
Cinemark USA, Inc. 5.250% senior notes due 2028		765.0		765.0
Other		21.9		30.2
Total carrying value of long-term debt	$	2,530.1	$	2,543.3
Less: Current portion		22.0		24.3
Less: Debt issuance costs, net of accumulated amortization		34.6		42.7
Long-term debt, less current portion, net of unamortized debt issuance costs	$	2,473.5	$	2,476.3

Long-term debt of CUSA consisted of the following for the periods presented:


	September 30,		December 31,
	2022		2021
Cinemark USA, Inc. term loan due 2025	$	628.2	$	633.1
Cinemark USA, Inc. 8.750% senior secured notes due 2025		250.0		250.0
Cinemark USA, Inc. 5.875% senior notes due 2026		405.0		405.0
Cinemark USA, Inc. 5.250% senior notes due 2028		765.0		765.0
Other		21.9		30.2
Total carrying value of long-term debt	$	2,070.1	$	2,083.3
Less: Current portion		22.0		24.3
Less: Debt issuance costs, net of accumulated amortization		24.7		30.3
Long-term debt, less current portion, net of unamortized debt issuance costs	$	2,023.4	$	2,028.7

Senior Secured Credit Facility

CUSA has a senior secured credit facility that includes a $700.0 term loan and a $100.0 revolving credit line (the “Credit Agreement”) which is guaranteed by Holdings. As of September 30, 2022, there was $628.2 outstanding under the term loan and no borrowings were outstanding under the revolving credit line. As of September 30, 2022, $100.0 was available for borrowing under the revolving credit line. Quarterly principal payments of $1.6 are due on the term loan through December 31, 2024, with a final principal payment of $613.4 due on March 29, 2025. The revolving credit line matures on November 28, 2024. The average interest rate on outstanding term loan borrowings under the Credit Agreement as of September 30, 2022 was approximately 4.1% per annum, after giving effect to the interest rate swap agreements discussed below.

Interest Rate Swap Agreements

Below is a summary of the Company's interest rate swap agreements, which are designated as cash flow hedges, as of September 30, 2022:


Notional						Estimated
Amount		Effective Date	Pay Rate	Receive Rate	Expiration Date	Fair Value (1)
$	137.5	December 31, 2018	2.12%	1-Month LIBOR	December 31, 2024	$	6.1
$	175.0	December 31, 2018	2.12%	1-Month LIBOR	December 31, 2024		8.0
$	137.5	December 31, 2018	2.19%	1-Month LIBOR	December 31, 2024		6.1
					Total	$	20.2

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES AND

CINEMARK USA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except per share data, unaudited)

(1)

Approximately $9.9 of the total is included in prepaid expenses and other and $10.3 is included in deferred charges and other assets, net on the condensed consolidated balance sheet as of September 30, 2022.

Effective March 31, 2020, the Company amended and extended its three then existing interest rate swap agreements, all of which are used to hedge a portion of the interest rate risk associated with the variable interest rates on its term loan debt and qualify for cash flow hedge accounting. Upon amending the interest rate swap agreements effective March 31, 2020, the Company determined that the interest payments hedged with the agreements are still probable to occur, therefore the loss that accumulated on the swaps prior to the amendments is being amortized to interest expense through December 31, 2022, the original maturity dates of the swaps. Approximately $1.1 was recorded in interest expense in the condensed consolidated statements of loss for the three months ended September 30, 2022 and 2021 and $3.4 was recorded in interest expense in the condensed consolidated statements of loss for the nine months ended September 30, 2022 and 2021.

The fair values of the interest rate swaps are recorded on Holdings' and CUSA's condensed consolidated balance sheets as an asset or liability with the related gains or losses reported as a component of accumulated other comprehensive loss. The changes in fair value are reclassified from accumulated other comprehensive loss into earnings in the same period that the hedged items affect earnings. The valuation technique used to determine fair value is the income approach and, under this approach, the Company used projected future interest rates as provided by counterparties to the interest rate swap agreements and the fixed rates that the Company is obligated to pay under the agreement. Therefore, the Company's measurements use significant unobservable inputs, which fall in Level 2 of the U.S. GAAP hierarchy as defined by FASB ASC Topic 820-10-35.

Fair Value of Long-Term Debt

The Company estimates the fair value of its long-term debt primarily using ~~the market approach, which utilizes~~ quoted market prices, ~~that~~which fall under Level 2 of the U.S. GAAP fair value hierarchy as defined by ASC 820, Fair Value Measurement (“ASC Topic ~~820.~~ 820”).The ~~carrying~~table below presents the fair value of the ~~Company’s~~Company's long-term debt ~~was $1,820,112~~as of the periods presented:


	As of
	September 30, 2022		December 31, 2021
Holdings fair value (1)	$	2,326.2	$	2,749.8
CUSA fair value	$	1,798.7	$	2,058.0

(1)

Includes the fair value of the 4.500% convertible senior notes of $527.5 and ~~$1,822,966~~$691.9 as of September 30, ~~2017~~2022 and December 31, 2016, respectively, excluding unamortized debt discounts and debt issue costs. The fair value of the Company’s long-term debt was $1,840,641 and $1,850,212 as of September 30, 2017 and December 31, 2016,2021, respectively.

4.	~~Equity~~

Investment in National CineMedia LLC

Below is a summary of ~~changes~~activity with NCM included in ~~stockholder’s equity attributable~~each of Holdings' and CUSA's condensed consolidated financial statements:


	Investment in NCM			NCM Screen Advertising Advances			Equity in Loss		Other Revenue			Interest Expense - NCM		Cash Received (2)


Balance as of January 1, 2022	$	135.4		$	(346.0	)
Receipt of common units due to annual common unit adjustment ("CUA")		1.3			(1.3	)
Screen rental revenue earned under ESA (1)		—			—		$	—	$	(15.0	)	$	—	$	15.0
Interest accrued related to significant financing component		—			(17.5	)		—		—			17.5		—
Equity in loss		(10.3	)		—			10.3		—			—		—
Impairment of investment in NCM		(98.0	)		—			—		—			—		—
Amortization of screen advertising advances		—			24.3			—		(24.3	)		—		—
Balance as of and for the nine months ended September 30, 2022	$	28.4		$	(340.5	)	$	10.3	$	(39.3	)	$	17.5	$	15.0

(1)

Amounts include the per patron and per digital screen theatre access fees due to ~~Cinemark USA, Inc., noncontrolling interests and total equity~~CUSA, net of amounts due to NCM for on-screen advertising time provided to the ~~nine months ended~~Company's beverage concessionaire of approximately $5.9.

(2)

The Company had a receivable from NCM of $5.1 as of September 30, ~~2017 and 2016:~~

Cinemark

USA, Inc.

Stockholder’s

Noncontrolling

Total

Equity

Interests

Equity

Balance at January 1, 2017

$
1,272,938

$
11,142

$
1,284,080

Share based awards compensation expense

8,862

—

8,862

Tax expense related to share based awards vesting

(32
)

―

(32
)
Dividends paid to parent

(100,875
)

—

(100,875
)
Dividends paid to noncontrolling interests

—

(588
)

(588
)
Net income

170,228

1,438

171,666

Other comprehensive income in equity method investees

92

—

92

Foreign currency translation adjustments (see Note 11)

4,027

—

4,027

Balance at September 30, 2017

$
1,355,240

$
11,992

$
1,367,232

2022.

1023

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES AND

CINEMARK USA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~In thousands,~~(in millions, except ~~share and~~ per share data, unaudited)

Cinemark

USA, Inc.

Stockholder’s

Noncontrolling

Total

Equity

Interests

Equity

Balance at January 1, 2016

$
1,102,146

$
11,105

$
1,113,251

Share based awards compensation expense

9,458

―

9,458

Tax benefit related to share based awards vesting

1,797

―

1,797

Dividends paid to parent

(93,650
)

―

(93,650
)
Dividends paid to noncontrolling interests

―

(515
)

(515
)
Net income

179,424

1,454

180,878

Fair value adjustments on interest rate swap agreements
   designated as hedges, net of settlements, net of taxes
   of $138

234

―

234

Gain realized on available-for-sale securities, net of taxes
   of $1,180

(2,011
)

―

(2,011
)
Other comprehensive loss in equity method investees

(183
)

―

(183
)
Foreign currency translation adjustments

34,974

24

34,998

Balance at September 30, 2016

$
1,232,189

$
12,068

$
1,244,257

5.	Investment ~~in National CineMedia~~

~~The Company has an investment~~ in National CineMedia ~~LLC (“NCM”).~~

NCM operates a digital in-theatre network in the U.S. for providing cinema advertising. ~~Upon joining NCM, the~~The Company entered into an Exhibitor Services Agreement with NCM (“ESA”), pursuant to which NCM primarily provides advertising ~~and promotions~~ to our theatres. ~~As described further in~~See Note 38 to ~~the Company’s financial statements as included in its 2016~~Holdings' Annual Report on Form 10-K filed February 25, 2022 and Note 6 to CUSA's Annual Report on ~~February 13, 2007, National CineMedia, Inc. (“~~From 10-K filed March 9, 2022 for additional discussion of the Company's investment in NCM ~~Inc.”), an entity that serves~~as well as the sole manager of NCM, completed an initial public offering (“IPO”) of its common stock. In connection with the NCM, Inc. initial public offering, the Company amended its operating agreement and the ESA. Following the NCM, Inc. IPO, the Company does not recognize undistributed equity in the earnings onaccounting for its original NCM membership units ~~(referred to herein as the Company’s Tranche 1 Investment) until NCM’s future net earnings, less distributions received, surpass the amount of the excess distribution.~~ and subsequent common unit adjustments.

Common Unit Adjustments

The Company ~~recognizes equity~~also periodically receives consideration in ~~earnings on its Tranche 1 Investment only to~~ the ~~extent it receives cash distributions~~form of common units from NCM. ~~The Company~~ ~~recognizes cash distributions it receives from NCM on its Tranche 1 Investment as a component of earnings as Distributions from NCM.~~ The Company believes that the accounting model provided by ASC Topic 323-10-35-22 for recognition of equity investee losses in excess of an investor’s basis is analogous to the accounting for equity income subsequent to recognizing an excess distribution.

~~Below is a summary of activity with NCM included in the Company’s condensed consolidated financial statements:~~

Distributions

Investment

Deferred

from

Equity in

Other

Cash

in NCM

Revenue

NCM

Income

Revenue

Received

Balance as of January 1, 2017

$
189,995

$
(343,928
)

Receipt of common units due to annual common
unit adjustment

18,363

(18,363
)

$
—

$
—

$
—

$
—

Revenues earned under ESA ⁽¹⁾

—

—

—

—

(8,446
)

8,446

Receipt of excess cash distributions

(10,020
)

—

(9,630
)

—

—

19,650

Receipt under tax receivable agreement

(2,089
)

—

(2,074
)

—

—

4,163

Equity in earnings

8,098

—

—

(8,098
)

—

—

Amortization of deferred revenue

—

7,872

—

—

(7,872
)

—

Balance as of and for the nine months ended September 30, 2017

$
204,347

$
(354,419
)

$
(11,704
)

$
(8,098
)

$
(16,318
)

$
32,259

~~(1)~~

Amount includes the per patron and per digital screen theatre access fees due to the Company, net of amounts paid to NCM for on-screen advertising time provided to the Company’s beverage concessionaire of approximately $8,382.

~~CINEMARK USA, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~In thousands, except share and per share data~~

During the three months ended September 30, 2017 and 2016, the Company recorded equity in earnings of approximately $5,032 and $5,815, respectively. During the nine months ended September 30, 2017 and 2016, the Company recorded equity in earnings of approximately $8,098 and $7,660, respectively.

The Company made payments to NCM of approximately $75 and $41 during the nine months ended September 30, 2017 and 2016, respectively, related to installation of certain equipment used for digital advertising, which is included in theatre properties and equipment on the condensed consolidated balance sheets.

Pursuant to a Common Unit Adjustment Agreement dated as of February 13, 2007 between NCM, Inc. and the Company, AMC Entertainment, Inc. (“AMC”) and Regal Entertainment Group (“Regal”) (collectively, “Founding Members”), annualAnnual adjustments to the common membership units are made primarily based on increases or decreases in the number of theatre screens operated and ~~theatre attendance generated by each Founding Member. As further discussed in Note 3 to~~ the ~~Company’s financial statements as included in its 2016 Annual Report~~impact of these theatres on ~~Form 10-K, the~~total attendance. The common units received are recorded at estimated fair value as an increase in the ~~Company’s~~Company's investment in NCM with an offset to ~~deferred revenue. The deferred revenue is amortized over the remaining term of the ESA.~~ NCM screen advertising advances.

During March ~~2017,~~2022, NCM performed its annual common unit adjustment calculation under the Common Unit Adjustment Agreement. As a result of the calculation, ~~on March 30, 2017,~~ the Company received an additional ~~1,487,218~~0.5 common units of NCM ~~each of which is convertible into one share of NCM, Inc. common stock. The Company~~during April 2022 and recorded the additional common units received at their estimated fair value of $1.3 with a corresponding adjustment to ~~deferred revenue of approximately $18,363.~~NCM screen advertising advances. The fair value of the common units received was estimated based on the market price of ~~NCM,~~National Cinemedia, Inc. ("NCMI") common stock (Level 1 input as defined in FASB ASC Topic 820) at the time the common units were determined, adjusted for volatility associated with the estimated time period it would take to convert the common units and register the respective shares. ~~The deferred revenue will be recognized over the remaining term~~

Impairment of ~~the ESA, which is approximately 19 years.~~NCM Investment

As of September 30, ~~2017,~~2022, the Company owned a total of ~~27,871,862~~43.7 common units of NCM representing an ownership interest of approximately ~~18%~~25.5%. ~~The~~Each of the Company’s common units in NCM is convertible into one share of NCMI common stock. As of September 30, 2022, the estimated fair value of the Company’s investment in NCM was approximately ~~$194,546~~$28.4 based on ~~NCM, Inc.’s~~NCMI's stock price as of September 30, ~~2017~~2022 of ~~$6.98~~$0.65 per share (Level 1 input as defined in FASB ASC Topic 820)~~, which~~. Because the share price of NCMI was ~~less than~~significantly below the Company’s carrying value of ~~$204,347. The~~NCM per common unit and due to the prolonged recovery of NCM's business, the Company ~~does not believe that the decline in NCM, Inc.’s stock price is other than temporary and therefore, no impairment of the Company’s~~wrote down its investment in NCM ~~was recorded~~to its estimated fair value during the nine months ended September 30, ~~2017. The market value of NCM, Inc.’s stock price may change due to~~2022. See Note 12 for impairment expense recorded during the ~~performance~~three and nine months ended September 30, 2022 and 2021.

Exhibitor Services Agreement

As discussed above, the Company’s domestic theatres are part of the ~~business, industry trends, general~~in-theatre digital network operated by NCM, the terms of which are defined in the ESA. NCM provides advertising to its theatres through its branded “Noovie” pre-show entertainment program and ~~economic conditions~~also handles lobby promotions and ~~other factors.~~ displays for our theatres. The Company receives a monthly theatre access fee for participation in the NCM network and also earns screen advertising or screen rental revenue on a per patron basis. See Note 8 to Holdings' Annual Report on Form 10-K filed February 25, 2022 and Note 6 to CUSA's Annual Report on Form 10-K filed March 9, 2022 for further discussion of the accounting for revenue earned under the ESA as well as the accounting related to NCM screen advertising advances.

The deferred NCM screen advertising advances are recorded on a straight-line basis over the term of the amended ESA through February 2041. The table below summarizes when the Company expects to recognize this revenue:


	Twelve Months Ended September 30,
Remaining Maturity	2023		2024		2025		2026		2027		Thereafter		Total
NCM screen advertising advances (1)	$	9.6	$	10.3	$	11.0	$	11.8	$	12.6	$	285.2	$	340.5

(1)

Amounts are net of the estimated interest to be accrued for the periods presented. See discussion of significant financing component below.

Significant Financing Component

As discussed in Note 8 to Holdings' Annual Report on Form 10-K filed February 25, 2022 and Note 6 to CUSA's Annual Report on Form 10-K filed March 9, 2022, CUSA's ESA with NCM includes an implied significant financing component, as per the guidance in ASC Topic 606. As a result of the significant financing component, the Company recognized incremental screen rental revenue and interest expense of $24.3 and $17.5, respectively, during the nine months ended September 30, 2022 and incremental screen rental revenue and interest expense of $24.0 and $17.7, respectively, during the nine months ended September 30, 2021. The interest expense was calculated using the Company's incremental borrowing rates at the time when the cash was received from the NCM, Inc. IPO and each tranche of common units was received from NCM, which ranged from 4.4% to 8.3%.

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES AND

CINEMARK USA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except per share data, unaudited)

NCM Financial Information

Below is summary financial information for NCM for the ~~three and six months ended June 29, 2017 (the financial information for the three and nine months ended September 28, 2017 is not yet available) and the three and nine months ended September 29, 2016:~~periods indicated:


	Three Months Ended			Three Months Ended			Nine Months Ended			Nine Months Ended
	September 29, 2022			September 30, 2021			September 29, 2022			September 30, 2021
Gross revenue	$	54.5		$	31.7		$	157.5		$	51.1
Operating loss	$	(4.3	)	$	(18.7	)	$	(21.2	)	$	(76.6	)
Net loss	$	(24.4	)	$	(35.3	)	$	(79.0	)	$	(125.7	)


	As of			As of
	September 29, 2022			December 30, 2021
Current assets	$	123.5		$	115.4
Noncurrent assets	$	637.5		$	658.0
Current liabilities	$	72.7		$	67.2
Noncurrent liabilities	$	1,162.4		$	1,114.7
Members deficit	$	(474.1	)	$	(408.5	)

Three Months

Six Months

Three Months Ended

Nine Months Ended

Ended
June 29, 2017

Ended
June 29, 2017

September 29, 2016

September 29, 2016

Gross revenues

$
97,042

$
168,962

$
113,476

$
305,101

Operating income

$
28,430

$
33,500

$
48,481

$
100,911

Net income

$
15,377

$
7,465

$
23,909

$
49,619

6.	~~Other Investments~~

~~Below is a summary of activity for each of the Company’s other investments for the nine months ended September 30, 2017:~~

DCIP

AC JV,
LLC

DCDC

Other

Total

Balance at January 1, 2017

$
87,819

$
5,980

$
2,750

$
1,768

$
98,317

Cash contributions

1,109

—

—

68

1,177

Cash distributions

(5,212
)

—

—

—

(5,212
)
Equity in income

16,820

996

853

—

18,669

Equity in other comprehensive income

92

—

—

—

92

Other

—

—

—

(165
)

(165
)
Balance at September 30, 2017

$
100,628

$
6,976

$
3,603

$
1,671

$
112,878

1225

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES AND

CINEMARK USA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~In thousands,~~(in millions, except ~~share and~~ per share data, unaudited)

Other Investments

Digital Cinema Implementation Partners LLC (“DCIP”)

On February 12, 2007, the Company, AMC and Regal (the “Exhibitors”) entered into a joint venture known as DCIP to facilitate the implementation of digital cinema in the Company’s theatres and to establish agreements with major motion picture studios for the financing of digital cinema. As of September 30, ~~2017,~~2022, the Company had a ~~33%~~33% voting interest in DCIP and a ~~24.3%~~24.3% economic interest in DCIP. DCIP also entered into long-term Digital Cinema Deployment Agreements (“DCDAs”) with six major motion picture studios pursuant to which Kasima LLC, one of DCIP’s subsidiaries, received a virtual print fee ("VPF") each time the studio booked a film or certain other content on the leased digital projection systems. Other content distributors entered into similar DCDAs that provided for the payment of VPFs for bookings of the distributor's content on a leased digital projection system. The DCDAs expired in October 2021. Pursuant to the operating agreement between the Exhibitors and DCIP, DCIP began to distribute excess cash generated from their operations to the Exhibitors during 2019. As the DCDAs have expired and the MELA (as defined below) has been terminated, as discussed below, DCIP and its subsidiaries no longer have regular operations, and a final distribution was made during July 2022.

Effective November 1, 2020, the Company amended the master equipment lease agreement (“MELA”) with Kasima LLC, which is an indirect subsidiary of DCIP, resulting in the termination of the MELA. Upon termination of the MELA, the Company received a distribution of the digital projection equipment that it previously leased. As the fair value of the distributed projectors was greater than the Company's investment in DCIP at the time of the distribution, the investment in DCIP was reduced to zero at the time of the distribution. The Company ~~accounts for~~does not recognize undistributed equity in the earnings or loss of its investment in DCIP until such time that future net earnings, less distributions received, surpass the amount of the excess distribution. The investment in DCIP on the condensed consolidated balance sheets of Holdings and ~~its subsidiaries under~~CUSA as of December 31, 2021 and September 30, 2022 was $0. DCIP ceased operations at the ~~equity method~~end of ~~accounting.~~the second quarter of 2022.

~~Below is summary financial information for~~The Company received distributions and warranty reimbursements from DCIP for the three and nine months ended September 30, ~~2017~~2022 and ~~2016.~~2021 as follows:


	Three Months Ended					Nine Months Ended
Transactions	September 30, 2022		September 30, 2021			September 30, 2022		September 30, 2021
Warranty reimbursements (1)	$	—	$	(0.1	)	$	—	$	(0.8	)
Distributions from DCIP (2)	$	3.7	$	6.5		$	3.7	$	6.5

Three Months Ended

Nine Months Ended

September 30, 2017

September 30, 2016

September 30, 2017

September 30, 2016

Gross revenues

$
39,961

$
48,274

$
132,535

$
133,675

Operating income

$
22,702

$
31,180

$
80,574

$
82,369

Net income

$
19,701

$
26,949

$
69,458

$
67,728

~~As of September 30, 2017, the Company had 3,796 digital projection systems being leased under the master equipment lease agreement with Kasima LLC, which is an indirect subsidiary of DCIP and~~(1)

Recorded as a ~~related party to the Company. The Company had the following transactions, reflected in~~reduction of utilities and other costs on the condensed consolidated ~~income statement,~~statements of loss.

(2)

Cash distributions received from DCIP are not treated as a reduction of the investment balance because, as discussed above, the Company's equity investment in DCIP is zero. Reflected as distributions from DCIP on the condensed consolidated statements of loss.

Other Investment Activity

Below is a summary of activity for each of the Company’s other investees and corresponding changes to the Company's investment balances during the nine months ended September 30, 2022:


	AC JV, LLC			DCDC		FE Concepts		Other			Total
Balance at January 1, 2022	$	3.7		$	1.8	$	19.3	$	0.4		$	25.2
Cash distributions received		(1.5	)		—		—		—			(1.5	)
Equity income		1.6			0.1		1.1		—			2.8
Other		—			—		—		(0.2	)		(0.2	)
Balance at September 30, 2022	$	3.8		$	1.9	$	20.4	$	0.2		$	26.3

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES AND

CINEMARK USA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except per share data, unaudited)

Transactions with ~~DCIP during~~Other Investees

Below is a summary of transactions with each of the Company’s other investees for the three and nine months ended September 30, ~~2017~~2022 and ~~2016:~~2021:


		Three Months Ended				Nine Months Ended
Investee	Transactions	September 30, 2022		September 30, 2021		September 30, 2022		September 30, 2021
AC JV, LLC	Event fees paid (1)	$	2.1	$	0.8	$	6.6	$	1.4
DCDC	Content delivery fees paid (1)	$	0.1	$	0.2	$	0.4	$	0.4

Three Months Ended

Nine Months Ended

September 30, 2017

September 30, 2016

September 30, 2017

September 30, 2016

Equipment lease payments

$
1,452

$
1,333

$
4,333

$
3,864

Warranty reimbursements from DCIP

$
(2,234
)

$
(1,608
)

$
(6,141
)

$
(4,367
)
Management service fees

$
207

$
207

$
619

$
619

~~AC JV, LLC~~

During December 2013, the Company, Regal, AMC (the “AC Founding Members”) and NCM entered into a series of agreements that resulted in the formation of AC JV, LLC (“AC”), a joint venture that owns “Fathom Events” (consisting of Fathom Events and Fathom Consumer Events) formerly operated by NCM. The Fathom Events business focuses on the marketing and distribution of live and pre-recorded entertainment programming to various theatre operators to provide additional programs that augment their feature film schedule. The Fathom Consumer Events business includes live and pre-recorded concerts featuring contemporary music, opera and symphony, DVD product releases and marketing events, theatrical premieres, Broadway plays, live sporting events and other special events. The Company paid event fees to AC of $9,448 and $7,808 for the nine months ended September 30, 2017 and 2016, respectively, which are included(1)

Included in film rentals and advertising costs on the condensed consolidated statements of ~~income.~~loss.

10.

Treasury Stock and Share Based Awards

Treasury Stock - Holdings

~~AC was formed~~Treasury stock represents shares of common stock repurchased or withheld by Holdings and not yet retired. The Company has applied the ~~AC Founding Members and NCM. NCM, under~~cost method in recording its treasury shares. Below is a ~~contribution agreement, contributed~~summary of treasury stock activity for the ~~assets associated with its Fathom Events division to AC in exchange for 97% ownership~~nine months ended September 30, 2022:


	Number of
	Treasury
	Shares		Cost
Balance at January 1, 2022		5.35	$	91.1
Restricted stock withholdings (1)		0.24		4.1
Restricted stock forfeitures		0.07		—
Balance at September 30, 2022		5.66	$	95.2

(1)

Holdings withheld shares as a result of the ~~Class A Units~~election by certain employees to satisfy their tax liabilities upon vesting of ~~AC. Under a separate contribution agreement,~~restricted stock and restricted stock units. Holdings determined the ~~Founding Members each contributed cash~~number of ~~approximately $268~~shares to ~~AC in exchange for 1%~~be withheld based upon market values of the ~~Class A Units~~common stock of ~~AC. Subsequently, NCM and~~Holdings on the ~~Founding Members entered into a Membership Interest Purchase Agreement, under~~vest dates, which ~~NCM sold each of the Founding Members 31% of its Class A Units in AC, the aggregate value of which was determined~~ranged from $15.18 to ~~be $25,000, in exchange for a six-year promissory note. Each of the Founding Members’ promissory notes were originally for $8,333, bear interest at 5%~~$18.33 per ~~annum and require annual principal and interest payments. The remaining outstanding balance of the note payable from the Company to NCM as~~share.

As of September 30, ~~2017 was $4,167.~~2022, Holdings had no plans to retire any shares of treasury stock.

~~Digital Cinema Distribution Coalition~~Restricted Stock

~~Digital Cinema Distribution Coalition (“DCDC”)~~Below is a joint venture among the Company, Universal, Warner Bros., AMC and Regal. DCDC operates a satellite distribution network that distributes all digital content to U.S. theatres via satellite. The Company has an approximate 14.6% ownership in DCDC. The Company paid approximately $637 and $707 to DCDC duringsummary of restricted stock activity for the nine months ended September 30, 2022:


	Shares of			Weighted Average
	Restricted			Grant Date
	Stock			Fair Value
Outstanding at January 1, 2022		2.00		$	21.73
Granted		0.88		$	16.40
Vested		(0.90	)	$	19.00
Forfeited		(0.07	)	$	18.80
Outstanding at September 30, 2022		1.91		$	20.66
Unvested restricted stock at September 30, 2022		1.91		$	20.66

1327

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES AND

CINEMARK USA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~In thousands,~~(in millions, except ~~share and~~ per share data, unaudited)


	Nine Months Ended September 30,
	2022		2021
Compensation expense recognized during the period
CUSA employees	$	11.3	$	13.1
Holdings directors		0.7		0.7
Total recognized by Holdings	$	12.0	$	13.8

Fair value of vested restricted stock held by:
CUSA employees	$	14.6	$	1.2
Holdings directors		0.6		1.3
Holdings total	$	15.2	$	2.5

Income tax benefit (cost) related to vested restricted stock held by:
CUSA employees	$	2.4	$	(0.4	)
Holdings directors		0.1		0.3
Holdings total income tax benefit (cost)	$	2.5	$	(0.1	)

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES AND

~~ended September 30, 2017 and 2016, respectively, related to content delivery services provided by DCDC. These fees are included~~ CINEMARK USA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in ~~film rentals and advertising costs on the condensed consolidated statements of income.~~millions, except per share data, unaudited)

7.	~~Share Based Awards~~

~~Restricted Stock~~ – During the nine months ended September 30, ~~2017, Cinemark~~2022, Holdings ~~Inc.~~ granted ~~237,933~~0.88 shares of its restricted stock to certain CUSA employees and its ~~directors and to employees of the Company.~~directors. The fair value of the restricted stock granted was determined based on the ~~market value~~closing price of ~~Cinemark Holdings, Inc.’s~~Holdings' common stock on the grant dates, ~~of grant,~~ which ranged from ~~$38.65~~$13.36 to ~~$42.37~~$17.07 per share. ~~The Company~~Holdings assumed forfeiture rates ~~that ranged from 0% to 10%~~ for the restricted stock ~~awards.~~awards that ranged from 0% to 12%. The restricted stock granted ~~to Cinemark Holdings, Inc.’s directors~~during the nine months ended September 30, 2022 vests over a periods ranging from one ~~year service period. The restricted stock granted~~ to ~~the Company’s employees vests over a four year service period.~~three years. The recipients of restricted stock are entitled to receive non-forfeitable dividends and to vote their respective shares, however, the sale and transfer of the restricted shares is prohibited during the restriction period.

~~Below is a summary~~As of ~~restricted stock activity for the nine months ended~~ September 30, ~~2017:~~

Shares of

Weighted
Average

Restricted

Grant Date

Stock

Fair Value

Outstanding at January 1, 2017

606,618

$
33.51

Granted

237,933

$
41.94

Vested

(192,152
)

$
36.26

Forfeited

(9,550
)

$
33.00

Outstanding at September 30, 2017

642,849

$
35.82

Unvested restricted stock at September 30, 2017

642,849

$
35.82

Nine Months Ended
September 30,

2017

2016

Compensation expense recognized by the Company during the period

$
5,673

$
5,762

Additional compensation expense recognized by Cinemark Holdings, Inc. during the period

$
625

$
789

Fair value of restricted shares held by Company employees that vested during the period

$
917

$
13,739

Fair value of restricted shares held by Cinemark Holdings, Inc.’s directors that vested during the period

$
7,252

$
923

Income tax benefit recognized upon vesting of restricted stock awards held by Company employees

$
2,280

$
5,167

Additional income tax benefit recognized upon vesting of restricted stock awards held by Cinemark Holdings, Inc.'s directors

$
385

$
388

~~As of~~ ~~September 30, 2017~~,2022, the estimated remaining unrecognized compensation expense related to unvested restricted stock awards was ~~$15,335, of which $14,456 will be recognized by the Company and $879 of which will be recognized by Cinemark Holdings, Inc.~~ as follows:


	Estimated
	Remaining
	Expense
CUSA employees (1)	$	23.0
Holdings directors		0.8
Total remaining - Holdings (1)	$	23.8

(1)

The weighted average period over which this remaining compensation expense will be recognized by both Holdings and CUSA is approximately ~~two~~2 years.

Restricted Stock Units–

Below is a summary of restricted stock unit activity for the periods presented:


	Nine Months Ended September 30,
	2022		2021
Number of restricted stock units that vested during the period		0.10		0.01
Fair value of restricted stock units that vested during the period	$	1.7	$	0.3
Accumulated dividends paid upon vesting of restricted stock units	$	0.3	$	0.1
Compensation expense recognized during the period	$	4.2	$	2.8
Income tax benefit (cost) related to restricted stock units	$	0.1	$	(0.5	)

During the nine months ended September 30, ~~2017, Cinemark~~2022, Holdings ~~Inc.~~ granted performance awards in the form of restricted stock ~~units representing 175,634 hypothetical~~units. The maximum number of shares issuable under the performance awards is 0.8 shares of ~~its~~Holdings' common ~~stock~~stock. The performance metrics for these awards are based upon the achievement of pre-established criteria that consists of revenue and consolidated cash flows as defined in the award agreement. The performance measurement period for these performance awards is one year with an additional service requirement to ~~employees~~the third anniversary of the ~~Company. The restricted stock units vest based on a combination~~date of ~~financial~~grant. Each performance ~~factors and continued service. The financial~~target underlying the performance factors are based on an implied equity value concept that determines an internal rate of return (“IRR”) during the two fiscal year periods ending December 31, 2018 based on a formula utilizing a multiple of Adjusted EBITDA subject to certain specified adjustments as specified by Cinemark Holdings, Inc.’s Compensation Committee prior to the grant date. The financial performance factors for the restricted stock units haveaward has a threshold, target and maximum level, with the maximum level equal to 175% of ~~payment opportunity and vest on a prorata basis according to~~ the ~~IRR achieved by the Company during~~target award. If the performance ~~period. If the IRR for the two-year period is at least 7%, which is~~metrics meet the threshold ~~one-third~~level, approximately 29% of the maximum restricted stock units vest. If the ~~IRR~~performance metrics for the ~~two-year~~one-year period isare at ~~least 9.5%, which is~~target, approximately 57% of the ~~target, two-thirds of the~~

~~CINEMARK USA, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~In thousands, except share and per share data~~

maximum restricted stock units vest. If the ~~IRR for the two-year period is~~performance metrics are at ~~least 13%, which is~~ the maximum, 100% of the maximum restricted stock units vest. Grantees are eligible to receive a ratable portion of the common stock issuable if the ~~IRR~~achievement of the performance goals is within the targets previously noted. Further, as an example, if the Company achieves an IRR equal to 11%, the number of restricted stock units that shall vest will be greater than the target but less than the maximum number that would have vested had the Company achieved the highest IRR. All restricted stock units granted during ~~2017 will vest subject to an additional two-year service requirement and~~2022 will be paid in the form of ~~shares of Cinemark Holdings, Inc.’s~~Holdings' common stock if the participant continues to provide services through ~~February 2021, which is~~ the ~~fourth~~third anniversary of the grant date. Restricted stock unit award participants are eligible to receive dividend equivalent payments from the grant date to the extent declared by Holdings if, and at the time that, the restricted stock unit awards vest.

~~Below is a table summarizing~~When the ~~potential number of shares that could vest under restricted stock unit~~performance awards ~~granted during the~~ ~~nine months ended September 30, 2017~~ ~~at each of the three target levels of financial performance (excluding forfeiture assumptions):~~

Number of

Shares

Value at

Vesting

Grant

at IRR of at least 7%

58,545

$
2,481

at IRR of at least 9.5%

117,089

$
4,961

at IRR of at least 13%

175,634

$
7,442

~~Due to the fact that the IRR for the two-year performance period could not be determined at the time of the 2017 grant,~~were issued, the Company estimated that the most likely outcome is the achievement of the target ~~IRR~~ level. The fair value of the restricted stock unit awards was determined based on the closing price of ~~Cinemark Holdings, Inc.’s~~Holdings' common stock on the date of grant, which was ~~$42.37~~$16.65 per share. The Company assumed a forfeiture rate of 5%5% for the restricted stock unit awards. IfBased on updated performance expectations, the Company determined that the maximum performance level was more likely to be achieved. The Company recorded incremental compensation expense of approximately $0.6 related to the change in estimated performance level during the service period, additional information becomes available to lead the Company to believe a different IRR level will be achieved for the two-year performance period, the Company will reassess the number of units that will vest for the grant and adjust its compensation expense accordingly on a prospective basis over the remaining service period.nine months ended September 30, 2022.

Nine Months Ended September 30,

2017

2016

Number of restricted stock unit awards that vested during
   the period

97,115

213,984

Fair value of restricted stock unit awards that vested during
   the period

$
4,155

$
7,260

Accumulated dividends paid upon vesting of restricted stock
   unit awards

$
313

$
662

Compensation expense recognized during the period

$
3,189

$
3,696

Income tax benefit recognized upon vesting of restricted stock
   unit awards

$
1,745

$
3,049

As of September 30, ~~2017,~~2022, the estimated remaining unrecognized compensation expense related to ~~the~~ outstanding restricted stock ~~unit awards~~units was ~~$8,314.~~$12.0. The weighted average period over which this remaining compensation expense will be recognized is approximately two ~~years.~~years. As of September 30, ~~2017~~2022, ~~the Company~~Holdings had restricted stock units outstanding that represented a total of ~~628,189~~1.0 hypothetical shares ~~of Cinemark Holdings, Inc.’s common stock, net of actual cumulative forfeitures of 7,407 units, assuming the maximum IRR level is achieved for all grants outstanding.~~

1529

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES AND

CINEMARK USA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~In thousands,~~(in millions, except ~~share and~~ per share data, unaudited)

of common stock, net of forfeitures, reflecting actual certified performance levels for restricted stock units granted during 2019 and 2020 and the maximum performance level for the 2022 grant as discussed above, adjusted for estimated forfeitures.

8.	11. Goodwill and Other Intangible Assets

~~The Company’s~~A summary of the Company's goodwill ~~was~~is as follows:


	U.S. Operating Segment		International Operating Segment		Total
Balance at January 1, 2022 (1)	$	1,182.9	$	65.9	$	1,248.8
Foreign currency translation adjustments		—		0.4		0.4
Balance at September 30, 2022 (1)	$	1,182.9	$	66.3	$	1,249.2

U.S.
Operating
Segment

International
Operating
Segment

Total

Balance at January 1, 2017 ⁽¹⁾

$
1,164,163

$
98,800

$
1,262,963

Acquisitions of theatres⁽²⁾

9,878

20,401

30,279

Foreign currency translation adjustments

—

1,100

1,100

Balance at September 30, 2017 (1)

$
1,174,041

$
120,301

$
1,294,342

(1)

~~(1)~~

~~Balances are presented net of accumulated impairment losses of $214,031 for the U.S. operating segment and $27,622 for the international operating segment.~~

~~(2)~~

~~Represents preliminary purchase price allocations associated with the acquisitions of theatres.~~

~~The Company evaluates goodwill~~Balances are presented net of accumulated impairment losses of $214.0 for ~~impairment annually during~~ the ~~fourth quarter or whenever events or changes in circumstances indicate~~U.S. operating segment and $43.8 for the ~~carrying value~~international operating segment. See discussion of the ~~goodwill may not be fully recoverable. The Company evaluates goodwill for~~qualitative impairment at the reporting unit level and has allocated goodwill to the reporting unit based on an estimate of its relative fair value. Management considers the reporting unit to be each of its nineteen regions in the U.S. and seven countries internationally with Honduras, El Salvador, Nicaragua, Costa Rica, Panama and Guatemala considered one reporting unit (the Company does not have goodwill recorded for all of its international locations). For the year ended December 31, 2016,analysis performed by the Company ~~performed a qualitative goodwill impairment assessment on all reporting units, in accordance with ASC Topic 350-20-35. No events or changes in circumstances occurred~~as of September 30, 2022 at Note 12.

A summary of the Company's intangible assets is as follows:


	Balance at January 1, 2022			Amortization			Foreign Currency Translation Adjustments		Other (1)			Balance at September 30, 2022
Intangible assets with finite lives:
Gross carrying amount	$	81.8		$	—		$	0.1	$	(0.2	)	$	81.7
Accumulated amortization		(71.1	)		(1.8	)		—		0.2			(72.7	)
Total net intangible assets with finite lives	$	10.7		$	(1.8	)	$	0.1	$	—		$	9.0

Intangible assets with indefinite lives:
Tradename and other		300.1			—			—		—			300.1
Total intangible assets, net	$	310.8		$	(1.8	)	$	0.1	$	—		$	309.1

(1)

Amounts represent the write-off of non-compete agreements that expired during the nine months ended September 30, ~~2017 that indicated the carrying value of goodwill might exceed its~~2022.

The estimated ~~fair value.~~

~~Intangible assets consisted of the following:~~

Balance at

Balance at

January 1,

September 30,

2017

Additions ⁽¹⁾

Amortization

Other ⁽²⁾

2017

Intangible assets with finite lives:

Gross carrying amount

$
99,796

$
4,453

$
—

$
(1,332
)

$
102,917

Accumulated amortization

(64,606
)

―

(3,606
)

1,162

(67,050
)
Total net intangible assets with finite lives

$
35,190

$
4,453

$
(3,606
)

$
(170
)

$
35,867

Intangible assets with indefinite lives:

Tradename

299,709

―

―

81

299,790

Total intangible assets — net

$
334,899

$
4,453

$
(3,606
)

$
(89
)

$
335,657

~~(1)~~

~~Amount represents preliminary fair values allocated to intangible assets acquired as part of the acquisitions of theatres.~~

~~(2)~~

~~Amounts represent foreign currency translation adjustments and the write-off of a favorable lease associated with a closed domestic theatre.~~

For the year ended December 31, 2016, the Company performed a qualitative assessment for all indefinite-lived tradename assets other than its tradename in Ecuador, for which the Company performed a quantitative assessment. For the year ended December 31, 2016, the Company also performed a quantitative test on its definite-lived tradename associated with certain of its Rave branded theatres acquired in 2013. No events or changes in circumstances occurred during the nine months ended September 30, 2017 that indicated the carrying value of its tradename assets might exceed their estimated fair values.

~~CINEMARK USA, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~In thousands, except share and per share data~~

~~Estimated~~ aggregate future amortization expense for intangible assets is as follows:


	Estimated
	Amortization
For the three months ended December 31, 2022	$	0.6
For the twelve months ended December 31, 2023		2.5
For the twelve months ended December 31, 2024		2.5
For the twelve months ended December 31, 2025		1.9
For the twelve months ended December 31, 2026		1.5
Thereafter		—
Total	$	9.0

For the three months ended December 31, 2017

$
1,668

For the twelve months ended December 31, 2018

5,964

For the twelve months ended December 31, 2019

5,101

For the twelve months ended December 31, 2020

4,995

For the twelve months ended December 31, 2021

2,444

Thereafter

15,695

Total

$
35,867

12.

Impairment of Long-Lived Assets

9.	~~Impairment of Long-Lived Assets~~

The Company ~~reviews~~performed a qualitative impairment analysis on its goodwill and tradename intangible assets as of September 30, 2022. As a result of the qualitative assessment, the Company noted no impairment indicators related to its goodwill and tradename intangible assets as of September 30, 2022.

The qualitative impairment analysis, by asset class, is described below:

•

Goodwill – The qualitative assessment of goodwill for each reporting unit considers economic and market conditions, industry trading multiples and the impact of recent developments and events on estimated fair values as compared with its most recent quantitative assessment.

•

Tradename Intangible Assets – The qualitative assessment considers recent developments that may impact revenue forecasts and other estimates as compared with its most recent quantitative assessment.

•

Other Long-lived Assets – The qualitative assessment considers relevant market transactions, industry trading multiples and recent developments that would impact the estimates of future cash flows, which are the primary measure of estimated fair value, as compared with its most recent quantitative impairment assessment.

The Company performed a qualitative impairment analysis on other long-lived assets, namely theatre properties and right-of-use assets, as of September 30, 2022 to determine whether indicators of potential impairment existed at the theatre level, which is the level at which the Company tests its other long-lived assets. If an impairment indicator was identified for ~~impairment indicators on~~ a ~~quarterly basis~~theatre as a result of the qualitative test, then the Company performed a quantitative test for that theatre.

The quantitative evaluation at the theatre level uses estimated undiscounted cash flows from continuing use through the remainder of the theatre’s useful life. The remainder of the theatre’s useful life correlates with the remaining lease period, which includes the probability of the exercise of available renewal periods for leased properties, and the lesser of twenty years or ~~whenever events or changes in circumstances indicate~~the building’s remaining useful life for owned properties. If the estimated undiscounted cash flows are not sufficient to recover a long-lived asset’s carrying value, the carrying ~~amount~~value of the ~~assets may not be fully recoverable. See discussion~~asset group (theatre) is compared with its estimated fair value. Significant judgment is involved in estimating fair value, including management’s estimate of future theatre level cash flows for each of the ~~Company’s long-lived asset impairment evaluation process in “Critical Accounting Policies” in its Annual Report~~theatres based on ~~Form 10-K for the year ended December 31, 2016, filed March 3, 2017. As noted in the discussion, fair~~projected box office. Fair value is ~~determined~~estimated based on a multiple of cash ~~flows,~~flows. Management’s estimates, which ~~was six and a half times for~~fall under Level 3 of the ~~evaluations performed during the nine months ended September 30, 2017 and 2016. As of September 30, 2017, the estimated aggregate~~U.S. GAAP fair value ~~of the long-lived assets impaired during the nine months ended September 30, 2017 was approximately $5,367.~~hierarchy, as defined by FASB ASC Topic 820-10-35, are based on projected operating performance, market transactions and industry trading multiples.

The long-lived asset impairment charges recorded during each of the periods presented are specific to theatres that were directly and individually impacted by increased competition, adverse changes in market demographics or adverse changes in the development or the conditions of the areas surrounding the theatre.

Below is a summary of impairment charges for the periods presented:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
U.S. Segment
Theatre properties	$	1.1	$	4.8	$	3.6	$	4.8
Theatre operating lease right-of-use assets		2.7		2.6		4.7		2.6
Investment in NCM (1)		11.2		—		98.0		—
U.S. total		15.0		7.4		106.3		7.4

International segment
Theatre properties		0.1		0.1		0.8		0.1
Theatre operating lease right-of-use assets		0.1		—		0.4		—
International total		0.2		0.1		1.2		0.1

Total Impairment	$	15.2	$	7.5	$	107.5	$	7.5

(1)

See discussion at Impairment of NCM Investment in Note 8.

Three Months Ended

Nine Months Ended

September 30,

September 30,

2017

2016

2017

2016

U.S. theatre properties

$
1,054

$
406

$
1,411

$
1,500

International theatre properties

3,972

—

8,189

823

Impairment of long-lived assets

$
5,026

$
406

$
9,600

$
2,323

13.

Fair Value Measurements

~~10.~~

~~Fair Value Measurements~~

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

Level 1 – quoted market prices in active markets for identical assets or liabilities that are accessible at the measurement date;

Level 2 – other than quoted market prices included in Level 1 that are observable for the asset or liability, either directly or indirectly; and

Level 3 – unobservable and should be used to measure fair value to the extent that observable inputs are not available.

~~The Company did not have any~~Below is a summary of assets orand liabilities measured at fair value on a recurring basis under FASB ASC Topic 820 as of September 30, 2022 and December 31, ~~2016 or September 30, 2017.~~ 2021:


		Carrying		Fair Value Hierarchy
Description	As of	Value		Level 1		Level 2		Level 3
Interest rate swap assets (1)	September 30, 2022	$	20.2	$	—	$	20.2	$	—

Interest rate swap liabilities (1)	December 31, 2021	$	14.6	$	—	$	14.6	$	—

(1)

See further discussion of interest rate swaps at Note 7.

~~CINEMARK USA, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~In thousands, except share and per share data~~

~~Below~~The market approach is a reconciliation of the beginning and ending balance for liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the nine months ended September 30, 2016:

Liabilities ⁽¹⁾

2016

Beginning balance - January 1

$
373

Total loss included in accumulated other comprehensive loss

71

Settlements included in interest expense

(444
)
Ending balance - September 30

$
—

~~(1)~~

~~The Company was previously party to an interest rate swap agreement, which expired in April 2016.~~

~~The Company uses the market approach~~used for fair value measurements on a nonrecurring basis in the impairment evaluations of its goodwill, intangible assets and long-lived assets (see Note 711 and Note 8)12). See additional explanation of fair value measurement techniques used for long-lived assets, goodwill and intangible assets in “Critical Accounting Policies” in the ~~Company’s~~Holdings' Annual Report on Form 10-K for the year ended December 31, ~~2016,~~2021, filed February 25, 2022 and the CUSA's Annual Report on Form 10-K for the year ended December 31, 2021, filed March ~~3, 2017.~~9, 2022. There were no changes in valuation ~~techniques and there~~techniques. There were no transfers ininto or out of Level 1, Level 2 or Level 3 during the nine months ended September 30, ~~2017.~~2022.

~~11.~~

~~Foreign Currency Translation~~

14.

Foreign Currency Translation

The accumulated other comprehensive loss account in ~~stockholder’s~~Holdings stockholders’ equity of ~~$242,894~~$362.9 and ~~$247,013~~$394.5 and CUSA stockholder's equity of $368.2 and $397.0, each as of September 30, ~~2017~~2022 and December 31, ~~2016,~~2021, respectively, primarily includes cumulative foreign currency ~~adjustments~~net losses of ~~$243,020~~$400.4 and ~~$247,047,~~$394.5, respectively, from translating the financial statements of the ~~Company’s~~Company's international ~~subsidiaries.~~subsidiaries and the cumulative changes in fair value of the interest rate swap agreements that are designated as hedges.

~~All~~As of September 30, 2022, all foreign countries where the Company has operations are non-highly inflationary, ~~and~~other than Argentina. In non-highly inflationary countries, the local currency is the same as the functional currency ~~in all of the locations. Thus,~~and any fluctuation in the currency results in a cumulative foreign currency translation adjustment recorded to accumulated other comprehensive loss.

The Company deemed Argentina to be highly inflationary beginning July 1, 2018. A highly inflationary economy is defined as an economy with a cumulative inflation rate of ~~approximately~~ 100 percent or more over a three-year period. 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. ~~There has been a steady devaluation~~The financial information of the ~~Argentine peso relative to the~~Company’s Argentina subsidiaries was remeasured in U.S. ~~dollar~~dollars in recent years. The official cumulative inflation rate for Argentina over the last three years has not definitively reached 100 percent and remeasurement is not required. The Company will continue to monitor the inflation on a quarterly basis to determine whether remeasurement is necessary.accordance with ASC Topic 830, Foreign Currency Matters, effective July 1, 2018.

Below is a summary of the impact of translating the September 30, ~~2017~~2022 and September 30, 2021 financial statements of the Company’s international subsidiaries:


					Other
					Comprehensive							Other Comprehensive Income (Loss) for
	Exchange Rate as of				Income (Loss) for The			Exchange Rate as of				Nine Months Ended
Country	September 30, 2017		December 31, 2016		Nine Months Ended September 30, 2017			September 30, 2022		December 31, 2021		September 30, 2022			September 30, 2021
Brazil		3.17		3.26	$	6,700			5.40		5.57	$	0.4		$	(3.4	)
Argentina		17.70		16.04		(5,918	)
Chile									965.80		852.00		(7.7	)		(7.9	)
Peru		3.35		3.45		1,133			3.99		4.02		0.2			(3.6	)
Chile		640.60		679.09		3,136
All other						527							1.2			(0.1	)
					$	5,578						$	(5.9	)	$	(15.0	)

~~During~~As noted above, beginning July 1, 2018, Argentina was deemed highly inflationary. A foreign currency exchange loss of $5.1 and gain of $0.4 was recorded for the nine months ended September 30, ~~2017, the Company reclassified $1,551~~2022 and 2021, respectively, as a result of ~~cumulative foreign currency translation adjustments, related~~translating Argentina's financial results to ~~a Canadian subsidiary that was liquidated, from accumulated other comprehensive loss to foreign currency exchange gain on the condensed consolidated statement of income.~~U.S. dollars.

~~12.~~

~~Supplemental Cash Flow Information~~

15.

Supplemental Cash Flow Information

The following is provided as supplemental information to the condensed consolidated statements of cash flows:


	Nine Months Ended
	September 30,
	2022			2021
Cash paid for interest by Holdings (1)	$	121.0		$	89.8
Cash paid for interest by CUSA	$	100.3		$	69.5
Cash paid (refunds received) for income taxes, net	$	2.3		$	(136.9	)
Cash deposited in (transferred from) restricted accounts (2)	$	(2.9	)	$	7.3
Noncash operating activities:
Interest expense - NCM (see Note 8)	$	(17.5	)	$	(17.7	)
Noncash investing activities:
Change in accounts payable and accrued expenses for the acquisition of theatre properties and equipment (3)	$	4.2		$	(2.4	)
Investment in NCM – receipt of common units (see Note 8)	$	1.3		$	10.2

Nine Months Ended

September 30,

2017

2016

Cash paid for interest

$
58,334

$
68,552

Cash paid for income taxes, net of refunds received

$
81,271

$
66,757

Noncash investing and financing activities:

Change in accounts payable and accrued expenses for the
acquisition of theatre properties and equipment ⁽¹⁾

$
(5,947
)

$
132

Theatre properties acquired under capital lease

$
30,517

$
11,292

Investment in NCM – receipt of common units (see
Note 5)

$
18,363

$
11,111

(1)

Includes the cash interest paid by CUSA.

(2)

Represents cash deposited in a collateral account during the period to support the issuance of letters of credit to lenders, net of deposits withdrawn from such accounts upon the repayment of related debt.

(3)

Additions to theatre properties and equipment included in accounts payable as of September 30, 2022 and December 31, 2021 were $12.4 and $8.2, respectively.

16.

Segments - Holdings

~~(1)~~

~~Additions to theatre properties and equipment included in accounts payable as of September 30, 2017 and December 31, 2016 were $34,678 and $40,625, respectively.~~

~~13.~~

~~Segments~~

The ~~Company manages its~~ international market and ~~its~~ U.S. market are managed as separate reportable operating segments, with the international segment consisting of operations in Brazil, Argentina, Chile, Colombia, Peru, Ecuador, Honduras, El Salvador, Nicaragua, Costa Rica, Panama, Guatemala, Bolivia, Curacao and Paraguay. Each segment’s revenue is derived from admissions and concession sales and other ancillary ~~revenues. The Company~~revenue. Holdings uses Adjusted EBITDA, as shown in the reconciliation table below, as the primary measure of segment profit and loss to evaluate performance and allocate its resources. The Company does not report total assets by segment because that information is not used to evaluate the performance of or allocate resources between segments.

Holdings revenue, Adjusted EBITDA and capital expenditures by reportable operating segment

Below is a breakdown of selected financial information by reportable operating ~~segment:~~segment for Holdings:


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2022			2021			2022			2021
Revenue
U.S.	$	514.4		$	376.3		$	1,491.6		$	743.0
International		138.7			59.3			370.5			101.9
Eliminations		(2.7	)		(0.8	)		(7.1	)		(1.1	)
Total revenue	$	650.4		$	434.8		$	1,855.0		$	843.8

Adjusted EBITDA
U.S.	$	70.7		$	44.8		$	196.2		$	(31.7	)
International		28.8			(0.5	)		66.8			(27.8	)
Total Adjusted EBITDA	$	99.5		$	44.3		$	263.0		$	(59.5	)

Capital expenditures
U.S.	$	20.2		$	22.4		$	50.7		$	47.5
International		4.5			2.0			14.6			9.7
Total capital expenditures	$	24.7		$	24.4		$	65.3		$	57.2

Three Months Ended

Nine Months Ended

September 30,

September 30,

2017

2016

2017

2016

Revenues

U.S.

$
514,376

$
572,916

$
1,650,514

$
1,677,365

International

200,122

199,476

602,116

551,212

Eliminations

(3,750
)

(3,818
)

(11,077
)

(10,730
)
Total revenues

$
710,748

$
768,574

$
2,241,553

$
2,217,847

Adjusted EBITDA

U.S.

$
109,057

$
137,872

$
404,095

$
410,386

International

44,818

47,351

133,329

128,915

Total Adjusted EBITDA

$
153,875

$
185,223

$
537,424

$
539,301

Capital expenditures

U.S.

$
65,612

$
75,839

$
221,604

$
175,218

International

14,318

22,984

41,126

55,128

Total capital expenditures

$
79,930

$
98,823

$
262,730

$
230,346

1933

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES AND

CINEMARK USA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~In thousands,~~(in millions, except ~~share and~~ per share data, unaudited)

The following table sets forth a reconciliation of net ~~income~~loss to Adjusted ~~EBITDA:~~EBITDA for Holdings:


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2022			2021			2022			2021
Net loss	$	(23.9	)	$	(77.6	)	$	(169.2	)	$	(428.7	)
Add (deduct):
Income tax expense (benefit)		3.4			(8.9	)		6.3			(15.6	)
Interest expense (1)		38.4			38.0			114.6			111.6
Other expense, net (2)		4.5			12.5			19.2			35.3
Cash distributions from other equity investees (3)		—			—			1.5			0.2
Depreciation and amortization		58.3			67.2			181.0			202.3
Impairment of long-lived and other assets		15.2			7.5			107.5			7.5
Restructuring costs		—			(0.4	)		(0.2	)		(1.3	)
(Gain) loss on disposal of assets and other		1.2			1.1			(6.4	)		7.9
Loss on extinguishment of debt		—			—			—			6.5
Non-cash rent expense		(2.8	)		(1.1	)		(7.5	)		(1.8	)
Share based awards compensation expense		5.2			6.0			16.2			16.6
Adjusted EBITDA	$	99.5		$	44.3		$	263.0		$	(59.5	)

Three Months Ended

Nine Months Ended

September 30,

September 30,

2017

2016

2017

2016

Net income

$
38,804

$
66,517

$
171,666

$
180,878

Add (deduct):

Income taxes

24,797

41,165

99,167

106,821

Interest expense ⁽¹⁾

26,317

26,659

79,208

81,980

Other income ⁽²⁾

(13,164
)

(14,540
)

(33,176
)

(32,510
)
Loss on debt amendments and refinancing

—

—

246

13,284

Other cash distributions from equity investees ⁽³⁾

2,402

1,391

17,321

9,660

Depreciation and amortization

58,052

54,187

174,545

155,874

Impairment of long-lived assets

5,026

406

9,600

2,323

Loss on sale of assets and other

8,576

6,940

9,464

10,985

Deferred lease expenses

(297
)

(162
)

(1,019
)

(809
)
Amortization of long-term prepaid rents

551

371

1,540

1,357

Share based awards compensation expense

$
2,811

$
2,289

$
8,862

9,458

Adjusted EBITDA

$
153,875

$
185,223

$
537,424

$
539,301

(1)

Includes amortization of debt issuance costs and amortization of accumulated losses for amended swap agreements.

(2)

Includes interest income, foreign currency exchange (gain) loss and equity in loss of affiliates.

(3)

Reflects cash distributions received from equity investees that were recorded as a reduction of the respective investment balances (see Note 9). These distributions are reported entirely within the U.S. operating segment.

~~(1)~~

~~Includes amortization of debt issue costs.~~

~~(2)~~

~~Includes interest income, foreign currency exchange gain and equity in income of affiliates and excludes distributions from NCM.~~

~~(3)~~

Includes cash distributions received from equity investees that were recorded as a reduction of the respective investment balances (see Notes 5 and 6). These distributions are reported entirely within the U.S. operating segment.

Financial Information About Geographic Areas

Below is a breakdown of selected financial information for the Company by geographic area:


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
Revenue	2022			2021			2022			2021
U.S.	$	514.4		$	376.3		$	1,491.6		$	743.0
Brazil		45.2			20.6			133.1			30.5
Other international countries		93.5			38.6			237.4			71.4
Eliminations		(2.7	)		(0.7	)		(7.1	)		(1.1	)
Total	$	650.4		$	434.8		$	1,855.0		$	843.8


	As of		As of
Theatre Properties and Equipment, net	September 30, 2022		December 31, 2021
U.S.	$	1,105.4	$	1,208.7
Brazil		49.6		56.8
Other international countries		105.0		117.4
Total	$	1,260.0	$	1,382.9

Three Months Ended

Nine Months Ended

September 30,

September 30,

Revenues

2017

2016

2017

2016

U.S.

$
514,376

$
572,916

$
1,650,514

$
1,677,365

Brazil

81,545

85,051

264,085

231,556

Other international countries

118,577

114,425

338,031

319,656

Eliminations

(3,750
)

(3,818
)

(11,077
)

(10,730
)
Total

$
710,748

$
768,574

$
2,241,553

$
2,217,847

17.

Related Party Transactions

Theatre Properties and Equipment-net

September 30, 2017

December 31, 2016

U.S.

$
1,392,429

$
1,306,643

Brazil

194,171

197,896

Other international countries

205,006

199,997

Total

$
1,791,606

$
1,704,536

~~14.~~

~~Related Party Transactions~~

~~The~~A subsidiary of the Company manages ~~theatres~~a theatre for Laredo Theatre, Ltd. (“Laredo”). The Company is the sole general partner and owns ~~75%~~75% of the limited partnership interests of Laredo. Lone Star Theatres, Inc. owns the remaining ~~25%~~25% of the limited partnership interests in Laredo and is ~~100%~~100% owned by Mr. David Roberts, Lee Roy Mitchell’s son-in-law. Lee Roy Mitchell, ~~is Cinemark Holdings, Inc.’s Chairman~~our founder and a member of ~~the~~Holdings' Board of Directors, ~~and~~owns, both directly and indirectly, ~~owns~~ approximately 9%8.5% of ~~Cinemark~~ Holdings ~~Inc.’s~~ common stock. Under the agreement, management fees are paid by Laredo to the Company at a rate of 5%5% of annual theatre ~~revenues up to $50,000 and 3% of annual theatre revenues in excess of $50,000.~~revenue. The Company recorded ~~$451~~$0.5 and ~~$410~~$0.2 of management fee ~~revenues~~revenue during the nine months ended September 30, ~~2017~~2022 and ~~2016,~~2021, respectively. All such amounts are included in ~~the Company’s~~each of Holdings' and CUSA's condensed consolidated financial statements with the intercompany amounts eliminated in consolidation.

~~CINEMARK USA, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~In thousands, except share and per share data~~

The Company has an Aircraft Time Sharing Agreement with Copper Beech Capital, LLC to use, on occasion, a private aircraft owned by Copper Beech Capital, LLC. Copper Beech Capital, LLC is owned by Mr. Mitchell and his wife, Tandy Mitchell. The private aircraft is used by Mr. Mitchell and other executives who accompany Mr. Mitchell to business meetings for the Company. The Company reimburses Copper Beech Capital, LLC for the actual costs of fuel usage and the expenses of the pilots, landing fees, storage fees and similar expenses incurred during the trip. For During the nine months ended September 30, ~~2017 and 2016, the aggregate amounts~~2022, cash distributions of $2.4 were paid to ~~Copper Beech Capital, LLC for~~Lone Star Theatres, Inc. as required by the ~~use~~partnership agreement, which were recorded as a reduction of noncontrolling interests on the condensed consolidating balance sheet.

Walter Hebert, Mr. Mitchell’s brother-in-law, previously served as the Executive Vice President – Purchasing of the ~~aircraft was $89~~Company and ~~$94, respectively.~~retired in July 2021. Mr. Hebert served as a consultant until July 2022. During the nine months ended September 30, 2022, the Company paid Mr. Hebert $0.2 related to consulting services.

~~The~~A subsidiary of the Company leases 1413 theatres ~~and one parking facility~~ from Syufy Enterprises, LP (“Syufy”) or affiliates of Syufy. Raymond Syufy is one of ~~Cinemark Holdings, Inc.’s~~Holdings' directors and is an officer of the general partner of Syufy. ~~Of these 15 leases, 14 have fixed minimum annual rent. The one lease without minimum annual rent has rent based upon a specified percentage of gross sales as defined in the lease.~~ For the nine months ended September 30, ~~2017~~2022 and ~~2016,~~2021, the Company paid total rent of ~~approximately $18,844~~$16.7 and ~~$17,806,~~$17.9, respectively, to Syufy.

CUSA provides digital equipment support to drive-in theatres owned by Syufy. The Company recorded management fees of $0.1 and $0.1 related to these services during each of the nine months ended September 30, 2022 and 2021, respectively.

A subsidiary of the Company has a 50% voting interest in FE Concepts, a joint venture with AWSR, an entity owned by Lee Roy Mitchell and Tandy Mitchell. FE Concepts operates a family entertainment center that offers bowling, gaming, movies and other amenities. See Note 9 for further discussion. CUSA has a theatre services agreement with FE Concepts under which the Company receives service fees for providing film booking and equipment monitoring services for the facility.

CUSA has paid certain fees on behalf of its parent, ~~Cinemark~~ Holdings, ~~Inc.,~~ and ~~Cinemark~~ Holdings ~~Inc.~~ has paid income taxes and other ~~items~~expenses on behalf of ~~the Company.~~CUSA. The net receivable from ~~Cinemark~~ Holdings ~~Inc.~~ as of September 30, ~~2017~~2022 and December 31, ~~2016~~2021 was ~~$14,192~~$60.5 and ~~$10,080,~~$46.7, respectively. ~~The Company paid Cinemark~~CUSA received contributions from Holdings ~~Inc. dividends~~ of ~~$100,875 and $93,650~~$120.0 during the nine months ended September 30, ~~2017~~2021.

18.

Commitments and ~~2016, respectively.~~

~~15.~~

~~Commitments and Contingencies~~

Contingencies

~~Joseph Amey, et al. v. Cinemark USA, Inc., Case No. 3:13cv05669, In the United States District Court for the Northern District of California, San Francisco Division.~~ The case presents putative class action claims for damages and attorney’s fees arising from employee wage and hour claims under California law for alleged meal period, rest break, reporting time pay, unpaid wages, pay upon termination, and wage statements violations. The claims are also asserted as a representative action under the California Private Attorney General Act (“PAGA”). The Company denies the claims, denies that class certification is appropriate and denies that a PAGA representative action is appropriate, and is vigorously defending against the claims. The Company denies any violation of law and plans to vigorously defend against all claims. The Court recently determined that class certification is not appropriate and determined that a PAGA representative action is not appropriate. The plaintiff has appealed these rulings. The Company is unable to predict the outcome of this litigation or the range of potential loss.

~~Flagship Theatres of Palm Desert, LLC d/b/a Cinemas Palme D’Or v. Century Theatres, Inc., and Cinemark USA, Inc.; Superior Court of the State of California, County of Los Angeles.~~ Plaintiff in this case alleges that the Company violated California antitrust and unfair competition laws by engaging in “circuit dealing” with various motion picture distributors and tortuously interfered with Plaintiff’s business relationships. Plaintiff seeks compensatory damages, trebling of those damages under California law, punitive damages, injunctive relief, attorneys’ fees, costs and interest. Plaintiff also alleges that the Company’s conduct ultimately resulted in closure of its theatre in June 2016. The Company denied the allegations. In 2008, the Company moved for summary judgment on Plaintiff’s claims, arguing primarily that clearances between the theatres at issue were lawful and that Plaintiff lacked proof sufficient to support certain technical elements of its antitrust claims. The trial court granted that motion and dismissed Plaintiff’s claims. Plaintiff appealed and, in 2011, the Court of Appeal reversed, holding, among other things, that Plaintiff’s claims were not about the illegality of clearances but were focused, instead, on “circuit dealing.” Having re-framed the claims in that manner, the Court of Appeal held that the trial court’s decision to limit discovery to the market where the theatres at issue operated was an error, as “circuit dealing” necessarily involves activities in different markets. Upon return to the trial court, the parties engaged in additional, broadened discovery related to Plaintiff’s “circuit dealing” claim. Thereafter, the Company moved again for summary judgment on all of Plaintiff’s claims. That new motion for summary judgment was pending when, on or about April 11, 2014, the trial court granted the Company’s motion for terminating sanctions and entered a judgment dismissing the case with prejudice. Plaintiff then appealed that second dismissal, seeking to have the judgment reversed and the case remanded to the trial court. The Court of Appeal issued a ruling on May 24, 2016, reversing the granting of terminating sanctions and instead imposed a lesser evidentiary and damages preclusion sanction. The case returned to the trial court on October 6, 2016. The Company has denied Plaintiff’s allegations and is vigorously defending these claims. The Company is unable to predict the outcome of this litigation or the range of potential loss.

The Company received a Civil Investigative Demand (“CID”) from the Antitrust Division of the United States Department of Justice. The CID relates to an investigation under Sections 1 and 2 of the Sherman Act. The Company also received CIDs from the Antitrust Section of the Office of the Attorney General of the State of Ohio and later from other states regarding similar inquiries under state antitrust laws. The CIDs request the Company to answer interrogatories, and produce documents, or both, related to the investigation of matters including film clearances, potential coordination and/or communication with other major theatre circuits and

~~CINEMARK USA, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~In thousands, except share and per share data~~

related joint ventures. The Company intends to fully cooperate with all federal and state government agencies. Although the Company does not believe that it has violated any federal or state antitrust or competition laws, it cannot predict the ultimate scope, duration or outcome of these investigations.

From time to time, the Company is involved in various ~~other~~ legal proceedings arising from the ordinary course of its business operations, such as personal injury claims, employment matters, patent claims, landlord-tenant disputes, ~~patent claims~~contractual disputes with landlords over certain termination rights or the right to discontinue rent payments due to the COVID-19 pandemic and other contractual disputes, some of which are covered by insurance. The Company believes its potential liability with respect to proceedings currently pending is not material, individually or in the aggregate, to the Company’s financial position, results of operations and cash flows.

~~16.~~

~~Condensed Consolidating Financial Information of Subsidiary Guarantors~~

AsCinemark Holdings, Inc., et al vs Factory Mutual Insurance Company. The Company filed suit on November 18, 2020, in the District Court, 471st Judicial District, Collin County, Texas. On December 22, 2020, the case was moved to the US District Court for the Eastern District of ~~September 30, 2017,~~Texas, Sherman Division. The Company submitted a claim under its property insurance policy issued by Factory Mutual Insurance Company (the “FM Policy”) for losses sustained as a result of the closure of the Company’s theatres due to the COVID-19 pandemic. Factory Mutual Insurance Company (“FM”) denied the Company’s claim. The Company is seeking damages resulting from FM’s breach of contract, FM’s bad faith conduct and a declaration of the parties’ rights under the FM Policy. The Company cannot predict the outcome of this litigation.

Lakeenya Neal, et al v. Cinemark Holdings, Inc., et al. This class action lawsuit was filed against the Company ~~had outstanding $400,000 aggregate principal amount~~on December 10, 2021, in the Central District of ~~5.125% senior notes due 2022, or~~Los Angeles County Superior Court of the ~~5.125% Senior Notes,~~State of California alleging certain violations of the Fair and ~~$755,000 aggregate principal amount~~Accurate Credit Transactions Act. We firmly maintain that the allegations are without merit and will vigorously defend this lawsuit. The Company cannot predict the outcome of 4.875% senior notes due 2023, or the 4.875% Senior Notes, (collectively the “Notes”). These Notes are fully and unconditionally guaranteed on a joint and several senior unsecured basis by the following subsidiaries of Cinemark USA, Inc.:this litigation.

Sunnymead Cinema Corp., Cinemark Properties, Inc., Greeley Holdings, Inc., Cinemark Partners I, Inc., CNMK Investments, Inc., CNMK Texas Properties, LLC., Cinemark Concessions LLC, Century Theatres, Inc., Marin Theatre Management, LLC, Century Theatres NG, LLC, Cinearts LLC, Cinearts Sacramento, LLC, Corte Madera Theatres, LLC, Novato Theatres, LLC, San Rafael Theatres, LLC, Northbay Theatres, LLC, Century Theatres Summit Sierra, LLC and Century Theatres Seattle, LLC.

~~The following supplemental condensed consolidating financial information presents:~~

Condensed consolidating balance sheet information as of December 31, 2016 and September 30, 2017, condensed consolidating statements of income information for the three and nine months ended September 30, 2017 and 2016, condensed consolidating statements of comprehensive income information for the three and nine months ended September 30, 2017 and 2016 and condensed consolidating statements of cash flows information for the nine months ended September 30, 2017 and 2016.

Cinemark USA, Inc. (the “Parent” and “Issuer”), combined Guarantor Subsidiaries and combined Non-Guarantor Subsidiaries with their investments in subsidiaries accounted for using the equity method of accounting and therefore, the Parent column reflects the equity income of its Guarantor Subsidiaries and Non-Guarantor Subsidiaries, which are also separately reflected in the stand-alone Guarantor Subsidiaries and Non-Guarantor Subsidiaries column. Additionally, the Guarantor Subsidiaries column reflects the equity income (loss) of its Non-Guarantor Subsidiaries, which are also separately reflected in the stand-alone Non-Guarantor Subsidiaries column.

~~Elimination entries necessary to consolidate the Parent and all of its Subsidiaries~~

2235

~~CINEMARK USA, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~In thousands, except share and per share data~~

~~CONDENSED CONSOLIDATING BALANCE SHEET INFORMATION~~

~~DECEMBER 31, 2016~~

Parent

Subsidiary

Subsidiary

Company

Guarantors

Non-Guarantors

Eliminations

Consolidated

(In thousands)

Assets

Current assets

Cash and cash equivalents

$
146,855

$
281,023

$
133,260

$
—

$
561,138

Other current assets

62,425

15,098

71,706

(34,154
)

115,075

Accounts receivable from parent
   or subsidiaries

76,550

121,478

—

(187,948
)

10,080

Total current assets

285,830

417,599

204,966

(222,102
)

686,293

Theatre properties and equipment - net

604,506

678,984

421,046

—

1,704,536

Investment in subsidiaries

1,570,592

132,892

—

(1,703,484
)

—

Other assets

1,409,320

134,284

488,535

(106,359
)

1,925,780

Total assets

$
3,870,248

$
1,363,759

$
1,114,547

$
(2,031,945
)

$
4,316,609

Liabilities and equity

Current liabilities

Current portion of long-term debt

$
4,282

$
—

$
1,409

$
(20
)

$
5,671

Current portion of capital lease obligations

7,903

9,541

3,695

—

21,139

Accounts payable and accrued expenses

197,789

121,640

113,020

(16,457
)

415,992

Accounts payable to parent or subsidiaries

—

—

187,948

(187,948
)

—

Total current liabilities

209,974

131,181

306,072

(204,425
)

442,802

Long-term liabilities

Long-term debt, less current portion

1,879,663

—

12,600

(109,822
)

1,782,441

Capital lease obligations, less current
   portion

124,944

71,228

38,109

—

234,281

Other long-term liabilities and deferrals

382,729

84,429

120,061

(14,214
)

573,005

Total long-term liabilities

2,387,336

155,657

170,770

(124,036
)

2,589,727

Commitments and contingencies

Equity

Cinemark USA, Inc.'s stockholder's equity:

Common stock

49,543

457,368

10,239

(467,607
)

49,543

Other stockholder's equity

1,223,395

619,553

616,324

(1,235,877
)

1,223,395

Total Cinemark USA, Inc. stockholder's
   equity

1,272,938

1,076,921

626,563

(1,703,484
)

1,272,938

Noncontrolling interests

—

—

11,142

—

11,142

Total equity

1,272,938

1,076,921

637,705

(1,703,484
)

1,284,080

Total liabilities and equity

$
3,870,248

$
1,363,759

$
1,114,547

$
(2,031,945
)

$
4,316,609

~~CINEMARK USA, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~In thousands, except share and per share data~~

~~CONDENSED CONSOLIDATING BALANCE SHEET INFORMATION~~

~~SEPTEMBER 30, 2017~~

Parent

Subsidiary

Subsidiary

Company

Guarantors

Non-Guarantors

Eliminations

Consolidated

(In thousands)

Assets

Current assets

Cash and cash equivalents

$
103,288

$
176,544

$
189,477

$
—

$
469,309

Other current assets

116,950

21,556

74,362

(91,986
)

120,882

Accounts receivable from parent
   or subsidiaries

131,040

97,739

—

(214,587
)

14,192

Total current assets

351,278

295,839

263,839

(306,573
)

604,383

Theatre properties and equipment - net

622,590

747,046

421,970

—

1,791,606

Investment in subsidiaries

1,613,492

158,349

—

(1,771,841
)

—

Other assets

1,433,344

134,645

536,003

(114,279
)

1,989,713

Total assets

$
4,020,704

$
1,335,879

$
1,221,812

$
(2,192,693
)

$
4,385,702

Liabilities and equity

Current liabilities

Current portion of long-term debt

$
5,710

$
—

$
1,389

$
—

$
7,099

Current portion of capital lease obligations

9,223

10,799

4,814

—

24,836

Accounts payable and accrued expenses

245,075

91,234

99,276

(75,573
)

360,012

Accounts payable to parent or subsidiaries

—

—

214,587

(214,587
)

—

Total current liabilities

260,008

102,033

320,066

(290,160
)

391,947

Long-term liabilities

Long-term debt, less current portion

1,879,174

—

12,600

(109,822
)

1,781,952

Capital lease obligations, less current
   portion

128,080

78,681

45,286

—

252,047

Other long-term liabilities and deferrals

398,202

82,665

132,527

(20,870
)

592,524

Total long-term liabilities

2,405,456

161,346

190,413

(130,692
)

2,626,523

Commitments and contingencies

Equity

Cinemark USA, Inc.'s stockholder's equity:

Common stock

49,543

457,368

10,238

(467,606
)

49,543

Other stockholder's equity

1,305,697

615,132

689,103

(1,304,235
)

1,305,697

Total Cinemark USA, Inc. stockholder's
   equity

1,355,240

1,072,500

699,341

(1,771,841
)

1,355,240

Noncontrolling interests

—

—

11,992

—

11,992

Total equity

1,355,240

1,072,500

711,333

(1,771,841
)

1,367,232

Total liabilities and equity

$
4,020,704

$
1,335,879

$
1,221,812

$
(2,192,693
)

$
4,385,702

~~CINEMARK USA, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~In thousands, except share and per share data~~

~~CONDENSED CONSOLIDATING STATEMENT OF INCOME INFORMATION~~

~~THREE MONTHS ENDED SEPTEMBER 30, 2016~~

Parent

Subsidiary

Subsidiary

Company

Guarantors

Non-Guarantors

Eliminations

Consolidated

(In thousands)

Revenues

$
260,296

$
312,447

$
208,654

$
(12,823
)

$
768,574

Cost of operations

Theatre operating expenses

204,521

211,283

150,980

(12,823
)

553,961

General and administrative expenses

3,094

20,125

11,441

—

34,660

Depreciation and amortization

17,690

20,891

15,606

—

54,187

Impairment of long-lived assets

406

—

—

—

406

Loss on sale of assets and other

2,047

4,660

233

—

6,940

Total cost of operations

227,758

256,959

178,260

(12,823
)

650,154

Operating income

32,538

55,488

30,394

—

118,420

Other income (expense)

Interest expense

(23,552
)

(1,847
)

(1,607
)

347

(26,659
)
Distributions from NCM

—

—

1,381

—

1,381

Equity in income of affiliates

60,972

20,481

11,341

(80,404
)

12,390

Other income (expense)

104

(4
)

2,397

(347
)

2,150

Total other income (expense)

37,524

18,630

13,512

(80,404
)

(10,738
)
Income before income taxes

70,062

74,118

43,906

(80,404
)

107,682

Income taxes

4,016

20,903

16,246

—

41,165

Net income

66,046

53,215

27,660

(80,404
)

66,517

Less: Net income attributable
to noncontrolling interests

—

—

471

—

471

Net income attributable to Cinemark
USA, Inc.

$
66,046

$
53,215

$
27,189

$
(80,404
)

$
66,046

~~CINEMARK USA, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~In thousands, except share and per share data~~

~~CONDENSED CONSOLIDATING STATEMENT OF INCOME INFORMATION~~

~~THREE MONTHS ENDED SEPTEMBER 30, 2017~~

Parent

Subsidiary

Subsidiary

Company

Guarantors

Non-Guarantors

Eliminations

Consolidated

(In thousands)

Revenues

$
230,580

$
287,525

$
209,042

$
(16,399
)

$
710,748

Cost of operations

Theatre operating expenses

192,155

200,571

151,645

(16,399
)

527,972

General and administrative expenses

2,632

19,697

14,183

—

36,512

Depreciation and amortization

19,118

21,413

17,521

—

58,052

Impairment of long-lived assets

1,054

-

3,972

—

5,026

Loss on sale of assets and other

3,075

4,277

1,224

—

8,576

Total cost of operations

218,034

245,958

188,545

(16,399
)

636,138

Operating income

12,546

41,567

20,497

—

74,610

Other income (expense)

Interest expense

(23,565
)

(1,984
)

(1,127
)

359

(26,317
)
Distributions from NCM

—

—

2,144

—

2,144

Equity in income of affiliates

46,446

13,101

9,578

(58,223
)

10,902

Other income

307

471

1,843

(359
)

2,262

Total other income (expense)

23,188

11,588

12,438

(58,223
)

(11,009
)
Income before income taxes

35,734

53,155

32,935

(58,223
)

63,601

Income taxes

(2,669
)

15,596

11,870

-

24,797

Net income

38,403

37,559

21,065

(58,223
)

38,804

Less: Net income attributable to
noncontrolling interests

—

—

401

—

401

Net income attributable to Cinemark
USA, Inc.

$
38,403

$
37,559

$
20,664

$
(58,223
)

$
38,403

~~CINEMARK USA, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~In thousands, except share and per share data~~

~~CONDENSED CONSOLIDATING STATEMENT OF INCOME INFORMATION~~

~~NINE MONTHS ENDED SEPTEMBER 30, 2016~~

Parent

Subsidiary

Subsidiary

Company

Guarantors

Non-Guarantors

Eliminations

Consolidated

(In thousands)

Revenues

$
758,952

$
919,705

$
579,483

$
(40,293
)

$
2,217,847

Cost of operations

Theatre operating expenses

600,225

620,886

420,525

(40,293
)

1,601,343

General and administrative expenses

10,727

63,816

32,443

—

106,986

Depreciation and amortization

51,687

60,782

43,405

—

155,874

Impairment of long-lived assets

1,501

—

822

—

2,323

Loss on sale of assets and other

1,623

8,598

764

—

10,985

Total cost of operations

665,763

754,082

497,959

(40,293
)

1,877,511

Operating income

93,189

165,623

81,524

—

340,336

Other income (expense)

Interest expense

(72,667
)

(5,720
)

(4,543
)

950

(81,980
)
Loss on debt amendments and refinancing

(13,284
)

—

—

—

(13,284
)
Distributions from NCM

1,310

—

8,807

—

10,117

Equity in income of affiliates

173,232

55,812

23,309

(227,756
)

24,597

Other income

237

24

8,602

(950
)

7,913

Total other income (expense)

88,828

50,116

36,175

(227,756
)

(52,637
)
Income before income taxes

182,017

215,739

117,699

(227,756
)

287,699

Income taxes

2,593

62,281

41,947

—

106,821

Net income

179,424

153,458

75,752

(227,756
)

180,878

Less: Net income attributable to
noncontrolling interests

—

—

1,454

—

1,454

Net income attributable to Cinemark
USA, Inc.

$
179,424

$
153,458

$
74,298

$
(227,756
)

$
179,424

~~CINEMARK USA, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~In thousands, except share and per share data~~

~~CONDENSED CONSOLIDATING STATEMENT OF INCOME INFORMATION~~

~~NINE MONTHS ENDED SEPTEMBER 30, 2017~~

Parent

Subsidiary

Subsidiary

Company

Guarantors

Non-Guarantors

Eliminations

Consolidated

(In thousands)

Revenues

$
748,282

$
903,500

$
631,035

$
(41,264
)

$
2,241,553

Cost of operations

Theatre operating expenses

594,731

618,160

459,731

(41,264
)

1,631,358

General and administrative expenses

9,257

60,906

41,016

—

111,179

Depreciation and amortization

58,969

63,574

52,002

—

174,545

Impairment of long-lived assets

1,340

71

8,189

—

9,600

(Gain) loss on sale of assets and other

8,580

(405
)

1,289

—

9,464

Total cost of operations

672,877

742,306

562,227

(41,264
)

1,936,146

Operating income

75,405

161,194

68,808

—

305,407

Other income (expense)

Interest expense

(70,348
)

(5,717
)

(4,217
)

1,074

(79,208
)
Loss on debt amendments and refinancing

(246
)

—

—

—

(246
)
Distributions from NCM

—

—

11,704

—

11,704

Equity in income of affiliates

166,691

42,855

24,905

(207,684
)

26,767

Other income

2,194

633

4,656

(1,074
)

6,409

Total other income (expense)

98,291

37,771

37,048

(207,684
)

(34,574
)
Income before income taxes

173,696

198,965

105,856

(207,684
)

270,833

Income taxes

3,468

59,495

36,204

-

99,167

Net income

170,228

139,470

69,652

(207,684
)

171,666

Less: Net income attributable to
noncontrolling interests

—

—

1,438

—

1,438

Net income attributable to Cinemark
USA, Inc.

$
170,228

$
139,470

$
68,214

$
(207,684
)

$
170,228

~~CINEMARK USA, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~In thousands, except share and per share data~~

~~CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME INFORMATION~~

~~THREE MONTHS ENDED SEPTEMBER 30, 2016~~

Parent

Subsidiary

Subsidiary

Company

Guarantors

Non-Guarantors

Eliminations

Consolidated

(In thousands)

Net income

$
66,046

$
53,215

$
27,660

$
(80,404
)

$
66,517

Other comprehensive loss, net of tax

Other comprehensive loss of equity
   method investments

(7
)

—

—

—

(7
)
Foreign currency translation adjustments

(3,673
)

—

(3,669
)

3,673

(3,669
)
Total other comprehensive loss, net of tax

(3,680
)

—

(3,669
)

3,673

(3,676
)
Total comprehensive income, net of tax

$
62,366

$
53,215

$
23,991

$
(76,731
)

$
62,841

Comprehensive income attributable to
   noncontrolling interests

—

—

(475
)

—

(475
)
Comprehensive income attributable to
   Cinemark USA, Inc.

$
62,366

$
53,215

$
23,516

$
(76,731
)

$
62,366

~~CINEMARK USA, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~In thousands, except share and per share data~~

~~CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME INFORMATION~~

~~THREE MONTHS ENDED SEPTEMBER 30, 2017~~

Parent

Subsidiary

Subsidiary

Company

Guarantors

Non-Guarantors

Eliminations

Consolidated

(In thousands)

Net income

$
38,403

$
37,559

$
21,065

$
(58,223
)

$
38,804

Other comprehensive income (loss), net of tax

Other comprehensive loss of equity method investments

(11
)

—

(11
)

11

(11
)
Foreign currency translation adjustments

9,085

—

9,085

(9,085
)

9,085

Total other comprehensive income, net of tax

9,074

—

9,074

(9,074
)

9,074

Total comprehensive income, net of tax

$
47,477

$
37,559

$
30,139

$
(67,297
)

$
47,878

Comprehensive income attributable to noncontrolling interests

—

—

(401
)

—

(401
)
Comprehensive income (loss) attributable to Cinemark USA, Inc.

$
47,477

$
37,559

$
29,738

$
(67,297
)

$
47,477

~~CINEMARK USA, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~In thousands, except share and per share data~~

~~CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME INFORMATION~~

~~NINE MONTHS ENDED SEPTEMBER 30, 2016~~

Parent

Subsidiary

Subsidiary

Company

Guarantors

Non-Guarantors

Eliminations

Consolidated

(In thousands)

Net income

$
179,424

$
153,458

$
75,752

$
(227,756
)

$
180,878

Other comprehensive income (loss), net of tax

Unrealized gain due to fair value adjustments on interest rate swap
agreements, net of settlements, net of taxes of $138

234

—

—

—

234

Other comprehensive loss of equity method investments

(183
)

—

—

—

(183
)
Foreign currency translation adjustments

34,974

—

34,998

(34,974
)

34,998

Total other comprehensive income, net of tax

35,025

—

34,998

(34,974
)

35,049

Total comprehensive income, net of tax

$
214,449

$
153,458

$
110,750

$
(262,730
)

$
215,927

Comprehensive income attributable to noncontrolling interests

—

—

(1,478
)

—

(1,478
)
Comprehensive income attributable to Cinemark USA, Inc.

$
214,449

$
153,458

$
109,272

$
(262,730
)

$
214,449

~~CINEMARK USA, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~In thousands, except share and per share data~~

~~CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME INFORMATION~~

~~NINE MONTHS ENDED SEPTEMBER 30, 2017~~

Parent

Subsidiary

Subsidiary

Company

Guarantors

Non-Guarantors

Eliminations

Consolidated

(In thousands)

Net income

$
170,228

$
139,470

$
69,652

$
(207,684
)

$
171,666

Other comprehensive income, net of tax

Other comprehensive income of equity method investments

92

—

92

(92
)

92

Foreign currency translation adjustments

5,578

—

5,578

(5,578
)

5,578

Total other comprehensive income, net of tax

5,670

—

5,670

(5,670
)

5,670

Total comprehensive income, net of tax

$
175,898

$
139,470

$
75,322

$
(213,354
)

$
177,336

Comprehensive income attributable to noncontrolling interests

—

—

(1,438
)

—

(1,438
)
Comprehensive income attributable to Cinemark USA, Inc.

$
175,898

$
139,470

$
73,884

$
(213,354
)

$
175,898

~~CINEMARK USA, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~In thousands, except share and per share data~~

~~CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS INFORMATION~~

~~NINE MONTHS ENDED SEPTEMBER 30, 2016~~

Parent

Subsidiary

Subsidiary

Company

Guarantors

Non-Guarantors

Eliminations

Consolidated

(In thousands)

Operating activities

Net income

$
179,424

$
153,458

$
75,752

$
(227,756
)

$
180,878

Adjustments to reconcile net income to
   cash provided by operating activities

(106,960
)

21,970

31,287

227,756

174,053

Changes in assets and liabilities

29,668

(87,172
)

(19,677
)

—

(77,181
)
Net cash provided by operating activities

102,132

88,256

87,362

—

277,750

Investing activities

Additions to theatre properties and equipment

(84,633
)

(89,554
)

(56,159
)

—

(230,346
)
Acquisition of theatres in the U.S.

(15,300
)

—

—

—

(15,300
)
Proceeds from sale of theatre properties and
   equipment and other

2,912

339

147

—

3,398

Proceeds from sale of marketable securities

13,451

—

—

—

13,451

Intercompany note issuances

(4,455
)

—

—

4,455

Dividends received from subsidiaries

25,733

8,011

—

(33,744
)

—

Investment in joint ventures and other

(1,000
)

—

(703
)

—

(1,703
)
Net cash used for investing activities

(63,292
)

(81,204
)

(56,715
)

(29,289
)

(230,500
)
Financing activities

Dividends paid to parent

(93,650
)

—

(33,744
)

33,744

(93,650
)
Proceeds from issuance of Senior Notes,
   net of discount

222,750

—

—

—

222,750

Retirement of Senior Subordinated Notes

(200,000
)

—

—

—

(200,000
)
Repayments of long-term debt

(15,201
)

—

(16
)

—

(15,217
)
Payments of debt issue costs

(4,504
)

—

—

—

(4,504
)
Intercompany loan proceeds

-

—

4,455

(4,455
)

Payments on capital leases

(4,906
)

(7,829
)

(1,920
)

—

(14,655
)
Other

1,797

(6,828
)

(515
)

—

(5,546
)
Net cash used for financing activities

(93,714
)

(14,657
)

(31,740
)

29,289

(110,822
)
Effect of exchange rate changes on cash and
   cash equivalents

—

—

2,081

—

2,081

Increase (decrease) in cash and cash
   equivalents

(54,874
)

(7,605
)

988

—

(61,491
)
Cash and cash equivalents:

Beginning of year

141,364

95,865

351,274

—

588,503

End of year

$
86,490

$
88,260

$
352,262

$
—

$
527,012

~~CINEMARK USA, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~In thousands, except share and per share data~~

~~CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS INFORMATION~~

~~NINE MONTHS ENDED SEPTEMBER 30, 2017~~

Parent

Subsidiary

Subsidiary

Company

Guarantors

Non-Guarantors

Eliminations

Consolidated

(In thousands)

Operating activities

Net income

$
170,228

$
139,470

$
69,652

$
(207,684
)

$
171,666

Adjustments to reconcile net income to
   cash provided by operating activities

(93,073
)

28,387

52,671

207,684

195,669

Changes in assets and liabilities

(38,534
)

(26,862
)

8,997

—

(56,399
)
Net cash provided by operating activities

38,621

140,995

131,320

—

310,936

Investing activities

Additions to theatre properties and
   equipment

(89,111
)

(130,816
)

(42,803
)

—

(262,730
)
Acquisition of theatres in the U.S. and international markets

(12,500
)

—

(28,500
)

—

(41,000
)
Proceeds from sale of theatre properties
   and equipment and other

2,147

12,267

402

—

14,816

Dividends received from subsidiaries

127,600

6

—

(127,606
)

—

Investment in joint ventures and other

—

(69
)

(1,109
)

—

(1,178
)
Net cash provided by (used for)
   investing activities

28,136

(118,612
)

(72,010
)

(127,606
)

(290,092
)
Financing activities

Dividends paid to parent

(100,875
)

(127,000
)

(606
)

127,606

(100,875
)
Repayments of long-term debt

(2,855
)

—

—

—

(2,855
)
Payments on capital leases

(5,745
)

(7,119
)

(2,950
)

—

(15,814
)
Proceeds from financing lease

-

10,200

-

—

10,200

Other

(849
)

(2,943
)

(588
)

—

(4,380
)
Net cash used for financing activities

(110,324
)

(126,862
)

(4,144
)

127,606

(113,724
)
Effect of exchange rate changes on cash and
   cash equivalents

—

—

1,051

—

1,051

Increase (decrease) in cash and cash
   equivalents

(43,567
)

(104,479
)

56,217

—

(91,829
)
Cash and cash equivalents:

Beginning of year

146,855

281,023

133,260

—

561,138

End of year

$
103,288

$
176,544

$
189,477

$
—

$
469,309

~~* * * * *~~

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Cinemark Holdings, Inc. is a holding company and its wholly-owned subsidiary is Cinemark USA, Inc. Holdings consolidates CUSA for financial statement purposes. CUSA comprises approximately the entire balance of Holdings’ assets, liabilities and operating cash flows. In addition, CUSA’s revenue comprises 100% and its operating expenses comprise nearly 100% of Holdings’ revenue and operating expenses, respectively. The following discussion and analysis should be read in conjunction with our condensed consolidated financial statements and related notes and schedules included elsewhere in this report. Where it is important to distinguish between the entities, we either refer specifically to Holdings or CUSA. Otherwise, all references to “we,” “our,” “us,” “the Company” or "Cinemark" relate to Cinemark Holdings, Inc. and its consolidated subsidiaries and all references to CUSA relate to CUSA and its consolidated subsidiaries. Amounts included in the following discussion, except for screens, average screens, average ticket price and concessions revenue per patron, are rounded in millions.

We are a leader in the motion picture exhibition industry, with theatres in the U.S., Brazil, Argentina, Chile, Colombia, Ecuador, Peru, Honduras, El Salvador, Nicaragua, Costa Rica, Panama, Guatemala, Bolivia, Curacao and Paraguay. As of September 30, ~~2017,~~2022, we managed our business under two reportable operating segments – U.S. markets and international markets. See Note 1316 to our condensed consolidated financial statements.

Impact of COVID-19 Pandemic

The COVID-19 pandemic has had an unprecedented impact on the world and the movie exhibition industry with widespread social and economic effects. We temporarily closed our theatres in the U.S. and Latin America during March of 2020 at the onset of the COVID-19 outbreak. During that time, we implemented various cash preservation strategies, including, but not limited to, temporary personnel and salary reductions, halting non-essential operating and capital expenditures, negotiating modified timing and/or abatement of contractual payments with landlords and other major suppliers, and suspending quarterly dividends paid by Holdings to its shareholders.

Throughout 2020 and 2021 we reopened theatres as local restrictions and the status of the COVID-19 pandemic would allow. All of our domestic and international theatres were reopened by the end of the fourth quarter of 2021. The industry’s recovery from the COVID-19 pandemic is still underway and is contingent upon the volume of new film content available, as well as the box office performance of new film content released, consumer sentiment around movie-going and government restrictions. The industry is also adjusting to the evolution of the exclusive theatrical window, competition from streaming platforms, supply chain constraints, inflationary impacts and other economic factors.

Revenue and Expense

We generate ~~revenues~~revenue primarily from filmed entertainment box office receipts and concession sales with additional ~~revenues~~revenue from screen advertising, ~~sales~~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. We also offer alternative entertainment, such as the Metropolitan Opera, concert events, in-theatre gaming, live and pre-recorded sports programs and other special events in our theatres through Fathom Entertainment (operated by AC JV, LLC). NCM provides our domestic theatres with various forms of in-theatre advertising. We also offer alternative entertainment, such as live and pre-recorded sports programs, concert events, the Metropolitan Opera, in-theatre gaming and other special events in our theatres through our joint venture, AC JV, LLC. Our Flix Media ~~initiative has also allowed us to expand our~~subsidiaries provide screen advertising and alternative content ~~within~~for our international circuit and to other international exhibitors.

Films leading the box office during the nine months ended September 30, ~~2017~~2022 included the carryover of ~~Rogue One: A Star Wars Story~~ ~~and~~ ~~Hidden Figures~~ ~~and~~Spider-Man: No Way Home as well as new releases ~~such as~~ ~~Beauty~~including Top Gun: Maverick, Doctor Strange in the Multiverse of Madness, Jurassic World: Dominion, The Batman, Minions: The Rise of Gru, Thor: Love and Thunder, Sonic the ~~Beast, Wonder Woman, Guardians of the Galaxy Vol.~~Hedgehog 2, ~~Spider Man: Homecoming, It, Despicable Me 3, Logan,~~Elvis, Uncharted, Nope, Lightyear, The ~~Fate of the Furious, Dunkirk, The LEGO Batman Movie, Get Out, The Boss Baby, Pirates of the Caribbean: Dead Men Tell No Tales, Kong: Skull Island~~Lost City and ~~other films.~~ Bullet Train. Films scheduled for release during the ~~remainder of 2017~~three months ending December 31, 2022 include ~~Jumanji: Welcome to the Jungle~~ ~~and~~ ~~Coco~~ ~~and well-known franchise films such as~~ ~~Star Wars:~~Black Panther: Wakanda Forever, Black Adam, Puss in Boots: The Last ~~Jedi, Justice League, Pitch Perfect 3~~ Wish, Smile, Ticket to Paradise and ~~Thor: Ragnarok~~ the highly anticipated sequel, Avatar: The Way of Water, among other films. There are several key factors impacting the industry box office's recovery from the COVID-19 pandemic, including the availability and quality of new films. released, the duration of the exclusive theatrical windows and evolving consumer behavior with competition from streaming platforms and other forms of entertainment.

Film rental costs are variable in nature and fluctuate with our admissions ~~revenues.~~revenue. Film rental costs as a percentage of ~~revenues~~revenue are generally higher for periods in which more blockbuster films are released. The Company received virtual print fees from studios for certain of its international locations, which are included as a contra-expense in film rental and advertising costs on the condensed consolidated statements of loss. However, these costs were fully recovered during 2021. Virtual print fees (VPFs) were not received during 2022 and will not be received in future periods. Advertising costs, which are expensed as incurred, are primarily related to ~~campaigns for new~~reigniting theatrical moviegoing, increasing loyalty to Cinemark and ~~renovated theatres and brand advertising that~~building our audiences. These expenses vary depending on the timing and length of such campaigns.

Concession supplies expense is variable in nature and fluctuates with our concession ~~revenues.~~revenue and product mix. Supply chain interruptions and inflationary pressures have impacted, and may continue to impact, product costs and product availability in the near

term. We ~~negotiate prices for concession supplies directly with concession vendors~~source products from a variety of partners around the world to minimize supply chain interruptions and ~~manufacturers to obtain volume rates.~~price increases, wherever possible.

Although salaries and wages include a fixed cost component (i.e., the minimum staffing costs to operate a theatre facility during non-peak periods), salaries and wages tend to move in relation to ~~revenues~~revenue as theatre staffing is adjusted to respond to changes in attendance. Staffing levels may vary based on the amenities offered at a location, such as full-service restaurants, bars or expanded food and beverage options. In ~~some~~certain international locations, staffing levels are also subject to local regulations. Labor market conditions and inflationary pressures have driven increases in wages across our labor base and 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. Certain leases are subject to percentage rent only, while others are subject to percentage rent in addition to their fixed monthly rent if a target annual performance level is achieved. Facility lease expense as a percentage of ~~revenues~~revenue is also affected by the number of theatres under operating leases, the number of theatres under ~~capital~~finance leases and the number of ~~fee-owned~~owned theatres.

Utilities and other costs include both fixed and variable costs and primarily ~~consists~~consist of utilities, ~~expenses for projection and sound equipment maintenance and monitoring,~~ property taxes, janitorial costs, credit card fees, third party ticket sales commissions, repairs and maintenance expenses, security services and expenses for the maintenance and ~~security services.~~monitoring of projection and sound equipment.

General and administrative expense to support the overall management of the Company is primarily fixed in nature with certain variable expenses. Fixed expenses include salaries and wages and benefits costs for our corporate office personnel, facility expenses for our corporate and other offices, software maintenance costs and audit fees. Some variable expenses may include incentive compensation, consulting and legal fees, supplies and other costs that are not specifically associated with the operations of our theatres.

Results of Operations

The following table sets forth, for the periods indicated, ~~certain operating data and~~ the ~~percentage of revenues represented by~~amounts for certain items reflected in ~~our condensed consolidated statements~~operating income (loss) of ~~income.~~Holdings along with each of those items as a percentage of revenue.


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2022			2021			2022			2021
Operating data (in millions):
Revenue
Admissions	$	324.6		$	225.5		$	942.3		$	435.1
Concession		253.6			164.2			712.6			313.5
Other		72.2			45.1			200.1			95.2
Total revenue	$	650.4		$	434.8		$	1,855.0		$	843.8
Cost of operations
Film rentals and advertising		180.9			117.0			531.1			216.8
Concession supplies		46.3			28.2			128.8			54.2
Salaries and wages		97.0			67.6			277.0			149.2
Facility lease expense		77.2			68.8			231.2			200.8
Utilities and other		110.4			81.7			303.8			192.0
General and administrative expense (1)		45.1			38.6			134.0			111.8
Depreciation and amortization		58.3			67.2			181.0			202.3
Impairment of long-lived and other assets		15.2			7.5			107.5			7.5
Restructuring costs		—			(0.4	)		(0.2	)		(1.3	)
(Gain) loss on disposal of assets and other		1.2			1.1			(6.4	)		7.9
Total cost of operations (1)		631.6			477.3			1,887.8			1,141.2
Operating income (loss) (1)	$	18.8		$	(42.5	)	$	(32.8	)	$	(297.4	)

Operating data as a percentage of total revenue:
Revenue
Admissions		49.9	%		51.9	%		50.8	%		51.6	%
Concession		39.0	%		37.8	%		38.4	%		37.2	%
Other		11.1	%		10.3	%		10.8	%		11.2	%
Total revenue		100.0	%		100.0	%		100.0	%		100.0	%
Cost of operations (2)
Film rentals and advertising		55.7	%		51.9	%		56.4	%		49.8	%
Concession supplies		18.3	%		17.2	%		18.1	%		17.3	%
Salaries and wages		14.9	%		15.5	%		14.9	%		17.7	%
Facility lease expense		11.9	%		15.8	%		12.5	%		23.8	%
Utilities and other		17.0	%		18.8	%		16.4	%		22.8	%
General and administrative expense		6.9	%		8.9	%		7.2	%		13.2	%
Depreciation and amortization		9.0	%		15.5	%		9.8	%		24.0	%
Impairment of long-lived and other assets		2.3	%		1.7	%		5.8	%		0.9	%
Restructuring costs		—	%		(0.1	)%		—	%		(0.2	)%
(Gain) loss on disposal of assets and other		0.2	%		0.3	%		(0.3	)%		0.9	%
Total cost of operations		97.1	%		109.8	%		101.8	%		135.2	%
Operating income (loss)		2.9	%		(9.8	)%		(1.8	)%		(35.2	)%
Average screen count (month end average)		5,843			5,876			5,850			5,890

(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. 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:


	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2022		2021			2022			2021
Operating data (in millions):
Cost of operations
General and administrative expense	$	44.4	$	37.9		$	131.8		$	109.7
Total cost of operations	$	630.9	$	476.6		$	1,885.6		$	1,139.1
Operating income (loss)	$	19.5	$	(41.8	)	$	(30.6	)	$	(295.3	)

(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.

Three Months Ended

Nine Months Ended

September 30,

September 30,

2017

2016

2017

2016

Operating data (in millions):

Revenues

Admissions

$
425.1

$
472.9

$
1,351.5

$
1,364.8

Concession

247.1

261.4

777.6

752.8

Other

38.6

34.3

112.5

100.3

Total revenues

$
710.8

$
768.6

$
2,241.6

$
2,217.9

Cost of operations

Film rentals and advertising

226.2

249.8

725.6

733.1

Concession supplies

40.2

41.9

124.1

117.0

Salaries and wages

87.3

84.4

261.3

243.8

Facility lease expense

82.0

82.8

248.6

241.9

Utilities and other

92.4

95.0

271.8

265.5

General and administrative expenses

36.5

34.7

111.2

107.0

Depreciation and amortization

58.1

54.2

174.5

155.9

Impairment of long-lived assets

5.0

0.4

9.6

2.3

Loss on sale of assets and other

8.6

7.0

9.5

11.0

Total cost of operations

636.3

650.2

1,936.2

1,877.5

Operating income

$
74.5

$
118.4

$
305.4

$
340.4

Operating data as a percentage of total revenues:

Revenues

Admissions

59.8
%

61.5
%

60.3
%

61.5
%
Concession

34.8
%

34.0
%

34.7
%

33.9
%
Other

5.4
%

4.5
%

5.0
%

4.6
%
Total revenues

100.0
%

100.0
%

100.0
%

100.0
%
Cost of operations ⁽¹⁾

Film rentals and advertising

53.2
%

52.8
%

53.7
%

53.7
%
Concession supplies

16.3
%

16.0
%

16.0
%

15.5
%
Salaries and wages

12.3
%

11.0
%

11.7
%

11.0
%
Facility lease expense

11.5
%

10.8
%

11.1
%

10.9
%
Utilities and other

13.0
%

12.4
%

12.1
%

12.0
%
General and administrative expenses

5.1
%

4.5
%

5.0
%

4.8
%
Depreciation and amortization

8.2
%

7.1
%

7.8
%

7.0
%
Impairment of long-lived assets

0.7
%

0.1
%

0.4
%

0.1
%
Loss on sale of assets and other

1.2
%

0.9
%

0.4
%

0.5
%
Total cost of operations

89.5
%

84.6
%

86.4
%

84.7
%
Operating income

10.5
%

15.4
%

13.6
%

15.3
%
Average screen count (month end average)

5,939

5,880

5,914

5,846

Average operating screen count (month end average)

5,749

5,785

5,764

5,771

Revenues per average screen (dollars)

$
119,675

$
130,710

$
379,025

$
379,379

~~(1)~~

All costs are expressed as a percentage of total revenues, except film rentals and advertising, which are expressed as a percentage of admissions revenues and concession supplies, which are expressed as a percentage of concession revenues.

Three months ended September 30, ~~2017~~2022 (the “third quarter of 2022”) versus ~~September 30, 2016~~

~~Revenues.~~ ~~Total revenues decreased $57.8 million to $710.8 million for~~ the three months ended September 30, ~~2017 (“~~2021 (the “third quarter of 2021”).

The COVID-19 pandemic has had an ongoing impact on the movie exhibition industry. When comparing the results for the third quarter of ~~2017”) from $768.6 million for~~2022 with the ~~three months ended September 30, 2016 (“~~third quarter of ~~2016”), representing~~2021, the following should be noted:

•

All of our domestic and international theatres were open during the third quarter of 2022 while certain of our domestic and international theatres were temporarily closed for portions of the third quarter of 2021.

•

There was a ~~7.5% decrease.~~ reduced volume of films released theatrically during both periods, although to a lesser extent in the third quarter 2022.

The North American Industry box office exceeded $1.9 billion during the third quarter of 2022, which included blockbuster films such as Minions: The Rise of Gru, Thor: Love and Thunder, Top Gun: Maverick, Nope, Elvis and Bullet Train.

The North American Industry box office totaled approximately $1.4 billion during the third quarter of 2021 with a limited number of new releases, which included Shang-Chi and the Legend of the Ten Rings, Black Widow, Jungle Cruise and Free Guy.

Revenue. The table below, presented by reportable operating segment, summarizes our year-over-year revenue performance and certain key performance indicators that impact our revenue.


	U.S. Operating Segment				International Operating Segment						Consolidated
	Three Months Ended September 30,				Three Months Ended September 30,						Three Months Ended September 30,
	2022		2021		2022		2021		Constant Currency (3) 2022		2022		2021
Admissions revenue	$	257.6	$	195.3	$	67.0	$	30.2	$	76.9	$	324.6	$	225.5
Concession revenue		200.8		142.6		52.8		21.6		60.9		253.6		164.2
Other revenue (1)		53.3		37.6		18.9		7.5		21.7		72.2		45.1
Total revenue (1)	$	511.7	$	375.5	$	138.7	$	59.3	$	159.5	$	650.4	$	434.8
Attendance		29.5		21.5		18.9		9.2				48.4		30.7
Average ticket price (2)	$	8.73	$	9.08	$	3.54	$	3.28	$	4.07	$	6.71	$	7.35
Concession revenue per patron (2)	$	6.81	$	6.63	$	2.79	$	2.35	$	3.22	$	5.24	$	5.35

(1)

U.S. operating segment revenue includes eliminations of intercompany transactions with the international operating segment. See Note 16 to our condensed 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 ~~three months ended September 30, 2017 and 2016.~~

U.S. Operating Segment

International Operating Segment

Consolidated

Constant
Currency ⁽³⁾

2017

2016

%
Change

2017

2016

%
Change

2017

%
Change

2017

2016

%
Change

Admissions revenues ⁽¹⁾

$
312.3

$
354.9

(12.0
)%

$
112.8

$
118.0

(4.4
)%

$
115.4

(2.2
)%

$
425.1

$
472.9

(10.1
)%
Concession revenues ⁽¹⁾

$
181.5

$
197.5

(8.1
)%

$
65.6

$
63.9

2.7
%

$
67.0

4.9
%

$
247.1

$
261.4

(5.5
)%
Other revenues ⁽¹⁾⁽²⁾

$
16.9

$
16.7

1.2
%

$
21.7

$
17.6

23.3
%

$
22.2

26.1
%

$
38.6

$
34.3

12.5
%
Total revenues ⁽¹⁾⁽²⁾

$
510.7

$
569.1

(10.3
)%

$
200.1

$
199.5

0.3
%

$
204.6

2.6
%

$
710.8

$
768.6

(7.5
)%
Attendance ⁽¹⁾

40.6

48.0

(15.4
)%

26.7

28.2

(5.3
)%

67.3

76.2

(11.7
)%
Average ticket price ⁽¹⁾

$
7.69

$
7.39

4.1
%

$
4.22

$
4.18

1.0
%

$
4.32

3.3
%

$
6.32

$
6.21

1.8
%
Concession revenues per patron ⁽¹⁾

$
4.47

$
4.11

8.8
%

$
2.46

$
2.27

8.4
%

$
2.51

10.6
%

$
3.67

$
3.43

7.0
%

~~(1)~~

Revenues and attendance amounts in millions. Average ticket price is calculated as admissions revenues divided by attendance. Concession revenues per patron is calculated as concession revenues divided by attendance.

~~(2)~~

~~U.S. operating segment revenues include eliminations of intercompany transactions with the international operating segment. See Note 13 to our condensed consolidated financial statements.~~

~~(3)~~

~~Constant currency revenue amounts, which are non-GAAP measurements, were calculated using the average exchange rate for the corresponding month for 2016.~~corresponding month for 2021. 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 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.~~Admissions revenues decreased $42.6 million primarily due to a 15.4% decrease in attendance, partially offset by a 4.1% increase in average ticket price. The decrease in concession revenues of $16.0 million was primarily due to the ~~15.4% decrease~~next can result in ~~attendance, partially offset by an 8.8% increase~~meaningful variations in ~~concession revenues per patron. The decrease in attendance was due~~reported results. We are providing constant currency amounts for our international operating segment to present a ~~weaker slate~~period-to-period comparison of ~~films in~~business performance that excludes the impact of foreign currency fluctuations.

•

U.S.Attendance increased 37.2% to 29.5 million patrons during the third quarter of ~~2017~~2022 compared towith 21.5 million patrons during the third quarter of ~~2016,~~2021 due to the improved state of the COVID-19 pandemic and a more consistent cadence of new film releases with broad consumer appeal. Average ticket price decreased to $8.73 during the third quarter of 2022 compared with $9.08 during the third quarter of 2021 driven by a higher mix of matinee and weekday showtimes, fewer Private Watch Parties and the impact of National Cinema Day, partially offset by strategic pricing initiatives. Concessions revenue per patron increased 2.7% to $6.81 during the third quarter of 2022 compared with $6.63 during the third quarter of 2021 primarily driven by strategic pricing initiatives, partially offset by the ~~favorable~~ impact of ~~luxury lounger conversions~~discounted concessions during National Cinema Day. Other revenue for the third quarter of 2022 increased 41.8% to $53.3 million compared with $37.6 million during the third quarter of 2021 primarily due to attendance growth, which drove an increase in screen advertising, transaction fees, and promotional revenue.

•

International.Attendance increased 105.4% to 18.9 million patrons during the third quarter of 2022 compared with 9.2 million patrons during the third quarter of 2021 due to the lifting of COVID-19 related restrictions as well as a more consistent cadence of new ~~theatres.~~film releases with broad consumer appeal. Average ticket price was $3.54 for the third quarter of 2022 as reported, $4.07 in constant currency, compared with $3.28 for the third quarter of 2021. The increase in average ticket price in constant currency was primarily due to ~~price increases.~~inflationary and strategic pricing actions and higher premium ticket mix. Concession revenue per patron was $2.79 as reported, $3.22 in constant currency, for the third quarter of 2022 compared with $2.35 in the third quarter of 2021. The increase in concession ~~revenues~~revenue per patron in constant currency was ~~primarily~~ due to ~~incremental sales, price increases~~inflationary and ~~new theatres.~~

~~International.Admissions revenues decreased $5.2~~strategic pricing actions and higher purchase incidence. Other revenue for the third quarter of 2022 increased 152.0% to $18.9 million ~~as reported primarily due to a 5.3% decrease in attendance, partially offset by a 1.0% increase in average ticket price. Admissions revenues decreased $2.6~~compared with $7.5 million ~~in constant currency,~~during the third period of 2021 primarily due to the ~~5.3% decrease~~growth in attendance, ~~partially offset by a 3.3%~~which drove an increase in screen advertising, transaction fees and promotional revenue.

Cost of Operations. The table below, presented by reportable operating segment, summarizes our year-over-year theatre operating costs.


	U.S. Operating Segment				International Operating Segment						Consolidated
	Three Months Ended September 30,				Three Months Ended September 30,						Three Months Ended September 30,
	2022		2021		2022		2021		Constant Currency (1) 2022		2022		2021
Film rentals and advertising	$	147.1	$	101.9	$	33.8	$	15.1	$	38.9	$	180.9	$	117.0
Concession supplies	$	34.8	$	23.0	$	11.5	$	5.2	$	13.2	$	46.3	$	28.2
Salaries and wages	$	81.9	$	58.0	$	15.1	$	9.6	$	17.3	$	97.0	$	67.6
Facility lease expense	$	61.9	$	58.8	$	15.3	$	10.0	$	17.3	$	77.2	$	68.8
Utilities and other	$	85.4	$	68.1	$	25.0	$	13.6	$	28.0	$	110.4	$	81.7

(1)

Constant currency expense amounts, which are non-GAAP measurements, were calculated using the average exchange rate for the corresponding month for 2021. 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 are providing constant currency ~~average ticket price. Concession revenues increased $1.7 million as reported primarily due~~amounts for our international operating segment to ~~an 8.4% increase in concession revenues per patron, partially offset by~~present a period-to-period comparison of business performance that excludes the ~~5.3% decrease in attendance.~~ ~~Concession revenues increased $3.1 million in constant~~impact of foreign currency primarily due to a 10.6% increase in constant currency concession revenues per patron, partially offset by the 5.3% decrease in attendance. The decrease in attendance was driven by a weaker slate of films duringfluctuations.

•

U.S. Film rentals and advertising costs for the third quarter of ~~2017~~2022 were 57.1% of admissions revenue compared towith 52.2% for the third quarter of ~~2016,~~2021. The rate for the third quarter of 2022 reflected the success of new film releases as discussed above, which skewed higher on sliding film rental scales. The rate for the third quarter of 2021 reflected limited new film releases and the impact of library content. Concession supplies expense for the third quarter of 2022 was 17.3% of concession revenue compared with 16.1% of concession revenue for the third quarter of 2021. The increase in the concession supplies rate was due to inflationary and supply chain pressures on concession costs, partially offset by the impact of ~~new theatres. Average ticket price and~~strategic pricing initiatives on concession revenues per patron increased primarily due to price increases, which were predominantly driven by local inflation. Other revenues increased primarily due to incremental screen advertising revenues generated by an expansion of our Flix Media services to affiliates in various countries and increased promotional income.

sales.

~~Cost of Operations.~~ ~~The table below summarizes our theatre operating costs (in millions) by reportable operating segment for the three months ended September 30, 2017 and 2016.~~

U.S. Operating Segment

International Operating Segment

Consolidated

2017

2016

2017

2016

Constant
Currency
2017 ⁽¹⁾

2017

2016

Film rentals and advertising

$
171.5

$
193.6

$
54.7

$
56.2

$
56.2

$
226.2

$
249.8

Concession supplies

26.2

28.2

14.0

13.7

14.2

40.2

41.9

Salaries and wages

64.6

63.2

22.7

21.2

23.5

87.3

84.4

Facility lease expense

59.8

60.5

22.2

22.3

22.4

82.0

82.8

Utilities and other

64.0

66.9

28.4

28.1

29.0

92.4

95.0

~~(1)~~

Constant currency expense amounts, which are non-GAAP measurements were calculated using the average exchange rate for the corresponding month for 2016. 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 are providing constant currency amounts for our international operating segment to present a period-to-period comparison of business performance that excludes the impact of foreign currency fluctuations.

•

~~U.S.~~ Film rentals and advertising costs were $171.5 million, or 54.9% of admissions revenues, for the third quarter of 2017 compared to $193.6 million, or 54.6% of admissions revenues, for the third quarter of 2016. The increase in the film rentals and advertising rate was primarily due to a higher box office concentration of top performing films during the third quarter of 2017. Concession supplies expense was $26.2 million, or 14.4% of concession revenues, for the third quarter of 2017 compared to $28.2 million, or 14.3% of concession revenues, for the third quarter of 2016.

Salaries and wages increased to ~~$64.6~~$81.9 million for the third quarter of ~~2017 from $63.2~~2022 compared with $58.0 million for the third quarter of ~~2016 primarily due to staffing at new~~2021 as a result of significantly higher attendance, expanded operating hours, wage rate increases with average hourly rates up 11% compared with the third quarter of 2021 and ~~recently remodeled theatres, increases in minimum wages and staffing~~additional labor required for expanded food and beverage ~~initiatives.~~offerings. These increases were partially offset by efficiencies and streamlined operations. Facility lease expense, ~~decreased~~which is primarily fixed in nature, increased to ~~$59.8~~$61.9 million for the third quarter of ~~2017 from $60.5~~2022 due to new theatres and an increase in common area maintenance costs. Utilities and other costs increased to $85.4 million for the third quarter of ~~2016 due to decreased percentage rent~~2022, as many of these costs, such as janitorial costs, utilities costs, credit card fees, repairs and maintenance and security costs, are variable in nature and increased due to the ~~decline~~expansion of operating hours, a significant increase in ~~revenues.~~attendance and inflationary pressures.

•

International. Film rentals and advertising costs for the third quarter of 2022 were 50.4% of admissions revenue compared with 50.0% for the third quarter of 2021. Concession supplies expense was 21.8% of concessions revenue for the third quarter of 2022 compared with 24.1% of concession revenue for the third quarter of 2021. The decrease in concessions supplies rate was primarily driven by the impact of strategic pricing initiatives on concession sales.

Salaries and wages increased to $15.1 million as reported for the third quarter of 2022 due to the significantly higher attendance, expanded operating hours and wage rate increases. Facility lease expense increased to $15.3 million as reported for the third quarter of 2022. The increase was due to higher percentage rent driven by higher revenue and the return of minimum rent thresholds compared with the third quarter of 2021. Utilities and other costs ~~decreased~~increased to ~~$64.0~~$25.0 million as reported as many of these costs are variable in nature, such as utilities, screen advertising commissions, credit card fees, janitorial costs and repairs and maintenance, and were impacted by the significant increase in attendance in the third quarter of 2022. These expenses, as reported, were also impacted by exchange rates in each of the countries in which we operate.

General and Administrative Expense. General and administrative expense for Holdings increased to $45.1 million for the third quarter of ~~2017 from $66.9~~2022 compared with $38.6 million for the third quarter of ~~2016 primarily due~~2021. General and administrative expense attributable to ~~decreased equipment lease expenses for 3-D presentations.~~

~~International.~~ Film rentals and advertising costs were $54.7 million ($56.2 million in constant currency), or 48.5% of admissions revenues, for the third quarter of 2017 compared to $56.2 million, or 47.6% of admissions revenues, for the third quarter of 2016. The increase in the film rental and advertising rate was primarily due to the mix of film product during the third quarter of 2017 compared to the third quarter of 2016 and increased advertising costs during the third quarter of 2017. Concession supplies expense was $14.0 million ($14.2 million in constant currency), or 21.3% of concession revenues, for the third quarter of 2017 compared to $13.7 million, or 21.4% of concession revenues, for the third quarter of 2016.

~~Salaries and wages~~CUSA increased to $22.7 million ($23.5 million in constant currency) for the third quarter of 2017 compared to $21.2 for the third quarter of 2016. The as reported increase was due to new theatres and growth in wages as a result of inflation. Facility lease expense decreased to $22.2 million (increased to $22.4 million in constant currency) for the third quarter of 2017 compared to $22.3$44.4 million for the third quarter of 2016. The as reported decrease was due to decreased percentage rent due to the decline in revenues. Utilities and other costs increased to $28.4 million ($29.0 million in constant currency) for the third quarter of 20172022 compared ~~to $28.1~~with $37.9 million for the third quarter of ~~2016.~~2021. The ~~as reported~~ increase ~~was~~for both Holdings and CUSA is primarily due to ~~increases in utility expenses~~higher staffing levels, wages and ~~the impact of new theatres.~~ benefits inflation, professional fees and a shift to cloud-based software.

~~General~~Depreciation and ~~Administrative Expenses.~~ ~~General~~Amortization. Depreciation and ~~administrative expenses increased~~amortization expense decreased to ~~$36.5~~$58.3 million for the third quarter of ~~2017 from $34.7~~2022 compared with $67.2 million for the third quarter of ~~2016. The increase was~~2021 primarily due to ~~increased salaries, professional fees and share based award compensation expense.~~the impairment of theatre assets during 2021.

~~Depreciation and Amortization.~~ Depreciation and amortization expense increased to $58.1 million during the third quarter of 2017 compared to $54.2 million during the third quarter of 2016. The increase was primarily due to theatre remodels and new theatres.

Impairment of Long-Lived and Other Assets.We recorded asset impairment charges on assets held and used of ~~$5.0~~$15.2 million for the third quarter of 2022. Long-lived asset impairment charges of approximately $4.0 million were recorded primarily due to the prolonged recovery of certain theatres from the COVID-19 pandemic. In addition, we recorded an impairment of $11.2 million for our investment in NCM, as NCMI’s stock price was significantly below the Company’s carrying value of NCM per common unit and due to the prolonged recovery of NCM's business. See Note 12 to our condensed consolidated financial statements for a discussion of

impairment analyses performed and a summary of impairment recorded. We recorded asset impairment charges on assets held and used of $7.5 million for the third quarter of 2021, all of which were long-lived asset impairment charges, primarily due to the limited recovery of certain theatres as a result of the impact of the COVID pandemic.

Loss on Disposal of Assets and Other. A loss on disposal of assets and other of $1.2 million was recorded during the third quarter of 2022 compared with a loss of $1.1 million during the third quarter of ~~2017 compared~~2021. Activity for the third quarter of 2022 was primarily related to ~~$0.4~~the write-off of assets for a closed theatre and the write-off of assets at certain remodeled theatres. Activity for the third quarter of 2021 was primarily related to the removal and disposal of assets at closed theatres.

Interest Expense. Interest expense for Holdings, which includes amortization of debt issuance costs and amortization of accumulated losses for swap amendments, increased to $38.4 million during the third quarter of 2016. The long-lived asset impairment charges recorded during each of the periods presented were specific to theatres that were directly and individually impacted by increased competition, adverse changes in market demographics or adverse changes in the development or the conditions of the areas surrounding the theatre. Impairment charges2022 compared with $38.0 million for the third quarter of ~~2017 impacted nine~~2021. Interest expense attributable to CUSA, which includes amortization of ~~our twenty-six reporting units. See Note 9~~debt issuance costs and amortization of accumulated losses for swap amendments, increased to ~~our condensed consolidated financial statements.~~

~~Loss on Sale of Assets and Other.~~ ~~We recorded a loss on sale of assets and other of $8.6~~$32.4 million during the third quarter of ~~2017~~2022 compared with $31.9 million for the third quarter of 2021. The increase for both Holdings and CUSA was primarily due to ~~$7.0~~the increase in variable interest rates. See further discussion at Financing Activities below.

Equity in Income (Loss) of Affiliates. Equity in income of affiliates of $0.2 million was recorded during the third quarter of 2022 compared with a loss of $(7.2) million during the third quarter of ~~2016. Activity for the third quarter~~2021. The improvement in equity in income (loss) of ~~2017 and the third quarter of 2016 was primarily~~affiliates is due to the ~~retirement of assets related to theatre remodels.~~

~~Interest Expense.~~ Interest costs incurred, including amortization of debt issue costs, were $26.3 million during the third quarter of 2017 compared to $26.7 million during the third quarter of 2016. The decrease was due to amendments to our senior secured credit facility completed during June and December of 2016 and June of 2017 which, in the aggregate, reduced the rate at which our term loan accrues interest by 100 basis points.

~~Distributions from NCM.~~ ~~We recorded a distribution from NCM of $2.1 million during the third quarter of 2017 compared to $1.4 million recorded during the third quarter of 2016, which were in excess of the carrying value~~ongoing recovery of our ~~Tranche 1 investment. See Note 5~~equity investees’ performance as the industry continues to ~~our condensed consolidated financial statements.~~

~~Equity in Income of Affiliates.~~ ~~We recorded equity in income of affiliates of $10.9 million during the third quarter of 2017 compared to $12.4 million during the third quarter of 2016.~~recover. See Notes 58 and 69 to our condensed consolidated financial statements for information about our equity investments.

Income ~~Taxes.~~ ~~Income~~Taxes - Holdings. An income tax expense of ~~$24.8~~$3.4 million was recorded for the third quarter of ~~2017~~2022 compared with an income tax benefit of $(8.9) million for the third quarter of 2021. The effective tax rate was approximately (16.6)% for the third quarter of 2022 compared with 10.3% for the third quarter of 2021. The effective tax rate for the third quarter of 2022 was impacted by valuation allowances related to ~~$41.2~~certain deferred tax assets for which the ultimate realization is uncertain. For the third quarter of 2022, we utilized the annual effective tax rate (“AETR”) method to calculate our interim tax provision. Income tax provisions for interim (quarterly) periods are generally based on estimated annual income tax rates and are adjusted for the effects of significant, infrequent or unusual items (i.e. discrete items) occurring during the interim period. As a result, the interim rate may vary significantly from the normalized annual rate.

Income Taxes - CUSA. An income tax benefit of $(0.4) million was recorded for the third quarter of ~~2016.~~2022 compared with an income tax benefit of $(7.4) million for the third quarter of 2021. The effective tax rate was approximately ~~39.0%~~2.7% for the third quarter of ~~2017~~2022 compared ~~to 38.2%~~with 9.3% for the third quarter of ~~2016.~~2021. The effective tax rate for the third quarter of 2022 was impacted by valuation allowances related to certain deferred tax assets for which the ultimate realization is uncertain. For the third quarter of 2022, we utilized the annual effective tax rate (“AETR”) method to calculate our interim tax provision. . Income tax provisions for interim (quarterly) periods are generally based on estimated annual income tax rates and are adjusted for the effects of significant, infrequent or unusual items (i.e. discrete items) occurring during the interim period. As a result, the interim rate may vary significantly from the normalized annual rate.

Nine months ended September 30, 2022 (the “2022 period”) versus the nine months ended September 30, 2021 (the “2021 period”)

The COVID-19 pandemic has had an ongoing impact on the movie exhibition industry. When comparing the results for the 2022 period with the 2021 period, the following should be noted:

•

All of our domestic and international theatres were open during the 2022 period while certain of our domestic and international theatres were temporarily closed for portions of the 2021 period.

•

There was a reduced volume of films released theatrically during both periods, although to a lesser extent during the 2022 period.

The North American Industry box office exceeded $5.6 billion during the 2022 period, which included blockbuster films such as Top Gun: Maverick, Doctor Strange in the Multiverse of Madness, Jurassic World: Dominion, The Batman, Minions: The Rise of Gru, Thor: Love and Thunder, Sonic the Hedgehog 2, Elvis, Uncharted and Nope.

The North American Industry box office totaled approximately $2.4 billion during the 2021 period with library content and a limited number of new releases, which included Shang-Chi and the Legend of the Ten Rings, Black Widow, F9 The Fast Saga, A Quiet Place Part II, Jungle Cruise, Free Guy, Godzilla vs. Kong, Cruella, Space Jam: A New Legacy and The Conjuring: The Devil Made Me Do It.

Revenue. The table below, presented by reportable operating segment, summarizes our year-over-year revenue performance and certain key performance indicators that impact our revenue.


	U.S. Operating Segment				International Operating Segment						Consolidated
	Nine Months Ended September 30,				Nine Months Ended September 30,						Nine Months Ended September 30,
	2022		2021		2022		2021		Constant Currency (3) 2022		2022		2021
Admissions revenue	$	759.1	$	384.4	$	183.2	$	50.7	$	199.5	$	942.3	$	435.1
Concession revenue		576.5		275.0		136.1		38.5		149.7		712.6		313.5
Other revenue (1)		148.9		82.5		51.2		12.7		55.3		200.1		95.2
Total revenue (1)	$	1,484.5	$	741.9	$	370.5	$	101.9	$	404.5	$	1,855.0	$	843.8
Attendance		84.2		41.8		49.3		15.7				133.5		57.5
Average ticket price (2)	$	9.02	$	9.20	$	3.72	$	3.23	$	4.05	$	7.06	$	7.57
Concession revenue per patron (2)	$	6.85	$	6.58	$	2.76	$	2.45	$	3.04	$	5.34	$	5.45

(1)

U.S. operating segment revenue includes eliminations of intercompany transactions with the international operating segment. See Note 16 to our condensed consolidated financial statements.

(2)

Average ticket price is calculated as admissions revenue divided by attendance. Concession revenue per patron is calculated as concession revenue divided by attendance.

(3)

Constant currency revenue amounts, which are non-GAAP measurements, were calculated using the average exchange rate for the corresponding month for 2021. 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 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.Attendance increased 101.4% to 84.2 million patrons during the 2022 period compared with 41.8 million patrons during the 2021 period due to the improved state of the COVID-19 pandemic and a more consistent cadence of new film releases with broad consumer appeal. Average ticket price decreased to $9.02 during the 2022 period compared with $9.20 during the 2021 period driven by a higher mix of matinee and weekday showtimes and fewer Private Watch Parties, partially offset by strategic pricing initiatives. Concession revenue per patron increased 4.1% to $6.85 during the 2022 period compared with $6.58 during the 2021 period primarily driven by strategic pricing initiatives. Other revenue for the 2022 period increased 80.5% to $148.9 million compared with $82.5 million during the 2021 period primarily due to attendance growth, which drove an increase in transaction fees, screen advertising and promotional revenue.

•

International.Attendance increased 214.0% to 49.3 million patrons during the 2022 period compared with 15.7 million patrons during the 2021 period due to the lifting of COVID-19 related restrictions as well as a more consistent cadence of new film releases with broad consumer appeal. Average ticket price was $3.72 as reported, $4.05 in constant currency, compared with the 2021 period of $3.23. The increase in average ticket price in constant currency was primarily the result of strategic pricing actions and higher premium ticket mix. Concession revenue per patron was $2.76 as reported, $3.04 in constant currency, for the 2022 period compared with $2.45 for the 2021 period. The increase in concession revenue per patron in constant currency was due to strategic pricing actions and higher purchase incidence. Other revenue for the 2022 period increased 303.1% to $51.2 million compared with $12.7 million during the 2021 period primarily due to higher attendance, which drove an increase screen advertising, transaction fees and promotional revenue.

Cost of Operations. The table below, presented by reportable operating segment, summarizes our year-over-year theatre operating costs.


	U.S. Operating Segment				International Operating Segment						Consolidated
	Nine Months Ended September 30,				Nine Months Ended September 30,						Nine Months Ended September 30,
	2022		2021		2022		2021		Constant Currency (1) 2022		2022		2021
Film rentals and advertising	$	439.0	$	191.5	$	92.1	$	25.3	$	100.6	$	531.1	$	216.8
Concession supplies	$	98.9	$	44.6	$	29.9	$	9.6	$	32.9	$	128.8	$	54.2
Salaries and wages	$	233.4	$	126.4	$	43.6	$	22.8	$	47.5	$	277.0	$	149.2
Facility lease expense	$	187.6	$	177.7	$	43.6	$	23.1	$	46.8	$	231.2	$	200.8
Utilities and other	$	234.8	$	161.0	$	69.0	$	31.0	$	74.0	$	303.8	$	192.0

(1)

•

U.S. Film rentals and advertising costs for the 2022 period were 57.8% of admissions revenue compared with 49.8% for the 2021 period. The rate for the 2022 period reflected the success of new film releases as discussed above. The rate for the 2021 period reflected the release of limited new films which skewed lower on our negotiated film rental scales and the impact of library content. Concession supplies expense for the 2022 period was 17.2% of concession revenue compared with 16.2% of concession revenue for the 2021 period. The increase in the concession supplies rate was due to inflationary and supply chain pressures on certain concession categories, partially offset by the impact of strategic pricing initiatives on concession sales.

Salaries and wages increased to $233.4 million for the 2022 period compared with $126.4 million for the 2021 period as a result of significantly higher attendance, expanded operating hours and wage rate increases with average hourly rates up approximately 12% over the 2021 period, partially offset by efficiencies and streamlined operations. Facility lease expense increased to $187.6 million primarily due to new theatres and an increase in common area maintenance costs. Utilities and other costs increased to $234.8 million, as many of these costs, such as janitorial costs, utilities costs, credit card fees, repairs and maintenance and security costs, are variable in nature and were impacted by the expansion of operating hours, a significant increase in attendance and inflationary pressures.

•

International. Film rentals and advertising costs for the 2022 period were 50.3% of admissions revenue compared with 49.9% for the 2021 period. The increase in the film rentals and advertising rate was a result of the increase in new film content and the expiration of VPFs received in certain countries. Concession supplies expense was 22.0% of concessions revenue compared with 24.9% of concession revenue for the 2021 period. The decrease in concessions supplies rate was primarily driven by the impact of strategic pricing initiatives on concession sales.

Salaries and wages increased to $43.6 million as reported for the 2022 period due to the significantly higher attendance, expanded operating hours and wage rate increases. Facility lease expense increased to $43.6 million as reported for the 2022 period. The increase was due to higher percentage rent driven by higher revenue and the return of minimum rent thresholds compared with the 2021 period. Utilities and other costs increased to $69.0 million as reported, as many of these costs are variable in nature, such as utilities, credit card fees, screen advertising commissions, janitorial costs and repairs and maintenance, and were impacted by the significant increase in attendance. These expenses, as reported, were also impacted by exchange rate fluctuations in each of the countries in which we operate.

General and Administrative Expense. General and administrative expense for Holdings increased to $134.0 million for the 2022 period compared with $111.8 million for the 2021 period. General and administrative expense attributable to CUSA increased to $131.8 million for the 2022 period compared with $109.7 million for the 2021 period. The increase is primarily due to higher staffing levels, incentive-based compensation, professional fees and a shift to cloud-based software.

Depreciation and Amortization. Depreciation and amortization expense decreased to $181.0 million for the 2022 period compared with $202.3 million for the 2021 period primarily due to the impairment of theatre assets during 2021.

Impairment of Long-Lived and Other Assets. We recorded asset impairment charges on assets held and used of $107.5 million for the 2022 period. Long-lived asset impairment charges of approximately $107.5 million were recorded primarily due to the prolonged recovery of certain theatres from the COVID pandemic. In addition, we recorded an impairment of $98.0 million for our investment in NCM as NCMI’s stock price was significantly below the Company’s carrying value of NCM per common unit and due to the prolonged recovery of NCM's business. We recorded asset impairment charges on assets held and used of $7.5 million for the 2021 period. See Note 12 to our condensed consolidated financial statements for a discussion of impairment analyses performed and a summary of impairment recorded.

(Gain) Loss on Disposal of Assets and Other. A gain on disposal of assets and other of $(6.4) million was recorded for the 2022 period compared with a loss of $7.9 million for the 2021 period. Activity for the 2022 period was primarily related to the sale of excess land parcels. Activity for the 2021 period was primarily related to the write-off of certain digital projectors received from DCIP in a non-cash distribution that were replaced with laser projectors, partially offset by gains on the sale of excess land parcels.

Interest Expense. Interest expense for Holdings, which includes amortization of debt issuance costs and amortization of accumulated losses for swap amendments, increased to $114.6 million during the 2022 period compared with $111.6 million for the 2021 period. Interest expense attributable to CUSA, which includes amortization of debt issuance costs and amortization of accumulated losses for swap amendments, increased to $96.5 million during the third quarter of 2022 compared with $93.5 million for the third quarter of 2021. The increase for both Holdings and CUSA was primarily due to the issuance of the 5.875% Senior Notes and 5.25% Senior Notes to refinance the 5.125% Senior Notes and 4.875% Senior Notes during 2021. See further discussion at Financing Activities below.

Loss on Extinguishment of Debt. We recorded a loss on extinguishment of debt of $6.5 million during the 2021 period related to the early retirement of our 5.125% Senior Notes and 4.875% Senior Notes, including the write-off of unamortized debt issuance costs and legal and other fees paid.

Equity in Loss of Affiliates. Equity in loss of affiliates of $7.5 million was recorded during the 2022 period compared with $22.1 million during the 2021 period. The decrease in equity in loss of affiliates is due to the ongoing recovery of our equity investees’ performance as the industry continues to recover. See Notes 8 and 9 to our condensed consolidated financial statements for information about our equity investments.

Income Taxes - Holdings. An income tax expense of $6.3 million was recorded for the 2022 period compared with an income tax benefit of $(15.6) million for the 2021 period. The effective tax rate was approximately (3.9)% for the 2022 period compared with 3.5% for the 2021 period. The effective tax rate for the 2022 period was impacted by valuation allowances related to certain deferred tax assets for which the ultimate realization is uncertain. For the 2022 and 2021 periods, we utilized the annual effective tax rate method to calculate our interim tax provision. Income tax provisions for interim (quarterly) periods are based on estimated annual income tax rates and are adjusted for the effects of significant, infrequent or unusual items (i.e. discrete items) occurring during the interim period. As a result, the interim rate may vary significantly from the normalized annual rate.

~~Nine months ended September 30, 2017 versus September 30, 2016~~

~~Revenues.~~ Total revenues increased $23.7 million to $2,241.6 million for the nine months ended September 30, 2017 (“the 2017 period”) from $2,217.9 million for the nine months ended September 30, 2016 (“the 2016 period”), representing a 1.1% increase. The table below, presented by reportable operating segment, summarizes our revenue performance and certain key performance indicators for the nine months ended September 30, 2017 and 2016.

U.S. Operating Segment

International Operating Segment

Consolidated

Constant
Currency ⁽³⁾

2017

2016

%
Change

2017

2016

%
Change

2017

%
Change

2017

2016

%
Change

Admissions revenues ⁽¹⁾

$
1,003.5

$
1,037.7

(3.3
)%

$
348.0

$
327.1

6.4
%

$
336.4

2.8
%

$
1,351.5

$
1,364.8

(1.0
)%
Concession revenues ⁽¹⁾

$
582.2

$
575.3

1.2
%

$
195.4

$
177.5

10.1
%

$
190.0

7.0
%

$
777.6

$
752.8

3.3
%
Other revenues ⁽¹⁾⁽²⁾

$
53.8

$
53.6

0.4
%

$
58.7

$
46.7

25.7
%

$
57.2

22.5
%

$
112.5

$
100.3

12.2
%
Total revenues ⁽¹⁾⁽²⁾

$
1,639.5

$
1,666.6

(1.6
)%

$
602.1

$
551.3

9.2
%

$
583.6

5.9
%

$
2,241.6

$
2,217.9

1.1
%
Attendance ⁽¹⁾

130.1

138.0

(5.7
)%

80.9

83.7

(3.3
)%

211.0

221.7

(4.8
)%
Average ticket price ⁽¹⁾

$
7.71

$
7.52

2.5
%

$
4.30

$
3.91

10.0
%

$
4.16

6.4
%

$
6.41

$
6.16

4.1
%
Concession revenues per patron ⁽¹⁾

$
4.48

$
4.17

7.4
%

$
2.42

$
2.12

14.2
%

$
2.35

10.8
%

$
3.69

$
3.40

8.5
%

~~(1)~~

~~(2)~~

~~U.S. operating segment revenues include eliminations of intercompany transactions with the international operating segment. See Note 13 to our condensed consolidated financial statements.~~

~~(3)~~

Constant currency revenue amounts, which are non-GAAP measurements, were calculated using the average exchange rate for the corresponding month for 2016. 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 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.~~Admissions revenues decreased $34.2 million primarily due to a 5.7% decrease in attendance, partially offset by a 2.5% increase in average ticket price. Concession revenues increased $6.9 million primarily due to a 7.4% increase in concession revenues per patron, partially offset by the 5.7% decrease in attendance. The decrease in attendance was due to a weaker slateIncome Taxes - CUSA. An income tax benefit of films in the 2017 period compared to the 2016 period, partially offset by the favorable impact of luxury lounger conversions and new theatres. The increase in average ticket price was primarily due to price increases. The increase in concession revenues per patron was primarily due to incremental sales, price increases and new theatres.

~~International.~~Admissions revenues increased $20.9 million as reported primarily due to a 10.0% increase in average ticket price, partially offset by a 3.3% decrease in attendance. Admissions revenues increased $9.3 million in constant currency, primarily due to a 6.4% increase in constant currency average ticket price, partially offset by the 3.3% decrease in attendance. Concession revenues increased $17.9 million as reported primarily due to a 14.2% increase in concession revenues per patron, partially offset by the 3.3% decrease in attendance. Concession revenues increased $12.5 million in constant currency, primarily due to a 10.8% increase in constant currency concession revenues per patron, partially offset by the 3.3% decrease in attendance. The decrease in attendance was driven by a weaker slate of films during the 2017 period compared to the 2016 period, partially offset by the impact of new theatres. Average ticket price and concession revenues per patron increased primarily due to price increases, which were predominantly driven by local inflation. Other revenues increased primarily due to incremental screen advertising generated by an expansion of our Flix Media services to affiliates in various countries and increased promotional income.

~~Cost of Operations.~~ ~~The table below summarizes our theatre operating costs (in millions) by reportable operating segment for the nine months ended September 30, 2017 and 2016.~~

U.S. Operating Segment

International Operating Segment

Consolidated

2017

2016

2017

2016

Constant
Currency
2017 ⁽¹⁾

2017

2016

Film rentals and advertising

$
558.3

$
578.2

$
167.3

$
154.9

$
162.2

$
725.6

$
733.1

Concession supplies

82.1

79.9

42.0

37.1

40.8

124.1

117.0

Salaries and wages

194.5

183.1

66.8

60.7

65.9

261.3

243.8

Facility lease expense

181.1

179.7

67.5

62.2

64.9

248.6

241.9

Utilities and other

185.1

188.0

86.7

77.5

84.4

271.8

265.5

~~(1)~~

Constant currency expense amounts, which are non-GAAP measurements, were calculated using the average exchange rate for the corresponding month for 2016. 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 are providing constant currency amounts for our international operating segment to present a period-to-period comparison of business performance that excludes the impact of foreign currency fluctuations.

~~U.S.~~ Film rentals and advertising costs were $558.3 million, or 55.6% of admissions revenues for the 2017 period compared to $578.2 million, or 55.7% of admissions revenues for the 2016 period. The decrease in the film rentals and advertising rate was primarily due to a higher concentration of blockbuster films during the 2016 period. Concession supplies expense was $82.1 million, or 14.1% of concession revenues, for the 2017 period compared to $79.9 million, or 13.9% of concession revenues, for the 2016 period. The increase in the concession supplies rate was primarily due to the impact of our expanded concession offerings.

Salaries and wages increased to $194.5 million for the 2017 period from $183.1 million for the 2016 period primarily due to staffing at new and recently remodeled theatres, increases in minimum wages and staffing for food and beverage initiatives. Facility lease expense increased to $181.1 million for the 2017 period from $179.7 million for the 2016 period due to the impact of new theatres. Utilities and other costs decreased to $185.1 million for the 2017 period from $188.0 million for the 2016 period primarily due to decreases in equipment lease expenses for 3-D presentations, partially offset by increased utilities, repairs and maintenance, and janitorial services expenses.

~~International.~~ Film rentals and advertising costs were $167.3 million ($162.2 million in constant currency), or 48.1% of admissions revenues, for the 2017 period compared to $154.9 million, or 47.4% of admissions revenues, for the 2016 period. The increase in the film rentals and advertising rate was primarily due to higher advertising costs during the 2017 period. Concession supplies expense was $42.0 million ($40.8 million in constant currency), or 21.5% of concession revenues, for the 2017 period compared to $37.1 million, or 20.9% of concession revenues, for the 2016 period. The increase in the concession supplies rate was primarily due to the mix of concession products sold.

Salaries and wages increased to $66.8 million ($65.9 million in constant currency) for the 2017 period compared to $60.7 million for the 2016 period. The as reported increase was due to new theatres, increased local currency wage rates, limited flexibility in scheduling staff caused by shifting government regulations and the impact of changes in foreign currency exchange rates in certain countries in which we operate. Facility lease expense increased to $67.5 million ($64.9 million in constant currency) for the 2017 period compared to $62.2 million for the 2016 period. The as reported increase was due to the impact of changes in foreign currency exchange rates in certain countries in which we operate and new theatres. Utilities and other costs increased to $86.7 million ($84.4 million in constant currency) for the 2017 period compared to $77.5 million for the 2016 period. The as reported increase was due to the impact of changes in foreign currency exchange rates in certain countries in which we operate, increases in repairs and maintenance expenses and utility expenses and the impact of new theatres.

~~General and Administrative Expenses.~~ General and administrative expenses increased to $111.2 million for the 2017 period from $107.0 million for the 2016 period. The increase was primarily due to increased salaries and wages, professional fees and the impact of changes in foreign currency exchange rates in certain countries in which we operate, partially offset by a decrease in share based award compensation expense.

~~Depreciation and Amortization.~~ ~~Depreciation and amortization expense was $174.5 million for the 2017 period compared to $155.9 million for the 2016 period. The increase was primarily due to theatre remodels and new theatres.~~

~~Impairment of Long-Lived Assets.~~ We recorded asset impairment charges on assets held and used of $9.6 million for the 2017 period compared to $2.3 million for the 2016 period. The long-lived asset impairment charges recorded during each of the periods presented were specific to theatres that were directly and individually impacted by increased competition, adverse changes in market

demographics or adverse changes in the development or the conditions of the areas surrounding the theatre. Impairment charges for the 2017 period impacted thirteen of our twenty-six reporting units. See Note 9 to our condensed consolidated financial statements.

~~Loss on Sale of Assets and Other.~~ We recorded a loss on sale of assets and other of $9.5 million during the 2017 period compared to $11.0 million during the 2016 period. The loss recorded during the 2017 period included the retirement of assets due to theatre remodels and closures, partially offset by gains related to the sale of excess land parcels and a gain on a landlord buyout of a theatre lease. The loss recorded during the 2016 period was primarily related to the retirement of assets due to theatre remodels and closures, partially offset by a gain on the sale of our investment in RealD stock.

~~Interest Expense.~~ Interest costs incurred, including amortization of debt issue costs, were $79.2 million for the 2017 period compared to $82.0 million for the 2016 period. The decrease was due to the redemption of our previously outstanding $200.0 million 7.375% senior subordinated notes (the “7.375% Senior Subordinated Notes”) funded by a $225.0 million add-on to our 4.875% senior notes (the “4.875% Senior Notes), which occurred on March 21, 2016, as well as amendments to our senior secured credit facility completed during June and December of 2016 and June of 2017, which, in the aggregate, reduced the rate at which our term loan accrues interest by 100 basis points.

~~Loss On Debt Amendments and Refinancing~~. We recorded a loss of $0.2 million during the 2017 period related to an amendment to our senior secured credit facility that included a reduction in the interest rate at which our term loan accrues interest and revisions to certain definitions within the agreement. See Note 3 to our condensed consolidated financial statements. We recorded a loss of $13.3 million during the 2016 period primarily related to the early redemption of our $200.0 million 7.375% Senior Subordinated Notes.

~~Foreign Currency Exchange Gain~~. We recorded a foreign currency exchange gain of $2.0 million during the 2017 period compared to a foreign currency exchange gain of $2.9 million during the 2016 period. These amounts primarily represent the impact of changes in foreign currency exchange rates on intercompany transactions between our domestic subsidiaries and our international subsidiaries. See Note 11 to the condensed consolidated financial statements for further discussion.

~~Distributions from NCM.~~ We recorded distributions from NCM of $11.7 million during the 2017 period and $10.1 million during the 2016 period, which were in excess of the carrying value of our Tranche 1 investment. See Note 5 to our condensed consolidated financial statements.

~~Equity in Income of Affiliates.~~ We recorded equity in income of affiliates of $26.8 million during the 2017 period compared to $24.6 million during the 2016 period. See Notes 5 and 6 for information about the equity investments to our condensed consolidated financial statements.

~~Income Taxes.~~ ~~Income tax expense of $99.2~~$(3.3) million was recorded for the ~~2017~~2022 period compared ~~to $106.8~~with an income tax benefit of $(11.3) million ~~recorded~~ for the ~~2016~~2021 period. The effective tax rate was ~~36.6%~~approximately 2.3% for the ~~2017~~2022 period compared ~~to 37.1%~~with 2.7% for the ~~2016~~2021 period. ~~Tax~~The effective tax rate for the 2022 period was impacted by valuation allowances related to certain deferred tax assets for which the ultimate realization is uncertain. For the 2022 and 2021 periods, we utilized the annual effective tax rate method to calculate our interim tax provision. Income tax provisions for interim (quarterly) periods are based on estimated annual income tax rates and are adjusted for the effects of significant, infrequent or unusual items (i.e. discrete items) occurring during the interim period. As a result, the interim rate may vary significantly from the normalized annual rate.

Liquidity and Capital Resources

Operating Activities

We primarily collect our ~~revenues~~revenue in cash, mainly through box office receipts and the sale of concessions. In addition, nearly all of our theatres provide the patron a choice of using a credit card, debit card or advanced-sale type certificates such as a gift card, in place of cash. Because our revenues areOur revenue is generally received in cash prior to the payment of related ~~expenses,~~expenses; therefore, we have an operating “float” and historically have not required traditional working capital financing. We temporarily closed all of our theatres during March 2020 and funded operating expenses with cash on hand and new financing discussed below under Financing Activities while theatres were closed and as we reopened our theatres. During the latter part of 2021, as we began to show a steady stream of new film content and our theatres were returning to more consistent operating hours, we began to generate positive cash flows from operations and transition back to our historical working capital “float” position. 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. 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.

Cash provided by operating activities was ~~$310.9~~$27.7 million for Holdings and $47.0 million for CUSA for the nine months ended September 30, ~~2017~~2022, compared ~~to $277.8~~with cash used for operating activities of $(42.2) million for Holdings and $(31.7) million for CUSA for the nine months ended September 30, ~~2016.~~2021. The increase in cash provided by (used for) operating activities was primarily a result of the timing and level of revenue earned during each period and the timing of payments to vendors for expenses incurred during each period.

As discussed in Note 4 to our condensed consolidated financial statements, rent deferrals and other lease-related payments were negotiated in 2020 and early 2021 with some of our landlords. As of September 30, 2022, approximately $5.3 million of deferred lease payments were outstanding, the majority of which will be repaid during the remainder of 2022.

Investing Activities

~~Our investing~~Investing activities have been principally related to the development, remodel and acquisition of theatres. New theatre openings, remodels and acquisitions historically have been financed with internally generated cash and by debt financing, including borrowings under our senior secured credit facility. Cash used for investing activities was ~~$290.1~~ $(53.3) million for the nine months ended September 30, ~~2017~~2022 compared to ~~$230.5~~ with $(55.0) million for the nine months ended September 30, ~~2016. The increase was primarily due to an increase in~~

~~capital expenditures for the remodel of certain of our existing domestic theatres and the acquisition of one theatre in the U.S. and two theatres in Brazil.~~ 2021.

Capital expenditures, ~~for~~disaggregated by new and existing theatres, during the nine months ended September 30, ~~2017~~2022 and ~~2016~~2021 were as follows (in millions):


	Nine Months Ended September 30,
	2022		2021
New theatres	$	24.8	$	24.1
Existing theatres		40.5		33.1
Total capital expenditures	$	65.3	$	57.2

Period

New
Theatres

Existing
Theatres ⁽¹⁾

Total

Nine Months Ended September 30, 2017

$
42.5

$
220.2

$
262.7

Nine Months Ended September 30, 2016

$
65.6

$
164.7

$
230.3

~~(1)~~

~~The amounts for the nine months ended September 30, 2017 and 2016 include $5.7 million and $3.6 million, respectively, related to the remodel of our corporate headquarters building in Plano, TX.~~

~~Capital expenditures for existing properties in the table above includes the costs~~We operated 517 theatres with 5,835 screens worldwide as of ~~remodeling certain of our existing theatres to include Luxury Loungers~~September 30, 2022. Theatres and ~~expanded concession offerings. During~~screens built and closed during the nine months ended September 30, ~~2017 and 2016, we had an average~~2022 are shown below:


	January 1, 2022		Built		Closed			September 30, 2022
U.S (42 states)
Theatres		321		1		(4	)		318
Screens		4,408		14		(30	)		4,392

International (15 countries)
Theatres		201		1		(3	)		199
Screens		1,460		19		(36	)		1,443

Worldwide
Theatres		522		2		(7	)		517
Screens		5,868		33		(66	)		5,835

As of ~~151 and 75 of our domestic screens, respectively, temporarily closed for such remodels.~~

~~Our U.S. theatre circuit consisted of 339 theatres with 4,562 screens at~~ September 30, ~~2017. During~~2022, the ~~nine months ended September 30, 2017, we built two new theatres with 18 screens,~~ ~~acquired~~ ~~one~~ ~~new theatre with~~ 12 ~~screens and closed~~ ~~three~~ ~~theatres and~~ 27 ~~screens. At September 30, 2017, we had~~following signed commitments were outstanding:


	Theatres	Screens	Estimated Remaining Investment (1)
Remainder of 2022
U.S.	1	14	$	5.1
International	1	5		0.6
Total	2	19	$	5.7

Subsequent to 2022
U.S.	3	34	$	23.7
International	4	21		8.5
Total	7	55	$	32.2

Total commitments at September 30, 2022	9	74	$	37.9

(1)

Approximately $5.7 million is to ~~open~~ ~~one~~ ~~new theatre and 10 screens in domestic markets~~be paid during the remainder of ~~2017~~2022 and ~~open~~ ~~ten~~ ~~new theatres with~~ ~~106~~ ~~screens subsequent~~$10.5 million, $18.7 million and $3.0 million is expected to ~~2017. We estimate~~be paid during 2023, 2024 and 2025, respectively. The timing of payments is subject to change in the ~~remaining capital expenditures for the development~~event of ~~these 116 domestic screens will be approximately $85.0~~ ~~million.~~

construction or other delays.

Our international theatre circuit consisted of 194 theatres with 1,395 screens at September 30, 2017. During the nine months ended September 30, 2017, we built five new theatres with 37 screens and acquired two theatres with 14 screens. At September 30, 2017, we had signed commitments to open one new theatre and six screens in international markets during the remainder of 2017 and open seven new theatres and 34 screens subsequent to 2017. We estimate the remaining capital expenditures for the development of these 40 international screens will be approximately $20.0 million.

Actual expenditures for continued theatre development, remodels and acquisitions are subject to change based upon the availability of attractive opportunities. ~~We plan to fund~~During the next twelve months and the foreseeable future, capital expenditures for our continued development will be funded with cash flow from operations and, if needed, borrowings under our senior secured credit facility, ~~and~~ proceeds from debt issuances, sale leaseback transactions and/or sales of excess real estate.

Financing Activities

Cash used for financing activities for Holdings was ~~$113.7~~$(32.6) million for the nine months ended September 30, ~~2017~~2022 compared ~~to $110.8~~with cash used for financing activities of $(12.9) million for the nine months ended September 30, ~~2016.~~ ~~Financing~~2021. Cash used for financing activities for CUSA was $(32.6) million for the nine months ended September 30, ~~2016 included~~2022 compared with cash provided by financing activities of $107.1 million for the ~~redemption~~nine months ended September 30, 2021. During the nine months ended September 30, 2021, Holdings distributed $120.0 million to CUSA and CUSA issued 5.875% Senior Notes and 5.25% Senior Notes, the proceeds of ~~our $200.0 million 7.375%~~which were used to redeem the 5.125% Senior ~~Subordinated~~ Notes ~~with proceeds from~~and the ~~issuance of a $225.0 million add-on to our existing~~ 4.875% Senior ~~Notes.~~Notes as discussed further below.

At the discretion of the board of directors and subject to applicable law, Holdings may pay dividends on its common stock. 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. As a result of the impact of the COVID-19 pandemic, Holdings suspended its quarterly dividend to its shareholders.

We may, from time to time, ~~subject~~seek to ~~compliance with~~retire or repurchase our ~~debt instruments, purchase our~~outstanding debt securities ~~on the~~through cash purchases or exchanges for other securities, in open market ~~depending upon~~purchases, privately negotiated transactions or otherwise. Such repurchases or exchanges, if any, will depend on the availability and prices of such ~~securities. Long-term~~ debt ~~consisted~~securities, prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.

See Note 7 for a summary of ~~the following~~long-term debt outstanding as of September 30, ~~2017 (in millions):~~2022 for Holdings and CUSA.

Cinemark USA, Inc. term loan

$
660.9

Cinemark USA, Inc. 5.125% senior notes due 2022

400.0

Cinemark USA, Inc. 4.875% senior notes due 2023

755.0

Other

4.2

Total long-term debt

$
1,820.1

Less current portion

7.1

Subtotal long-term debt, less current portion

$
1,813.0

Less: Debt discounts and debt issuance costs, net of accumulated amortization

31.0

Long-term debt, less current portion, net of debt issuance costs

$
1,782.0

As of September 30, ~~2017, we had $100.0~~2022, $100 million inwas available for borrowing ~~capacity on our~~under the revolving ~~credit line.~~line of credit.

Contractual Obligations

There have been no material changes in ~~our~~the contractual obligations previously disclosed in “Liquidity and Capital Resources” in ~~our~~the Holdings Annual Report on Form 10-K for the year ended December 31, ~~2016~~2021 filed ~~March 3, 2017.~~

~~Off-Balance Sheet Arrangements~~

~~Other than~~February 25, 2022 or in the ~~operating leases and purchase commitments disclosed in our~~CUSA Annual Report on Form 10-K for the year ended December 31, ~~2016~~2021 filed March ~~3, 2017, we~~9, 2022.

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 million 4.50% convertible senior notes (the “4.50% Convertible Senior Notes”). The notes will mature on August 15, 2025, unless earlier repurchased or converted. Interest on the notes will be payable on February 15 and August 15 of each year, beginning on February 15, 2021.

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 we distribute 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 our common stock (including due to a stockholder rights plan) or (ii) our assets or securities or rights, options or warrants to purchase the same with a per share value exceeding 10% of the trading price of our common stock, (3) upon the occurrence of specified corporate events as described further in the indenture. Beginning May 15, 2025, holders may convert their notes at any time prior to the close of business on the third scheduled trading day immediately preceding the maturity date, or (4) during any calendar quarter commencing after the calendar quarter ending on September 30, 2020 (and only during such calendar quarter), if the last reported sale price of our common stock for at least 20 trading days during the period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to $18.65 per share (130% of the initial conversion price of $14.35 per share), on each applicable trading day. Upon conversion of the notes, we will pay or deliver cash, shares of our common stock or a combination of cash and shares of our common stock, at our election.

The initial conversion rate is 69.6767 shares of our common stock per one thousand dollars principal amount of the 4.50% Convertible Senior Notes. 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, we will, in certain circumstances, increase the conversion rate for a holder who elects to convert its notes in connection with such make-whole fundamental change.

The 4.50% Convertible Notes are effectively subordinated to any of Holdings, or its subsidiaries’, existing and future secured debt to the extent of the value of the assets securing such indebtedness, including obligations under the Credit Agreement. The 4.50% Convertible Notes are structurally subordinated to all existing and future debt and other liabilities, including trade payables, including CUSA’s 8.75% Secured Notes due 2025, 5.25% Senior Notes due 2028 and 5.875% Senior Notes due 2026, or, collectively, CUSA’s senior notes (but excluding all obligations under the Credit Agreement which are guaranteed by Holdings). The 4.50% Convertible Notes rank equally in right of payment with all of our existing and future unsubordinated debt, including all obligations under the CUSA 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 notes. The 4.50% Convertible Notes are not guaranteed by any of Holdings' subsidiaries.

Senior Secured Credit Facility

~~Cinemark USA, Inc.~~CUSA has a senior secured credit facility that includes a $700.0 million term loan ~~with a maturity date of May 2022,~~ and a $100.0 million revolving credit line ~~with a maturity date of December 2017 (collectively referred to as the~~(the “Credit Agreement”).

~~On May 16, 2016, Cinemark USA, Inc. made a principal pre-payment of $13,451 using~~ Under the ~~proceeds received from the sale of shares of RealD. In accordance with the terms of the~~amended Credit Agreement, ~~the pre-payment was applied first to the next four~~quarterly principal ~~installments, and second, to the remaining installments pro-rata based on the remaining outstanding principal amount of such installments. Therefore, quarterly~~ payments of ~~$1.4~~$1.6 million are due on the term loan through ~~March~~December 31, ~~2022,~~2024, with ~~the remaining~~a final principal payment of ~~$635.3~~$613.4 million due on ~~May 8,~~March 29, 2025. CUSA had $100.0 million of available borrowing capacity on the revolving credit line as of September 30, 2022. ~~The Company did not incur any fees as a result of the pre-payment.~~

On June 13, 2016 and December 15, 2016, Cinemark USA, Inc. amended its Credit Agreement to reduce the rate at which the term loan bears interest by 0.25% and then an additional 0.50%, respectively. On June 16, 2017, Cinemark USA, Inc. amended its Credit Agreement to further reduce the rate at which the term loan bears interest by 0.25% and also to modify certain definitions and other provisions within the Credit Agreement.

Interest on the term loan accrues at ~~Cinemark USA, Inc.’s~~CUSA's option at: (A) the base rate equal to the greater of (1) the US “Prime Rate” as quoted in The Wall Street Journal or, if no such rate is quoted therein, in a Federal Reserve Board statistical release, (2) the federal funds effective rate plus 0.50%, and (3) a one-month Eurodollar-based rate plus 1.0%, plus, in each case, a margin of ~~1.00%~~0.75% per annum, or (B) a Eurodollar-based rate for a period of 1, 2, 3, 6, 9 or 12 months plus a margin of ~~2.00%~~1.75% per annum. Interest on the revolving credit line accrues, at our option, at: (A) a base rate equal to the greater of (1) the US “Prime Rate” as quoted in The Wall Street Journal or if no such rate is quoted therein, in a Federal Reserve Board statistical release, (2) the federal funds effective rate plus 0.50%, and (3) a one-month Eurodollar-based rate plus 1.0%, plus, in each case, a margin that ranges from ~~1.00%~~0.50% to ~~1.75%~~1.25% per annum, or (B) a Eurodollar-based rate for a period of 1, 2, 3, 6, 9 or 12 months plus a margin that ranges from ~~2.00%~~1.50% to ~~2.75%~~2.25% per annum. The margin of the revolving credit line is determined by the consolidated net senior secured leverage ratio as defined in the Credit Agreement.

At September 30, 2017, there was $660.9 million outstanding under the term loan and no borrowings outstanding under the revolving credit line. Cinemark USA, Inc. had $100.0 million in available borrowing capacity on the revolving credit line. The average interest rate on outstanding term loan borrowings under the Credit Agreement at September 30, 2017 was approximately 3.3% per annum.

~~Cinemark USA, Inc.’s~~CUSA's obligations under the Credit Agreement are guaranteed by ~~Cinemark~~ Holdings, ~~Inc. and~~as well as certain of ~~Cinemark USA, Inc.’s~~CUSA’s domestic subsidiaries, and are secured by mortgages on certain fee and leasehold properties and security interests in substantially all of ~~Cinemark USA, Inc.’s~~CUSA’s and the guarantors’ personal property, including, without limitation, pledges of all of ~~Cinemark USA, Inc.’s~~CUSA’s capital stock and, all of the capital stock of certain of ~~Cinemark USA, Inc.’s~~CUSA’s domestic ~~subsidiaries and 65% of the voting stock of certain of its foreign~~ subsidiaries.

The Credit Agreement contains usual and customary negative covenants for agreements of this type, including, but not limited to, restrictions on ~~Cinemark USA, Inc.’s~~CUSA’s ability, and in certain instances, its subsidiaries’ and ~~our~~Holdings' ability, to consolidate or merge or liquidate, wind up or dissolve; substantially change the nature of its business; sell, transfer or dispose of assets; create or incur indebtedness; create liens; pay dividends or repurchase stock; and make capital expenditures and investments. If ~~Cinemark USA, Inc.~~CUSA has borrowings outstanding on the revolving credit line, it is required to satisfy a consolidated net senior secured leverage ratio covenant as defined in the Credit ~~Agreement.~~Agreement, not to exceed 4.25 to 1. See below for discussion of recent covenant waivers.

The dividend restriction contained in the Credit Agreement prevents ~~the Company~~Holdings and ~~any~~certain of its subsidiaries from paying a dividend or otherwise distributing cash to its stockholders unless (1) ~~the Company~~Holdings is not in default, and the distribution would not cause ~~Cinemark USA, Inc.~~CUSA to be in default, under the Credit Agreement; and (2) the aggregate amount of certain dividends, distributions, investments, redemptions and capital expenditures made since December 18, 2012, including dividends declared by the Holdings' board of directors, is less than the sum of (a) the aggregate amount of cash and cash equivalents received by ~~Cinemark~~ Holdings ~~Inc.~~

or ~~Cinemark USA, Inc.~~CUSA as common equity since December 18, 2012, (b) ~~Cinemark USA, Inc.’s~~CUSA's consolidated EBITDA minus 1.75 times its consolidated interest expense, each as defined in the Credit Agreement, and (c) certain other defined ~~amounts.~~amounts, or collectively, the Applicable Amount. As of September 30, ~~2017, Cinemark USA, Inc.~~2022, CUSA could have distributed up to approximately ~~$2,551.1 million~~$3.0 billion to its parent company and sole stockholder, ~~Cinemark~~Holdings.

On April 17, 2020, in conjunction with the issuance of the 8.75% Secured Notes discussed below, CUSA obtained a waiver of the leverage covenant from the majority of revolving lenders under the Credit Agreement for the fiscal quarters ended September 30, 2020 and December 31, 2020. The waiver was subject to certain liquidity thresholds, restrictions on investments and the use of the Applicable Amount.

On August 21, 2020, in conjunction with the issuance by Holdings of the 4.50% Convertible Senior Notes discussed below, CUSA further amended the waiver of the leverage covenant through the fiscal quarter ending September 30, 2021. The amendment also i) modified the leverage covenant calculation beginning with the calculation for the trailing twelve-month period ended December 31, 2021, ii) for purposes of testing the consolidated net senior secured leverage ratio for the fiscal quarters ended on December 31, 2021, March 31, 2022 and June 30, 2022, permitted substitution of Consolidated EBITDA for the first three fiscal quarters of 2019 in lieu of Consolidated EBITDA for the corresponding fiscal quarters of 2021, (iii) modified the restrictions imposed by the covenant waiver and (iv) made such other changes to permit the issuance of the 4.50% Convertible Senior Notes discussed below. The ratio for the period ended September 30, 2022 was calculated using actual Consolidated EBITDA for the trailing twelve month period then ended. The required maximum ratio is 4.25 to 1 and CUSA's actual ratio as of September 30, 2022 was 2.2.

On June 15, 2021, in conjunction with the issuance of the 5.25% Senior Notes discussed below, the Credit Agreement was amended to, among other things, extend the maturity of the revolving credit line from November 28, 2022 to November 28, 2024.

CUSA has three interest rate swap agreements that are used to hedge a portion of the interest rate risk associated with the variable interest rates on the term loan outstanding under the Credit Agreement. See Note 7 of our condensed consolidated financial statements for discussion of the interest rate swaps.

As of September 30, 2022, there was $628.2 million outstanding under the term loan and no borrowings were outstanding under the $100.0 million revolving line of credit. The average interest rate on outstanding term loan borrowings under the Credit Agreement as of September 30, 2022 was approximately 4.0% per annum, after giving effect to the interest rate swap agreements discussed above.

5.875% Senior Notes

On March 16, 2021, CUSA issued $405 million aggregate principal amount of 5.875% senior notes due 2026, at par value (the “5.875% Senior Notes”). Proceeds, after payment of fees, were used to fund a cash tender offer to purchase any and all of CUSA’s 5.125% Senior Notes (the “5.125% Senior Notes”) and to redeem any of the 5.125% Notes that remained outstanding after the tender offer. See further discussion of the tender offer below. Interest on the 5.875% Senior Notes is payable on March 15 and September 15 of each year, beginning September 15, 2021. The 5.875% Senior Notes mature on March 15, 2026. CUSA incurred debt issuance costs of approximately $6.0 million in connection with the issuance, which are recorded as a reduction of long-term debt, less current on the condensed consolidated balance sheet.

The 5.875% Senior Notes are fully and unconditionally guaranteed on a joint and several senior unsecured basis by certain of CUSA's subsidiaries that guarantee, assume or become liable with respect to any of CUSA's or a guarantor’s debt. The 5.875% Senior Notes and the guarantees are senior unsecured obligations and rank equally in right of payment with all of CUSA's and its guarantor’s existing and future senior debt and senior in right of payment to all of CUSA’s and its guarantors’ existing and future senior subordinated debt. The 5.875% Senior Notes and the guarantees are effectively subordinated to all of CUSA’s and its guarantor’s existing and future secured debt to the extent of the value of the collateral securing such debt, including all borrowings under CUSA’s Credit Agreement. The 5.875% Senior Notes and the guarantees are structurally subordinated to all existing and future debt and other liabilities of CUSA's subsidiaries that do not guarantee the 5.875% Senior Notes.

Prior to March 15, 2023, CUSA may redeem all or any part of the 5.875% Senior Notes at its option at 100% of the principal amount plus a make-whole premium plus accrued and unpaid interest on the 5.875% Senior Notes to the date of redemption. After March 15, 2023, CUSA, may redeem the 5.875% Senior Notes in whole or in part at redemption prices specified in the indenture. In addition, prior to March 15, 2023, CUSA, may redeem up to 40% of the aggregate principal amount of the 5.875% Senior Notes from the net proceeds of certain equity offerings at the redemption price set forth in the indenture.

5.25% Senior Notes

On June 15, 2021, CUSA, Inc., issued $765 million aggregate principal amount of 5.25% senior notes due 2028, at par value (the “5.25% Senior Notes”). 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.

The 5.25% Senior Notes are fully and unconditionally guaranteed on a joint and several senior unsecured basis by certain of CUSA’s subsidiaries that guarantee, assume or become liable with respect to any of CUSA's or a guarantor’s debt. The 5.25% Senior Notes and the guarantees will be CUSA’s and the guarantors’ senior unsecured obligations and (i) rank equally in right of payment to CUSA’s and the guarantors’ existing and future senior debt, including borrowings under CUSA's Credit Agreement (as defined below) and CUSA’s existing senior notes, (ii) rank senior in right of payment to CUSA’s and the guarantors’ future subordinated debt, (iii) are effectively subordinated to all of CUSA’s and the guarantors’ existing and future secured debt, including all obligations under the Credit Agreement and CUSA’s 8.750% 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.

Prior to July 15, 2024, CUSA may redeem all or any part of the 5.25% Senior Notes at its option at 100% of the principal amount plus a make-whole premium plus accrued and unpaid interest on the 5.25% Senior Notes to the date of redemption. On or after July 15, 2024, CUSA may redeem the 5.25% Senior Notes in whole or in part at redemption prices specified in the indenture. In addition, prior to July 15, 2024, CUSA may redeem up to 40% of the aggregate principal amount of the 5.25% Senior Notes from the net proceeds of certain equity offerings at the redemption price set forth in the indenture, so long as at least 60% of the principal amount of the 5.25% Senior Notes remains outstanding immediately after each such redemption.

8.75% Secured Notes

On April 20, 2020, CUSA issued $250 million 8.75% senior secured notes (the “8.75% Secured Notes”). The 8.75% Secured Notes will mature on May 1, 2025. Interest on the 8.75% Secured Notes is payable on May 1 and November 1 of each year. CUSA may redeem the 8.75% Secured Notes in whole or in part at redemption prices specified in the indenture.

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. If CUSA cannot make payments on the 8.75% Secured Notes when due, CUSA's guarantors must make them instead. Under certain circumstances, the guarantees may be released without action by, or the consent of, the holders of the 8.75% Secured Notes.

Borrowings of International Subsidiaries

As of September 30, 2022, certain of the Company’s international subsidiaries have an aggregate borrowing of $21.9 million outstanding under various local bank loans. A subsidiary of CUSA has deposited cash into a collateral account to support the issuance of letters of credit to the lenders for certain of these international bank loans. The total amount deposited as of September 30, 2022 was $22.9 million and is considered restricted cash.

Covenant Compliance

See discussion above at Senior Secured Credit Facility for discussion of dividend restriction, negative covenants and leverage ratio covenant under the Credit Agreement.

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. As of September 30, 2022, CUSA could have distributed up to approximately $3.1 billion to its parent company and sole stockholder, Holdings, under the terms of the ~~Credit Agreement,~~indentures, subject to its available cash and other borrowing restrictions outlined in the ~~agreement.~~

~~Cinemark USA, Inc. 5.125%~~indentures. 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,

~~On December 18, 2012, Cinemark USA, Inc. issued $400.0 million~~ 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 ~~5.125% senior notes due 2022, at par value (the “5.125% Senior Notes”). Interest on the 5.125% Senior Notes is payable on June 15 and December 15 of each year, beginning June 15, 2013.~~repurchase. The ~~5.125% Senior Notes mature on December 15, 2022.~~

~~The indenture to the 5.125% Senior Notes contains covenants including limitations on the amount of dividends that could be paid by Cinemark USA, Inc.~~ ~~As of September 30, 2017, Cinemark USA, Inc. could have distributed up to approximately $2,529.3~~ million to its parent company and sole stockholder, Cinemark Holdings, Inc., under the terms of the indenture to the 5.125% Senior Notes, subject to its available cash and other borrowing restrictions outlined in the indenture. ~~The indenture allows Cinemark USA, Inc.~~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 September 30, ~~2017~~2022 was ~~approximately 5.9 to 1.~~3.2.

~~Cinemark USA, Inc. 4.875% Senior Notes~~

On May 24, 2013, Cinemark USA, Inc. issued $530.0 million aggregate principal amount of the 4.875% Senior Notes due 2023, at par value (the “4.875% Senior Notes”). On March 21, 2016, Cinemark USA, Inc. issued an additional $225.0 million aggregate principal amount of the 4.875% Senior Notes at 99.0% of the principal amount plus accrued and unpaid interest from December 1, 2015. Proceeds, after payment of fees, were used to finance the redemption of Cinemark, USA, Inc.’s $200.0 million 7.375% Senior Subordinated Notes, as discussed below. These additional notes have identical terms, other than the issue date, the issue price and the first interest payment date, and constitute part of the same series as the Company’s existing 4.875% Senior Notes. Interest on the 4.875% Senior Notes is payable on June 1 and December 1 of each year. The 4.875% Senior Notes mature on June 1, 2023.

~~The indenture to the 4.875% Senior Notes contains covenants that include limitations on the amount of dividends that Cinemark USA, Inc. can pay.~~ As of September 30, ~~2017, Cinemark USA, Inc. could have distributed up to approximately $2,524.4 million to its parent company~~2022, each of Holdings and ~~sole stockholder, Cinemark Holdings, Inc., under the terms of the indenture to the 4.875% Senior Notes, subject to its available cash and other borrowing restrictions outlined in the indenture.~~ ~~The indenture allows Cinemark USA, Inc. to incur additional indebtedness if~~CUSA believes 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 September 30, 2017~~ was ~~approximately 5.9 to 1.~~

~~Cinemark USA, Inc. 7.375% Senior Subordinated Notes~~

On June 3, 2011, Cinemark USA, Inc. issued $200.0 million aggregate principal amount of 7.375% Senior Subordinated Notes due 2021, at par value. On March 21, 2016, Cinemark USA, Inc. redeemed the 7.375% Senior Subordinated Notes at a make-whole premium of approximately 104% plus accrued and unpaid interest, utilizing the proceeds from the issuance of the additional $225.0 million 4.875% Senior Notes discussed above. As a result of the redemption, the Company wrote-off approximately $2.4 million in unamortized debt issue costs, paid the make-whole premium of approximately $9.4 million and paid other fees of $1.2 million, all of which are reflected in loss on debt amendments and refinancing during the nine months ended September 30, 2016.

~~Covenant Compliance~~

~~As of September 30, 2017, we believe we were~~ in full compliance with all agreements, including all related covenants, governing our outstanding debt.

~~Seasonality~~49

Our revenues have historically been seasonal, coinciding with the timing of releases of motion pictures by the major distributors. Generally, the most successful motion pictures have been released during the summer, extending from May to July, and during the holiday season, extending from early November through year-end. The unexpected emergence of a hit film during other periods can alter this seasonality trend. The timing of such film releases can have a significant effect on our results of operations, and the results of one quarter are not necessarily indicative of results for the next quarter or for the same period in the following year.

Item 3. Quantitative an~~d Qualitative~~and Qualitative Disclosures About Market Risk

WeHoldings and CUSA have exposure to financial market risks, including changes in interest rates, foreign currency exchange rates and other relevant market prices.

Interest Rate Risk

~~We are~~The Company currently ~~party to a~~has variable rate ~~debt facility.~~debt. An increase or decrease in interest rates would affect ~~our~~its interest expense ~~relating~~related to ~~our~~this variable rate debt. The Company has three interest rate swap agreements that are used to hedge a portion of the interest rate risk associated with our term loan, covering $450.0 million of the $628.2 million outstanding at September 30, 2022. At September 30, ~~2017,~~2022, we had an aggregate of ~~approximately $660.9~~$200.1 million of variable rate debt ~~outstanding. Based on the interest rates in effect on the variable rate debt~~ outstanding, ~~at September 30, 2017,~~and a 100 basis point increase in market interest rates would increase our annual interest expense by ~~approximately $6.6~~$2.0 million.

The ~~table~~tables below ~~provides~~provide information about ~~our~~Holdings' fixed rate and variable rate long-term debt agreements as of September 30, ~~2017:~~2022, which includes fixed rate and variable rate long-term debt of CUSA which is guaranteed by Holdings.

Holdings Debt


	Expected Maturity for the Twelve Months Ending September 30,																Average
	(in millions)																Interest
	2023		2024		2025		2026		2027		Thereafter		Total		Fair Value		Rate
Fixed rate	$	—	$	—	$	1,160.0	$	405.0	$	—	$	765.0	$	2,330.0	$	2,135.8		5.3	%
Variable rate		21.9		8.2		166.1		1.1		1.1		1.7		200.1		190.4		5.1	%
Total debt (1)	$	21.9	$	8.2	$	1,326.1	$	406.1	$	1.1	$	766.7	$	2,530.1	$	2,326.2

Expected Maturity for the Twelve-Month Periods Ending September 30,

Average

(in millions)

Interest

2018

2019

2020

2021

2022

Thereafter

Total

Fair Value

Rate

Fixed rate

$
1.4

$
1.4

$
1.4

$
—

$
—

$
1,155.0

$
1,159.2

$
1,177.2

5.0
%
Variable rate

5.7

5.7

5.7

5.7

638.1

—

660.9

663.4

3.3
%
Total debt

$
7.1

$
7.1

$
7.1

$
5.7

$
638.1

$
1,155.0

$
1,820.1

$
1,840.6

(1)

Amounts are presented before adjusting for debt issuance costs.

CUSA Debt


	Expected Maturity for the Twelve Months Ending September 30,																Average
	(in millions)																Interest
	2023		2024		2025		2026		2027		Thereafter		Total		Fair Value		Rate
Fixed rate	$	—	$	—	$	700.0	$	405.0	$	—	$	765.0	$	1,870.0	$	1,608.3		5.5	%
Variable rate		21.9		8.2		166.1		1.1		1.1		1.7		200.1		190.4		5.1	%
Total debt (1)	$	21.9	$	8.2	$	866.1	$	406.1	$	1.1	$	766.7	$	2,070.1	$	1,798.7

(1)

Amounts are presented before adjusting for debt issuance costs.

Interest Rate Swap Agreements

~~Foreign Currency Exchange Rate Risk~~

~~Other than the devaluation~~All of the ~~Argentine peso, discussed in~~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 condensed consolidated balance sheet as an asset or liability with the related gains or losses reported as a component of accumulated other comprehensive loss. See Note 117 to the condensed consolidated financial statements ~~there~~for further discussion of the interest rate swap agreements.

Foreign Currency Exchange Rate Risk

There have been no material changes in foreign currency exchange rate risk previously disclosed in “Quantitative and Qualitative Disclosures About Market Risk” in ~~our~~Holdings' Annual Report on Form 10-K for the year ended December 31, ~~2016~~2021 filed February 25, 2022 or CUSA's Annual Report on Form 10-K for the year ended December 31, 2021 filed March ~~3, 2017.~~9, 2022.

Item 4. Controls and Procedures

Evaluation of the Effectiveness of Disclosure Controls and Procedures

As of September 30, ~~2017, we~~2022, each of Holdings and CUSA carried out an evaluation required by the Exchange Act, under the supervision and with the participation of ~~our~~their respective principal executive officer and principal financial officer, of the effectiveness of the design and operation of ~~our~~their respective disclosure controls and procedures, as defined in Rule 13a-15(e) of the Exchange Act. Based on this evaluation, ~~our~~the respective principal executive officer and principal financial officer of Holdings and CUSA concluded that, as of September 30, ~~2017, our~~2022, their respective disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by useach of them in the reports that ~~we file~~are filed or ~~submit~~submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and were effective to provide reasonable assurance that such information is accumulated and communicated to ~~our~~their respective management, including ~~our~~the principal

executive officer and principal financial officer of Holdings and CUSA, as appropriate to allow timely decisions regarding required disclosures.

Changes in Internal Control Over Financial Reporting

There have been no changes in ~~our~~the internal control over financial reporting for Holdings or CUSA identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 that occurred during the quarter ended September 30, ~~2017~~2022 that materially ~~affected, or~~affect the are reasonably likely to materially affect, our internal control over financial ~~reporting.~~reporting for Holdings or CUSA.

PART II - ~~OTHE~~ROTHER INFORMATION

Item 1. Legal Proceedings

~~There~~Other than the discussion at Note 18, there have been no material changes from legal proceedings previously reported under “Business – Legal Proceedings” in ~~our~~Holdings' Annual Report on Form 10-K for the year ended December 31, ~~2016~~2021 filed ~~March 3, 2017~~.

~~Item 1A. Risk Factors~~

~~There have been no material changes from risk factors previously disclosed in “Risk Factors” in~~ ~~our~~February 25, 2022 or CUSA's Annual Report on Form 10-K for the year ended December 31, ~~2016~~2021 filed March ~~3, 2017~~.9, 2022.

Item 1A. Risk Factors

See discussion in “Risk Factors” in Holdings' Annual Report on Form 10-K for the year ended December 31, 2021 filed February 25, 2022 and CUSA's Annual Report on Form 10-K for the year ended December 31, 2021 filed March 9, 2022.

Item 5. Other Information

Supplemental Schedules Specified by the Senior Notes Indentures

As required by the indentures governing the ~~Company’s 5.125%~~CUSA 5.875% Senior Notes, 5.25% Senior Notes and ~~4.875%~~8.75% Senior Secured Notes, ~~the Company~~collectively “the senior notes”, CUSA has included in this filing, interim financial information for its subsidiaries that have been designated as unrestricted subsidiaries, as defined by the indentures. As required by these indentures, ~~the Company~~CUSA has included an unaudited condensed consolidating balance sheet and unaudited condensed consolidating statements of ~~income,~~loss, comprehensive ~~income~~loss and cash flows for ~~the Company~~CUSA and its subsidiaries. See Liquidity and Capital Resources at Part I - Item 2 for discussion of the senior notes, including relevant covenants and restrictions. The following supplementary schedules separately identify ~~the Company’s~~CUSA’s restricted subsidiaries and unrestricted subsidiaries as required by the indentures.


		Page
Unaudited Condensed Consolidating Balance Sheet ~~Information~~ as of September 30, ~~2017~~2022		4753

Unaudited Condensed Consolidating Statement of ~~Income Information~~Loss for the nine months ended September 30, ~~2017~~2022		4854

Unaudited Condensed Consolidating Statement of Comprehensive ~~Income Information~~Loss for the nine months ended September 30, ~~2017~~2022		4955

Unaudited Condensed Consolidating Statement of Cash Flows ~~Information~~ for the nine months ended September 30, ~~2017~~2022		5056

CINEMARK USA, INC. AND SUBSIDIARIES

~~UNAUDITED~~ CONDENSED CONSOLIDATING BALANCE SHEET ~~INFORMATION~~

SEPTEMBER 30, ~~2017~~2022

(~~In thousands)~~in millions, unaudited)


	Restricted		Unrestricted
	Group		Group			Eliminations			Consolidated
Assets
Current assets
Cash and cash equivalents	$	281.1	$	105.5		$	—		$	386.6
Other current assets		346.1		(109.0	)		(7.9	)		229.2
Total current assets		627.2		(3.5	)		(7.9	)		615.8
Theatre properties and equipment, net		1,260.0		—			—			1,260.0
Operating lease right-of-use assets, net		1,144.0		—			—			1,144.0
Other assets		1,736.6		280.5			(371.5	)		1,645.6
Total assets	$	4,767.8	$	277.0		$	(379.4	)	$	4,665.4
Liabilities and equity
Current liabilities
Current portion of long-term debt	$	22.0	$	—		$	—		$	22.0
Current portion of operating lease obligations		217.9		—			—			217.9
Current portion of finance lease obligations		14.6		—			—			14.6
Current income tax payable		2.3		0.1			—			2.4
Accounts payable and accrued expenses		376.4		—			(7.9	)		368.5
Total current liabilities		633.2		0.1			(7.9	)		625.4
Long-term liabilities
Long-term debt, less current portion		2,287.9		—			(264.5	)		2,023.4
Operating lease obligations, less current portion		987.6		—			—			987.6
Finance lease obligations, less current portion		91.6		—			—			91.6
Other long-term liabilities and deferrals		470.8		12.0			—			482.8
Total long-term liabilities		3,837.9		12.0			(264.5	)		3,585.4
Commitments and contingencies
Equity		296.7		264.9			(107.0	)		454.6
Total liabilities and equity	$	4,767.8	$	277.0		$	(379.4	)	$	4,665.4

Restricted

Unrestricted

Group

Group

Eliminations

Consolidated

Assets

Current assets

Cash and cash equivalents

$
443,688

$
25,621

$
—

$
469,309

Other current assets

254,600

(98,574
)

(20,952
)

135,074

Total current assets

698,288

(72,953
)

(20,952
)

604,383

Theatre properties and equipment, net

1,791,606

—

—

1,791,606

Other assets

1,832,437

484,293

(327,017
)

1,989,713

Total assets

$
4,322,331

$
411,340

$
(347,969
)

$
4,385,702

Liabilities and equity

Current liabilities

Current portion of long-term debt

$
5,710

$
1,389

$
—

$
7,099

Current portion of capital lease obligations

24,836

—

—

24,836

Accounts payable and accrued expenses

380,445

518

(20,952
)

360,011

Total current liabilities

410,991

1,907

(20,952
)

391,946

Long-term liabilities

Long-term debt, less current portion

1,999,174

2,778

(220,000
)

1,781,952

Capital lease obligations, less current portion

252,047

—

—

252,047

Other long-term liabilities and deferrals

492,397

100,127

—

592,524

Total long-term liabilities

2,743,618

102,905

(220,000
)

2,626,523

Commitments and contingencies

Equity

1,167,722

306,528

(107,017
)

1,367,233

Total liabilities and equity

$
4,322,331

$
411,340

$
(347,969
)

$
4,385,702

Note: “Restricted Group” and “Unrestricted Group” are defined in the indentures for the senior notes.

CINEMARK USA, INC. AND SUBSIDIARIES

~~UNAUDITED~~ CONDENSED CONSOLIDATING STATEMENT OF ~~INCOME INFORMATION~~LOSS

NINE MONTHS ENDED SEPTEMBER, ~~30, 2017~~2022

(~~In thousands)~~in millions, unaudited)


	Restricted			Unrestricted
	Group			Group			Eliminations		Consolidated
Revenue	$	1,855.0		$	—		$	—	$	1,855.0
Cost of operations										—
Theatre operating costs		1,471.9			—			—		1,471.9
General and administrative expense		131.8			—			—		131.8
Depreciation and amortization		181.0			—			—		181.0
Impairment of long-lived assets and other		72.0			35.5			—		107.5
Restructuring costs		(0.2	)		—			—		(0.2	)
Gain on sale of assets and other		(6.4	)		—			—		(6.4	)
Total cost of operations		1,850.1			35.5			—		1,885.6
Operating income (loss)		4.9			(35.5	)		—		(30.6	)
Other income (expense)		(118.0	)		4.4			—		(113.6	)
Loss before income taxes		(113.1	)		(31.1	)		—		(144.2	)
Income tax expense (benefit)		3.3			(6.6	)		—		(3.3	)
Net loss		(116.4	)		(24.5	)		—		(140.9	)
Less: Net income attributable to noncontrolling interests		2.7			—			—		2.7
Net loss attributable to Cinemark USA, Inc.	$	(119.1	)	$	(24.5	)	$	—	$	(143.6	)

Restricted

Unrestricted

Group

Group

Eliminations

Consolidated

Revenues

$
2,241,553

$
—

$
—

$
2,241,553

Cost of operations

Theatre operating costs

1,631,358

—

—

1,631,358

General and administrative expenses

111,177

2

—

111,179

Depreciation and amortization

174,545

—

—

174,545

Impairment of long-lived assets

9,600

—

—

9,600

Loss on sale of assets and other

9,464

—

—

9,464

Total cost of operations

1,936,144

2

—

1,936,146

Operating income (loss)

305,409

(2
)

—

305,407

Other income (expense)

(91,316
)

56,742

—

(34,574
)
Income before income taxes

214,093

56,740

—

270,833

Income taxes

64,215

34,952

—

99,167

Net income

149,878

21,788

—

171,666

Less: Net income attributable to noncontrolling interests

1,438

—

—

1,438

Net income attributable to Cinemark USA, Inc.

$
148,440

$
21,788

$
—

$
170,228

Note: “Restricted Group” and “Unrestricted Group” are defined in the indentures for the senior notes.

CINEMARK USA, INC. AND SUBSIDIARIES

~~UNAUDITED~~ CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE ~~INCOME INFORMATION~~LOSS

NINE MONTHS ENDED SEPTEMBER, ~~30, 2017~~2022

(~~In thousands)~~in millions, unaudited)


	Restricted			Unrestricted
	Group			Group			Eliminations		Consolidated
Net loss	$	(116.4	)	$	(24.5	)	$	—	$	(140.9	)
Other comprehensive loss, net of tax
Unrealized gain due to fair value adjustments on interest rate swap agreements, net of taxes and settlements		31.4			—			—		31.4
Foreign currency translation adjustments		(5.9	)		—			—		(5.9	)
Total other comprehensive income, net of tax		25.5			—			—		25.5
Total comprehensive loss, net of tax		(90.9	)		(24.5	)		—		(115.4	)
Comprehensive income attributable to noncontrolling interests		(2.7	)		—			—		(2.7	)
Comprehensive loss attributable to Cinemark USA, Inc.	$	(93.6	)	$	(24.5	)	$	—	$	(118.1	)

Restricted

Unrestricted

Group

Group

Eliminations

Consolidated

Net income

$
149,878

$
21,788

$
—

$
171,666

Other comprehensive income, net of tax

Other comprehensive income in equity method investments

—

92

—

92

Foreign currency translation adjustments

5,578

—

—

5,578

Total other comprehensive income , net of tax

5,578

92

—

5,670

Total comprehensive income, net of tax

155,456

21,880

—

177,336

Comprehensive income attributable to noncontrolling interests

(1,438
)

—

—

(1,438
)
Comprehensive income attributable to Cinemark USA, Inc.

$
154,018

$
21,880

$
—

$
175,898

Note: “Restricted Group” and “Unrestricted Group” are defined in the indentures for the senior notes.

CINEMARK USA, INC. AND SUBSIDIARIES

~~UNAUDITED~~ CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS ~~INFORMATION~~

NINE MONTHS ENDED SEPTEMBER, ~~30, 2017~~2022

(~~In thousands)~~in millions, unaudited)


	Restricted			Unrestricted
	Group			Group			Eliminations		Consolidated
Operating activities
Net loss	$	(116.4	)	$	(24.5	)	$	—	$	(140.9	)
Adjustments to reconcile net loss to cash provided by (used for) operating activities		258.9			38.9			—		297.8
Changes in assets and liabilities		(100.9	)		(9.0	)		—		(109.9	)
Net cash provided by (used for) operating activities		41.6			5.4			—		47.0
Investing activities
Additions to theatre properties and equipment		(65.3	)		—			—		(65.3	)
Proceeds from sale of theatre properties and equipment and other		12.0			—			—		12.0
Net cash used for investing activities		(53.3	)		—			—		(53.3	)
Financing activities
Restricted stock withholdings for payroll taxes		(4.1	)		—			—		(4.1	)
Repayments on long-term debt		(14.0	)		—			—		(14.0	)
Payments on finance leases		(10.8	)		—			—		(10.8	)
Other financing activities		(3.7	)		—			—		(3.7	)
Net cash provided by (used for) financing activities		(32.6	)		—			—		(32.6	)
Effect of exchange rate changes on cash and cash equivalents		(17.2	)		—			—		(17.2	)
Decrease in cash and cash equivalents		(61.5	)		5.4			—		(56.1	)
Cash and cash equivalents:
Beginning of year		342.6			100.1			—		442.7
End of year	$	281.1		$	105.5		$	—	$	386.6

Restricted

Unrestricted

Group

Group

Eliminations

Consolidated

Operating activities

Net income

$
149,878

$
21,788

$
—

$
171,666

Adjustments to reconcile net income to cash provided by
operating activities

205,699

(10,030
)

—

195,669

Changes in assets and liabilities

(70,198
)

13,799

—

(56,399
)
Net cash provided by operating activities

285,379

25,557

—

310,936

Investing activities

Additions to theatre properties and equipment and other

(262,730
)

—

—

(262,730
)
Acquisition of theatres in the U.S. and international markets

(41,000
)

—

—

(41,000
)
Proceeds from sale of theatre properties and equipment and other

14,816

—

—

14,816

Investment in joint ventures and other

(68
)

(1,110
)

—

(1,178
)
Net cash used for investing activities

(288,982
)

(1,110
)

—

(290,092
)
Financing activities

Dividends paid to parent

(100,875
)

—

—

(100,875
)
Repayments of long-term debt

(2,855
)

—

—

(2,855
)
Payments on capital leases

(15,814
)

—

—

(15,814
)
Other

5,820

—

—

5,820

Net cash used for financing activities

(113,724
)

—

—

(113,724
)
Effect of exchange rate changes on cash and cash equivalents

1,051

—

—

1,051

Increase in cash and cash equivalents

(116,276
)

24,447

—

(91,829
)
Cash and cash equivalents:

Beginning of year

559,964

1,174

—

561,138

End of year

$
443,688

$
25,621

$
—

$
469,309

Note: “Restricted Group” and “Unrestricted Group” are defined in the indentures for the senior notes.

Item 6. E~~xhibits~~ Exhibits


*31.1		Certification of ~~Mark Zoradi,~~Sean Gamble, Chief Executive Officer of Cinemark Holdings, Inc., pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
*31.2
*31.2		Certification of ~~Sean Gamble,~~Melissa Thomas, Chief Financial Officer of Cinemark Holdings, Inc., pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
*31.3		Certification of Sean Gamble, Chief Executive Officer of Cinemark USA, Inc., pursuant to Section 302 of the Sarbanes – Oxley Act of 2002.
*~~32.1~~31.4		Certification of ~~Mark Zoradi,~~Melissa Thomas, Chief Financial Officer of Cinemark USA, Inc., pursuant to Section 302 of the Sarbanes – Oxley Act of 2002.
**32.1		Certification of Sean Gamble, Chief Executive Officer of Cinemark Holdings, Inc., pursuant to 18 U.S.C. Section 1350, as added by Section 906 of the Sarbanes-Oxley Act of 2002.
**32.2
*32.2		Certification of ~~Sean Gamble,~~Melissa Thomas, Chief Financial Officer of Cinemark Holdings, Inc., pursuant to 18 U.S.C. Section 1350, as added by Section 906 of the Sarbanes-Oxley Act of 2002.
**32.3
*101		~~Financial Statements from the quarterly report on Form 10-Q~~Certification of Sean Gamble, Chief Executive Officer of Cinemark USA, Inc., pursuant to 18 U.S.C. Section 1350, as added by Section 906 of the Sarbanes – Oxley Act of 2002.
**32.4		Certification of Melissa Thomas, Chief Financial Officer of Cinemark, USA, Inc., pursuant to 18 U.S.C. Section 1350, as added by Section 906 of the Sarbanes – Oxley Act of 2002.
**101		The following material from the combined Cinemark Holdings, Inc. and Cinemark USA, Inc. Form 10-Q for the quarter ended September 30, ~~2017, filed November 6, 2017,~~2022, formatted in ~~XBRL:~~ iXBRL (Inline eXtensible Business Reporting Language), filed herewith: (i) ~~the~~ Cinemark Holdings, Inc. Condensed Consolidated Balance Sheets (ii) ~~the~~ Cinemark Holdings, Inc. Condensed Consolidated Statements of ~~Income,~~ Loss (iii) ~~the~~ Cinemark Holdings, Inc. Condensed Consolidated Statements of Comprehensive ~~Income,~~ Loss (iv) ~~the~~ Cinemark Holdings, Inc. Condensed Consolidated Statements of Cash Flows ~~and~~ (v) ~~the~~ Cinemark Holdings, Inc. Condensed Consolidated Statements of Equity (vi) Cinemark USA, Inc. Condensed Consolidated Balance Sheets (vii) Cinemark USA, Inc. Condensed Consolidated Statements of Loss (viii) Cinemark USA, Inc. Condensed Consolidated Statements of Comprehensive Loss (ix) Cinemark USA, Inc. Condensed Consolidated Statements of Cash Flows (x) Cinemark USA, Inc. Condensed Consolidated Statements of Cash Equity (xi) Notes to Condensed Consolidated Financial Statements ~~tagged~~of Cinemark Holdings, Inc. and Cinemark USA, Inc.
* 104		Cover Page Interactive Data File (formatted as ~~detailed text.~~inline XBRL and contained in Exhibit 101)

*	~~filed herewith.~~

~~SIGNATURES~~

* filed herewith.

** furnished herewith.

CINEMARK HOLDINGS, INC. AND

CINEMARK USA, INC.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		CINEMARK HOLDINGS, INC. CINEMARK USA, INC.
		~~Registrant~~Registrants

DATE:	November ~~6, 2017~~4, 2022

		/s/~~Mark Zoradi~~ Sean Gamble
		~~Mark Zoradi~~Sean Gamble
		Chief Executive Officer

		/s/~~Sean Gamble~~ Melissa Thomas
		~~Sean Gamble~~Melissa Thomas
		Chief Financial Officer

5258


			Page
PART I. FINANCIAL INFORMATION			3

	Item 1.	Cinemark Holdings, Inc. and Subsidiaries Financial Statements (unaudited)

		Condensed Consolidated Balance Sheets as of September 30, ~~2017~~2022 and December 31, ~~2016 (unaudited)~~2021	43

		Condensed Consolidated Statements of ~~Income~~Loss for the three and nine months ended September 30, ~~2017~~2022 and ~~2016 (unaudited)~~2021	54

		Condensed Consolidated Statements of Comprehensive ~~Income~~Loss for the three and nine months ended September 30, ~~2017~~2022 and ~~2016 (unaudited)~~2021	65
		Condensed Consolidated Statements of Equity for the three and nine months ended September 30, 2022 and 2021	6
		Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, ~~2017~~2022 and ~~2016 (unaudited)~~2021	78
		Cinemark USA, Inc. and Subsidiaries Financial Statements (unaudited)
		Condensed Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021	9
		Condensed Consolidated Statements of Loss for the three and nine months ended September 30, 2022 and 2021	10
		Condensed Consolidated Statements of Comprehensive Loss for the three and nine months ended September 30, 2022 and 2021	11
		Condensed Consolidated Statements of Equity for the three and nine months ended September 30, 2022 and 2021	12
		Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2022 and 2021	14
		Cinemark Holdings, Inc. and Cinemark USA, Inc. Notes to Condensed Consolidated Financial Statements ~~(unaudited)~~	815

	Item 2.	~~Management’s~~Management's Discussion and Analysis of Financial Condition and Results of Operations	3536

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4550

	Item 4.	Controls and Procedures	4550

PART II. OTHER INFORMATION			52

	Item 1.	Legal Proceedings	4652

	Item 1A.	Risk Factors	4652

	Item 5.	Other Information	4652

	Item 6.	Exhibits	5157

SIGNATURES			5258

	September 30,			December 31,
	2017			2016
Assets
Current assets
Cash and cash equivalents	$	469,309		$	561,138
Inventories		16,844			16,961
Accounts receivable		82,647			74,993
Current income tax receivable		4,381			7,367
Prepaid expenses and other		17,010			15,754
Accounts receivable from parent		14,192			10,080
Total current assets		604,383			686,293

Theatre properties and equipment		3,268,653			3,059,754
Less: accumulated depreciation and amortization		1,477,047			1,355,218
Theatre properties and equipment, net		1,791,606			1,704,536

Other assets
Goodwill		1,294,342			1,262,963
Intangible assets - net		335,657			334,899
Investment in NCM		204,347			189,995
Investments in and advances to affiliates		112,878			98,317
Long-term deferred tax asset		2,098			2,051
Deferred charges and other assets - net		40,391			37,555
Total other assets		1,989,713			1,925,780

Total assets	$	4,385,702		$	4,316,609

Liabilities and equity

Current liabilities
Current portion of long-term debt	$	7,099		$	5,671
Current portion of capital lease obligations		24,836			21,139
Current income tax payable		7,893			5,071
Current liability for uncertain tax positions		11,714			10,085
Accounts payable and accrued expenses		340,405			400,836
Total current liabilities		391,947			442,802

Long-term liabilities
Long-term debt, less current portion		1,781,952			1,782,441
Capital lease obligations, less current portion		252,047			234,281
Long-term deferred tax liability		144,740			135,014
Long-term liability for uncertain tax positions		7,801			8,105
Deferred lease expenses		41,291			42,378
Deferred revenue - NCM		354,419			343,928
Other long-term liabilities		44,273			43,580
Total long-term liabilities		2,626,523			2,589,727

Commitments and contingencies (see Note 15)

Equity
Cinemark USA, Inc.'s stockholder's equity:
Class A common stock, $0.01 par value: 10,000,000 shares authorized,
1,500 shares issued and outstanding		—			—
Class B common stock, no par value: 1,000,000 shares authorized,
239,893 shares issued and 182,648 shares outstanding		49,543			49,543
Treasury stock, 57,245 Class B shares at cost		(24,233	)		(24,233	)
Additional paid-in-capital		1,261,545			1,252,715
Retained earnings		311,279			241,926
Accumulated other comprehensive loss		(242,894	)		(247,013	)
Total Cinemark USA, Inc.'s stockholder's equity		1,355,240			1,272,938
Noncontrolling interests		11,992			11,142
Total equity		1,367,232			1,284,080

Total liabilities and equity	$	4,385,702		$	4,316,609


	Common Stock		Treasury Stock			Additional Paid-In-Capital		Retained Earnings (Deficit)			Accumulated Other Comprehensive Loss			Total Cinemark Holdings, Inc. Stockholders’ Equity			Noncontrolling Interests			Total Equity
Balance at January 1, 2022	$	0.1	$	(91.1	)	$	1,197.8	$	(389.4	)	$	(394.5	)	$	322.9		$	11.6		$	334.5
Issuance of share based awards and share based awards compensation expense	—		—				5.1		—			—			5.1			—			5.1
Stock withholdings related to vesting of share based awards	—			(1.6	)		—		—			—			(1.6	)		—			(1.6	)
Net income (loss)	—		—				—		(74.0	)		—			(74.0	)		1.5			(72.5	)
Unrealized gain due to fair value adjustments on interest rate swap agreements, net of taxes and settlements	—		—				—		—			18.4			18.4			—			18.4
Amortization of accumulated losses for amended swap agreements	—		—				—		—			1.1			1.1			—			1.1
Foreign currency translation adjustments	—		—				—		—			14.4			14.4			—			14.4
Balance at March 31, 2022	$	0.1	$	(92.7	)	$	1,202.9	$	(463.4	)	$	(360.6	)	$	286.3		$	13.1		$	299.4
Issuance of share based awards and share based awards compensation expense	—			—			6.0		—			—			6.0			—			6.0
Stock withholdings related to vesting of share based awards	—			(0.5	)		—		—			—			(0.5	)		—			(0.5	)
Net income (loss)	—			—			—		(73.4	)		—			(73.4	)		0.6			(72.8	)
Distributions to noncontrolling interests	—			—			—		—			—			—			(3.0	)		(3.0	)
Unrealized gain due to fair value adjustments on interest rate swap agreements, net of taxes and settlements	—			—			—		—			4.2			4.2			—			4.2
Amortization of accumulated losses for amended swap agreements	—			—			—		—			1.1			1.1			—			1.1
Foreign currency translation adjustments		—		—			—		—			(15.7	)		(15.7	)		—			(15.7	)
Balance at June 30, 2022	$	0.1	$	(93.2	)	$	1,208.9	$	(536.8	)	$	(371.0	)	$	208.0		$	10.7		$	218.7
Issuance of share based awards and share based awards compensation expense	—			—			5.2		—			—			5.2			—			5.2
Stock withholdings related to vesting of share based awards	—			(2.0	)		—		—			—			(2.0	)		—			(2.0	)
Net income (loss)	—			—			—		(24.5	)		—			(24.5	)		0.6			(23.9	)
Distributions to noncontrolling interests	—			—			—		—			—			—			(0.7	)		(0.7	)
Unrealized gain due to fair value adjustments on interest rate swap agreements, net of taxes and settlements	—			—			—		—			11.6			11.6			—			11.6
Amortization of accumulated losses for amended swap agreements	—			—			—		—			1.1			1.1			—			1.1
Foreign currency translation adjustments		—		—			—		—			(4.6	)		(4.6	)		—			(4.6	)
Balance at September 30, 2022	$	0.1	$	(95.2	)	$	1,214.1	$	(561.3	)	$	(362.9	)	$	194.8		$	10.6		$	205.4

	Cinemark
	USA, Inc.
	Stockholder’s			Noncontrolling			Total
	Equity			Interests			Equity
Balance at January 1, 2017	$	1,272,938		$	11,142		$	1,284,080
Share based awards compensation expense		8,862			—			8,862
Tax expense related to share based awards vesting		(32	)	―				(32	)
Dividends paid to parent		(100,875	)		—			(100,875	)
Dividends paid to noncontrolling interests		—			(588	)		(588	)
Net income		170,228			1,438			171,666
Other comprehensive income in equity method investees		92			—			92
Foreign currency translation adjustments (see Note 11)		4,027			—			4,027
Balance at September 30, 2017	$	1,355,240		$	11,992		$	1,367,232

							Distributions
	Investment			Deferred			from			Equity in			Other			Cash
	in NCM			Revenue			NCM			Income			Revenue			Received
Balance as of January 1, 2017	$	189,995		$	(343,928	)
Receipt of common units due to annual common unit adjustment		18,363			(18,363	)	$	—		$	—		$	—		$	—
Revenues earned under ESA ⁽¹⁾		—			—			—			—			(8,446	)		8,446
Receipt of excess cash distributions		(10,020	)		—			(9,630	)		—			—			19,650
Receipt under tax receivable agreement		(2,089	)		—			(2,074	)		—			—			4,163
Equity in earnings		8,098			—			—			(8,098	)		—			—
Amortization of deferred revenue		—			7,872			—			—			(7,872	)		—
Balance as of and for the nine months ended September 30, 2017	$	204,347		$	(354,419	)	$	(11,704	)	$	(8,098	)	$	(16,318	)	$	32,259

	Three Months		Six Months		Three Months Ended		Nine Months Ended
	Ended June 29, 2017		Ended June 29, 2017		September 29, 2016		September 29, 2016
Gross revenues	$	97,042	$	168,962	$	113,476	$	305,101
Operating income	$	28,430	$	33,500	$	48,481	$	100,911
Net income	$	15,377	$	7,465	$	23,909	$	49,619

	DCIP			AC JV, LLC		DCDC		Other			Total
Balance at January 1, 2017	$	87,819		$	5,980	$	2,750	$	1,768		$	98,317
Cash contributions		1,109			—		—		68			1,177
Cash distributions		(5,212	)		—		—		—			(5,212	)
Equity in income		16,820			996		853		—			18,669
Equity in other comprehensive income		92			—		—		—			92
Other		—			—		—		(165	)		(165	)
Balance at September 30, 2017	$	100,628		$	6,976	$	3,603	$	1,671		$	112,878

	Number of
	Shares		Value at
	Vesting		Grant
at IRR of at least 7%		58,545	$	2,481
at IRR of at least 9.5%		117,089	$	4,961
at IRR of at least 13%		175,634	$	7,442

	Balance at											Balance at
	January 1,											September 30,
	2017			Additions ⁽¹⁾		Amortization			Other ⁽²⁾			2017
Intangible assets with finite lives:
Gross carrying amount	$	99,796		$	4,453	$	—		$	(1,332	)	$	102,917
Accumulated amortization		(64,606	)	―			(3,606	)		1,162			(67,050	)
Total net intangible assets with finite lives	$	35,190		$	4,453	$	(3,606	)	$	(170	)	$	35,867

Intangible assets with indefinite lives:
Tradename		299,709		―		―				81			299,790
Total intangible assets — net	$	334,899		$	4,453	$	(3,606	)	$	(89	)	$	335,657

For the three months ended December 31, 2017	$	1,668
For the twelve months ended December 31, 2018		5,964
For the twelve months ended December 31, 2019		5,101
For the twelve months ended December 31, 2020		4,995
For the twelve months ended December 31, 2021		2,444
Thereafter		15,695
Total	$	35,867

	Liabilities ⁽¹⁾
	2016
Beginning balance - January 1	$	373
Total loss included in accumulated other comprehensive loss		71
Settlements included in interest expense		(444	)
Ending balance - September 30	$	—

Theatre Properties and Equipment-net	September 30, 2017		December 31, 2016
U.S.	$	1,392,429	$	1,306,643
Brazil		194,171		197,896
Other international countries		205,006		199,997
Total	$	1,791,606	$	1,704,536

	Parent		Subsidiary		Subsidiary
	Company		Guarantors		Non-Guarantors		Eliminations			Consolidated
	(In thousands)
Assets
Current assets
Cash and cash equivalents	$	146,855	$	281,023	$	133,260	$	—		$	561,138
Other current assets		62,425		15,098		71,706		(34,154	)		115,075
Accounts receivable from parent or subsidiaries		76,550		121,478		—		(187,948	)		10,080
Total current assets		285,830		417,599		204,966		(222,102	)		686,293
Theatre properties and equipment - net		604,506		678,984		421,046		—			1,704,536
Investment in subsidiaries		1,570,592		132,892		—		(1,703,484	)		—
Other assets		1,409,320		134,284		488,535		(106,359	)		1,925,780
Total assets	$	3,870,248	$	1,363,759	$	1,114,547	$	(2,031,945	)	$	4,316,609
Liabilities and equity
Current liabilities
Current portion of long-term debt	$	4,282	$	—	$	1,409	$	(20	)	$	5,671
Current portion of capital lease obligations		7,903		9,541		3,695		—			21,139
Accounts payable and accrued expenses		197,789		121,640		113,020		(16,457	)		415,992
Accounts payable to parent or subsidiaries		—		—		187,948		(187,948	)		—
Total current liabilities		209,974		131,181		306,072		(204,425	)		442,802
Long-term liabilities
Long-term debt, less current portion		1,879,663		—		12,600		(109,822	)		1,782,441
Capital lease obligations, less current portion		124,944		71,228		38,109		—			234,281
Other long-term liabilities and deferrals		382,729		84,429		120,061		(14,214	)		573,005
Total long-term liabilities		2,387,336		155,657		170,770		(124,036	)		2,589,727
Commitments and contingencies
Equity
Cinemark USA, Inc.'s stockholder's equity:
Common stock		49,543		457,368		10,239		(467,607	)		49,543
Other stockholder's equity		1,223,395		619,553		616,324		(1,235,877	)		1,223,395
Total Cinemark USA, Inc. stockholder's equity		1,272,938		1,076,921		626,563		(1,703,484	)		1,272,938
Noncontrolling interests		—		—		11,142		—			11,142
Total equity		1,272,938		1,076,921		637,705		(1,703,484	)		1,284,080
Total liabilities and equity	$	3,870,248	$	1,363,759	$	1,114,547	$	(2,031,945	)	$	4,316,609

Cinemark USA, Inc. term loan	$	660.9
Cinemark USA, Inc. 5.125% senior notes due 2022		400.0
Cinemark USA, Inc. 4.875% senior notes due 2023		755.0
Other	4.2
Total long-term debt	$	1,820.1
Less current portion		7.1
Subtotal long-term debt, less current portion	$	1,813.0
Less: Debt discounts and debt issuance costs, net of accumulated amortization		31.0
Long-term debt, less current portion, net of debt issuance costs	$	1,782.0