UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, ~~2021~~2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

~~Commission File Number:~~ ~~001-33401~~

~~CINEMARK HOLDINGS, INC.~~

~~(Exact name of registrant as specified in its charter)~~


Commission ~~Delaware~~File Number	Exact Name of Registrant as Specified in its Charter, Principal Executive Office Address and Telephone Number	State of ~~20-5490327~~Incorporation	I.R.S. Employer Identification No.
~~(State or other jurisdiction~~ ~~of incorporation or organization)~~001-33401	Cinemark Holdings, Inc.	~~(I.R.S. Employer~~ ~~Identification No.)~~

3900 Dallas Parkway
Plano, Texas		75093
~~(Address of principal executive offices)~~		~~(Zip Code)~~

~~Registrant's telephone number, including area code:~~ (972) 665-1000

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
Cinemark Holdings, Inc. ("Holdings")	Common stock, par value $.001 per share	CNK	New York Stock Exchange
Cinemark USA, Inc. ("CUSA")	None	None	None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Cinemark Holdings, Inc. Yes ☒ No ☐

Cinemark USA, Inc. Yes ☐ No ☒

(Note: As a voluntary filer, Cinemark USA, Inc. is not subject to the filing requirement of Section 13 or 15(d) of the Exchange Act. Cinemark USA, Inc. has filed all reports pursuant to Section 13 or 15(d) of the Exchange Act during the preceding 12 months as if it was subject to such filing requirements.)

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit files).

Cinemark Holdings, Inc. Yes ☒ No ☐

Cinemark USA, Inc. Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Cinemark Holdings, Inc.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Cinemark USA, Inc.


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☐
Emerging growth company	☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Cinemark Holdings, Inc. Yes ☐ No ☒

Cinemark USA, Inc. Yes ☐ No ☒

As of October ~~29, 2021,~~28, 2022, ~~119,626,449~~120,424,973 shares of common stock, $0.001 per value per share, of Cinemark Holdings, Inc. were issued and outstanding.

As of October 30, 2022, 1,500 shares of Class A common stock, $0.01 par value per share, and 182,648 shares of Class B common stock, no par value per share, of Cinemark USA, Inc. were outstanding and held by Cinemark Holdings, Inc.

Cinemark USA, Inc. meetS the conditions set forth in General Instructions (H)(1)(a) and (b) of Form 10-Q and IS therefore filing this form with reduced disclosure format pursuant to General Instructions (H)(2).

This combined Form 10-Q is separately filed by Cinemark Holdings, Inc. and Cinemark USA, Inc. Information contained herein relating to any individual registrant is filed by such registrant on its own behalf. Each registrant makes no representation as to information relating to the other registrants. When this Form 10-Q is incorporated by reference into any filings with the SEC made by Cinemark Holdings, Inc. or Cinemark USA, Inc., as a registrant, the portions of this Form 10-Q that relate to the other registrant are not incorporated by reference therein.

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES

CINEMARK USA, INC. AND SUBSIDIARIES

TABLE OF CONTENTS


				Page
PART I. FINANCIAL INFORMATION				3

	Item 1.	Cinemark Holdings, Inc. and Subsidiaries Financial Statements	(unaudited)	4

		Condensed Consolidated Balance Sheets as of September 30, ~~2021~~2022 and December 31, ~~2020 (unaudited)~~2021		43

		Condensed Consolidated Statements of Loss for the three and nine months ended September 30, ~~2021~~2022 and ~~2020 (unaudited)~~2021		54

		Condensed Consolidated Statements of Comprehensive Loss for the three and nine months ended September 30, ~~2021~~2022 and ~~2020 (unaudited)~~2021		5
		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, ~~2021~~2022 and ~~2020 (unaudited)~~2021		7

		~~Notes to Condensed Consolidated Financial Statements (unaudited)~~		8
		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		15

	Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations		3236

	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			52

	Item 6.	Exhibits		4757

SIGNATURES				4858

Cautionary Statement Regarding Forward-Looking Statements

Certain matters within this Quarterly Report on Form ~~10Q~~10-Q include “forward–looking statements” within the meaning of ~~Section 27A~~the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of ~~1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.~~1995. The “forward-looking statements” may include our current expectations, assumptions, estimates and projections about our business and our industry. They may include statements relating to to:

•

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.

Forward-looking statements can be identified by the use of words such as “may,” “should,” “could,” “estimates,” “predicts,” “potential,” “continue,” “anticipates,” “believes,” “plans,” “expects,” “future” and “intends” and similar expressions. Forward-looking statements may involve known and unknown risks, uncertainties and other factors that may cause the actual results or performance to differ from those projected in the forward-looking statements. These statements are ~~not~~neither historical facts nor guarantees of future ~~performance~~performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions and are, therefore, subject to risks, inherent uncertainties and other factors, some of which are beyond our control and difficult to predict, including, among others, the impacts of ~~COVID-19.~~the COVID-19 pandemic. Such risks and uncertainties could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. For a description of the risk factors, please review the “Risk Factors” section or other sections, of, or incorporated by reference to, ~~the Company’s~~ Holdings' Annual Report on Form 10-K filed February ~~26, 2021~~ ~~and the Current~~25, 2022 or CUSA's Annual Report on Form ~~8-K~~10-K filed March ~~4, 2021~~.9, 2022, as applicable. All forward-looking statements are expressly qualified in their entirety by such risk factors. We undertake no obligation, other than as required by law, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Where it is important to distinguish between the entities, this report either refers specifically to Holdings or CUSA. Otherwise, unless the context otherwise requires, 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 Cinemark USA, Inc. and its consolidated subsidiaries. All references to Latin America relate to Brazil, Argentina, Chile, Colombia, Peru, Ecuador, Honduras, El Salvador, Nicaragua, Costa Rica, Panama, Guatemala, Bolivia, Curacao and Paraguay.

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

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


	September 30,			December 31,			September 30,			December 31,
	2021			2020			2022			2021
Assets
Current assets
Cash and cash equivalents	$	543,013		$	655,338		$	631.9		$	707.3
Inventories		15,244			12,593			19.6			15.5
Accounts receivable		36,753			25,265			52.4			68.8
Current income tax receivable		38,388			165,151			45.4			46.6
Prepaid expenses and other		35,850			34,400			51.6			36.2
Total current assets		669,248			892,747			800.9			874.4
Theatre properties and equipment		3,365,455			3,403,103
Less: accumulated depreciation and amortization		1,929,981			1,788,041
Theatre properties and equipment, net		1,435,474			1,615,062
Theatre properties and equipment, net of accumulated depreciation of $2,132.1 and $1,985.9								1,260.0			1,382.9
Operating lease right-of-use assets, net		1,220,898			1,278,191			1,144.0			1,230.8
Other assets
Goodwill		1,250,135			1,253,840			1,249.2			1,248.8
Intangible assets, net		312,025			314,195			309.1			310.8
Investment in NCM		139,997			151,962			28.4			135.4
Investments in affiliates		23,755			23,726			26.3			25.2
Deferred charges and other assets, net		27,042			33,199			32.6			22.3
Total other assets		1,752,954			1,776,922			1,645.6			1,742.5
Total assets	$	5,078,574		$	5,562,922		$	4,850.5		$	5,230.6

Liabilities and equity
Current liabilities
Current portion of long-term debt	$	20,288		$	18,056		$	22.0		$	24.3
Current portion of operating lease obligations		215,119			208,593			217.9			217.1
Current portion of finance lease obligations		14,406			16,407			14.6			14.6
Current income tax payable		0			5,632			2.4			—
Accounts payable and accrued expenses		392,964			357,753			371.5			513.1
Total current liabilities		642,777			606,441			628.4			769.1
Long-term liabilities
Long-term debt, less current portion		2,477,257			2,377,162			2,473.5			2,476.3
Operating lease obligations, less current portion		1,070,432			1,138,142			987.6			1,078.3
Finance lease obligations, less current portion		105,688			124,609			91.6			102.6
Long-term deferred tax liability		38,059			79,525			39.5			39.8
Long-term liability for uncertain tax positions		40,379			19,225			47.3			45.9
NCM screen advertising advances		348,212			344,255			340.5			346.0
Other long-term liabilities		40,813			74,594			36.7			38.1
Total long-term liabilities		4,120,840			4,157,512			4,016.7			4,127.0
Equity
Cinemark Holdings, Inc.'s stockholders' equity:
Common stock, $0.001 par value: 300,000,000 shares authorized, 124,720,207 shares issued and 119,626,627 shares outstanding at September 30, 2021 and 123,627,080 shares issued and 118,576,099 shares outstanding at December 31, 2020		125			124
Common stock, $0.001 par value: 300.0 shares authorized, 126.08 shares issued and 120.43 shares outstanding at September 30, 2022 and 125.10 shares issued and 119.75 shares outstanding at December 31, 2021								0.1			0.1
Additional paid-in-capital		1,188,554			1,245,569			1,214.1			1,197.8
Treasury stock, 5,093,580 and 5,050,981 shares, at cost, at September 30, 2021 and December 31, 2020, respectively		(87,020	)		(87,004	)
Retained earnings (deficit)		(395,143	)		27,937
Treasury stock, 5.66 and 5.35 shares, at cost, at September 30, 2022 and December 31, 2021, respectively								(95.2	)		(91.1	)
Retained deficit								(561.3	)		(389.4	)
Accumulated other comprehensive loss		(402,380	)		(398,653	)		(362.9	)		(394.5	)
Total Cinemark Holdings, Inc.'s stockholders' equity		304,136			787,973			194.8			322.9
Noncontrolling interests		10,821			10,996			10.6			11.6
Total equity		314,957			798,969			205.4			334.5
Total liabilities and equity	$	5,078,574		$	5,562,922		$	4,850.5		$	5,230.6

The accompanying notes, as they relate to Cinemark Holdings, Inc., are an integral part of the condensed consolidated financial statements.

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF LOSS

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

Three Months Ended September 30,

Nine Months Ended September 30,

2021

2020

2021

2020

Revenues

Admissions

$
225,464

$
14,901

$
435,064

$
307,400

Concession

164,258

9,116

313,560

199,596

Other

45,099

11,461

95,210

81,072

Total revenues

434,821

35,478

843,834

588,068

Cost of operations

Film rentals and advertising

117,047

8,257

216,839

165,262

Concession supplies

28,208

2,688

54,195

39,879

Salaries and wages

67,630

20,181

149,203

116,589

Facility lease expense

68,767

67,047

200,809

214,490

Utilities and other

81,723

43,412

192,052

178,806

General and administrative expenses

38,584

30,342

111,774

99,361

Depreciation and amortization

67,208

62,543

202,288

191,380

Impairment of long-lived assets

7,480

24,595

7,480

41,214

Restructuring costs

(340
)

524

(1,288
)

20,062

(Gain) loss on disposal of assets and other

1,020

(13,327
)

7,883

(10,997
)
Total cost of operations

477,327

246,262

1,141,235

1,056,046

Operating loss

(42,506
)

(210,784
)

(297,401
)

(467,978
)
Other income (expense)

Interest expense

(37,993
)

(36,577
)

(111,580
)

(92,284
)
Interest income

861

1,348

5,335

4,235

Loss on extinguishment of debt

0

—

(6,527
)

—

Foreign currency exchange loss

(273
)

(2,251
)

(920
)

(6,183
)
Distributions from NCM

0

1,061

77

6,975

Distributions from DCIP

6,534

—

6,534

—

Interest expense - NCM

(5,926
)

(5,901
)

(17,723
)

(17,726
)
Equity in loss of affiliates

(7,146
)

(16,077
)

(22,061
)

(27,711
)
Total other expense

(43,943
)

(58,397
)

(146,865
)

(132,694
)
Loss before income taxes

(86,449
)

(269,181
)

(444,266
)

(600,672
)
Income taxes

(8,876
)

(121,145
)

(15,569
)

(222,398
)
Net loss

$
(77,573
)

$
(148,036
)

$
(428,697
)

$
(378,274
)
Less: Net income (loss) attributable to noncontrolling interests

241

(444
)

(175
)

(702
)
Net loss attributable to Cinemark Holdings, Inc.

$
(77,814
)

$
(147,592
)

$
(428,522
)

$
(377,572
)

Weighted average shares outstanding

Basic

117,274

116,707

117,226

116,552

Diluted

117,274

116,707

117,226

116,552

Loss per share attributable to Cinemark Holdings, Inc.'s common stockholders

Basic

$
(0.65
)

$
(1.25
)

$
(3.59
)

$
(3.22
)
Diluted

$
(0.65
)

$
(1.25
)

$
(3.59
)

$
(3.22
)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
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		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		631.6			477.3			1,887.8			1,141.2
Operating income (loss)		18.8			(42.5	)		(32.8	)		(297.4	)
Other income (expense)
Interest expense		(38.4	)		(38.0	)		(114.6	)		(111.6	)
Interest income		6.4			0.8			11.1			5.3
Loss on extinguishment of debt		—			—			—			(6.5	)
Foreign currency exchange loss		(5.4	)		(0.2	)		(5.3	)		(0.9	)
Distributions from NCM		—			—			—			0.1
Distributions from DCIP		3.7			6.5			3.7			6.5
Interest expense - NCM		(5.8	)		(5.9	)		(17.5	)		(17.7	)
Equity in income (loss) of affiliates		0.2			(7.2	)		(7.5	)		(22.1	)
Total other expense		(39.3	)		(44.0	)		(130.1	)		(146.9	)
Loss before income taxes		(20.5	)		(86.5	)		(162.9	)		(444.3	)
Income tax expense (benefit)		3.4			(8.9	)		6.3			(15.6	)
Net loss	$	(23.9	)	$	(77.6	)	$	(169.2	)	$	(428.7	)
Less: Net income (loss) attributable to noncontrolling interests		0.6			0.2			2.7			(0.2	)
Net loss attributable to Cinemark Holdings, Inc.	$	(24.5	)	$	(77.8	)	$	(171.9	)	$	(428.5	)

Weighted average shares outstanding
Basic		118.4			117.3			118.1			117.2
Diluted		118.4			117.3			118.1			117.2
Loss per share attributable to Cinemark Holdings, Inc.'s common stockholders
Basic	$	(0.20	)	$	(0.65	)	$	(1.43	)	$	(3.59	)
Diluted	$	(0.20	)	$	(0.65	)	$	(1.43	)	$	(3.59	)

The accompanying notes, as they relate to Cinemark Holdings, Inc., are an integral part of the condensed consolidated financial statements.

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

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

Three Months Ended September 30,

Nine Months Ended September 30,

2021

2020

2021

2020

Net loss

$
(77,573
)

$
(148,036
)

$
(428,697
)

$
(378,274
)
Other comprehensive income (loss), net of tax

Unrealized gain (loss) due to fair value adjustments on interest rate swap agreements, net of taxes of $835, $5,677, $3,682 and $3,696, net of settlements

1,462

6,528

7,912

(16,794
)
Foreign currency translation adjustments

(13,804
)

(1,503
)

(15,010
)

(62,830
)
Total other comprehensive income (loss), net of tax

(12,342
)

5,025

(7,098
)

(79,624
)
Total comprehensive loss, net of tax

(89,915
)

(143,011
)

(435,795
)

(457,898
)
Comprehensive (income) loss attributable to noncontrolling interests

(241
)

444

175

702

Comprehensive loss attributable to Cinemark Holdings, Inc.

$
(90,156
)

$
(142,567
)

$
(435,620
)

$
(457,196
)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Net loss	$	(23.9	)	$	(77.6	)	$	(169.2	)	$	(428.7	)
Other comprehensive income (loss), net of tax
Unrealized gain due to fair value adjustments on interest rate swap agreements, net of taxes and settlements		11.6			1.4			34.2			7.9
Foreign currency translation adjustments		(4.6	)		(13.8	)		(5.9	)		(15.0	)
Total other comprehensive income (loss), net of tax		7.0			(12.4	)	$	28.3		$	(7.1	)
Total comprehensive loss, net of tax		(16.9	)		(90.0	)		(140.9	)		(435.8	)
Comprehensive (income) loss attributable to noncontrolling interests		(0.6	)		(0.2	)		(2.7	)		0.2
Comprehensive loss attributable to Cinemark Holdings, Inc.	$	(17.5	)	$	(90.2	)	$	(143.6	)	$	(435.6	)

The accompanying notes, as they relate to Cinemark Holdings, Inc., are an integral part of the condensed consolidated financial statements.

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(in millions, unaudited)


	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

The accompanying notes, as they relate to Cinemark Holdings, Inc., are an integral part of the condensed consolidated financial statements.

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (CONTINUED)

(in millions, unaudited)


	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, 2021	$	0.1	$	(87.0	)	$	1,245.6		$	27.9		$	(398.7	)	$	787.9		$	11.0		$	798.9
Impact of adoption of ASU 2020-06, net of deferred taxes	—		—				(73.6	)		5.4		—				(68.2	)		—			(68.2	)
Issuance of share based awards and share based awards compensation expense	—		—				4.7		—			—				4.7			—			4.7
Net loss	—		—			—				(208.3	)		—			(208.3	)		(0.6	)		(208.9	)
Unrealized gain due to fair value adjustments on interest rate swap agreements, net of taxes and settlements	—		—			—			—				5.7			5.7			—			5.7
Amortization of accumulated losses for amended swap agreements	—		—			—			—				1.1			1.1			—			1.1
Foreign currency translation adjustments	—		—			—			—				(9.5	)		(9.5	)		—			(9.5	)
Balance at March 31, 2021	$	0.1	$	(87.0	)	$	1,176.7		$	(175.0	)	$	(401.4	)	$	513.4		$	10.4		$	523.8
Issuance of share based awards and share based awards compensation expense		—		—			5.9			—			—			5.9			—			5.9
Net income (loss)		—		—			—			(142.4	)		—			(142.4	)		0.2			(142.2	)
Unrealized gain due to fair value adjustments on interest rate swap agreements, net of taxes, net of settlements		—		—			—			—			0.8			0.8			—			0.8
Amortization of accumulated losses for amended swap agreements		—		—			—			—			1.1			1.1			—			1.1
Foreign currency translation adjustments		—		—			—			—			8.3			8.3			—			8.3
Balance at June 30, 2021	$	0.1	$	(87.0	)	$	1,182.6		$	(317.4	)	$	(391.2	)	$	387.1		$	10.6		$	397.7
Issuance of share based awards and share based awards compensation expense		—		—			6.0			—						6.0						6.0
Net loss		—		—			—			(77.8	)		—			(77.8	)		0.2			(77.6	)
Unrealized gain to fair value adjustments on interest rate swap agreements, net of taxes, net of settlements		—		—			—			—			1.4			1.4			—			1.4
Amortization of accumulated losses for amended swap agreements		—		—			—			—			1.1			1.1			—			1.1
Foreign currency translation adjustments		—		—			—			—			(13.8	)		(13.8	)		—			(13.8	)
Balance at September 30, 2021	$	0.1	$	(87.0	)	$	1,188.6		$	(395.2	)	$	(402.5	)	$	304.0		$	10.8		$	314.8

The accompanying notes, as they relate to Cinemark Holdings, Inc., are an integral part of the condensed consolidated financial statements.

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

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


	Nine Months Ended September 30,
	2022			2021
Operating activities
Net loss	$	(169.2	)	$	(428.7	)
Adjustments to reconcile net loss to cash provided by (used for) operating activities:
Depreciation		179.1			200.3
Amortization of intangible and other assets		1.9			2.0
Amortization of debt issuance costs		8.2			8.0
Interest accrued on NCM screen advertising advances		17.5			17.7
Amortization of NCM screen advertising advances and other deferred revenues		(24.5	)		(24.3	)
Amortization of accumulated losses for amended swap agreements		3.4			3.4
Share based awards compensation expense		16.2			16.6
Impairment of long-lived and other assets		107.5			7.5
(Gain) loss on disposal of assets and other		(6.4	)		7.9
Loss on extinguishment of debt		—			6.5
Non-cash rent expense		(7.5	)		(1.8	)
Equity in loss of affiliates		7.5			22.1
Deferred income tax benefit		(1.5	)		(21.1	)
Distributions from equity investees		1.5			0.2
Changes in assets and liabilities and other		(106.0	)		141.5
Net cash provided by (used for) operating activities		27.7			(42.2	)

Investing activities
Additions to theatre properties and equipment		(65.3	)		(57.2	)
Proceeds from sale of theatre properties and equipment and other		12.0			2.2
Net cash used for investing activities		(53.3	)		(55.0	)

Financing activities
Restricted stock withholdings for payroll taxes		(4.1	)		—
Proceeds from issuance of senior notes		—			1,170.0
Proceeds from other borrowings		—			9.7
Redemption of senior notes		—			(1,155.0	)
Repayments of long-term debt		(14.0	)		(7.2	)
Payment of debt issuance costs		—			(17.3	)
Fees paid related to debt refinancing		—			(2.1	)
Payments on finance leases		(10.8	)		(11.0	)
Other financing activities		(3.7	)		—
Net cash used for financing activities		(32.6	)		(12.9	)

Effect of exchange rate changes on cash and cash equivalents		(17.2	)		(2.2	)

Decrease in cash and cash equivalents		(75.4	)		(112.3	)

Cash and cash equivalents:
Beginning of period		707.3			655.3
End of period	$	631.9		$	543.0

Nine Months Ended September 30,

2021

2020

Operating activities

Net loss

$
(428,697
)

$
(378,274
)
Adjustments to reconcile net loss to cash used for operating activities:

Depreciation

200,262

187,748

Amortization of intangible and other assets

2,026

3,632

Amortization of debt issue costs

7,994

4,942

Non-cash accretion on convertible notes

0

1,739

Interest accrued on NCM screen advertising advances

17,723

17,726

Amortization of NCM screen advertising advances and other deferred revenues

(24,253
)

(23,647
)
Amortization of accumulated losses for amended swap agreements

3,371

5,338

Impairment of long-lived assets

7,480

41,214

Share based awards compensation expense

16,589

12,859

(Gain) loss on disposal of assets and other

7,883

(10,997
)
Loss on extinguishment of debt

6,527

—

Non-cash rent expense

(1,803
)

1,649

Equity in loss of affiliates

22,061

27,711

Deferred income tax expenses

(21,059
)

(29,941
)
Distributions from equity investees

156

25,430

Changes in assets and liabilities and other

141,537

(54,782
)
Net cash used for operating activities

(42,203
)

(167,653
)

Investing activities

Additions to theatre properties and equipment

(57,244
)

(67,618
)
Proceeds from sale of theatre properties and equipment and other

2,192

212

Investment in joint ventures and other, net

0

(50
)
Net cash used for investing activities

(55,052
)

(67,456
)

Financing activities

Dividends paid to stockholders

0

(42,311
)
Payroll taxes paid as a result of stock withholdings

(16
)

(2,865
)
Proceeds from issuance of convertible notes

0

460,000

Proceeds from issuance of senior notes

1,170,000

250,000

Proceeds from other borrowings

9,706

7,167

Redemption of senior notes

(1,155,000
)

—

Repayments of long-term debt

(7,220
)

(4,947
)
Payment of debt issue costs

(17,272
)

(24,981
)
Fees paid related to debt refinancing

(2,058
)

—

Purchase of convertible note hedges

0

(142,094
)
Proceeds from warrants issued

0

89,424

Payments on finance leases

(11,045
)

(11,497
)
Other

0

(392
)
Net cash provided by (used for) financing activities

(12,905
)

577,504

Effect of exchange rate changes on cash and cash equivalents

(2,165
)

(5,002
)

Increase (decrease) in cash and cash equivalents

(112,325
)

337,393

Cash and cash equivalents:

Beginning of period

655,338

488,313

End of period

$
543,013

$
825,706

The accompanying notes, as they relate to Cinemark Holdings, Inc., are an integral part of the condensed consolidated financial statements.

7* * * * * * * *

CINEMARK USA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions, except per share data, unaudited)


	September 30,			December 31,
	2022			2021
Assets
Current assets
Cash and cash equivalents	$	386.6		$	442.7
Inventories		19.6			15.5
Accounts receivable		52.1			68.8
Current income tax receivable		45.4			46.6
Prepaid expenses and other		51.6			36.2
Accounts receivable from parent		60.5			46.7
Total current assets		615.8			656.5
Theatre properties and equipment, net of accumulated depreciation of $2,132.1 and $1,985.9		1,260.0			1,382.9
Operating lease right-of-use assets, net		1,144.0			1,230.8
Other assets
Goodwill		1,249.2			1,248.8
Intangible assets, net		309.1			310.8
Investment in NCM		28.4			135.4
Investments in affiliates		26.3			25.2
Deferred charges and other assets, net		32.6			22.3
Total other assets		1,645.6			1,742.5
Total assets	$	4,665.4		$	5,012.7
Liabilities and equity
Current liabilities
Current portion of long-term debt	$	22.0		$	24.3
Current portion of operating lease obligations		217.9			217.1
Current portion of finance lease obligations		14.6			14.6
Current income tax payable		2.4			—
Accounts payable and accrued expenses		368.5			504.6
Total current liabilities		625.4			760.6
Long-term liabilities
Long-term debt, less current portion		2,023.4			2,028.7
Operating lease obligations, less current portion		987.6			1,078.3
Finance lease obligations, less current portion		91.6			102.6
Long-term deferred tax liability		58.4			57.8
Long-term liability for uncertain tax positions		47.3			45.9
NCM screen advertising advances		340.5			346.0
Other long-term liabilities		36.6			37.9
Total long-term liabilities		3,585.4			3,697.2
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		49.5			49.5
Treasury stock, 57,245 Class B shares at cost		(24.2	)		(24.2	)
Additional paid-in-capital		1,474.5			1,459.0
Retained deficit		(687.6	)		(544.0	)
Accumulated other comprehensive loss		(368.2	)		(397.0	)
Total Cinemark USA, Inc.'s stockholder's equity		444.0			543.3
Noncontrolling interests		10.6			11.6
Total equity		454.6			554.9
Total liabilities and equity	$	4,665.4		$	5,012.7

The accompanying notes, as they relate to Cinemark USA, Inc., are an integral part of the condensed consolidated financial statements.

CINEMARK USA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF LOSS

(in millions, except per share data, unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
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		44.4			37.9			131.8			109.7
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		630.9			476.6			1,885.6			1,139.1
Operating income (loss)		19.5			(41.8	)		(30.6	)		(295.3	)
Other income (expense)
Interest expense		(32.4	)		(31.9	)		(96.5	)		(93.5	)
Interest income		5.2			0.9			9.5			5.3
Loss on extinguishment of debt		—			—			—			(6.5	)
Foreign currency exchange loss		(5.4	)		(0.2	)		(5.3	)		(0.9	)
Distributions from NCM		—			—			—			0.1
Distributions from DCIP		3.7			6.5			3.7			6.5
Interest expense - NCM		(5.8	)		(5.9	)		(17.5	)		(17.7	)
Equity in income (loss) of affiliates		0.2			(7.2	)		(7.5	)		(22.1	)
Total other expense		(34.5	)		(37.8	)		(113.6	)		(128.8	)
Loss before income taxes		(15.0	)		(79.6	)		(144.2	)		(424.1	)
Income tax benefit		(0.4	)		(7.4	)		(3.3	)		(11.3	)
Net loss	$	(14.6	)	$	(72.2	)	$	(140.9	)	$	(412.8	)
Less: Net income (loss) attributable to noncontrolling interests		0.6			0.2			2.7			(0.2	)
Net loss attributable to Cinemark USA, Inc.	$	(15.2	)	$	(72.4	)	$	(143.6	)	$	(412.6	)

The accompanying notes, as they relate to Cinemark USA, Inc., are an integral part of the condensed consolidated financial statements.

CINEMARK USA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(in millions, unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Net loss	$	(14.6	)	$	(72.2	)	$	(140.9	)	$	(412.8	)
Other comprehensive income (loss), net of tax
Unrealized gain due to fair value adjustments on interest rate swap agreements, net of taxes and settlements		9.8			1.4			31.4			7.9
Foreign currency translation adjustments		(4.6	)		(13.8	)		(5.9	)		(15.0	)
Total other comprehensive income (loss), net of tax		5.2			(12.4	)		25.5			(7.1	)
Total comprehensive loss, net of tax		(9.4	)		(84.6	)		(115.4	)		(419.9	)
Comprehensive (income) loss attributable to noncontrolling interests		(0.6	)		(0.2	)		(2.7	)		0.2
Comprehensive loss attributable to Cinemark USA, Inc.	$	(10.0	)	$	(84.8	)	$	(118.1	)	$	(419.7	)

The accompanying notes, as they relate to Cinemark USA, Inc., are an integral part of the condensed consolidated financial statements.

CINEMARK USA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(in millions, unaudited)


	Common Stock		Treasury Stock			Additional Paid-In-Capital		Retained Earnings (Deficit)			Accumulated Other Comprehensive Loss			Total Cinemark USA, Inc. Stockholder's Equity			Noncontrolling Interests			Total Equity
Balance at January 1, 2022	$	49.5	$	(24.2	)	$	1,459.0	$	(544.0	)	$	(397.0	)	$	543.3		$	11.6		$	554.9
Issuance of share based awards and share based awards compensation expense		—		—			4.9		—			—			4.9			—			4.9
Net income (loss)		—		—			—		(62.5	)		—			(62.5	)		1.5			(61.0	)
Unrealized gain due to fair value adjustments on interest rate swap agreements, net of taxes and settlements		—		—			—		—			14.6			14.6			—			14.6
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	$	49.5	$	(24.2	)	$	1,463.9	$	(606.5	)	$	(366.9	)	$	515.8		$	13.1		$	528.9
Issuance of share based awards and share based awards compensation expense		—		—			5.7		—			—			5.7			—			5.7
Net income (loss)		—		—			—		(65.9	)		—			(65.9	)		0.6			(65.3	)
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		—		—			—		—			7.0			7.0			—			7.0
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	$	49.5	$	(24.2	)	$	1,469.6	$	(672.4	)	$	(374.5	)	$	448.0		$	10.7		$	458.7
Share based awards compensation expense		—		—			4.9		—			—			4.9			—			4.9
Net income (loss)		—		—			—		(15.2	)		—			(15.2	)		0.6			(14.6	)
Distributions to noncontrolling interests	—			—			—		—			—			—			(0.7	)		(0.7	)
Amortization of accumulated losses for amended swap agreements	—			—			—		—			1.1			1.1			—			1.1
Unrealized gain due to fair value adjustments on interest rate swap agreements, net of taxes and settlements	—			—			—		—			9.8			9.8			—			9.8
Foreign currency translation adjustments		—		—			—		—			(4.6	)		(4.6	)		—			(4.6	)
Balance at September 30, 2022	$	49.5	$	(24.2	)	$	1,474.5	$	(687.6	)	$	(368.2	)	$	444.0		$	10.6		$	454.6

The accompanying notes, as they relate to Cinemark USA, Inc., are an integral part of the condensed consolidated financial statements.

CINEMARK USA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (CONTINUED)

(in millions, unaudited)


	Common Stock		Treasury Stock			Additional Paid-In-Capital		Retained Earnings (Deficit)			Accumulated Other Comprehensive Loss			Total Cinemark USA, Inc. Stockholder's Equity			Noncontrolling Interests			Total Equity
Balance at January 1, 2021	$	49.5	$	(24.2	)	$	1,310.6	$	(163.3	)	$	(398.6	)	$	774.0		$	11.0		$	785.0
Issuance of share based awards and share based awards compensation expense		—		—			4.4		—			—			4.4			—			4.4
Contributions from parent		—		—			120.0		—			—			120.0			—			120.0
Net loss	—		—			—			(202.9	)		—			(202.9	)		(0.6	)		(203.5	)
Unrealized gain due to fair value adjustments on interest rate swap agreements, net of taxes and settlements	—		—			—		—				5.7			5.7			—			5.7
Amortization of accumulated losses for amended swap agreements	—		—			—		—				1.1			1.1			—			1.1
Foreign currency translation adjustments	—		—			—		—				(9.5	)		(9.5	)		—			(9.5	)
Balance at March 31, 2021	$	49.5	$	(24.2	)	$	1,435.0	$	(366.2	)	$	(401.3	)	$	692.8		$	10.4		$	703.2
Issuance of share based awards and share based awards compensation expense		—		—			5.7		—			—			5.7			—			5.7
Net income (loss)		—		—			—		(137.3	)		—			(137.3	)		0.2			(137.1	)
Unrealized gain due to fair value adjustments on interest rate swap agreements, net of taxes and settlements		—		—			—		—			0.8			0.8			—			0.8
Amortization of accumulated losses for amended swap agreements		—		—			—		—			1.1			1.1			—			1.1
Foreign currency translation adjustments		—		—			—		—			8.3			8.3			—			8.3
Balance at June 30, 2021	$	49.5	$	(24.2	)	$	1,440.7	$	(503.5	)	$	(391.1	)	$	571.4		$	10.6		$	582.0
Share based awards compensation expense		—		—			5.8		—			—			5.8			—			5.8
Net loss		—		—			—		(72.4	)		—			(72.4	)		0.2			(72.2	)
Unrealized gain to fair value adjustments on interest rate swap agreements, net of taxes, net of settlements		—		—			—		—			1.5			1.5			—			1.5
Amortization of accumulated losses for amended swap agreements		—		—			—		—			1.1			1.1			—			1.1
Foreign currency translation adjustments		—		—			—		—			(13.8	)		(13.8	)		—			(13.8	)
Balance at September 30, 2021	$	49.5	$	(24.2	)	$	1,446.5	$	(575.9	)	$	(402.3	)	$	493.6		$	10.8		$	504.4

The accompanying notes, as they relate to Cinemark USA, Inc., are an integral part of the condensed consolidated financial statements.

CINEMARK USA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions, unaudited)


	Nine Months Ended September 30,
	2022			2021
Operating activities
Net loss	$	(140.9	)	$	(412.8	)
Adjustments to reconcile net loss to cash provided by (used for) operating activities:
Depreciation		179.1			200.3
Amortization of intangible and other assets		1.9			2.0
Amortization of debt issuance costs		5.6			5.4
Interest accrued on NCM screen advertising advances		17.5			17.7
Amortization of NCM screen advertising advances and other deferred revenues		(24.5	)		(24.3	)
Amortization of accumulated losses for amended swap agreements		3.4			3.4
Share based awards compensation expense		15.5			15.9
Impairment of long-lived and other assets		107.5			7.5
(Gain) loss on disposal of assets and other		(6.4	)		7.9
Loss on extinguishment of debt		—			6.5
Non-cash rent expense		(7.5	)		(1.8	)
Equity in loss of affiliates		7.5			22.1
Deferred income tax benefit		(3.3	)		(20.9	)
Distributions from equity investees		1.5			0.2
Changes in assets and liabilities and other		(109.9	)		139.2
Net cash provided by (used for) operating activities		47.0			(31.7	)

Investing activities
Additions to theatre properties and equipment		(65.3	)		(57.2	)
Proceeds from sale of theatre properties and equipment and other		12.0			2.2
Net cash used for investing activities		(53.3	)		(55.0	)

Financing activities
Restricted stock withholdings for payroll taxes		(4.1	)		—
Contributions received from parent		—			120.0
Proceeds from issuance of senior notes		—			1,170.0
Proceeds from other borrowings		—			9.7
Redemption of senior notes		—			(1,155.0	)
Repayments of long-term debt		(14.0	)		(7.2	)
Payment of debt issuance costs		—			(17.3	)
Fees paid related to debt refinancing		—			(2.1	)
Payments on finance leases		(10.8	)		(11.0	)
Other financing activities		(3.7	)		—
Net cash provided by (used for) financing activities		(32.6	)		107.1

Effect of exchange rate changes on cash and cash equivalents		(17.2	)		(2.2	)

Increase (decrease) in cash and cash equivalents		(56.1	)		18.2

Cash and cash equivalents:
Beginning of period		442.7			260.5
End of period	$	386.6		$	278.7

The accompanying notes, as they relate to Cinemark USA, Inc., are an integral part of the condensed consolidated financial statements.

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES AND

CINEMARK ~~HOLDINGS,~~USA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

unaudited)

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 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. 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, ~~2020,~~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 ofover which the Company has control are consolidated while those ~~affiliates~~investments in entities of which ~~the Company~~Holdings or CUSA, as applicable, owns between 20% and 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% 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. The 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, ~~2020,~~2021, included in the Annual Report on Form 10-K filed February ~~26, 2021~~25, 2022 by Holdings and the ~~Company~~Annual Report on Form 10-K filed March 9, 2022 by 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, ~~2021~~2022 are not necessarily indicative of the results to be achieved for the full year.

Amounts included in the condensed consolidated financial statements of this Quarterly Report on Form 10-Q are rounded in millions with the exception of per share data. The amounts reported in the consolidated financial statements, and the notes thereto, of the Annual Report on Form 10-K for the year ended December 31, 2021 filed by Holdings on February 25, 2022 and by CUSA on March 9, 2022 are rounded in thousands.

Impact of the COVID-19 Pandemic

~~As the Company has previously disclosed, the~~The COVID-19 pandemic has had an unprecedented impact on the world and the movie exhibition ~~industry. The~~industry with widespread social and economic effects have been widespread. As a movie exhibitor that operates spaces where patrons gather in close proximity, the Company continues to be impacted by the pandemic. To comply with government mandates at the initial outbreak of the COVID-19 pandemic, theeffects. The Company temporarily closed ~~all of~~ its theatres in the U.S. and Latin America induring March of 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, ~~halted~~halting non-essential operating and capital expenditures, ~~and negotiated~~negotiating modified timing and/or abatement of contractual payments with landlords and other major suppliers, ~~until~~and suspending quarterly dividends paid by Holdings to its ~~theatres reopened. In addition, the Company suspended its quarterly dividend.~~shareholders.

AsThroughout 2020 and 2021 the Company reopened theatres as local restrictions and the status of ~~September 30, 2021, all~~the COVID-19 pandemic would allow. All of the Company's domestic and international theatres were ~~open. Theatre staffing levels remain reduced as compared to pre-COVID levels due to reduced operating hours in certain locations~~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 ~~Company’s focus on initiatives~~box office performance of new film content released, consumer sentiment around movie-going and government restrictions. The industry is also adjusting to ~~enhance productivity. The Company continues to limit capital expenditures to essential activities and projects. The Company worked with landlords~~the evolution of the exclusive theatrical window, competition from streaming platforms, supply chain constraints, inflationary impacts and other ~~vendors during the nine months ended September 30, 2021 to extend payment terms as it reopened theatres and continues to recover from the impacts of the COVID-19 pandemic.~~economic factors.

Based on the Company’s current estimates of recovery, it believes it has, and will generate, sufficient cash to sustain operations. Nonetheless, the COVID-19 pandemic has had, and continues to have, adverse effects on the Company’s business, results of operations, cash flows and financial condition.

Restructuring Charges

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES AND

CINEMARK USA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except per share data, unaudited)

During June 2020, Company management approved and announced a restructuring plan to realign its operations to create a more efficient cost structure (referred to herein as the “Restructuring Plan”). in response to the COVID-19 pandemic. The Restructuring Plan primarily included a ~~permanent~~ headcount reduction at its domestic corporate office and the permanent closure of certain domestic and international theatres. The Company paid approximately $0.9

~~CINEMARK HOLDINGS, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

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

~~The following table summarizes activity recorded~~related to previously accrued restructuring costs during the nine months ended September 30, ~~2021:~~2022. The Company recorded a $

0.2

U.S. Operating Segment

International Operating Segment

Consolidated

Employee-related Costs

Facility Closure Costs

Total Charges

Employee-related Costs

Facility Closure Costs

Total Charges

Employee-related Costs

Facility Closure Costs

Total Charges

Balance at December 31, 2020

$
840

$
5,740

$
6,580

$
—

$
161

$
161

$
840

$
5,901

$
6,741

Amounts paid

(350
)

—

(350
)

—

—

—

(350
)

—

(350
)
Reserve adjustments

—

(208
)

(208
)

—

—

—

—

(208
)

(208
)
Balance at March 31, 2021

$
490

$
5,532

$
6,022

$
—

$
161

$
161

$
490

$
5,693

$
6,183

Amounts paid

—

(200
)

(200
)

—

—

—

—

(200
)

(200
)
Reserve adjustments

(60
)

(680
)

(740
)

—

—

—

(60
)

(680
)

(740
)
Balance at June 30, 2021

$
430

$
4,652

$
5,082

$
—

$
161

$
161

$
430

$
4,813

$
5,243

Reserve adjustments

—

(305
)

(305
)

—

(35
)

(35
)

—

(340
)

(340
)
Balance at September 30, 2021

$
430

$
4,347

$
4,777

$
—

$
126

$
126

$
430

$
4,473

$
4,903

reduction to previously accrued restructuring costs during the nine months ended September 30, 2022 related to the settlement of facility closure costs for certain theatres. The remaining accrued restructuring costs of $~~4,903~~0.4, which are primarily related to facility closure costs, are reflected in accounts payable and accrued expenses on the condensed consolidated balance sheet as of September 30, ~~2021.~~2022.

New Accounting Pronouncements

Accounting Standards Update (“ASU”) 2020-04, Reference Rate Reform (Topic 848): Facilitation of the 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 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 affected by the discounting transition. The amendments in ASU 2020-04 and ASU 2021-01 are effective as of March 12, 2020 through December 31, 2022. The Company ~~is evaluating the impact of~~does not expect ASU 2020-04 and ASU 2021-01 ~~and their~~to have a material impact on ~~its~~the condensed consolidated financial ~~statements.~~statements of 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 ~~initiated discussions with landlords to negotiate~~began negotiating the deferral of rent and other lease-related payments with ~~certain of~~ its ~~landlords. The~~landlords while theatres remained closed. These negotiations resulted in amendments ~~signed with~~to the ~~landlords~~leases that involved varying concessions, including the abatement of rent payments ~~during closure, alternative rent terms~~ during closure, deferral of all or a portion of rent payments to later periods, temporary percentage rent terms and deferrals of rent payments ~~to later periods~~ combined with an early exercise of an existing renewal option or extension of the lease term. ~~In some cases, the Company was entitled to rent-free periods while theatres were closed due to local regulations in certain locations.~~

In April 2020, the FASB staff released guidance indicating that in response to the COVID-19 crisis, an entity would not have to analyze each contract to determine whether enforceable rights and obligations for concessions exist in the contract and can elect to apply or not apply the lease modification guidance in Topic 842 to those contracts. The election is available for concessions related to the effects of the COVID-19 pandemic that do not result in a substantial increase in the rights of the lessor or the obligations of the lessee. For example, this election is available for concessions that result in the total payments required by the modified contract being substantially the same as or less than total payments required by the original contract.

The Company elected to not remeasure the related lease liabilities and right-of-use assets for those leases where the concessions and deferrals did not result in a significant change in total payments under the lease and where the remaining lease term did not change as a result of the negotiation. For those leases that were renewed or extended as a result of the negotiation to defer rent payments, the Company recalculated the related lease liability and right-of-use asset based on the new terms. Total remaining deferred payments as of September 30, 2022 and December 31, 2021 were $~~42,954~~5.3 and $31.9, ~~of which $37,587~~ ~~were~~respectively, and are included in accounts payable and accrued expenses ~~and $5,367~~ ~~were included in other long-term liabilities~~ in the condensed consolidated balance ~~sheet.~~sheets.

916

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


		Three Months Ended				Nine Months Ended					Three Months Ended				Nine Months Ended
		September 30				September 30					September 30,				September 30,
Lease Cost	Classification	2021		2020		2021		2020		Classification	2022		2021		2022		2021
Operating lease costs
Equipment (1)	Utilities and other	$	699	$	823	$	1,567	$	2,495	Utilities and other	$	1.0	$	0.7	$	2.6	$	1.6
Real Estate (2)(3)	Facility lease expense		69,492		65,970		200,930		211,088	Facility lease expense		79.5		69.5		236.4		200.9
Total operating lease costs		$	70,191	$	66,793	$	202,497	$	213,583		$	80.5	$	70.2	$	239.0	$	202.5

Finance lease costs
Amortization of leased assets	Depreciation and amortization	$	3,142	$	3,665	$	9,533	$	11,052	Depreciation and amortization	$	3.1	$	3.1	$	9.4	$	9.5
Interest on lease liabilities	Interest expense		1,449		1,725		4,510		5,333	Interest expense		1.4		1.4		4.1		4.5
Total finance lease costs		$	4,591	$	5,390	$	14,043	$	16,385		$	4.5	$	4.5	$	13.5	$	14.0

(1)

Includes approximately $~~566~~0.8 and $($~~267~~0.6) of short-term lease payments for the three months ended September 30, ~~2021~~2022 and ~~2020,~~2021, respectively. Includes approximately $~~1,194~~2.2 and $($~~839~~1.2) of short-term lease payments for the nine months ended September 30, ~~2021~~2022 and ~~2020,~~2021, respectively.

(2)

Includes approximately $~~1,862~~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 $(~~191~~0.1) of variable lease payments based on a change in index, such as CPI or inflation, variable payments based on ~~revenues or attendance and variable common area maintenance costs for the three months ended September 30, 2021 and 2020, respectively. Includes approximately $(~~81~~) and $9,146~~ ~~of variable lease payments based on a change in index, such as CPI or inflation, variable payments based on revenues~~revenue or attendance and variable common area maintenance costs for the nine months ended September 30, 2022 and 2021, ~~and 2020,~~ respectively.

(3)

Approximately $~~318~~0.3 and $~~335~~0.3 of lease payments are included in general and administrative ~~expenses~~expense primarily related to office leases for the three months ended September 30, ~~2021~~2022 and ~~2020,~~2021, respectively. Approximately $~~967~~1.0 and $~~1,122~~1.0 of lease payments are included in general and administrative ~~expenses~~expense primarily related to office leases for the nine months ended September 30, ~~2021~~2022 and ~~2020,~~2021, respectively.

The following table represents the minimum cash lease payments ~~recorded as lease expense, interest expense and a reduction~~included in the measurement of lease liabilities ~~as well as~~and the non-cash addition of lease right-of-use assets for the periods ~~indicated.~~presented.

Nine Months Ended

September 30,

Other Information

2021

2020

Contractual cash payments included in the measurement of lease liabilities(1)

Cash outflows for operating leases

$
201,384

$
205,276

Cash outflows for finance leases - operating activities

$
4,504

$
5,304

Cash outflows for finance leases - financing activities

$
11,045

$
11,497

Non-cash amount of leased assets obtained in exchange for:

Operating lease liability additions, net

$
109,088

$
84,241

~~(1)~~

~~As discussed above at~~ ~~Lease Deferrals and Abatements~~, the Company negotiated certain lease amendments to defer and/or abate contractual payments as a result of the COVID-19 pandemic and temporary closure of theatres. In accordance with FASB Staff guidance, the Company did not recalculate lease liabilities and right of use assets for amendments that did not result in a substantial increase in the rights of the lessor or the obligations of the lessee. Contractual payment amounts for the nine months ended September 30, 2021 above are prior to the impact of deferred or abated rent amounts.


	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, ~~2021,~~2022, the Company had signed lease agreements with total ~~contractual minimum~~noncancelable lease payments of approximately $~~144,845~~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 ~~often~~ 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 ~~theatre leases which have~~theatres are not ~~yet commenced are excluded from~~included in the right-of-use assets and lease liabilities as of September 30, ~~2021.~~2022.

~~CINEMARK HOLDINGS, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

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

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 ~~revenues~~revenue when the showtime for a purchased movie ticket has passed. Concession ~~revenues are~~revenue is recognized when products are sold to the consumer. Other ~~revenues~~revenue primarily ~~consist~~consists of screen advertising and screen rental ~~revenues,~~revenue, promotional income, studio trailer placements and transactional fees. Except for ~~NCM~~National CineMedia, LLC. ("NCM") screen advertising advances discussed below in Note 9,8, 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 ~~revenues.~~revenue. Deferred ~~revenues~~revenue for gift cards and discount ticket vouchers ~~are~~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 ~~monthly~~ 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 ~~revenues~~revenue and records admissions ~~revenues~~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 ~~membership~~ fee or award points to customers as purchases are made. For those loyalty programs that have ana prepaid annual ~~membership~~ fee, the Company recognizes the fee collected as other ~~revenues~~revenue on a straight-line ~~basis over the term of the membership.~~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 ~~revenues~~revenue based on the number of reward points issued to customers and recognizes the deferred ~~revenues~~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 ~~generally~~ records breakage revenue on ~~gift cards~~its loyalty and ~~discount ticket vouchers based on redemption activity and historical experience with unused balances. The Company also records breakage revenue~~subscription programs generally upon the expiration of loyalty points ~~and~~or subscription credits. Advances collected on ~~concession and~~ 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, ~~2021~~2022 and December 31, ~~2020~~2021 included approximately $~~11,151~~19.4 and $~~6,232~~23.5, respectively, of receivables related to contracts with customers. The Company did 0not record any assets related to the costs to obtain or fulfill a contract with customers during the nine months ended September 30, ~~2021.~~2022.

Disaggregation of Revenue

The following tables present ~~revenues for the three and nine months ended September 30, 2021 and 2020,~~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 ~~revenue recognition.~~recognition and by reportable operating segment.

Three Months Ended

Nine Months Ended

September 30, 2021

September 30, 2021

U.S.

International

U.S.

International

Operating

Operating

Operating

Operating

Major Goods/Services
Segment (1)

Segment

Consolidated

Segment (1)

Segment

Consolidated

Admissions revenues
$
195,307

$
30,157

$
225,464

$
384,361

$
50,703

$
435,064

Concession revenues

142,634

21,624

164,258

275,032

38,528

313,560

Screen advertising, screen rental and promotional revenues (2)

18,054

4,845

22,899

44,543

7,628

52,171

Other revenues

19,532

2,668

22,200

37,941

5,098

43,039

Total revenues
$
375,527

$
59,294

$
434,821

$
741,877

$
101,957

$
843,834


	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

Three Months Ended

Nine Months Ended

September 30, 2020

September 30, 2020

U.S.

International

U.S.

International

Operating

Operating

Operating

Operating

Major Goods/Services
Segment (1)

Segment

Consolidated

Segment (1)

Segment

Consolidated

Admissions revenues
$
14,794

$
107

$
14,901

$
247,157

$
60,243

$
307,400

Concession revenues

8,861

255

9,116

161,674

37,922

199,596

Screen advertising, screen rental and promotional revenues (2)

9,227

513

9,740

35,319

13,437

48,756

Other revenues

1,527

194

1,721

25,857

6,459

32,316

Total revenues
$
34,409

$
1,069

$
35,478

$
470,007

$
118,061

$
588,068

1118

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)

Three Months Ended

Nine Months Ended

September 30, 2021

September 30, 2021

U.S.

International

U.S.

International

Operating

Operating

Operating

Operating

Timing of Recognition

Segment (1)

Segment

Consolidated

Segment (1)

Segment

Consolidated

Goods and services transferred at a point in time

$
348,484

$
53,306

$
401,790

$
678,445

$
91,519

$
769,964

Goods and services transferred over time (2)

27,043

5,988

33,031

63,432

10,438

73,870

Total

$
375,527

$
59,294

$
434,821

$
741,877

$
101,957

$
843,834


	Three Months Ended						Nine Months Ended						Three Months Ended						Nine Months Ended
	September 30, 2020						September 30, 2020						September 30, 2021						September 30, 2021
	U.S.		International				U.S.		International				U.S.		International				U.S.		International
	Operating		Operating				Operating		Operating				Operating		Operating				Operating		Operating
Timing of Recognition	Segment (1)		Segment		Consolidated		Segment (1)		Segment		Consolidated
													Segment (1)		Segment		Consolidated		Segment (1)		Segment		Consolidated
Goods and services transferred at a point in time	$	24,945	$	352	$	25,297	$	426,476	$	101,681	$	528,157	$	348.4	$	53.3	$	401.7	$	678.4	$	91.5	$	769.9
Goods and services transferred over time (2)		9,464		717		10,181		43,531		16,380		59,911		27.0		6.1		33.1		63.4		10.5		73.9
Total	$	34,409	$	1,069	$	35,478	$	470,007	$	118,061	$	588,068	$	375.4	$	59.4	$	434.8	$	741.8	$	102.0	$	843.8

(1)

U.S. segment ~~revenues include eliminations of~~revenue excludes intercompany transactions with the international operating segment. See Note 1716 for ~~additional information on~~the amount of intercompany ~~eliminations.~~eliminations for the periods presented.

(2)

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

The following table presents changes in the Company’s NCM screen advertising advances and other deferred ~~revenues~~revenue for the nine months ended September 30, ~~2021.~~2022.


	NCM screen advertising advances (1)			Other Deferred Revenues (2)			NCM screen advertising advances (1)			Other Deferred Revenues (2)
Balance at January 1, 2021	$	344,255		$	138,830
Balance at January 1, 2022							$	346.0		$	160.3
Amounts recognized as accounts receivable		—			3,409			—			1.0
Cash received from customers in advance		—			58,256			—			163.5
Common units received from NCM		10,237			—			1.3			—
Interest accrued related to significant financing component		17,723			—			17.5			—
Revenue recognized during period		(24,003	)		(64,625	)		(24.3	)		(150.9	)
Foreign currency translation adjustments		—			(1,253	)		—			(1.0	)
Balance at September 30, 2021	$	348,212		$	134,617
Balance at September 30, 2022							$	340.5		$	172.9

(1)

See Note 98 for the maturity of NCM screen advertising advances as of September 30, ~~2021.~~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 ~~revenues~~revenue collected but not yet ~~recognized~~earned for screen advertising, screen rental and other promotional activities. ~~Classified~~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, ~~2021~~2022 and when the Company expects to recognize this revenue.


	Twelve Months Ended September 30,														Twelve Months Ended September 30,
Remaining Performance Obligations	2022		2023		2024		2025		2026		Thereafter		Total		2023		2024		Thereafter		Total
Other deferred revenues	$	117,093	$	17,524	$	—	$	—	$	—	$	—	$	134,617
Other deferred revenue															$	153.3	$	19.6	$	—	$	172.9

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)

Earnings Per Share

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

Three Months Ended

Nine Months Ended

September 30,

September 30,

2021

2020

2021

2020

Numerator:

Net loss attributable to Cinemark Holdings, Inc.

$
(77,814
)

$
(147,592
)

$
(428,522
)

$
(377,572
)
Loss allocated to participating share-based awards (1)

1,525

1,472

7,583

2,832

Net loss attributable to common stockholders

$
(76,289
)

$
(146,120
)

$
(420,939
)

$
(374,740
)

Denominator (shares in thousands):

Basic weighted average common stock outstanding

117,274

116,707

117,226

116,552

Common equivalent shares for restricted stock units (2)

—

—

—

—

Common equivalent shares for convertible notes and warrants (3)

—

—

—

—

Diluted common equivalent shares

117,274

116,707

117,226

116,552

Basic loss per share attributable to common stockholders

$
(0.65
)

$
(1.25
)

$
(3.59
)

$
(3.22
)
Diluted loss per share attributable to common stockholders

$
(0.65
)

$
(1.25
)

$
(3.59
)

$
(3.22
)


	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, ~~2021~~2022 and ~~2020,~~2021, a weighted average of approximately ~~2,344~~1.90 shares and ~~1,175~~2.34 shares of restricted stock, respectively, were considered participating securities. For the nine months ended September 30, ~~2021~~2022 and ~~2020,~~2021, a weighted average of approximately ~~2,112~~1.69 shares and ~~880~~2.11 shares of restricted stock, respectively, were considered participating securities.

(2)

For the three months ended September 30, ~~2021~~2022 and ~~2020,~~2021, approximately ~~103~~0.18 and ~~438~~0.10~~, respectively,~~ common equivalent shares for restricted stock units, respectively, were excluded because they were anti-dilutive. For the nine months ended September 30, ~~2021~~2022 and ~~2020,~~2021, approximately 900.39 and ~~689~~0.10~~, respectively,~~ 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, ~~2021~~2022 and ~~2020,~~2021, diluted loss per share excludes the conversion of the 4.50% Convertible Senior Notes into ~~32,051~~32.0 shares of common stock, as well as outstanding warrants, as they would be anti-dilutive. See further discussion below.

~~The Company~~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 onbe included in the calculation of diluted ~~loss per share is calculated under the if-converted method, which assumes~~EPS assuming conversion ~~of the notes~~ at the beginning of the reporting period. ~~The if-converted value of the~~ ~~4.50% Convertible Senior Notes exceeded the aggregate outstanding principal value of the notes by $180,842~~. The closing price of ~~the Company's~~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, ~~2021~~2022 and, therefore, the 4.50% Convertible Senior Notes are not ~~considered~~ convertible during the fourth quarter of ~~2021.~~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.

~~As stated in Note 13 of the Company’s Annual Report on Form 10-K filed February 26, 2021, the Company~~Holdings entered into hedge transactions with ~~and sold warrants to,~~ counterparties in connection with the issuance of the 4.50% Convertible Senior Notes. The convertible note hedge transactions ~~are generally expected~~cover, subject to ~~reduce~~anti-dilution adjustments substantially similar to those applicable to 4.50% Convertible Senior Notes, the ~~potential dilution~~number of ~~any conversion~~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 and/or offset any cash payments the Company is required to make in excess of the principal amount of converted 4.50% Convertible Senior Notes, as the case may be. The warrants could have a dilutive effect on earningsfrom approximately $18.65 per share ~~to the extent that the price~~ of ~~the Company’s~~Holdings' common stock ~~during a given measurement period exceeds the strike price (initially~~to approximately $22.08 per ~~share).~~share.

Long Term Debt ~~Activity~~

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

~~Cinemark USA, Inc.~~CUSA has a senior secured credit facility that includes a $~~700,000~~700.0 term loan and a $~~100,000~~100.0 revolving credit line (the “Credit Agreement”). which is guaranteed by Holdings. As of September 30, ~~2021,~~2022, there was $~~634,785~~628.2 outstanding under the term loan and 0no borrowings were outstanding under the revolving credit line. As of September 30, ~~2021,~~2022, $~~100,000~~100.0 was available for borrowing under the revolving credit line. Quarterly principal payments of $~~1,649~~1.6 are due on the term loan through December 31, 2024, with a final principal payment of $~~613,351~~613.4 due on March 29, 2025. ~~As a result of the June 15, 2021 amendment to the Credit Agreement discussed below, the~~The revolving

~~CINEMARK HOLDINGS, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

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

credit line matures on November 28, 2024. The average interest rate ~~applicable to~~on outstanding term loan borrowings under the Credit Agreement as of September 30, ~~2021~~2022 was approximately ~~3.4~~4.1% per annum, after giving effect to the interest rate swap agreements discussed below.

~~On April 17, 2020, in conjunction with the issuance~~Interest Rate Swap Agreements

Below is a summary of the ~~8.750% Secured Notes discussed below, the Company obtained a waiver~~Company's interest rate swap agreements, which are designated as cash flow hedges, as of ~~the leverage covenant from the majority of revolving lenders under the Credit Agreement for the fiscal quarters ending~~ September 30, ~~2020 and December 31, 2020. The waiver is subject to certain liquidity thresholds, restrictions on investments and the use of the Applicable Amount.~~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

On August 21, 2020, the Company further amended the waiver of the leverage covenant to extend through the fiscal quarter ending September 30, 2021. The amendment also (i) modifies 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 ending on December 31, 2021, March 31, 2022 and June 30, 2022, permits the Company to substitute Consolidated EBITDA for the first three fiscal quarters of 2019 in lieu of Consolidated EBITDA for the corresponding fiscal quarters of 2021, (iii) modifies the restrictions imposed by the covenant waiver, and (iv) makes such other changes to permit the issuance of the 4.50% Convertible Senior Notes discussed below.

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. The Company incurred debt issue costs of approximately $500~~ ~~in connection with the extension of the revolving credit line, which are recorded as a reduction of long-term debt on the consolidated balance sheet.~~

~~5.875% Senior Notes~~

~~On March 16, 2021, Cinemark USA, Inc. issued $405,000~~ ~~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 Cinemark USA’s 5.125% Senior Notes (the “5.125% Senior Notes”) and to redeem any of the 5.125% Senior Notes that remained outstanding after the tender offer. 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. The Company incurred debt issue costs of approximately $5,980~~ ~~in connection with the issuance, which are recorded as a reduction of long-term debt, less current on the consolidated balance sheet.~~

The 5.875% Senior Notes are fully and unconditionally guaranteed on a joint and several senior unsecured basis by certain of Cinemark USA, Inc.’s subsidiaries that guarantee, assume or become liable with respect to any of Cinemark USA, Inc.’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 Cinemark USA, Inc.’s and its guarantor’s existing and future senior debt and are senior in right of payment to all of Cinemark USA, Inc.’s and its guarantors’ existing and future senior subordinated debt. The 5.875% Senior Notes and the guarantees are effectively subordinated to all of Cinemark USA, Inc.’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 Cinemark USA, Inc.’s amended senior secured credit facility. The 5.875% Senior Notes and the guarantees are structurally subordinated to all existing and future debt and other liabilities of Cinemark USA, Inc.’s subsidiaries that do not guarantee the 5.875% Senior Notes.

The indenture to the 5.875% Senior Notes contains covenants that limit, among other things, the ability of Cinemark USA, Inc. 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. Upon a change of control, as defined in the indenture, the Company would be required to make an offer to repurchase the 5.875% Senior Notes at a price equal to ~~101~~% of the aggregate principal amount outstanding plus accrued and unpaid interest, if any, through the date of repurchase. The indenture governing the 5.875% Senior Notes allows Cinemark USA, Inc. to incur additional indebtedness if we satisfy the coverage ratio specified in the indenture, after giving effect to the incurrence of the additional indebtedness, and in certain other circumstances.

~~5.250% Senior Notes~~

~~On June 15, 2021, Cinemark USA, Inc. issued $765,000~~ ~~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 Cinemark USA’s~~ ~~4.875% $755,000~~ 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 Company incurred debt~~

1422

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)

~~issue costs of approximately $10,684~~ ~~in connection with the issuance, which are recorded as a reduction of long-term debt on the consolidated balance sheet.~~

The 5.25% Senior Notes are fully and unconditionally guaranteed on a joint and several senior unsecured basis by certain of Cinemark USA, Inc.’s subsidiaries that guarantee, assume or become liable with respect to any of Cinemark USA, Inc.’s or a guarantor’s debt. The 5.25% Senior Notes and the guarantees will be Cinemark USA’s and the guarantors’ senior unsecured obligations and (i) rank equally in right of payment to Cinemark USA’s and the guarantors’ existing and future senior debt, including borrowings under Cinemark USA’s Credit Agreement (as defined below) and Cinemark USA’s existing senior notes, (ii) rank senior in right of payment to Cinemark USA’s and the guarantors’ future subordinated debt, (iii) are effectively subordinated to all of Cinemark USA’s and the guarantors’ existing and future secured debt, including all obligations under the Credit Agreement and Cinemark USA’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 Cinemark USA’s non-guarantor subsidiaries, and (v) are structurally senior to the ~~4.50% convertible senior notes due 2025 issued by Cinemark Holdings.~~

The indenture to the 5.25% Senior Notes contains covenants that limit, among other things, the ability of Cinemark USA, Inc. 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. Upon a change of control, as defined in the indenture, the Company would be required to make an offer to repurchase the 5.25% Senior Notes at a price equal to ~~101~~% of the aggregate principal amount outstanding plus accrued and unpaid interest, if any, through the date of repurchase. The indenture governing the 5.25% Senior Notes allows Cinemark USA, Inc. to incur additional indebtedness if we satisfy the coverage ratio specified in the indenture, after giving effect to the incurrence of the additional indebtedness, and in certain other circumstances.

~~4.875% Senior Notes~~

~~On May 21, 2021, Cinemark USA, Inc. issued a conditional notice of optional redemption to redeem the $755,000~~ outstanding principal amount of the 4.875% Senior Notes. In connection therewith, Cinemark USA deposited with Wells Fargo Bank, N.A., as Trustee for the 4.875% Senior Notes (the “Trustee”), funds sufficient to redeem all 4.875% Senior Notes remaining outstanding on June 21, 2021 (the “Redemption Date”). The redemption payment (the “Redemption Payment”) included $~~755,000~~ ~~of outstanding principal at the redemption price equal to~~ ~~100.000~~% of the principal amount plus accrued and unpaid interest thereon to the Redemption Date. Upon deposit of the Redemption Payment with the Trustee on June 15, 2021, the indenture governing the 4.875% Senior Notes was fully satisfied and discharged.

~~The Company recorded a loss on extinguishment of debt of $3,919, which included the write-off of $3,301~~ ~~unamortized debt issuance costs and the payment of $618~~ ~~in related fees during the nine months ended September 30, 2021.~~

~~5.125% Senior Notes~~

~~On March 16, 2021, Cinemark USA, Inc. completed a tender offer to purchase its previously outstanding 5.125% Senior Notes, of which $333,990~~ ~~was tendered at the expiration of the offer. On March 16, 2021, Cinemark USA, Inc. also issued a notice of optional redemption to redeem the remaining $66,010~~ principal amount of the 5.125% Senior Notes. In connection therewith, Cinemark USA deposited with Wells Fargo Bank, N.A., as Trustee for the 5.125% Senior Notes (the “Trustee”), funds sufficient to redeem all 5.125% Notes remaining outstanding on April 15, 2021 (the “Redemption Date”). The redemption payment (the “Redemption Payment”) included $66,010 of outstanding principal at the redemption price equal to ~~100~~.000% of the principal amount plus accrued and unpaid interest thereon to the Redemption Date. Upon deposit of the Redemption Payment with the Trustee on March 16, 2021, the indenture governing the 5.125% Senior Notes was fully satisfied and discharged.

~~The Company recorded a loss on extinguishment of debt of $2,603~~ ~~during the nine months ended September 30, 2021, which included the write-off of $1,168~~ ~~unamortized debt issuance costs and the payment of $1,435~~ ~~in tender and legal fees.~~

~~CINEMARK HOLDINGS, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

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

~~Additional Borrowings of International Subsidiaries~~

~~During the nine months ended September 30, 2021, certain of the Company’s international subsidiaries borrowed an aggregate of $9,706~~ ~~under various local bank loans. Below is a summary of these loans:~~

Loan Amounts

Loan Description

(in USD)

Interest Rates

Covenants

Maturity
Peru bank loan

$
3,277

4.8%

Negative covenants

January 2024
Brazil bank loan

$
6,429

4.0%

Negative covenants

January 2029

Additionally, the Company deposited cash into a collateral account to support the issuance of bank letters of credit to the lenders for the international loans noted above. The total amount deposited during the nine months ended September 30, 2021 was $~~7,300. Total deposits made to support bank letters of credit for the Company’s outstanding international loans is $21,147~~ ~~and is considered restricted cash as of September 30, 2021.~~

~~Interest Rate Swap Agreements~~

~~Below is a summary of the Company’s interest rate swap agreements designated as cash flow hedges as of September 30, 2021:~~

Estimated

Fair Value at

Notional

September 30,

Amount

Effective Date

Pay Rate

Receive Rate

Expiration Date

2021 (1)

$
137,500

December 31, 2018

2.12%

1-Month LIBOR

December 31, 2024

$
6,562

$
175,000

December 31, 2018

2.12%

1-Month LIBOR

December 31, 2024

8,419

$
137,500

December 31, 2018

2.19%

1-Month LIBOR

December 31, 2024

6,918

$
150,000

March 31, 2020

0.57%

1-Month LIBOR

March 31, 2022

354

Total

$
22,253

(1)

Approximately $~~9,536~~9.9 of the total is included in ~~accounts payable and accrued~~prepaid expenses and other and $~~12,717~~10.3 is included in deferred charges and other ~~long-term liabilities~~assets, net on the condensed consolidated balance sheet as of September 30, ~~2021.~~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,~~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 ~~of $29,359~~is being amortized to interest expense through December 31, 2022, the original maturity dates of the swaps. Approximately $~~1,124~~ ~~and $3,372~~1.1 was recorded in interest expense in the condensed consolidated ~~income statement~~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, ~~2021, respectively.~~2022 and 2021.

The fair values of the ~~amended~~ interest rate swaps ~~and the new interest rate swap~~ are recorded on ~~the Company’s~~Holdings' and CUSA's condensed consolidated balance ~~sheet~~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. Under~~approach and, under this approach, the Company ~~uses~~used projected future interest rates ~~which fall in Level 2 of the U.S. GAAP hierarchy as defined by FASB ASC Topic 820-10-35,~~ as provided by counterparties to the interest rate swap agreements and the fixed rates that the Company is obligated to pay under the ~~agreements.~~

~~Adoption of ASU 2020-06~~

~~ASU 2020-06 simplifies~~agreement. Therefore, the guidance on an issuer’s accounting for convertible debt instruments by removing the separation models for (1) convertible debt with a cash conversion feature and (2) convertible instruments with a beneficial conversion feature. As a result, entities will not separately presentCompany's measurements use significant unobservable inputs, which fall in equity an embedded conversion feature of such debt. Instead, they will account for a convertible debt instrument wholly as debt, unless certain other conditions are met. The elimination of these models reduces reported interest expense and increases reported net income for entities that have issued a convertible instrument within the scope of those models before the adoption of ASU 2020-06. Also, ASU 2020-06 requires the applicationLevel 2 of the if-converted method for calculating diluted earnings per share and the treasury stock method is no longer available. The provisions of ASU 2020-06 are applicable for fiscal years beginning after December 15, 2021, with early adoption permitted no earlier than fiscal years beginning after December 15, 2020.U.S. GAAP hierarchy as defined by FASB ASC Topic 820-10-35.

~~CINEMARK HOLDINGS, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

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

~~The Company adopted ASU 2020-06 under the modified retrospective method effective January 1, 2021. As a result of the adoption, the entire $460,000~~ ~~principal balance of the~~ ~~4.50% Convertible Senior Notes are recorded in long-term debt and is no longer bifurcated between long-term debt and equity. The impact of the adoption is as follows:~~



~~Reclassified $101,123~~ ~~previously allocated to the cash conversion feature and recorded in equity, from equity to long term debt on the condensed consolidated balance sheet.~~



~~Reversed the accretion of interest of $5,714~~ ~~on the 4.50% Convertible Senior Notes recorded during the year ended December 31, 2020 with a credit to retained earnings.~~



~~Reclassified $3,764~~ ~~of debt issue costs previously allocated to equity to long-term debt on the condensed consolidated balance sheet.~~



~~Recorded offsetting amortization of debt issue costs of $274~~ ~~as an adjustment to retained earnings on the condensed consolidated balance sheet.~~

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”). The ~~carrying~~table below presents the fair value of the ~~Company’s~~Company's long-term debt ~~excluding unamortized debt discounts and debt issue costs, was~~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 $~~2,543,099~~527.5 and $~~2,527,900~~691.9 as of September 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively. ~~The fair value of the Company’s long-term debt was $2,825,036~~ ~~and $2,652,635~~ ~~as of September 30, 2021 and December 31, 2020, respectively.~~

~~CINEMARK HOLDINGS, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

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

~~Equity~~

Below is a summary of changes in stockholders’ equity attributable to Cinemark Holdings, Inc., noncontrolling interests and total equity for the three and nine months ended September 30, 2021 and 2020:

  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, 2021

$
124

$
(87,004
)
$
1,245,569

$
27,937

$
(398,653
)
$
787,973

$
10,996

$
798,969

Impact of adoption of ASU 2020-06, net of deferred taxes of $23,756 (See Note 7)

—

—

(73,604
)

5,440

—

(68,164
)

—

(68,164
)
Issuance of share based awards and share based awards compensation expense

—

—

4,668

—

—

4,668

—

4,668

Stock withholdings related to share based awards that vested during the three months ended March 31, 2021

—

(8
)

—

—

—

(8
)

—

(8
)
Adjustment to accrued dividends on unvested restricted stock unit awards

—

—

—

(2
)

—

(2
)

—

(2
)
Net loss

—

—

—

(208,241
)

—

(208,241
)

(602
)

(208,843
)
Unrealized gain due to fair value adjustments on interest rate swap agreements, net of taxes, net of settlements

—

—

—

—

5,704

5,704

—

5,704

Amortization of accumulated losses for amended swap agreements

—

—

—

—

1,124

1,124

—

1,124

Foreign currency translation adjustments

—

—

—

—

(9,465
)

(9,465
)

—

(9,465
)
Balance at March 31, 2021

124

(87,012
)

1,176,633

(174,866
)

(401,290
)

513,589

10,394

523,983

Issuance of share based awards and share based awards compensation expense

1

—

5,907

—

—

5,908

—

5,908

Stock withholdings related to share based awards that vested during the three months ended June 30, 2021

—

(4
)

—

—

—

(4
)

—

(4
)
Adjustment to accrued dividends on unvested restricted stock unit awards related to forfeitures

—

—

—

4

—

4

—

4

Net loss

—

—

—

(142,467
)

—

(142,467
)

186

(142,281
)
Unrealized gain due to fair value adjustments on interest rate swap agreements, net of taxes, net of settlements

—

—

—

—

746

746

—

746

Amortization of accumulated losses for amended swap agreements

—

—

—

—

1,123

1,123

—

1,123

Foreign currency translation adjustments

—

—

—

—

8,259

8,259

—

8,259

Balance at June 30, 2021

125

(87,016
)

1,182,540

(317,329
)

(391,162
)

387,158

10,580

397,738

Share based awards and share based awards compensation expense

—

—

6,014

—

—

6,014

6,014

Stock withholdings related to share based awards that vested during the three months ended September 30, 2021

—

(4
)

—

—

—

(4
)

—

(4
)
Net loss

—

—

—

(77,814
)

—

(77,814
)

241

(77,573
)
Unrealized gain to fair value adjustments on interest rate swap agreements, net of taxes, net of settlements

—

—

—

—

1,462

1,462

—

1,462

Amortization of accumulated losses for amended swap agreements

—

—

—

—

1,124

1,124

—

1,124

Foreign currency translation adjustments

—

—

—

—

(13,804
)

(13,804
)

—

(13,804
)
Balance at September 30, 2021

$
125

$
(87,020
)
$
1,188,554

$
(395,143
)
$
(402,380
)
$
304,136

$
10,821

$
314,957

~~CINEMARK HOLDINGS, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

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

  Common Stock

  Treasury Stock

  Additional Paid-In-Capital

  Retained Earnings

Accumulated Other Comprehensive Loss

Total Cinemark Holdings, Inc. Stockholders’ Equity

  Noncontrolling Interests

  Total Equity

Balance at January 1, 2020

$
122

$
(81,567
)
$
1,170,039

$
687,332

$
(340,112
)
$
1,435,814

$
12,508

$
1,448,322

Issuance of share based awards and share based awards compensation expense

—

—

4,111

—

—

4,111

—

4,111

Stock withholdings related to share based awards that vested during the three months ended March 31, 2020

—

(2,691
)

—

—

—

(2,691
)

—

(2,691
)
Dividends paid to stockholders, $0.36 per common share (1)

—

—

—

(42,311
)

—

(42,311
)

—

(42,311
)
Dividends paid to noncontrolling interests

—

—

—

—

—

—

(392
)

(392
)
Dividends accrued on unvested restricted stock unit awards (1)

—

—

—

(256
)

—

(256
)

—

(256
)
Net loss

—

—

—

(59,591
)

—

(59,591
)

169

(59,422
)
Unrealized loss due to fair value adjustments on interest rate swap agreements, net of taxes, net of settlements

—

—

—

—

(24,171
)

(24,171
)

—

(24,171
)
Foreign currency translation adjustments

—

—

—

—

(57,625
)

(57,625
)

—

(57,625
)
Balance at March 31, 2020

122

(84,258
)

1,174,150

585,174

(421,908
)

1,253,280

12,285

1,265,565

Issuance of share based awards and share based awards compensation expense

—

—

4,321

—

—

4,321

—

4,321

Stock withholdings related to share based awards that vested during the three months ended June 30, 2020

—

(107
)

—

—

—

(107
)

—

(107
)
Net loss

—

—

—

(170,389
)

—

(170,389
)

(427
)

(170,816
)
Unrealized gain due to fair value adjustments on interest rate swap agreements, net of taxes, net of settlements

—

—

—

—

849

849

—

849

Amortization of accumulated losses for amended swap agreements

—

—

—

—

2,669

2,669

—

2,669

Foreign currency translation adjustments

—

—

—

—

(3,702
)

(3,702
)

—

(3,702
)
Balance at June 30, 2020

$
122

$
(84,365
)
$
1,178,471

$
414,785

$
(422,092
)
$
1,086,921

$
11,859

$
1,098,780

Issuance of share based awards and share based awards compensation expense

1

—

4,427

—

4,428

4,428

Stock withholdings related to share based awards that vested during the three months ended September 30, 2020

—

(67
)

—

—

—

(67
)

—

(67
)
Net loss

—

—

—

(147,592
)

—

(147,592
)

(444
)

(148,036
)
Issuance of convertible senior notes, net of allocated debt issue costs

—

—

97,359

—

—

97,359

—

97,359

Tax impact of convertible notes issued

—

—

10,960

—

—

10,960

—

10,960

Call options purchased

—

—

(142,094
)

—

—

(142,094
)

—

(142,094
)
Proceeds from issuance of warrants

—

—

89,424

—

—

89,424

—

89,424

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

—

—

—

—

6,528

6,528

—

6,528

Amortization of accumulated losses for amended swap agreements

—

—

—

—

2,669

2,669

—

2,669

Foreign currency translation adjustments

—

—

—

—

(1,503
)

(1,503
)

—

(1,503
)
Balance at September 30, 2020

$
123

$
(84,432
)
$
1,238,547

$
267,193

$
(414,398
)
$
1,007,033

$
11,415

$
1,018,448

~~(1)~~

~~On March 20, 2020 the Company paid a $0.36~~ ~~dividend per common share to stockholders of record on March 6, 2020. Additionally, the Company accrued dividends on outstanding unvested restricted stock units.~~

~~CINEMARK HOLDINGS, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

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

Investment in National CineMedia LLC

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


	Investment in NCM			NCM Screen Advertising Advances			Distributions from NCM			Equity in Loss		Other Revenue			Interest Expense - NCM		Cash Received		Investment in NCM			NCM Screen Advertising Advances			Equity in Loss		Other Revenue			Interest Expense - NCM		Cash Received (2)
Balance as of January 1, 2021	$	151,962		$	(344,255	)


Balance as of January 1, 2022																			$	135.4		$	(346.0	)
Receipt of common units due to annual common unit adjustment ("CUA")		10,237			(10,237	)		—			—		—			—		—		1.3			(1.3	)
Screen rental revenues earned under ESA (1)		—			—			—			—		(7,516	)		—		7,516
Screen rental revenue earned under ESA (1)																				—			—		$	—	$	(15.0	)	$	—	$	15.0
Interest accrued related to significant financing component		—			(17,723	)		—			—		—			17,723		—		—			(17.5	)		—		—			17.5		—
Receipt under tax receivable agreement		(156	)		—			(77	)		—		—			—		233
Equity in loss		(22,046	)		—			—			22,046		—			—		—		(10.3	)		—			10.3		—			—		—
Impairment of investment in NCM																				(98.0	)		—			—		—			—		—
Amortization of screen advertising advances		—			24,003			—			—		(24,003	)		—		—		—			24.3			—		(24.3	)		—		—
Balance as of and for the nine months ended September 30, 2021	$	139,997		$	(348,212	)	$	(77	)	$	22,046	$	(31,519	)	$	17,723	$	7,749
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 ~~the Company,~~CUSA, net of amounts due to NCM for on-screen advertising time provided to the ~~Company’s~~Company's beverage concessionaire of approximately $~~2,850~~5.9.

(2)

The Company had a receivable from NCM of $5.1 as of September 30, 2022.

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES AND

CINEMARK USA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except per share data, unaudited)

Investment in National CineMedia

NCM operates a digital in-theatre network in the U.S. for providing cinema advertising. The Company entered into an Exhibitor Services Agreement with NCM (“ESA”), pursuant to which NCM primarily provides advertising to our theatres. ~~The Company does not recognize undistributed equity~~See Note 8 to Holdings' Annual Report on Form 10-K filed February 25, 2022 and Note 6 to CUSA's Annual Report on From 10-K filed March 9, 2022 for additional discussion of the Company's investment in NCM as well as the ~~earnings on~~accounting 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. The Company recognizes equity in earnings on its Tranche 1 Investment only to the extent it receives cash distributions 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 incomeand subsequent ~~to recognizing an excess distribution.~~common unit adjustments.

Common Unit Adjustments

The Company also periodically receives consideration in the form of common units from NCM. Annual adjustments to the common membership units are made primarily based on increases or decreases in the number of theatre screens operated and ~~theatre attendance generated.~~the impact of these theatres on 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 NCM screen advertising advances.

During March ~~2021,~~2022, NCM performed its annual common unit adjustment calculation under the Common Unit Adjustment Agreement. As a result of the calculation, the Company received an additional ~~2,311,482~~0.5 common units of NCM onduring April ~~14, 2021. The Company~~2022 and recorded ~~these~~the additional common units received at antheir estimated fair value of $~~10,237~~1.3 with a corresponding adjustment to NCM screen advertising advances. The fair value of the common units received was estimated based on the market price of ~~NCMI~~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.

Impairment of NCM Investment

As of September 30, ~~2021,~~2022, the Company owned a total of ~~43,161,550~~43.7 common units of NCM representing an ownership interest of approximately 2625.5%. Each of the Company’s common units in NCM is convertible into 1one share of ~~NCM, Inc.~~NCMI common stock. As of September 30, ~~2021,~~2022, the estimated fair value of the Company’s investment in NCM was approximately $~~153,655~~28.4 based on ~~NCM, Inc.’s~~NCMI's stock price as of September 30, ~~2021~~2022 of $~~3.56~~0.65 per share (Level 1 input as defined in FASB ASC Topic 820).

~~CINEMARK HOLDINGS, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~In thousands, except~~ Because the share price of NCMI was significantly below the Company’s carrying value of NCM per common unit and ~~per share data~~

due to the prolonged recovery of NCM's business, the Company wrote down its investment in NCM to its estimated fair value during the nine months ended September 30, 2022. See Note 12 for impairment expense recorded during the 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 in-theatre digital network operated by NCM, ~~under~~the terms of which are defined in the ESA. NCM provides advertising to ~~the Company’s~~its theatres through its branded “Noovie” pre-show entertainment program and also handles lobby promotions and displays for our theatres. The Company receives a monthly theatre access ~~fees~~fee for participation in the NCM network ~~for participation in the NCM network generally~~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 ~~per screen basis. These fees~~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 ~~are reflected in other revenue on~~as well as the ~~condensed consolidated income statement.~~

Prior to September 17, 2019, the ESA was accounted for under ASC Topic 606, Revenue from Contracts with Customers. Effective September 17, 2019, the Company signed an amendment to the ESA, under which the Company will provide incremental advertising timeaccounting related to NCM and has extended the term through February 2041. Since the agreement was amended, the Company was required to evaluate the revised contract under ASC Topic 842, Leases, and as a result, determined that the ESA met the definition of a lease. The Company leases nonconsecutive periods of use of its domestic theatre screens to NCM for purposes of showing third partyscreen advertising content. The lease, which is classified as an operating lease, generally requires variable lease payments based on the number of patrons attending the showtimes during which such advertising is shown. The lease agreement is considered short-term due to the fact that the nonconsecutive periods of use, or advertising time slots, are set on a weekly basis. The revenues earned under the ESA, both before and after the amendment, are reflected in other revenue on the consolidated income statement.advances.

The ~~recognition of revenue related to 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,														Twelve Months Ended September 30,
Remaining Maturity	2022		2023		2024		2025		2026		Thereafter		Total		2023		2024		2025		2026		2027		Thereafter		Total
NCM screen advertising advances (1)	$	8,968	$	9,587	$	10,251	$	10,962	$	11,724	$	296,720	$	348,212	$	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

~~In connection with the completion of the NCMI initial public offering, the Company amended~~As discussed in Note 8 to Holdings' Annual Report on Form 10-K filed February 25, 2022 and ~~restated its~~Note 6 to CUSA's Annual Report on Form 10-K filed March 9, 2022, CUSA's ESA with NCM ~~and received approximately $174,000~~ in cash consideration from NCM. The proceeds were recorded as deferred revenue and are being amortized over the term of the modified ESA, or through February 2041. In addition to the consideration received upon the ESA modification during 2007, the Company also receives consideration in the form of common units from NCM, at each annual common unit adjustment settlement, in exchange for exclusive access to the Company’s newly opened domestic screens under the ESA. Due to the significant length of time between receiving the consideration from NCM and fulfillment of the related performance obligation, the ESA 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 $~~24,003~~24.3 and $~~17,723~~17.5, respectively, during the nine months ended September 30, ~~2021~~2022 and incremental screen rental revenue and interest expense of $~~23,464~~24.0 and $~~17,726~~17.7, respectively, during the nine months ended September 30, ~~2020.~~2021. The interest expense was calculated using the ~~Company’s~~Company's incremental borrowing rates at the time when the cash was received from the ~~NCMI~~NCM, Inc. IPO and each tranche of common units was received from NCM, which ranged from 4.4% to 8.3%.

Effective September 17, 2019, upon the Company’s evaluation and determination that ASC Topic 842 applies to the amended ESA, the Company determined it acceptable to apply the significant financing component guidance from ASC Topic 606 by analogy as the economic substance of the agreement represents a financing arrangement.

2124

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)

NCM Financial Information

Below is summary financial information for NCM for the periods indicated:

Three Months Ended

Three Months ended

Nine Months Ended

Nine Months Ended

September 30, 2021

September 24, 2020

September 30, 2021

September 24, 2020

Gross revenues

$
31,677

$
6,000

$
51,080

$
74,700

Operating income (loss)

$
(18,669
)

$
(20,073
)

$
(76,607
)

$
(38,973
)
Net loss

$
(35,335
)

$
(34,950
)

$
(125,699
)

$
(81,350
)


	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			As of			As of
	September 30, 2021			December 31, 2020			September 29, 2022			December 30, 2021
Current assets	$	97,064		$	142,566		$	123.5		$	115.4
Noncurrent assets	$	665,570		$	685,643		$	637.5		$	658.0
Current liabilities	$	48,761		$	46,872		$	72.7		$	67.2
Noncurrent liabilities	$	1,114,599		$	1,072,207		$	1,162.4		$	1,114.7
Members deficit	$	(400,726	)	$	(290,870	)	$	(474.1	)	$	(408.5	)

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES AND

CINEMARK USA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except per share data, unaudited)

~~10.~~9.

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, ~~2021,~~2022, the Company had a 33% voting interest in DCIP and a 24.3% economic interest in DCIP. The Company accounts for its investment in DCIP and its subsidiaries under the equity method of accounting. On March 10, 2010, DCIP and its subsidiaries completed an initial financing transaction to enable the purchase, deployment and leasing of digital projection systems to the Exhibitors under equipment lease and installation agreements. On March 31, 2011, DCIP obtained incremental financing necessary to complete the deployment of digital projection systems. DCIP also entered into long-term Digital Cinema Deployment Agreements (“DCDAs”) with 6six major motion picture studios pursuant to which Kasima LLC, one of DCIP’s subsidiaries, ~~receives~~received a virtual print fee ("VPF") each time the studio ~~books~~booked a film or certain other content on the leased digital projection systems. Other content distributors entered into similar DCDAs that ~~provide~~provided for the payment of VPFs for bookings of the distributor's content on a leased digital projection system. The DCDAs ~~end on the earlier to occur of (i) the tenth anniversary of the "mean deployment date" for all digital projection systems scheduled to be deployed over a period of up to~~ ~~five years, or (ii) the date DCIP achieves "cost recoupment", each as defined~~expired in ~~the DCDAs.~~ Cost recoupment occurs when revenues attributable to the digital projection systems exceed the financing, deployment, administration and other costs associated with the purchase of the digital projection systems. DCIP expects cost recoupment to occur during October 2021. ~~The timing of cost recoupment is dependent on VPF payments from studios.~~ Pursuant to the operating agreement between the Exhibitors and DCIP, DCIP ~~could~~began to distribute excess cash generated from their operations to the Exhibitors ~~upon~~during 2019. As the ~~payoff of~~DCDAs have expired and the MELA (as defined below) has been terminated, as discussed below, DCIP and its ~~outstanding debt, which began~~subsidiaries no longer have regular operations, and a final distribution was made during ~~the year ended December 31, 2019.~~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~~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 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.

~~CINEMARK HOLDINGS, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~In thousands, except share~~ The investment in DCIP on the condensed consolidated balance sheets of Holdings and ~~per share data~~CUSA as of December 31, 2021 and September 30, 2022 was $

0. DCIP ceased operations at the end of the second quarter of 2022.

~~Below is summary financial information for~~The Company received distributions and warranty reimbursements from DCIP for ~~the periods indicated:~~

Three Months Ended

Nine Months Ended

September 30, 2021

September 30, 2020

September 30, 2021

September 30, 2020

Gross revenues

$
27,639

$
1,084

$
47,361

$
20,809

Operating income (loss)

$
18,427

$
(29,878
)

$
41,868

$
(72,422
)
Net income (loss)

$
18,976

$
(30,554
)

$
42,933

$
(79,660
)

As of

September 30, 2021

December 31, 2020

Current assets

$
41,625

$
36,372

Noncurrent assets

$
63

$
205

Current liabilities

$
14,562

$
39,844

Noncurrent liabilities

$
—

$
687

Members' equity (deficit)

$
27,126

$
(3,954
)

~~The Company had the following transactions with DCIP during~~ the three and nine months ended September 30, 2022 and 2021 ~~and 2020:~~as follows:

Three Months Ended

Nine Months Ended

September 30, 2021

September 30, 2020

September 30, 2021

September 30, 2020

Equipment lease payments (1)(2)

$
0

$
346

$
0

$
1,384

Warranty reimbursements from DCIP (2)

$
(84
)

$
—

$
(784
)

$
(3,123
)
Management service fees (2)

$
21

$
—

$
36

$
84

Distributions from DCIP (3)

$
6,534

$
—

$
6,534

$
—


	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

(1)

AsRecorded as a ~~result~~reduction of the MELA amendment noted above, the Company recorded a lease termination liability during 2020. The lease termination payments made during the nine months ended September 30, 2021 reduced the liability outstanding. The remaining termination liability of $~~174~~ ~~as of September 30, 2021 is reflected in accrued other current liabilities on the condensed consolidated balance sheet.~~

~~(2)~~

~~Amounts reflected in~~ utilities and other costs on the condensed consolidated statements of loss.

~~(3)~~(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 ~~investments for~~investees and corresponding changes to the Company's investment balances during the nine months ended September 30, ~~2021:~~2022:

AC JV,
LLC

DCDC

FE Concepts

Other

Total

Balance at January 1, 2021

$
3,745

$
1,255

$
18,273

$
453

$
23,726

Equity income (loss)

(1,099
)

296

788

—

(15
)
Other

—

—

—

44

44

Balance at September 30, 2021

$
2,646

$
1,551

$
19,061

$
497

$
23,755


	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 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, 2022 and 2021:


		Nine Months Ended							Three Months Ended				Nine Months Ended
Investee	Transactions	September 30, 2021			September 30, 2020			Transactions	September 30, 2022		September 30, 2021		September 30, 2022		September 30, 2021
AC JV, LLC	Event fees paid (1)	$	1,386		$	2,258		Event fees paid (1)	$	2.1	$	0.8	$	6.6	$	1.4
DCDC	Content delivery fees paid (1)	$	377		$	208		Content delivery fees paid (1)	$	0.1	$	0.2	$	0.4	$	0.4
FE Concepts	Theatre service fees received (2)	$	(47	)	$	(19	)

(1)

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

~~(2)~~

~~Included in other revenues on the condensed consolidated statements of income.~~loss.

~~CINEMARK HOLDINGS, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

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

~~11.~~10.

Treasury Stock and Share Based Awards

Treasury Stock - Holdings

Treasury stock represents shares of common stock repurchased or withheld by ~~the Company~~Holdings and not yet retired. The Company has applied the cost method in recording its treasury shares. Below is a summary of ~~the Company’s~~ treasury stock activity for the nine months ended September 30, ~~2021:~~2022:

Number of

Treasury

Shares

Cost

Balance at January 1, 2021

5,050,981

$
87,004

Restricted stock withholdings (1)

565

16

Restricted stock forfeitures

42,034

0

Balance at September 30, 2021

5,093,580

$
87,020


	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)

~~The Company~~Holdings withheld ~~restricted~~ shares as a result of the election by certain employees to satisfy their tax liabilities upon vesting inof restricted stock and restricted stock units. ~~The Company~~Holdings determined the number of shares to be withheld based upon market values ~~ranging~~of the common stock of Holdings on the vest dates, which ranged from $~~17.41~~15.18 to $~~24.14~~18.33 per share.

As of September 30, ~~2021, the Company~~2022, Holdings had no plans to retire any shares of treasury stock.

Restricted Stock

Below is a summary 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

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES AND

CINEMARK USA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except 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

CINEMARK USA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except per share data, unaudited)

During the nine months ended September 30, ~~2021, the Company~~2022, Holdings granted ~~1,077,926~~0.88 shares of its restricted stock to ~~its~~certain CUSA employees and its directors. The fair value of the restricted stock granted was determined based on the closing price of ~~the Company’s~~Holdings' common stock on the ~~day preceding the~~ grant ~~date,~~dates, which ranged from $~~16.09~~13.36 to $~~23.98~~17.07 per share. ~~The Company~~Holdings assumed forfeiture rates for the restricted stock awards that ranged from 0% to 1012%. ~~Certain of the~~The restricted stock ~~awards vested immediately on~~granted during the ~~grant date while others vest~~nine months ended September 30, 2022 vests over periods ranging from one to ~~four year~~threes. 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 of restricted stock activity for the nine months ended September 30, 2021:~~

Shares of

Weighted
Average

Restricted

Grant Date

Stock

Fair Value

Outstanding at January 1, 2021

1,431,975

$
21.11

Granted

1,077,926

$
21.24

Vested

(115,712
)

$
23.79

Forfeited

(42,034
)

$
18.13

Outstanding at September 30, 2021

2,352,155

$
21.00

Unvested restricted stock at September 30, 2021

2,352,155

$
21.00

Nine Months Ended
September 30,

2021

2020

Compensation expense recognized during the period

$
13,757

$
8,235

Fair value of restricted shares that vested during the period

$
2,491

$
8,944

Income tax benefit (cost) related to restricted stock awards

$
(105
)

$
2,678

As of September 30, ~~2021,~~2022, the estimated remaining unrecognized compensation expense related to unvested restricted stock awards was $as follows:


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

~~28,541~~(1) ~~and the~~

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

~~CINEMARK HOLDINGS, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

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

2 years.

Restricted Stock Units

~~The Company did not grant any restricted stock units during the nine months ended September 30, 2021.~~

During the nine months ended September 30, 2021, the Compensation Committee of the Company’s Board of Directors evaluated the impact of the COVID-19 pandemic on the performance metric used for the restricted stock unit awards granted during February 2019 and February 2020 and determined that the COVID-19 pandemic significantly impacted the Company’s ability to meet the performance metric. The Compensation Committee made a discretionary decision to certify the vest of the 2019 and 2020 restricted stock unit awards at target based upon the unforeseen, external circumstances beyond management’s control, the projected macroeconomic conditions through 2021 and beyond, and the uncertain timing as to the recovery of the Company’s industry. The requirement to satisfy the applicable service period under the restricted stock unit awards was not changed.

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, ~~2021:~~2022, Holdings granted performance awards in the form of restricted stock units. The maximum number of shares issuable under the performance awards is 0.8 shares of Holdings' common 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 the third anniversary of the date of grant. Each performance target underlying the performance award has a threshold, target and maximum level, with the maximum level equal to 175% of the target award. If the performance metrics meet the threshold level, approximately 29% of the maximum restricted stock units vest. If the performance metrics for the one-year period are at target, approximately 57% of the maximum restricted stock units vest. If the performance metrics are at 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 achievement of the performance goals is within the targets previously noted.All restricted stock units granted during 2022 will be paid in the form of Holdings' common stock if the participant continues to provide services through the 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.

Nine Months Ended September 30,

2021

2020

Number of restricted stock unit awards that vested during the period

15,230

120,293

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

$
314

$
3,669

Accumulated dividends paid upon vesting of restricted stock unit awards

$
62

$
576

Compensation expense recognized during the period

$
2,832

$
4,624

Income tax benefit (cost) related to stock unit awards

$
(467
)

$
215

When the performance awards were issued, the Company estimated that the most likely outcome is the achievement of the target level. The fair value of the restricted stock unit awards was determined based on the closing price of Holdings' common stock on the date of grant, which was $16.65 per share. The Company assumed a forfeiture rate of 5% for the restricted stock unit awards. Based 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 nine months ended September 30, 2022.

As of September 30, ~~2021,~~2022, the estimated remaining unrecognized compensation expense related to outstanding restricted stock ~~unit awards~~units was $~~7,185~~12.0. The weighted average period over which this remaining compensation expense will be recognized is approximately ~~2 year~~two yearss.. As of September 30, ~~2021, the Company~~2022, Holdings had restricted stock units outstanding that represented a total of ~~561,041~~1.0 hypothetical shares

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES AND

CINEMARK USA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except per share data, unaudited)

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

~~12.~~11.

Goodwill and Other Intangible Assets

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

U.S.
Operating
Segment

International
Operating
Segment

Total

Balance at January 1, 2021 (1)

$
1,182,853

$
70,987

$
1,253,840

Foreign currency translation adjustments

—

(3,705
)

(3,705
)
Balance at September 30, 2021 (1)

$
1,182,853

$
67,282

$
1,250,135


	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

(1)

Balances are presented net of accumulated impairment losses of $~~214,031~~214.0 for the U.S. operating segment and $~~43,750~~43.8 for the international operating segment. See discussion of the qualitative impairment analysis performed by the Company as of September 30, ~~2021~~2022 at Note ~~13.~~12.

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

~~CINEMARK HOLDINGS, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

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


	Balance at January 1, 2021			Additions (1)		Amortization			Foreign Currency Translation Adjustments			Balance at September 30, 2021			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	$	82,432		$	—	$	—		$	(132	)	$	82,300		$	81.8		$	—		$	0.1	$	(0.2	)	$	81.7
Accumulated amortization		(68,416	)	―			(1,994	)		—			(70,410	)		(71.1	)		(1.8	)		—		0.2			(72.7	)
Total net intangible assets with finite lives	$	14,016		$	—	$	(1,994	)	$	(132	)	$	11,890		$	10.7		$	(1.8	)	$	0.1	$	—		$	9.0

Intangible assets with indefinite lives:
Tradename and other		300,179			146		—			(190	)		300,135			300.1			—			—		—			300.1
Total intangible assets, net	$	314,195		$	146	$	(1,994	)	$	(322	)	$	312,025		$	310.8		$	(1.8	)	$	0.1	$	—		$	309.1

(1)

~~Amount represents alcoholic beverage licenses acquired.~~Amounts represent the write-off of non-compete agreements that expired during the nine months ended September 30, 2022.

The estimated aggregate future amortization expense for intangible assets is as follows:


For the three months ended December 31, 2021	$	680
For the twelve months ended December 31, 2022		2,519
			Estimated
			Amortization
For the three months ended December 31, 2022			$	0.6
For the twelve months ended December 31, 2023		2,429		2.5
For the twelve months ended December 31, 2024		2,429		2.5
For the twelve months ended December 31, 2025		2,316		1.9
For the twelve months ended December 31, 2026				1.5
Thereafter		1,517		—
Total	$	11,890	$	9.0

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES AND

CINEMARK USA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except per share data, unaudited)

~~13.~~12.

Impairment of Long-Lived Assets

The Company performed ~~long-lived asset~~a qualitative impairment ~~evaluations at the end~~analysis on its goodwill and tradename intangible assets as of ~~each quarter during the nine months ended~~ September 30, ~~2021. The following table is~~2022. As a ~~summary~~result of the ~~evaluations performed~~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 ~~classification:~~class, is described below:


	~~Asset~~	~~Impairment~~	~~Valuation~~	~~Valuation~~
	~~Category~~	~~Test Type~~	~~Approach~~	~~Multiple~~

~~First and Second Quarters~~
	~~Goodwill~~	~~Qualitative~~	~~N/A~~	~~N/A~~
	~~Tradename Intangible Assets~~	~~Qualitative~~	~~N/A~~	~~N/A~~
	~~Other Long-lived Assets~~	~~Qualitative~~	~~N/A~~	~~N/A~~

~~Third Quarter~~
	~~Goodwill~~	~~Qualitative~~	~~N/A~~	~~N/A~~
	~~Tradename Intangible Assets~~	~~Qualitative~~	~~N/A~~	~~N/A~~
	~~Other Long-lived Assets~~	~~Quantitative~~ ~~(1)~~	~~Market~~	~~3.1 to 6 times~~

~~(1)~~•

Quantitative test performed for certain theatre level assets where indicators existed under a qualitative test. For theatre level asset evaluations performed, the Company used the lesser of the remaining theatre lease term or the applicable market multiple to determine impairment exposure.

Goodwill – The ~~Company evaluates goodwill for impairment as follows:~~



~~Qualitative approach~~ ~~The Company’s~~ 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 ~~the~~ estimated fair values as ~~determined during its most recent quantitative assessment~~

~~Tradename Intangible assets~~ ~~– The Company evaluates tradename intangible assets for impairment as follows:~~



~~Qualitative approach~~ ~~The Company’s qualitative assessment considers industry and market conditions and recent developments that may impact the revenue forecasts and other estimates used in~~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 ~~evaluates~~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~~a theatre as ~~follows:~~a result of the qualitative test, then the Company performed a quantitative test for that theatre.



~~Quantitative approach~~The ~~Company performs a~~ quantitative evaluation at the theatre level ~~using~~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 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 value of the asset group (theatre) is compared with its estimated fair value. Significant judgment is involved in estimating fair value, including

~~CINEMARK HOLDINGS, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

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

management’s estimate of ~~the impact of temporary~~future theatre ~~closures and other considerations as a result of COVID-19, was involved in estimating~~level cash flows ~~and fair value.~~for each of the theatres based on projected box office. Fair value is ~~determined~~estimated based on a multiple of cash flows. Management’s estimates, which fall under Level 3 of the U.S. GAAP fair value hierarchy, as defined by FASB ASC Topic 820-10-35, are based on projected operating performance, market transactions and industry trading multiples.



~~Qualitative approach~~Below The Company performs a qualitative evaluation for certain theatres based on the results of the quantitative evaluation noted above. The Company’s qualitative evaluation considers relevant market transactions, industry trading multiples and recent developments that would impact its estimates of future cash flows.

~~The following table~~ is a summary of impairment charges for the ~~impairment recorded as a result~~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 ~~the evaluations performed during the three and nine months ended September 30, 2021 and 2020:~~NCM Investment

Three Months Ended

Nine Months Ended

September 30,

September 30,

2021

2020

2021

2020

U.S. Segment

Theatre properties

$
4,801

$
2,075

$
4,801

$
5,718

Theatre operating lease right-of-use assets

2,638

1,123

2,638

7,075

Cost method investment

—

2,500

—

2,500

U.S. total

7,439

5,698

7,439

15,293

International segment

Theatre properties

39

938

39

5,422

Theatre operating lease right-of-use assets

2

1,654

2

4,194

Goodwill

—

16,128

—

16,128

Intangible assets

—

177

—

177

International total

41

18,897

41

25,921

Total Impairment

$
7,480

$
24,595

$
7,480

$
41,214

in Note 8.

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES AND

CINEMARK USA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except per share data, unaudited)

~~14.~~13.

Fair Value Measurements

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

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

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

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

Below is a summary of assets and liabilities measured at fair value on a recurring basis ~~by the Company~~ under FASB ASC Topic 820 as of September 30, ~~2021~~2022 and December 31, ~~2020:~~2021:


		Carrying		Fair Value Hierarchy							Carrying		Fair Value Hierarchy
Description	As of,	Value		Level 1		Level 2		Level 3		As of	Value		Level 1		Level 2		Level 3
Interest rate swap liabilities (1)	September 30, 2021	$	22,253	$	—	$	22,253	$	—
Interest rate swap assets (1)										September 30, 2022	$	20.2	$	—	$	20.2	$	—

Interest rate swap liabilities (1)	December 31, 2020	$	33,847	$	—	$	33,847	$	—	December 31, 2021	$	14.6	$	—	$	14.6	$	—

(1)

See further discussion of interest rate swaps at Note 7.

The ~~Company uses the~~ market approach is used for fair value measurements on a nonrecurring basis in the impairment evaluations of its goodwill, intangible assets and long-lived assets (see Note 1211 and Note ~~13)~~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, ~~2020,~~2021, filed February ~~26, 2021.~~25, 2022 and the CUSA's Annual Report on Form 10-K for the year ended December 31, 2021, filed March 9, 2022. There were no changes in valuation techniques. ~~The Company elected to perform its goodwill impairment evaluation using both the market approach and the income approach for the nine months ended September 30, 2021.~~ There were 0no transfers ~~in to~~into or out of Level 1, Level 2 or Level 3 during the nine months ended September 30, ~~2021.~~2022.

~~CINEMARK HOLDINGS, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

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

~~15.~~14.

Foreign Currency Translation

The accumulated other comprehensive loss account in Holdings stockholders’ equity of $~~402,380~~362.9 and $~~398,653~~394.5 and CUSA stockholder's equity of $368.2 and $397.0, each as of September 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively, primarily includes cumulative foreign currency net losses of $~~390,654~~400.4 and $~~375,644~~394.5, respectively, from translating the financial statements of the ~~Company’s~~Company's international subsidiaries and the cumulative changes in fair value of the ~~Company’s~~ interest rate swap agreements that are designated as hedges.

As of September 30, ~~2021,~~2022, all foreign countries where the Company has operations ~~other than Argentina,~~ 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. The financial information of the Company’s Argentina subsidiaries was remeasured in U.S. dollars in accordance with ASC Topic 830, Foreign Currency Matters, effective July 1, 2018.

Below is a summary of the impact of translating the September 30, ~~2021~~2022 and ~~2020~~September 30, 2021 financial statements of the Company’s international subsidiaries:

Other Comprehensive Loss for

Exchange Rate as of

Nine Months Ended

Country

September 30, 2021

December 31, 2020

September 30, 2021

September 30, 2020

Brazil

5.43

5.20

$
(3,368
)
$
(51,453
)
Chile

811.13

714.14

(7,967
)

(5,046
)
Colombia

3,834.68

3,432.50

(140
)

(2,584
)
Peru

4.16

3.65

(3,609
)

(3,187
)
All other

74

(560
)

$
(15,010
)
$
(62,830
)


					Other Comprehensive Income (Loss) for
	Exchange Rate as of				Nine Months Ended
Country	September 30, 2022		December 31, 2021		September 30, 2022			September 30, 2021
Brazil		5.40		5.57	$	0.4		$	(3.4	)
Chile		965.80		852.00		(7.7	)		(7.9	)
Peru		3.99		4.02		0.2			(3.6	)
All other						1.2			(0.1	)
					$	(5.9	)	$	(15.0	)

~~(1)~~

~~Beginning~~As noted above, beginning July 1, 2018, Argentina was deemed highly inflationary. A foreign currency exchange loss of $5.1 and gain of $~~345~~0.4 ~~and $1,053~~was recorded for the nine months ended September 30, 2022 and 2021, ~~and 2020,~~ respectively, ~~is reflected as foreign currency exchange loss on the Company’s condensed consolidated statement of income~~ as a result of translating ~~Argentina~~Argentina's financial results to U.S. dollars.

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES AND

CINEMARK USA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except per share data, unaudited)

~~16.~~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,

2021

2020

Cash paid for interest

$
89,834

$
53,364

Cash paid (refunds received) for income taxes, net

$
(136,937
)

$
(108,776
)
Cash deposited in restricted accounts (1)

$
7,300

$
—

Noncash investing and financing activities:

Change in accounts payable and accrued expenses for the acquisition of theatre properties and equipment (2)

$
(2,409
)

$
(7,933
)
Interest expense - NCM (see Note 9)

$
(17,723
)

$
(17,726
)
Investment in NCM – receipt of common units (see Note 9)

$
10,237

$
3,620

Dividends accrued on unvested restricted stock unit awards

$
2

$
(257
)


	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

(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. See further discussion at Note 7.~~lenders, net of deposits withdrawn from such accounts upon the repayment of related debt.

~~(2)~~(3)

Additions to theatre properties and equipment included in accounts payable as of September 30, ~~2021~~2022 and December 31, ~~2020~~2021 were $~~25,841~~12.4 and $~~28,250~~8.2, respectively.

~~CINEMARK HOLDINGS, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

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

~~17.~~16.

Segments - Holdings

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

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES AND

CINEMARK USA, INC. AND SUBSIDIARIES

Three Months Ended

Nine Months Ended

September 30,

September 30,

2021

2020

2021

2020

Revenues

U.S.

$
376,278

$
34,639

$
742,982

$
472,096

International

59,294

1,069

101,957

118,061

Eliminations

(751
)

(230
)

(1,105
)

(2,089
)
Total revenues

$
434,821

$
35,478

$
843,834

$
588,068

Adjusted EBITDA

U.S.

$
44,781

$
(105,767
)

$
(31,697
)

$
(145,947
)
International

(495
)

(22,232
)

(27,788
)

(33,459
)
Total Adjusted EBITDA

$
44,286

$
(127,999
)

$
(59,485
)

$
(179,406
)

Capital expenditures

U.S.

$
22,423

$
17,903

$
47,547

$
54,604

International

2,002

2,756

9,697

13,014

Total capital expenditures

$
24,425

$
20,659

$
57,244

$
67,618

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except per share data, unaudited)

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

Three Months Ended

Nine Months Ended

September 30,

September 30,

2021

2020

2021

2020

Net loss

$
(77,573
)

$
(148,036
)

$
(428,697
)

$
(378,274
)
Add (deduct):

Income taxes

(8,876
)

(121,145
)

(15,569
)

(222,398
)
Interest expense (1)

37,993

36,577

111,580

92,284

Other expense, net (2)

12,484

22,881

35,369

47,385

Cash distributions from DCIP (3)

—

—

—

10,383

Cash distributions from other equity investees (4)

—

2,146

156

15,047

Depreciation and amortization

67,208

62,543

202,288

191,380

Impairment of long-lived assets

7,480

24,595

7,480

41,214

Restructuring costs

(340
)

524

(1,288
)

20,062

Loss on disposal of assets and other

1,020

(13,327
)

7,883

(10,997
)
Loss on extinguishment of debt

—

—

6,527

—

Non-cash rent expense

(1,124
)

816

(1,803
)

1,649

Share based awards compensation expense

6,014

4,427

16,589

12,859

Adjusted EBITDA

$
44,286

$
(127,999
)

$
(59,485
)

$
(179,406
)


	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	)

(1)

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

~~CINEMARK HOLDINGS, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

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

(2)

Includes interest income, foreign currency exchange (gain) loss and equity in ~~income (loss)~~loss of ~~affiliates and interest expense - NCM and excludes distributions from NCM and distributions from DCIP.~~affiliates.

(3)

~~Includes cash distributions from DCIP that were recorded as a reduction of the Company’s investment in DCIP. These distributions are reported entirely within the U.S. operating segment.~~

~~(4)~~

~~Includes~~Reflects cash distributions received from equity investees ~~other than those from DCIP noted above,~~ that were recorded as a reduction of the respective investment balances (see ~~Notes 9 and 10)~~Note 9). 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

Three Months Ended

Nine Months Ended

September 30,

September 30,

Revenues

2021

2020

2021

2020

U.S.

$
376,278

$
34,639

$
742,982

$
472,096

Brazil

20,632

513

30,533

53,829

Other international countries

38,662

556

71,424

64,232

Eliminations

(751
)

(230
)

(1,105
)

(2,089
)
Total

$
434,821

$
35,478

$
843,834

$
588,068


	As of		As of		As of		As of
Theatre Properties and Equipment-net	September 30, 2021		December 31, 2020
Theatre Properties and Equipment, net					September 30, 2022		December 31, 2021
U.S.	$	1,249,490	$	1,392,780	$	1,105.4	$	1,208.7
Brazil		60,020		72,080		49.6		56.8
Other international countries		125,964		150,202		105.0		117.4
Total	$	1,435,474	$	1,615,062	$	1,260.0	$	1,382.9

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES AND

CINEMARK USA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except per share data, unaudited)

~~18.~~17.

Related Party Transactions

~~The~~A subsidiary of the Company manages a theatre for Laredo Theatre, Ltd. (“Laredo”). The Company is the sole general partner and owns 75% of the limited partnership interests of Laredo. Lone Star Theatres, Inc. owns the remaining 25% of the limited partnership interests in Laredo and is 100% owned by Mr. David Roberts, Lee Roy Mitchell’s son-in-law. Lee Roy Mitchell, ~~is the Company’s Chairman~~our founder and a member of ~~the~~Holdings' Board of Directors, ~~and~~owns, both directly and indirectly, ~~owns~~ approximately 98.5% of ~~the Company’s~~Holdings common stock. Under the agreement, management fees are paid by Laredo to the Company at a rate of 5% of annual theatre ~~revenues.~~revenue. The Company recorded $~~222~~0.5 and $~~123~~0.2 of management fee ~~revenues~~revenue during the nine months ended September 30, ~~2021~~2022 and ~~2020,~~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. During the nine months ended September 30, 2022, cash distributions of $2.4 were paid to Lone Star Theatres, Inc. as required by the 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 Company and retired in July 2021. Mr. Hebert ~~now serves~~served as a consultant ~~to the Company~~ until July 2022. During the nine months ended September 30, ~~2021,~~2022, the Company ~~has~~ paid Mr. Hebert $620.2 related to consulting services.

The Company has an Aircraft Time Sharing Agreement with Copper Beech Capital, LLC (“Copper Beech”) to use, on occasion, a private aircraft owned by Copper Beech. Copper Beech 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 for the actual costs of fuel usage and the expensesA subsidiary of the pilots, landing fees, storage fees and similar expenses incurred during the trip. For the nine months ended September 30, 2021 and 2020, the aggregate amounts paid to Copper Beech for the use of the aircraft was $0 ~~and $~~12~~, respectively.~~

~~The~~ Company leases 1413 theatres from Syufy Enterprises, LP (“Syufy”) or affiliates of Syufy. Raymond Syufy is one of ~~the Company’s~~Holdings' directors and is an officer of the general partner of Syufy. ~~Of these~~ 14 ~~leases,~~ 12 ~~have fixed minimum annual rent. The~~ 2 ~~leases without minimum annual rent have rent based upon a specified percentage of gross sales as defined in the lease.~~ For the nine months ended September 30, ~~2021~~2022 and ~~2020,~~2021, the Company paid total rent of $~~17,893~~16.7 and $~~17,271~~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.

~~The~~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 that opened during December 2019.~~amenities. See Note 109 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.

~~CINEMARK HOLDINGS, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~CUSA has paid certain fees on behalf of its parent, Holdings, and Holdings has paid income taxes and other expenses on behalf of CUSA. The net receivable from Holdings as of September 30, 2022 and December 31, 2021 was $60.5 and $46.7, respectively. CUSA received contributions from Holdings of $120.0 during the nine months ended September 30, 2021.

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

~~19.~~18.

Commitments and Contingencies

From time to time, the Company is involved in various legal proceedings arising from the ordinary course of its business operations, such as personal injury claims, employment matters, patent claims, landlord-tenant disputes, 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.

Cinemark Holdings, Inc., et al vs Factory Mutual Insurance Company. The Company filed suit on November 18, 2020, in the District Court, ~~471~~st471st Judicial District, Collin County, Texas. On December 22, 2020, the case was moved to the US District Court for the Eastern District of 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 ~~COVID-19 pandemic and the forced~~ closure of the Company’s theatres ~~pursuant~~due to ~~orders issued by various government agencies.~~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~~litigation..

~~Intertrust Technologies Corporation~~ ~~(“Intertrust”)~~Lakeenya Neal, et al v. Cinemark Holdings, Inc., ~~Regal, AMC,~~ et al. This ~~case~~class action lawsuit was filed against the Company on ~~August 7, 2019~~December 10, 2021, in the ~~Eastern~~Central District of ~~Texas – Marshall Division~~Los Angeles County Superior Court of the State of California alleging ~~patent infringement. The Company~~certain violations of the Fair and Accurate Credit Transactions Act. We firmly ~~maintains~~maintain that the ~~contentions of the Plaintiff~~allegations are without merit and will vigorously defend ~~itself against the~~this lawsuit. ~~Although the~~The Company ~~does not believe that it has infringed on any of Intertrust’s patents, it~~ cannot predict the outcome of this litigation.

3135

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

~~Recent Developments~~

As Where it is important to distinguish between the entities, we ~~have previously disclosed, the COVID-19 pandemic has had an unprecedented impact on the world~~either refer specifically to Holdings or CUSA. Otherwise, all references to “we,” “our,” “us,” “the Company” or "Cinemark" relate to Cinemark Holdings, Inc. and ~~the movie exhibition industry. The social~~its consolidated subsidiaries and ~~economic effects have been widespread. As a movie exhibitor that operates spaces where patrons gather in close proximity, we continue~~all references to ~~be impacted by the pandemic. To comply with government mandates at the initial outbreak of the COVID-19 pandemic, we temporarily closed all of our theatres~~CUSA relate to CUSA and its consolidated subsidiaries. Amounts included in the ~~U.S.~~following discussion, except for screens, average screens, average ticket price and ~~Latin America~~concessions revenue per patron, are rounded in March of 2020, implemented temporary personnel and salary reductions, halted non-essential operating and capital expenditures, and negotiated modified timing and/or abatement of contractual payments with landlords and other major suppliers until our theatres reopened. In addition, we suspended our quarterly dividend.

As of September 30, 2021, all of our domestic and international theatres were open. Theatre staffing levels remain reduced as compared to pre-COVID levels due to reduced operating hours in certain locations as well as our focus on initiatives to enhance productivity. We continue to limit capital expenditures to essential activities and projects. We worked with landlords and other vendors during the nine months ended September 30, 2021 to extend payment terms as it reopened theatres and continues to recover from the impacts of the COVID-19 pandemic.millions.

Based on our current estimates of recovery, we believe we have, and will generate, sufficient cash to sustain operations. Nonetheless, the COVID-19 pandemic has had, and continues to have, adverse effects on our business, results of operations, cash flows and financial condition.

~~General Information~~

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, ~~2021,~~2022, we managed our business under two reportable operating segments – U.S. markets and international markets. See Note 1716 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 ~~concert events, the Metropolitan Opera, in-theatre gaming~~ and other special events in our ~~theatres. In-theatre advertising for~~theatres through Fathom Entertainment (operated by AC JV, LLC). NCM provides our domestic theatres ~~is provided by National CineMedia. In our international locations, our~~with various forms of in-theatre advertising. Our Flix Media subsidiaries provide screen advertising and alternative content for our international circuit and to other international exhibitors.

Films leading the box office during the nine months ended September 30, ~~2021~~2022 included the carryover of Spider-Man: No Way Home as well as new releases including ~~Shang-Chi~~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 ~~Legend of the Ten Rings,~~Hedgehog 2, Elvis, Uncharted, Nope, Lightyear, The Lost City and ~~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~~. Bullet Train. Films ~~currently~~ scheduled for release during the ~~remainder of 2021~~ three months ending December 31, 2022 include ~~Venom: Let There Be Carnage, Eternals, Ghostbusters: Afterlife,~~Black Panther: Wakanda Forever, Black Adam, Puss in Boots: The ~~Matrix Resurrections, No Time~~Last Wish, Smile, Ticket to ~~Die, Encanto, Sing 2, Halloween Kills, Dune, West Side Story~~Paradise and the ~~Marvel~~highly anticipated sequel, ~~Spider-man; No~~Avatar: The Way ~~Home,~~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 ~~and advertising~~ 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 ~~also receives~~received virtual print fees from studios for certain of its international locations, which are included as a contra-expense in film ~~rentals~~rental and advertising ~~costs. Promotional expenses are generally variable~~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 ~~nature and primarily include the placement of film-specific social and digital media spots promoting film content currently playing in our theatres.~~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, loyalty and membership programs and brand advertising that~~building our audiences. These expenses vary depending on the timing and length of such campaigns.

Concession supplies ~~expenses are~~expense is variable in nature and ~~fluctuate~~fluctuates with our concession ~~revenues~~revenue and product mix. ~~We negotiate prices for concession supplies directly with concession vendors~~Supply chain interruptions and ~~manufacturers~~inflationary pressures have impacted, and may continue to ~~obtain volume rates.~~impact, product costs and product availability in the near

~~Salaries~~36

term. We source products from a variety of partners around the world to minimize supply chain interruptions and price increases, wherever possible.

Although salaries and wages ~~for our theatres generally~~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~~attendance. Staffing levels may vary based on the amenities offered at a location, such as full-service restaurants, bars or expanded food and ~~also include a fixed cost component (i.e. the minimum staffing costs to operate a theatre during non-peak periods).~~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 ~~expenses are~~expense is primarily a fixed ~~costs~~cost at the theatre level as most of our facility leases require a fixed monthly minimum rent ~~payments.~~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 ~~expenses~~expense as a percentage of ~~revenues are~~revenue is also affected by the number of theatres under operating leases, the number of theatres under finance leases and the number of owned theatres.

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

General and administrative ~~expenses are primarily fixed in nature and consist of the costs~~expense to support the overall management of the Company ~~including base, incentive compensation~~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, ~~professional fees, cloud-based software licensing fees, travel expenses,~~ 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						Three Months Ended						Nine Months Ended
	September 30,						September 30,						September 30,						September 30,
	2021			2020			2021			2020			2022			2021			2022			2021
Operating data (in millions):
Revenues
Revenue
Admissions	$	225.5		$	14.9		$	435.1		$	307.4		$	324.6		$	225.5		$	942.3		$	435.1
Concession		164.2			9.1			313.5			199.6			253.6			164.2			712.6			313.5
Other		45.1			11.5			95.2			81.1			72.2			45.1			200.1			95.2
Total revenues	$	434.8		$	35.5		$	843.8		$	588.1
Total revenue													$	650.4		$	434.8		$	1,855.0		$	843.8
Cost of operations
Film rentals and advertising		117.0			8.2			216.8			165.2			180.9			117.0			531.1			216.8
Concession supplies		28.2			2.7			54.2			39.9			46.3			28.2			128.8			54.2
Salaries and wages		67.6			20.2			149.2			116.6			97.0			67.6			277.0			149.2
Facility lease expense		68.8			67.1			200.8			214.5			77.2			68.8			231.2			200.8
Utilities and other		81.7			43.3			192.0			178.7			110.4			81.7			303.8			192.0
General and administrative expenses		38.6			30.4			111.8			99.4
General and administrative expense (1)														45.1			38.6			134.0			111.8
Depreciation and amortization		67.2			62.6			202.3			191.4			58.3			67.2			181.0			202.3
Impairment of long-lived assets		7.5			24.6			7.5			41.2
Impairment of long-lived and other assets														15.2			7.5			107.5			7.5
Restructuring costs		(0.3	)		0.6			(1.3	)		20.1			—			(0.4	)		(0.2	)		(1.3	)
(Gain) loss on disposal of assets and other		1.0			(13.3	)		7.9			(11.0	)		1.2			1.1			(6.4	)		7.9
Total cost of operations		477.3			246.4			1,141.2			1,056.0
Operating loss	$	(42.5	)	$	(210.9	)	$	(297.4	)	$	(467.9	)
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 revenues:
Revenues
Operating data as a percentage of total revenue:
Revenue
Admissions		51.9	%		42.0	%		51.6	%		52.3	%		49.9	%		51.9	%		50.8	%		51.6	%
Concession		37.8	%		25.6	%		37.2	%		33.9	%		39.0	%		37.8	%		38.4	%		37.2	%
Other		10.3	%		32.4	%		11.2	%		13.8	%		11.1	%		10.3	%		10.8	%		11.2	%
Total revenues		100.0	%		100.0	%		100.0	%		100.0	%
Total revenue														100.0	%		100.0	%		100.0	%		100.0	%
Cost of operations ~~(1)~~(2)
Film rentals and advertising		51.9	%	NM				49.8	%		53.7	%		55.7	%		51.9	%		56.4	%		49.8	%
Concession supplies		17.2	%	NM				17.3	%		20.0	%		18.3	%		17.2	%		18.1	%		17.3	%
Salaries and wages		15.5	%	NM				17.7	%		19.8	%		14.9	%		15.5	%		14.9	%		17.7	%
Facility lease expense		15.8	%	NM				23.8	%		36.5	%		11.9	%		15.8	%		12.5	%		23.8	%
Utilities and other		18.8	%	NM				22.8	%		30.4	%		17.0	%		18.8	%		16.4	%		22.8	%
General and administrative expenses		8.9	%	NM				13.2	%		16.9	%
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		109.8	%	NM				135.2	%		179.6	%		97.1	%		109.8	%		101.8	%		135.2	%
Operating income (loss)		(9.8	)%	NM				(35.2	)%		(79.6	)%		2.9	%		(9.8	)%		(1.8	)%		(35.2	)%
Average screen count (month end average)		5,876			5,975			5,890			6,068			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 ~~revenues,~~revenue, except film rentals and advertising, which are expressed as a percentage of admissions ~~revenues~~revenue, and concession supplies, which are expressed as a percentage of concession ~~revenues. Certain values are considered not meaningful (“NM”) as they are not comparable due to the temporary theatre closures effective in March 2020.~~revenue.

3338

Three months ended September 30, ~~2021~~2022 (the “third quarter of 2022”) versus the three months ended September 30, ~~2020~~2021 (the “third quarter of 2021”).

~~Three months ended September 30,~~The COVID-19 pandemic has had an ongoing impact on the movie exhibition industry. When comparing the results for the third quarter of 2022 with the third quarter of 2021, the following should be noted:

– •

All of our domestic and international theatres were open asduring the third quarter of ~~September 30, 2021.~~

~~Three months ended September 30, 2020~~ ~~– All~~2022 while certain of our domestic and international theatres were temporarily closed ~~effective March 17, 2020 and March 18, 2020, respectively, as a result~~for portions of the ~~COVID-19 pandemic. We began reopening our domestic theatres~~third quarter of 2021.

•

There was a reduced volume of films released theatrically during both periods, although to a lesser extent in June 2020 and operated under a test-and-learn strategy to define training, communication, implementation and execution of enhanced health and safety protocols. These theatres opened to reduced operating hours with library content and “welcome back” pricing for tickets and concession products to encourage patrons to return to the ~~movies. As of September 30, 2020, we had 252 domestic theatres and 15 international theatres reopened.~~third quarter 2022.

~~As a result of theatre closures~~o

The North American Industry box office exceeded $1.9 billion during the ~~three months ended September 30, 2020,~~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 ~~average ticket price~~third quarter of 2021 with a limited number of new releases, which included Shang-Chi and ~~concession revenues per patron for~~the Legend of the Ten Rings, Black Widow, Jungle Cruise and Free Guy.

Revenue. The table below, presented by reportable operating segment, summarizes our ~~international theatres are not meaningful ("NM") for comparison to the three months ended September 30, 2021.~~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

U.S. Operating Segment

International Operating Segment
Consolidated

Constant
Currency (3)

2021

2020

2021

2020

2021

2021

2020

Admissions revenues (1)

$
195.3

$
14.9

$
30.2

$
0.1

$
32.2

$
225.5

$
15.0

Concession revenues (1)

$
142.6

$
8.9

$
21.6

$
0.3

$
23.0

$
164.2

$
9.2

Other revenues (1)(2)

$
37.6

$
10.8

$
7.5

$
0.7

$
7.9

$
45.1

$
11.5

Total revenues (1)(2)

$
375.5

$
34.6

$
59.3

$
1.1

$
63.1

$
434.8

$
35.7

Attendance (1)

21.5

1.9

9.2

—

30.7

1.9

Average ticket price (1)

$
9.08

$
8.01

$
3.28

NM

$
3.50

$
7.35

$
7.96

Concession revenues per patron (1)

$
6.63

$
4.79

$
2.35

NM

$
2.50

$
5.35

$
4.87

(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~~revenue includes eliminations of intercompany transactions with the international operating segment. See Note 1716 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 ~~2020.~~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. ~~The third quarter of 2021 includednew releases such as~~ ~~Shang-Chi and the Legend of the Ten Rings,Black Widow, Jungle Cruise, Free Guy, F9: The Fast Saga~~ ~~and~~ ~~Space Jam: A New Legacy~~. Average ticket price was $9.08, which was impacted by ticket type mix and a reduced number of weekday and matinee showtimes. Concession revenues per patron was $6.63, which was impacted by core concession product sales, the reintroduction of enhanced food and beverage options and the recognition of previously deferred loyalty revenues. Other revenues forAttendance increased 37.2% to 29.5 million patrons during the third quarter of 2021 included the amortization of NCM screen advertising advances, screen rental revenue, promotional and trailer placement income related to new film releases and transactional fees. Other revenues for the third quarter of 2020 primarily included the amortization of NCM screen advertising advances.



~~International.We offered new releases and some library content in our international theatres~~2022 compared with 21.5 million patrons during the third quarter of 2021 ~~resulting~~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 impact of 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 film releases with broad consumer appeal. Average ticket price was $3.54 for the third quarter of 2022 as reported, $4.07 in ~~attendance, $30.2 million~~constant currency, compared with $3.28 for the third quarter of ~~admissions revenue and $21.6 million of concessions revenue. Our~~2021. The increase in average ticket price ~~was $3.28 as reported and $3.50 in constant currency. Concession revenues per patron of $2.35 as reported, and $2.50~~ in constant currency was primarily due to 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 revenue per patron in constant currency was due to inflationary and strategic pricing actions and higher purchase incidence. Other revenue for the third quarter of 2022 increased 152.0% to $18.9 million compared with $7.5 million during the third period of 2021 primarily due to the growth in attendance, which ~~was impacted by purchase incidence of our core concession items, inflation, new premium combo offerings, and the volume of retail concession sales. Other revenues primarily included~~drove an increase in screen advertising, transaction fees and ~~loyalty membership revenues.~~promotional revenue.

Cost of Operations. The table below, ~~summarizes our theatre operating costs (in millions)~~presented by reportable operating segment, ~~for the three months ended September 30, 2021 and 2020.~~summarizes our year-over-year theatre operating costs.

U.S. Operating Segment

International Operating Segment

Consolidated

2021

2020

2021

2020

Constant
Currency (1)
2021

2021

2020

Film rentals and advertising

$
101.9

$
8.1

$
15.1

$
0.1

$
16.2

$
117.0

$
8.2

Concession supplies

$
23.0

$
2.3

$
5.2

$
0.4

$
5.6

$
28.2

$
2.7

Salaries and wages

$
58.0

$
15.9

$
9.6

$
4.3

$
10.1

$
67.6

$
20.2

Facility lease expense

$
58.8

$
60.8

$
10.0

$
6.3

$
10.4

$
68.8

$
67.1

Utilities and other

$
68.1

$
36.5

$
13.6

$
6.8

$
14.4

$
81.7

$
43.3


	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 2020. 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.~~ Film rentals and advertising costs for third quarter of 2021 were 52.2% of admissions revenue. New films released during the third quarter of 2021 had lower performing box office as a result of the current environment, which skewed lower on our negotiated film rental scales. Concession supplies expenses for the third quarter of 2021 were 16.1% of concessions revenue. The concession supplies rate for the third quarter of 2021 reflected the impact of our retail price increases and favorable product mix, which offset certain supply chain cost pressures.

Salaries and wages increased to $58.0 million for the third quarter of 2021 as all of our theatres were open compared to only 252 theatres opened at the end of the third quarter of 2020. We also began extending operating hours to accommodate the release of new films while maintaining our focus on efficient staffing levels. Facility lease expense, which is primarily fixed in nature, reflects a slight increase in percentage rent expense and common area maintenance costs as volumes increased, partially offset by the impact of the permanent closure of certain theatres. Utilities and other costs increased to $68.1 million, as many of these costs, such as credit card fees, electricity costs, janitorial costs, repairs and maintenance and security expense are variable in nature and have increased with the improved attendance from new film content.



~~International.~~ Film rentals and advertising costs for third quarter of 2021 were 50.0% of admissions revenue. Concession supplies expenses, which included a higher mix of retail and premium concession products, were 24.1% of concessions revenue.

Salaries and wages increased to $9.6 million as reported for the third quarter of 2021 as many of our theatres reopened during the quarter. Facility lease expense increased to $10.0 million for the third quarter of 2021 reflecting payment of rent under alternative structures, such as percentage rents in place of minimum fixed rents, as theatres recover, partially offset by the impact of the permanent closure of certain theatres. Utilities and other costs increased to $13.6 million, as many of these costs are variable in nature and have increased with the improved attendance from new film content and theatre reopenings. These expenses, as reported, were also impacted by exchange rates in each of the countries in which we operate.

~~General and Administrative Expenses.~~ General and administrative expenses increased to $38.6 million for the third quarter of 2021 compared to $30.4 million for the third quarter of 2020. The increase is primarily due to temporary salary reductions for corporate office staff during the third quarter of 2020 and increased incentive and share based award compensation expense as a result of certain retention measures during the third quarter of 2021.

~~Depreciation and Amortization.~~ Depreciation and amortization expense increased to $67.2 million for the third quarter of 2021 compared to $62.6 million for the third quarter of 2020 primarily due to the digital projectors received in a non-cash distribution from DCIP during the fourth quarter of 2020. See Note 10 to the condensed consolidated financial statements for discussion of the non-cash distribution from DCIP.

~~(Gain) Loss on Disposal of Assets and Other.~~ We recorded a loss on disposal of assets and other of $1.0 million during the third quarter of 2021 compared to a gain of $13.3 million during the third quarter of 2020. Activity for the third quarter of 2021 was primarily related to the removal and disposal of assets at closed theatres. Activity for the third quarter of 2020 was primarily related to a favorable litigation outcome for a case that was previously accrued.

~~Interest Expense.~~ Interest expense, which includes amortization of debt issue costs and amortization of accumulated losses for swap amendments, increased to $38.0 million during the third quarter of 2021 compared to $36.6 million the third quarter of 2020. The increase was primarily due to the issuance of notes discussed at Note 7 to our condensed consolidated financial statements.

~~Distributions from DCIP.~~ We recorded distributions from DCIP of $6.5 million during the third quarter of 2021. These distributions were in excess of the carrying value of our investment in DCIP, which was zero. See Note 10 to our condensed consolidated financial statements for discussion of our investment in DCIP.

~~Equity in Loss of Affiliates.~~ We recorded equity in loss of affiliates of $7.1 million during the third quarter of 2021 compared to $16.1 million during the third quarter of 2020. Our equity method investees are also recovering from the impacts of the COVID-19 pandemic. See Note 2 to our condensed consolidated financial statements for additional discussion of the COVID-19 pandemic. See Notes 9 and 10 to our condensed consolidated financial statements for information about our equity investments.

~~Income Taxes.~~ An income tax benefit of $(8.9) million was recorded for the third quarter of 2021 compared to an income tax benefit of $(121.1) million for the third quarter of 2020. The effective tax rate was approximately 10.3% for the third quarter of 2021 compared to 45.0% for the third quarter of 2020. The effective tax rate for the third quarter of 2021 was negatively impacted by valuation allowances related to deferred tax assets for which the ultimate realization is uncertain. The effective tax rate for third quarter of 2020 was favorably impacted by the carryback of 2020 losses to tax years that had a 35% federal tax rate under the provisions of the CARES Act. 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, 2021 (the “2021 period”) versus the nine months ended September 30, 2020 (the “2020 period”)~~

~~All of our domestic and international theatres were open as of September 30, 2021. Certain of our international theatres were temporarily closed for portions of the 2021 period.~~

U.S. Operating Segment

International Operating Segment

Consolidated

Constant
Currency (3)

2021

2020

%
Change

2021

2020

%
Change

2021

%
Change

2021

2020

%
Change

Admissions revenues (1)

$
384.4

$
247.2

55.5
%

$
50.7

$
60.2

(15.8
)%

$
54.1

(10.1
)%

$
435.1

$
307.4

41.5
%
Concession revenues (1)

$
275.0

$
161.7

70.1
%

$
38.5

$
37.9

1.6
%

$
40.8

7.7
%

$
313.5

$
199.6

57.1
%
Other revenues (1)(2)

$
82.5

$
61.2

34.8
%

$
12.7

$
19.9

(36.2
)%

$
13.9

(30.2
)%

$
95.2

$
81.1

17.4
%
Total revenues (1)(2)

$
741.9

$
470.1

57.8
%

$
101.9

$
118.0

(13.6
)%

$
108.8

(7.8
)%

$
843.8

$
588.1

43.5
%
Attendance (1)

41.8

29.8

40.3
%

15.7

17.9

(12.3
)%

57.5

47.7

20.5
%
Average ticket price (1)

$
9.20

$
8.30

10.8
%

$
3.23

$
3.36

(3.9
)%

$
3.45

2.7
%

$
7.57

$
6.44

17.5
%
Concession revenues per patron (1)

$
6.58

$
5.43

21.2
%

$
2.45

$
2.12

15.6
%

$
2.60

22.6
%

$
5.45

$
4.18

30.4
%

~~(1)~~

~~(2)~~

~~U.S. operating segment revenues include eliminations of intercompany transactions with the international operating segment. See Note 17 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 2020.~~ 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. Film rentals and advertising costs for the third quarter of 2022 were 57.1% of admissions revenue compared with 52.2% for the third quarter of 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 strategic pricing initiatives on concession sales.

Salaries and wages increased to $81.9 million for the third quarter of 2022 compared with $58.0 million for the third quarter of 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 additional labor required for expanded food and beverage offerings. These increases were partially offset by efficiencies and streamlined operations. Facility lease expense, which is primarily fixed in nature, increased to $61.9 million for the third quarter of 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 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 expansion of operating hours, a significant increase in 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 increased to $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 2022 compared with $38.6 million for the third quarter of 2021. General and administrative expense attributable to CUSA increased to $44.4 million for the third quarter of 2022 compared with $37.9 million for the third quarter of 2021. The increase for both Holdings and CUSA is primarily due to higher staffing levels, wages and benefits inflation, professional fees and a shift to cloud-based software.

Depreciation and Amortization. Depreciation and amortization expense decreased to $58.3 million for the third quarter of 2022 compared with $67.2 million for the third quarter of 2021 primarily due to the impairment of theatre assets during 2021.

Impairment of Long-Lived and Other Assets. We ~~showed many new releases~~recorded asset impairment charges on assets held and used of $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 2021. Activity for the third quarter of 2022 was primarily related to 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 2022 compared with $38.0 million for the third quarter of 2021. Interest expense attributable to CUSA, which includes amortization of debt issuance costs and amortization of accumulated losses for swap amendments, increased to $32.4 million during the third quarter of 2022 compared with $31.9 million for the third quarter of 2021. The increase for both Holdings and CUSA was primarily due to 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 2021. The improvement in equity in income (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 $3.4 million was recorded for the third quarter of 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 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 2022 compared with an income tax benefit of $(7.4) million for the third quarter of 2021. The effective tax rate was approximately 2.7% for the third quarter of 2022 compared with 9.3% for the third quarter of 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 ~~including~~with library content and a limited number of new releases, which included Shang-Chi and the Legend of the Ten Rings,Black Widow, ~~F9:~~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 ~~and~~also showed some library content. Additionally, we continued to offer Private Watch Parties to our patrons. Average ticket price increased 10.8% to $9.20 during the 2021 period compared to $8.30 during the 2020 period, primarily as a result of the mix of fewer matinee and weekday showtimes, the impact of Private Watch Parties and recognition of previously deferred loyalty revenues. Concession revenues per patron increased 21.2% to $6.58 during the 2021 compared to $5.43 during the 2020 period, driven by an increase in overall purchase incidence across core concession items, price increases and the recognition of previously deferred loyalty revenues. Other revenues for the 2021 and 2020 periods included the amortization of NCM screen advertising advances. Other revenues for the 2021 period also included screen rental revenue, promotional and trailer placement income related to the recent new film releases and transactional fees, which were lower in the 2020 period as a result of reduced attendance.



~~International.~~We showed new releases and some library content in our international theatres during the 2021 period, resulting in 15.7 million in attendance, $50.7 million of admissions revenues and $38.5 million of concession revenues. Our average ticket price was $3.23 as reported, $3.45 in constant currency, compared to the 2020 period of $3.36. Concession revenues per patron was $2.45 as reported, $2.60 in constant currency, for the 2021 period compared to $2.12 in the 2020 period. The increase in concession revenues per patron was a result of increased purchase incidence of our core concession items, the impact of inflation, new premium combo offerings, and increased retail concession sales. Other revenues primarily included screen advertising and loyalty membership revenues and were impacted by reduced attendance..

Revenue.

~~Cost of Operations.~~The table below, ~~summarizes our theatre operating costs (in millions)~~presented by reportable operating segment, ~~for~~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 ~~nine months ended September 30, 2021 and 2020.~~

U.S. Operating Segment

International Operating Segment

Consolidated

2021

2020

2021

2020

Constant
Currency (1)
2021

2021

2020

Film rentals and advertising

$
191.5

$
136.3

$
25.3

$
28.9

$
27.2

$
216.8

$
165.2

Concession supplies

$
44.6

$
29.4

$
9.6

$
10.5

$
10.2

$
54.2

$
39.9

Salaries and wages

$
126.4

$
90.5

$
22.8

$
26.1

$
24.5

$
149.2

$
116.6

Facility lease expense

$
177.7

$
186.0

$
23.1

$
28.5

$
24.0

$
200.8

$
214.5

Utilities and other

$
161.0

$
140.3

$
31.0

$
38.4

$
33.4

$
192.0

$
178.7

international operating segment. See Note 16 to our condensed consolidated financial statements.

~~(1)~~(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 ~~expense~~revenue amounts, which are non-GAAP measurements, were calculated using the average exchange rate for the corresponding month for ~~2020.~~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

•

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)

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 amounts for our international operating segment to present a period-to-period comparison of business performance that excludes the impact of foreign currency fluctuations.

•

U.S. Film rentals and advertising costs for the ~~2021~~2022 period were ~~49.8%~~57.8% of admissions revenue compared ~~to 55.1%~~with 49.8% for the ~~2020~~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 ~~expenses~~expense for the 2022 period was 17.2% of concession revenue compared with 16.2% of concession revenue for the 2021 ~~period was 16.2% of concessions revenue compared to 18.2% of concession revenues for the 2020~~ period. The increase in the concession supplies rate ~~for the 2021 period reflected our retail price increases~~was due to inflationary and ~~the impact of a favorable product mix,~~supply chain pressures on certain concession categories, partially offset by the ~~disposal~~impact of ~~perishable goods related to prior theatre closures.~~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 ~~theatre~~a result of significantly higher attendance, expanded operating hours ~~continue to expand to service growing attendance demand.~~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 ~~which is primarily fixed in nature, decreased $8.3~~increased to $187.6 million primarily due to ~~a decline~~new theatres and an increase in ~~percentage rent expense and~~ common area maintenance ~~costs, as well as the permanent closure of certain theatres.~~costs. Utilities and other costs increased ~~$20.7~~to $234.8 million, as many of these costs, such as janitorial costs, ~~electricity~~utilities costs, credit card fees, ~~and~~ repairs and maintenance and security costs, are variable in nature and were impacted by ~~lower~~the expansion of operating hours, a significant increase in attendance ~~as a result of the temporary closures during the 2020 period.~~and inflationary pressures.

•

International. Film rentals and advertising costs for the ~~2021~~2022 period were ~~49.9%~~50.3% of admissions revenue compared ~~to 48.0%~~with 49.9% for the ~~2020~~2021 period. The increase in the film rentals and advertising rate was a result of ~~increased promotional~~the increase in new film content and ~~advertising costs as a percentage~~the expiration of ~~revenue as well as a decrease~~VPFs received in ~~virtual print fees collected from studios as cost recoupment is attained on the digital equipment.~~certain countries. Concession supplies ~~expenses were 24.9%~~expense was 22.0% of concessions revenue compared ~~to 27.7%~~with 24.9% of concession ~~revenues~~revenue for the ~~2020 period,~~2021 period. The decrease in concessions supplies rate was primarily driven by ~~a higher mix~~the impact of ~~retail and premium~~strategic pricing initiatives on concession ~~products, partially offset by the disposal of perishable goods due to temporary theatre closures.~~sales.

Salaries and wages ~~decreased $3.3~~increased to $43.6 million as reported for the ~~2021~~2022 period ~~as compared~~due to the ~~2020 period as a result of temporary theatre closures and limited~~significantly higher attendance, expanded operating hours ~~for those theatres that were open.~~and wage rate increases. Facility lease expense ~~decreased $5.4~~increased to $43.6 million as reported for the 2022 period. The increase was due to ~~our negotiations with certain landlords to shift from a~~higher percentage rent driven by higher revenue and the return of minimum rent ~~structure to percentage rent while we recover from~~thresholds compared with the ~~pandemic, as well as lower percentage rent at other locations.~~2021 period. Utilities and other costs ~~decreased $7.3~~increased to $69.0 million as reported, as many of these costs are variable in nature, such as utilities, credit card fees, ~~security expenses,~~screen advertising commissions, janitorial costs and repairs and maintenance, and were impacted by the ~~limited operating hours of our theatres as well as periodic closures during the 2021 period.~~significant increase in attendance. These expenses, as reported, were also impacted by exchange ~~rates~~rate fluctuations in each of the countries in which we operate.

General and Administrative ~~Expenses.~~Expense. General and administrative ~~expenses~~expense for Holdings increased to $134.0 million for the 2022 period compared with $111.8 million for the 2021 ~~period compared~~period. General and administrative expense attributable to ~~$99.4~~CUSA increased to $131.8 million for the ~~2020~~2022 period compared with $109.7 million for the 2021 period. The increase is primarily due to ~~the temporary salary reductions~~higher staffing levels, incentive-based compensation, professional fees and ~~furloughs for our corporate workforce during the 2020 period and increased incentive and share based award compensation expense as~~ a ~~result of certain retention measures during the 2021 period.~~shift to cloud-based software.

Depreciation and Amortization. Depreciation and amortization expense ~~increased~~decreased to $181.0 million for the 2022 period compared with $202.3 million for the 2021 period ~~compared to $191.4 million for the 2020 period~~ primarily due to the ~~digital projectors received in a non-cash distribution from DCIP~~impairment of theatre assets during ~~the fourth quarter of 2020. See Note 10 to the condensed consolidated financial statements for discussion of the non-cash distribution from DCIP.~~2021.

Impairment of Long-Lived and Other Assets.We recorded asset impairment charges on assets held and used of ~~$7.5~~$107.5 million ~~during~~for the ~~2021~~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 ~~$41.2~~$7.5 million during the 2020 period. The asset impairment charges recorded during the 2021 and 2020 periods were primarily a result of the prolonged impact of the COVID pandemic on our operations, as some theatres remained closed and film content continued to shift into future periods, both of which impacted our estimated future cash flows for theatres. Impairment charges for the 2021 ~~period impacted two countries. Impairment charges for the 2020 period impacted eight countries.~~period. See Note ~~13 to our condensed consolidated financial statements.~~

~~Restructuring Costs.~~ Restructuring costs were $(1.3) million during the 2021 period compared to $20.1 million during the 2020 period. The credit recorded during the 2021 period was primarily the result of settlements of lease obligations below the original estimated amounts. Charges recorded during the 2020 period related to a restructuring plan implemented during the second quarter of 2020. See Note 212 to our condensed consolidated financial statements for ~~further discussion.~~a discussion of impairment analyses performed and a summary of impairment recorded.

(Gain) Loss on Disposal of Assets and Other. ~~We recorded a loss~~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 ~~during~~for the 2021 period. Activity for the 2022 period ~~compared~~was primarily related to ~~a gain~~the sale of ~~$11.0 million during the 2020 period.~~excess land parcels. Activity for the 2021 period was primarily related to the write-off of certain digital projectors ~~recently~~ received from DCIP in a non-cash distribution that were replaced with laser projectors, partially offset by gains on the ~~sales~~sale of excess land parcels. See Note 10 for discussion of the distribution of digital projectors from DCIP. Activity for the 2020 period was primarily due to a favorable litigation outcome for a case that was previously accrued, partially offset by the retirement of assets related to theatre remodels.

Interest Expense. Interest expense for Holdings, which includes amortization of debt ~~issue~~issuance costs and amortization of accumulated losses for swap amendments, increased to ~~$111.6~~$114.6 million during the ~~2021~~2022 period compared ~~to $92.3~~with $111.6 million for the ~~2020~~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 ~~notes discussed~~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 ~~Note 7 to our condensed consolidated financial statements.~~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. ~~See Note 7 to our condensed consolidated financial statements.~~

~~Distributions from NCM.~~ We recorded distributions from NCM of $0.1 million during the 2021 period compared to $7.0 million recorded during the 2020 period. These distributions were in excess of the carrying value of our Tranche 1 investment. The decrease in distributions from NCM is primarily due to the impact of theatres being temporarily closed as a result of the COVID-19 pandemic as discussed at Note 2. See Note 9 to our condensed consolidated financial statements for discussion of our investment in NCM.

~~Distributions from DCIP.~~ We recorded distributions from DCIP of $6.5 million during the 2021 period. These distributions were in excess of the carrying value of our investment in DCIP, which was zero. See Note 10 to our condensed consolidated financial statements for discussion of our investment in DCIP.

Equity in Loss of Affiliates. WeEquity 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 ~~$22.1 million during~~our equity investees’ performance as the ~~2021 period compared~~industry continues to ~~$27.7 million during the 2020 period. Our equity method investees are also recovering from the impacts of the COVID-19 pandemic.~~recover. See Notes 98 and 109 to our condensed consolidated financial statements for information about our equity investments.

Income ~~Taxes.~~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 ~~was recorded~~ for the 2021 ~~period compared to income tax benefit of $(222.4) million for the 2020~~ period. The effective tax rate was approximately (3.9)% for the 2022 period compared with 3.5% for the 2021 ~~period compared to 37.0% for the 2020~~ period. ~~As a result of continued projected losses in 2021, the~~The effective tax rate for the 2022 period was ~~negatively~~ impacted by valuation allowances related to certain ~~foreign tax credits and~~ deferred tax assets for which the ultimate realization is uncertain. ~~The~~For the 2022 and 2021 periods, we utilized the annual effective tax rate ~~for the 2020 period was favorably impacted by the carryback of 2020 losses~~method to calculate our interim tax ~~years that had a 35% federal tax rate under the provisions of the CARES Act.~~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.

Income Taxes - CUSA. An income tax benefit of $(3.3) million was recorded for the 2022 period compared with an income tax benefit of $(11.3) million for the 2021 period. The effective tax rate was approximately 2.3% for the 2022 period compared with 2.7% 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.

Liquidity and Capital Resources

Operating Activities

We primarily collect our ~~revenues~~revenue in cash, mainly through box office receipts and the sale of concessions. Our ~~revenues are~~revenue is generally received in cash prior to the payment of related expenses; therefore, we have an operating “float” and historically have not required traditional working capital financing. ~~However, as we reopened~~We temporarily closed all of our theatres ~~that were temporarily closed~~ during March 2020 ~~we have~~and funded operating expenses with cash on hand and ~~recent additional~~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 ~~used for~~provided by operating activities was ~~$42.2~~$27.7 million for Holdings and $47.0 million for CUSA for the nine months ended September 30, ~~2021~~2022, compared ~~to $167.7~~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, ~~2020.~~2021. The ~~decrease~~increase in cash ~~used for~~provided by (used for) operating activities was primarily a result of ~~$136.8 million of tax refunds received during April 2021,~~ the timing and level of ~~revenues~~revenue earned during each period and the timing of payments to vendors for expenses incurred during each ~~period, partially offset by payments of previously deferred rent.~~period.

As discussed in Note 4 to our condensed consolidated financial statements, ~~we negotiated the deferral of~~ rent deferrals and other lease-related payments were negotiated in 2020 and early 2021 with some of our landlords. ~~Approximately $43.0~~As of September 30, 2022, approximately $5.3 million inof deferred lease payments ~~remain as~~were outstanding, the majority of ~~September 30, 2021. Approximately $37.6 million~~which will be repaid ~~within one year and~~during the ~~remaining $5.4 million will be repaid in subsequent years.~~

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 ~~$55.1~~$(53.3) million for the nine months ended September 30, ~~2021~~2022 compared ~~to $67.5~~with $(55.0) million for the nine months ended September 30, ~~2020. The decrease in cash used for investing activities was primarily due to reduced capital expenditures as we continue to limit spend to essential projects.~~2021.

Capital expenditures, ~~for~~disaggregated by new and existing theatres, during the nine months ended September 30, ~~2021~~2022 and ~~2020~~2021 were as follows (in millions):

Period

New Theatres

Existing Theatres

Total

Nine Months Ended September 30, 2021

$
24.1

$
33.1

$
57.2

Nine Months Ended September 30, 2020

$
18.7

$
48.9

$
67.6


	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

We operated ~~524~~517 theatres with ~~5,897~~5,835 screens worldwide as of September 30, ~~2021.~~2022. Theatres and screens ~~acquired,~~ built and closed during the ~~three~~nine months ended September 30, ~~2021 were as follows:~~2022 are shown below:


	January 1, 2021		Built		Closed			September 30, 2021		January 1, 2022		Built		Closed			September 30, 2022
U.S (42 states)
Theatres		331		1		(8	)		324		321		1		(4	)		318
Screens		4,507		14		(81	)		4,440		4,408		14		(30	)		4,392

International (15 countries)
Theatres		200		3		(3	)		200		201		1		(3	)		199
Screens		1,451		25		(19	)		1,457		1,460		19		(36	)		1,443

Worldwide
Theatres		531		4		(11	)		524		522		2		(7	)		517
Screens		5,958		39		(100	)		5,897		5,868		33		(66	)		5,835

As of September 30, ~~2021, we had~~2022, the following signed commitments ~~(costs in millions):~~were outstanding:


	Theatres	Screens	Estimated Cost (1)		Theatres	Screens	Estimated Remaining Investment (1)
Remainder of 2021
Remainder of 2022
U.S.	2	28	$	16.1	1	14	$	5.1
International	—	5		3.7	1	5		0.6
Total	2	33	$	19.8	2	19	$	5.7

Subsequent to 2021
Subsequent to 2022
U.S.	5	62	$	41.0	3	34	$	23.7
International	7	50		22.4	4	21		8.5
Total	12	112	$	63.4	7	55	$	32.2

Total commitments at September 30, 2021	14	145	$	83.2
Total commitments at September 30, 2022					9	74	$	37.9

(1)

~~We expect approximately $19.8~~Approximately $5.7 million is to be paid during the remainder of ~~2021~~2022 and ~~$26.0~~$10.5 million, ~~$31.5~~$18.7 million and ~~$5.9~~$3.0 million is expected to be paid during ~~2022,~~ 2023, 2024 and ~~2024,~~2025, respectively. The timing of payments is subject to change ~~as a result~~in the event of construction or other delays.

Actual expenditures for continued theatre development, remodels and acquisitions are subject to change based upon the availability of attractive opportunities. ~~We may 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 ~~$12.9~~$(32.6) million for the nine months ended September 30, ~~2021~~2022 compared towith cash ~~provided by~~used for financing activities of ~~$577.5~~$(12.9) million for the nine months ended September 30, ~~2020.~~2021. Cash used for financing activities for CUSA was $(32.6) million for the nine months ended September 30, 2022 compared with cash provided by financing activities of $107.1 million for the nine months ended September 30, 2021. During the nine months ended September 30, 2021, weHoldings distributed $120.0 million to CUSA and CUSA issued 5.875% Senior Notes and 5.25% Senior Notes, the proceeds of which were used to redeem the 5.125% Senior Notes and the 4.875% Senior Notes ~~respectively,~~ as discussed further below. ~~We paid approximately $17.3 million in debt issuance costs and~~

$2.1 million in fees related to these transactions and an amendment to our Senior Secured Credit Facility during the nine months ended September 30, 2021. During the nine months ended September 30, 2020, we borrowed $98.8 million on our revolving line-of-credit, which was repaid during the third quarter of 2020, issued the 8.750% Secured Notes discussed below and paid dividends to stockholders of $42.3 million.

~~We, at~~At the discretion of the board of directors and subject to applicable law, Holdings may pay dividends on ~~our~~its common stock. The amount, if any, of the dividends to be paid in the future will depend upon ~~our then~~ available cash ~~balance,~~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, ~~we have~~Holdings suspended ~~our~~its quarterly ~~dividend.~~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, ~~2021 (in millions):~~

Cinemark Holdings, Inc. 4.500% convertible senior notes due 2025

460.0

Cinemark USA, Inc. term loan

$
634.8

Cinemark USA, Inc. 8.750% senior secured notes due 2025

250.0

Cinemark USA, Inc. 5.875% senior notes due 2026

405.0

Cinemark USA, Inc. 5.250% senior notes due 2028

765.0

Other debt

28.3

Total long-term debt

$
2,543.1

Less current portion

20.3

Subtotal long-term debt, less current portion

$
2,522.8

Less: Debt issuance costs, net of accumulated amortization

45.5

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

$
2,477.3

2022 for Holdings and CUSA.

As of September 30, ~~2021,~~2022, $100 million was available for borrowing under the revolving line of credit.

Contractual Obligations

During the nine months ended September 30, 2021, Cinemark USA, Inc. issued the 5.875% Senior Notes and the 5.25% Senior Notes and redeemed the 5.125% Senior Notes and the 4.875% Senior Notes. Included below is an updated summary of long-term debt obligations and related estimated scheduled interest payment obligations as of September 30, 2021, reflecting these changes.

Payments Due by Period

(in millions)

Less Than

After

Contractual Obligations

Total

One Year

1 - 3 Years

3 - 5 Years

5 Years

Long-term debt (1)

$
2,543.1

$
20.3

$
21.1

$
1,730.2

$
771.5

Scheduled interest payments on long-term debt (2)

$
605.1

$
129.2

$
255.8

$
151.3

$
68.8

~~(1)~~

~~Amounts are presented before adjusting for unamortized debt issuance costs.~~

~~(2)~~

Amounts include scheduled interest payments on fixed rate and variable rate debt agreements. Estimates for the variable rate interest payments were based on interest rates in effect on September 30, 2021.

There have been no ~~other~~ 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, ~~2020~~2021 filed February ~~26, 2021.~~25, 2022 or in the CUSA Annual Report on Form 10-K for the year ended December 31, 2021 filed March 9, 2022.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

~~Senior Secured Credit Facility~~

Cinemark USA, Inc. has a senior secured credit facility that includes a $700.0 million term loan and a $100.0 million revolving credit line (the “Credit Agreement”). Under the amended Credit Agreement, quarterly principal payments of $1.6 million are due on the term loan through December 31, 2024, with a final principal payment of $613.4 million due on March 29, 2025. Cinemark USA, Inc. had $100.0 million available borrowing capacity on the revolving credit line as of September 30, 2021.

Interest on the term loan accrues at Cinemark USA, Inc.’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 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 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 0.50% to 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 1.50% to 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.

Cinemark USA, Inc.’s obligations under the Credit Agreement are guaranteed by Cinemark Holdings, Inc. and certain of Cinemark USA, Inc.’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 and the guarantors’ personal property, including, without limitation, pledges of all of Cinemark USA, Inc.’s capital stock, all of the capital stock of certain of Cinemark USA, Inc.’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 ability, and in certain instances, its subsidiaries’ and our 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. 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, 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 and any of its subsidiaries from paying a dividend or otherwise distributing cash to its stockholders unless (1) the Company is not in default, and the distribution would not cause Cinemark USA, Inc. 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 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. as common equity since December 18, 2012, (b) Cinemark USA, Inc.’s consolidated EBITDA minus 1.75 times its consolidated interest expense, each as defined in the Credit Agreement, and (c) certain other defined amounts (collectively the “Applicable Amount”).

On April 17, 2020, in conjunction with the issuance of the 8.750% Secured Notes discussed below, we obtained a waiver of the leverage covenant from the majority of revolving lenders under the Credit Agreement for the fiscal quarters ending September 30, 2020 and December 31, 2020. The waiver is subject to certain liquidity thresholds, restrictions on investments and the use of the Applicable Amount.

On August 21, 2020, in conjunction with the issuance of the 4.50% Convertible Senior Notes discussed below, we further amended the waiver of the leverage covenant through the fiscal quarter ending September 30, 2021. The amendment also i) modifies 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 ending on December 31, 2021, March 31, 2022 and June 30, 2022, permits us to substitute Consolidated EBITDA for the first three fiscal quarters of 2019 in lieu of Consolidated EBITDA for the corresponding fiscal quarters of 2021, (iii) modifies the restrictions imposed by the covenant waiver and (iv) makes such other changes to permit the issuance of the 4.50% Convertible Senior Notes discussed below.

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

At September 30, 2021, there was $634.8 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, 2021 was approximately 3.4% per annum, after giving effect to the interest rate swap agreements discussed above.

~~5.875% Senior Notes~~

On March 16, 2021, Cinemark USA, Inc. 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 Cinemark USA’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. The Company incurred debt issue 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 consolidated balance sheet.

The 5.875% Senior Notes are fully and unconditionally guaranteed on a joint and several senior unsecured basis by certain of Cinemark USA, Inc.’s subsidiaries that guarantee, assume or become liable with respect to any of Cinemark USA, Inc.’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 Cinemark USA, Inc.’s and its guarantor’s existing and future senior debt and senior in right of payment to all of Cinemark USA, Inc.’s and its guarantors’ existing and future senior subordinated debt. The 5.875% Senior Notes and the guarantees are effectively subordinated to all of Cinemark USA, Inc.’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 Cinemark USA, Inc.’s amended senior secured credit facility. The 5.875% Senior Notes and the guarantees are structurally subordinated to all existing and future debt and other liabilities of Cinemark USA, Inc.’s subsidiaries that do not guarantee the 5.875% Senior Notes.

Prior to March 15, 2023, Cinemark USA, Inc. 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, Cinemark USA, Inc. 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, Cinemark USA, Inc. 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, Cinemark USA, 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 Cinemark USA’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 Cinemark USA, Inc.’s subsidiaries that guarantee, assume or become liable with respect to any of Cinemark USA, Inc.’s or a guarantor’s debt. The 5.25% Senior Notes and the guarantees will be Cinemark USA’s and the guarantors’ senior unsecured obligations and (i) rank equally in right of payment to Cinemark USA’s and the guarantors’ existing and future senior debt, including borrowings under Cinemark USA’s Credit Agreement (as defined below) and Cinemark USA’s existing senior notes, (ii) rank senior in right of payment to Cinemark USA’s and the guarantors’ future subordinated debt, (iii) are effectively subordinated to all of Cinemark USA’s and the guarantors’ existing and future secured debt, including all obligations under the Credit Agreement and Cinemark USA’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 Cinemark USA’s non-guarantor subsidiaries, and (v) are structurally senior to the 4.50% convertible senior notes due 2025 issued by Cinemark Holdings.

Prior to July 15, 2024, Cinemark USA, Inc. 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, Cinemark USA, Inc. 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, Cinemark USA, Inc. 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.

~~8.750% Secured Notes~~

On April 20, 2020, Cinemark USA, Inc. issued $250 million 8.750% senior secured notes (the “8.750% Secured Notes”). The 8.750% Senior Notes will mature on May 1, 2025; provided, however, that if (i) on September 13, 2022, the aggregate outstanding principal amount of the 5.125% Senior Notes that shall not have been purchased, repurchased, redeemed, defeased or otherwise acquired, retired, cancelled or discharged exceeds $50 million, the 8.750% Senior Notes will mature on September 14, 2022 and (ii) on February 27, 2023, the aggregate outstanding principal amount of the 4.875% Senior Notes that shall not have been purchased, repurchased, redeemed, defeased or otherwise acquired, retired, cancelled or discharged exceeds $50 million, the 8.750% Senior Notes will mature on February 28, 2023. Interest on the 8.750% Senior Notes will be payable on May 1 and November 1 of each year, beginning on November 1, 2020.

The 8.750% Secured Notes are fully and unconditionally guaranteed on a joint and several senior basis by certain of the Company’s subsidiaries that guarantee, assume or in any other manner become liable with respect to any of the Company’s or its guarantors’ other debt. If the Company cannot make payments on the 8.750% Secured Notes when they are due, the Company’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 8.750% Secured Notes.

4.50% Convertible Senior Notes

On August 21, 2020, ~~Cinemark~~ Holdings ~~Inc.~~ 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.

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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 ~~second~~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 ~~130%~~$18.65 per share (130% of the initial conversion price ~~(initially~~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 ~~will initially be~~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 ~~will be~~are effectively subordinated to any of ~~our,~~Holdings, or ~~our~~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 ~~will be~~are structurally subordinated to all existing and future debt and other liabilities, including trade payables, including ~~Cinemark USA’s 5.125% senior notes due 2022, 4.875% senior notes due 2023 and the 8.750%~~CUSA’s 8.75% Secured Notes due 2025, 5.25% Senior Notes due 2028 and 5.875% Senior Notes due 2026, or, collectively, ~~Cinemark USA’s~~CUSA’s senior notes (but excluding all obligations under the Credit Agreement which are guaranteed by ~~Cinemark Holdings, inc.)~~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 ~~Cinemark USA, Inc.~~CUSA Credit Agreement, which such Credit Agreement is guaranteed by ~~Cinemark~~ Holdings, ~~Inc.,~~ 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 ~~Cinemark Holdings, Inc.’s~~Holdings' subsidiaries.

~~Additional~~ Senior Secured Credit Facility

CUSA has a senior secured credit facility that includes a $700.0 million term loan and a $100.0 million revolving credit line (the “Credit Agreement”). Under the amended Credit Agreement, quarterly principal payments of $1.6 million are due on the term loan through December 31, 2024, with a final principal payment of $613.4 million due on March 29, 2025. CUSA had $100.0 million of available borrowing capacity on the revolving credit line as of September 30, 2022.

Interest on the term loan accrues at 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 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 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 0.50% to 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 1.50% to 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.

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

The Credit Agreement contains usual and customary negative covenants for agreements of this type, including, but not limited to, restrictions on CUSA’s ability, and in certain instances, its subsidiaries’ and Holdings' ability, to consolidate or merge or liquidate, wind up or dissolve; substantially change the nature of its business; sell, transfer or dispose of assets; create or incur indebtedness; create liens; pay dividends or repurchase stock; and make capital expenditures and investments. If 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, not to exceed 4.25 to 1. See below for discussion of recent covenant waivers.

The dividend restriction contained in the Credit Agreement prevents Holdings and certain of its subsidiaries from paying a dividend or otherwise distributing cash to its stockholders unless (1) Holdings is not in default, and the distribution would not cause 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 Holdings or CUSA as common equity since December 18, 2012, (b) 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, or collectively, the Applicable Amount. As of September 30, 2022, CUSA could have distributed up to approximately $3.0 billion to its parent company and sole stockholder, 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.

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, ~~2021,~~2022, certain of ~~our~~the Company’s international subsidiaries ~~had~~have an aggregate borrowing of ~~$28.3~~$21.9 million outstanding under various local bank loans. ~~Below is a summary~~A subsidiary of ~~these loans:~~


	~~USD Balance as of~~	~~Interest Rates as of~~
~~Loan Description~~	~~September 30, 2021~~	~~September 30, 2021~~	~~Covenants~~	~~Maturity~~
~~Peru loans~~	~~$5.0 million~~	~~1.0% to 4.8%~~	~~Negative covenants~~	~~June 2023 and December 2023~~
~~Brazil loans~~	~~$15.1 million~~	~~3.6% to 8.1%~~	~~Negative covenants~~	~~November 2021, October 2023 and January 2029~~
~~Colombia loans~~	~~$3.2 million~~	~~3.3% to 5.9%~~	Negative and maintenance covenants	~~May 2023, June 2023 and September 2025~~
~~Chile loans~~	~~$5.0 million~~	~~3.5%~~	Negative and maintenance covenants	~~November 2023~~

~~Additionally, we~~CUSA has deposited cash into a collateral account to support the issuance of ~~bank~~ letters of credit to the lenders for ~~the~~certain of these international ~~loans noted above.~~bank loans. The total amount deposited ~~during the nine months ended~~as of September 30, ~~2021~~2022 was ~~$7.3 million. Total deposits to support bank letters of credit for the outstanding loans of our international subsidiaries is $21.1~~$22.9 million and is considered restricted cash as of September 30, 2021. These restricted cash amounts do not impact the Applicable Amount as defined under the Credit Agreement or the restricted payments as defined in the indentures to the notes as described above.

~~5.125% Senior Notes~~

On March 16, 2021, Cinemark USA, Inc. completed a tender offer to purchase it’s previously outstanding 5.125% Senior Notes, of which $334 million was tendered at the expiration of the offer. On March 16, 2021, Cinemark USA, Inc. also issued a notice of optional redemption to redeem the remaining $66 million principal amount of the 5.125% Senior Notes. In connection therewith, on March 16, 2021, Cinemark USA deposited with Wells Fargo Bank, N.A., as trustee for the 5.125% Senior Notes (the “Trustee”), funds sufficient to redeem all 5.125% Notes remaining outstanding on April 15, 2021 (the “Redemption Date”). The redemption payment (the “Redemption Payment”) included approximately $66 million of outstanding principal at the redemption price equal to 100% of the principal amount plus accrued and unpaid interest thereon to the Redemption Date. Upon deposit of the Redemption Payment with the Trustee on March 16, 2021, the indenture governing the 5.125% Senior Notes was fully satisfied and discharged.

~~4.875% Senior Notes~~

On May 21, 2021, Cinemark USA, Inc. issued a conditional notice of optional redemption to redeem the $755 million outstanding principal amount of the 4.875% Senior Notes. In connection therewith, Cinemark USA deposited with Wells Fargo Bank, N.A., as Trustee for the 4.875% Senior Notes (the “Trustee”), funds sufficient to redeem all 4.875% Senior Notes remaining outstanding on June 21, 2021 (the “Redemption Date”). The redemption payment (the “Redemption Payment”) included $755 million of outstanding principal at the redemption price equal to 100.000% of the principal amount plus accrued and unpaid interest thereon to the Redemption Date. Upon deposit of the Redemption Payment with the Trustee on June 15, 2021, the indenture governing the 4.875% Senior Notes was fully satisfied and discharged.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 ~~8.750%~~8.75% Secured Notes ("the indentures") contain covenants that limit, among other things, the ability of ~~Cinemark USA, Inc.~~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, ~~2021, Cinemark USA, Inc.~~2022, CUSA could have distributed up to approximately ~~$2.9~~$3.1 billion to its parent company and sole stockholder, ~~Cinemark~~ Holdings, ~~Inc.,~~ under the terms of the indentures, subject to its available cash and other borrowing restrictions outlined in the indentures. Upon a change of control, as defined in the indentures, ~~Cinemark USA, Inc.~~CUSA would be required to make an offer to repurchase the 5.875% Senior Notes, the 5.25% Senior Notes and the ~~8.750%~~8.75% Secured Notes at a price equal to 101% of the aggregate principal amount outstanding plus accrued and unpaid interest, if any, through the date of repurchase. The indentures allow ~~Cinemark USA, Inc.~~CUSA to incur additional indebtedness if ~~we satisfy~~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, ~~2021~~2022 was ~~below zero.~~3.2.

As of September 30, ~~2021, we believe we were~~2022, each of Holdings and CUSA believes it was in full compliance with all agreements, including all related covenants, governing our outstanding debt.

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Item 3. Quantitative 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. We have four~~debt. An increase or decrease in interest rates would affect its interest expense related to 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 ~~the variable interest rates on $600~~our term loan, covering $450.0 million of the ~~term loan~~$628.2 million outstanding ~~under the Credit Agreement. An increase or decrease in interest rates would affect our interest expense relating to our variable rate debt.~~at September 30, 2022. At September 30, ~~2021,~~2022, we had an aggregate of ~~approximately $63.1~~$200.1 million of variable rate debt ~~outstanding. Based on the interest rates in effect on the variable rate debt~~ outstanding, ~~at September 30, 2021,~~and a 100 basis point increase in market interest rates would increase our annual interest expense by ~~approximately $0.6~~$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, ~~2021:~~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-Month Periods Ending September 30,																Average			Expected Maturity for the Twelve Months Ending September 30,																Average
	(in millions)																Interest			(in millions)																Interest
	2022		2023		2024		2025		2026		Thereafter		Total		Fair Value		Rate			2023		2024		2025		2026		2027		Thereafter		Total		Fair Value		Rate
Fixed rate	$	—	$	—	$	—	$	850.0	$	865.0	$	765.0	$	2,480.0	$	2,763.1		5.1	%	$	—	$	—	$	1,160.0	$	405.0	$	—	$	765.0	$	2,330.0	$	2,135.8		5.3	%
Variable rate ~~(1)~~		20.3		13.3		7.8		15.2		—		6.5		63.1		61.9		2.8	%		21.9		8.2		166.1		1.1		1.1		1.7		200.1		190.4		5.1	%
Total debt(1)	$	20.3	$	13.3	$	7.8	$	865.2	$	865.0	$	771.5	$	2,543.1	$	2,825.0				$	21.9	$	8.2	$	1,326.1	$	406.1	$	1.1	$	766.7	$	2,530.1	$	2,326.2

(1)

Amounts are presented before adjusting for ~~unamortized~~ debt issuance ~~costs and~~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 ~~discounts.~~issuance costs.

Interest Rate Swap Agreements

All of ~~our~~the interest rate swap agreements qualify for cash flow hedge accounting. The fair values of the interest rate swaps are recorded on ~~our~~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 7 to the condensed consolidated financial statements 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, ~~2020~~2021 filed February ~~26, 2021.~~25, 2022 or CUSA's Annual Report on Form 10-K for the year ended December 31, 2021 filed March 9, 2022.

Item 4. Controls and Procedures

Evaluation of the Effectiveness of Disclosure Controls and Procedures

As of September 30, ~~2021, 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, ~~2021, 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, ~~2021~~2022 that materially ~~affected, or~~affect the are reasonably likely to materially affect, our internal control over financial ~~reporting.~~reporting for Holdings or CUSA.

4551

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

Other than the discussion at Note ~~19,~~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, ~~2020~~2021 filed February ~~26, 2021.~~25, 2022 or CUSA's Annual Report on Form 10-K for the year ended December 31, 2021 filed March 9, 2022.

Item 1A. Risk Factors

See discussion in “Risk Factors” in ~~our~~Holdings' Annual Report on Form 10-K for the year ended December 31, ~~2020~~2021 filed February ~~26,~~25, 2022 and CUSA's Annual Report on Form 10-K for the year ended December 31, 2021 ~~as updated~~filed March 9, 2022.

Item 5. Other Information

Supplemental Schedules Specified by ~~risk factors~~the Senior Notes Indentures

As required by the indentures governing the CUSA 5.875% Senior Notes, 5.25% Senior Notes and 8.75% Senior Secured Notes, collectively “the senior notes”, CUSA has included in ~~a Form 8-K~~this filing, interim financial information for its subsidiaries that ~~was filed on March 4, 2021.~~have been designated as unrestricted subsidiaries, as defined by the indentures. As required by these indentures, CUSA has included an unaudited condensed consolidating balance sheet and unaudited condensed consolidating statements of loss, comprehensive loss and cash flows for CUSA and its subsidiaries. See

Liquidity and Capital Resources

at Part I - Item ~~6. Exhibits~~2 for discussion of the senior notes, including relevant covenants and restrictions. The following supplementary schedules separately identify CUSA’s restricted subsidiaries and unrestricted subsidiaries as required by the indentures.


		Page
Unaudited Condensed Consolidating Balance Sheet as of September 30, 2022		53

Unaudited Condensed Consolidating Statement of Loss for the nine months ended September 30, 2022		54

Unaudited Condensed Consolidating Statement of Comprehensive Loss for the nine months ended September 30, 2022		55

Unaudited Condensed Consolidating Statement of Cash Flows for the nine months ended September 30, 2022		56

CINEMARK USA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING BALANCE SHEET

SEPTEMBER 30, 2022

(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

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

CINEMARK USA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF LOSS

NINE MONTHS ENDED SEPTEMBER, 2022

(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	)

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

CINEMARK USA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE LOSS

NINE MONTHS ENDED SEPTEMBER, 2022

(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	)

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

CINEMARK USA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

NINE MONTHS ENDED SEPTEMBER, 2022

(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

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

Item 6. 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		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
*32.1		Certification of ~~Mark Zoradi,~~Sean Gamble, Chief Executive Officer of Cinemark USA, Inc., pursuant to Section 302 of the Sarbanes – Oxley Act of 2002.
*31.4		Certification of 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		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		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.’s and Cinemark USA, Inc. Form 10-Q for the quarter ended September 30, ~~2021,~~2022, formatted in 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),~~ Loss (iii) ~~the~~ Cinemark Holdings, Inc. Condensed Consolidated Statements of Comprehensive ~~Income (Loss),~~ 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.~~
		Statements of Cinemark Holdings, Inc. and Cinemark USA, Inc.
* 104		Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

* filed herewith.

47** 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.
		~~Registrant~~CINEMARK USA, INC.
		Registrants

DATE:	November ~~5, 2021~~4, 2022

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

		/s/ Sean Gamble
		Sean Gamble
		Chief Executive Officer

		/s/ Melissa Thomas
		Melissa Thomas
		Chief Financial Officer

4858


	Loan Amounts
Loan Description	(in USD)		Interest Rates	Covenants	Maturity
Peru bank loan	$	3,277	4.8%	Negative covenants	January 2024
Brazil bank loan	$	6,429	4.0%	Negative covenants	January 2029


						Estimated
						Fair Value at
Notional						September 30,
Amount		Effective Date	Pay Rate	Receive Rate	Expiration Date	2021 (1)
$	137,500	December 31, 2018	2.12%	1-Month LIBOR	December 31, 2024	$	6,562
$	175,000	December 31, 2018	2.12%	1-Month LIBOR	December 31, 2024		8,419
$	137,500	December 31, 2018	2.19%	1-Month LIBOR	December 31, 2024		6,918
$	150,000	March 31, 2020	0.57%	1-Month LIBOR	March 31, 2022		354
					Total	$	22,253


					Other Comprehensive Loss for
	Exchange Rate as of				Nine Months Ended
Country	September 30, 2021		December 31, 2020		September 30, 2021			September 30, 2020
Brazil		5.43		5.20	$	(3,368	)	$	(51,453	)
Chile		811.13		714.14		(7,967	)		(5,046	)
Colombia		3,834.68		3,432.50		(140	)		(2,584	)
Peru		4.16		3.65		(3,609	)		(3,187	)
All other						74			(560	)
					$	(15,010	)	$	(62,830	)


Period	New Theatres		Existing Theatres		Total
Nine Months Ended September 30, 2021	$	24.1	$	33.1	$	57.2
Nine Months Ended September 30, 2020	$	18.7	$	48.9	$	67.6


Cinemark Holdings, Inc. 4.500% convertible senior notes due 2025		460.0
Cinemark USA, Inc. term loan	$	634.8
Cinemark USA, Inc. 8.750% senior secured notes due 2025		250.0
Cinemark USA, Inc. 5.875% senior notes due 2026		405.0
Cinemark USA, Inc. 5.250% senior notes due 2028		765.0
Other debt		28.3
Total long-term debt	$	2,543.1
Less current portion		20.3
Subtotal long-term debt, less current portion	$	2,522.8
Less: Debt issuance costs, net of accumulated amortization		45.5
Long-term debt, less current portion, net of unamortized debt issuance costs	$	2,477.3


	Payments Due by Period
	(in millions)
			Less Than						After
Contractual Obligations	Total		One Year		1 - 3 Years		3 - 5 Years		5 Years
Long-term debt (1)	$	2,543.1	$	20.3	$	21.1	$	1,730.2	$	771.5
Scheduled interest payments on long-term debt (2)	$	605.1	$	129.2	$	255.8	$	151.3	$	68.8

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company