CNK - Earnings call transcript Q2 2018 | Cinemark Holdings, Inc.

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Operator

Good morning. My name is Natalia and I will be your conference operator today. At this time, I would like to welcome everyone to the Cinemark's Second Quarter Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. you. Thank turn to now of Brashears, call Relations. Investor the would Chanda over VP I

begin. may You

Chanda Brashears

may quarter Natalia, Gamble, you, I you Inc.'s remind Executive are during Officer. call, to the like time, morning, Litigation Zoradi, Mark Officer would welcome release Chief to Harbor second our and forward-looking call discussed this XXXX. members would certain hosted Holdings, Safe that Act Operating listeners by Reform the I matters Cinemark and United within Thank to good management Financial by like and Sean of conference everyone. Officer; earnings the conference Securities meaning Chief constitute statements that XXXX of States At of Private of this Chief provisions

be reconciliation may in non-GAAP Form XX-Q, Mark like the include release, can and press filings call are on subject to recently most recently Today's webcast by and in that expressly with forth to non-GAAP results call expectations within are filed financial of company Cinemark's obligation qualified the today's and the actual Zoradi. or from risks including to over the on company's XX-K. factors website, statements. publicly differ implied measures. indicated Annual measures revise or undertakes comparable measures report on found statements risk filed the would cause certain The no set to turn update investors.cinemark.com. quarterly their Form SEC, the to Such company's accordance calculated may I now materially most GAAP forward-looking Report any the entirety and in statements. with A financial in these directly the uncertainties to and company's presented such most Forward-looking

Mark Zoradi

you to Thank us you, our everyone. quarter second good joining discuss XXXX results. We appreciate and morning, Chanda,

a industry, optimistic exceeding it the even stellar me saying was expectations. Let quarter for most the by what begin North America

the records records including quarterly box across total EBITDA concessions metrics, billion per revenue noting adjusted It's Much also XQ high was year of we of significant key by growth a results. the achieved adjusted U.S., in high $X.X income, capitalizing year. in XX%. and earnings a attendance all-time to highs despite for half our on shutdown new Furthermore, top the just that commend significant result family I'd transportation year-to-date, content, Cinemark had were up effectively pressure from weeks, team. outstanding declined That by industry in like that, region, strategic global generated pleased attendance five Cinemark films U.S. a on our North XX%. admissions said, the and office comp box all-time of growth were in pressures the of quarter alongside America's to still initiatives. the propelled EBITDA. to challenging XX% currency these series as continuing that of office quarter year-over-year navigating entire a record the industry quarter the XXXX's performance trucker and American for during like to World constant second film all-time $X.X last global a with strength that these quarter America, another adverse slightly revenue, global Second of the as established the advance high first by billion a Furthermore, range of outstanding was well our impact including our to industry previous despite several Cup, to share titles and strike Latin Latin results, records report on set numerous I'm North revenue, delivered deliver quarterly net achieved a relative in five shy in titles, and broke that international several figures incredibly exceeding Brazil impact including shortage more of across that the our Yet office the of overall box of compared quarter which environment of And teams a worth top managed margin, second America challenges put industry tougher XQ, teens. further that commerce

with provide our those of on continue guest you enhance Let experience several results, me now and to our initiatives with starting that update Luxury strategic Loungers. bolster an

the consumption. second threshold, our to for also auditoriums continue over experience. the quarter, attendance the exceeding preference X,XXX circuit incremental express mark the in and returns end with We we strong reclined and of crossed by remain seat Luxury year lucrative the our prudent their recliner approximately Luxury expect food end favorable significant reclined. driven beverage As and and opportunistic Consumers ongoing Financial power XX% of to Lounger featuring growth, seats. XX% of conversions XX% Lounger domestic pricing our with remain

concession realize continued We robust to growth. also

As variety choices test we of greater very of audiences. we're appeal the providing our consumers out our roll wider offerings, taste and to a that

consecutive on like food food a and quarter $X per beverage operations extended of our a this initiative to first Our of our growth. Furthermore, cap outstanding we domestic and team congratulate time. per for and dedicated food beverage field focus milestone consistent and I'd global streak on beverage to cap our and quarters the reach these helped achievements. XX us

XXX us and experience, solid benefits, collective and initiatives guest the helped format supplement Cinemark our our providing screens. enhance do financial While premium large food as also XD beverage

in that and Our provide XD heightened watching environment immerse sound a auditoriums movie presentation action. premium best-in-class sight patrons the on-screen their with

THX further XD and in XX% of XXX% work experience, which approximately been the XD We auditoriums. our continue features on certified has domestic Loungers Luxury now advancing to

and various XD the screen across amplify XD on a the a Most quality that of sight, As new out discussed calls, to on sound previous XD enacted has media to superior about of and campaign all social offer. emphasize recently, a awareness we strategic of screen earning we year ago consumer brilliance. around brand that series rolled trailer marketing attributes

a All of Cinemark high program. as to point historic that and slate, record, members, attention of initiatives, previous groups over screens. with drove the our fans to phenomenal on our X.X% are particular quarter, office expansion basis Movie subscription the XD worldwide XD these Two upgrade in moviegoers was percentage is box of shift only film XX of coupled XD Club which achieved often to of who our and let's of our experience a a that, X% twice second are subscription as our non-members. our With loyalty worldwide

first program. that active subscription XXX,XXX report to than Club, members thrilled are We more the in Movie exhibitor-sponsored

more per theatre. Cinemark members translates that to than perspective, X,XXX For

signup to We Movie our the and our quarter. from cadence membership have doubled Club maintained the second first

moviegoer. to twice which moderate provide the program Our subscription majority differentiates up offering a from the our program encompasses of as Economically, individuals it country. of targets best features the other month, moviegoers the movies value across to for itself the frequent attending those

lose model. our credits most member of offering Our long allows rollover These a ability or particular it particularly that value enthusiastic reaction rollover, as Club. clear, and regarding consumer the Consumer credit features been use is it them. be has use Movie is To as consumers do proposition unique movie roll which never express for not benefit. very their credit not a the expire accumulate this includes interest ticket their which the month in, over audience a target to ticket the our in

grown million that personalize marketing loyalty our noteworthy, for remain viable compared XX%. already targeted program vein, is from messages no results, Club preferences members thrilled been very and has online XX% that we're members, of are than frequent in Cinemark. trends a our now In movie-going preferences In focused they passes XX% of marketing The importantly, offering. on addition, remain of of loyalty drive ticket members every we between and They Club in, result to as often of this are can and our Movie habits worldwide and our box member Movie with base and are reporting have they program. demonstrating to is Movie months previously at X.X and on financially to a our all Also on fees. associated derived membership more highly six redeemed, incremental programs our with their Furthermore, concessions members purchasing additional pricing, X% behavior companion during before per our not we than movie-going advantageous credits intend members unique and concessions campaigns. Eight quest the that laser movies our prior loyalty pay add engaged. to and office and survey to was identify half gathering our receive and we see discount have four Club opportunities that and percentage We enthusiastic data to our on visit. to X% more as more loyalty, year part are on analyze to in segment, capitalizing subscription

and significant opportunity Another international business. our Cinemark long-term is for

We region, results the film cycles. seen more high operated to years we America economic box for have on experience economic in low. more Latin tied are have cycles, through and XX various tenure than our in content and that office Based closely than

become flows appeal the the content performance remains which While ebbs Avengers in in robust. box of for the the grossing prospect by and film Latin contention of markets, the to X, region films This Hollywood in record-shattering highest consumer international released to all long-term is and is the of demonstrated of in timing office addition Incredibles animated time. our

That evidenced balanced Brazil. contingent screen and acquisition during continue to XX screen endeavor on approximately economic the of by that XX Additionally, screens America, and South growth. growth key movie which of three theaters XX the of has a deliver screens. and mall to our territories. Mexico, seek in acquisition is the and XX quarter incremental consistently countries Brazil yet the the a deliver growth and accretive we X% that optimistic opportunities approximately has And upon our We diligent said, ROI screen investment threshold remain potential Latin track in number during remain particularly annual tuck-in a diverse few we been development, the the representing twice our Central With long-term in considering of America. exceed XX% prospects strong, XX% screen to margin, and delayed disciplined our growth as throughout during half long-term screens of in growth our on remains of challenges population footprint XXXX,

call I'd briefly to with of by shares AMC. accretive Before address over our Sean, were held which CineMedia, Cineworld remaining to National the like to transaction financially turning purchase the

the As of a a $X.XX investment. their Cinemark's reminder, with half acquisition XX.X per Carmike. its in million DOJ in AMC at of equaled was price required decree of purchase NCM consent the $XX.X interest share, under million the to transaction connection sell with shares totaling

of collaborative box securing encourage closing, on a the the perspective for office further plans, founding on and ownership look business XX% Following LLC. is we strategic transaction, strategies a of confidence we NCM, closely our further continue the NCM. of NCM a now first more to shares, owns business domestic have our XX million alignment on-screen transaction to believe aspect heels model associated members the allows core greater that with long-term advertising of to ownership year, with meaningful members input Screen by record-breaking in enhance Cinemark the working incredibly half results. and opportunity We and And and analyzing is We In when forward valuable. this founding the ongoing long-term advertising Cineworld representing a opportunity efforts. the an potential.

the may for across the year full-year While remains enthusiasm on office grow robust a of slate appear the to franchise the entertainment, record. XXXX genres set second film to adventure the half as sequels large and the another box profile the live superhero quite our of tent-poles. titles XXXX for action, ranging high potential half, not from variety and family, first continues And as

the staked their capitalize nearly that most Our to outstanding prepared remarks. weekend Sean? upcoming content ground the lineup and appeals initiatives. our movies commercial more on an That now to key of of of turn solidifying of have their audiences. Cinemark studio remains concludes in and our well-positioned with financial address call detailed execution to I'll distribution a focus over my the marketing Sean every content to and our partners strength XXXX, with discussion all in-theater performance.

Sean Gamble

Mark, morning, Thank you, everyone. and good

for adopted Before you certain we ASC to of how we quarter's our beginning revenue I'd X, delving affects that second like XXXX, results, XXX, into the financial January pronouncement which remind accounting details items. recognize

for Associated method the with used a financing as revenues of other increased inclusion our NCM pronouncement, amortization the related a component significant revenue. this due change in such deferred deferred to well to revenue, as

on recorded now gross transaction net addition, In are a fees versus basis.

to Finally, admissions the issuance deferring points have with by our associated slightly been members. of impacted revenues Connections of loyalty revenues portion and concessions a those

on as Shifting in stated, second of these mentioned the our attendance the the served. with on believe of XX.X%. our by American attendance now be was our on were In industry of driven an in Additional growth our financials. North were U.S., results $XXX.X million previously XX-Q, in the the margin we This adoption revenues EBITDA predominantly versus total an not impact again XX.X% XX.X to those this adjustments. prior which the total global revenues admission up record-breaking do found grew which recognition excluding accounting can XX.X% materially $XXX and patrons changes million, affects to quarterly prior the new gains outpaced highest million, as XX.X%, information new Mark financials, $XXX.X adjusted about and EBITDA year quarter, and record pronouncement quarter, and overall of footnotes generated calls, the company of as-reported revenue adjusted with million of domestic basis grew

to associated recliner with average a ticket conversions, Our adult-versus-child and price result X.X% type $X.XX, also ticket as pricing mix. of incremental largely inflation, opportunities favorable increased

that all-time accounting a cap Domestic Our revenues by generated attendance, X.X% per with to XX.X% of driven total concessions and an patron This XXX.X%, primarily million. recognition increase drove food initiatives strong up revenue $XXX.X described. U.S. combined of previously quarter's this per increased beverage $X.XX. to revenues concession increase, the changes varied I other high

delivered in transaction and revenues, fees line screen of operations revenues during highs Overall, the $XXX item adjusted attendance-related million. ad EBITDA of from quarter. promotional income U.S. growth in this and all-time benefited million total our Additionally, $XXX.X

minimal set the as this strike a industry of the Nada declined of volume quarter Brazilian financial World normal ticket XX.X%. quarter significant from sizable down effect Cup it margin generated appeal Our million local Furthermore, XX% weaker on a while tickets decline to last largely and was Brazil. sold that than many of and previously Mark year in was to in This XQ that to one-off title mentioned. benefited had lower XX% Internationally, second attendance of meaningfully sales, carried consumer impacts of adjusted distorting family metrics. title, Perder, that second well also patrons. the record in EBITDA attendance a over price compared yielded content concession due a XX.X X.X% our as Because trucker the

quarter year, were versus Second admissions which international in down million, were $XXX revenues X.X% currency. XX% declined last as reported, and constant

of currency was $X.XX a Our impact aforementioned Nada of reported price of that constant average translated to X.X% the decline Perder. by ticket a driven

title, in concessions X.X%. currency have per declined our the of by Excluding constant patron grown this international currency. Similarly, X.X% effect of by would ATP as constant reported $X.XX our

concessions have other International down million Nada that and consumption constant to were would as X.X% total However, on limited with down led quarter's a of as XX.X%. revenues it up described of overall and been X% $XX.X increased in driven reported which revenues adjusted by were of million international revenue EBITDA Overall, EBITDA total reported, XX.X% accounting This the were an changes. XX.X% and increase currency. was revenues margin constant recognition million, an $XXX million attendance associated XX.X% in normalized along basis. reported beverage food approximately currency. a The $XX.X with this previously as and Perder, decline, of $XX.X with adjusted predominately

U.S. the a hold levels, intensified exchange foreign reported low continue the percentage headwind drag remainder to During quarter, we the the And results. the an rates XXXX. our strength approximate the would dollar second at sustained in throughout of teens translation on currency current XX% of international to expect caused and extent

create level This majority and of of mix currency, may drive the prior the year-over-year due compared quarter of film to vast support second second margin offerings professional additional comparison strategic in to Shifting inflation, varied expenses pre-tax and attendance transaction-oriented. while initiatives. revenues percentage even year-over-year Concession as increase a to drag it productivity costs benefits investments of local our a film reminder, driven and as gross are resulted percentage costs concessions accounting a costs quarter on as expanding this than to was the year new as transaction international and lease though fixed slight our our and fixed to in from with points transacted fees and our beverage rental predominately growth resulted across increased total basis sizable leverage continues admissions global also quarter of utilities by and decline Collectively, basis as our total expenses, wage was This offset concessions were so standards. base costs And of decline a by rate, labor back translation-based variety consolidated associated is result improved office. results, revenues worldwide by basis of Facility points $XXX.X a lease up impact points. and total a revenues facility exchange staffing and basis and total operating and on XXXX. in spend the the total impact theaters. revenue basis to This product Conversely, revenues. films rates, declined revenues And including quarter's over of fee remodeled circuit. to G&A X.X% up count more and driven increased recently were this expenses from points million. our by currency wages basis XX not leverage at As a points, XX.X%. income percentage of of head recording versus improved that as new box revenues costs revenues by percentage XX declined by overall advertising basis declined other concessions larger growth points percentage and a of second was percentage quarter food a rental our by higher as total benefit net costs in driven XX XXX were income. of G&A Salaries of the of and increase growth a in was recognition concentration of XX.X% that XX the increased and total for a XXX of

a per second or with income Our attention diluted to million and operated of respect we U.S. $X.X cash screens our net was of ended XXX $XX.X With net debt quarter effective balance XXX and sheet, to in $XXX.X position rate was footprint, and the Cinemark XX.X% $X.XX XX share. Holdings, a X,XXX quarter's billion. quarter Inc. we states end. DMAs tax at attributable Shifting theaters our to balance and million

We have XXXX. subsequent XXXX and theaters screens signed the nine representing commitments XX three during to screens XX and theaters to open remainder of

expect We approximately for spend $XX screens. million to XXX CapEx in these

operated closing in theatres We or also year-end. XXX XX theaters we X,XXX one anticipate Latin countries Internationally, America. and before across two screens

and XXXX CapEx representing $XX XX spending signed we X during five screens for As theaters of anticipate and open to approximately the screens quarter-end, to million remainder had these We in XXXX. screens. commitments new of subsequent XX theaters XX

Regarding theaters $XX.X were million overall associated predominately the $XX.X on recliner million on CapEx, with that existing including new quarter, builds spent million we in $XX.X conversions. second and

approximately $XX core screens and spending theater with million continue and internationally, is anticipate $XXX is of of projects $XX XXXX, additional completing include the million our full renovation and in CapEx generating We conversions food year during and million million approximately residual maintenance is is designated beverage million Luxury associated our $XXX cash historic for the both for flow line building, which domestically initiatives. with to that existing run varied and Lounger builds, new for of of headquarters rate, and $XXX

industry approximately was $XXX like I'd result tremendous close increase that it depreciation quarter to annual in a amortization Cinemark. by to as that capital XXXX will our continue expect highlighting and these for of and We the for million $XXX million to North expenditures. to American again a

And of the content long-term Mark our as like sustained of extremely balance now with consistency and commented, progress remain enduring and for Natalia, prospects up sheet. concludes initiatives, financial open the our for pleased that our strategic and and remarks our the to lines continued results film of about are we We prepared enthusiastic our operating we the company. strength would questions.

Operator

line question first of with Handler Eric Partners. from Your is MKM the

Eric O. Handler

much, Couple very good for you. you and Thank morning. questions

you the you're then the or all one they these where just MoviePass where strategic that curious expenses? subscribers don't doing curious to where and make out get I'm secondly, you is years? a in get manage investments, you of costs can your First, cut think And what to mass could two critical areas next as for so find to control of you sort

Mark Zoradi

cost the We I'm Thank second Eric. Sean, first questions. side. to going you, and one regarding you Movie Club take question and, take on appreciate support your maybe the the

we say Eric, just December Movie by on And I'll we me going-in you, year those. know, you blown X, our tell first Club, XXXX. have Let this, launched projections, as

And to so, for incredibly we've at And had expectation members we're consumer. been because to such the active pleased. raise response positive a XXX,XXX be there's today, our sitting

year. competing visit. Obviously, benefit where the as of see. marketplace attractive rollover between from discount representing early new looking think as the million month rollup subscribers that's next the this of them there, uniqueness or of to especially and there's accumulate particularly Where and this X% has We I to of within continue noted, of into box throughout And part will the year going think programs. with each a year. goes component growth cannot XX% it reason been end competitors every the somewhere be certainly for and it's the still consumers we're our office. X.X have to But our at for program, on the I for As have and in X% for concessions well just go

Sean Gamble

investments. rigor I put the we're type these cost deploying we're them analytical spend basically say with the We to initiatives. other through On very CapEx-related the our would careful of of side, amount we that same would

little G&A. Some of our is near-term what which seeing, of a on is putting pressure kind them, bit we're

professional consulting them even upfront and a a and degree. of bit in G&A require to head count of investment Some fees little

the of driving and in revenue-generating, head as be but also in efficiencies be will Some both our focused will many field. well as them productivity, improved on office

hope is being the of put But very a a in close and all this analysis So, down the of coming from of we're cost we is is, short time, result answer associated through we'll rigor overall around what spending upfront see are how returns investment. expect to that, as some them much and derive them. the

Eric O. Handler

and question. Latin you just might does any quick Great, see in one for you puts look play at America in do the slate how to there to terms might the back the When we that American think other cause to it be we half takes of and what year, are materially this compares of well different? North it expect there, content

Sean Gamble

take I'd more for our in we're the expectations perhaps Latin say second measured a one, box Sure. America little Eric. of that office the I'll in half year.

Fantastic convert as to Nun, are there it like region, The and in degree, we're that Christopher and several that films and don't well Beasts Transylvania Asians, Hotel several Incredibles well, expect Hollywood The Grinch. will we seeing Night Robin, expect School, films such with a too even the do also will Rich While Crazy we X, there's

region. in tough which a tougher quarter last Additionally, volume comps is content, the there the for stronger second year, are of of half some third including animated

we're titles XXXX the local is appeal how again, in but in the So, second in beyond XXXX, region, enthusiastic do breakout said, possible while that of film content that we're the and will connect to with the other surprise of a really what just That be very audiences. is, it'll not see we're film family translate that it a the when a always we these little expectations we us and and Latin for think which there'll half. look some kind U.S., slate, the about for well our titles of hopeful bit measured more it'll lineup of we'll maybe the we see type especially will

Eric O. Handler

very you Thank much.

Sean Gamble

Thanks, Eric.

Operator

with is the of Fishman the question next Robert MoffettNathanson. line from Your

Robert Fishman

and and Mark Iger now and owning for have share importance you the owning to I can for dust Mark, Disney Sean. last how negatively one reaffirmed of Warner positively either releases? or Hollywood one to Disney on studio, theatrical fewer the relationship with some Cinemark's night, is Fox the Bob settle Good AT&T morning. for including any the number Brothers of of window thoughts potential impact starting will M&A a that each even updated

Mark Zoradi

combination. – with there. let's on what and whether to this incremental see some bringing which what theatrical of this is and is they're We're Disney first Disney. Bob And upside Fox with the some occasions window. the Well, potential actually pleased consistent that We he's there's time, start Fox very wasn't – done the just that be the with very Fox assets multiple supportive very Disney, great Searchlight, series, it's bringing Avatar to X-Men, Deadpool, is continues

it bringing business Disney is will intellectual Disney in strength entertainment consumer property value products, will and ABC. the to company marketing lineup. sports very be networks, is So, because the their any strongest ability we to from probably and the parks incremental standpoint, think what of Fox opportunities synergistic much an Disney bringing theme of in is leverage What

given great machine, job, that. we some did can either additional marketing Disney Disney has think, a think assets we just even the – that that think we So Fox, further enhance potentially

pretty we're So about positive that.

Regarding their Warner marketing again Brothers, we they them excited think they're with very Warner Brothers about has and supportive again, and and privately AT&T, AT&T publicly Brothers content. having the that Warner think being both about been what in the promotion a to significant additional on movies data, AT&T ability they help to have. gives whole have the them and area access within the to And family,

positive is our think for also, business. there So we that

Robert Fishman

the any color recent if or you. just Sean, seen contributing below the the your any U.S. on And of screens, profits. most recliner upgraded that recliners you've share wondering revenues are for from can much initial you. Thank or returns be how upgraded than Okay. levels? detail your further to now half Just And Thank U.S. theaters you've screens' any if if more would additional slowdown earliest there you are helpful.

Sean Gamble

continue to and they have more excess come a results. drive returns somewhat from were of would low-hanging The XX% and I down some a explosive recliners our EBITDA recent doing, say of which recliners, bit certainly healthy thresholds. of ROI overall we're kind Sure. early returns had fruit in just the threshold the of that them

kind past, in this case-by-case the we've a at basis. go So, mentioned we of on

sure at delivering what changing will we're at our returns path clear makes consistently in making have those looking rates. that the the we sense meet looking to a hurdle dynamics and marketplace So, and that

have excess and come home, that again, down bit recliners. and still we're levels, bringing just of pleased attendance they're those consumer overall just in the our what returns in on returns of terms newer targets very with lifts while still So, seeing response we're early their and a from

Robert Fishman

Okay. Thank you, both.

Sean Gamble

Thanks, Robert.

Operator

is with the of Sachs. next Ng from Your question Goldman Michael line

Michael Ng

Hi. the the box on one I and on question. one just concessions Thanks U.S. office. for have

had periods? new to was which good, just I'd out First, whether concessions, in started programs quarter to strength Cinemark to F&B on helped that U.S. per mix help with this future Thanks. like something able there film the quarter. to are the if growth we any might better expect just X.X% may initiatives during there understand patron the was really up have growth roll in F&B or quarter, or that be F&B

Mark Zoradi

the have product we've and is, and let me it's process they're cooked of lot significant been year the it's most the just new F&B, And with a to of next the accretive things. new foremost been a one a branded, layouts around, half team. think Hut with of theater. And first We rolls in during an Pizza where products new little do that the country. throughout to Pizza Hut of relative continue because would our rolled a the Probably by Hut has fresh of Probably they the bit callout. year of Pizza each we're a installations pizza, those outstanding out XXX just partnership innovate the within Michael, time combination first just way I they installing, highly store. has they're in

to response So there's been great that.

in And that continues one what Maybe Hut. which enhance every theater. the offerings, beyond the to be merchandising thing we've call In of the and not it there's but per at can also theaters. all just And cap, cap standard parts thing. throughout unique out, say food to Pizza very country one much it's unique beverage addition, we're and per got further We're if rolling for would various particular offerings looking was individual looking I driven. our of in out is

Michael Ng

Thanks. great. Hut that Okay, was follow-up else? to question think was In And that venture. as Was a a statement, for there million cash the a and maybe something I flow investment, Pizza related just $XX that joint or Sean.

Sean Gamble

connection venture to That This with family climbing that effort. a – everything do a group successful we're combining I that that a in It's does here entertainment is highly in joint That and and in And Let in to games, extremely movie to me They're it. Pizza about we million $XX Dallas. to R&D laser referring already was venture from a works. to attached is you're includes video really and Dallas with an take to that that them joint an think going tag, not theater see the walls. related. entertainment bowling with doing how are the excited that test theater to Texas. here Hut quick. open center We're

Mark Zoradi

if about And and you're line, Mark investment just $XX the that's talking confirm, exactly in million was in Michael, describing. ventures joint other what the to

Michael Ng

Thanks. was you set mentioned office, was Yeah, And that's potential box a there exactly on referring to. then, that record. another the to XXXX what for I

and not quarter imply a basis? say of that or that's rather, – I Thank you year-on-year. about see tough potential would, from upside of X% box do areas whether you. the or a you upside the month think is could, office Appreciating that film basis growth half would did second where

Mark Zoradi

about a are optimistic mentioned, the of As we measured. half the second try and also we're expectation year, but little level. at very a reasonable I We set

we Brothers. like Beasts, add significant, this QX XXXX looking up, Fantastic Fallout, see, quarter they're first do Warner with we're sequel but The obviously, Bohemian all was we're going think things be Ralph last you likely at $XX that now, down you what this with QX, from we from into when Dr. to and north and going the picture of that Seuss, and and of to slightly Venom Rhapsody, course, Aquaman quarter, the Disney, And billion and But Wreck-It north equal potentially biggest and and we're was. in was be or fourth also half of looking so year.

what So and up bring. we're at add year, the be we to look quarter, slightly full good strength above last fourth can will we quarter of fourth what saw it positive we about and third year. all the a and the third when And that on think first the solid half

Michael Ng

Thank Great. for that. you

Sean Gamble

Michael. Thanks,

Operator

line Miller Your Capital. Imperial the David is next of question from with

David W. Miller

are on on loss data In guys. the a two early to waiting $X.XX delayed Hey, have then, like would folks you Sean. credits then one you credits Mark, looks you're cost a those the are share. then have other And waiting basis? It or words, What about Any and or six regard using they how on of using with months, a the it like I willing disposal. million often and months took there on congratulations looks learned accumulating three Club, folks months success. three that are high. $XX.X for on tickets months? for appreciate to Sean, share like I after you Movie kind three That's statement, unusually that. Mark, one income

Just Thanks. wondering what in that. feedback. the was Appreciate

Mark Zoradi

is David, relates too, the important Club, one about per think members for XXX that over an have we metric I happy X,XXX theaters. yes, that we that an us out, thing regarding of incredibly subscribers. location, because Movie XXX,XXX average Cinemark And I pointed to are is

for which and Regards large earns seeing best the earned we're those, in means month, credits metric we cities to it of that as well. XX% subscriber per is the It's credit think utilization, one I every people of are all concentrated just So have the using across board. utilized that not are our program. the that

if they'll not twice. particular interested going times in the month, go So, in movie, if month, many next a there's they're a

XX% them. using people us that are that's really that statistic telling utilization So us key a for is

people we that do of are time can benefits $X.XX. is one at month. addition, the companion they credit one a their that price. find the want they can In get for the other the $X.XX but bring In second also words, a purchasing they month, they for if during additional to And other during with them $X.XX, come credits

So of tremendous reasons why some we've these success the seen all of the unique Movie of benefits I are think Club.

Sean Gamble

And just that to fixed our answer and your of line recliner of is continue one question of asset big line with have gains remodel. a on item item, series losses retirements the to associated we drivers the

that big a you say a item is There the So an when with and on that almost year kind sizable the But a for litigation of of almost this retirements magnitude of to outstanding those and variance we're that big timing was of associated we just reserve I'd in that last the line being year-over-year, a had fairly the part a was particular with booked on. one-time also us theaters gave landlord based that look an of quarter. item in which working accrual year, lease, flat, zero, line driver credit zero. theater buyout that brought last

we're be If year. much with more to out, you were it this take what seeing line that would in

David W. Miller

Thanks. allowing seeing just Are the yet could on of if as volume or follow-up yet, overall of Sean, per cost Movie concessions discount, lower higher sold and you there the to your you I of just concessions not goods yet that XX% discount, the with Club. move the is on kind you XXX,XXX? are

Sean Gamble

as Half in that. mentioned increasing We're seeing consumption are their levels. them their even improvements in our and the And of before. consumers reporting – behavior his versus are script, Mark consumption

on can improvements the on that day In use goods our say to day of going the continue ability to to it volume that terms the continue we to a how that. pricing something we're we continue better of overall negotiating – our as subscribership to of it's still that improve more negotiate actual fairly on and early to volume vendors look increase we ability I'd But cost with cost – for have to our to something to just we're sold, take have to it's basis ability. in That's to of goods. get and certainly that use data work and

David W. Miller

much. you very Thank wonderful. Okay,

Sean Gamble

David. Thank you,

Operator

Hi. the with from is Beynon Macquarie. Beynon (USA), morning. Macquarie of Chad Good Thanks my taking next question - Your Chad Capital line for Inc. questions.

just or I Flix your then, this this Thanks. regards further CineMedia a First, advertising Latin America, start investment your or into National in that the on you down business. And run to you access related now is note, to in increased knowledge investment Media maybe screens? which X,XXX monetize wanted more Does help over give could further business believe with business?

Mark Zoradi

answer of we Relative America. Central have let Chad. the Flix question you, me first, advertising Thank good very seller Yeah. We're second NCM, South a to and throughout business. largest the Media

working norms is other. particularly very share because doing So the and both that's first one to if well-run, running for North But on in already don't the practices, Clearly, of that to look it's With understand give to to established, things Beynon great overall you see Macquarie the each will any kind Chad me increased South, we Capital I if we'll any it's please? you improvement remind (USA), see going there's business certainly we're respect curtain South, vice your there. this thing best NCM. think, question, bring find well. the ownership, necessarily, But we that with - well just it your behind very of or business And up more? North Inc. again, versa. would, business and ability does

Mark Zoradi

only not Well, I fact were three Cinemark say slightly, We obviously had us and seat big little to and the maybe purchasing owning founding and would the now company, investment bigger shares we begin of approximately bit ownership. have the a XX% I LLC as table in of we does each a one of materially Cineworld – of But that us with. the members more and think the at Cineworld. the AMC gives remaining

We why - Macquarie support our we the are Beynon as We foremost fact that think sharing business reason positive amount core think that the some and And and I aspect Capital it. and in So them. idea we're highly meaningful to we very did greater and Chad in mean, the you mentioned. to Inc. first we of believe a motivated help tremendously. (USA), business. NCM, influence those well input the as that's it's can have things all

quarter And and just surge you and heavy you average I little elaborate the competitors better measure? or strategy surge respect the more with Mark. and on just was, the was your pricing and if variable pricing then figure could top this a out to in half potentially as bit in this of quarter help and doing you could Thanks, any price follow Okay. Thanks. back are is know up my how variable given this kind pricing. if ticket a of

Sean Gamble

overall, say, continue range is a on. work that different I'd we had pricing. Sure. We've to actively pricing of something strategies

but wide throughout wouldn't the I dynamic consumers day, se, highly pricing varied year for had demand. meet tailor as it quite per properly as the of well range throughout to So, that to a access try throughout we've to call the all week, to

sort. that at we have per periods implemented pricing titles So, unique but we surge pricing do peak se peak haven't and for any – different things titles, at of

we've further continuing recliners, and go a limited general out there look opportunity So, been has our half then with. is to I daypart when would to this year there's upfront in and do and pricing roll and basis. Furthermore, we and our opportunity we see the to regard. – to on demand there, forward at elasticities work we're look continued back of of say the we believe experiment increase tactic I'd that with it's forward theater-by-theater something a lot that say as still analyzing as in We still

Capital is Macquarie with there'll to future. continue be the going benefit short that data as still as from - recliner we're So, Inc. we there opportunity well think with and to answer, Chad of and we something in lot sophistication of to test believe Beynon (USA), to opportunity a opportunities our increase

Thank Okay. very you much.

Sean Gamble

question. your Appreciate Chad. Thanks,

Mark Zoradi

Thanks, Chad.

Operator

is the question Research. line Jim with from Goss next Barrington Your of

James Charles Goss

any ready-to-go? buy at acquisitions. to properties, purchases? any be consider have your in a environment Good buy renovate was prefer to would might and and been were own about the M&A morning. selective if to something you discount Cinemark very get you has appetite making And Traditionally, fashion to in or I wondering able you

Mark Zoradi

and very be that. for our strategy In It's Jim, consistent I'll say proved would to regards very, take to M&A, the we're successful staying course. is us. I

idea especially Latin around which and with buyers. quarter United price. but I the like matter in as I accretive look screens and said, be really in are proved deal If ability buyers we like We're market think additional happy it buy of associated this markets or matter into will CapEx will in to picky accretive the we we with at be to noted I doesn't cinema that what to to day It's needs looking you We're we're picky the what America If we're buy countries deals at are additional going theaters got to to a going not have things We three this get-go. already that Brazil that and that's gaining needs of the completed – whether think to are we'll don't pointed world, good be States. It out, to work up. as – strategy. going one. and fixed share a We from very in put we food, capital, we and pay the for we're my want has a mean, it's XX we And the comments, because we've buy for. put less. from be calculation in looking it XX to for aggressive continue enhanced that But – it reclined a I lot will operating. in of of already and then our we're at it it. just

James Charles Goss

some Is lately. hasn't involvement there up sort alternative an thing to believe think something be that other issue a in NCM. this in exist. just to days active And general, one your I relates And still of come still as own used side There does in additive content, Okay. I I theaters. a lot process? called sort that or that these it see Fathom of is

Mark Zoradi

very have sporting the opera content classic it's most events, to They we're series much is us. by e-sports. and alternative Fathom they to everything owned and very Cineworld movies, plays, active jointly provide Met Cinemark and Well, still from to to And AMC, supportive Fathom. successful to that's stage of

It's we're in. significant one not supportive driver Fathom. we're it's So still interested income, very very of a our of that but

to into continue alternative We way have content board representation support additional to any new the and and them alternative in the provide for want future. and to on possible avenues content

James Charles Goss

But very very, Okay. the has impact small? relative remained

Mark Zoradi

correct. consistent. impact The been has That's relatively

James Charles Goss

you. Thank Okay.

Sean Gamble

Thanks, Jim.

Operator

Wold line the question final of Eric Your B. is Riley. with from

Eric Wold

you. guys. Thank morning, Good

that to kind little acquisition within XX Do of XX if so, screen know kind if far. there for at that's guess, that consider asked to seeing of of a of Cinemark are for need couple to there, been of mall around follow-ons kind America. more of you're which one the to going Latin so kind look range kind least attractive Brazil for the in of to you I Just time, enough has the questions, does stay towards headwinds on like been to range, one ones be an bit down for push at a And mostly I that near-term? valuations? the targets construction, the issue have

Sean Gamble

development. Eric. to we've ever seeing push I we're We're would more certainly now. of economic that environment. a question, as yeah, that particular, some those If result increase mall for some are right of necessarily as our economic at for Thanks kind starting has shake in of the say for the environment that. opportunities been. through I'd played say, opportunities as perhaps in out to say wouldn't Brazil active anything, looking influence M&A? that, Does I

seeing on But that a is specific for opportunities down of time country byproduct one to where capitalize just what front malls, like tended we're historically builds we a recently. So is on, that Brazil we've may little we've able we're as elsewhere. to to activity seen the maybe now, see saw being bit like be that in new more the and the

builds builds year in got a So, new we of coming new Most had the And region of we've are Central that out in Colombia. in America. more of Central where that year that recently this be in to opportunities. certainly bunch opened that America going year are many our Colombia with seeing last we're this

So, it's part a having portfolio else benefit is of we've the across somebody down, in. of When may be benefit. countries that diversified country and one up, XX the we're got

Eric Wold

then you've increased to obviously, segment back since just along in Cineworld of belief last And your get-go. this been the on question position. investment that kind with involved Got NCMI, in their This adding circling it. demonstrates

to best we talked about of can kind You kind what both. of practices improve doing and

trailers kind those the there something And opposed internally locations? about, the you a separate at with? one in moviegoers is not is things had Cinemark is you the integrating of you within curtain think performance okay keeping can the can greater but potentially now help obviously kind before. as can You've U.S. versus are do ads to you kind anything incentive of do talked performance Obviously, of that to of practices screens? some them of boost you at things this of investment what would you had be What best your that as behind of to or do

Mark Zoradi

their advertising be and to early for and to a to Latin comment is how are presenting we're the ads evaluate. look on looking best point, They'll screen course, more point, and We're the Cineworld lobby. for that. together again, this doing looking and component component at and digital of greater what might practices of, the looking the screen. they screen their It overall ways more sell the a that be and to thing to into of might the strategy. It board, America. accountability. too for this the At a putting maximize co-promote in probably It's us tie make just at At be us will be their the digital to to with NCM some a ads within same in to advertising. theater. doing They're time. go-forward outside many at Cineworld and looking for team They're advertisers management

we've make kinds both got is CineMedia considering do, going we AMC to at be does, consider. agreement think for a us we fact, it's little when announcement. there of future things look do, think for an National about probably probably to appropriate that Cineworld about does, CineMedia, are National very because NCM we I And those. to with for us that opportunities talking a looked the long-term bright to them, all new be very, And talk and are for specific these in at. It's So, early

Eric Wold

guys. Thank it. you, Got

Sean Gamble

Eric. Thanks,

Operator

There are the remarks. for turn no questions. will further closing over I back call

Mark Zoradi

and Thank following joining our very us for speaking morning, quarter. again you much we look third this you, to all, with forward

Operator

This concludes today's call. earnings

You may now disconnect.

Cinemark (CNK) 8 Aug 182018 Q2 Earnings call transcript