Cinemark Holdings, Inc.

Previous wording

The following discussion and analysis should be read in conjunction with the condensed consolidated financial statements and related notes and schedules included elsewhere in this report. Amounts included in the following discussion, except for theatres, screens, average screens, average ticket price and concessions revenue per patron, are rounded in millions.

Current wording

The following discussion and analysis should be read in conjunction with the condensed consolidated financial statements and related notes and schedules included elsewhere in this report. Amounts included in the following discussion, except for theaters, screens, average screens, average ticket price and concessions revenue per patron, are rounded in millions.

Previous wording

We are a leader in the motion picture exhibition industry, with theatres in the U.S., Brazil, Argentina, Chile, Colombia, Peru, Honduras, El Salvador, Nicaragua, Costa Rica, Panama, Guatemala, Bolivia, and Paraguay. As of September 30, 2024, we managed our business under two reportable operating segments – U.S. markets and international markets. See Note 16 to the condensed consolidated financial statements.

Current wording

We are a leader in the theatrical exhibition industry, with theaters in the U.S., Brazil, Argentina, Chile, Colombia, Peru, Honduras, El Salvador, Nicaragua, Costa Rica, Panama, Guatemala, Bolivia, and Paraguay. As of March 31, 2025, we managed our business under two reportable segments – U.S. markets and international markets. See Note 16 to the condensed consolidated financial statements.

Previous wording

The success of the theatrical exhibition industry is contingent upon several key factors, including the volume of new film content available, which has been impacted by the effects of the COVID-19 pandemic and last year’s writers’ and actors’ guilds strikes (the “Hollywood strikes”), the box office performance of new film content released, the duration of the exclusive theatrical release window, and evolving consumer behavior with competition from other forms of in-and-out-of-home entertainment.

Current wording

The success of the theatrical exhibition industry is contingent upon several key factors, including the volume of new film content available, which is continuing to recover from the effects of the COVID-19 pandemic and most recently the writers’ and actors’ guilds strikes (the “Hollywood strikes”), as well as the box office performance of new film content released, the duration of the exclusive theatrical release window, and evolving consumer behavior with competition from other forms of in-and-out-of-home entertainment.

Previous wording

We generate revenue primarily from filmed entertainment box office receipts and concession sales with additional revenue from screen advertising, screen rental and other revenue streams, such as transactional fees, vendor marketing promotions, studio trailer placements, meeting rentals and electronic video games located in some of our theatres. Filmed entertainment box office receipts include traditional content from studios as well as alternative entertainment, such as the Metropolitan Opera, concert events, live and pre-recorded sports programs and other special events in our theatres. NCM provides our domestic theatres with various forms of in-theatre advertising. Our Flix Media subsidiaries provide screen advertising and alternative content for our international circuit and for other international exhibitors.

Current wording

We generate revenue primarily from filmed entertainment box office receipts and concession sales, with additional revenue from screen advertising, screen rental and other revenue streams, such as transactional fees, studio trailer placements, meeting rentals, electronic video games and other games located in some of our facilities. Filmed entertainment box office receipts include traditional content from studios as well as alternative entertainment, such as the Metropolitan Opera, concert events, live and pre-recorded sports programs and other special events in our theaters. NCM provides our domestic theaters with various forms of in-theater advertising. Our Flix Media subsidiaries provide screen advertising and alternative content for our international circuit and for other international exhibitors.

Previous wording

Concession supplies expense is variable in nature and fluctuates with our concession revenue and also product mix. Inflationary pressures have impacted, and may continue to impact, product costs in the near term. We source products from a variety of partners around the world to minimize supply chain interruptions and price increases, wherever possible.

Current wording

Concession supplies expense is variable in nature and fluctuates with our concession revenue and also product mix. Inflationary pressures have impacted product costs in the near term, and inflationary pressures and tariffs may impact product costs going forward. We source products from a variety of partners around the world to minimize supply chain interruptions and manage costs, wherever possible.

Previous wording

Although salaries and wages include a fixed cost component (i.e., the minimum staffing costs to operate a theatre facility during non-peak periods), salaries and wages tend to move in relation to anticipated changes in attendance. Staffing levels may vary based on the amenities offered at each location, such as full-service restaurants, bars or expanded food and beverage options. In certain international locations, staffing levels are also subject to local regulations, including minimum hour requirements. Inflationary pressures have driven increases in wage rates across our labor base and increases may continue in the future.

Current wording

Although salaries and wages include a fixed cost component (i.e., the minimum staffing costs to operate a theater facility during non-peak periods), salaries and wages tend to move in relation to anticipated changes in attendance. Staffing levels may vary based on the amenities offered at each location, such as full-service restaurants, bars or expanded food and beverage options. In certain international locations, staffing levels are also subject to local regulations, including minimum hour requirements. Labor market conditions and inflationary pressures have driven increases in wage rates across our labor base and similar increases may continue in the future.

Previous wording

Facility lease expense is primarily a fixed cost at the theatre level as most of our facility leases require a fixed monthly minimum rent payment. Certain leases are subject to percentage rent only, while others are subject to percentage rent in addition to their fixed monthly rent if a target annual performance level is achieved. Facility lease expense as a percentage of 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.

Current wording

Facility lease expense is primarily a fixed cost at the theater level as most of our facility leases require a fixed monthly minimum rent payment. Certain leases are subject to percentage rent only, while others are subject to percentage rent in addition to their fixed monthly rent if a target annual performance level is achieved. Facility lease expense as a percentage of revenue is also affected by the number of theaters under operating leases, the number of theaters under finance leases and the number of owned theaters.

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

The following table sets forth, for the periods indicated, the amounts for certain items reflected in the operating income of Holdings along with each of those items as a percentage of revenue.

Current wording

The following table sets forth, for the periods indicated, the amounts for certain items reflected in the operating (loss) income of Holdings along with each of those items as a percentage of revenue.

Previous wording

The only difference between components of operating income 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 of CUSA:

Current wording

The only difference between components of operating (loss) income for Holdings, as presented above, and those of CUSA is incremental general and administrative expense recognized by Holdings. The following table sets forth, for the periods indicated, the amounts for general and administrative expense, total cost of operations and operating (loss) income of CUSA:

Previous wording

Nine months ended September 30, 2024 (the “2024 period”) versus the nine months ended September 30, 2023 (the “2023 period”)

Current wording

Three months ended March 31, 2025 (the “2025 period”) versus the three months ended March 31, 2024 (the “2024 period”)

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

Constant currency revenue amounts, which are non-GAAP measurements, were calculated using the average exchange rate for the corresponding month for 2023. 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.

Current wording

Constant currency revenue amounts, which are non-GAAP measurements, were calculated using the average exchange rate for the corresponding month for 2024. We translate the results of our international reportable segment from local currencies into U.S. dollars using currency rates in effect at different points in time in accordance with U.S. GAAP. Significant changes in foreign currency exchange rates from one period to the next can result in meaningful variations in reported results. We are providing constant currency amounts for our international reporting segment to present a period-to-period comparison of business performance that excludes the impact of foreign currency fluctuations.

Previous wording

U.S. Attendance decreased 11.0% to 90.3 million patrons during the 2024 period compared with 101.5 million patrons during the 2023 period driven by less carryover benefit in the 2024 period from prior year releases and the overall mix of film releases due to the impact of the Hollywood strikes. Average ticket price increased 3.8% to $9.90 during the 2024 period compared with $9.54 during the 2023 period driven by strategic pricing actions. Concession revenue per patron increased 6.2% to $7.86 during the 2024 period compared with $7.40 during the 2023 period primarily driven by strategic pricing actions, product mix and higher incidence rates associated with the film content mix. Other revenue for the 2024 period decreased 5.9% to $166.4 million compared with $176.9 million during the 2023 period primarily due to a decrease in attendance, which resulted in a reduction in the variable component of other revenue.

Current wording

U.S. Attendance decreased 12.7% to 20.6 million patrons during the 2025 period compared with 23.6 million patrons during the 2024 period primarily driven by fewer tentpole releases during the 2025 period. Average ticket price increased 2.6% to $10.08 during the 2025 period compared with $9.82 during the 2024 period driven by strategic pricing initiatives partially offset by lower premium format penetration. Concession revenue per patron increased 5.4% to $7.98 during the 2025 period compared with $7.57 during the 2024 period primarily driven by strategic pricing actions, higher incidence rates and a higher mix of merchandise. Other revenue for the 2025 period decreased 3.2% to $45.1 million compared with $46.6 million during the 2024 period primarily due to a decrease in attendance, which resulted in a reduction in the variable component of other revenue, partially offset by higher gaming and promotional income.

Previous wording

International. Attendance decreased 11.7% to 59.8 million patrons during the 2024 period compared with 67.7 million patrons during the 2023 period due to less carryover benefit in the 2024 period from prior year releases and the overall mix of film releases due to the impact of the Hollywood strikes. Revenues, average ticket price and concession revenue per patron for our international segment, as reported, were unfavorably impacted by exchange rate fluctuations for the 2024 period. In constant currency, the average ticket price increased 45.8% to $5.70 for the 2024 period primarily due to inflationary pricing actions. Similarly, in constant currency, concession revenue per patron increased 51.7% to $4.43 for the 2024 period primarily due to inflationary pricing actions. Other revenue increased 51.4% in constant currency to $104.0 million for the 2024 period primarily due to inflationary impacts.

Current wording

International. Attendance decreased slightly to 16.0 million patrons for the 2025 period compared with 16.1 million patrons for the 2024 period driven by fewer tentpole releases offset by the strong performance of local film content and the benefit of promotional activities. Revenues, average ticket price and concession revenue per patron for our international segment, as reported, were unfavorably impacted by exchange rate fluctuations during the 2025 period. In constant currency, the average ticket price increased 13.1% to $4.07 for the 2025 period primarily due to inflationary pricing actions, partially offset by promotional activities. Similarly, in constant currency, concession revenue per patron increased 15.2% to $3.26 for the 2025 period primarily due to inflationary pricing actions, partially offset by promotional activities. Other revenue increased 31.7% in constant currency to $24.5 million for the 2025 period primarily due to inflationary impacts, higher screen advertising and loyalty program revenue, as well as increased online sales penetration.

Previous wording

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

Current wording

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

Previous wording

Constant currency expense amounts, which are non-GAAP measurements, were calculated using the average exchange rate for the corresponding month for 2023. 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.

Current wording

Constant currency expense amounts, which are non-GAAP measurements, were calculated using the average exchange rate for the corresponding month for 2024. We translate the results of our international reportable segment from local currencies into U.S. dollars using currency rates in effect at different points in time in accordance with U.S. GAAP. Significant changes in foreign currency exchange rates from one period to the next can result in meaningful variations in reported results. We are providing constant currency amounts for our international reportable segment to present a period-to-period comparison of business performance that excludes the impact of foreign currency fluctuations.

Previous wording

U.S. Film rentals and advertising costs for the 2024 period were 57.4% of admissions revenue compared with 57.7% for the 2023 period due to the overall mix of film releases. Concession supplies expense for the 2024 period was 17.9% of concession revenue compared with 17.4% for the 2023 period. The concession supplies rate for the 2024 period was impacted by inflationary pressures on certain concession categories, product mix and higher shrink, partially offset by the impact of strategic pricing actions.

Current wording

U.S. Film rentals and advertising costs for the 2025 period remained flat compared with the 2024 period at 54.5% of admissions revenue primarily due to the lower concentration of high-grossing films offset by the overall mix of films and higher marketing spend. Concession supplies expense for the 2025 period was 20.6% of concession revenue compared with 19.2% for the 2024 period. The concession supplies rate for the 2025 period was primarily impacted by a higher mix of merchandise, lower rebates and inflationary pressures, partially offset by strategic pricing actions.

Previous wording

Salaries and wages decreased 3.4% to $244.4 million for the 2024 period compared with $253.0 million for the 2023 period due to lower attendance and the impact of labor productivity initiatives, partially offset by higher wage rates and expanded operating hours. Facility lease expense, which is predominantly fixed in nature, decreased to $184.0 million primarily due to theatre closures and lease renegotiations, partially offset by higher percentage rent. Utilities and other costs decreased 5.2% to $255.7 million, as many of these costs are variable or semi-variable in nature and were impacted by the decrease in attendance. A decrease in property taxes also contributed to the decline in utilities and other costs.

Current wording

Salaries and wages increased 2.9% to $74.6 million for the 2025 period compared with $72.5 million for the 2024 period due to increased wage rates and workers’ compensation costs, partially offset by lower attendance. Salaries and wages in the 2025 period were also impacted by the lower-than expected box office performance. Facility lease expense, which is predominantly fixed in nature, decreased slightly to $60.2 million primarily due to lower percentage rent. Utilities and other costs increased 4.5% to $81.8 million, largely driven by higher property taxes, credit card fees and repairs and maintenance, partially offset by the decrease in attendance, as many of these costs are variable or semi-variable in nature.

Previous wording

Film rentals and advertising costs were 50.0% of admissions revenue as reported for the 2024 period compared with 50.7% for the 2023 period due to the overall mix of film releases. Concession supplies expense was 21.9% of concessions revenue as reported for the 2024 period compared with 21.7% for the 2023 period. The increase in the concession supplies rate was primarily driven by inflationary pressures offset by the impact of strategic pricing actions.

Current wording

Film rentals and advertising costs were 49.9% of admissions revenue as reported for the 2025 period compared with 48.3% for the 2024 period due to the overall mix of films and higher marketing spend. Concession supplies expense was 22.8% of concessions revenue as reported for the 2025 period compared with 21.3% for the 2024 period. The increase in the concession supplies rate was primarily driven by inflationary pressures and the impact of promotional activities.

Previous wording

Salaries and wages, facility lease expense and utilities and other expenses, as reported, were lower for the 2024 period as a result of favorable exchange rate fluctuations. In constant currency, salaries and wages increased to $80.4 million for the 2024 period primarily driven by wage rate inflation, partially offset by labor productivity initiatives and lower attendance. Facility lease expense increased to $81.4 million in constant currency for the 2024 period primarily due to inflationary increases and the return of certain minimum rent thresholds, partially offset by lower percentage rent. Utilities and other costs increased to $120.6 million in constant currency for the 2024 period due to inflationary pressures and higher utility costs.

Current wording

Salaries and wages, facility lease expense and utilities and other expenses, as reported, were lower for the 2025 period as a result of favorable exchange rate fluctuations. In constant currency, salaries and wages increased to $17.9 million for the 2025 period primarily driven by wage and benefit inflation, as well as the impact of the lower-than expected box office performance. Facility lease expense increased to $20.2 million in constant currency for the 2025 period primarily due to inflationary increases and the dissipation of temporary rent abatements that benefited the 2024 period. Utilities and other costs increased to $27.3 million in constant currency for the 2025 period due to inflationary pressures and higher screen advertising related commissions, credit card fees and utility costs.

Previous wording

General and Administrative Expense. General and administrative expense for Holdings increased to $161.0 million for the 2024 period compared with $144.7 million for the 2023 period. General and administrative expense for CUSA increased to $158.2 million for the 2024 period compared with $142.2 million for the 2023 period. The increase for both Holdings and CUSA is primarily due to wages and benefits inflation, as well as higher incentive and share-based compensation and related payroll taxes, partially offset by the favorable impact of exchange rate fluctuations.

Current wording

General and Administrative Expense. General and administrative expense for Holdings increased to $54.5 million for the 2025 period compared with $48.9 million for the 2024 period. General and administrative expense for CUSA increased to $53.5 million for the 2025 period compared with $48.0 million for the 2024 period. The increase for both Holdings and CUSA is primarily due to wages and benefits inflation, higher share-based compensation and related payroll taxes, and higher professional fees, partially offset by the favorable impact of exchange rate fluctuations.

Previous wording

Gain on Disposal of Assets and Other. A gain on disposal of assets and other of $0.1 million was recorded for the third quarter of 2024 compared with a gain of $6.1 million for the third quarter of 2023. Activity for the third quarter of 2023 was primarily related to the sale of our Ecuador subsidiary in September 2023.

Current wording

(Gain) Loss on Disposal of Assets and Other. A gain on disposal of assets and other of $4.1 million was recorded for the 2025 period compared with a loss of $0.4 million for the 2024 period. Activity for the 2025 period was primarily related to gains on the sale of a land parcel and one of our owned theater properties.

Previous wording

Interest Expense. Interest expense for Holdings, which includes amortization of debt issuance costs and original issue discount and amortization of accumulated gains for swap amendments, was $109.0 million during the 2024 period compared with $112.0 million during the 2023 period. The interest expense attributable to CUSA, which includes amortization of debt issuance costs and original issue discount and amortization of accumulated gains for swap amendments, was $90.8 million during the 2024 period compared with $93.9 million during the 2023 period. The decrease in interest expense was primarily due to the redemption of the remaining 8.75% Secured Notes, the extinguishment of the 5.875% Senior Notes, and the amendment and extension of our interest rate swaps, partially offset by a higher average interest rate on our term loan and the impact of the issuance of the 7.00% Senior Notes. See further discussion in Liquidity and Capital Resources below.

Current wording

Interest Expense. Interest expense for Holdings, which includes amortization of debt issuance costs and original issue discount and amortization of accumulated losses for swap amendments, was $38.5 million during the 2025 period compared with $37.7 million during the 2024 period. The interest expense attributable to CUSA was $32.4 million during the 2025 period compared with $31.6 million during the 2024 period. The increase in interest expense was primarily due to the impact of the issuance of the 7.00% Senior Notes in July 2024, partially offset by the redemption of the remaining principal amount of the 8.75% Secured Notes during May 2024, the extinguishment of the 5.875% Senior Notes during July 2024, and the term loan reprice transactions that reduced our margin rate by 50 bps in each of May and November 2024. See further discussion in Liquidity and Capital Resources below.

Previous wording

Interest Income. Interest income for Holdings was $40.3 million during the 2024 period compared with $40.2 million during the 2023 period. The interest income attributable to CUSA was $30.8 million during the 2024 period compared with $31.5 million during the 2023 period.

Current wording

Interest Income. Interest income for Holdings was $12.0 million during the 2025 period compared with $13.6 million during the 2024 period. The interest income attributable to CUSA was $9.7 million during the 2025 period compared with $10.3 million during the 2024 period. The decrease in interest income was primarily due to foreign currency fluctuations.

Previous wording

Equity in Income of Affiliates. Equity in income of affiliates of $5.0 million was recorded during the third quarter of 2024 compared with $1.5 million during the third quarter of 2023 driven by higher income earned from our investment in AC JV LLC during the third quarter of 2024. See Note 9 to the condensed consolidated financial statements for information about our equity investments.

Current wording

Equity in Income of Affiliates. Equity in income of affiliates of $0.9 million was recorded during the 2025 period compared with $3.8 million during the 2024 period primarily due to lower income from our investment in AC JV, LLC during 2025. See Note 9 to the condensed consolidated financial statements for information about our equity investments.

Previous wording

Net Gain on Investment in NCMI. We recorded a net gain on our investment in NCMI of $12.8 million during the 2024 period compared with $13.9 million during the 2023 period, primarily related to the mark-to-market adjustment of our investment in NCMI under the fair value basis of accounting. See Note 8 to the condensed consolidated financial statements for information about our investment in NCMI.

Current wording

Net (Loss) Gain on Investment in NCMI. We recorded a net loss on our investment in NCMI of $3.6 million during the 2025 period compared with a gain of $4.4 million during the 2024 period, primarily related to the mark-to-market adjustment of our investment in NCMI under the fair value basis of accounting. See Note 8 to the condensed consolidated financial statements for information about our investment in NCMI.

Previous wording

Income Taxes - Holdings. An income tax benefit of $71.3 million was recorded for the 2024 period compared with income tax expense of $29.8 million for the 2023 period. The effective tax rate was approximately (37.6)% for the 2024 period compared with 12.5% for the 2023 period. During the 2024 period, a deferred tax benefit of $116.3 million was recorded discretely related to the release of valuation allowances previously recorded against certain foreign tax credits, other federal deferred tax assets, certain state net operating losses and other state deferred tax assets as well as deferred tax assets in certain foreign jurisdictions. The release of these valuation allowances was the result of the availability of positive evidence related to sustained taxable income in the relevant jurisdictions to support the future realizability of deferred tax assets. This discrete benefit favorably impacted the effective tax rate for the 2024 period, causing the income tax benefit to vary significantly from the tax expense derived by applying the statutory tax rate to the pre-tax income for the period. The effective tax rate for the 2023 period was favorably impacted by the use of certain foreign tax credits for which valuation allowances had been established in prior periods as well as the release of valuation allowances previously recorded against the net deferred tax assets in certain foreign jurisdictions. Income tax provisions for interim 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.

Current wording

Income Taxes - Holdings. An income tax benefit of $14.7 million was recorded for the 2025 period compared with an income tax benefit of $27.7 million for the 2024 period. The effective tax rate was approximately 27.6% for the 2025 period compared with 1,144.3% for the 2024 period. The effective tax rate for the 2025 period differs from the U.S. statutory rate primarily due to foreign tax rate differences, the U.S. tax impact of foreign operations, and state and local taxes. During the 2024 period, a deferred tax benefit of $33.7 million was recorded discretely related to the release of valuation allowances in certain foreign jurisdictions. The release of these valuation allowances was the result of the availability of positive evidence related to sustained taxable income in the relevant jurisdictions to support the future realizability of deferred tax assets. This discrete benefit favorably impacted the effective tax rate for the 2024 period, causing the income tax benefit to vary significantly from the tax benefit derived by applying the statutory tax rate to Holdings’ pre-tax loss for the period. Income tax provisions for interim 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.

Previous wording

Income Taxes - CUSA. An income tax benefit of $67.6 million was recorded for the 2024 period compared with income tax expense of $24.2 million for the 2023 period. The effective tax rate was approximately (33.7)% for the 2024 period compared with 9.7% for the 2023 period. During the 2024 period, a deferred tax benefit of 112.4 million was recorded discretely related to the release of valuation allowances previously recorded against certain foreign tax credits, other federal deferred tax assets, certain state net operating losses and other state deferred tax assets as well as deferred tax assets in certain foreign jurisdictions. The release of these valuation allowances was the result of the availability of positive evidence related to sustained taxable income in the relevant jurisdictions to support the future realizability of deferred tax assets. This discrete benefit favorably impacted the effective tax rate for the 2024 period, causing the income tax benefit to vary significantly from the tax expense derived by applying the statutory tax rate to the pre-tax income for the period. The effective tax rate for the 2023 period was favorably impacted by the use of certain foreign tax credits for which valuation allowances had been established in prior periods as well as the release of valuation allowances previously recorded against the net deferred tax assets in certain foreign jurisdictions. Income tax provisions for interim 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.

Current wording

Income Taxes - CUSA. An income tax benefit of $14.2 million was recorded for the 2025 period compared with income tax benefit of $26.6 million for the 2024 period. The effective tax rate was approximately 29.3% for the 2025 period compared with (2,120.5)% for the 2024 period. The effective tax rate for the 2025 period differs from the U.S. statutory rate primarily due to foreign tax rate differences, U.S. tax impact of foreign operations, and state and local taxes. During the 2024 period, a deferred tax benefit of $33.7 million was recorded discretely related to the release of valuation allowances in certain foreign jurisdictions. The release of these valuation allowances was the result of the availability of positive evidence related to sustained taxable income in the relevant jurisdictions to support the future realizability of deferred tax assets. This discrete benefit favorably impacted the effective tax rate for the 2024 period, causing the income tax benefit to vary significantly from the tax expense derived by applying the statutory tax rate to the pre-tax income for the period. Income tax provisions for interim 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.

Previous wording

We primarily collect our revenue in cash, mainly through box office receipts and the sale of concessions. Our revenue is generally received in cash prior to the payment of related expenses; therefore, we have an operating “float” and historically have not required traditional working capital financing. 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.

Current wording

We primarily collect our revenue in cash, mainly through box office receipts and the sale of concessions. Our revenue is generally received in cash prior to the payment of related expenses; therefore, we have an operating “float” and historically have not required traditional working capital financing. However, our working capital position will fluctuate based on seasonality, the timing and volume of new film content, the timing of interest payments on our debt as well as timing of payment of other operating expenses that are paid annually or semi-annually, such as property and other taxes and incentive compensation. We believe our existing cash and expected cash flows from operations will be sufficient to meet our working capital, capital expenditures, and known contractual obligations for the next twelve months and beyond.

Previous wording

Cash provided by operating activities was $269.6 million for Holdings and $279.5 million for CUSA for the nine months ended September 30, 2024, compared with cash provided by operating activities of $335.8 million for Holdings and $347.9 million for CUSA for the nine months ended September 30, 2023. The decrease in cash provided by operating activities was primarily driven by the timing and level of revenue earned during each period partially offset by the timing of payments to vendors for expenses incurred during each period.

Current wording

Cash used for operating activities was $119.1 million for Holdings and $111.1 million for CUSA for the three months ended March 31, 2025, compared with cash used for operating activities of $22.7 million for Holdings and $16.4 million for CUSA for the three months ended March 31, 2024. The increase in cash used for operating activities was primarily driven by the timing of payments to vendors for expenses and the level of revenue earned during each period.

Previous wording

Investing activities have been principally related to the development and remodel of theatres. New theatre openings and remodels 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 $89.1 million and $74.9 million for the nine months ended September 30, 2024 and 2023, respectively. The increase in cash used for investing activities was primarily due to the proceeds from the sale of our Ecuador subsidiary during the nine months ended September 30, 2023.

Current wording

Investing activities have been principally related to the development, remodel and enhancement of theaters, which historically have been financed with cash flow from operations and debt financings. Cash used for investing activities was $15.3 million and $23.3 million for the three months ended March 31, 2025 and 2024, respectively. The decrease in cash used for investing activities was primarily due to the proceeds from the sale of a land parcel and one of our owned theater properties during the three months ended March 31, 2025.

Previous wording

Below is a summary of capital expenditures, disaggregated by new and existing theatres, for the nine months ended September 30, 2024 and 2023 (in millions):

Current wording

Below is a summary of capital expenditures, disaggregated by new and existing theaters, for the three months ended March 31, 2025 and 2024 (in millions):

Previous wording

We operated 499 theatres with 5,680 screens worldwide as of September 30, 2024. Theatres and screens opened and closed during the nine months ended September 30, 2024 were as follows:

Current wording

We operated 497 theaters with 5,644 screens worldwide as of March 31, 2025. Theaters and screens opened and closed during the three months ended March 31, 2025 were as follows:

Previous wording

Approximately $3.2 million is expected to be paid during the remainder of 2024 and $7.8 million, $1.2 million and $4.8 million is expected to be paid during 2025, 2026 and 2027, respectively. The timing of payments is subject to change in the event of construction or other delays.

Current wording

Approximately $26.7 million is expected to be paid during the remainder of 2025 and $7.6 million, $9.7 million and $2.4 million is expected to be paid during 2026, 2027 and 2028, respectively. The timing of payments is subject to change in the event of construction or other delays.

Previous wording

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

Current wording

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

Previous wording

Holdings, at the discretion of its board of directors and subject to applicable law, may pay dividends on its common stock. The amount of the dividends to be paid in the future, if any, will depend upon available cash balances, anticipated cash needs, overall financial condition, loan agreement restrictions as discussed below, and future prospects for earnings and cash flows, as well as other relevant factors. As a result of the impact of the COVID-19 pandemic, Holdings’ Board of Directors has suspended the quarterly dividend to shareholders.

Current wording

Holdings, at the discretion of its Board of Directors and subject to applicable law, anticipates paying regularly quarterly cash dividends on its common stock. The amount of the dividends to be paid in the future, if any, will depend upon our then available cash balances, anticipated cash needs, overall financial condition, loan agreement restrictions as discussed below, and future prospects for earnings and cash flows, as well as other relevant factors. See Note 6 to the condensed consolidated financial statements for a summary of the quarterly dividend paid during three months ended March 31, 2025.

Previous wording

We expect to repay the principal amount of our 4.50% Convertible Senior Notes upon their maturity in August 2025 with cash on hand, and could fund the remainder with a combination of cash, shares or a combination thereof. See “4.50% Convertible Senior Notes”below. Also see Note 7 to the condensed consolidated financial statements for a summary of long-term debt outstanding as of September 30, 2024 for Holdings and CUSA.

Current wording

We expect to repay the principal amount of our 4.50% Convertible Senior Notes upon their maturity in August 2025 with cash on hand, and we can, at our election, fund the remainder with cash, shares or a combination thereof. Our current intent is to settle the remainder with shares. See “4.50% Convertible Senior Notes”below.