16.Related Party Transactions
A subsidiary of the Company manages a theater for Laredo Theatre, Ltd. (“Laredo”). The Company is the sole general partner and owns 75% of the limited partnership interests of Laredo. Lone Star Theatres, Inc. owns the remaining 25% of the limited partnership interests in Laredo and is 100% owned by Mr. David Roberts, who is Lee Roy Mitchell’s son-in-law and Kevin Mitchell’s brother-in-law. Lee Roy Mitchell, our founder, owns, both directly and indirectly, approximately 8.5% of Holdings’ common stock and Kevin Mitchell is a member of Holdings’ Board of Directors. Under the agreement, management fees are paid by Laredo to the Company at a rate of 5% of annual theater revenue. The Company recorded $0.2 and $0.1 of management fee revenue during the three months ended March 31, 2026 and 2025, respectively. All such amounts are included in the condensed consolidated statements of loss, with the intercompany amounts eliminated in consolidation. During the three months ended March 31, 2026 and 2025, the Company paid excess cash distributions of $0.1 and $0.1, respectively to Lone Star Theatres, Inc. as required by the partnership agreement, which were recorded as a reduction of noncontrolling interests on each of Holdings’ and CUSA’s condensed consolidated balance sheets.
A subsidiary of the Company leases 12 theaters from Syufy Enterprises, LP (“Syufy”) or affiliates of Syufy. Raymond Syufy is one of Holdings' directors and is an officer of the general partner of Syufy. For the three months ended March 31, 2026 and 2025, the Company paid total rent of $5.8 and $5.4, respectively, to Syufy. CUSA provides digital equipment support to drive-in theaters owned by Syufy. The Company recorded management fees related to these services of $0.00 and $0.03 during the three months ended March 31, 2026 and 2025, respectively.
A subsidiary of the Company has a 50% voting interest in FE Concepts, a joint venture with AWSR, an entity which owns the remaining 50% of FE Concepts. AWSR is owned by Lee Roy Mitchell and Tandy Mitchell. FE Concepts operates a family entertainment center that offers bowling, gaming, movies and other amenities. CUSA has a theater services agreement with FE Concepts under which the Company receives service fees for providing film booking and equipment monitoring services for the facility. The Company recorded management fees of $0.02 and $0.02 related to these services during the three months ended March 31, 2026 and 2025, respectively. The Company received cash distributions of $2.0 and $4.0 from FE Concepts during the three months ended March 31, 2026 and 2025, respectively.
During the three months ended March 31, 2026, CUSA paid cash distributions totaling approximately $10.5 to Cinemark Holdings, Inc., primarily to fund the payment of the Company’s shareholder dividends. See Note 6 for further discussion of the Company’s shareholder dividends.
17.Commitments and Contingencies
From time to time, the Company is involved in various legal proceedings arising from the ordinary course of its business operations, such as personal injury claims, employment matters, patent claims, landlord-tenant disputes, contractual disputes with landlords over certain termination rights and other contractual disputes, some of which are covered by insurance. The Company believes its potential liability with respect to proceedings currently pending is not material, individually or in the aggregate, to the Company’s financial position, results of operations and cash flows.
Gerardo Rodriguez, individually and on behalf of a class of all others similarly situated vs Cinemark USA, Inc. and Cinemark Holdings, Inc., et al. This class action lawsuit was filed against the Company on February 24, 2023 in the Cook County Circuit Court in Illinois alleging violation of the Fair and Accurate Credit Transactions Act. The Company firmly maintains that the allegations are without merit and will vigorously defend itself against the lawsuit. The Company cannot predict the outcome of this litigation.
Shane Waldrop, individually and on behalf of all other similarly situated, vs. Cinemark USA, Inc. This putative nationwide class action lawsuit was filed against the Company on April 16, 2024, in the United States District Court for the Eastern District of Texas, Sherman Division, alleging violations of the Federal Food Drug & Cosmetics Act, violations of the Texas Deceptive Trade Practices Act, negligent misrepresentation, fraud and unjust enrichment based on the Company’s alleged mislabeling of twenty-four ounce draft beer cups used at certain theaters. On March 19, 2026, the United States District Judge issued an order dismissing the case without prejudice due to lack of subject matter jurisdiction. Subsequently, the parties entered into a settlement agreement resolving all alleged disputed claims.
The One Big Beautiful Bill Act (“OBBBA”) was signed into law on July 4, 2025. The OBBBA makes permanent certain expiring provisions of the Tax Cuts and Jobs Act and restores favorable tax treatment for certain business provisions including 100% bonus depreciation and the business interest expense limitation. The OBBBA also includes adjustments to the calculation of certain international framework provisions, which were initially established by the Tax Cuts and Jobs Act. The OBBBA has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. The OBBBA did not have a material impact on the Company’s effective tax rate for the three months ended March 31, 2026.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
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.
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, 2026, we managed our business under two reportable segments – U.S. markets and international markets. See Note 15 to the condensed consolidated financial statements.
The success of the theatrical exhibition industry is primarily driven by the box office performance of newly released film content. Box office performance is influenced by several key factors, including the quality and quantity of films released, the scale and effectiveness of studio-led marketing support, the duration of the exclusive theatrical release window, and evolving consumer behavior amid competition from other in- and out-of-home entertainment options.
Revenue and Expense
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, promotional income, meeting rentals, and games located in some of our facilities. Filmed entertainment box office receipts include traditional content from studios as well as alternative entertainment, such as foreign and faith-based films, concert events 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.
Films leading the box office during the three months ended March 31, 2026 included new releases Project Hail Mary, Hoppers, Scream 7, and GOAT, as well as the carryover of 2025 release Avatar: Fire and Ash.
Film rental costs are variable in nature and fluctuate with our admissions revenue. Film rental costs as a percentage of revenue are generally higher for periods in which more blockbuster films are released. Advertising costs, which are expensed as incurred, are primarily related to expanding our customer base, increasing the frequency of visits and growing loyalty. These expenses vary depending on the timing and length of such campaigns.
Concession supplies expense is variable in nature and fluctuates with our concession revenue and product mix. Inflationary pressures and tariffs continue to impact product costs in the near term and may impact product costs going forward. We source products from a variety of global partners to minimize supply chain interruptions and manage costs, wherever possible.
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 and benefits across our labor base and similar increases may continue in the future.
Facility lease expense is primarily a fixed cost at the theater level as most of our facility leases require a fixed monthly minimum rent payment. 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.
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.
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, general supplies, and other costs that are not specifically associated with the operations of our theaters.
Results of Operations
The following table sets forth, for the periods indicated, the amounts for certain items reflected in the operating income (loss) of Holdings along with each of those items as a percentage of revenue.
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
March 31, |
|
|
|
2026 |
|
|
2025 |
|
Operating data (in millions): |
|
|
|
|
|
|
Revenue |
|
|
|
|
|
|
Admissions |
|
$ |
311.4 |
|
|
$ |
264.1 |
|
Concession |
|
|
255.2 |
|
|
|
210.4 |
|
Other |
|
|
76.5 |
|
|
|
66.2 |
|
Total revenue |
|
$ |
643.1 |
|
|
$ |
540.7 |
|
Cost of operations |
|
|
|
|
|
|
Film rentals and advertising |
|
|
169.7 |
|
|
|
141.4 |
|
Concession supplies |
|
|
48.5 |
|
|
|
44.3 |
|
Salaries and wages |
|
|
94.4 |
|
|
|
90.3 |
|
Facility lease expense |
|
|
80.9 |
|
|
|
78.3 |
|
Utilities and other |
|
|
114.7 |
|
|
|
105.7 |
|
General and administrative expenses (1) |
|
|
56.1 |
|
|
|
54.5 |
|
Depreciation and amortization |
|
|
51.6 |
|
|
|
49.5 |
|
Loss (gain) on disposal of assets and other |
|
|
3.7 |
|
|
|
(4.1 |
) |
Total cost of operations (1) |
|
|
619.6 |
|
|
|
559.9 |
|
Operating income (loss) (1) |
|
$ |
23.5 |
|
|
$ |
(19.2 |
) |
|
|
|
|
|
|
|
Operating data as a percentage of total revenue: |
|
|
|
|
|
|
Revenue |
|
|
|
|
|
|
Admissions |
|
|
48.4 |
% |
|
|
48.8 |
% |
Concession |
|
|
39.7 |
% |
|
|
38.9 |
% |
Other |
|
|
11.9 |
% |
|
|
12.3 |
% |
Total revenue |
|
|
100.0 |
% |
|
|
100.0 |
% |
Cost of operations (2) |
|
|
|
|
|
|
Film rentals and advertising (2) |
|
|
54.5 |
% |
|
|
53.5 |
% |
Concession supplies (2) |
|
|
19.0 |
% |
|
|
21.1 |
% |
Salaries and wages |
|
|
14.7 |
% |
|
|
16.7 |
% |
Facility lease expense |
|
|
12.6 |
% |
|
|
14.5 |
% |
Utilities and other |
|
|
17.8 |
% |
|
|
19.5 |
% |
General and administrative expenses |
|
|
8.7 |
% |
|
|
10.1 |
% |
Depreciation and amortization |
|
|
8.0 |
% |
|
|
9.2 |
% |
Loss (gain) on disposal of assets and other |
|
|
0.6 |
% |
|
|
(0.8 |
)% |
Total cost of operations |
|
|
96.3 |
% |
|
|
103.6 |
% |
Operating income (loss) |
|
|
3.7 |
% |
|
|
(3.6 |
)% |
Average screen count (3) |
|
|
5,629 |
|
|
|
5,649 |
|
(1)The only difference between components of operating income (loss) for Holdings, as presented above, and those of CUSA is incremental general and administrative expense recognized by Holdings. The following table sets forth, for the periods indicated, the amounts for general and administrative expense, total cost of operations and operating income (loss) of CUSA:
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
March 31, |
|
|
|
2026 |
|
|
2025 |
|
Operating data (in millions): |
|
|
|
|
|
|
Cost of operations |
|
|
|
|
|
|
General and administrative expenses |
|
$ |
55.0 |
|
|
$ |
53.5 |
|
Total cost of operations |
|
$ |
618.5 |
|
|
$ |
558.9 |
|
Operating income (loss) |
|
$ |
24.6 |
|
|
$ |
(18.2 |
) |
(2)All costs are expressed as a percentage of total revenue, except film rentals and advertising, which are expressed as a percentage of admissions revenue, and concession supplies, which are expressed as a percentage of concession revenue.
(3)Average screen count is calculated based on the average of month-end screen counts.
Three months ended March 31, 2026 (the “2026 period”) versus the three months ended March 31, 2025 (the “2025 period”)
2026 Period - The North American Industry box office generated approximately $1.8 billion during the 2026 period, which included new releases Project Hail Mary, Hoppers, Scream 7, and GOAT, as well as the carryover of 2025 release Avatar: Fire and Ash.
2025 Period - The North American Industry box office generated approximately $1.5 billion during the 2025 period, which included new releases Captain America: Brave New World, Dog Man, and Disney’s Snow White, as well as the carryover of 2024 releases Mufasa: The Lion King and Sonic the Hedgehog 3.
Revenue. The table below, presented by reportable segment, summarizes our year-over-year revenue performance and certain key performance indicators that impact our revenue.
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Reportable Segment |
|
|
International Reportable Segment |
|
|
Consolidated |
|
|
|
Three Months Ended March 31, |
|
|
Three Months Ended March 31, |
|
|
Three Months Ended March 31, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Constant Currency (3) |
|
|
|
|
|
|
|
|
|
|
|
|
2026 |
|
|
2025 |
|
|
%
Change |
|
|
2026 |
|
|
2025 |
|
|
%
Change |
|
|
2026 |
|
|
%
Change |
|
|
2026 |
|
|
2025 |
|
|
%
Change |
|
Admissions revenue |
|
$ |
253.8 |
|
|
$ |
207.6 |
|
|
|
22.3 |
% |
|
$ |
57.6 |
|
|
$ |
56.5 |
|
|
|
1.9 |
% |
|
$ |
57.3 |
|
|
|
1.4 |
% |
|
$ |
311.4 |
|
|
$ |
264.1 |
|
|
|
17.9 |
% |
Concession revenue |
|
|
206.8 |
|
|
|
164.4 |
|
|
|
25.8 |
% |
|
|
48.4 |
|
|
|
46.0 |
|
|
|
5.2 |
% |
|
|
47.7 |
|
|
|
3.7 |
% |
|
|
255.2 |
|
|
|
210.4 |
|
|
|
21.3 |
% |
Other revenue (1) |
|
|
54.1 |
|
|
|
45.1 |
|
|
|
20.0 |
% |
|
|
22.4 |
|
|
|
21.1 |
|
|
|
6.2 |
% |
|
|
22.7 |
|
|
|
7.6 |
% |
|
|
76.5 |
|
|
|
66.2 |
|
|
|
15.6 |
% |
Total revenue (1) |
|
$ |
514.7 |
|
|
$ |
417.1 |
|
|
|
23.4 |
% |
|
$ |
128.4 |
|
|
$ |
123.6 |
|
|
|
3.9 |
% |
|
$ |
127.7 |
|
|
|
3.3 |
% |
|
$ |
643.1 |
|
|
$ |
540.7 |
|
|
|
18.9 |
% |
Attendance |
|
|
24.1 |
|
|
|
20.6 |
|
|
|
17.0 |
% |
|
|
14.9 |
|
|
|
16.0 |
|
|
|
(6.9 |
)% |
|
|
|
|
|
|
|
|
39.0 |
|
|
|
36.6 |
|
|
|
6.6 |
% |
Average ticket price (2) |
|
$ |
10.53 |
|
|
$ |
10.08 |
|
|
|
4.5 |
% |
|
$ |
3.87 |
|
|
$ |
3.53 |
|
|
|
9.6 |
% |
|
$ |
3.85 |
|
|
|
9.1 |
% |
|
$ |
7.98 |
|
|
$ |
7.22 |
|
|
|
10.5 |
% |
Concession revenue per patron (2) |
|
$ |
8.58 |
|
|
$ |
7.98 |
|
|
|
7.5 |
% |
|
$ |
3.25 |
|
|
$ |
2.88 |
|
|
|
12.8 |
% |
|
$ |
3.20 |
|
|
|
11.1 |
% |
|
$ |
6.54 |
|
|
$ |
5.75 |
|
|
|
13.7 |
% |
(1)U.S. reportable segment revenue includes eliminations of intercompany transactions with the international reportable segment. See Note 15 to our condensed consolidated financial statements.
(2)Average ticket price is calculated as admissions revenue divided by attendance. Concession revenue per patron is calculated as concession revenue divided by attendance.
(3)Constant currency revenue amounts, which are non-GAAP measurements, were calculated using the average exchange rate for the corresponding month for 2025. 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.
•U.S. Attendance increased to 24.1 million patrons during the 2026 period compared with 20.6 million patrons during the 2025 period primarily driven by a film slate that had stronger consumer appeal year-over-year. Average ticket price increased 4.5% to $10.53 during the 2026 period compared with $10.08 during the 2025 period driven by strategic pricing actions and higher premium format mix. Concession revenue per patron increased 7.5% to $8.58 during the 2026 period compared with $7.98 during the 2025 period primarily driven by strategic pricing actions, increased incidence rates and a favorable shift in product mix. Other revenue for the 2026 period increased 20.0% to $54.1 million compared with $45.1 million during the 2025 period primarily due to higher transaction fees, as well as an increase in screen advertising revenue and promotional income.
•International. Attendance decreased to 14.9 million patrons for the 2026 period from 16.0 million during the 2025 period reflecting a film slate that did not resonate as strongly with audiences in our international markets year-over-year. Revenues, average ticket price and concession revenue per patron for our international segment, as reported, were favorably impacted by exchange rate fluctuations during the 2026 period. In constant currency, the average ticket price increased 9.1% to $3.85 for the 2026 period primarily due to inflationary pricing actions and higher premium format mix. Similarly, in constant currency, concession revenue per patron increased 11.1% to $3.20 for the 2026 period primarily due to inflationary pricing actions. Other revenue increased 7.6% in constant currency to $22.7 million for the 2026 period primarily due to inflationary impacts.
Cost of Operations. The table below, presented by reportable segment, summarizes our year-over-year theater operating costs.
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Reportable Segment |
|
|
International Reportable Segment |
|
|
Consolidated |
|
|
|
Three Months Ended March 31, |
|
|
Three Months Ended March 31, |
|
|
Three Months Ended March 31, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Constant Currency (1) |
|
|
|
|
|
|
|
|
|
|
|
|
2026 |
|
|
2025 |
|
|
%
Change |
|
|
2026 |
|
|
2025 |
|
|
%
Change |
|
|
2026 |
|
|
%
Change |
|
|
2026 |
|
|
2025 |
|
|
%
Change |
|
Film rentals and advertising |
|
$ |
140.9 |
|
|
$ |
113.2 |
|
|
|
24.5 |
% |
|
$ |
28.8 |
|
|
$ |
28.2 |
|
|
|
2.1 |
% |
|
$ |
28.8 |
|
|
|
2.1 |
% |
|
$ |
169.7 |
|
|
$ |
141.4 |
|
|
|
20.0 |
% |
Concession supplies |
|
$ |
37.8 |
|
|
$ |
33.8 |
|
|
|
11.8 |
% |
|
$ |
10.7 |
|
|
$ |
10.5 |
|
|
|
1.9 |
% |
|
$ |
10.5 |
|
|
|
— |
% |
|
$ |
48.5 |
|
|
$ |
44.3 |
|
|
|
9.5 |
% |
Salaries and wages |
|
$ |
77.2 |
|
|
$ |
74.6 |
|
|
|
3.5 |
% |
|
$ |
17.2 |
|
|
$ |
15.7 |
|
|
|
9.6 |
% |
|
$ |
17.1 |
|
|
|
8.9 |
% |
|
$ |
94.4 |
|
|
$ |
90.3 |
|
|
|
4.5 |
% |
Facility lease expense |
|
$ |
62.3 |
|
|
$ |
60.2 |
|
|
|
3.5 |
% |
|
$ |
18.6 |
|
|
$ |
18.1 |
|
|
|
2.8 |
% |
|
$ |
17.9 |
|
|
|
(1.1 |
)% |
|
$ |
80.9 |
|
|
$ |
78.3 |
|
|
|
3.3 |
% |
Utilities and other |
|
$ |
88.8 |
|
|
$ |
81.8 |
|
|
|
8.6 |
% |
|
$ |
25.9 |
|
|
$ |
23.9 |
|
|
|
8.4 |
% |
|
$ |
25.8 |
|
|
|
7.9 |
% |
|
$ |
114.7 |
|
|
$ |
105.7 |
|
|
|
8.5 |
% |
(1)Constant currency expense amounts, which are non-GAAP measurements, were calculated using the average exchange rate for the corresponding month for 2025. 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.
•U.S. Film rentals and advertising costs increased to 55.5% of admissions revenue for the 2026 period compared with 54.5% of admissions revenue for the 2025 period primarily due to the increased scale and concentration of high-grossing films. Concession supplies expense for the 2026 period was 18.3% of concession revenue compared with 20.6% for the 2025 period. The decrease in the concession supplies rate for the 2026 period was primarily driven by strategic pricing actions and sourcing initiatives, as well as a shift in product mix, partially offset by continued inflationary pressures.
Salaries and wages increased 3.5% to $77.2 million for the 2026 period compared with $74.6 million for the 2025 period due to higher attendance and wage inflation, partially offset by labor productivity initiatives. Facility lease expense increased 3.5% to $62.3 million, primarily due to higher percentage rent. Utilities and other costs increased 8.6% to $88.8 million, as many of these costs, such as credit card fees, repairs and maintenance costs, utility and janitorial costs, are variable or semi-variable in nature and were impacted by the increase in attendance.
•International. Our international operating costs, as reported, were unfavorably impacted by exchange rate fluctuations for the 2026 period.
Film rentals and advertising costs remained relatively flat at 50.0% of admissions revenue as reported for the 2026 period compared with 49.9% for the 2025 period. Concession supplies expense was 22.1% of concessions revenue as reported for the 2026 period compared with 22.8% for the 2025 period. The decrease in the concession supplies rate was primarily driven by strategic pricing actions and sourcing initiatives, as well as favorable product mix.
In constant currency, salaries and wages increased 8.9% to $17.1 million for the 2026 period primarily driven by wage inflation, partially offset by lower attendance and effective labor management. Facility lease expense of $17.9 million in constant currency was relatively flat compared to the 2025 period. Utilities and other costs increased 7.9% to $25.8 million in constant currency for the 2026 period primarily due to inflationary pressures.
General and Administrative Expense. General and administrative expense for Holdings increased to $56.1 million for the 2026 period compared with $54.5 million for the 2025 period. General and administrative expense for CUSA increased to $55.0 million for the 2026 period compared with $53.5 million for the 2025 period. The increase for both Holdings and CUSA is primarily due to higher wages and benefits, increased headcount, higher share-based compensation and an increase in cloud-based software costs, partially offset by a decrease in professional fees.
Depreciation and Amortization. Depreciation and amortization expense increased to $51.6 million for the 2026 period compared with $49.5 million for the 2025 period.
Loss (Gain) on Disposal of Assets and Other. A loss on disposal of assets and other of $3.7 million was recorded for the 2026 period compared with a gain of $4.1 million for the 2025 period. Activity for the 2026 period was primarily related to the retirement of certain assets that were replaced as a result of theater enhancements. Activity for the 2025 period was primarily related to gains on the sale of real property.
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 $34.7 million during the 2026 period compared with $38.5 million during the 2025 period. The interest expense attributable to CUSA was $34.7 million during the 2026 period compared with $32.4 million during the 2025 period. The decrease in interest expense at Holdings reflects the impact of the payoff of the $460.0 million principal of the 4.50% Convertible Senior Notes on August 15, 2025.
Other Income, Net. Other income, net for Holdings was $1.4 million during the 2026 period compared with $4.4 million during the 2025 period. Other income, net attributable to CUSA was $1.4 million during the 2026 period compared with $2.1 million during the 2025 period. The decrease in other income, net for Holdings and CUSA reflects a decrease in interest income, primarily due to lower average cash balances, partially offset by an increase in equity income from affiliates and higher foreign currency exchange gains primarily related to the impact of hyper-inflationary accounting for Argentina.
Income Taxes - Holdings. An income tax benefit of $4.0 million was recorded for the 2026 period compared with an income tax benefit of $14.7 million for the 2025 period. The effective tax rate was approximately 40.5% for the 2026 period compared with 27.6% for the 2025 period. The effective tax rates for the 2026 and 2025 periods differ 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. 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.
Income Taxes - CUSA. An income tax benefit of $3.6 million was recorded for the 2026 period compared with income tax benefit of $14.2 million for the 2025 period. The effective tax rate was approximately 41.8% for the 2026 period compared with 29.3% for the 2025 period. The effective tax rates for the 2026 and 2025 periods differ 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. 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.
Liquidity and Capital Resources
Operating Activities
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.
Cash used for operating activities was $20.4 million for Holdings and $20.2 million for CUSA for the three months ended March 31, 2026, compared with cash used for operating activities of $119.1 million for Holdings and $111.1 million for CUSA for the three months ended March 31, 2025. The decrease in cash used for operating activities was primarily driven by the level of revenue earned during each period and the timing of payments to vendors for expenses.
Investing Activities
Investing activities have been principally related to the development, remodel and enhancement of theaters. Cash used for investing activities was $37.5 million and $15.3 million for the three months ended March 31, 2026 and 2025, respectively. The increase in cash used for investing activities was primarily due to an increase in capital expenditures to support the continued enhancement of our global circuit.
Below is a summary of capital expenditures, disaggregated by new and existing theaters, for the three months ended March 31, 2026 and 2025 (in millions):
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
|
2026 |
|
|
2025 |
|
New theaters |
|
$ |
4.6 |
|
|
$ |
5.0 |
|
Existing theaters |
|
|
33.1 |
|
|
|
17.1 |
|
Total capital expenditures |
|
$ |
37.7 |
|
|
$ |
22.1 |
|
We operated 495 theaters with 5,620 screens worldwide as of March 31, 2026. Theaters and screens opened and closed during the three months ended March 31, 2026 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
January 1, 2026 |
|
|
Built |
|
|
Closed |
|
|
March 31, 2026 |
|
U.S. |
|
|
|
|
|
|
|
|
|
|
|
|
Theaters |
|
|
303 |
|
|
|
— |
|
|
|
(2 |
) |
|
|
301 |
|
Screens |
|
|
4,241 |
|
|
|
— |
|
|
|
(22 |
) |
|
|
4,219 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International |
|
|
|
|
|
|
|
|
|
|
|
|
Theaters |
|
|
193 |
|
|
|
1 |
|
|
|
— |
|
|
|
194 |
|
Screens |
|
|
1,396 |
|
|
|
5 |
|
|
|
— |
|
|
|
1,401 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Worldwide |
|
|
|
|
|
|
|
|
|
|
|
|
Theaters |
|
|
496 |
|
|
|
1 |
|
|
|
(2 |
) |
|
|
495 |
|
Screens |
|
|
5,637 |
|
|
|
5 |
|
|
|
(22 |
) |
|
|
5,620 |
|
As of March 31, 2026, we had the following signed new build and expansion commitments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Venues (1) |
|
|
Screens (1) |
|
|
Estimated
Remaining Investment (2) |
|
Expected to open during 2026 |
|
|
|
|
|
|
|
|
|
U.S. |
|
|
1 |
|
|
|
8 |
|
|
$ |
14.2 |
|
International |
|
|
1 |
|
|
|
5 |
|
|
|
— |
|
Total |
|
|
2 |
|
|
|
13 |
|
|
$ |
14.2 |
|
|
|
|
|
|
|
|
|
|
|
Expected to open subsequent to 2026 |
|
|
|
|
|
|
|
|
|
U.S. |
|
|
2 |
|
|
|
16 |
|
|
$ |
34.6 |
|
International |
|
|
2 |
|
|
|
23 |
|
|
|
21.1 |
|
Total |
|
|
4 |
|
|
|
39 |
|
|
$ |
55.7 |
|
|
|
|
|
|
|
|
|
|
|
Total commitments at March 31, 2026 |
|
|
6 |
|
|
|
52 |
|
|
$ |
69.9 |
|
(1)Based on the venue’s expected opening date.
(2)Approximately $21.5 million is expected to be paid during the remainder of 2026 and $39.6 million and $8.8 million is expected to be paid during 2027 and 2028, respectively. The timing of payments is subject to change in the event of construction or other delays.
Actual expenditures for the continued development of venues and remodels can vary based on such factors as the type of venue, the amenities being built or remodeled within the venue and the timing for completion of a project. Actual expenditures are also subject to change based upon the availability of attractive opportunities and the impact of tariffs. During the next twelve months and the foreseeable future, we plan to fund capital expenditures for our continued development projects with cash flow from operations and, if needed, borrowings under our revolving credit facility, proceeds from debt issuances, sale leaseback transactions and/or sales of excess real estate.
Financing Activities
Cash used for financing activities was $36.8 million for Holdings and $37.1 million for CUSA for the three months ended March 31, 2026, compared with $230.1 million for Holdings and $20.4 million CUSA for the three months ended March 31, 2025. The decrease in cash used for financing activities for Holdings primarily reflects the repurchase of common stock in the first quarter of 2025, partially offset by higher payroll tax payments associated with equity awards that vested during the period. The increase in cash used for financing activities for CUSA was driven by cash distributions to Cinemark Holdings, Inc. to fund the Company’s shareholder dividends and higher payroll tax payments associated with equity awards that vested during the period.
Holdings, at the discretion of its Board of Directors and subject to applicable law, anticipates paying quarterly cash dividends on its common stock. The amount of 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. The following table summarizes the quarterly dividends paid during the three months ended March 31, 2026 and 2025.
|
|
|
|
|
|
|
|
|
|
|
|
|
Declaration Date |
|
Record Date |
|
Payable Date |
|
Amount per Share of Common Stock |
|
|
Total (1) |
|
2/17/2026 |
|
3/3/2026 |
|
3/17/2026 |
|
$ |
0.09 |
|
|
$ |
10.8 |
|
|
|
|
|
|
|
|
|
|
|
|
2/18/2025 |
|
3/5/2025 |
|
3/19/2025 |
|
$ |
0.08 |
|
|
$ |
10.1 |
|
(1)Of the total dividends recorded during the three months ended March 31, 2026 and 2025 $0.3 million and $0.2 million, respectively, relate to outstanding performance and restricted stock units and are not paid until such units vest. See Note 9 to the condensed consolidated financial statements.
We may, from time to time, seek to retire or repurchase our outstanding debt securities through cash purchases or exchanges for other securities, in open market purchases, privately negotiated transactions or otherwise. Such repurchases or exchanges, if any, will depend on the availability and prices of such debt securities, prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.
Contractual Obligations
There have been no material changes in the contractual obligations previously disclosed in “Liquidity and Capital Resources” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 filed February 18, 2026.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements.
Senior Secured Credit Facility
On May 26, 2023, CUSA amended and restated its senior secured credit facility (the “Credit Agreement”) to provide for an aggregate principal amount of $775.0 million, consisting of a $650.0 million term loan with a maturity date of May 24, 2030 and a $125.0 million revolving credit facility with a maturity date of May 26, 2028. The term loan and revolving credit facility are subject to a springing maturity date of April 15, 2028 if CUSA’s 5.25% Senior Notes due 2028 have not been paid or refinanced as required under the Credit Agreement prior to such date, as more specifically described in the Credit Agreement.
Under the Credit Agreement, quarterly principal payments of $1.6 million are due on the term loan through March 31, 2030, with a final principal payment of the remaining unpaid principal due on May 24, 2030.
The applicable margin with respect to revolving credit loans is a function of the Consolidated Net Senior Secured Leverage Ratio as defined in the Credit Agreement. As of March 31, 2026, the applicable margin was 1.75%, however, there were no borrowings outstanding under the revolving line of credit. In addition, CUSA is required to pay a commitment fee on the revolving line of credit that accrues at a rate ranging from 0.25% to 0.375% per annum of the daily unused portion of the revolving line of credit. The commitment fee rate is a function of the Consolidated Net Senior Secured Leverage Ratio and was 0.25% at March 31, 2026.
CUSA’s obligations under the Credit Agreement are guaranteed by Holdings and certain subsidiaries of Holdings other than CUSA (the “Other Guarantors”) and are secured by security interests in substantially all of Holdings’ and the Other Guarantors’ personal property.
The Credit Agreement contains usual and customary negative covenants for agreements of this type, including, but not limited to, restrictions on the ability of Holdings, CUSA and their subsidiaries to: merge, consolidate, liquidate, or dissolve; sell, transfer or otherwise dispose of assets; create, incur or permit to exist certain indebtedness and liens; pay dividends, repurchase stock and make other Restricted Payments (as defined in the Credit Agreement); prepay certain indebtedness; make investments; enter into transactions with affiliates; and change the nature of their business. At any time that CUSA has revolving credit loans outstanding, it is not permitted to allow the Consolidated Net Senior Secured Leverage Ratio to exceed 3.5 to 1.0. As of March 31, 2026, there were no revolving credit loans outstanding, and CUSA’s Consolidated Net Senior Secured Leverage Ratio was 0.6 to 1.
The Credit Agreement also includes customary events of default, including, among other things, payment default, covenant default, breach of representation or warranty, bankruptcy, cross-default, material ERISA events, a change of control, material money judgments and failure to maintain security interests. If an event of default occurs, all commitments under the Credit Agreement may be terminated and all obligations under the Credit Agreement could be accelerated by the Lenders, causing all loans outstanding (including accrued interest and fees payable thereunder) to be declared immediately due and payable.
The Restricted Payments covenant, as defined in the Credit Agreement generally does not limit the ability of Holdings and its subsidiaries to pay dividends and make other Restricted Payments if the Consolidated Net Total Leverage Ratio (as defined in the Credit Agreement) is less than or equal to 2.75 to 1.00. If the Consolidated Net Total Leverage Ratio is greater than 2.75 to 1.00, but not greater than 5.00 to 1.00, Restricted Payments generally may be made in an aggregate amount not to exceed the Available Amount (as defined in the Credit Agreement), which is a function of CUSA’s Consolidated EBITDA minus 1.75 times its Consolidated Interest Expense (as such terms are defined in the Credit Agreement) and certain other factors as specified in the Credit Agreement. As of March 31, 2026, the Consolidated Net Total Leverage Ratio was 2.46 to 1.00 and the Available Amount was $1.4 billion. In addition, the Credit Agreement contains other baskets that allow certain Restricted Payments in excess of the Applicable Amount.
We have three interest rate swap agreements that are used to hedge a portion of the interest rate risk associated with the variable interest rates on the term loan outstanding under the Credit Agreement. See Note 7 to the condensed consolidated financial statements for discussion of the interest rate swaps.
As of March 31, 2026, there was $630.7 million outstanding under the term loan and no borrowings were outstanding under the $225.0 million revolving line of credit. The average interest rate on outstanding term loan borrowings under the Credit Agreement as of March 31, 2026 was approximately 5.6% per annum, after giving effect to the interest rate swap agreements.
7.00% Senior Notes
On July 18, 2024, CUSA issued $500.0 million aggregate principal 7.00% senior unsecured notes, at par (the “7.00% Senior Notes”). The notes will mature on August 1, 2032. Interest on the 7.00% Senior Notes is payable on February 1 and August 1 of each year, beginning on February 1, 2025. CUSA incurred debt issuance costs of approximately $8.7 million in connection with the issuance, which were recorded as a reduction of long-term debt on the Company’s consolidated balance sheet. Proceeds, net of fees, were used to repay CUSA’s 5.875% $405.0 million aggregate principal amount of Senior Notes due March 2026.
The 7.00% Senior Notes are fully and unconditionally guaranteed on a joint and several senior unsecured basis by certain of CUSA’s subsidiaries, or its guarantors, that guarantee, assume or in any other manner become liable with respect to any of CUSA’s or its guarantors’ other debt. If CUSA cannot make payments on the 7.00% Senior Notes when they are due, CUSA’s guarantors must
make them instead. The 7.00% Senior Notes and the guarantees are senior unsecured obligations and rank equally in right of payment with all of CUSA’s and its guarantor’s existing and future senior debt, including the 5.25% senior notes due 2028 and all borrowings under CUSA’s Credit Agreement. The notes and the guarantees will be structurally subordinated to all existing and future debt and other liabilities of CUSA’s non-guarantor subsidiaries. The notes and the guarantees will be structurally senior to all future debt, if any, issued by Holdings that is not guaranteed by CUSA or any of its subsidiaries.
Prior to August 1, 2027, CUSA has the option to redeem all or a portion of the 7.00% Senior Notes at a price equal to 100.0% of the principal amount thereof, plus accrued and unpaid interest, if any, plus a make-whole premium. In addition, prior to August 1, 2027, CUSA may redeem up to 40% of the aggregate principal amount of the 7.00% Senior Notes with funds in an amount equal to the net proceeds of certain equity offerings at a redemption price equal to 107.0% of the principal amount of the 7.00% Senior Notes redeemed, plus accrued and unpaid interest, if any, as long as (i) at least 60% of the principal amount of the 7.00% Senior Notes issued under the indenture governing the 7.00% Senior Notes (including any additional notes) remains outstanding immediately after each such redemption and (ii) the redemption occurs within 120 days of the closing of such equity offerings.
CUSA may redeem the 7.00% Senior Notes in whole or in part at any time on or after August 1, 2027 at redemption prices set forth in the indenture governing the 7.00% Senior Notes as indicated below:
|
|
|
Percentage of Principal Amount |
2027 |
103.50% |
2028 |
101.75% |
2029 and Thereafter |
100.00% |
The indenture governing the 7.00% Senior Notes contains covenants that limit, among other things, the ability of CUSA and certain of its subsidiaries to (1) incur or guarantee additional indebtedness, (2) pay dividends or distributions on, or redeem or repurchase, capital stock and make other restricted payments, (3) make certain investments, (4) engage in certain transactions with affiliates, (5) incur or assume certain liens, and (6) consolidate, merge or transfer all or substantially all of its assets. Additionally, upon a change in control, as defined in the indenture governing the 7.00% Senior Notes, CUSA would be required to make an offer to repurchase all of the 7.00% Senior Notes at a price equal to 101% of the aggregate principal amount outstanding plus accrued and unpaid interest, if any, through the date of repurchase.
5.25% Senior Notes
On June 15, 2021, CUSA issued $765.0 million aggregate principal amount of 5.25% senior notes due 2028, at par value (the “5.25% Senior Notes”). Interest on the 5.25% Senior Notes is payable on January 15 and July 15 of each year. The 5.25% Senior Notes mature on July 15, 2028.
The 5.25% Senior Notes are fully and unconditionally guaranteed on a joint and several senior unsecured basis by certain of CUSA’s subsidiaries that guarantee, assume or become liable with respect to any of CUSA's or a guarantor’s debt. The 5.25% Senior Notes and the guarantees will be CUSA’s and the guarantors’ senior unsecured obligations and (i) rank equally in right of payment to CUSA’s and the guarantors’ existing and future senior debt, including borrowings under CUSA's Credit Agreement and CUSA’s existing senior notes, (ii) rank senior in right of payment to CUSA’s and the guarantors’ future subordinated debt, (iii) are effectively subordinated to all of CUSA’s and the guarantors’ existing and future secured debt, including all obligations under the Credit Agreement, in each case to the extent of the value of the collateral securing such debt, and (iv) are structurally subordinated to all existing and future debt and other liabilities of CUSA’s non-guarantor subsidiaries.
CUSA may redeem the 5.25% Senior Notes in whole or in part at 101.313% of the principal amount up to July 15, 2026 and at par thereafter, as set forth in the indenture.
Covenant Compliance
The indentures governing the 5.25% Senior Notes and the 7.00% Senior Notes ("the indentures") contain covenants that limit, among other things, the ability of CUSA and certain of its subsidiaries to (1) make investments or other restricted payments, including paying dividends, making other distributions or repurchasing subordinated debt or equity, (2) incur additional indebtedness and issue preferred stock, (3) enter into transactions with affiliates, (4) enter new lines of business, (5) merge or consolidate with, or sell all or substantially all of its assets to, another person and (6) create liens. As of March 31, 2026, CUSA could have distributed up to approximately $4.5 billion to its parent company and sole stockholder, Holdings, under the terms of the indentures, subject to its available cash and other borrowing restrictions outlined in the indentures. Upon a change of control, as defined in the indentures, CUSA would be required to make an offer to repurchase the 5.25% Senior Notes and the 7.00% Senior Notes at a price equal to 101% of the aggregate principal amount outstanding plus accrued and unpaid interest, if any, through the date of repurchase. The indentures allow Cinemark USA, Inc. to incur additional indebtedness if it satisfies the coverage ratio specified in the indentures, after giving effect to the incurrence of the additional indebtedness, and in certain other circumstances. The required minimum coverage ratio is 2 to 1 and our actual ratio as of March 31, 2026 was 6.6 to 1.
See discussion of dividend restrictions and the net senior secured leverage ratio under the Credit Agreement at Senior Secured Credit Facility above.
As of March 31, 2026, we believe we were in full compliance with all agreements, including all related covenants, governing our outstanding debt.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We have exposure to financial market risks, including changes in interest rates and foreign currency exchange rates.
Interest Rate Risk
The Company currently has variable rate debt. An increase or decrease in interest rates would affect its interest expense related to this variable rate debt. At March 31, 2026, we had an aggregate of $180.7 million of variable rate debt outstanding, after giving effect to the interest rate swaps. Based on the interest rates in effect on the variable rate debt outstanding at March 31, 2026, a 100 basis point increase in market interest rates would increase our annual interest expense by $1.8 million.
The table below provides information about the Company’s fixed rate and variable rate long-term debt agreements as of March 31, 2026. The Company has three interest rate swap agreements that are used to hedge a portion of the interest rate risk associated with the variable interest rates on the Company’s term loan debt. See Interest Rate Swap Agreements below. The Company’s long-term debt agreements include fixed rate and variable rate long-term debt of CUSA, which is guaranteed by Holdings.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expected Maturity for the Twelve Months Ending March 31, |
|
|
Average |
|
|
|
(in millions) |
|
|
Interest |
|
|
|
2027 |
|
2028 |
|
2029 |
|
2030 |
|
2031 |
|
Thereafter |
|
Total |
|
|
Fair Value |
|
|
Rate |
|
Fixed rate (1) |
|
$ |
— |
|
$ |
— |
|
$ |
765.0 |
|
$ |
— |
|
$ |
450.0 |
|
$ |
500.0 |
|
$ |
1,715.0 |
|
|
$ |
1,728.0 |
|
|
|
5.8 |
% |
Variable rate |
|
|
6.4 |
|
|
6.4 |
|
|
6.4 |
|
|
6.4 |
|
|
155.1 |
|
|
— |
|
|
180.7 |
|
|
|
181.6 |
|
|
|
5.9 |
% |
Total debt (2) |
|
$ |
6.4 |
|
$ |
6.4 |
|
$ |
771.4 |
|
$ |
6.4 |
|
$ |
605.1 |
|
$ |
500.0 |
|
$ |
1,895.7 |
|
|
$ |
1,909.6 |
|
|
|
5.8 |
% |
(1)Fixed rate amounts include the hedged portion of Holdings’ variable debt. See “Interest Rate Swap Agreements” below.
(2)Amounts are presented before adjusting for debt issuance costs.
Interest Rate Swap Agreements
All of the interest rate swap agreements qualify for cash flow hedge accounting. The fair values of the interest rate swaps are recorded on each of Holdings’ and CUSA’s condensed consolidated balance sheets as an asset or liability with the related gains or losses reported as a component of accumulated other comprehensive loss. See Note 7 to the condensed consolidated financial statements for further discussion of the interest rate swap agreements.
Foreign Currency Exchange Rate Risk
There have been no material changes in foreign currency exchange rate risk previously disclosed in “Quantitative and Qualitative Disclosures About Market Risk” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 filed February 18, 2026.
Item 4. Controls and Procedures
Evaluation of the Effectiveness of Disclosure Controls and Procedures
As of March 31, 2026, under the supervision and with the participation of Holdings’ and CUSA’s principal executive officer and principal financial officer, Holdings and CUSA carried out an evaluation required by the Exchange Act of the effectiveness of the design and operation of their respective disclosure controls and procedures, as defined in Rule 13a-15(e) of the Exchange Act. Based on this evaluation, Holdings’ and CUSA’s principal executive officer and principal financial officer concluded that, as of March 31, 2026, each of Holdings’ and CUSA’s respective disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by each of Holdings and CUSA in the reports that are filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and were effective to provide reasonable assurance that such information is accumulated and communicated to Holdings’ and CUSA’s management, including Holdings’ and CUSA’s principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosures.
Changes in Internal Control Over Financial Reporting
There have been no changes in Holdings’ and CUSA’s internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 that occurred during the quarter ended March 31, 2026 that materially affected, or are reasonably likely to materially affect, Holdings’ and CUSA’s internal control over financial reporting.