CNK 10-K & 10-Q changes, risk factors and insider trading

An investment in Holdings’ common stock or Holdings’ or CUSA’sour debt securities involves risks and uncertainties, and our actual results and future trends may differ materially from our past or projected future performance. We urge investors to consider carefully the risk factors described below, in addition to the other information contained in this report, in evaluating our Company and our business. It is not possible to identify all risk factors, and additional risks and uncertainties not presently known to us or that we currently believe to be immaterial may also materially impact our business operations.

Our results of operations can be significantly and adversely affected in the U.S., Latin America or in specific regions as a result of a variety of factors beyond our control, including: health concerns (includingsuch as it was by COVID-19 and could be by future health emergencies, endemics, epidemics and pandemics); adverse weather conditions arising from short-term weather patterns or long-term climate change, including catastrophic events or natural disasters such as hurricanes, typhoons, floods, droughts, wildfires and earthquakes; international, political or military developments, including trade and other international disputes and social unrest resulting in supply chain interruptions and increased tariffs and other costs; macroeconomic conditions, including a decline in economic activity, inflation, deflation and foreign exchange rate fluctuations; and terrorist attacks. These events and others, such as fluctuations inrising energy costs and computer virus attacks, intrusions, ransom ware or other widespread computing or telecommunications failures, may also damage our ability to provide our services. We may have insurance coverage with respect to some, but not all, of these events.

We obtainmaintain insurance coverage against the risk of losses relating to some of these events, generally including certain physical damage to our property and resulting business interruption, cybersecurity events, certain injuries occurring on our property and some liabilities for alleged breach of legal responsibilities. When insurance is obtained it is subject to deductibles, exclusions, terms, conditions and limits of liability. The types and levels of coverage we obtain vary from time to time depending on our view of the likelihood of specific types and levels of loss compared to the cost of obtaining coverage for such types and levels of loss. We may experience material losses not covered by our insurance. The costs of protecting against such incidents may reduceimpact the results of our operations.

The motion picturetheatrical exhibition industry is highly competitive. We compete against local, regional, national and international exhibitors in many of our markets. We compete for both patrons and licensing of films. In markets where we do not face nearby competitive theaters, there is a risk of new theaters being built. The degree of competition for patrons is dependent upon such factors as location, theater capacity, presentation quality, film showtime and availability, customer service quality, products and amenities offered, and prices. The principal competitive factors with respect to film licensing include theall theater’s location and its demographics,of the condition,aformentioned capacityfactors andas well as the grossing potential of each theater,theater and licensing terms. Additionally, the emergence of new ticketing platforms and agentic AI purchase channels could result in the loss of a significant portion of our online ticketing fees and adversely impact the effectiveness of our digital marketing. We also face competition from new concept theaters such as dine-in theaters, tavern style theaters and family entertainment centers that open in close proximity to our conventional theaters. If we are unable to attract patrons or license successful films, our business may be adversely affected.

We hadoperated 193 theaters with 1,3981,396 screens in 13 countries in Latin America as of December 31, 2024.2025. Brazil represented approximately 8.0%6.8% of our consolidated 20242025 revenue. Governmental regulation of the motion picture industry in foreign markets differs from that in the U.S. Changes in regulations affecting pricesprices, product taxability and quota systems requiring the exhibition of locally-produced films may adversely affect our international operations. Our international operations are subject to certain political, economic and other uncertainties generally not encountered by our domestic operations, including risks of severe economic downturns and high inflation. We also face risks of currency fluctuations, hard currency shortages and controls of foreign currency exchange and cash payments to the U.S., all of which could have an adverse effect on the results of our operations and liquidity.

TightLabor labormarket market,conditions, loss of key personnel, or inability for our workforce to scale as business evolves may negatively impact our operations and operating results.

Labor shortagesmarket conditions may affect our ability to hire and retain employees. The success of our business depends on our ability to recruit and retain our theater staff. Without proper staffing, waitcustomer times to buy tickets and concessions may be extendedservice and operating hours may be reduced. These conditions could result in a poor guest experience, which could adversely affect future attendance. We could face similar challenges with respect to retaining senior level corporate employees. LosingIf thewe servicesfail to develop an adequate succession plan for anticipated retirements or other losses of one or more senior executives, or other key personnel, it could adversely affect our ability to execute our business strategies and could have an adverse effect on our business, financial condition, and results of operations, especially if we were unable to timely employ a qualified replacement. Labor shortages could also result in rising wages, affecting our results of operations. We have historically relied on a lean workforce model. To the extent our employees are unable to sustain productivity levels or scale as our business evolves or grows, we may be required to expand our workforce, which could negatively impact our results of operations.

We have a significant amount of long-lived assets. We evaluate long-lived assets for impairment at the theater level. Therefore, if a theater is directly and individually impacted by increased competition, adverse changes in market demographics, or adverse changes in the development or condition of the areas surrounding the theater, we may record impairment charges to reflect the decline in estimated fair value of that theater.theater, as required by U.S. GAAP We also have a significant amount of goodwill and tradename intangible assets. Other-than-temporary declines in our stock price or market capitalization, or declines in our attendance due to increased competition, macroeconomic conditions or other factors could result in impairments of goodwill and our intangible assets.

We have historically expanded our operations through targeted worldwide theater development and acquisitions. We continue to pursue a strategy of expansion that involves the development of new theaters and may involve acquisitions of existing theaters and theater circuits both in the U.S. and internationally. There is significant competition for new site locations and for existing theater and theater circuit acquisition opportunities. As a result of such competition, we may not be able to secure attractive new site locations or acquire existing theaters or theater circuits on terms we consider acceptable. The pace of our growth may also be impacted by delays in site development caused by otherthird parties. Acquisitions and expansion opportunities may divert a significant amount of management’s time away from the operation of our business. Growth by acquisition also involves risks relating to difficulties in integrating the operations and personnel of acquired companies and the potential loss of key employees of acquired companies. Our potential expansion strategy may not result in improvements to our business, financial condition, profitability or cash flows. Further, our expansion programs may require financingfinancing, above our existing borrowing capacity and operating cash flows andwhich we may not be able to obtain such financing on acceptable terms, or at all.

We have significant long-term debt service obligations and long-term lease obligations. As of December 31, 2024,2025, Holdingsthe Company had $2,363.7$1,897.3 million in long-term debt obligations, which included $1,903.7 million of CUSA debt and excludes unamortized debt issuance costs and original issue discount. As of December 31, 2024,2025, Holdings and CUSA had $125.3$110.2 million in finance lease obligations and $784.0$1,006.0 million in long-term operating lease obligations. The substantial lease and debt obligations could:

limit our ability to invest in innovations in technology and implement new platforms or concepts in our theatersvenues; and make us more vulnerable to adverse economic, market and industry conditions, limit our flexibility in planning for, or reacting to, changes in our business operations or to our industry overall, and place us at a disadvantage in relation to our competitors that may have lower debt levels.

Holdings’ and CUSA’sOur ability to make scheduled payments of principal and interest on their respectiveour indebtedness will depend on our ability to generate positive cash flows and on our future financial results. Our ability to generate positive cash flows is subject to general economic, financial, competitive, regulatory and other factors, some of which are beyond our control. As our industry recovers from the effects of the COVID-19 pandemic and the 2023 writers’ and actors’ guild strikes, we may not be able to generate cash flows at historical levels, or guarantee that future borrowings will be available under our senior secured credit facility, in an amount sufficient to enable us to pay our indebtedness. If our cash flows and capital resources are insufficient to fund our lease and debt service obligations, we may be forced to reduce or delay capital expenditures, sell assets or operations, seek additional capital or restructure or refinance our indebtedness. We may not be able to take any of these actions, and these actions may not be successful or sufficient to permit us to meet our scheduled debt service obligations. Certain actions may also be restricted under the terms of our existing or future debt agreements.

Our debt currently has aprimarily non-investment grade rating,ratings, and any rating assigned could be lowered (or outlook thereof could be changed) or withdrawn entirely by a rating agency if, in that rating agency’s judgment, future circumstances relating to the basis of the rating, such as adverse changes in our business or industry, so warrant. Any future lowering of our ratings likely would make it more difficult or more expensive for us to obtain additional debt financing. In particular, our access to the capital markets may be impacted, our other funding sources may decrease, the cost of debt may increase as a result of increased interest rates or fees, and we may be required to provide additional credit assurances, including collateral, under certain contracts or arrangements.

Holdings’ ability to pay dividends is limited by its status as a holding company and the terms of CUSA’s senior notes indentures and CUSA’s senior secured credit facility, which restrict Holdings’ ability to pay dividends and the ability of certain of its subsidiaries to pay dividends, directly or indirectly, to Holdings. Under CUSA’s debt instruments, we may pay a cash dividend up to a specified amount, provided we have satisfied certain financial covenants in, and are not in default under, CUSA’s debt instruments. The declaration of future dividends on Holdings’ common stock, par value $0.001 per share, or Common Stock,stock will be at the discretion of Holdings’ board of directors and will depend upon many factors, including our results of operations, cash flows, financial condition, earnings, capital requirements, limitations in CUSA’s debt agreements and legal requirements.

Future sales of substantial amounts of Holdings’ common stock in the open market and the issuance of the shares reserved for potential future issuance under Holdings’ incentive plan, in exchange for outstanding warrants, conversion of outstanding 4.50% Convertible Senior Notes,plan or in connection with acquisitions or other corporate events,events willwould be dilutive to Holdings’ existing stockholders and could result in a decrease in Holdings’ stock price. Holdings cannot predict whether substantial amounts of its common stock will be sold in the open market in anticipation of, or following, any divestiture by any of its large stockholders, its directors or its executive officers of their shares of common stock. Holdings can also issue shares of its common stock which are authorized but unissued and not reserved for any specific purpose without any action or approval by its stockholders.

We are subject to various federal, state and local laws, regulations and administrative practices in the U.S. and internationally. We must comply with laws regulating, among other things, antitrust activities, employment environment, sale of goods and services, health and safety, alcoholic beverages, artificial intelligence, data protection and privacy and Title III of the Americans with Disabilities Act of 1990 (“ADA”) and similar state disability rights laws. Compliance with the ADA and similar disability rights laws requires us as a public accommodation to reasonably accommodate individuals with disabilities. This applies to the construction of new theaters, certain renovations, existing theaters, websites and mobile applications and presentations for the blind, deaf and hard of hearing. Changes in existing laws, regulations or administrative practices or new laws, regulations or administrative practices could result in substantial costs to us and have a significant impact on our business.

Strict data privacy laws regulating the collection, transmission, storage and use of employee data and consumers’ personally identifying information are evolving in the U.S. and other jurisdictions in which we operate. These laws impose compliance obligations for the collection, use, retention, security, processing, transfer and deletion of personally identifiable information of individuals and creates enhanced rights for individuals. Emerging artificial intelligence regulations could further increase compliance burdens and legal risks. These changes in the legal and regulatory environments in the areas of customer and employee privacy, data security, artificial intelligence, and cross-border data flows could have a material adverse effect on our business, primarily through the impairment of our marketing and transaction processing activities, the limitation on the types of information that we may collect, process, transfer and retain, the resulting costs of complying with such legal and regulatory requirements and defending legal claims alleging noncompliance, and potential monetary forfeitures and penalties for noncompliance.

In the U.S., we are subject to United States federal and state laws governing such matters as minimum wages, working conditions and overtime. We are also subject to union regulations in certain of our international markets, which can specify wage rates as well asrates, minimum hours to be paid to certain employees.employees and maximum daily hours that an employee can work. As federal and state minimum wage rates increase, we may need to increase not only the wages of our minimum wage employees, but also the wages paid to employees at wage rates that are above minimum wage. Labor market conditions have also driven increases in wages across our labor base and similar increases may continue in the future. Labor shortages, increased employee turnover and health care mandates could also increase our labor costs. This in turn could lead us to increase prices, which could impact our sales. Conversely, if competitive pressures or other factors prevent us from offsetting labor costs by increasing prices, our results of operations may be adversely impacted.

We collect, use, store and maintain electronic information and data necessary to conduct our business, including confidential and proprietary information of the company, our customers, and our employees. We also rely on the availability of information technology systems to operate our business, including for communications, receiving and displaying movies, ticketing, guest services, cash receipts and payments, and other general operations. We rely on some of our vendors to store and process certain data and to manage, host, and/or provide some of our information technology systems. Because of the scope and complexity of our information technology systems, our reliance on vendors to provide, support and protect our systems and data, and the constantly evolving cyber-threat landscape, including those involving sophisticated artificial intelligence tools, our information technology systems are subject to the risk of disruption, failure, unauthorized access, cyber-terrorism, human error, misuse, tampering, theft, and other cyber-attacks. These or similar events, whether accidental or intentional, could result in theft, unauthorized access or disclosure, loss, fraudulent or unlawful use of customer, employee or company data, which could harm our reputation or result in a loss of business, as well as remedial and other costs, fines, investigations, enforcement actions or lawsuits. These or similar events could also lead to an interruption in the operation of our systems resulting in business impact, including loss of business. These same factors could also affect our ability to adapt to and comply with changing regulations and contractual obligations applicable to data security and privacy, which are increasingly demanding, both in the United States and in other jurisdictions where we operate. To address these risks, we have adopted multiple security measures and technology,technology solutions, operate a comprehensive security program, and work continuously to evaluate and improve our security posture. However, the development and maintenance of these systems and programs are costly and require ongoing monitoring and updating as technologies change and efforts to overcomebypass security measures become more sophisticated. As such, there can be no assurance that these or similar events will not occur in the future or will not have an adverse effect on our business and results of operations.

In addition to Company-specific cyber threats or events, our business and results of operations could also be impacted by cyber-related events affecting our peers and partners within the entertainment industry, as well as other retail companies. We maintain insurance designed to provide coverage for cyber risksevents related to whatthat we believe to be adequate and collectible insurance in the event of the theft, loss, fraudulent or unlawful use of customer, employee or company data, but the foregoing events or future events could result in costs and business impacts that may not be covered or may be in excess of any available insurance that we may have procured. As a result, future events could have a material impact on our business and adversely affect our financial condition and results of operations.

While we continue to invest in technological innovations, such as laser projectors, motion seats and digital consumer interfaces, new technological innovations may continue to impact our industry. If we are unable to respond to or invest in changes in technology and the technological preferences of our customers, we may not be able to compete with other exhibitors or other entertainment venues, which could adversely affect our results of operations.

Recently, there has been an increasing focus and continuous debate on global climate change including increased attention from regulatory agencies and legislative bodies. This increased focus may lead to new initiatives directed at regulating an as-yet unspecified array of environmental matters. Legislative, regulatory or other efforts in the U.S. to combat climate change could result in future increases in the cost of raw materials, taxes, reporting requirements, transportation and utilities for our vendors and for usus, which would result in higher operating costs for the Company. Also, compliance of our theaters and accompanying real estate with new and revised environmental, zoning, land-use or building codes, laws, rules or regulations, could have a material and adverse effect on our business. However, we are unable to predict at this time, the potential effects, if any, that any future environmental initiatives may have on our business.

We may be found liable if the consumption of any of the products we sell causes illness or injury. We are also subject to recall by product manufacturers orrecalls if the food products become contaminated. Recalls could result in losses due to the cost of the recall, the destruction of the product and losta salesreduction in revenues due to the unavailability of the product for a period of time.time and reputational damage.

Inflation has the potential to adversely affect our business, financial condition and results of operations by increasing our overall cost structure, particularly if we are unable to achieve commensurate increases in the price we charge our guests.guests or offset the increased costs with other measures. Other inflationary pressures could affect wages and the cost and availability of concession supplies. Inflation may further exacerbate other risk factors, including supply chain disruptions and risks related to international operations.

Cinemark Holdings, Inc. (“Holdings”) is a holding company and its wholly-owned subsidiary is Cinemark USA, Inc. Holdings consolidates CUSACinemark USA, Inc. and its subsidiariessubsidiaries, or “CUSA”, for financial statement purposes, and CUSA comprises approximately the entire balance of Holdings’ assets, liabilities and operating cash flows. In addition,purposes. CUSA’s operating revenue and operating expenses comprise nearly 100% of Holdings’ revenue and operating expenses. As such, Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) that follows is for Holdings and CUSA in all material respects, unless otherwise noted. Differences between the operations and results of Holdings and CUSA are separately disclosed and explained. Where it is important to distinguish between theHoldings entities,and weCUSA, specific reference is made to either refer specifically to Holdings or CUSA. Otherwise, all references to “we,” “our,” “us,” “the Company” or “Cinemark” relate to Cinemark Holdings, Inc. and its consolidated subsidiaries and all references to CUSA relate to CUSA and its consolidated subsidiaries.

We are a leader in the motion picturetheatrical 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 December 31, 2024,2025, we managed our business under two reportable segments – U.S. markets and international markets. See Note 2120 to the consolidated financial statements.

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 more recently 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-an-out-of homein-and-out-of-home entertainment.

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 rentalsrentals, and video games located in manysome of our theaters.facilities. Filmed entertainment box office receipts include traditional content from studios as well as alternative entertainment, such as theforeign Metropolitanand Opera,faith-based documentaries,films, 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.

Films released during the year ended December 31, 20242025 included InsideA OutMinecraft Movie, Lilo & Stitch, Superman, Jurassic World: Rebirth, Zootopia 2, Deadpool & Wolverine, Wicked, Moana 2, Despicable Me 4, Beetlejuice Beetlejuice, DuneWicked: PartFor Two,Good, Twisters, Godzilla x Kong:Sinners, The NewFantastic Empire,Four: First Steps, How to Train Your Dragon, and KungAvatar: FuFire Pandaand 4,Ash, among other films.

Concession supplies expense is variable in nature and fluctuates with our concession revenue and also product mix. Inflationary pressures have impacted, and maytariffs continue to impact,impact product costs in the near term.term and may impact product costs going forward. We source products from a variety of global partners around the world 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 across our labor base and similar increases may continue in the future.

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 servicesservices, 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.

On February 18,17, 2025,2026, Holdings’ boardBoard of directorsDirectors approveddeclared ana annualquarterly cash dividend of $0.32$0.09 per share of common stock, payable quarterly.stock. The first quarterly dividend will be payable on March 19,17, 20252026 to shareholders of record as of March 5,3, 2025. The dividend will be paid with cash on hand.2026.

Our patrons have the option to purchase movie tickets well in advance of a movie showtime, right before the movie showtime, or at any point in between those two timeframes depending on seat availability. We recognize such admissions revenue when the showtime for a purchased movie ticket has passed. Concession revenue is recognized when products are sold to the consumer at the theater, or if purchased online in advance, either through the Company’s website, its mobile application or through a third-party delivery service, once the consumer’s order is fulfilled. Other revenue primarily consists of screen advertising, screen rental revenue, gaming revenue, promotional income, studio trailer placements, and transactional fees. Except for NCM screen advertising advances which are recognized on a straight-line basis over the term of our ESA as discussed in Note 8 to the consolidated financial statements, these revenues are recognized when we have fulfilled our performance obligations by providing the services specified in each contract.

We sell gift cards and prepaid and discount ticket vouchers, the proceeds from which are recorded as deferred revenue. Deferred revenue for gift cards and discount ticket vouchers is recognized when they are redeemed for concession itemsitems, or,or if redeemed for movie tickets, when the movie showtime has passed. We generally record breakage revenue on unredeemed gift cards and discount ticket vouchers based on redemption activity and historical experience with associated unused balances.

We offer a subscription program in the U.S. whereby patrons can pay a monthly or annual fee to receive a monthly credit for use towards a future movie ticket purchase. We alsooffer offersimilar subscription fee programs in several of our international locations where customers can pay a monthly or annual fee to receive benefits such as a free monthly ticket. We record the subscription program fees as deferred revenue and record admissions revenue when the showtime for a movie ticket purchased with a credit has passed. We generally record breakage revenue for unused credits based upon redemption of subscription credits and historical experience with the expiration of unused credits.

Film rental costs are based on the film licensing arrangements and are accrued based on the applicable box office receipts and either: 1) a sliding scale formula, which is generally established prior to the opening of the film, 2) a firm terms formula as negotiated prior to a film’s theatrical run or 3) estimates of the final settlement rate, which occurs at the conclusion of the film’s run. Under a sliding scale formula, we pay a percentage of box office revenues using a pre-determined scale that is based upon box office performance of the film for its full theatrical run. Under a firm terms formula, we pay the distributor a percentage of box office receipts that can either be an aggregate rate for the full theatrical run or rates that decline over the term of the theatrical run. The settlement process allows for negotiation of film rental fees upon the conclusion of the film's theatrical run based upon how the film performs. Estimates are based on the expected success of a film. The success of a film can generally be determined a few weeks after a film is released when the initial box office performance of the film is known. If actual settlementsbox areoffice differentperformance thandiffers thosefrom our estimates, film rental cost estimatescosts are adjusted ataccordingly thatthroughout time.a film’s theatrical run.

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 of our leases are subject to monthly percentage rent only, which is accrued each month based on actual revenues. Certain of our other theaterstheater leases require payment of percentage rent in addition to fixed monthly rent if an annual target revenue level is achieved. Percentage rent expense for these annual payments is estimated and recorded for these theaters on a monthly basis if the theater’s historical performance or forecasted performance indicates that the annual target revenue level will be reached. Once actual annual percentage rent is determinable, the timing of which is based on the respective lease agreement, percentage rent expense estimates are adjusted at that time.

Long-lived assets are evaluated for impairment onat athe theater level, which we believe is the lowest applicable level for which there are identifiable cash flows. The impairment evaluation is based on the estimated undiscounted cash flows from continuing use through the remainder of the theater’s useful life. The remainder of the theater’s useful life correlates with the remaining lease period, which may include the probability of the exercise of available renewal periods for leased properties, and the lesser of twenty years or the building’s remaining useful life for owned properties. If the estimated undiscounted cash flows are not sufficient to recover a long-lived asset’s carrying value, we then compare the carrying value of the asset group (theater) with its estimated fair value. When estimated fair value is determined to be lower than the carrying value of the asset group (theater), the asset group (theater) is written down to its estimated fair value. Significant judgment is involved in estimating cash flows and fair value. Fair value is determinedestimated based on a multiple of cash flows. Management’s estimates, which fall under Level 3 of the U.S. GAAP fair value hierarchyhierarchy, as defined by FASB ASC Topic 820-10-35, are based on historical and projected operating performance, recent market transactions and current industry trading multiples.

We use an asset and liability approach to financial accounting and reporting for income taxes. CUSA participates in the consolidated return of Holdings; however, CUSA’s provisions for income taxes are computed on a stand-alone basis. We use an asset and liability approach to financial accounting and reporting for income taxes. Deferred income taxes are provided when tax laws and financial accounting standards differ with respect to the amount of income for a year and the basis of assets and liabilities. A valuation allowance is recorded to reduce the carrying amount of deferred tax assets unless it is more likely than not that such assets will be realized. Income taxes are provided on unremitted earnings from foreign subsidiaries unless such earnings are expected to be indefinitely reinvested. Income taxes have also been provided for potential tax assessments. The evaluation of an uncertain tax position is a two-step process. The first step is recognition: we determine whether it is more likely than not that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. In evaluating whether a tax position has met the more-likely-than-not recognition threshold, we presume that the position would be examined by the appropriate taxing authority that would have full knowledge of all relevant information. The second step is measurement: a tax position that meets the more-likely-than-not recognition threshold is measured to determine the amount of benefit to recognize in the financial statements. The tax position is measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. Differences between tax positions taken in a tax return and amounts recognized in the financial statements result in (1) a change in a liability for income taxes payable or (2) a change in an income tax refund receivable, a deferred tax asset or a deferred tax liability or both (1) and (2). We accrue interest and penalties on uncertain tax positions. See Note 1918 to the consolidated financial statements for further discussion of income taxes.

The Company also periodically receives consideration from NCM in the form of common unitunits adjustments fromof NCM. Pursuant to a Common Unit Adjustment Agreement dated as of February 13, 2007 between NCMI and the Company, referred to as the Founding Members, the Company receivesmay annualreceive adjustmentsnew common units to the commonextent membershipits unitsnew primarilylocations basedhave onadded increasesincremental orattendance decreases into the numberNCM ofnetwork, theaterwhile screens operated andconsidering the impact of these theaters on total attendance generated by us.closures. The common units received are recorded at estimated fair value as an increase in the Company’s investment in NCM with an offset to deferred revenue or NCM screen advertising advances. The fair value of the common units received is estimated based on the market price of NCMI common stock (Level 1 input as defined in FASB ASC Topic 820, Fair Value Measurement) at the time the common units are determined, adjusted for volatility associated with the estimated time period it would take to convert the common units and register the respective shares.

Through April 11, 2023, we accounted for our investment in NCMI under the equity method of accounting. On April 11, 2023, NCM filed a petition for reorganization under Chapter 11 of the United States Bankruptcy Code. NCMI continued to manage NCM as the “debtor in possession,” under the jurisdiction of the bankruptcy court and in accordance with the applicable bankruptcy laws and orders of the bankruptcy court. Due to NCM’s bankruptcy proceedings, we reassessed our rights and level of influence over NCM. We determined that effective April 11, 2023, the date NCM filed its bankruptcy petition, we no longer had significant influence over NCM and therefore ceased accounting for our investment in NCMI under the equity method of accounting in the second quarter of 2023. Effective April 11, 2023, we started to account for our investment in NCMI in accordance with the guidance set forth in FASB ASC Topic 321 Investments - Equity Securities, which requires us to measure our investment in common stock of NCMI at fair value and recognize holding gains and losses on the change in the fair market value of our investment in earnings.

On August 3, 2023, NCMI announced that it had effected a 1-for-10 reverse stock split of its common stock. NCMI’s common stock automatically began trading on a split adjusted basis at the opening of the market on August 4, 2023. After giving effect to the reverse stock split, the Company owns approximately 4.4 million shares of NCMI common stock. NCM emerged from bankruptcy on August 7, 2023, and the Company’s ownership interest in NCMI was reduced to lessapproximately than 5%.4.5%. The Company no longer has the right to designate two board members to the NCMI board of directors.

See Note 8 to the consolidated financial statements for further discussion of our investment in NCMI and our screen advertising advances, and the related accounting.

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.

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:

Year ended December 31, 20242025 - The North American Industry box office generated approximately $8.8$8.9 billion during 2024,2025, which included InsideA OutMinecraft Movie, Lilo & Stitch, Superman, Jurassic World: Rebirth, Zootopia 2, Deadpool & Wolverine, Wicked, Moana 2, Despicable Me 4, Beetlejuice Beetlejuice, DuneWicked: PartFor Two,Good, Twisters, Godzilla x Kong:Sinners, The NewFantastic Empire,Four: First Steps, How to Train Your Dragon, and KungAvatar: FuFire Pandaand 4,Ash, among other films.

U.S. Attendance decreased 3.8%2.1% to 120.3 million patrons in 2025 compared with 122.9 million patrons in 2024 compared with 127.7 million patrons in 2023primarily driven by less carryover benefit in the 2024 period from prior year releases and the overall mix ofa film releasesslate duethat todid thenot impactresonate ofas thestrongly Hollywoodwith strikes.audiences year-over-year. Average ticket price increased 3.6%4.9% to $10.52 during 2025 compared with $10.03 during 2024 compared with $9.68 during 2023,2024, driven by strategic pricing initiatives,initiatives partially offset by aand higher mixpremium offormat alternative content in 2023 that carried a higher ticket price than traditional films.mix. Concession revenue per patron increased 5.9%5.2% to $8.30 during 2025 compared with $7.89 during 2024 compared with $7.45 during 2023 primarily driven by strategic pricing actions, productincreased incidence rates, and a higher mix andof higher incidence rates associated with the film content mix.merchandise. Other revenue for 20242025 increased 3.1%1.5% to $234.4$238.0 million compared with $227.3$234.4 million for 20232024 primarily due to an increase in promotional and events revenueincome, higher gaming revenue, and an increase in transactional fees, partially offset by a non-recurring minimum guarantee payment from a third-party service provider, partially offset by a decreaseprovider in attendance,2024 whichand resultedlower in a reduction in the variable component of other revenue.attendance.

International. Attendance decreased 4.8%7.0% to 78.272.7 million patrons in 20242025 compared with 82.178.2 million in 20232024 drivenreflecting bya lessfilm carryoverslate benefitthat did not resonate as strongly with audiences in theour 2024international periodmarkets from prior year releases and the overall mix of film releases due to the impact of the Hollywood strikes.year-over-year. Revenues, average ticket price and concession revenue per patron for our international segment, as reported, were unfavorably impacted by exchange rate fluctuations during 2024.2025. In constant currency, the average ticket price increased 42.2%13.2% to $5.53$4.19 for 20242025 primarily due to inflationary pricing actions. Similarly, in constant currency, concession revenue per patron increased 47.6%16.8% to $4.31$3.41 for 20242025 primarily due to inflationary pricing actions.actions and a higher mix of merchandise. Other revenue increased 53.2%21.6% in constant currency to $140.6$115.3 million for 20242025 primarily due to inflationary impacts.impacts, higher screen advertising and loyalty program revenue, and increased transactional fees.

Cost of Operations. The table below, presented by reportable segment, summarizes certain of our theater operating costs (in millions) for the years ended December 31, 20242025 and 2023.2024.

U.S. Film rentals and advertising costs for 2024 were 57.9%relatively flat at 58.0% of admissions revenue for 2025 compared with 56.9%57.9% for 2023 primarily2024 due to anincreased increasedmarketing spend, partially offset by a lower concentration of high-grossing titles and the overall mix of film releases.films. Concession supplies expense for 20242025 was 18.0%18.9% of concession revenue compared with 17.8% of concession revenue18.0% for 2023.2024. The concession supplies rate for 20242025 was impacted by a higher mix of merchandise, inflationary pressures onand certainlower concession categories and a shift in product mix,rebates, partially offset by the impact of strategic pricing actions.actions and sourcing initiatives.

Salaries and wages increased 0.5%2.0% to $335.6$342.3 million compared with $333.8$335.6 million for 20232024 due to wages and benefits inflation and expanded operating hours,inflation, partially offset by lower attendanceattendance, reduced operating hours and the impact of labor productivity initiatives. Facility lease expense,expense whichof is primarily fixed in nature, decreased to $245.8$244.8 million primarilywas duerelatively toflat theatercompared closureswith and lease renegotiations, partially offset by higher percentage rent.2024. Utilities and other costs remainedincreased relatively5.9% flatto at $356.5$377.5 million, primarily duedriven toby higherincreases in repairs and maintenance costs, credit card feesfees, real estate taxes, and utility rates, largely offset by the impact of the decrease in attendance, as many of these costs are variable or semi-variable in nature. A decrease in property taxes also contributed to a decline in utilities and otherliability costs.insurance.

Film rentals and advertising costs wereincreased 50.2%to 51.4% of admissions revenue as reported for 2024,2025, compared with 50.7%50.2% for 20232024 due to thefilm concentrationmix and overallincreased mixmarketing of film releases.spend. Concession supplies expense was 22.3%22.8% of concessionsconcession revenue as reported for 20242025 compared with 21.8%22.3% of concession revenue for 2023.2024. The increase in the concession supplies rate was primarily driven by inflationary pressures,pressures partiallyand offseta byhigher the impactmix of strategic pricing actions.merchandise.

Salaries and wages, facility lease expense and utilities and other expenses, as reported, were lower for 20242025 as a result of favorable exchange rate fluctuations. In constant currency, salaries and wages increased to $103.7$74.8 million for 20242025 primarily driven by wagewages rateand benefits inflation, partially offset by more effective labor productivity initiatives and lower attendance.management. Facility lease expense increased to $104.9$81.8 million in constant currency for 20242025 primarily due to inflationary increases, partially offset by lower percentage rent.rent due to the decline in box office. Utilities and other costs increased to $156.8$116.5 million in constant currency for 20242025 due to inflationary pressures and higher creditscreen cardadvertising fees,related partially offset by the impact of the decrease in attendance, as many of these costs are variable or semi-variable in nature.commissions.

General and Administrative Expense. General and administrative expense for Holdings increased to $236.1 million for 2025 compared with $218.1 million for 2024 compared with $198.8 million for 2023.2024. General and administrative expense attributable to CUSA increased to $232.5 million for 2025 compared with $214.4 million for 2024 compared with $195.5 million for 2023.2024. The increase for both Holdings and CUSA is primarily due to wages and benefits inflation, increased severance costs, andheadcount, higher incentive compensation,and share-based compensationcompensation, and relatedan payrollincrease taxes,in cloud-based software costs, partially offset by the favorable impact of exchange rate fluctuations.

Impairment of Long-Lived Assets. We recorded asset impairment charges of $6.5 million during 2025 related to four domestic theaters and 13 international theaters that have underperformed relative to the rest of our theater circuit. We recorded an asset impairment charge of $1.5 million during 20242024, related to one international theater that hashad not demonstrated sufficient recovery since reopening after the temporary COVID-19 related closures. We recorded asset impairment charges of $16.6 million during 2023, including $15.9 million due to the prolonged recovery of certain theaters from the COVID-19 pandemic, and a $0.7 million charge on our investment in NCM as NCMI’s stock price was significantly below the Company’s carrying value of NCM per common unit. See NotesNote 8 and 1110 to the consolidated financial statements.

Interest Expense. Interest expense for Holdings, which includes amortization of debt issuance costs and original issue discount and amortization of accumulated gainslosses for swap amendments, was $144.0$142.3 million during 20242025 compared with $150.4$144.0 million for 2023.2024. The interest expense attributable to CUSA was $119.9$127.3 million during 20242025 compared with $126.3$119.9 million for 2023.2024. The decreaseincrease in interest expense for CUSA 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 and2024, November 2024, and theJune amendment and extension of our interest rate swaps, partially offset by the impact of the issuance of the 7.00% Senior Notes in July 2024.2025. See further discussion in Liquidity and Capital Resources below and Note 1312 to the consolidated financial statements.

Loss on Debt Amendments and Extinguishments. We recorded a loss on amendmentsamendment and extinguishmentsextinguishment of debt of $1.5 million during 2025 related to the amendment of our term loan, including the write-off of unamortized debt issuance costs and original issue discount, and legal and other fees paid. We recorded a loss on amendment and extinguishment of debt of $6.9 million during 2024 compared with $10.7 million for 2023. The loss on amendments and extinguishments of debt for 2024 was related to the repricing amendments of our Credit Agreement,Agreement (as defined below), the redemption of the remaining 8.75% Secured Notes, and the extinguishment of the 5.875% Senior Notes. The loss on amendments and extinguishments of debt for 2023 was related to the amendment and extension of our Credit Agreement (as defined below) and the partial redemption of the 8.75% Secured Notes. See further discussion in Liquidity and Capital Resources below.

Foreign Currency Exchange and Other Related Loss. We recorded a foreign currency exchange and other related loss of $9.8 million during 2025 and $9.7 million during 2024 and $28.8 million during 2023.2024. Activity for 20242025 and 20232024 includes losses of $0.9$0.7 million and $12.4$0.9 million, respectively, on Blue Chip Swap transactions. Excluding the impact of Blue Chip Swap transactions, the loss on foreign currency exchange is primarily related to the impact of hyper-inflationary accounting for Argentina, partially offset by currency exchange fluctuations fromrelated originalto transactionUS-denominated datesaccounts untilin cashcertain settlement,international countries. See Notes 1 and 1514 to the consolidated financial statements for discussion of foreign currency translation and Blue Chip Swap transactions.

Equity in Income of Affiliates. Equity in income of affiliates of $11.9$6.6 million was recorded during 20242025 compared with $3.6$11.9 million during 2023 driven by higher income earned from our investment in AC JV, LLC during 2024 and the absence of a loss from our investment in NCMI, which is now accounted for under the fair value basis of accounting.2024. See Note 8 and Note 9, respectively, to the consolidated financial statements for information about our investment in NCMI and our equity investments.

Net (Loss) Gain on Investment in NCMI. We recorded a net gainloss on our investment in NCMI of $11.0$12.1 million during 20242025 compared with $12.4a net gain of $11.0 million for 20232024, asprimarily arelated result ofto the mark-to-market adjustment of our investment in NCMI under the fair value basis of accounting. See Note 8 to the consolidated financial statements for information about our investment in NCMI.

Income Taxes - CUSA.Holdings. An income tax benefitexpense of $55.8$12.4 million was recorded for 20242025 compared with an income tax expensebenefit of $28.4$60.1 million for 2023.2024. The effective tax rate was approximately 8.1% for 2025 compared with (20.823.8)% for 20242024. comparedThe witheffective 12.0%tax rate for 2023.2025 was impacted by the release of valuation allowances, primarily consisting of $48.5 million related to federal interest expense carryforwards and $11.2 million related to state net operating losses, interest expense carryforwards and other deferred tax assets. The release of these valuation allowances was the result of the availability of positive evidence related to changes in the business interest expense limitation contained within the OBBBA as well as sustained profitability and cumulative income in the relevant filing groups to support the future realizability of deferred tax assets. The effective tax rate for 2024 was impacted by the release of valuation allowances, primarily consisting of $27.4$29.4 million related to certain foreign tax credits, $30.8$34.5 million related to certain state net operating losses and $37.0 million related to other federal and state deferred tax assets, as well as a $36.5 million 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 profitability and cumulative income in the relevant jurisdictions to support the future realizability of deferred tax assets. The effective tax rate for 2023 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. We have recorded an income tax receivable of $52.3$67.9 million at December 31, 20242025 and have paid cash taxes of $45.5$37.5 million during the year ended December 31, 2024.2025. See Note 1918 to the consolidated financial statements for further discussion of income taxes.

Cash provided by operating activities was $396.1 million for Holdings and $408.1 million for CUSA for the year ended December 31, 2025 compared with $466.0 million for Holdings and $472.8 million for CUSA for the year ended December 31, 2024 compared with $444.3 million for Holdings and $454.8 million for CUSA for the year ended December 31, 2023.2024. The increasedecrease in cash provided by operating activities was primarily driven by the timing of payments to vendors for expenses during each period,expenses, partially offset by the level of revenue earned during each period.

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 $146.9$209.2 million and $131.8$146.9 million for the years ended December 31, 20242025 and 2023,2024, respectively. CashThe increase in cash used for investing activities increased from 2023was primarily due to an increase in capital expenditures to support the absencecontinued enhancement of proceedsour receivedglobal from the sale of the Company’s Ecuador subsidiary in September 2023.circuit.

Below is a summary of capital expenditures, disaggregated by new and existing theaters,venues, for the years ended December 31, 20232024 and 20242025 (in millions):

Actual expenditures for the continued theaterdevelopment developmentof 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.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 senior securedrevolving credit facility, proceeds from debt issuances, sale leaseback transactions and/or sales of excess real estate.

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 MarchJune 31,30, 2026, we managed our business under two reportable segments – U.S. markets and international markets. See Note 15 to the condensed consolidated financial statements.

Films leading the box office during the threesix months ended MarchJune 31,30, 2026 included new releases The Super Mario Galaxy Movie, Michael, Toy Story 5, Project Hail Mary, Hoppers,Obsession, ScreamThe 7,Devil Wears Prada 2, Backrooms, and GOAT,Star as well as the carryover of 2025 release AvatarWars: FireThe Mandalorian and Ash.Grogu.

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.

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 MarchJune 31,30, 2026 (the “second quarter of 2026 period”) versus the three months ended MarchJune 31,30, 2025 (the “second quarter of 2025 period”)

Second quarter of 2026 Period - The North American Industry box office generated approximately $1.8$3.0 billion during the 2026second period,quarter of 2026, which included new releases ProjectThe HailSuper Mary,Mario Hoppers,Galaxy ScreamMovie, 7,Michael, Toy Story 5, Obsession, The Devil Wears Prada 2, Backrooms, and GOAT,Star as well as the carryover of 2025 release AvatarWars: FireThe Mandalorian and Ash.Grogu.

Second quarter of 2025 Period - The North American Industry box office generated approximately $1.5$2.7 billion during the 2025second period,quarter of 2025, which included new releases CaptainA AmericaMinecraft Movie, Lilo & Stitch, Sinners, How to Train Your Dragon, Thunderbolts*, Mission: BraveImpossible New- World,The DogFinal Man,Reckoning and Disney’sFinal Snow White, as well as the carryover of 2024 releases MufasaDestination: The Lion King and Sonic the Hedgehog 3.Bloodlines.

U.S. Attendance increased 8.7% to 24.140.1 million patrons during the second quarter of 2026 period compared with 20.636.9 million patrons during the second quarter of 2025 period primarily driven by a stronger film slate that had stronger consumer appeal year-over-year.slate. Average ticket price increased 4.5%4.2% to $10.53$10.83 during the second quarter of 2026 period compared with $10.08$10.39 during the second quarter of 2025 period driven by strategic pricing actions and higher premium format mix. Concession revenue per patron increased 7.5%4.3% to $8.58$8.70 during the second quarter of 2026 period compared with $7.98$8.34 during the second quarter of 2025 period primarily driven by strategic pricing actions, increased incidence ratesactions and a favorable shift in product mix. Other revenue for the second quarter of 2026 period increased 20.0%12.3% to $54.1$76.7 million compared with $45.1$68.3 million during the second quarter of 2025 period primarily due to higher transaction fees,fees as well asand an increase in screen advertising revenue and promotional income.revenue.

International. Attendance decreasedincreased to 14.923.6 million patrons for the second quarter of 2026 periodcompared fromwith 16.021.0 million during the second quarter of 2025 period reflecting a stronger film slate that did not resonate as strongly with audiences in our international markets year-over-year.slate. Revenues, average ticket price and concession revenue per patron for our international segment, as reported, were favorably impacted by exchange rate fluctuations during the 2026second period.quarter of 2026. In constant currency, the average ticket price increased 9.1%9.3% to $3.85$4.36 for the second quarter of 2026 period primarily due to inflationary pricing actionsactions, andpartially higheroffset by a lower premium format mix. Similarly, inIn constant currency, concession revenue per patron increased 11.1%3.6% to $3.20$3.46 for the second quarter of 2026 period primarily due to inflationary pricing actions.actions, partially offset by a shift in mix. Other revenue increased 7.6%29.6% in constant currency to $22.7$35.5 million for the second quarter of 2026 period primarily due to higher transaction fees, an increase in screen advertising and loyalty revenue, and inflationary impacts.

U.S. Film rentals and advertising costs increasedwere to 55.5%59.5% of admissions revenue for the second quarter of 2026 period compared with 54.5%59.4% of admissions revenue for the second quarter of 2025 period primarily due to thehigher increasedmarketing scale and concentration of high-grossing films.spend. Concession supplies expense for the second quarter of 2026 period was 18.3%17.9% of concession revenue compared with 20.6%18.5% for the 2025second period.quarter of 2025. The decrease in the concession supplies rate for the second quarter of 2026 period was primarily driven by strategic pricing actions andactions, sourcing initiatives, asand wellinventory asmanagement a shift in product mix,enhancements, partially offset by continued inflationary pressures.pressures and product mix.

Salaries and wages increased 3.5%4.5% to $77.2$95.0 million for the second quarter of 2026 period compared with $74.6$90.9 million for the second quarter of 2025 period due to higher attendance and wage and benefits inflation, partially offset by labor productivity initiatives. Facility lease expense increased 3.5%2.1% to $62.3$63.5 million, primarily due to higher percentage rent. Utilities and other costs increased 8.6%7.0% to $88.8$104.5 million, as many of these costs, such as credit card fees, repairs and maintenancemaintenance, costs, utilityutilities and janitorial costs, are variable or semi-variable in nature and were impacted by the increase in attendance. An increase in gift card commissions and fees also contributed to the increase in utilities and other costs.

Film rentals and advertising costs remainedwere relatively flat at 50.0%50.4% of admissions revenue as reported for the 2026 period compared with 49.9%50.9% for the 2025 period.period primarily due to the overall mix of films. Concession supplies expense was 22.1%22.7% of concessions revenue as reported for the 2026 period compared with 22.8%22.9% 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%11.7% to $17.1$38.2 million for the 2026 period primarily driven by wage inflation,inflation and higher attendance, partially offset by lower attendance and effective labor management.productivity initiatives. Facility lease expense ofincreased $17.99.0% to $42.3 million in constant currency was relatively flat compared towith the 2025 period.period, primarily due to higher percentage rent and inflationary impacts. Utilities and other costs increased 7.9%12.4% to $25.8$57.2 million in constant currency for the 2026 period primarily due to inflationary pressures.pressures and the impact of the increase in attendance, as many of these costs are variable or semi-variable in nature.

General and Administrative Expense. General and administrative expense for Holdings increased to $56.1$118.9 million for the 2026 period compared with $54.5$108.6 million for the 2025 period. General and administrative expense for CUSA increased to $55.0$116.8 million for the 2026 period compared with $53.5$106.8 million for the 2025 period. The increase for both Holdings and CUSA is primarily due to higher wages and benefits, increased headcount, higher incentive and share-based compensationcompensation, and an increase in cloud-based software costs, partially offset by a decrease in professional fees.

Loss (Gain) on Disposal of Assets and Other. A loss on disposal of assets and other of $3.7$6.5 million was recorded for the 2026 period compared with a gain of $4.1$3.1 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 reala property.land parcel and one of our owned theater properties, partially offset by the retirement of certain assets replaced as a result of remodels.

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$66.0 million during the 2026 period compared with $38.5$77.9 million during the 2025 period. The interest expense attributable to CUSA was $34.7$66.0 million during the 2026 period compared with $32.4$65.8 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. The decrease for both Holdings and CUSA also reflects a reduction in our term loan interest rate due to the term loan reprice transactions in June 2025 and May 2026.

Other Income, Net. Other income, net for Holdings was $1.4$5.7 million during the 2026 period compared with $4.4$9.0 million during the 2025 period. Other income, net attributable to CUSA was $1.4$5.7 million during the 2026 period compared with $2.1$6.7 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,balances and lower interest rates, partially offset by anthe increasefavorable impact of the mark-to-market adjustment on our investment in equityNCMI incomeunder fromthe affiliatesfair value basis of accounting and higher foreign currency exchange gains primarily related to the impact of hyper-inflationary accounting for Argentina.

Income Taxes - Holdings. An income tax benefitexpense of $4.0$58.4 million was recorded for the 2026 period compared with an income tax benefitexpense of $14.7$27.8 million for the 2025 period. The effective tax rate was approximately 40.5%30.2% for the 2026 period compared with 27.6%33.1% 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 benefitexpense of $3.6$58.9 million was recorded for the 2026 period compared with income tax benefitexpense of $14.2$29.4 million for the 2025 period. The effective tax rate was approximately 41.8%30.1% for the 2026 period compared with 29.3%30.7% 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.

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 “floatfloat.” 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 usedprovided forby operating activities was $20.4$339.7 million for Holdings and $20.2$340.0 million for CUSA for the threesix months ended MarchJune 31,30, 2026, compared with cash usedprovided forby operating activities of $119.1$156.8 million for Holdings and $111.1$164.4 million for CUSA for the threesix months ended MarchJune 31,30, 2025. The decreaseincrease in cash usedprovided forby 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 have been principally related to the development, remodel and enhancement of theaters. Cash used for investing activities was $37.5$99.1 million and $15.3$45.2 million for the threesix months ended MarchJune 31,30, 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 threesix months ended MarchJune 31,30, 2026 and 2025 (in millions):

We operated 495 theaters with 5,620 screens worldwide as of MarchJune 31,30, 2026. Theaters and screens opened and closed during the threesix months ended MarchJune 31,30, 2026 were as follows:

As of MarchJune 31,30, 2026, we had the following signed new build and expansion commitments:

Cash used for financing activities was $36.8$80.7 million for Holdings and $37.1$82.4 million for CUSA for the threesix months ended MarchJune 31,30, 2026, compared with $230.1$246.3 million for Holdings and $20.4$27.6 million for CUSA for the threesix months ended MarchJune 31,30, 2025. The decrease in cash used for financing activities for Holdings primarily reflects thea repurchasedecrease in repurchases of the Company’s common stock in the first quarter of 2025,stock, 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 share repurchases. Cash used for financing activities for CUSA also reflects 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 threesix months ended MarchJune 31,30, 2026 and 2025.

Of the total dividends recorded during the three and six months ended MarchJune 31,30, 20262026, and 2025 $0.3$0.2 million and $0.5 million, respectively, relate to outstanding performance and restricted stock units and are not paid until such units vest. Of the total dividends recorded during the three and six months ended June 30, 2025, $0.2 million and $0.4 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.

ThereOther than the May 12, 2026 amendment of our Credit Agreement as discussed in Note 7 to the condensed conolidated financial statements, 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.

On May 26, 2023, CUSA amendedhas and restated itsa senior secured credit facility (the “Credit Agreement”) tothat provideprovides for an aggregate principal amount of $775.0$875.0 million, consisting of a $650.0 million term loan with a maturity date of May 24, 2030 and a $125.0$225.0 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.

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 MarchJune 31,30, 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 MarchJune 31,30, 2026.

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 MarchJune 31,30, 2026, there were no revolving credit loans outstanding, and CUSA’s Consolidated Net Senior Secured Leverage Ratio was 0.60.2 to 1.