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Long Term Debt | 9 Months Ended
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Sep. 30, 2024
Debt Disclosure [Abstract] |
Long Term Debt | 7. Long-Term Debt Long-term debt of Holdings and CUSA consisted of the following for the periods presented:
| September 30, |  |  | December 31, |
| 2024 |  |  | 2023 |
Cinemark Holdings, Inc. 4.50% convertible senior notes due August 2025 | $ | 460.0 |  |  | $ | 460.0 |
Cinemark USA, Inc. term loan due May 2030 |  | 640.3 |  |  |  | 645.1 |
Cinemark USA, Inc. 8.75% senior secured notes due May 2025 |  | — |  |  |  | 150.0 |
Cinemark USA, Inc. 5.875% senior notes due March 2026 |  | — |  |  |  | 405.0 |
Cinemark USA, Inc. 5.25% senior notes due July 2028 |  | 765.0 |  |  |  | 765.0 |
Cinemark USA, Inc. 7.00% senior notes due August 2032 |  | 500.0 |  |  |  | — |
Other |  | — |  |  |  | 7.0 |
Total long-term debt carrying value (1) | $ | 2,365.3 |  |  | $ | 2,432.1 |
Less: Current portion, net of unamortized debt issuance costs |  | 463.4 |  |  |  | 7.8 |
Less: Debt issuance costs and original issue discount, net of accumulated amortization (1) |  | 31.5 |  |  |  | 33.0 |
Long-term debt, less current portion, net of unamortized debt issuance costs and original issue discount (1) | $ | 1,870.4 |  |  | $ | 2,391.3 |
(1) The only differences between the long-term debt for Holdings, as presented above, and the long-term debt for CUSA are the $460.0 4.50% Convertible Senior Notes due August 2025 and the related debt issuance costs. The following table sets forth, as of the periods indicated, the total long-term debt carrying value, current portion of long-term debt and debt issuance costs, net of amortization, for CUSA.
| September 30, |  |  | December 31, |
| 2024 |  |  | 2023 |
Total long-term debt carrying value | $ | 1,905.3 |  |  | $ | 1,972.1 |
Less: Current portion |  | 6.4 |  |  |  | 7.8 |
Less: Debt issuance costs and original issue discount, net of accumulated amortization |  | 28.5 |  |  |  | 27.5 |
Long-term debt, less current portion, net of unamortized debt issuance costs and original issue discount | $ | 1,870.4 |  |  | $ | 1,936.8 |
4.50% Convertible Senior Notes As further discussed in Note 14 to the Company’s consolidated financial statements for the year ended December 31, 2023, included in the Company’s Annual Report on Form 10-K filed on February 16, 2024, prior to May 15, 2025, holders of the 4.50% Convertible Senior Notes may convert their notes during any calendar quarter (and only during such calendar quarter), if the last reported sale price of Holdings’ common stock for at least 20 trading days during the period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to $18.66 per share (130% of the initial conversion price of $14.35 per share), on each applicable trading day. The closing price of Holdings' common stock exceeded $18.66 per share (130% of the initial conversion price of $14.35 per share) during at least 20 of the last 30 trading days of the quarter ended September 30, 2024 and, therefore, the 4.50% Convertible Senior Notes will be convertible during the fourth quarter of 2024. Senior Secured Credit Facility On May 28, 2024, CUSA amended and restated its senior secured credit facility (the “Credit Agreement”) to reduce the rate at which the term loan bears interest by 0.50% and reset the 101% soft call for another six months. CUSA incurred a total of approximately $1.0 in debt issuance costs in connection with the amendment, which are reflected in the condensed consolidated financial statements as follows: (i) $0.8 in debt issuance costs were capitalized and are reflected as a reduction of “Long-term debt, less current portion” on the Company’s condensed consolidated balance sheet; and (ii) $0.2 of legal and other fees are included in “Loss on debt amendments and extinguishments” in the Company’s condensed consolidated statement of income for the nine months ended September 30, 2024. As a result of the amendment, CUSA also wrote-off $1.3 of unamortized debt issuance costs and original issue discount associated with exiting lenders of the amended Credit Agreement, which is reflected in “Loss on debt amendments and extinguishments” in the Company’s condensed consolidated statement of income for the nine months ended September 30, 2024. As of September 30, 2024, there was $640.3 outstanding under the term loan and no borrowings were outstanding under the revolving credit line. Under the Credit Agreement, principal payments of $1.6 are due on the term loan quarterly through March 31, 2030, with a final principal payment of the remaining unpaid principal due on May 24, 2030. The average interest rate on outstanding term loan borrowings under the Credit Agreement as of September 30, 2024 was approximately 6.9% per annum, after giving effect to the interest rate swap agreements discussed below. 8.75% Secured Notes On May 1, 2024, CUSA redeemed the remaining $150.0 in outstanding principal amount of the 8.75% Secured Notes, at par, plus accrued interest thereon for $156.6 in cash. As a result of the redemption, the indenture governing the 8.75% Secured Notes was fully satisfied and discharged. CUSA recognized a loss on extinguishment of debt of $1.0 related to the write-off of unamortized debt issuance costs, which is reflected in “Loss on debt amendments and extinguishments” in the Company’s condensed consolidated statement of income for the nine months ended September 30, 2024. For additional discussion of the 8.75% Secured Notes, see Note 14 to the Company’s consolidated financial statements for the year ended December 31, 2023, included in the Company’s Annual Report on Form 10-K filed on February 16, 2024. 7.00% Senior Notes On July 18, 2024, CUSA issued $500.0 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 will be payable on February 1 and August 1 of each year, beginning on February 1, 2025. CUSA incurred debt issuance costs of approximately $8.7 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 aggregate principal amount of Senior Notes due March 2026 (the “5.875% Senior Notes”), as discussed below under 5.875% Secured Notes. The remainder of the net proceeds will be used for general corporate purposes. The 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 the 4.50% convertible senior notes due 2025, and all future debt, if any, issued by Holdings that is not guaranteed by CUSA or any of its subsidiaries. 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. 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 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. 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. 5.875% Secured Notes Concurrently with the 7.00% Senior Notes bond offering discussed above, on July 9, 2024, CUSA commenced a cash tender offer to purchase any and all of CUSA’s 5.875% Senior Notes. On July 18, 2024, CUSA completed the tender offer of $345.3 aggregate principal amount of the notes, at par. After the expiration of the tender offer, $59.7 aggregate principal amount of the 5.875% Senior Notes remained outstanding. On September 19, 2024, CUSA, as permitted by the terms of the indenture governing the 5.875% Senior Notes, irrevocably deposited non-callable U.S. government treasury securities with a trustee in an amount sufficient to fund the repayment of the remaining $59.7 principal amount of the 5.875% Senior Notes on March 15, 2025 (the “Redemption Date”) at 100% of the principal amount plus accrued and unpaid interest thereon. After the deposit of such funds with the trustee, CUSA’s obligations under the indenture with respect to the 5.875% Senior Notes were satisfied and discharged and the transaction was accounted for as a debt extinguishment. As a result of the debt extinguishment, CUSA recognized a loss of $3.0 related to the write-off of unamortized debt issuance costs as well as legal and other fees incurred in connection with the transactions, which is reflected in “Loss on debt amendments and extinguishments” in the Company’s condensed consolidated statement of income for the three and nine months ended September 30, 2024. Interest Rate Swap Agreements The Company’s interest rate swap agreements are used to hedge a portion of the interest rate risk associated with the variable interest rates on the Company’s term loan and qualify for cash flow hedge accounting. Effective January 31, 2024, the Company amended and extended one of its then existing $137.5 notional amount interest rate swap agreements to amend the pay rate and extend the maturity date to December 31, 2027. Effective February 29, 2024, the Company amended and extended its other then existing $137.5 notional amount interest rate swap agreement to amend the pay rate and extend the maturity to December 31, 2026. Upon amending each of the interest rate swap agreements, the Company determined that the interest payments hedged with the respective agreements are still probable to occur, therefore the aggregate gains that accumulated on the swaps prior to the amendments of $7.0 are being amortized to interest expense through the maturity date of the swaps. Below is a summary of the Company's interest rate swap agreements, which are designated as cash flow hedges, as of September 30, 2024:
Notional |  |  |  |  |  |  |  |  | Estimated |
Amount |  |  | Pay Rate |  | Receive Rate |  | Expiration Date |  | Fair Value (1) |
$ | 137.5 |  |  | 3.21% |  | 1-Month Term SOFR |  | December 31, 2026 |  | $ | 0.5 |
$ | 175.0 |  |  | 3.20% |  | 1-Month Term SOFR |  | December 31, 2026 |  |  | 0.8 |
$ | 137.5 |  |  | 3.17% |  | 1-Month Term SOFR |  | December 31, 2027 |  |  | 0.7 |
|  |  |  |  |  |  | Total |  | $ | 2.0 |
(1) Approximately $2.8 of the total is included in “Prepaid expenses and other” and the long-term liability portion of $0.8 is included in “Other long-term liabilities” on the condensed consolidated balance sheet as of September 30, 2024. The fair values of the interest rate swaps are recorded on 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. The changes in fair value are reclassified from accumulated other comprehensive loss into earnings in the same period that the hedged items affect earnings. The valuation technique used to determine fair value is the income approach and under this approach, the Company uses projected future interest rates as provided by counterparties to the interest rate swap agreements and the fixed rates that the Company is obligated to pay under the agreement. Therefore, the Company's measurements are based on observable market data, which fall in Level 2 of the U.S. GAAP hierarchy as defined by FASB ASC Topic 820-10-35. Fair Value of Long-Term Debt The Company estimates the fair value of its long-term debt primarily based on observable market prices, which fall under Level 2 of the U.S. GAAP fair value hierarchy as defined by FASB ASC 820-10-35, Fair Value Measurement. The table below presents the fair value of the Company's long-term debt as of the periods presented:
|  | As of |
|  | September 30, 2024 |  |  | December 31, 2023 |
Holdings fair value (1) |  | $ | 2,834.0 |  |  | $ | 2,460.3 |
CUSA fair value |  | $ | 1,920.1 |  |  | $ | 1,903.8 |
(1) The fair value of the 4.50% convertible senior notes was $913.9 and $556.5 as of September 30, 2024 and December 31, 2023, respectively.

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