Q2 2024 Cinemark Holdings Inc Earnings Call

Welcome to the Cinemark Holdings, Inc. Second quarter 2024 earnings call. At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance. During the conference. Please press star zero on your telephone keypad as a room.

Operator: Welcome to the Cinemark Holdings Inc. 2nd quarter, 2024 earnings call. At this time, all participants are in a listen-only mode.

Operator: Welcome to the Cinemark Holdings Inc. second quarter 2024 earnings call. At this time, all participants are in a listen-only mode. The question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the call over to Chanda Brashears, SVP of Investor Relations. Thank

Operator: The question and answer session will follow the formal presentation. If anyone will require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded.

Minder. This conference is being recorded I would now like to turn the call over to Chanda Brashears SVP of Investor Relations. Thank you you may begin.

Chanda Brashears: I would now like to turn the call over to Chanda Brashears, SVP of Investor Relations. Thank you. You may begin.

Chanda Brashears: Good morning, everyone. I would like to welcome you to Cinemark Holdings Inc.'s second quarter 2024 earnings release conference call hosted by Sean Gamble, President and Chief Executive Officer, and Melissa Thomas, Chief Financial Officer. Before we begin, I would like to remind everyone that statements or comments made on this conference call may be forward-looking statements. Such statements may include, but are not necessarily limited to, financial projections or other statements of the company's plans, objectives, expectations, or intentions.

Chanda Brashears: Good morning, everyone. I would like to welcome you to Cinemark Holdings Inc. 2nd quarter, 2024 earnings released conference call hosted by Sean Gamble, President and Chief Executive Officer, and Melissa Thomas, Chief Financial Officer.

Chanda Brashears: Good morning, everyone I would like to welcome you to Cinemark Holdings, Inc. Second quarter 2024 earnings release Conference call hosted by Sean Gamble, President and Chief Executive Officer, and Melissa Thomas Chief Financial Officer, before we begin I would like to remind everyone that statements or comments made on this conference call may be forward looking statements.

Chanda Brashears: Before we begin, I would like to remind everyone that statements or comments made on this conference call may be forward-looking statements. Forward-looking statements may include that are not necessarily limited to financial projections or other statements of the company's plans, objectives, expectations, or intentions. These matters involve certain risks and uncertainties. The company's actual results may materially differ from forward-looking projections due to a variety of factors.

Chanda Brashears: Forward looking statements may include but are not necessarily limited to financial projections or other statements of the company's plans objectives expectations or intentions. These matters involve certain risks and uncertainties. The company's actual results may materially differ from forward looking projections due to a variety of factors information.

Chanda Brashears: These matters involve certain risks and uncertainty. The company's actual results may materially differ from forward-looking projections due to a variety of factors. Information concerning the factors that could cause results to differ materially is contained in the company's most recently filed 10-K. Also, today's call may include non-GAAP financial measures. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures can be found in the company's most recently filed earnings release, the 10Q, and on the company's website at ir.cinemark.com. With that said, I would like to turn the call over to Sean Gamble.

Chanda Brashears: Information concerning the factors that could cause results to differ materially is contained in the company's most recently filed 10-K. Also, today's call may include non-GAAP financial measures. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures can be found in the company's most recently filed earnings release, 10-Q, and on the company's website at ir.cinemark.com.

Concerning the factors that could cause results to differ materially is contained in the company's most recently filed 10-K.

Chanda Brashears: Also today's call May include non-GAAP financial measures a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures can be found in the company's most recently filed earnings released 10-Q and on the company's website at IR Cinemark Dot com with that I would like to turn the call over to Sean Gamble.

Sean Gamble: With that, I would like to turn the call over to Sean Gamble. Thank you, Chanda. Good morning, everyone. We appreciate you joining us today to discuss our 2nd quarter, 2024 results. During my prepared remarks this morning, I'm going to focus on 3 main topics. First, sustained consumer enthusiasm for immersive cinematic experiences, which continues to be validated by robust film performance and provides a positive long-term outlook for our industry, along with favorable forward-looking indicators related to wide-release volume. Second, Cinemark's solid results this quarter that continued to outperform and were driven by the consistent and skilled operational execution of our sensational team, as well as the impact of our ongoing strategic actions to advance our business.

Sean Gamble: Thank you Chanda and good morning, everyone. We appreciate you joining us today to discuss our second quarter 2024 results.

Sean Gamble: Thank you, Chanda. Good morning, everyone. We appreciate you joining us today to discuss our second quarter 2024 results. During my prepared remarks this morning, I'm going to focus on three main topics. First, sustained consumer enthusiasm for immersive cinematic experiences, which continues to be validated by robust film performance and provides a positive long-term outlook for our industry along with favorable forward-looking indicators related to wide release volume. Second, Cinemark's solid results this quarter that continue to outperform and were driven by the consistent and skilled operational execution of our sensational team, as well as the impact of our ongoing strategic actions to advance our business. And third, the overall strength of our company, operationally, financially, and competitively, which we believe positions us exceptionally well to deliver sustainable future growth, profitability, and shareholder value.

Sean Gamble: During my prepared remarks, this morning, I'm going to focus on three main topics.

Sean Gamble: First sustained consumer enthusiasm for immersive cinematic experiences, which continues to be validated by robust film performance and provides a positive long term outlook for our industry along with favorable forward looking indicators related to wide release volume.

Sean Gamble: Second Cinemark solid results this quarter that continued to outperform and were driven by the consistent and skilled operational execution of our sensational team as well as the impact of our ongoing strategic actions to advance our business.

Sean Gamble: And third, the overall strength of our company, operationally, financially, and competitively, which we believe positions us exceptionally well to deliver sustainable future growth, profitability, and shareholder value. To start, for the past three years now, we have witnessed example after example of outsized film performance across a diverse range of genres and non-traditional content that include a multitude of record-setting highs. These results provide a clear indication that consumer enthusiasm for elevated, larger-than-life theatrical experiences remains strong and vibrant when compelling titles are brought to the big screen and marketed effectively. This performance trend was widely apparent in the first quarter and continued to be evident during 2Q and July.

Sean Gamble: And third the overall strength of our company operationally financially and competitively, which we believe positions us exceptionally well to deliver sustainable future growth profitability and shareholder value.

Sean Gamble: To start for the past three years now we have witnessed example, after example of outsized film performance across a diverse range of genres and non traditional content that include a multitude of record setting highs.

Sean Gamble: To start, for the past three years now, we have witnessed example after example of outsized film performance across a diverse range of genres and non-traditional content that include a multitude of record-setting highs. These results provide a clear indication that consumer enthusiasm for elevated, larger-than-life theatrical experiences remains strong and vibrant when compelling titles are brought to the big screen and marketed effectively. This performance trend was widely apparent in the first quarter and continued to be evident during 2Q in July.

Sean Gamble: These results provide a clear indication that consumer enthusiasm for elevated larger than life theatrical experiences remains strong and vibrant when compelling titles are brought to the big screen and marketed effectively.

Sean Gamble: This performance trend was widely apparent in the first quarter and continued to be evident during Q2 in July.

Sean Gamble: For example, in April, the dystopian saga Civil War delivered 824's biggest opening weekend ever. Shortly thereafter, adult drama challengers exceeded expectations, generating $50 million of domestic box office. And then at the beginning of May, action-adventure Kingdom of the Planet of the Apes delivered exceptional results, surpassing the full run of its preceding installment by more than 15%. The second quarter also included solar results from action-comedy Bad Boys Ride or Die and suspense thriller Aquia Place Day 1, as well as a resurgence in family film volume beginning with the heartwarming If in May that was followed by the Garfield movie the next weekend.

Sean Gamble: For example, in April, the dystopian saga Civil War delivered A24's biggest opening weekend ever. Shortly thereafter, adult drama challengers exceeded expectations, generating $50 million in domestic box office. And then at the beginning of May, Action Adventure Kingdom of the Planet of the Apes delivered exceptional results, surpassing the full run of its preceding installment by more than 15%. The second quarter also included solid results from action comedy Bad Boys Ride or Die and suspense thriller A Quiet Place Day One, as well as a resurgence in family film volume, beginning with the heartwarming If in May that was followed by the Garfield movie The Next Weekend

Speaker Change: For example in April the dystopian Saga Civil War delivered $8 24, as biggest opening weekend ever.

Speaker Change: Shortly thereafter adult drama challengers exceeded expectations generating $50 million of domestic box office.

Speaker Change: And then at the beginning of May action Adventure Kingdom of the planet of the apes delivered exceptional results, surpassing the full run of its preceding installment by more than 15%.

Speaker Change: The second quarter also included solid results from action comedy Bad Boys rider of di and suspense thriller a quiet place day, one as well as a resurgence and family film volume beginning with the heartwarming. If in May that was followed by the Garfield movie the next weekend.

Sean Gamble: And then in June, Inside Out took family movie going to new heights with an astounding opening that blew away expectations and a strong continued run that recently made it the highest grossing animated film of all time with over $615 million domestically and more than one and a half billion dollars worldwide so far. With a steadier cadence of theatrical releases over the past month, movie going momentum escalated during the second quarter and has continued to build in 3Q, along with the ongoing playthrough of Inside Out to July, kicked off with the fantastic opening of yet another family film, Despicable Me, for which is already eclipsed $675 million globally and is still growing.

Sean Gamble: And then in June, Inside Out 2 took family moviegoing to new heights with an astounding opening that blew away expectations and a strong continued run that recently made it the highest-grossing animated film of all time with over $615 million domestically and more than $1.5 billion worldwide so far. With a steadier cadence of theatrical releases over the past month, moviegoing momentum escalated during the second quarter and has continued to build in 3Q.

And then in June inside out to took family movie going to new Heights, with an astounding opening that blew away expectations and its strong continued run that recently made it the highest grossing animated film of all time with over $615 million domestically and more than one five.

Speaker Change: Dollars worldwide so far.

Speaker Change: With a steadier cadence of theatrical releases over the past month moviegoing momentum escalated during the second quarter and has continued to build in <unk>.

Speaker Change: Along with the ongoing play through of inside out to July kicked off with the fantastic opening of yet another family films Despicable me for which has already eclipsed $675 million globally and is still growing.

Sean Gamble: Along with the ongoing playthrough of Inside Out 2, July kicked off with the fantastic opening of yet another family film, Despicable Me 4, which has already eclipsed $675 million globally and is still growing. Additionally, over the course of July, horror film Long Legs became a breakout hit, grossing more than $60 million domestically to date and yielding indie label Neon's biggest title ever. Action Thriller Twisters created a storm at the box office, earning more than $80 million in its domestic debut, which exceeded most industry opening weekend estimates by over 50%.

Sean Gamble: Additionally, over the course of July, horror film Long Legs became a breakout hit grossing more than $60 million domestically to date and yielding indie label Neon's biggest title ever. Action thriller Twisters created a storm at the box office, stirring up more than $80 million in its domestic debut, which exceeded most industry opening weekend estimates by over 50%. And this past weekend, Disney and Marvel's highly anticipated release of superhero adventure Deadpool and Wolverine just tore up the box office, becoming the biggest R-rated opening ever with over $210 million domestically and more than $440 million globally. It produced the highest domestic July opening of all time for our industry, and for cinema arc, it delivered the biggest summer opening in the history of our company.

Speaker Change: Additionally over the course of July horror film long legs became a breakout hit grossing more than $60 million domestically to date and yielding indie label Neons biggest title ever.

Speaker Change: Action thriller Twisters created a storm at the box office staring up more than $80 million in its domestic debut which exceeded most industry opening weekend estimates by over 50%.

Sean Gamble: And this past weekend, Disney and Marvel's highly anticipated release of the superhero adventure Deadpool and Wolverine just tore up the box office, becoming the biggest R-rated opening ever with over $210 million domestically and more than $440 million globally. It produced the highest domestic July opening of all time for our industry, and for Cinemark, it delivered the biggest summer opening in the history of our company. So individual title performance across all categories of films continues to demonstrate that consumer enthusiasm to view compelling content in theaters has been undeterred, even when confronted by the temporary drag and fluctuations in theatrical release volume caused first by the pandemic and then last year's strikes in Hollywood.

Speaker Change: And this past weekend Disney and Marvel highly anticipated release of superhero adventure Deadpool and Wolverine just tore up the box office, becoming the biggest are rated opening ever with over $210 million domestically and more than $440 million globally. It produced the highest domestic July.

Speaker Change: Opening of all time for our industry and for Cinemark. It delivered the biggest summer opening in the history of our company.

Sean Gamble: So individual title performance across all categories of films continues to demonstrate that consumer enthusiasm to view compelling content and theaters has been undeterred, even confronted by the temporary drag and fluctuations in theatrical release volume caused first by the pandemic and then last year strikes in Hollywood. We were thrilled to see how robust consumer enthusiasm drove second quarter North American industry box office to nearly $2 billion that was well ahead of our internal projections and how it has continued to generate strong third quarter results to date as the scale of this year's films has started turning the quarter corner in the second half.

Speaker Change: So individual title performance across all categories of films continues to demonstrate that consumer enthusiasm to view compelling content in theaters has been undeterred, even confronted by the temporary drag and fluctuations and theatrical release volume caused first by the pandemic.

Speaker Change: And then last year's strikes in Hollywood.

Sean Gamble: We were thrilled to see how robust consumer enthusiasm drove second quarter North American industry box office to nearly $2 billion, which was well ahead of our internal projections, and how it has continued to generate strong third quarter results to date as the scale of this year's films has started turning the corner in the second half. Furthermore, we remain highly optimistic about the ongoing rebound of theatrical release volume back toward pre-pandemic levels over the next couple of years based on our continued discussions with our traditional studio partners, the further expansion into theatrical exhibition of growing studios like Amazon and Apple, and the increasing success of non-traditional content. Next, I'd like to comment on Cinemark's second-quarter results.

Speaker Change: We were thrilled to see how robust consumer enthusiasm drove second quarter, North American industry box office to nearly $2 billion that was well ahead of our internal projections and how it has continued to generate strong third quarter results to date as the scale of this year's films has started turning the quarter.

Speaker Change: In the second half.

Speaker Change: Yeah.

Sean Gamble: Furthermore, we remain highly optimistic about the ongoing rebound of theatrical release volume back toward pre-pandemic levels over the next couple of years based on our continued discussions with our traditional studio partners, the further expansion into theatrical exhibition of growing studios like Amazon and Apple, and the increasing success of non-traditional content.

Speaker Change: Furthermore, we remain highly optimistic about the ongoing rebound of theatrical release volume back towards pre pandemic levels over the next couple of years based on our continued discussions with our traditional studio partners to further expansion into theatrical exhibition of growing studios like Amazon and Apple and the increasing success.

Speaker Change: Of non traditional content.

Sean Gamble: Next, I'd like to comment on Cinemark's second quarter results. As strong consumer movie-going demand produced a plethora of outperforming films during the quarter and propelled overall industry box office, meaningfully beyond our expectations. At Cinemark, we once again extended our lengthy track record about sized results. Notably, our second quarter box office performance far outpaced our industry and peers, exceeding year-over-year industry results by more than 300 basis points, both domestically and in Latin America. Moreover, compared to 2Q19, our box office recovery in the second quarter was even further pronounced and surpassed the industry by nearly 1,000 basis points domestically and 500 basis points internationally.

Speaker Change: Next I'd like to comment on Cinemark second quarter results.

Sean Gamble: As strong consumer moviegoing demand produced a plethora of outperforming films during the quarter and propelled overall industry box office meaningfully beyond our expectations, at Cinemark, we once again extended our lengthy track record of outsized results. Notably, our second quarter box office performance far outpaced our industry and peers, exceeding year-over-year industry results by more than 300 basis points, both domestically and in Latin America. Moreover, compared to 2Q19, our box office recovery in the second quarter was even more pronounced and surpassed the industry by nearly 1,000 basis points domestically and 500 basis points internationally.

Speaker Change: As strong consumer movie going demand produced a plethora of outperforming films during the quarter and propelled overall industry box office meaningfully beyond our expectations at Cinemark, we once again extended our lengthy track record of outsized results.

Speaker Change: Notably our second quarter box office performance far outpaced our industry and peers exceeding year over year industry results by more than 300 basis points, both domestically and in Latin America.

Speaker Change: Moreover, compared to <unk> 19, our box office recovery in the second quarter was even further pronounced and surpassed the industry by nearly 1000 basis points domestically and 500 basis points internationally.

Sean Gamble: Our strong box office outperformance, coupled with disciplined expense control and agile management of the quarter's dynamic volume fluctuations, yielded strong bottom-line results, even facing strike-induced headwinds that caused a 22 percent decline in year-over-year attendance. During the quarter, we delivered $142 million of adjusted EBITDA with a 19.4 percent adjusted EBITDA margin and $161 million of free cash flow. Our impressive second quarter results were amplified by the impact of our many ongoing initiatives to build audiences, grow sources of revenue, and hone our industry-leading operating capabilities. Additionally, our results also benefited from film content mix that skewed particularly well across our global circuit, as well as minimal seating capacity constraints due to the reduced volume of film releases and associated attendance levels.

Sean Gamble: Our strong box office outperformance, coupled with disciplined expense control and agile management of the quarter's dynamic volume fluctuations, yielded strong bottom-line results, even facing strike-induced headwinds that caused a 22% decline in year-over-year attendance. During the quarter, we delivered $142 million of adjusted EBITDA with a 19.4% adjusted EBITDA margin and $161 million of free cash flow.

Speaker Change: Our strong box office outperformance, coupled with disciplined expense control and agile management of the quarter's dynamic volume fluctuations yielded strong bottomline results, even facing strike induced headwinds that caused a 22% decline in year over year attendance.

Speaker Change: During the quarter, we delivered $142 million of adjusted EBITDA with a 19, 4% adjusted EBITDA margin and $161 million of free cash flow.

Sean Gamble: Our impressive second quarter results were amplified by the impact of our many ongoing initiatives to build audiences, grow new sources of revenue, and hone our industry-leading operating capabilities. Additionally, our results also benefited from a film content mix that skewered particularly well across our global circuit, as well as minimal seating capacity constraints due to the reduced volume of film releases and associated attendance. Some examples of impactful drivers that helped elevate our results during the quarter and were derived from our many ongoing strategic initiatives include the following.

Speaker Change: Our impressive second quarter results were amplified by the impact of our many ongoing initiatives to build audiences grow new sources of revenue and hone our industry, leading operating capabilities.

Speaker Change: Additionally, our results also benefited from film content mix that skewed, particularly well across our global circuit as well as minimal seating capacity constraints due to the reduced volume of film releases and associated attendance levels.

Sean Gamble: Some examples of impactful drivers that helped elevate our results during the quarter and were derived from our many ongoing strategic initiatives include the following. We continued to earn high satisfaction ratings from approximately 95 percent of our guests surveyed in the U.S. due to our heightened levels of guest service. We further expanded the reach of our extensive and loyal customer base, growing our movie club membership 10 percent since our last update to over 1.3 million subscribers. We generated almost 10 percent of our domestic box office through non-traditional content by continuing to actively pursue emerging categories of films such as anime, multicultural titles, and faith-based releases.

Speaker Change: Some examples of impactful drivers that helped to elevate our results during the quarter and were derived from our many ongoing strategic initiatives include the following.

Sean Gamble: We continue to earn high satisfaction ratings from approximately 95% of our guests surveyed in the U.S. due to our heightened levels of guest service. We've further expanded the reach of our extensive and loyal customer base, growing our movie club membership by 10% since our last update to over 1.3 million subscribers. We generated almost 10% of our domestic box office through non-traditional content by continuing to actively pursue emerging categories of films, such as anime, multicultural titles, and faith-based releases.

Speaker Change: We continued to earn high satisfaction ratings from approximately 95% of our guests surveyed in the U S. Due to our heightened levels of guest service.

Speaker Change: We further expanded the reach of our extensive and loyal customer base growing our movie club membership, 10% since our last update to over $1 3 million subscribers.

Speaker Change: We generated almost 10% of our domestic box office through non traditional content by continuing to actively pursue emerging categories of films such as anime multicultural titles in faith based releases.

Sean Gamble: Through rigorous planning and execution, we also improved labor efficiencies while increasing the number of show times we offer per theater per day, despite operating with fewer overall hours. And we achieved our highest domestic food and beverage per cap ever of $7.95 through the continued enhancement of our concession offerings, pricing strategies, purchasing platforms, and space management. So again, we are thrilled with the results we were able to deliver in the quarter and believe there are a direct reflection of the significant impact we have made and continue to make advancing our company.

Sean Gamble: Through rigorous planning and execution, we also improved labor efficiencies while increasing the number of showtimes we offer per theater, per day, despite operating with fewer overall hours. And we achieved our highest domestic food and beverage per cap ever of $7.95 through the continued enhancement of our concession offerings, pricing strategies, purchasing platforms, and space management.

Speaker Change: Through rigorous planning and execution, we also improved labor efficiencies, while increasing the number of Showtime's we offer per theatre per day, despite operating with fewer overall hours.

Speaker Change: And we achieved our highest domestic food and beverage per cap ever of $7 95.

Speaker Change: Through the continued enhancement of our concession offerings pricing strategies purchasing platforms and space management.

Speaker Change: So again, we are thrilled with the results, we're able to deliver in the quarter and believe they are a direct reflection of the significant impact we have made and continue to make advancing our company.

Sean Gamble: So again, we are thrilled with the results we were able to deliver in the quarter and believe they are a direct reflection of the significant impact we have made and continue to make on advancing our company. And that brings me to my third topic, which is the overall strength of Cinemark. As we highlighted last quarter, following many years of strategic capital deployment, as well as actions to enhance our operating capabilities and the experience we provide our guests, we believe that Cinemark maintains an advantageous market position and is uniquely situated to grow and prosper as we move forward.

Sean Gamble: And that brings me to my third topic, which is the overall strength of cinema. As we highlighted last quarter, following many years of strategic capital deployment, as well as actions to enhance our operating capabilities and the experience we provide our guests, we believe that cinema maintains an advanced market position and is uniquely situated to grow and prosper as we move forward. First and foremost, the strength and stability of our global team is unparalleled, and a key differentiator for our company with domain expertise, resourcefulness, creativity, and determination that is second to none. Furthermore, in addition to our extensive and loyal customer base, as well as our industry leader leading feeder management practices that I already mentioned, we continue to benefit from the sustained investments we have made over time to develop and maintain the largest collection of high-quality assets in our markets.

Speaker Change: And that brings me to my third topic, which is the overall strength of cinemark.

Speaker Change: As we highlighted last quarter following many years of strategic capital deployment as well as actions to enhance our operating capabilities and the experience. We provide our guests. We believe that cinemark maintains an advantaged market position and is uniquely situated to grow and prosper as we move forward.

Sean Gamble: First and foremost, the strength and stability of our global team is unparalleled and a key differentiator for our company, with domain expertise, resourcefulness, creativity, and determination that is second to none. Furthermore, in addition to our extensive and loyal customer base as well as our industry leader-leading theater management practices, as I have already mentioned, we continue to benefit from the sustained investments we have made over time to develop and maintain the largest collection of high-quality assets in our market.

Speaker Change: First and foremost the strength and stability of our global team is unparalleled and a key differentiator for our company with domain expertise resourcefulness creativity and determination that is second to none.

Speaker Change: Furthermore, in addition to our extensive and loyal customer base as well as our industry leader, leading theater management practices that I already mentioned, we continue to benefit from the sustained investments we've made over time to develop and maintain the largest collection of high quality assets in our markets.

Sean Gamble: For instance, over the past decade, we have invested more than $675 million in high-return recliner conversions, resulting in the most extensive domestic recliner penetration of all major exhibitors at nearly 70% circuit watt. We have built Cinemark XD into the largest exhibitor-branded premium large format in the world, with nearly 300 XD auditoriums across the U.S. and Latin America, and in the second quarter alone, while XD represented only 5% of our global screens, it generated 13% of our total company box office, which was up 300 basis points compared to 2Q19. We have also developed the largest footprint of Debock's motion seats in the world that now extends across 365 auditoriums globally, with associated revenue growth of 75% since the pandemic.

Sean Gamble: For instance, over the past decade, we have invested more than $675 million in high-return recliner conversions, resulting in the most extensive domestic recliner penetration of all major exhibitors at nearly 70% circuit-wide. We have built Cinemark XD into the largest exhibitor-branded, premium-large format in the world, with nearly 300 XD auditoriums across the U.S. and Latin America. And in the second quarter alone, while XD represented only 5% of our global screens, it generated 13% of our total company box office, which was up 300 basis points compared to 2Q19.

Speaker Change: For instance over the past decade, we have invested more than $675 million in high return recliner conversions, resulting in the most extensive domestic recliner penetration of all major exhibitors and nearly 70% circuit what.

Speaker Change: We have built cinemark XD into the largest exhibitor branded premium large format in the world with nearly 300, XD auditoriums across the U S and Latin America and in the second quarter alone. While XD represented only Sep only 5% of our global screens. It generated 13% of our total company box office, which was up 300.

Speaker Change: Basis points compared to <unk> 19.

Sean Gamble: We have also developed the largest footprint of DboxMotion seats in the world that now extends across 365 auditoriums globally with associated revenue growth of 75% since the pandemic. Our circuit has long been regarded as having the leading sight, sound, and overall presentation quality in the business, including our best-in-class xenon projection technology, and we continue to raise that standard to the next level with our ongoing rollout of Barco projectors, and Barco laser projectors.

Speaker Change: We have also developed the largest footprint of D box motion seats in the world that now extends across 365 auditoriums globally with associated revenue growth of 75% since the pandemic.

Sean Gamble: Our circuit has long been regarded as having the leading site, sound, and overall presentation quality in the business, including our best-in-class xenon projection technology, and we continue to raise that standard to the next level with our ongoing rollout of Farco projectors, Farco laser projectors. And, with the exception of 2020 through 2022, we have historically spent approximately $80 to $100 million of Catholics per year to maintain the overall condition of our theaters, which is far beyond our major peers on a per-feeder basis. We also have a distinctive global footprint that we continue to optimize. Since the pandemic, we have exited approximately 70 lower performing theaters, and over the past year alone, we renegotiated a series of ongoing lease arrangements that yielded approximately $10 million of annual rent savings.

Speaker Change: Our circuit has long been regarded as having the leading site sound and overall presentation quality in the business, including our best in class Xenon projection technology, and we continue to raise that standard to the next level with our ongoing rollout of Barco projectors Barco laser projectors.

Speaker Change: And with the exception of 2020 through 2022, we have historically spent approximately $80 million to $100 million of capex per year to maintain the overall condition of our theaters, which is far beyond our major peers on a per theater basis.

Sean Gamble: And, with the exception of 2020 through 2022, we have historically spent approximately $80 to $100 million in capex per year to maintain the overall condition of our theaters, which is far beyond our major peers on a per theater basis. We also have a distinctive global footprint that we continue to optimize. Since the pandemic, we have exited approximately 70 lower-performing theaters, and over the past year alone, we renegotiated a series of ongoing lease arrangements that yielded approximately $10 million in annual rents.

Speaker Change: We also have a distinctive global footprint that we continue to optimize.

Speaker Change: Since the pandemic, we have exited approximately 70 lower performing theaters and over the past year alone. We renegotiated a series of ongoing lease arrangements that yielded approximately $10 million of annual rent savings.

Sean Gamble: At the same time, we have opened 16 new theaters that are collectively performing well beyond the performance targets we established prior to the pandemic. In North America, we continue to consistently generate the number one or number two box office results in 21 of our top 25 markets, with the highest attendance per screen of the leading exhibitors. Across Latin America, we are the industry leader with over 25 percent market share. As a result of our many strategic initiatives and our long history of disciplined capital management, CINEMARK also maintains a solid financial position. We consistently deliver industry-leading adjusted EBITDA in free cash flow, as was apparent once again in our second quarter results, and Melissa will comment in a moment about the further steps we made during 2Q to further reform to fire balance sheet.

Sean Gamble: At the same time, we have opened 16 new theaters that are collectively performing well beyond the pro forma targets we established prior to the pandemic. In North America, we continue to consistently generate the number one or number two box office results in 21 of our top 25 markets, with the highest attendance per screen of the leading exhibitors. And across Latin America, we are the industry leader with over 25% market share.

Speaker Change: At the same time, we've opened 16, new theaters that are collectively performing well beyond the pro forma targets, we established prior to the pandemic.

Speaker Change: In North America, we continue to consistently generate the number one or number two box office results in 21 of our top 25 markets with the highest attendance per screen of the leading exhibitors and across Latin America, we are the industry leader with over 25% market share.

Speaker Change: As a result of our many strategic initiatives and our long history of disciplined capital management Cinemark also maintains a solid financial position.

Sean Gamble: As a result of our many strategic initiatives and our long history of disciplined capital management, Cinemark also maintains a solid financial position. We consistently deliver industry-leading adjusted EBITDA and free cash flow, as was apparent once again in our second quarter results. And Melissa will comment in a moment about the further steps we took during 2Q to further refortify our balance. So we believe Cinemark is in great shape. So this is a wide range of distinctive advantages, and it is well positioned to thrive in the years to come. I will now pass the call over to Melissa, who will share more information about this quarter's results. Melissa?

Speaker Change: We consistently deliver industry, leading adjusted EBITDA and free cash flow as was apparent once again in our second quarter results and Melissa will comment in a moment about the further steps we made during <unk> to further re fortify our balance sheet.

Sean Gamble: So we believe CINEMARK is in great shape, so this is a wide range of distinctive advantages and is well positioned to thrive in the years. to come.

Speaker Change: So we believe cinemark is in great shape. Because this is a wide range of distinctive advantages and is well positioned to thrive in the years to come.

Sean Gamble: I'll now pass the call over to Melissa, who will share more information about this quarter's results. Melissa?

Speaker Change: I will now pass the call over to Melissa who will share more information about this quarter's results Melissa.

Melissa Thomas: Thank you, Sean. Good morning, everyone, and thank you for joining the call today. We are pleased with the remarkable success of the June box office, which meaningfully exceeded our expectations and bolstered the second quarter's results. This Box Office upside benefited our operating leverage and coupled with the operational excellence of the Cinemark team led to our strong financial performance in the quarter. During the second quarter, we entertained 50 million guests across our global footprint and generated $734.2 million of revenue worldwide. We delivered $142.1 million of Adjusted EBITDA, yielding a robust Adjusted EBITDA margin of 19.4%, despite a softer box office and typical in the second quarter due to the impact of the Hollywood strikes.

Melissa: Thank you Sean.

Melissa Thomas: Thank you, Sean. Good morning, everyone, and thank you for joining the call today. We were pleased with the remarkable success of the June box office, which meaningfully exceeded our expectations and bolstered the second quarter's results. This box office upside benefited our operating leverage and, coupled with the operational excellence of Cinemark, led to our strong financial performance in the quarter. During the second quarter, we entertained 50 million guests across our global footprint and generated $734.2 million in revenue worldwide.

Melissa: Everyone and thank you for joining the call today.

Melissa: We are pleased with the remarkable success of the June box office, which meaningfully exceeded our expectations and bolster the second quarter's results.

Melissa: This box office upside benefited our operating leverage and coupled with the operational excellence of the Cinemark team led to our strong financial performance in the quarter.

Melissa: During the second quarter, we entertained 50 million guests across our global footprint and generated $734 $2 million of revenue worldwide.

Melissa Thomas: We delivered $142.1 million of Adjusted EBITDA, yielding a robust Adjusted EBITDA margin of 19.4%, despite a softer box office than typical in the second quarter due to the impact of the Hollywood strike. In the US, we hosted 29.1 million guests, and we grew our market share. Our market share expansion was driven by three primary factors: a film slate that resonated exceptionally well across our footprint.

Melissa: We delivered $142 $1 million of adjusted EBITDA, yielding a robust adjusted EBITDA margin of 19, 4%. Despite a softer box office and typical in the second quarter due to the impact of the Hollywood strikes.

Melissa Thomas: In the US, we hosted 29.1 million guests, and we grew our market share. Our market share expansion was driven by three primary factors: a film slate that resonated exceptionally well across our footprint, a lack of capacity constraints given the softer box office, and successful execution of our strategic initiatives. We generated $287.4 million in admissions revenue, and our average ticket price increased 3% year over year to $9.88. The growth and average ticket price was primarily driven by our strategic pricing initiatives. We reported $231.4 million of domestic concession revenue for the second quarter. Our concession per cap achieved a new all-time high of $7.95, increasing 4% compared with the second quarter 2023, primarily driven by strategic and inflationary pricing measures.

Melissa: In the U S. We hosted $29 1 million guests and we grew our market share our.

Melissa: Our market share expansion was driven by three primary factors.

Melissa: A film slate that resonated exceptionally well across our footprint.

Melissa Thomas: Lack of capacity constraints given the softer box office and the successful execution of our strategic initiatives. We generated $287.4 million in admissions revenue, and our average ticket price increased 3% year over year to $9.88. The growth in average ticket price was primarily driven by our Strategic Pricing Initiative. We reported $231.4 million of domestic concession revenue for the second quarter. Our concession per cap achieved a new all-time high of $7.95, increasing 4% compared with the second quarter of 2023, primarily driven by strategic and inflationary pricing measures. We were pleased that our incidence rates held flat year over year, despite a less favorable content mix for concession purchases.

Melissa: Lack of capacity constraints, given the softer box office.

Melissa: And successful execution of our strategic initiatives.

Melissa: We generated $287 $4 million in admissions revenue and our average ticket price increased 3% year over year to $9 and 88%.

Melissa: Growth in average ticket price was primarily driven by our strategic pricing initiatives.

Melissa: We reported $231 $4 million of domestic concession revenue for the second quarter.

Melissa: Our concession per cap achieved a new all time high of $7 95.

Melissa: Increasing four 4% compared with the second quarter, 2023, primarily driven by strategic and inflationary pricing measures.

Melissa Thomas: We were pleased that our incident rates held flat year over year despite the less favorable content mix for concession purchases. Other revenue was $53.2 million for the second quarter, down 18% year over year due primarily to reduced attendance. In total, our domestic operations generated $572 million of revenue and $108.8 million of adjusted EBITDA, resulting in a strong 19% adjusted EBITDA margin.

Melissa: We were pleased that our incidence rates held flat year over year, despite a less favorable content mixed our concession purchases.

Melissa: Other revenue was $53 2 million for the second quarter down 18% year over year due primarily to reduced attendance.

Melissa Thomas: Other revenue was $53.2 million for the second quarter, down 18% year over year due primarily to reduced attendance. In total, our domestic operations generated $572 million of revenue and $108.8 million of adjusted EBITDA, resulting in a strong 19% adjusted EBITDA margin. Shifting to our international segment, we welcomed 20.9 million moviegoers to our theaters during the second quarter, with attendance recovery outpacing that of the U.S., largely due to the outsized performance of Inside Out 2 in Latin America, which has become the highest-grossing film of all time in the region.

In total our domestic operations generated $572 million of revenue and $108 8 million of adjusted EBITDA, resulting in a strong 19% adjusted EBITDA margin.

Melissa: Shifting to our international segment, we welcomed $20 9 million moviegoers in our theatres during the second quarter with attendance recovery outpacing that of the U S. Largely due to the outsized performance of inside out two in Latin America, which has become the highest attended film of all time in the region.

Melissa Thomas: Chifting to our international segment, we welcomed $20.9 million moviegoers in our theaters during the second quarter, with attendance recovery outpacing that of the US, largely due to the outsized performance of Inside Out 2 in Latin America, which has become the highest attended film of all time in the region. Our international team was able to capitalize on the strength of this film and grow market share in the quarter. Our international operations generated $78.4 million of admissions revenue, $61.5 million of concession revenue, and $22.3 million of other revenue in the second quarter. Collectively, we delivered $162.2 million of total international revenue.

Melissa: Our international team was able to capitalize on the strength of this film and grow market share in the quarter.

Melissa Thomas: Our international team was able to capitalize on the strength of this film and grow market share in the quarter. Our international operations generated $78.4 million in admissions revenue. $61.5 million of concession revenue and $22.3 million of other revenue in the second quarter. Collectively, we delivered $162.2 million of total international revenue and $33.3 million of adjusted EBITDA, resulting in a strong 20.5% adjusted EBITDA margin. Foreign currency devaluation, particularly in Argentina, remained a year-over-year headwind to international adjusted EBITDA in the quarter, which was largely affected by inflationary dynamics.

Melissa: Our international operations generated $78 $4 million of admissions revenue.

Melissa: $61 $5 million of concession revenue and $22 $3 million of other revenue in the second quarter.

Melissa: Collectively we delivered $162 $2 million of total international revenue.

Melissa Thomas: and 33.3 million dollars of adjusted EBITDA, resulting in a strong 20.5% adjusted EBITDA margin. Foreign currency devaluation, particularly in Argentina, remained a year-over-year headwind to international adjusted EBITDA in the quarter, which was largely upset by inflationary dynamics. The tenure and expertise of our local teams continue to provide tremendous value as we navigate the economic and political landscape across our Latin American footprint. Moving to global expenses, film rental and advertising expense was 55.8% of admissions revenue, down 230 basis points compared with the second quarter of 2023, due to a lower concentration of high grossing titles and the overall mix of films. Concession costs as a percent of concession revenue were 19.3%, an increase of 120 basis points year over year, driven by inflationary pressures on certain concession categories and higher shrink, partially upset by pricing measures taken to mitigate some of the cost pressure.

Melissa: And $33 $3 million of adjusted EBITDA.

Melissa: Resulting in a strong 25% adjusted EBITDA margin.

Melissa: Foreign currency devaluation, particularly in Argentina remainder of year over year headwind to international adjusted EBITDA in the quarter, which was largely offset by inflationary dynamics.

Melissa Thomas: The tenure and expertise of our local teams continue to provide tremendous value as we navigate the economic and political landscape across our Latin American footprint. Moving to global expenses, film rental and advertising expense was 55.8% of admissions revenue, down 230 basis points compared with the second quarter of 2023, due to a lower concentration of high-grossing titles and the overall mix of films. Concession costs as a percent of concession revenue were 19.3%, an increase of 120 basis points year over year, driven by inflationary pressures on certain concession categories and higher shrinkage, although partially offset by pricing measures taken to mitigate some of the cost pressure. Global salaries and wages were $97.3 million in the second quarter, down 13% compared with the same period last year.

Melissa: The Kenya and expertise of our local teams continue to provide tremendous value as we navigate the economic and political landscape across our Latin American footprint.

Speaker Change: Moving to global expenses film rental and advertising expense was 55, 8% of admissions revenue down 230 basis points compared with the second quarter of 2023 due to a lower concentration of high grossing titles and the overall mix of films.

Speaker Change: Concession costs as a percent of concession revenue were 19, 3% an increase of 120 basis points year over year.

Speaker Change: Driven by inflationary pressures on certain concession categories and higher shrink.

Speaker Change: Partially offset by pricing measures taken to mitigate some of the cost pressure.

Melissa Thomas: Global salaries and wages were 97.3 million dollars in the second quarter, down 13% compared with the same period last year. As a percent of total revenue, salaries and wages were up 140 basis points year over year, primarily driven by weight-rate inflation and less operating leverage due to the decline in attendance. Partially upset by benefits from our labor management initiatives and reduced operating hours. Facility lease expense was 81.5 million dollars. A decline of 6% year over year, primarily due to lower percentage rent associated with the decline in revenue, successful lease renegotiations, and theater closures. As a percent of total revenue, facility lease expense increased 190 basis points.

Speaker Change: Global salaries and wages were $97 $3 million in the second quarter down 13% compared with the same period last year.

Melissa Thomas: As a percent of total revenue, salaries and wages were up 140 basis points year-over-year, primarily driven by wage rate inflation and less operating leverage due to the decline in attendance, partially offset by benefits from our labor management initiatives and reduced operating hours. Facility lease expense was $81.5 million, a decline of 6% year-over-year primarily due to lower percentage rent associated with the decline in revenue, successful lease renegotiations, and theater closures As a percent of total revenue, facility lease expense increased 190 basis points. Utilities and other expense were $104.7 million, a 13% decline versus the second quarter of 2023. Primarily driven by variable and semi-variable costs that declined with attendance, foreign currency impacts, and a decrease in property taxes.

Speaker Change: As a percent of total revenue salaries and wages were up 140 basis points year over year, primarily driven by wage rate inflation and less operating leverage due to the decline in attendance.

Speaker Change: Partially offset by benefits from our labor management initiatives and reduced operating hours.

Speaker Change: Facility lease expense was $81 $5 million.

Speaker Change: Decline of 6% year over year, primarily due to lower percentage rent associated with the decline in revenue.

Speaker Change: Festival lease renegotiations and theater closures.

Speaker Change: As a percent of total revenue facility lease expense increased 190 basis points.

Melissa Thomas: Utilities and other expense was 104.7 million dollars, a 13% decline versus the second quarter 2023, primarily driven by variable and semi-variable costs that declined with attendance, foreign currency impacts, and a decrease in property taxes. Inflationary pressures drove a partial offset. As a percent of total revenue, utilities and other increased 150 basis points. GNA was 55.7 million dollars in the second quarter, an increase year over year, primarily due to wage and benefits inflation, as well as higher share-based compensation and related payroll taxes. Favorable impacts from foreign currency fluctuations drove a partial offset, and we remain diligent with our discretionary spending and staffing levels.

Speaker Change: Utilities and other expense was $104 7, million% to 13% decline versus the second quarter 2023.

Speaker Change: Primarily driven by variable and semi variable costs that declined with attendance.

Speaker Change: Foreign currency impacts and a decrease in property taxes.

Melissa Thomas: Inflationary pressures drove a partial offset. As a percent of total revenue, utilities and other revenue increased by 150 basis points. G&A was $55.7 million in the second quarter, an increase year-over-year, primarily due to wage and benefits inflation, as well as higher share-based compensation and related payroll taxes. Favorable impacts from foreign currency fluctuations drove a partial offset, and we remain diligent with our discretionary spending and staffing levels. Globally, we delivered net income attributable to Cinemark Holdings Inc. of $46 million in the second quarter and diluted earnings per share of $0.32.

Speaker Change: Inflationary pressures drove a partial offset.

Speaker Change: As a percent of total revenue utilities and other increased 150 basis points.

Speaker Change: G&A was $55 $7 million in the second quarter and increased year over year, primarily due to wage and benefits inflation as well as higher share based compensation and related payroll taxes.

Speaker Change: Favorable impacts from foreign currency fluctuations drove a partial offset.

Speaker Change: We remain diligent with our discretionary spending and staffing levels.

Melissa Thomas: Glovely, we delivered net income attributable to Cinema Coldings Ink of 46 million dollars in the second quarter and eluded earnings per share of 32 cents.

Speaker Change: Globally, we delivered net income attributable to Cinemark Holdings, Inc. A $46 million in the second quarter and diluted earnings per share of 32.

Melissa Thomas: Turning to the balance sheet, we ended the second quarter with $789 million of cash on hand. Flat with Q1 2024 levels, even after redeeming the remaining $150 million of senior secured notes in May. We generated $161 million of free cash flow, which was bolstered by working capital benefits associated with the strong June box office and the timing of associated film rental payments.

Speaker Change: Turning to the balance sheet. We ended the second quarter was $789 million of cash on hand.

Melissa Thomas: Turning to the balance sheet, we ended the second quarter with $789 million of cash on hand, flat with Q1 2024 levels, even after redeeming the remaining $150 million of senior secured notes in May. We generated $161 million of free cash flow, which was bolstered by working capital benefits associated with a strong June box office and the timing of associated film rental payments. From a capital allocation standpoint, we continue to take a balanced and disciplined approach with the goal of maximizing long-term shareholder value. As outlined in our investor deck, we have three pillars of our capital allocation strategy. 1.

Speaker Change: Flat with Q1 2024 levels, even after redeeming the remaining $150 million of senior secured notes in May.

Speaker Change: We generated $161 million of free cash flow, which was bolstered by working capital benefit associated with a strong June box office and the timing of associated film rental payments.

Speaker Change: Okay.

Melissa Thomas: From a capital allocation standpoint, we continue to take a balanced and disciplined approach with the goal of maximizing long-term shareholder value. As outlined in our investor deck, we have three pillars to our capital allocation strategy. One, strengthening our balance sheet post-pandemic; two, making financially a creative investment to position the company for long-term success; and three, returning excess capital to shareholders with a near-term focus on the first two priorities. Starting with our first capital allocation pillar, we have made significant progress delivering and refortifying our balance sheet, with notable advancements over the past few months. In May, we redeemed the remaining $150 million of 8.75 percent senior secured notes at par, retiring over $270 million to date of debt taken out during the pandemic.

Speaker Change: From a capital allocation standpoint, we continue to take a balanced and disciplined approach with the goal of maximizing long term shareholder value.

Speaker Change: As outlined at our Investor deck, we have three pillars to our capital allocation strategy.

Melissa Thomas: Strengthening Our Balance Sheet Post-Pandemic, 2. Making financially accretive investments to position the company for long-term success, and 3. Returning excess capital to shareholders, with a near-term focus on the first two priorities, starting with our first capital allocation pillar. We have made significant progress de-levering and re-fortifying our balance sheet, with notable advancements over the past few months. In May, we redeemed the remaining $150 million of 8.75% senior secured notes at par, retiring over $270 million to date of debt taken out during the pandemic. We also capitalized on favorable market conditions and successfully repriced our term loan this May to reduce the interest rate by 50 basis points, resulting in $3.2 million of cash interest savings annually.

Speaker Change: One strengthening our balance sheet post pandemic.

Speaker Change: Two making financially accretive investments to position the company for long term success and.

Speaker Change: And three <unk>.

Speaker Change: Turning excess capital to shareholders.

Speaker Change: With a near term focus on the first two priorities.

Speaker Change: Starting with our first capital allocation pillar.

Speaker Change: We have made significant progress delevering and re fortifying our balance sheet.

Speaker Change: With notable advancements over the past few months.

Speaker Change: In May we redeemed the remaining $150 million of 875% senior secured notes at par.

Speaker Change: Retiring over $270 million to date of that taken out during the pandemic.

Melissa Thomas: We also capitalized on favorable market conditions and successfully repriced our term loan this May to reduce the interest rate by 50 basis points, resulting in $3.2 million of cash interest savings annually. In July, we proactively addressed our unsecured notes due in March 2026 with the issuance of $500 million of 7 percent unsecured notes due to 2032. Concurrently, we executed a cash tender for the vast majority of the 2026 notes, with the remainder to be addressed in the coming months. Collectively, these actions have enhanced our flexibility and risk management, extended our maturities, and underscore our commitment to strengthening our balance sheet.

We also capitalized on favorable market conditions and successfully repriced our term loan this may to reduce the interest rate by 50 basis points, resulting in $3 $2 million of cash interest savings annually.

Speaker Change: In July we proactively addressed our unsecured notes due in March 2026, with the issuance of $500 million, a 7% unsecured notes due 2032.

Melissa Thomas: In July, we proactively addressed our unsecured notes due in March 2026 with the issuance of $500 million of 7% unsecured notes due 2032. Concurrently, we executed a cash tender for the vast majority of the 2026 notes, with the remainder to be addressed in the coming. Collectively, these actions have enhanced our flexibility and risk management, extended our maturity, and underscored our commitment to strengthening our balance sheet. We ended the second quarter with a net leverage ratio of three times, which was within our target range and better than our expectations due largely to the significant outperformance of Inside Out 2.

Speaker Change: Concurrently we executed a cash tender for the vast majority of the 2026 notes with the remainder to be addressed in the coming months.

Speaker Change: Collectively these actions have enhanced our flexibility and risk management.

Speaker Change: Extended our maturities.

Speaker Change: And underscore our commitment to strengthening our balance sheet.

Melissa Thomas: We ended the second quarter with a net leverage ratio of three times, which was within our target range and better than our expectations due largely to the significant outperformance of Insight Out too. Looking forward, given our strong financial position coupled with our optimism around industry recovery and, in turn, our free cash flow generation, we intend to leverage cash on hand to repay the principal amount of the $460 million of convertible notes upon their maturity in August 2025. As the notes do not have a provisional call feature, we expect our cash balance will remain elevated in the interim as we prepare to address the convertible notes.

Speaker Change: We ended the second quarter with a net leverage ratio of three times.

Speaker Change: Which was within our target range and better than our expectations due largely to the significant outperformance of inside out too.

Speaker Change: Looking forward, given our strong financial position, coupled with our optimism around industry recovery and in turn our free cash flow generation, we intend to leverage cash on hand to repay the principal amount of $460 million of convertible notes upon their maturity in August.

Melissa Thomas: Looking forward, given our strong financial position, coupled with our optimism about industry recovery, and, in turn, our free cash flow generation, we intend to leverage cash on hand to repay the principal amount of the $460 million of convertible notes upon their maturity in August 2025. As the nodes do not have a provisional call feature, we expect our cash balance will remain elevated in the interim as we prepare to address the convertible nodes. Once the convertible notes have been fully addressed, our nearest maturity will be in 2020.

Speaker Change: 2025.

As the notes do not have a provisional call feature we expect our cash balance will remain elevated in the interim as we prepare to address the convertible notes.

Melissa Thomas: Once the convertible notes have been fully addressed, our nearest maturity will be 2028.

Speaker Change: Once the convertible notes have been fully addressed our nearest maturity will be 2028.

Speaker Change: Turning to our second capital allocation pillar.

Melissa Thomas: Turning to our second capital allocation pillar, we have actively pursued strategic and financially accretive investments to position our company for success over the long term. We continue to believe our capital investments are a key differentiator for us that have contributed to our consistent industry outperformance. During the second quarter, we deployed $24 million of capital towards maintaining and further enhancing our global circuit. We remain on track to invest $150 million for full year 2024, with normalized capital expenditures anticipated to be in the $200 to $250 million range as our box office and free cash flow rebound.

Melissa Thomas: Turning to our second capital allocation pillar, we have actively pursued strategic and financially accretive investments to position our company for success over the long term. We continue to believe our capital investments are a key differentiator for us that has contributed to our consistent industry outperformance. During the second quarter, we deployed $24 million of capital towards maintaining and further enhancing our global circuit. We remain on track to invest $150 million for full year 2024, with normalized capital expenditures anticipated to be in that $200 to $250 million range as our box office and free cash flow rebound.

Speaker Change: We have actively pursued strategic and financially accretive investments to position our company for success over the long term.

Speaker Change: We continue to believe our capital investments are a key differentiator for us that have contributed to our consistent industry outperformance.

Speaker Change: During the second quarter, we deployed $24 million of capital towards maintaining and further enhancing our global circuit.

Speaker Change: We remain on track to invest $150 million for full year 2024, with normalized capital expenditures anticipated to be in that $200 million to $250 million range as our box office and free cash flow rebound.

Melissa Thomas: Looking ahead, we remain highly optimistic regarding the box office for the second half of this year and in 2025 and beyond. Following the significant progress we've made on our near-term priorities, coupled with our optimism around recovery and that of our industry, we will be re-evaluating our capital allocation, including the possibility of returning excess capital to shareholders in connection with our 2025 budgeting process later this year. Returning excess capital to shareholders, our third capital allocation pillar, has historically been a key part of our capital allocation strategy and remains an important consideration for us as we move ahead.

Speaker Change: Looking ahead, we remain highly optimistic regarding the box office for the second half of this year and in 2025 and beyond.

Melissa Thomas: Looking ahead, we remain highly optimistic regarding the box office for the second half of this year and for 2025 and beyond. Following the significant progress we've made on our near-term priorities, coupled with our optimism around the recovery and that of our industry, we will be re-evaluating our capital allocation, including the possibility of returning excess capital to shareholders, in connection with our 2025 budgeting process later this year. Returning excess capital to shareholders, our third capital allocation pillar, has historically been a key part of our capital allocation strategy and remains an important consideration for us as we move ahead.

Speaker Change: Following the significant progress we've made on our near term priorities, coupled with our optimism around recovery and that of our industry, we will be reevaluating, our capital allocation, including the possibility of returning excess capital to shareholders.

Speaker Change: In connection with our 2025 budgeting process later this year.

Speaker Change: Returning excess capital to shareholders, our third capital allocation pillar has historically been a key part of our capital allocation strategy and remains an important consideration for us as we move ahead.

Melissa Thomas: We look forward to providing you a comprehensive update on our capital allocation strategy on our fourth quarter earnings call in February. In closing, our ability to consistently deliver solid performance has provided us financial flexibility and the opportunity to continue delivering. We have a long-standing history of disciplined operators and good stewards of capital, and we remain highly focused on creating long-term shareholder value.

Melissa Thomas: We look forward to providing you with a comprehensive update on our capital allocation strategy on our fourth-quarter earnings call in February. In closing, our ability to consistently deliver solid performance has provided us with financial flexibility and the opportunity to continue delivering. We have a long-standing history of being disciplined operators and good stewards of capital, and we remain highly focused on creating long-term shareholder value. Operator, that concludes our prepared remarks, and we would now like to open up the line for questions.

Speaker Change: We look forward to providing you a comprehensive update on our capital allocation strategy on our fourth quarter earnings call in February.

Speaker Change: In closing our ability to consistently deliver solid performance has provided us financial flexibility and the opportunity to continue delevering.

Speaker Change: We have a longstanding history of disciplined operators and good stewards of capital and we remain highly focused on creating long term shareholder value.

Speaker Change: Operator that concludes our prepared remarks, and we would now like to open up the line for questions.

Operator: Operator that concludes our prepared remarks, and we would now like to open up the line for questions.

Operator: Thank you.

Speaker Change: Thank you we will now be conducting a question and answer session. If you would.

Operator: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key.

Operator: We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question q. You may press star 2 if you would like to remove your question from the Q.

Speaker Change: I'd like to ask a question. Please press star one on your telephone keypad.

Speaker Change: A confirmation tone will indicate your line is in the question queue you.

Speaker Change: You May press star two if he would like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing the star keys.

Operator: For participants using speaker, equipment, and may be necessary to pick up your handset before pressing the star keys. One moment please, while we poll for your question.

Operator: One moment, please, while we poll for your question. Our first questions come from the line of Chad Bynum with Macquarie. Please proceed with your question. Hey, good morning. This is Aaron on behalf of Chad.

Speaker Change: One moment, please while we poll for your questions.

Chad Byron: Our first questions come from the line of Chad Byron with McQuarrie. Please proceed with your questions.

Speaker Change: Our first questions come from the line of Chad Beynon with Macquarie. Please proceed with your questions.

Aaron Lee: Good morning. This is Aaron. Thanks for taking my question. Really nice quarter. Your average ticket price has increased for several years in a row now. But I think we'll be facing some more difficult comps potentially from a mixed standpoint with really high XB tickets. So how are you thinking about the ability to drive prices higher in 24 and 25, just given the anticipated display in your pricing initiatives? Thanks.

Speaker Change: Hey, Good morning. This is Aaron on for Chad. Thanks for taking my question.

Aaron Lee: Thanks for taking my question. Really nice quarter. You know, your average ticket price has increased for several years.

Speaker Change: Really nice quarter.

Speaker Change: Average ticket price has increased for several years in a row now.

Speaker Change: But I think we'll be facing some more difficult comps potentially from a mixed standpoint with really high XD ticket.

Speaker Change: How are you thinking about the ability to drive prices higher in 2425, just given the.

Speaker Change: The anticipated slate in your pricing initiatives. Thanks.

Aaron Lee: Hi, Aaron. Thanks for the question. So in just more broadly, we do continue to see opportunity to continue to modestly grow our average ticket prices. And we're leaning into data and analytics to find that optimal pricing that maximizes our overall attendance and box office. So we do still believe we have runways there. As you look at full year 2024, again, modest growth expected, though that may fluctuate or ATP may fluctuate quarter to quarter based on film mix, particularly with respect to Q4 of this year.

Speaker Change: Hi, and thanks for the question.

Melissa Thomas: Hi Aaron, thanks for the question. So, more broadly, we do continue to see opportunity to modestly grow our average ticket prices. And we're leaning into data and analytics to find that optimal pricing that maximizes our overall attendance at the box office. So we do still believe we have runway there.

Speaker Change: More broadly we do continue to see opportunity to continue to modestly grow our average ticket prices and we're leaning in to data and analytics to find that optimal pricing that maximizes our overall attendance and box office and so we do still believe we have runway there as you look at full year.

Speaker Change: For 2024, again modest growth expected, though that may fluctuate our ATP it may fluctuate quarter to quarter based on film mix.

Melissa Thomas: As you look at full year 2024, again, modest growth is expected, though that may fluctuate or ATPs may fluctuate quarter to quarter based on film mix. Particularly with respect to Q4 of this year, it's important to keep in mind that we'll face a challenging comp given the Taylor Swift Eras Tour concert film in Q4 of last year. And then, you know, beyond that, I would just highlight on the international side, you'll continue to see some fluctuations there given FX dynamics within the recent past. Got it, understood.

Speaker Change: Particularly with respect to Q4 of this year, it's important to keep in mind that will face a challenging comp given that Taylor Swift erez to our concert film and Q4 of last year.

Aaron Lee: It's important to keep in mind that we'll face a challenging comp given the Taylor Swift Era's tour concert film in Q4 of last year.

Aaron Lee: and then, beyond that, I would just highlight on the international side, you'll continue to see fluctuations there given ethics, dynamics within the region.

Speaker Change: And then beyond that I would highlight on the international side Youll continue to see some fluctuations there given FX dynamic within the region.

Aaron Lee: It got it, understood. And as a quick follow-up, consumers appear to have a greater appetite for a premium of large formats, and your XB offering is driving more of your box office, like you mentioned.

Speaker Change: Got it understood.

Speaker Change: And then as a quick follow up consumers appear to have a greater appetite for premium large formats.

Speaker Change: The equity offering is driving more of your box office I can mention.

Aaron Lee: Can you talk about what the opportunity looks like to expand that across your circuit?

Speaker Change: Can you talk about what the opportunity looks like to expand that across your circuit.

Sean Gamble: Sure, and I'll take that one. Yeah, definitely been pleased with the performance of premium amenities in general. It's continued to grow. Post-pandemic, there's certainly been a bit of an uptick; any consumer appeal for that. XDs, as well as D-Box, motion seats, I would say, as well as just our overall food and beverage enhanced offerings. It's something that we're continuing to look for opportunities to deploy, specifically with regard to XD, which I believe is your question.

Sean Gamble: Sure, and I'll take that one. Yeah, definitely been pleased with the performance of premium amenities in general. It's continued to grow post-pandemic, and there's certainly been a bit of an uptick in consumer appeal for that. XDs, as well as D-box, motion seats, I would say, as well as just our overall food and beverage enhanced offerings. It's something that we're continuing to look for opportunities to deploy. Specifically with regard to XD, which I believe was your question, some of the governors on that are just the scale of auditoriums that are available.

Speaker Change: Sure.

Speaker Change: That one.

Speaker Change: Yes, definitely been pleased with the performance of premium amenities in general.

Speaker Change: <unk> continued to grow post pandemic theres, certainly been a bit of an uptick in consumer appeal for that expertise as well as D box motion seats, I would say as well is just our overall food and beverage enhanced offerings, it's something that we're continuing to look for opportunities to deploy specifically with.

Speaker Change: With regard to XD, which I believe was your question some of the governors on that or just the scale of auditorium set are available. So we're looking in the case of existing theaters, where we may have an opportunity for a second XD.

Sean Gamble: Some of the governors on that are just the scale of auditorium that are available, so we're looking in the case of existing theaters where we may have an opportunity for a second XD. But it's important that that be as a large enough screen; otherwise, it undermines the point of having a larger screen with the enhanced sound and so on. So we're continuing to look for where those opportunities are to deploy those. In certain cases, we may have the opportunity to design a theater to actually add to that theater, and definitely, wherever we're opening new theaters, we're putting in multiple XDs right out of the gate.

Sean Gamble: So we're looking at the case of existing theaters where we may have an opportunity for a second XD, but it's important that that be a large enough screen. Otherwise, it kind of undermines the point of having a larger screen with the enhanced sound and so on.

Speaker Change: But it's important that that would be a large enough screen otherwise it kind of undermines the the point of having the <unk>.

Speaker Change: A larger screen with the enhanced sound and so on so we're continuing to look for where those opportunities are to deploy those in certain cases, we may have the opportunity of the way we design a theatre to actually add to that Peter and definitely wherever we're opening new theatres were putting in multiple XD is right out of the gate.

Sean Gamble: So we're continuing to look for where those opportunities are to deploy them. In certain cases, we may have the opportunity, the way we've designed a theater, to actually add to that theater. And definitely, wherever we're opening new theaters, we're putting in multiple XDs right out of the gate. D-box seats, we continue to have a long runway of opportunity there in terms of deploying more of those across the circuit. These have been generating really strong returns.

Sean Gamble: D-Box seats; we continue to have a long runway of opportunity there, in terms of deploying more of those across the circuit. Those have been generating really strong returns, and where I'd say just very early in terms of the overall penetration across our circuit, in terms of the opportunities there. So we see that too as a real possibility.

Speaker Change: D box seats, we continue to have a long runway of opportunity there in terms of deploying more of those across the circuit those had been generating really strong returns.

Sean Gamble: And we're, I'd say, just very early in terms of the overall penetration across our circuit in terms of the opportunities there. So we see that, too, as a real possibility. So it's part of our ongoing CapEx, where we look at further ROI-generating opportunities. We still see plenty of opportunity for further and varied kinds of premium energy.

Speaker Change: And we're I'd say just very early in terms of the overall penetration across our circuit in terms of the opportunities there. So we see it we.

Speaker Change: We see that to us is a real possibility. So it is part of our ongoing capex when we look at.

Sean Gamble: So it's part of our ongoing cat-backs. When we look at further ROI-generating opportunities, we still see plenty of opportunity for further and varied kinds of premium amenities.

Speaker Change: Further ROI generating opportunities, we still see plenty of opportunity for further and very kinds of premium amenities.

Aaron Lee: That's helpful.

Speaker Change: That's helpful. I appreciate the color and congrats again on the quarter. Thanks I appreciate it.

Aaron Lee: Appreciate the color, and congrats again on the quarter. Thanks, Aaron. Appreciate it.

Speaker Change: Thank you our next questions come from the line of David Karnofsky with J P. Morgan. Please proceed with your questions.

Operator: Thank you. Our next questions come from the line of David Karnovsky with J.P. Morgan. Please proceed with your questions.

Operator: Thank you.

David Karnovsky: Our next question has come from the line of David Karnowski with the JP Morgan. Please proceed with your questions.

David Karnovsky: Hey, thank you. Sean, your market share gain this quarter looks pretty extraordinary even relative to some of the increases from prior periods. Maybe you can segment out the performance a little bit between the film mix that you highlighted and then those factors that you listed that are more in your control, and would you kind of expect to sustain gains on this level going forward?

David Karnofsky: Alright, thank you.

David Karnovsky: Thank you. Showing your market share again, this quarter looks outside even relative to some of the increases from prior periods. Maybe you can segment out the performance a little bit between the film mix, which you highlighted, and the factors that are more in your control, and would you kind of expect to sustain games on this level going forward?

David Karnofsky: On your market share gain this quarter looks outsized even relative to some of the increases from prior periods. Maybe you can segment out the performance a little bit between the film mix that you highlighted and then those factors that you listed that are more under control and would you kind of expect to sustain gains on this level going forward.

Sean Gamble: Sure. Thanks, David. Yeah, we're really pleased with our share results in the quarter. You know, just to kind of flag again, in addition to, I'd say, just solid execution in the quarter by our team, obviously, as I mentioned, we benefited from a content mix that was particularly strong for our circuit, you know, with about more than a third of the domestic box office, as an example, coming from family films, which is right in our sweet spot. Titles like Kingdom of the Planet of the Apes, Godzilla X Kong, and Quiet Place also skew really well for our circuit.

Sean Gamble: Sure. Thanks, David. We're really pleased with our share results in the quarter. Just to flag again, in addition to, I'd say, just solid execution in the quarter by our team. Obviously, as I mentioned, we benefited from a content mix that was particularly strong for our circuit, with more than a third of the domestic box office, as an example, coming from Family Films, which is right in our sweet spot. Titles like Kingdom of Planet of the Apes, Godzilla x, Kong, Quiet Place. Those also skew really well for our circuit. When we saw that benefit domestically, we saw that benefit internationally.

Speaker Change: Sure. Thanks, David Yeah, we're really pleased with our share results in the quarter.

Speaker Change: Just to kind of flag again.

Speaker Change: In addition to I'd say, just solid execution in the quarter by our team.

Speaker Change: Obviously as I mentioned, we benefited from content mix that was particularly strong for our circuit with about more than a third of the domestic box office. As an example came from family films, which is right in our sweet spot titles like Kingdom of the planet of the Apes Godzilla X Kang quiet place those also skew.

Speaker Change: You really well for our circuit.

Speaker Change: We saw that benefit.

Sean Gamble: And we saw that benefit. You know, domestically, and we saw that benefit internationally. So we definitely got a lift there.

Domestically, we saw that benefit internationally.

Sean Gamble: We definitely got a lift there. The other thing that I'd say is, since the pandemic, as you know, we've continued to see that volume, overall film volume, has been somewhat depressed. We haven't really encountered many situations where we're hitting seating capacity constraints that can limit our ability where we hit our maximum occupancy thresholds. That can limit our overall share expansion. We've benefited from that as well. As we look forward, the comments we've made is we continue to think that about 100 basis points of improvement is a reasonable expectation. Certainly, as we start to encounter more of those situations where we are hitting those seating capacity thresholds.

Speaker Change: So we definitely got a lift there the other thing that I'd say is.

Sean Gamble: The other thing that I'd say is, you know, since the pandemic, as you know, we've continued to see that volume, overall film volume has been somewhat depressed. So we haven't really encountered many situations where we're hitting seating capacity constraints that can kind of limit our ability when we hit our maximum occupancy thresholds. That can limit our overall share expansion.

Speaker Change: Since the pandemic as you know we continue to see that volume overall film volume has been somewhat depressed. So we havent really encountered many situations, where we're hitting seating capacity constraints that can can kind of limit our ability, where we hit our maximum market didn't see thresholds that can <unk>.

Speaker Change: Our overall share expansion.

So we benefited from that as well so as we look forward to.

Sean Gamble: So as we look forward, the comments we've made is that we continue to think that about 100 basis points of improvement is a reasonable expectation, certainly as we start to encounter more of those situations where we are hitting those seating capacity thresholds. Just as an example, we've already started to see some examples of that this July. And we certainly saw examples of that in the third quarter of last year. So as more and more content comes back, we expect to see more of that. In some ways, that's a good problem to have.

Speaker Change: Comments, we've made as we continue to think that.

Speaker Change: About 100 basis points of improvement is a reasonable expectation certainly as we start to encounter more of those situations, where we are hitting those seating capacity thresholds you just as an example, we've already started to see some examples of that this July we certainly saw examples of that in the third quarter.

Sean Gamble: As an example, we've already started to see some examples of that. This July, we certainly saw examples of that in the third quarter of last year. So, as more and more content comes back, we expect to see more of that. In some ways, that's a good problem to have. It just means we're fully optimizing our theater capacity and highly productive. And then, of course, we're going to continue to see skews from content mix. We've seen that even recent examples where that can cause fluctuations of about 100 basis points or more in our market share. As was a circumstances quarter, which was kind of on the upper end.

Speaker Change: Of last year, so as more and more content comes back we expect to see more of that in some ways. It's a that's a good problem to have it just means we are fully optimizing our theater capacity and highly productive.

Sean Gamble: It just means we're fully optimizing our theater capacity and highly productive. And then, of course, we're going to continue to see skews from content mix. You know, we've seen recent examples where that can cause fluctuations of about 100 basis points or more in our market share, as was the case this quarter, which was kind of on the upper end. So, again, pleased with our performance. We're going to continue to obviously do everything we can to maximize our share into the future and push the limits on how far we can push our attendance gains and box office performance gains. But those are some of the key things that we benefited from this quarter and what our expectations are as we go forward.

Speaker Change: And then of course, we're going to continue to see Skus from content mix, we've seen that even recent examples where that can cause fluctuations of about 100 basis points or more in our market share as was the circumstance this quarter, which was a kind of on the upper end. So again pleased with our performance we're going to continue to obviously do everything we can.

Sean Gamble: So, again, please, with our performance, we're going to continue to obviously do everything we can to maximize our share into the future and push the limits on how far we can push our attendance gains and box office performance gains. But that's some of the key things that we've benefited from this quarter, and what our expectations are as we go forward.

Speaker Change: To maximize our share into the future and push the limits on how far we can push our attendance gains in box office performance gains, but thats.

Speaker Change: Some of the key things that we benefited from this quarter and what our expectations are as we go forward.

David Karnovsky: Okay, and maybe one more on the expense side. So you've been able to manage salaries and wages during these periods of anticipated slower box. You have talked through to a recovering film supply for 25 and 26.

Okay, and maybe one more on the expense side, so you've been able to manage salaries and wages. During these periods of anticipated slower box you have talked to recover and film supply for 25 and 26. So when you look over the medium term does that better box office necessitate greater hours and staffing.

Melissa Thomas: Okay, and maybe one more on the expense side. So you've been able to manage salaries and wages during these periods of anticipated slower box. You have talked, though, about a recovering film supply for 25 and 26. So as you look over the medium term, does that better box office necessitate greater hours and staffing, or can you utilize some of these innovations that you've seen over the past couple of years and get a lot more operating leverage on that line as the box recovers? I'll take that,

Melissa Thomas: So if you look over the medium term, there's that better box office that says to take greater hours and staffing or, you know, can you utilize some of these innovations that you've seen over the past couple of years. You get a lot more operating leverage on that line as the box recovers.

Speaker Change: Or can you utilize some of these innovations that you've seen over the past couple of years to get a lot more operating leverage on that line of stocks recovers.

Melissa Thomas: I'll take that question. So regarding our go-forward salaries and wages expense, we do flex our labor hours up or down based on projected attendance levels and operating hours. So I would expect labor hours and, in turn, our salaries and wages to increase as we start to see the box office scale to accommodate higher attendance.

Speaker Change: I'll take that question so regarding our go forward salaries and wages expense.

Melissa Thomas: I'll take that question. So regarding our go-forward salaries and wages expense, we do flex our labor hours up or down based on projected attendance levels and operating hours. So I would expect labor hours and, in turn, our salaries and wages to increase as we start to see the box office scale to accommodate higher attendance. But we do still expect to benefit from the productivity gains that we have been seeing, just not to the same extent as we have in these softer box office environments we've been experiencing over the past couple of quarters.

Speaker Change: Do flex, our labor hours up or down based on projected attendance levels and operating hours. So I would expect labor hours and in turn our salaries and wages to increase as we start to see the box office scale to accommodate higher attendance.

Melissa Thomas: But we do still expect to benefit from the productivity gains that we have been seeing, just not to the same extent as we have been in these softer box office environments. We've been experiencing over the past couple of quarters.

Speaker Change: But we do still expect to benefit from the productivity gains that we have been seeing just not to the same extent as we have been in these softer box office environment, we've been experiencing over the past couple of quarters.

Melissa Thomas: I think the other thing I would call out on the salaries and wages side, just to keep in mind, is wage rates. So we do continue to expect to see some pressure there. It's in line with what we saw pre-pandemic, which was in that five to six percent range annually. We continue, of course, to continue to look for opportunities to drive further productivity and efficiencies. But those are the puts and takes. Very helpful.

Melissa Thomas: I think the other thing I would call out on the salaries and wages side just to keep in mind is wage rates. So we do continue to expect to see some pressure there. It's in line with what we saw pre-pandemic, which was in that five to 6% range annually. We continue, of course, to look for opportunities to drive further productivity and efficiencies, but those are the puts and takes.

Speaker Change: Other thing I would call out on the salaries and wages side just to keep in mind is wage rates. So we do.

Operator: Thank you. Our next question has come from the line of Eric Handler with Roth MKM. Please proceed with your question.

Speaker Change: <unk> expects to see some pressure there it's in line with what we saw pre pandemic, which was in that 5% to 6% range annually. We continue of course to continue to look for opportunities to drive further productivity and efficiencies, but those are the.

Speaker Change: Puts and takes.

Speaker Change: Very helpful. Thank you.

Speaker Change: David.

Speaker Change: Thank you. Our next question is come from the line of Eric Handler with Roth. Please proceed with your questions.

Eric Handler: Our next question has come from the line of Eric Handler with the Roth MKM. Please proceed with your questions.

Eric Handler: Good morning, and thanks for the question. Sean, it's clear that when the content is compelling, people are showing up for the movies. When you look at the fourth quarter, when you look at 25 and you have a great chart in your PowerPoint presentation, the content looks really good in 25, and then you get some really big franchises coming in 2026. So, I would say Wall Street's probably hyper aware of the content slate over the next two plus years, but how well do you think your consumers are aware of just how good the slate is, and what can you do to improve that, so maybe it helps reinvigorate the movie pass subscriptions even more than what you're seeing right now?

Eric Handler: Good morning, and thanks for the question. Sean, it's clear that when content is compelling, people are showing up to the movie theaters. When you look at the fourth quarter, when you look at 25 and you have a great chart in your proper presentation, the content looks really good in 25 and then you get some really big franchises coming in 2026. So I would say Wall Street is probably hyper aware of the content slate over the next two plus years.

Speaker Change: Good morning, and thanks for the question.

Speaker Change: Sean it's clear that when content is compelling people are filling up to the movie theaters when you look at.

Eric Handler: The fourth quarter. When you look at 25 and you have a great chart in your Powerpoint presentation. The content looks really good in 'twenty five and then you've got some really big franchises coming in 2026, So I would say wall Street's, probably hyper aware of the content slate over the next two plus years, but how well do you think.

Eric Handler: But how well do you think your consumers are aware of just how good the slate is. And what can you do to improve that? So maybe it helps reinvigorate the movie past subscriptions even more than what you're seeing right now.

Speaker Change: Your consumers are aware.

Speaker Change: Just how good the slate is and what can you do to.

Speaker Change: Improve that so maybe it helps.

Speaker Change: Reinvigorate the movie pass subscriptions, even more than what you're seeing right now.

Sean Gamble: Well, thanks, you know, thanks, Eric, for the question and for the observation. I mean, we agree. I think when we look at what we have in line of sight today, and which generally is some of those larger films, we definitely think it looks quite promising. And you're right.

Sean Gamble: Well, thanks. Thanks, Eric, for the question and for your observation. I mean, we agree.

Speaker Change: Well. Thanks, yes, thanks, Eric for the question for you the observation I mean, we agree I think when.

Sean Gamble: I think when we look at what is what we have line of sight to today and which is generally, as some of those larger films, we definitely think it looks quite promising, and you're right. I mean, I think that's certainly understood by industry insiders. The question on how do we get broader consumer awareness of that. I think there's a range of ways. Obviously, there's the classic ways as we get nearer to those titles, the marketing campaigns that take place both by the studios as well as by exhibitors just to gain awareness for what's coming in the near term.

Speaker Change: When we look at what.

Speaker Change: As well we have line of sight to today, and which is generally as some of those larger films, we definitely think it looks quite.

Speaker Change: Quite promising and Youre right I mean, I think thats certainly understood by.

Sean Gamble: I mean, I think that's certainly understood by industry insiders, the question of how do we get broader consumer awareness of that. You know, I think there's a range of ways. I mean, obviously, there's the classic way as we get nearer to those titles, the marketing campaigns that take place both by the studios as well as by exhibitors just to gain awareness of what's coming in the nearer term. I think as we get to a place where there is a more steady cadence, this is why we talk about the benefits and really desire for more of this volume to come back in.

Speaker Change: Industry insiders the question on how do we get broader consumer awareness of that.

Speaker Change: I think there is a range of ways I mean, obviously there is the classic way is as we get near to those titles.

Speaker Change: The marketing campaigns that take place both by the studios as well as by exhibitors just to gain awareness for what's coming in the near term I think is.

Sean Gamble: I think as we get to a place where there is a more steady cadence to what we talk about, the benefits and really desire for more of this volume to come back in. When more volumes in, we're seeing it right now right in the marketplace. We got great momentum going in the marketplace as a result of number one great films in the market. But then also this more steady cadence release. People come in; they get exposed through trailers, through one sheet, just by being there in terms of what's coming down the pipeline. So I think that's a real other important ingredient as we have more sustained volume of content in theaters.

Speaker Change: We get to a place where there is a more steady cadence is why we talk about the the benefits and really desire for the for more of this volume to come back and when more volumes than we're seeing it right now right in the marketplace, We've got great momentum going in the marketplace.

Sean Gamble: More volumes in, we're seeing it right now, in the marketplace. We've got great momentum going in the marketplace as a result of, number one, great films in the marketplace, but then also this more steady cadence of release. People come in, they get exposed through trailers, through one sheets, just by being there in terms of what's coming down the pipeline. So I think that's a real other important ingredient.

Speaker Change: As a result of number one great films in the market, but then also there's more steady cadence of release people come in they get exposed through trailers through one sheets just by being there in terms of what's coming down the pipeline. So I think thats a real other important ingredient as we have more sustained volume of content in theaters people get into that habit of going.

Sean Gamble: As we have more sustained volume of content in theaters, people get into that habit of going to the theaters and getting more exposure to other things. Beyond that, I'd say there's a range of other conversations happening about just how to broaden out PR. It's one of NATO's big focal points in terms of priorities of how do they work to help the industry to create and spread more positive news and awareness about what's coming and try to counteract some of these false narratives that sometimes get presented about moviegoing, which consumers can read about.

Sean Gamble: People get into that habit of going to the theaters and getting more exposure to other things.

Speaker Change: The theatres and getting more exposure to other things beyond that I'd say there is there is a range of other conversations happening about just how to broaden our PR to it's one of Nato's big focal points in terms of priorities and how do we.

Sean Gamble: Beyond that, I'd say there's a range of other conversations happening about just how to broaden out PR to its one of NATO's big focal points in terms of priorities. How do we, how do they work to help the industry to create and spread more of the positive news and awareness about what's coming and try to counteract some of these false narratives that sometimes get portrayed about movie going, which consumers can read about. So there's a range of things, big focal point, but I think a large part is just getting back to that scenario where there are more films in the marketplace and people are just getting exposed to them more regularly through marketing and by coming to the movie.

Speaker Change: Today work to help the industry to create and spread more of the positive news and awareness about what's coming and try to counteract some of these false narratives that sometimes get portrayed about movie going.

Speaker Change: Consumers can read about so there is a range of things big focal point, but I think a large part is just getting back to that scenario, where there are more films in the marketplace and people are just getting exposed to them more regularly through marketing and by coming to the movies.

Sean Gamble: So there's a range of things, a big focal point, but I think a large part is just getting back to that scenario where there are more films in the marketplace, and people are just getting exposed to them more regularly through marketing and by going to the movies.

Sean Gamble: Okay, great. And then, as a follow-up, I mean, your financial position is definitely one of, if not the best, in the industry right now. So I'm curious, you know, we haven't seen much in new theater development of late, particularly in the U.S. There's only so much you can do to push real estate projects along, but what are you seeing right now in terms of new development?

Eric Handler: Great, great.

Speaker Change: Okay, Great and then as a follow up I mean, your financial position is definitely.

Eric Handler: And then, as a follow-up, I mean, your financial position is definitely one of the best in the industry right now. So I'm curious; you know, we haven't seen much in new theater development of late, particularly in the US. There's only so much you can do to push real estate projects along, but what are you seeing right now in terms of new developments? Well, obviously, as you point out, the development pipeline was slow, kind of like the film pipeline was slowed to the pandemic. So, too, was the whole new build pipeline. And if anything, been more in a contraction mode in the industry of more theaters that have closed over the past few years, certainly lower performing theaters, which in some ways isn't a bad thing.

Speaker Change: One of if not the best in the industry right now so I'm curious.

Speaker Change: We haven't seen much in new theater development, particularly in the U S. There's only so much you can do to push real estate projects, along but what are you seeing right now.

Speaker Change: In terms of new developments.

Sean Gamble: Well, obviously, as you point out, the development pipeline was slow, kind of like the film pipeline was slow due to the pandemic. So, too, was the whole new build pipeline and, if anything, had been more in a contraction mode in the industry, with more theaters that have closed over the past few years, certainly lower-performing theaters, which, in some ways, isn't a bad thing. It's kind of pruning some of those theaters that were less-yielding venues.

Sean Gamble: Well, obviously...

Speaker Change: Well, obviously as.

Speaker Change: As you point out the development pipeline was slow kind of like the film pipeline was slow due to the pandemic. So too was the whole newbuild pipeline.

Speaker Change: If anything been more in a contraction mode in the industry have more theaters that have have closed over the past few years.

Speaker Change: Certainly lower performing theaters.

Speaker Change: Which in some ways is isn't a bad thing, it's kind of pruning some of those theaters that.

Eric Handler: It's kind of pruning some of those theaters that were lesser-yielding venues.

Speaker Change: That were lesser yielding venues.

Sean Gamble: We have reactivated our pipeline of looking at and incubating new projects. We've had, as I mentioned in my prepared remarks, had great success with the new builds that we have opened since the pandemic, which were projects that were committed to prior to the pandemic. On the whole, those have been performing better than what we set out to do in our expectations before the pandemic. So, we've reactivated that pipeline. I expect others have done so as well.

Sean Gamble: We have reactivated our pipeline of looking at and incubating new projects. We've had, as I mentioned in my prepared remarks, we've had great success with the new builds that we have opened since the pandemic, which were projects that were committed to prior to the pandemic. You know, on the whole, those have been performing better than what we set out to do in our expectations before the pandemic. So, we've reactivated that pipeline. I expect others have as well. It's just going to take a little bit of time because, like making a movie, these projects can take years to work through all of the deals with landlords, with government permitting, and just the whole construction process.

Speaker Change: We have reactivated our pipeline of looking at and incubating new projects. We've had as I mentioned in my prepared remarks, we've had great success with the new builds that we have opened since the pandemic, which were projects that were committed to prior to <unk> on the whole those have been performing better than what we said.

Speaker Change: Out to do in our expectations before the pandemic. So we've reactivated that pipeline I expect others have as well I'm just going to take a little bit of time, because like making a movie. These projects can take years to work through all of the deals with with landlords with government permitting.

Sean Gamble: It's just going to take a little bit of time because, like making a movie, these projects can take years to work through all of the deals with landlords, with government permits, and just the whole construction process. It can take some time. So, I expect more of that will start to take place over the next few years, going through a bit of a recovery, our whole industry is still continuing to recover volume is still coming back. So as everyone is still working through that cycle, I still think that'll be a little bit of a governing factor on how fast any kind of new build activity ramps up.

Speaker Change: And just the whole construction progress process. It can take some time, so I expect more of that will you'll start to see more of that taking place over the next few years, albeit I also expect that will continue to be tempered a bit just as everybody is still is.

Sean Gamble: It can take some time. So, I expect the more that will, you'll start to see more of that taking place over the next few years; albeit, I also expect that it'll continue to be tempered a bit, just as everybody still is going through a bit of recovery. Our whole industry still is continuing to recover. Volume still is coming back. So, as everyone is still working through that cycle, I still think that'll be a little bit of a governing factor on how fast any kind of new build activity ramps up.

Speaker Change: Through a bit of recovery in our whole industry is still is continuing to recover volumes still is coming back so.

Speaker Change: As everyone is still working through that cycle I still think that'll be a little bit of a governing factor on how fast any kind of new build activity ramps up.

Eric Handler: Thank you. Thanks, Eric.

Speaker Change: Thank you.

Eric Handler: Thanks, Eric.

Ben Swinburne: Thank you. Our next questions come from a lot of Ben Swinburne with Morgan Stanley. Please proceed with your questions.

Speaker Change: Thank you. Our next question is coming from the line of Ben Swinburne with Morgan Stanley. Please proceed with your questions.

Operator: Thank you. Our next questions come from the line of Ben Swinburne with Morgan Stanley. Please proceed with your questions.

Ben Swinburne: Hey, good morning, everyone.

Ben Swinburne: Hey, good morning everyone. Sean, I always benefit from hearing your expectations on film supply next couple of years. I know you hit it a little in your prayer remarks, but maybe you could just give us the latest and greatest from the studio side in terms of 25 wide releases. I think the last time you updated it, I think you felt those would be higher than 23.

Benjamin Swinburne: Hey, good morning, everyone. Sean, I always benefit, we always benefit from hearing your expectations for film supply in the next couple of years, and you hit it a little in your prepared remarks, but maybe you could just give us the latest and greatest from the studio side in terms of 25 wide releases. I think the last time you updated us, you felt those would be higher than 23. And then I had a follow-up from Melissa.

Speaker Change: Sean.

Sean Gamble: Always benefit we always benefit from hearing your expectations on film supply next couple of years I know you hit it a little in your prepared remarks, but maybe you could just give us the latest and greatest from the studio side in terms of 25%.

Speaker Change: Good releases I think the last time, you updated us I think you felt those would be higher than 23.

Ben Swinburne: And then I had a follow-up from Melissa.

Speaker Change: And then I had a follow up from Elisa.

Sean Gamble: Sure. Well, as we sit here today, considering Speaking of, most specifically about 2024, because that's where we have the most line of sight too. So earlier, we were kind of coming into the year; we were estimating that the overall volume would be somewhere around 95 wide releases. At this point, we're seeing a few more. So we're looking at about 100 wide releases this year. For this year, there have been a few smaller films that have been dated since that time, which is great to see, you know, a little bit of further recovery.

Ben Swinburne: Sure. Well, I mean, as we sit here today, you can speak, you know, most specifically about 2024, because that's where we have the most line of sight to. So, earlier, when we were coming into the air, we were estimating overall volume would be somewhere around 95 wide releases. At this point, we're seeing a few more. So, we're looking at about a hundred wide releases for this year. There's been a few smaller films that have been dated since that time, which is great to see, you know, a little bit of further recovery.

Speaker Change: Sure well I mean, as we sit here today.

Speaker Change: Speaking of most specifically about 2024, because thats, where we have the most line of site too so.

Speaker Change: Earlier, we were kind of coming into the year, we were estimating overall volume would be somewhere around 95 wide releases at this point, we are seeing a few more so we're looking at about 100 wide releases.

Speaker Change: For this year, there's been a few smaller films that have been dated since that time, which is great to see a little bit of of further recovery. Obviously, that's still down about 25% from the 130 years or so average prior to them <unk> and down.

Sean Gamble: Obviously, that's still down about 25% from the 130 or so average prior to the pandemic and down a little bit from last year, which was about 110. As we look to 2025, the typical process, and this even predates COVID, we generally get a better line of sight to that towards the end of the year. You know, that's just, we have a good sense for what some of the larger titles are, but the studios don't fully announce what they have and all their dates until you get towards the end of this year.

Sean Gamble: Obviously, that's still down about 25% from the 130 or so average prior to the pandemic and down a little bit from last year, which was about 110. As we looked to 2025, the typical process in this even predates COVID. We generally get a better line of site towards the end of the year. You know, that's just, we have a good sense for what some of the larger titles are, but the studios don't more fully announce what they have and all they're dating until you get towards the end of this year. So, we don't have a complete line of sight that, but from our conversations, the discussions we have and the different data points that we do have access to, we continue to expect that we'll see a rebound in overall volume next year somewhere between where 2023 landed and where we were pre-pandemic in 25.

Speaker Change: A little bit from last year, which was about 110 as we look to 2025.

Speaker Change: Typical process in this even predates COVID-19, we generally get a better line of sight to that towards the end of the year.

Speaker Change: We have we have a good sense for what some of the larger titles are but the studios don't more fully announce what they have in other dating until you get towards the end of this year. So we don't have complete line of sight to that but from our conversations and the discussions we have in the different data points that we do have access to we continue to expect that we will see a re.

Sean Gamble: So we don't have complete line of sight to that, but from our conversations, the discussions we have, and the different data points that we do have access to, we continue to expect that we'll see a rebound in overall volume next year, somewhere between where 2023 landed and where we were pre-pandemic in 25. You know, there's probably a little bit of lingering impact from the Hollywood strikes of last year, but definitely a nice bounce back to the trajectory we had been progressing on in terms of overall volume recovery in the marketplace.

Speaker Change: Bound and overall volume next year somewhere between where 2023 landed and where we were pre pandemic and 25%, there's probably a little bit of lingering impact from the Hollywood strikes of last year, but definitely a nice bounce back to the trajectory we have been.

Sean Gamble: You know, there's probably a little bit of lingering impact from the Hollywood strikes of last year, but definitely a nice bounce back to the trajectory we had been progressing upon in terms of overall volume volume recovery in the marketplace.

Speaker Change: <unk> upon in terms of overall volume volume recovery in the marketplace.

Speaker Change: That's helpful. Thank you.

Melissa Thomas: That's helpful, thank you. And Melissa, you give us a lot to chew on in the prepared remarks. I just want to come back to a couple of things. On the convert, you guys are planning to redeem that with cash. I guess on my questions a little technical; you said principle amount. I'm wondering as the stock in his perform, you know, and I think that liability grows.

Benjamin Swinburne: That's helpful, thank you. And Melissa, you gave us a lot to chew on in the prepared remarks. I just wanna come back to a couple of things.

Speaker Change: And most of you gave us a lot to chew on in the prepared remarks, I just want to come back to a couple of things on the convert.

Melissa Thomas: On the convert, you guys are planning to redeem that with cash. I guess my question's a little technical. You said principal amounts. I'm wondering, as the stock continues to perform, and I think that liability grows, do you plan to redeem all of it in cash, or might there be a stock piece if the stock were to do really well between now and next August? And then you also mentioned in the budgeting process and sort of talking about your return on capital plans in February; you framed them as returning excess capital to shareholders.

Speaker Change: You guys are planning to redeem that with cash I.

Speaker Change: I guess Im a question a little technical.

Speaker Change: You said principal amounts I'm wondering as the stock continues to perform.

Speaker Change: And I think that liability grows do you plan to redeem all of it in cash or might there be a stock piece if the stock were to.

Melissa Thomas: Do you plan to redeem all of it in cash, or might there be a stock piece if the stock, you know, were to do really well between now and now. Next August.

Speaker Change: Do really well between now and next August and then you also mentioned in the budgeting process and sort of talking about your return of capital plans. In February you framed them is returning excess capital to shareholders. So I guess I wanted to ask if that includes buybacks as a consideration historically cinemark has been obviously a.

Melissa Thomas: And then you also mentioned in the budgeting process and sort of talking about your return of capital plans in February. Well, you framed them as returning access capital to shareholders. I guess I wanted to ask if that includes buybacks as a consideration. Historically, Cinemark's been obviously a dividend payer, but I noticed maybe I'm reading too much into your language. But it seemed like you were being a little more vague. So I wonder if maybe you guys were considering buybacks as well, or the board was.

Melissa Thomas: I guess I wanted to ask if that includes buybacks as a consideration. Historically, Cinemark's obviously been a dividend payer, but I noticed, maybe I'm reading too much into your language, but it seemed like you were being a little more vague. So I wondered if maybe you guys were considering buybacks as well, or the board was. Thank you.

Speaker Change: Dividend payer, but I noticed.

Speaker Change: Maybe I'm reading too much into it.

Speaker Change: Language, but it seemed like you were being a little more VIX I Wonder if maybe you guys were considering buybacks as well where the board was thank you.

Melissa Thomas: Thank you. Thank you very much, Ben.

Melissa Thomas: Thanks for those questions, Ben. So on your first question with regard to the convert, we purchased a call spread that protects us from the impact of stock price movements up to $22.08. To the extent that the stock price exceeds $22.08, we have the flexibility to settle the incremental amount in either shares or cash. Ultimately, our decision will be contingent upon the extent to which the stock price exceeds $22.08, our cash on hand, and potential dilution considerations, among other factors.

Speaker Change: Thanks.

Speaker Change: So on your first question with regard to the convert so we purchased a call spread that protects us from the impact of stock price movements up to $22 in <unk> to the extent that the stock price exceeds 22 away, we have the flexibility to settle the incremental amount.

Melissa Thomas: So, on your first question with regard to the convert. So we purchased a call spread that protects us from the impact of stock price movements up to $22 and eight cents to the extent that the stock price exceeds twenty two away. We have the flexibility to settle the incremental amount in either shares or cash. Ultimately, our decision will be contingent upon the extent to which the stock price exceeds twenty two or eight, our cash on hand, and potential delusion considerations, among other factors.

Speaker Change: And either shares or cash and ultimately our decision will be contingent upon the extent to which the stock price exceeds 20, 208, our cash on hand and potential dilution considerations among other factors.

Melissa Thomas: And then, with respect to your question on capital allocation. We are taking, as you would expect, in a comprehensive approach to evaluating our capital allocation strategy. So you can assume that that is looking across all three pillars, inclusive looking at stock buybacks as well as dividends. Great.

Melissa Thomas: And then with respect to your question on capital allocation, we are taking, as you would expect, a comprehensive approach to evaluating our capital allocation strategy. So you can assume that that is looking across all three pillars, inclusive of looking at stock buybacks as well as...

Speaker Change: And then with respect to your question on capital allocation.

Speaker Change: We are taking as you would expect.

Speaker Change: And a comprehensive approach to evaluating our capital allocation strategy. So you can assume that that is looking across all three pillars inclusive looking at stock buybacks as well as dividends.

Operator: Great. Thank you so much.

Speaker Change: Great. Thank you so much thanks.

Ben Swinburne: Thank you so much. Thanks, Ben.

Brent: Thanks Brent.

Ben Swinburne: Thank you.

Speaker Change: Thank you. Our next question does come from the line of Jim Goss with Barrington Research. Please proceed with your questions.

Operator: Thank you. Our next questions come from the line of Jim Goss with Barrington Research. Please proceed with your questions.

Jim Goss: Our next question has come from the line of Jim Goss with Barronkin Research. Please proceed with your question.

Jim Goss: All right, thanks. Sean, I'm wondering if you feel with this discussion of the film flow if it's more of a number scheme right now or is it dependent primarily on the quality and demographic appeal mix of the film screen release. You do seem optimistic about attendee attitudes, and I'm just wondering how you view the slate. Sure. Well, I had to say I think we kind of look at it as it's really a factor of both. You know, we've clearly seen examples where, even with reduced film volume, overall box office can perform at levels comparable to pre-pandemic.

James Goss: All right, thanks. Sean, I'm wondering if you feel, with this discussion of the film flow, if it's more of a numbers game right now, or is it dependent primarily on the quality and demographic appeal mix of the films being released? You do seem optimistic about attendee attitudes, and I'd just wondering how you'd view the slate.

Jim Goss: Alright. Thanks.

Jim Goss: Sean I'm wondering if you feel with the discussion of the film flow if its more of a numbers game right now or is it dependent primarily on the quality and demographic appeal mix of films being released.

Speaker Change: Hum.

Speaker Change: Can I ask about.

Speaker Change: Attendee attitudes.

Speaker Change: I'm just wondering how you view the slate.

Sean Gamble: Sure. Well, I'd say we kind of look at it as it's really a factor of both. You know, we've clearly seen examples where even with reduced film volume, overall box office can perform at levels comparable to pre-pandemic. And we saw that, you know, I think it was last July where box office exceeded July of 2019, even with quite a bit, quite a few fewer overall titles being released. So compelling content that resonates well with audiences is clearly a critical aspect of that.

Speaker Change: Sure.

Speaker Change: Well I'd say I think we kind of look at it as it's really a factor of both.

Speaker Change: We've clearly seen examples.

Speaker Change: Where even with reduced film volume overall box office can perform at levels comparable to pre pandemic and we saw that.

Sean Gamble: And we saw that, you know, I think it was last July where box office exceeded July of 2019, even with quite a bit, quite a fewer number of overall titles being released. So compelling content that resonates well with audiences is clearly a critical aspect of that. But I would say the volume piece, you want to have just more opportunities for one film to have those breakouts, you know, like we've seen. I went through a series of those examples. We've seen many of them over the last several years. You want more of those opportunities for those breakouts, which oftentimes can propel the box office.

Speaker Change: I think it was last July where box office exceeded July of 2019, even with quite a bit quite a fewer number of overall titles being released so.

Speaker Change: Compelling content that resonates well with audiences is clearly a critical aspect of that.

Sean Gamble: But I would say, you know, the volume piece: you want to have just more opportunities for one film to have those breakouts. You know, like we've seen, I went through a series of those examples. We've seen many of them over the last several years. You know, you want more of those opportunities for those breakouts, which can often propel the box office. And then just to have that opportunity for that continued, far in terms of the appeal of and strength of what's coming down the line from a quality standpoint, and we're certainly encouraged as we listen to and look at the different indicators we have regarding overall volume filling back in.

Speaker Change: But I would say the volume piece you want to have just more opportunities for one films to have those breakouts like we've seen I went through a series of those example, we see many of them over over the last several years.

Speaker Change: We want more of those opportunities for those breakouts, which oftentimes can propel the box office and then just to have that opportunity for that continued.

Sean Gamble: And then just to have that opportunity for that continued...

Speaker Change: The continued momentum of going to the films and this is this is an industry where movie going often begets moviegoing people get into that kind of habit as I mentioned earlier, you get exposed to what's coming up we like a nice variety of films that speak to our audiences and then sufficient volume of that to keep people coming because you'll get.

Sean Gamble: He continued momentum of going to the films. This is an industry where movie going off and beguess movie going. People get into that habit, as I mentioned earlier. You get exposed to what's coming up. We like a nice variety of films that speak to all audiences, and then sufficient volume of that to keep people coming, because you get kind of into that mode and it helps. It's really both elements of that, and we're encouraged by what we see thus far in terms of the appeal and strength of what's coming down the line from a quality standpoint.

Speaker Change: You get kind of into that mode and it helps so it's really both elements of that and we're again, we're encouraged by what we see thus far in terms of.

Speaker Change: The appeal of.

Speaker Change: Strength of what's coming down the line from quality standpoint, and we're certainly encouraged as we listened to and look to the different indicators, we have regarding overall volume filling back in.

Sean Gamble: We're certainly encouraged as we listen to and look to the different indicators we have regarding overall volume filling back in.

Sean Gamble: Okay, and maybe one other. Melissa mentioned that you're leaning into data analytics to determine the most effective pricing strategy. Back's office trends and the recovery has really then focused a lot on price increases and premium share mix. And I know attendance levels, as always, is Cinemark priority, and that's really what is going to allow you to benefit from the higher concessions per cap. I wonder if you might talk about how you attend physical attendance recovery over the next several years and how that might move into the next couple of years where there's a lot of optimism.

Speaker Change: Okay, and maybe one other Melissa mentioned.

Sean Gamble: Okay, and maybe one other thing Melissa mentioned. You're leaning into data analytics to determine the most effective pricing strategy. Box office trends and the recovery have really been focused a lot on price increases and premium share mix. And I know attendance levels are always a Cinemark priority, and that's really what is going to allow you to benefit from the higher concessions per cap. And I wonder if you might talk about how you view attendance, physical attendance recovery over the next several years and how that might, you know, move into the next couple of years, where there's a lot of optimism.

Melissa: You are leaning into the data analytics to determine the most effective pricing strategy.

Melissa: Box office trends.

Speaker Change: And the recovery is really.

Speaker Change: Im focused 11 price increases in premium share mix.

Speaker Change: I know attendance levels as ours, cinemark priority and Thats really what is going to allow you to benefit from the higher concessions per cap and I'm wondering if you might talk about how you view attendance physical attendance recovery over the next several years and how that might.

Speaker Change: And our move into the next couple of years, where Theres a lot of optimism.

Sean Gamble: Well, I think that goes hand-in-hand with the volume. I mean, you're right. Our primary focus is driving attendance and driving frequency of attendance because that helps to maximize box office. It helps to create those opportunities for food and beverage sales. And again, it just keeps people getting exposed to what's coming down the line. So it becomes a positive circle.

Sean Gamble: Well, I think that goes hand in hand with the volume. I mean you're right. I think our primary focus is driving attendance and driving frequency of attendance because that helps to maximize box office. It helps to create those opportunities for food and beverage sales. And again, it just keeps people getting exposed to what's coming down the line. So it becomes a positive, positive circle. So when we think about attendance trends, by the way, it also plays into our pricing strategies too, as Melissa mentioned earlier. When we approach pricing, we're looking at it strategically. Like clearly we're looking to do what we can to get price gains, but we're very conscious of what that can do ultimately to attendance.

Speaker Change: Well I think that goes that goes hand in hand, with the volume I mean, youre right I think.

Speaker Change: Our.

Speaker Change: Primary focus is driving attendance and driving frequency of attendance because that helps to maximize box office. It helps to create those opportunities for food and beverage sales and again it just keeps people getting exposed to whats coming down the line.

Speaker Change: So it becomes a positive positive circle.

Sean Gamble: So when we think about attendance trends, and by the way, it also plays into our pricing strategies, too, as Melissa mentioned earlier, when we approach pricing, we're looking at it strategically, like clearly we're looking to do what we can to get price gains, but we're very conscious of what that can do ultimately to attendance. So it's really the goal of finding that sweet spot where we're not negatively affecting attendance or we're not negatively affecting incidence of consumption of food and beverage.

Speaker Change: So when we think about attendance trends.

Speaker Change: And by the way it also plays into our pricing strategies to as Melissa mentioned earlier, when we approach pricing.

Melissa: We're looking at it strategically like clearly we're looking to do what we can to get price gains, but we're very conscious of what that can do ultimately to attendance. So it's really that goal of of finding that sweet spot, where we're not negatively affecting attendance or were not negatively affecting incidents of consumption of food and beverage. So we're looking for what.

Sean Gamble: So it's really that goal of finding that sweet spot where we're not negatively affecting attendance or we're not negatively affecting incidents of consumption of food and beverage. So we're looking for what can actually stimulate that. And we think there's those trends on both attendance and box office looks positive. Just as more movies come back into the marketplace and people come in, they receive all the enhancements that have been made in the theaters, particularly for those people who may not have been there frequently. We just think that winds up continuing a positive, continuing movie going. All right, thanks very much.

Speaker Change: Can actually stimulate that.

Sean Gamble: So we're looking for what can actually stimulate that. And we think the trends on both attendance and box office look positive. Just as more movies come back into the marketplace and people come in, they receive all the enhancements that have been made in the theaters, particularly for those people who may not have been there frequently. We just think that winds up continuing a positive continuum of movement.

Speaker Change: And we think the trends on both attendance and box office was positive just as more movies come back into the marketplace and people come in they receive all the enhancements that have been made in the theaters when it's particularly for those people who may not have been there frequently we just think that winds up.

Speaker Change: <unk> a positive continuum of moviegoing.

Speaker Change: Alright, thanks, very much I appreciate it thanks Jim.

Sean Gamble: Alright, thanks very much. I appreciate it. Thanks, Jim. Thank you. Our next questions come from the line of Omar Mahias with Wells Fargo. Please proceed with your question. Good morning, guys.

Sean Gamble: Appreciate it.

Speaker Change: Thank you our next questions come from the line of Omar <unk> highest with Wells Fargo. Please proceed with your questions.

Operator: Thank you. Our next questions come from the line of Omar Mahias with Wells Fargo. Please proceed with your Good morning, guys. Thank you for taking the questions. Sean, maybe first, in your prepared remarks, you mentioned the extension of

Omar Santiago: Our next questions come from the line of Omar Mahias with Wells Fargo. Please proceed with your questions. Good morning, guys. Thank you for taking the questions. Chuck, maybe first in your prepared remarks you mentioned extension of a attendance content as a driver of film supply volumes. Could you give us an update on what your plans are for traditional non-traditional content going forward? And if you continue to expect that to continue to have the box office performance. Sure, thanks a lot, yes.

Omar: Good morning, guys. Thank you for taking the questions.

Omar: Chuck maybe first in your prepared remarks, you mentioned expansion of alternative content as a driver of film supply volumes.

Omar: Could you give us an update on what your plans are for traditional non traditional content going forward and if you continue to expect that to continue to have the box office performance.

Chuck: Sure. Thanks, Thanks Omar yes.

Omar Santiago: Sure. Thanks. Thanks, Omar.

Sean Gamble: Look, I think we've been pleased with some of the building's success we've seen in non-traditional content, anime, faith-based film, multicultural titles, concert films. I know for a long while, prior to the pandemic, at least for me personally, it was a disappointment. I always felt like there was this huge potential in the space of alternative content that never was kind of living up to fruition. And it's been great to finally see that momentum build. There's been many, many examples now across all those different categories. So it feels like it's getting to a place where audiences are seeking those out more.

Chuck: Look I think we've been pleased with some of the building success, we've seen in non traditional content anime faith based film multicultural titles concert films.

Sean Gamble: Yes. Look, I think we've been pleased with some of the building success we've seen in non-traditional content, anime, faith-based films, multicultural titles, and concert films. I know for a long while prior to the pandemic, at least for me personally, it was a disappointment. I always felt like there was this huge potential in the space of alternative content that never was kind of living up to fruition. And it's been great to finally see that momentum build. There are many, many examples now across all those different categories. So it feels like it's getting to a place where audiences are seeking those out more. There's more compelling content in that space.

Chuck: I know for a long while prior to pandemic at least for me personally it was a disappointment and I always felt like there was this huge potential in this space of alternative content that never was kind of living up to fruition and it's been great to finally see that momentum build there has been many many examples now across all those different categories.

Speaker Change: It feels like it's getting to a place where.

Speaker Change: Audiences are seeking those out more there's more compelling content in that space and because of that success. There is more of that content getting made now that you've got you've got now studios like Angel Studios is putting out I think they've announced five releases of faith based films. This year and they had phenomenal success last year. So there is.

Sean Gamble: There's more compelling content in that space. And because of that success, there's more of that content getting made now. You know, you got now studios, like Angel Studios, as putting out, I think they've announced five releases of faith-based films this year. They had phenomenal success last year, so there's more of that. We obviously saw Taylor Swift and Beyonce last year with the concert-based films. There's been many of those types of examples with BTS and Metallica and Coldplay and the smaller scale. We're optimistic that that'll lead to more in that area. Anime has been growing really strong.

Sean Gamble: And because of that success, there's more of that content getting made now. You know, you got studios like Angel Studios that are putting out, I think they've announced five releases of faith-based films this year. They had phenomenal success last year, so there's more of that. We obviously saw Taylor Swift and Beyonce last year with the concert-based films. There have been many of those types of examples with BTS and Metallica and Coldplay on the smaller scale.

Speaker Change: More of that we obviously saw.

Speaker Change: Taylor Swift and beyond say last year with the concert based films. There's been many of those types of examples with Bts and Metallica and Coldplay into smaller scale, we're optimistic that that will lead to more in that area and EMEA has been growing really strong obviously, Sony purchased crunchy role. They are leaning more heavily into that space. So there is more and more of that compelling.

Sean Gamble: We're optimistic that that'll lead to more in that area because anime has been growing really strong. Obviously, Sony purchased Crunchyroll.

Sean Gamble: Obviously, Sony purchased Crunchyroll. They're leaning more heavily into that space. So there's more and more of that compelling content coming into the market. So we remain optimistic about what it can continue to do on a go-forward basis. Last year was a banner year. It was about 14% of our box office. This past quarter, again, it was about 10%. For us, so we're really pleased. Now we think that percentage may go down a bit, just as we have more of that Hollywood content rebounding over future years. But we've said for a long while we could see non-traditional content represent more like 5% or so of overall box office.

Sean Gamble: They're leaning more heavily into that space, so there's more and more of that compelling content coming into the market. So we remain optimistic about what it can continue to do on a go-forward basis. Last year was a banner year. It was about 14% of our box office. This past quarter, again, it was about 10% for us. So we're really pleased. Now, we think that percentage may go down a bit, just as we have more of that Hollywood content rebounding over the next few years.

Speaker Change: Content coming into the market. So we remain optimistic about what it can continue to do on a go forward basis last year was a banner year. It was about 14% of our box office. This past quarter again, it was about 10% for us. So we're real pleased that now we think that percentage may go down a bit just as we have more.

Speaker Change: More of that Hollywood content rebounding over future years, but we've said for a long while we could see non traditional content represent more like 5% or so of overall box office and weakened versus the 1% to 2%. It's historically been and we continue to expect that as we look ahead.

Sean Gamble: But we said for a long while that we could see non-traditional content represent more like 5% or so of overall box office versus the 1% to 2% it's historically been. And we continue to expect that as we look ahead.

Sean Gamble: And we continue, versus the 1 to 2% it's historically been, and we continue to expect that as we look ahead.

Melissa Thomas: Yeah, that's very helpful. And maybe for Melissa on PERCAP, you mentioned that instance rate was flat year over year, yet PERCAP grew over 4%. I could have signed that some of the strategic initiatives that are working.

Speaker Change: That's very helpful maybe for milk.

Speaker Change: <unk> you mentioned that incidence rate was flat year over year, yet per caps grew over 4%.

Speaker Change: Sign that some of the strategic initiatives that are working for you provided some color on the key drivers of the success and how much room for improvement and you haven't had thanks.

Melissa Thomas: Could you provide us some color on the key drivers of this success and how much room for improvement you have ahead? Thanks. Sure, so on the PERCAP side for Q2, our increase was driven largely by our strategic pricing actions to offset some of the inflationary pressures that we've experienced. So we've seen success in being able to push price on food and beverage. Again, as Sean mentioned, we're very cognizant, similar to how on average ticket prices were cognizant of we want to maximize attendance first and foremost on the food and beverage side. We're looking to ultimately find the optimal pricing as well as drive our incidents.

Speaker Change: Sure. So on the per cap side for Q2, our increase was driven largely by our strategic pricing actions to offset some of the inflationary pressures that we've experienced so we've seen.

Melissa Thomas: So, on the per-cap side for Q2, our increase was driven largely by our strategic pricing actions to offset some of the inflationary pressures that we've experienced. So, we've seen, you know, success in being able to push prices on food and beverage. Again, as Sean mentioned, we're very cognizant, similar to how on average ticket prices, we're cognizant that we want to maximize attendance first and foremost. On the food and beverage side, we're looking to ultimately find the optimal pricing as well as drive our incidence. The last two quarters, just the film slate hasn't been as conducive to concession purchases.

Speaker Change: Success in being able to touch.

Sean Gamble: Such price on food and beverage again as Sean mentioned, we're very cognizant similar to how an average ticket prices were cognizant of we want to maximize dependent first and foremost on the food and beverage side, we're looking to ultimately find the optimal pricing as well as drive.

Speaker Change: Our incident.

Melissa Thomas: The last two quarters, just the film slate, hasn't been as conducive to concession purchases. So, you know, more action-oriented and horror content typically brings in that audience that does have a higher concession purchase. But we were pleased, given some of the initiatives that we've been leaning into, that we were able to hold incidents flat year over year, despite that dynamic.

Speaker Change: The last two quarters, just the film slate and Hasnt been as conducive to concession purchases. So.

Melissa Thomas: So, you know, the more action-oriented and horror content typically brings in that audience that does have a higher concession purchase. But we were pleased, given some of the initiatives that we've been leaning into, that we were able to hold incidence flat year over year despite that dynamic. As you think about some of the things that we're doing that we're most excited about, I would say, modifying our flow of concession traffic, putting in self-service capabilities, and mobile ordering.

Speaker Change: More action oriented and horror content typically brings in that audience that.

Speaker Change: It does have a higher concession purchase but we were pleased given some of the initiatives that we've been leaning into that we were able to hold incidence flat year over year despite that dynamic.

Melissa Thomas: As you think about some of the things that we're doing that we're most excited about, I would say, would be on modifying our flow of concession traffic, putting in self-service capabilities, mobile ordering. We also have enhanced our hot foods offering. So, as we offer more products, we've certainly seen some success from that. Pushing merchandise sales as well as scaling third party delivery are some other initiatives that we're pursuing to ultimately drive incident rates higher. So we feel good about where we're at, and the film slate will allow our per caps fluctuate quarter to quarter, but we still believe we have plenty of opportunity to grow.

Speaker Change: As you think about some of the things that we're doing that.

Speaker Change: Were most excited about I would say.

Speaker Change: B on modifying our flow of concession traffic, putting in self service capabilities mobile ordering we are.

Melissa Thomas: We have also enhanced our hot food offering. So, as we offer more products, we've certainly seen some success with that. Pushing merchandise sales as well as scaling third-party delivery are some other initiatives that we're pursuing to ultimately drive incidence rates higher. So, we feel good about where we are. And, you know, the film slate will fluctuate our per caps from quarter to quarter, but we still believe we have plenty of opportunity to grow.

Speaker Change: Also has enhanced our.

Speaker Change: Hot foods offering so as we offer more products, we certainly seen some success from that pushing merchandise sales as well as scaling third party delivery or some other initiatives that we're pursuing to ultimately drive incidents rates higher so we feel good about where we're at.

Speaker Change: And the film slate will lead our per caps fluctuate quarter to quarter, but we still I believe we have plenty of opportunity to grow.

Melissa Thomas: Thank you guys, appreciate it. Thanks, Omar.

Speaker Change: Thank you guys appreciate it thanks Omar.

Operator: Thank you. Our next question has come from the line of Mike Hickey with The Benchmark Company. Please proceed with your question.

Operator: Thank you.

Speaker Change: Thank you. Our next question is come from the line of Mike Hickey with the Benchmark Company. Please proceed with your questions.

Mike Hickey: Our next question has come from the line of Mike Hickey with the Ben Swinburne Company. Please proceed with your questions.

Mike Hickey: A. Sean, Melissa, Shanda, good morning guys. A great job on your your quarter. I guess on the topic of concession, and this dovetails a bit. I think Omar's question and you're an answer, Melissa, but looking at two Q and this has obviously been a trend here, exiting the pandemic, but your concession looking at domestic revenue, your concession, concession to admission ratio is about 81%. And I think that's an all-time record. And you compare that to pre-pandemic. It was 68%. So I'm just curious. I heard what you said, Melissa, on concession. What's driving it on a per-cat basis, but just curious sort of the total volume here relative admission.

Mike Hickey: Hey, Sean Melissa Good morning, guys, so great job on here.

Michael Hickey: Hey, Sean, Melissa, and Chanda. Good morning, guys. Great job on your quarter. I guess on the topic of concession, and this dovetails a bit, I think. Omar's question and your answer, Melissa, but looking at 2Q, and this has obviously been the trend here, exiting the pandemic, but your concession, looking at domestic revenue, your concession to admission is about 81 percent. And I think that's all. An all-time record, and you compare that to pre-pandemic. It was 68 percent of the population.

Mike Hickey: Quarter, I guess on the topic of <unk>.

Speaker Change: Concession and this dovetails a bit I think Tom.

Speaker Change: <unk> question and your answer Melissa, but looking at <unk>.

Ben Swinburne: Obviously Ben.

Speaker Change: The trend here exiting the pandemic, but youre concession looking at domestic revenue youre consistent concession to admission.

Ben Swinburne: <unk> ratio is about 81%.

Speaker Change: And I think that so.

Speaker Change: All time record.

Mike Hickey: And you compare that pre pandemic.

Speaker Change: 68%.

Michael Hickey: So I'm just curious, I heard what you said, Melissa, about concessions, what's driving it on a per cap basis, but just curious sort of the total, volume here, relative admission, what you think is sort of the key driver there. And I guess then the question is, I can keep waiting for this to come down a bit, but it seems very durable. In fact, it seems to be, the mix seems to be growing.

Speaker Change: So I'm just curious I heard what you said Melissa.

Speaker Change: And what's driving it on a per cap basis, but just curious sort of the total.

Speaker Change: Volume here relative admission.

Melissa Thomas: What you think is sort of the key driver there. And I guess in the question is, I can be keep waiting for this to come down a bit, but it seems very durable. In fact, it seems to be the mix seems to be growing. So curious as you look forward, how durable. In fact, you think it will continue to be when we have a full product plate and maybe, you know, economic challenges. Obviously, we've seen strain on the consumer that's fed through into some of the restaurants. It doesn't seem to be the case at all in theater, but wondering your view there.

Speaker Change: What you think is sort of the key driver there.

Speaker Change: Thank you.

Speaker Change: And the question is can we keep waiting for this to come down a bit but it seems very durable.

Speaker Change: It seems to be the mix seems to be growing. So curious as you look forward how durable impact do you think it will.

Michael Hickey: So curious as you look forward how durable, in fact, you think it will continue to be when we have a full plate and maybe, you know, economic challenges. Obviously, we've seen strain on the consumer that's fed through into... Some of the restaurants don't seem to be the case at all in theater. But I'm wondering your view there. And then, I guess, the last piece, if it is, in fact, durable.

Speaker Change: We'll continue to be.

Speaker Change: And we have a full product slate.

Speaker Change: And maybe economic challenges, obviously, we've seen strain on the consumer that's true too.

Speaker Change: And some of the restaurants doesn't seem to be the case at all in theatre, but.

Speaker Change: Wondering your view there.

Melissa Thomas: And then I guess the last piece, if it is fact durable, when we do see a larger portion of the mix, when you think about attendance getting back to pre-pandemic. And I know that, John, you said you think volume of product in the next couple of years should be equal to pre-pandemic. So maybe attendance is, too. What is that sort of mix towards a concession ultimately mean to your total margin opportunity versus pre-pandemic. Thanks, guys.

Speaker Change: And then I guess.

Speaker Change: The last piece if it is in fact durable.

Melissa Thomas: And we do see a larger portion of the mix when you think about attendance getting back to pre-pandemic levels. And I know that, John, you said you think volume of product in the next couple of years should be equal to pre-pandemic levels, so maybe attendance is, too. What does that sort of mix towards concession ultimately mean to your total margin opportunity versus pre-pandemic levels? Thanks, guys.

Speaker Change: Do see.

Speaker Change: A larger portion of the mix when you think about attendance getting back to pre pandemic and I know that John.

Speaker Change: John You said, you think volume of product in the next couple of years should be equal to pre pandemic. So maybe attendance as to what is that sort of mix towards concession ultimately mean to you.

Speaker Change: Total margin opportunity versus pre pandemic. Thanks, guys.

Melissa Thomas: So I can start on that. Mike, one of the things you know, you mentioned the percentage of concessions relative to admissions. And even if we look at that on a per cap basis, versus 2019, our domestic per cap is up north of 40%. And the majority of that growth that we're seeing is driven by higher incidence rates and then, to a lesser extent, price. And that higher incidence rate is a blend of core concession purchases, so say, Coke and popcorn, as well as expanded product offerings, including alcohol, icy, and hot foods such as pizza, as well as the execution of some of the strategic initiatives.

Speaker Change: So I can I can start on that Mike one of the things.

Melissa Thomas: So I can start on that, Mike. One of the things you mentioned was the percentage of concessions relative to admissions. And even if we look at that on a per-cap basis, versus 2019, our domestic per-cap is up north of 40%. And the majority of that growth that we're seeing is driven by higher incidence rates and then, to a lesser extent, price. And that higher incidence rate is a blend of core concession purchases, so say Coke and popcorn, as well as expanded product offerings, including alcohol, IC, and hot foods such as pizza, as well as the execution of some of the strategic initiatives that I mentioned earlier. So we did, coming out of the pandemic, think that incidence rates would start to normalize. We haven't seen that yet.

Speaker Change: You mentioned the percentage of concessions relative to admissions and even if we look at that on a per cap basis versus 2019, our domestic per cap is up north of 40% and the majority of that growth that we're seeing is driven by higher incidence rate.

Speaker Change: And then to a lesser extent price.

Speaker Change: And that higher incidence rate is a blend of core concession purchases as a coke and popcorn.

Speaker Change: Well as expanded product offerings, including alcohol, IC and hot foods, such as pizza as well as the execution.

Speaker Change: Some of the strategic initiatives that I mentioned earlier so.

Melissa Thomas: That I mentioned earlier. So, you know, we did coming out of the pandemic. We did think that incidence rates would start, you know, could potentially normalize. We haven't seen that. And we do believe that our efforts that we've been leaning into to drive incidence rates are ultimately causing them to hold. So we feel good about where we're at, but those are kind of the drivers since 2019. And then from a margin standpoint, I mean, as we talk about just a deeper dot margin going forward and even look at what we were able to deliver in full year 2023 with concession revenue being higher than it was pre-pandemic.

Speaker Change: We did coming out of the pandemic, we did think that incidence rates would start could potentially normalize we haven't seen that and we do believe that our efforts that we've been leaning into to drive incidence rates are ultimately.

Melissa Thomas: And we do believe that our efforts that we've been leaning into to drive incidence rates are ultimately causing them to hold. So we feel good about where we're at, but those are kind of the drivers since 2019. And then from a margin standpoint, and as we talk about just the EBITDA margin going forward and even look at what we were able to deliver in full year 2023, with concession revenue being higher than it was pre-pandemic, we certainly feel that that's a key element to adjust the EBITDA margin going forward. And ultimately, As we look to get back to pre-pandemic margins, our ability to sustain and grow our per capita income would be an important driver of that.

Speaker Change: Causing them to hold so we feel good about where we're at but those are kind of the drivers since since 2019, and then from a margin standpoint.

Speaker Change: We talk about adjusted EBITDA margin going forward and even look at what we were able to deliver in full year 2023 with concession revenue being higher than it was pre pandemic, we certainly feel that that's a key element.

Sean Gamble: We certainly feel that that's a key element to adjust the diva dot margin going forward and ultimately. As we look to try to get back to pre-pandemic margins, our ability to sustain and grow our per caps would be an important driver of that. And I would just add, Mike, you know, just while we're certainly going to continue to pursue the kinds of initiatives Melissa's mentioned, things we've been successful with to grow per caps.

Speaker Change: Element to adjusted EBITDA margin going forward and ultimately.

Speaker Change: As we look to get back to try to get back to pre pandemic margins our ability to sustain.

Speaker Change: Grow our per caps would be an important driver of that.

Sean Gamble: And I would just add, Mike, you know, just... While we're certainly gonna continue to pursue the kinds of initiatives Melissa mentioned, things we've been successful with to grow per caps, we don't know, at least historically, one of the areas that pressures per caps is just when you have full theaters. Long lines are probably the number one deterrent to buying food and beverages. People see that, and then they'll skip it.

Speaker Change: I would just add Mike.

Speaker Change: Just.

Mike Hickey: While we are certainly going to continue to pursue the kinds of initiatives Melissa mentioned and things we have been successful with to grow per caps, we don't know at least historically.

Sean Gamble: We don't know, at least historically, one of the areas that pressures per caps is just when you have full feeders. You know, long lines are probably the number one deterrent to buying food and beverage. People see that, and then they'll skip it. So we've worked really hard to try to avoid that. Obviously, with a lower volume of films in the marketplace, and thus, because of that lower attendance, we haven't had as much of those kinds of situations where we find that pressure. That is something that we could see into the future as a more full slate of films comes back, which could put a little bit of pressure on that concession-to-admission ratio.

Mike Hickey: One of the areas that pressures per caps is just when you have full theaters long lines or is probably the number one deterrent to.

Speaker Change: Buying food and beverage people see that and then they'll skip it. So we've worked really hard to try to avoid that obviously with a lower volume of films in the marketplace and thus because of that lower attendance. We haven't had as much of those kinds of situations, where we find that pressure that is something that we could see into the future as a.

Sean Gamble: So we've worked really hard to try to avoid that. Obviously, with a lower volume of films in the marketplace, and thus because of that lower attendance, we haven't had as many of those kinds of situations where we find that pressure. That is something that we could see into the future as a more full slate of films comes back, which could put a little bit of pressure on that concession to admission ratio.

Speaker Change: More full slate of films comes back, which could put a little bit of pressure on that concession to admission ratio.

Sean Gamble: That said, again, we've been working on initiatives like the mobile platforms where you can order ahead, delivery to seat, things of that sort that allow people to avoid the lines. And thus, by doing that, it makes it easier for people who are buying in theaters to have lower lines. So hopefully we'll see that all those things will continue to sustain as we go forward, and we have fuller theaters with more volume in the marketplace. But obviously, we're very pleased by the impact that our many initiatives have had to boost our per caps with our tenants.

Sean Gamble: That said, again, we've been working on initiatives like mobile platforms where you can order ahead, delivery to your seat, things of that sort that allow people to avoid the lines, and thus, by doing that, it makes it easier for people who are buying in theaters to have shorter lines. So hopefully, we'll see that all those things will continue to sustain as we go forward, and we have fuller theaters with more volume in the marketplace, but we'll have to see.

Speaker Change: That said again, we've been working on initiatives like the most.

Speaker Change: Mobile platforms, where you can order ahead delivery to seat things of that sort that.

Speaker Change: Allow people to avoid the lines and thus by doing that it makes it makes it easier for people who are buying in theaters to have lower line. So hopefully we'll see that all those things will continue to sustain as we go forward and we have fuller theatres with more volume in the marketplace, but.

Speaker Change: But we'll have to see but obviously, we're very we're very pleased by the impact that our many initiatives and had to boost our per caps with our tenants and we got a lot more of those that we're working on to sustain that type of growth going forward.

Sean Gamble: But obviously, we're very pleased by the impact that our many initiatives have had on our per capita income and our attendance, and we have a lot more of those that we're working on to sustain that type of growth going forward. Thanks. Thanks Mike. I appreciate it.

Sean Gamble: And we got a lot more of those that we're working on to sustain that type of growth going forward.

Mike Hickey: Thanks, guys. Thanks, Mike.

Speaker Change: Thanks, guys.

Mike Hickey: Thanks, Mike appreciate it.

Mike Hickey: Appreciate it. Thank you.

Operator: Thank you. Our next questions come from the line of Eric Wold with B Reilly Securities. Please proceed with your questions.

Speaker Change: Thank you. Our next question is coming from the line of Eric Wold with B Riley Securities. Please proceed with your questions.

Eric Wold: Our next questions come from a line of Eric Wolt with B. Riley Securities. Please proceed with your questions.

Eric Wold: Thanks, good morning. It's a high-level question, Sean. I guess in the past couple of years, the whole issue around windows and days in theater that came about during the pandemic has essentially disappeared from discussions of the exhibition industry. But maybe just update us on kind of what you hear in general from studios about windows. Are they coming into kind of scheduling discussions with you with any kind of predetermined date that a film may go on a streaming platform?

Eric Wold: Thanks.

Speaker Change: Thanks.

Eric Wold: Good morning. I guess it's a high level question. Sean, I guess in the past couple of years, the whole issue around Windows. You know, days and theater that came about during the pandemic has essentially disappeared from discussions of the exhibition industry. But maybe just a status on kind of what you hear in general from studios recently around windows. Are they coming into kind of scheduling discussions with you with kind of any predetermined date that a film may go to a streaming platform that is completely flexible on that date. And when we'll start marketing streaming availability to subscribers, depending on how a film performs and how do you think that could or could not change as the slate becomes more robust and 25 beyond.

Speaker Change: I guess so.

Sean: A high level question, Sean I guess in the past couple of years.

Speaker Change: The whole issue around windows.

Speaker Change: Your days in theater that came about during the pandemic has essentially disappeared from discussions of the exhibition industry, but maybe just update us on kind of what you hear in general from studios recently around Windows are becoming into kind of scheduling discussions with you with kind of any predetermined date.

Speaker Change: But a film May go to a streaming platform is completely flexible on that.

Eric Wold: Is it completely flexible on that date? And when will they start marketing streaming availability to subscribers, depending on how a film performs? And how do you think that could or could not change as the slate becomes more robust in 25 and beyond? Sure, great question.

Speaker Change: When we will start marketing streaming availability to subscribers, depending on how a film performs and how do you think that could go.

Speaker Change: It could not change.

Speaker Change: The slate becomes more robust and 25 P M.

Sean Gamble: Sure. Great question. Obviously, there was a lot of kind of public focus on that with all the experimentation that was going on during the pandemic. I would say it's probably less in the public eye now. It's an ongoing just conversation holistically amongst exhibitors amongst studios as we just continue to try to evaluate any impact that evolving windows might have on consumer behavior. I would say what we are right now is it's it. It's been a bit more stable, albeit stable with a dynamic component. Before, things were more rigid. Now it's a more flexible window, which I know we've commented on with you as a positive because, in many respects, it reduces some of the risk for certainly smaller and mid-tier films for the studios, giving them the opportunity to run a long window in success and get those titles into home faster and curtail losses if things just don't connect.

Sean Gamble: Sure. Great question. Obviously, there was a lot of public focus on that with all the experimentation that was going on during the pandemic, but I would say it's probably less in the public eye now.

Speaker Change: Sure Great question.

Speaker Change: Obviously, there was a lot of kind of public focus on that with all the experimentation that was going on during the pandemic I would say, it's probably less.

Sean Gamble: It's an ongoing conversation holistically amongst exhibitors and studios as we just continue to try to evaluate any impact that evolving windows might have on consumer behavior. I would say where we are right now is it's a long window of success to get those titles into the home faster and curtail losses if things just don't connect. Likewise, for us, when things aren't connecting, we're looking to put other things on our screen, so it kind of works both ways.

Speaker Change: Public I know it's.

Speaker Change: And ongoing just conversation it holistically.

Speaker Change: Amongst exhibitors amongst studios as we just continue to.

Speaker Change: To evaluate any impact that evolving windows might have on consumer behavior, I would say, what where we are right now.

Speaker Change: It's been a bit more stable, albeit stable with a dynamic component right before things were more rigid now it's a more flexible window, which I know we've commented we view us as a positive because in many respects.

Speaker Change: De risks it reduces some of the risks for certainly smaller and mid tier films for the studios, giving them the opportunity to run a long window and success and get those titles into home the home faster and curtail losses, if things just don't connect likewise for us when things aren't connecting we're looking.

Sean Gamble: Likewise for us, when things aren't connecting, we're looking to put other things onto our screens, so it kind of works both ways. Generally, what we're finding is things are still kind of coalescing around 45 days for those more compelling films, you know, films that's kind of a, in some respects, starting point for those larger, more compelling films. Some of the smaller films are ranging, you know, they're kind of screwing a little, but it largely is depending on size, scale and ultimate performance in terms of how that's playing through. Thus far, again we're still all evaluating; are we seeing any kind of impact on movie going?

Speaker Change: To put other things onto our screens. So it kind of works both ways generally what we're finding is things are still kind of coalescing.

Sean Gamble: Generally, what we're finding is things are still kind of coalescing around 45 days for those more compelling films, so it's kind of a, in some respects, starting point for those larger, more compelling films. Some of the smaller films are ranging, they're kind of skewing a little, but it largely depends on size, scale, and ultimate performance in terms of how that's playing through. Thus far, again, we're still evaluating. Are we seeing any kind of impact on moviegoing?

Speaker Change: Around 45 days for those more compelling.

Speaker Change: Compelling films films, that's kind of the.

Speaker Change: In some respects starting point for those larger more compelling films. Some of the smaller films are ranging there kind of skewing a little but it largely is depending on size scale and ultimate performance in terms of how that's playing through thus far again, we're still evaluating are we seeing any kind of <unk>.

Sean Gamble: I mean, thus far, we're not seeing that having a major effect on people's decisions to go to the movies and kind of where we've landed at this point in time, which is probably why there hasn't been as much discussion on it, but it's something that we all continue to watch carefully as we're just trying to figure out what's the sweet spot and optimal point for the studios to maximize their financial gains on their films, as well as for us in the exhibitor side, for us to be able to maximize our opportunity as well.

Speaker Change: Impact on moving volumes, thus far we're not seeing that having a major effect on people's decisions to go to the movies and kind of where we've landed at this point in time, which is probably why there hasnt been as much discussion on it but it's something that we all continue to watch carefully as we're just trying to figure out what's the.

Sean Gamble: I mean thus far, we're not seeing that having a major effect on people's decisions to go to the movies and kind of where we've landed at this point in time, which is probably why there hasn't been as much discussion on it. But it's something that we all continue to watch carefully as we're just trying to figure out what's the sweet spot and optimal point for the studios to maximize, you know, their financial gains on their films, as well as for us in the exhibitor's side, for us to be able to maximize our opportunities as well.

Speaker Change: Sweet spot an optimal point for the studios to maximize.

Speaker Change: Their financial gains on their films as well as for us in the exhibitor side for us to be able to maximize our opportunity as well.

Sean Gamble: Perfect.

Speaker Change: Perfect. Thank you.

Eric Wold: Thank you. Thanks.

Speaker Change: Thanks.

Operator: Thank you. Our next questions come from the line of Robert Fishman with Moffitt & Nathanson. Please proceed with your questions.

Robert Fishman: Thank you. Our next questions come from the line of Robert Fisherman with Moffat-Nathanson. Please proceed with your questions.

Speaker Change: Thank you our next questions come from the line of Robert Fishman with Moffett Nathanson. Please proceed with your questions.

Robert Fishman: Hi, good morning, everyone.

Robert Fishman: Hi, good morning, everyone. One for Sean and then one from Melissa Vajcan. So Sean, given your strong financial position, can you just update us on your appetite for acquisitions both in the U.S.? and internationally?

Robert Fishman: Good morning, everyone. One for Sean and then one for Melissa, if I can.

Robert Fishman: One for John and then one for Melissa I can Sean.

Sean Gamble: So, Sean, given your strong financial position, can you just update us on your appetite for acquisitions, both in the US and internationally? And do you even have a preference in terms of larger portfolios versus smaller tuck-ins if they both meet your return on investment criteria? And, maybe, on a related note, any thoughts you can share about Sony's acquisition of Alamo, taking it from the other side? Sure.

Robert Fishman: Given your strong financial position can you just update us on your appetite for acquisitions, both in the U S and internationally and do you even have a preference in terms of larger portfolios versus smaller tuck ins if they both meet your return on investment criteria and just maybe on a related note.

Sean Gamble: And do you even have a preference in terms of larger portfolios versus smaller tuck-ins if they both meet your return on investment criteria, and just maybe on a related note? Any thoughts you can share about Sony's acquisition of Alamo, taking it from the other side? Sure. Well, yeah, I mean, look, as we have talked about optimizing our circuit and evolving, our footprint, which includes growing and recalibrating and strengthening our circuit, that M&A is certainly a piece of that equation. So the appetite for M&A is certainly there. I would say, as we've indicated in the past, our focus is generally on high quality assets that we believe can deliver solid assured returns over time.

Speaker Change: Thoughts you can share about the tonys acquisition of Alamo, taking it from the other side.

Sean Gamble: Sure. Well, yeah, I mean, look, as we have talked about optimizing our circuit and evolving our footprint, which includes growing, recalibrating, and strengthening our circuit, M&A is certainly a piece of that equation. So, the appetite for M&A is certainly there, and I would say, as we've indicated in the past, you know, our focus is generally on high-quality assets that we believe can deliver solid, assured returns over time. As I've also mentioned, we don't just pursue growth for growth's sake. We really are targeting accretive investments that don't strain our balance sheet.

Speaker Change: Sure.

Speaker Change: Well, yes, I mean look as we.

Speaker Change: Have.

Speaker Change: <unk> talked about.

Speaker Change: Optimizing our circuit and evolving our evolving our footprint, which includes growing and recalibrating and strengthening our circuit M&A is certainly a piece of that equation. So the appetite for M&A is certainly there and I would say as we've indicated.

Speaker Change: In the past.

Speaker Change: Our focus is generally on high quality assets that we believe have can deliver solid assured returns over time.

Sean Gamble: As I've also mentioned, we don't just pursue growth for growth's sake. We really are targeting a creative investment that doesn't strain our balance sheet. We've had great success following that approach in the past. And we believe it's the right approach as we move forward. So we keep a close view on what's out there in the marketplace. There hasn't, you know, I would say we look across the industry. The M&A activity has been fairly limited. You know, there have been a handful of assets that have come to the market. None of those, I would say, met our strategic or investment thresholds, but we continue to keep a close watch on what's out there.

Speaker Change: As I've also mentioned like we don't just pursue growth for growth's sake, and we really are targeting accretive investments that don't screen our balance sheet. We've had great success following that approach in the past and we believe it's the right approach as we move forward.

Sean Gamble: We've had great success following that approach in the past, and we believe it's the right approach as we move forward. So, we keep a close eye on what's out there in the marketplace. There hasn't, you know, I would say that when we look across the industry, the M&A activity has been fairly limited. You know, there have been a handful of assets that have come to the market. None of those, I would say, met our strategic or investment thresholds, but we continue to keep a close watch on what's out there.

Speaker Change: So we keep a close view on what's out there in the marketplace. There hasn't you know I would say there.

Speaker Change: When we look across the industry. The M&A activity has been fairly limited you know there have been a handful of assets that have come to the market. None of those I would say met our strategic or investment thresholds, but we'll continue to keep a close watch on whats out there in terms of smaller opportunities versus larger opportunities.

Sean Gamble: In terms of smaller opportunities versus larger opportunities, it really would just depend. You know, I would say clearly it all comes back to the quality assets, the assurance of being able to deliver the returns that we're looking for, and then have a fit in with our circuit. I'd say, directionally, we tend to favor going a bit deeper in the markets we're in versus just going broader. And when I say markets, I'm talking more like, you know, U.S., Latin America. But again, we keep a close eye. We evaluate everything that's out there as we're thinking about the best way to move our circuit forward.

Sean Gamble: In terms of smaller opportunities versus larger opportunities, it really would just depend. You know, I would say clearly, it all comes back to quality assets, the assurance of being able to deliver the returns that we're looking for, and then how they fit in with our circuit. I'd say, directionally, we tend to favor going a bit deeper in the markets we're in versus just going broader. And when I say markets, I'm talking more like, you know, the U.S., and Latin America.

Speaker Change: Really would just depends you know I'd say it clearly it all comes back to the quality assets.

Speaker Change: The assurance of being able to deliver the returns that we're looking for and then how they fit in with with our circuit.

Speaker Change: Say directionally, we tend to favor going a bit deeper in the markets. We're in versus just going broader and when I say markets I'm talking more like U S.

Speaker Change: Latin America.

Speaker Change: But again, we keep a close eye we evaluate.

Sean Gamble: But, again, we keep a close eye. We evaluate everything that's out there as we think about the best way to move our circuit forward, and we're going to continue to do that. Oh, I'm sorry.

Speaker Change: Everything that's out there.

Speaker Change: Thinking about the best way to move our circuit Board and we're going to continue to do that.

Sean Gamble: And we're going to continue to do that.

Sean Gamble: on Alamo? Oh, I'm sorry. And then a second question on Alamo. Yeah, I mean, it's an interesting acquisition by Sony. We know from what Sony has commented on in their earnings last quarter, even based on their mid-range plan. We know that they've talked about looking for ways to further monetize their IP, their film IP, their gaming IP, and looking at experiential types of opportunities to do that. So this clearly fits that category.

Sean Gamble: And then, second question on Alamo. Yeah, I mean, it's an interesting acquisition by Sony. You know, from what Sony commented on in their earnings last quarter, even based on their mid-range plan, we know that they've talked about looking for ways to further monetize their IP, their film IP, their gaming IP, and looking at experiential types of opportunities to do that. So this clearly fits that category.

Speaker Change: Oh, I'm, sorry, and then second question on.

Speaker Change: On Alamo, Yes, I mean, that's it's an interesting acquisition.

Speaker Change: By Sony we know from.

Speaker Change: The what Sony has commented on.

Speaker Change: In there their earnings last quarter, even based on their midrange plan here, we know that they've talked about looking for ways to further monetize their IP their films either gaming IP and looking at experiential types of opportunities to do that so this clearly fits that category.

Speaker Change: Laurie.

Sean Gamble: We know Sony has been a big supporter of the theatrical experience for a long, long time, and certainly this transaction is a demonstration of that, the fact that they are actually physically purchasing a circuit and entering into this space themselves. I think that's just underscores their feelings of the future of theatrical exhibitions. So we look at that as a positive. But beyond that, I mean, I think, again, we see this as a plus in terms of their view on the marketplace, and I think we'll probably learn more as they continue to talk about their future plans.

Sean Gamble: We know, you know, Sony has been a big supporter of the theatrical experience for a long, long time. And certainly, this transaction is a demonstration of that, the fact that they are actually physically purchasing a circuit and entering into this space themselves. I think that just, you know, underscores their feelings about the future of theatrical exhibitions. So we look at that as positive. But beyond that, I mean, I think, again, we see this as a plus in terms of their view of the marketplace. And I think we'll probably learn more as they continue to talk about their future plans.

Speaker Change: Sony has been a big supporter of the theatrical experience for a long long time.

Laurie: Certainly this this transaction is a demonstration of that the fact that they are actually physically purchasing.

Speaker Change: Purchasing a circuit and entering into this space themselves I think that's just a.

Laurie: Underscores their feelings of the future of theatrical exhibition. So we look at that as a positive but beyond that I mean, I think again, we see this as a plus.

Speaker Change: In terms of their view on the marketplace and.

Speaker Change: I think we'll probably learn more as they continue to talk about their future plans.

Sean Gamble: Okay, and if I can just squeeze one quickly from Melissa, just coming back to the margin conversation, I've been a lot to talk about that, but just in terms of the sustainability outside of from the cost side, outside of the salaries with which she talked about, are there any other big lessons learned that you can share with us that, you know, given these slower box office periods, give you the confidence in terms of the sustainability of cost efficiencies going forward as box office ramps up? Sure, so as we think about the sustainability of cost efficiencies, I mean, one of our largest variable costs is salaries and wages.

Speaker Change: Okay, and if I can just squeeze one quickly for Melissa just coming back to the margin conversation than a lot of talk about that but just in terms of the sustainability outside of from the cost side outside of the salaries. Once you talked about are there any other big lessons learned.

Melissa Thomas: And if I can just squeeze one quickly for Melissa, just coming back to the margin conversation, been a lot of talk about that, but just in terms of the sustainability, outside of, from the cost side, outside of the salaries, which you talked about, are there any other big lessons learned that you can share with us that, you know, given these slower box office periods that give you the confidence in terms of the sustainability of cost efficiencies going forward as box office ramps up?

Speaker Change: That you can share with us given the.

Speaker Change: These slower box office periods that that gives you the confidence in terms of the sustainability of cost efficiencies going forward and as box office ramps up.

Speaker Change: Sure. So as we think about the sustainability of cost efficiencies are or one of our largest variable cost is salaries and wages. So that has been the area, where I would say we've gained most of our productivity and we talked about that side.

Melissa Thomas: Sure. So as we think about the sustainability of cost efficiencies, I mean, one of our largest variable costs is salaries and wages. So that has been the area where I would say we've gained most of our productivity, and we talked about that side. As we scale, as the box office scales, I think the other couple of things that I would keep in mind from an expense and margin standpoint are that over the past couple of quarters, given the mix of films and concentration of box office, our film rental rates have been lower than they historically have been.

Melissa Thomas: So that has been the area where I would say we've gained most of our productivity, and we talked about that side. As we scale, as a box office scale, I think the other just a couple things that I would keep in mind from an expense and margin standpoint is over the past couple of quarters are given the mix of films and concentration of box office, our film rental rates have been lower than they historically have been. So we would expect as that overall mix and concentration starts to change, you know, in the second half of the year and beyond that film rental rates would normalize.

Speaker Change: As we scale at the box office scale I think the other just a couple of things that I would keep in mind from an expense and margin standpoint is over the past couple of quarters or given the mix of films and concentration of box office, our film rental rates have been.

Speaker Change: <unk> lower than they historically have been so we would expect as that overall mix and concentration starts to change and second half of the year and beyond that film rental rates would normalize the other thing I would just call out is on the facility lease expense side, particularly.

Melissa Thomas: So we would expect as that overall mix and concentration starts to change, you know, in the second half of the year and beyond, that film rental rates would normalize. The other thing I would just call out is on the facility lease expense side, particularly on the international side, that is more variable in nature, given it is tied to box office generated. So that we would expect to scale as the box office scales. And there've been other efficiencies that we've learned within utilities and elsewhere as well. But I would say the biggest drivers would be theater labor, the learnings that we've gained there, and then just some of the other costs will naturally increase as a result of the box office.

Melissa Thomas: The other thing I would just call out is on the facility, lease expense side, particularly an international that is more variable in nature, given it's tied to box office generated. So that we would expect to scale as the box office scales, and there have been, you know, other efficiencies that we've learned within utilities and other as well. But I would say the biggest drivers would be theater labor, the learnings that we've gained there, and then just some of the other costs will naturally increase as a result of the box.

Speaker Change: In international that is more variable in nature given it.

Speaker Change: Tied to box office generated so that we would expect to scale as the box office scales and there have been.

Speaker Change: Other efficiencies that we've learned within utilities and other.

Speaker Change: Well, but I would say the biggest drivers would be theater labor. The learnings that we've gained there and then just some of the other costs will naturally increase as a result of the box office scaling.

Robert Fishman: Thank you all. Thank you, Robert.

Speaker Change: Great. Thank you all thanks Robert.

Operator: Great. Thank you all.

Speaker Change: Thank you our next questions come from the line of Stephen Lazar check with Goldman Sachs. Please proceed with your question.

Robert Fishman: Thank you.

Operator: Thank you. Our next questions come from the line of Stephen Laszczyk with Goldman Sachs. Please proceed with your question.

Stephen Laszczyk: Our next questions come from the line of Stephen Laszczyk with Goldman Sachs. Please proceed with your questions.

Stephen Laszczyk: Hey, great, thanks for taking the questions. Maybe first, Sean, you mentioned the strategy to exit underperforming theaters. I think you've done 70 or so to date. I'd just be curious how much more opportunity there is to close less productive theaters, and then maybe how you think about the benefits financially, perhaps on the long-term margin side from that recalibration.

Speaker Change: Hey, great. Thanks for taking the questions maybe first Sean you mentioned the strategy to exit underperforming theaters I think you've done seven years or so to date I would just be curious on how much more opportunity. You think there is to close less productive theaters and then maybe how you think about the benefit financially, perhaps some long term margin side from that Recalibration.

Stephen Laszczyk: A great thanks for taking the questions. Maybe first, Sean, you mentioned the strategy to exit under performing theaters. I think you've done 70 or so to date.

Sean Gamble: I would just be curious on how much more opportunity you think there is to close list productive theaters, and then maybe how you think about the benefits financially perhaps on the long term margin side from that re-galleration. Sure, I'm sorry. Could you repeat the last part? I got the question on what we think going forward on closing any. Here the last piece? Just the financial benefit of that strategy and the potential long-term margin benefit. Gotcha. Thanks. Yeah, I think as far as closing theaters goes, there was a bigger amount of titles that were affected more recently as we've exited the pandemic.

Sean Gamble: Sure, I'm sorry, could you repeat the last part? I got the question on what we think going forward on closing. I didn't hear the last piece.

Sean: Sure I'm, sorry could you repeat the last part I got the question on what we think going forward on closing I didn't hear the last piece.

Stephen Laszczyk: Just the financial benefit of that strategy and the potential long-term margin benefit.

Speaker Change: The financial benefit of that strategy and the potential long term margin benefit got you got you. Thanks.

Sean Gamble: Gotcha, gotcha, thanks. Yeah, I think as far as closing theaters goes, there was a bigger amount of titles that were affected more recently as we've exited the pandemic. The majority of those were theaters that were at the end of their lease life, so they were a bit older and, I would say, more on the cusp financially. So, on the whole, those have yielded positive bottom-line benefits to our organization by exiting those theaters.

Speaker Change: Yes, I think as far as closing theaters goes there was a bigger.

Speaker Change: Mount of titles that were affected more recently as we've exited the pandemic now the majority of those were theaters that were at the end of their lease life. So there were a bit older and I would say more on the cusp financially. So on the whole those have yielded positive bottomline bench.

Sean Gamble: Now the majority of those were theaters that were at the end of their lease life, so they were a bit older, and I would say more on the cusp financially. So, on the whole, those have yielded positive bottom-line benefits to our organization by exiting those theaters. I think as we look forward, we're getting more into that normal state of operation where historically we've been in that case. We might close a few theaters a year, and then we would open a few theaters in a year. Generally, it's repurposing older theaters with newer theaters that have just run their course.

Speaker Change: <unk> to our organization.

Speaker Change: Bye bye exiting those theaters I think as we look forward.

Sean Gamble: I think as we look forward... We're getting more into that normal state of operation where, historically, we've been in that case. We might close a few theaters a year, and then we would open a few more in a year. And generally, it's repurposing older theaters with newer theaters that have just run their course. So I expect we will continue to have a certain number of closures each year, which is just part of the norm of the business.

Sean: We're getting more into that normal state of operation, where historically, we've been in that case, we may close a few theaters a year and then we would open a few theaters in our year end generally it's it's repurposing older theaters with newer theaters that have just run their course, so I expect we will continue to have.

Sean Gamble: So I expect we will continue to have a certain number of closures just each year, which is just part of the norm of the business. But I'm the same token to talk about earlier, we've reactivated both our new build pipeline. We'll see what comes from a potential M&A perspective as we go forward, but we expect that we'll be adding new theaters in as well. In all cases, as we pursue these type of activities to your question on future margin impact, we're looking at circumstances that enhance our margins and benefit our margins. It's rare. I can't even think of a situation where we're closing a theater that actually has a negative margin impact. Generally, when that's happening, it's happening for a reason and it's to the positive.

Speaker Change: Certain number of closures just each year, which is just part of the norm of the business, but at the same token I just talked about earlier, we've reactivated both our Newbuild pipeline, we'll see what comes from potential M&A perspective, as we go forward, but we expect that we'll be adding new theatres and as well net net in all cases as we pursue these.

Sean Gamble: But on the same token, as we talked about earlier, we've reactivated both our new build pipeline. We'll see what comes from a potential M&A perspective as we go forward, but we expect that we'll be adding new theaters as well. Net-net, in all cases, as we pursue these types of activities to answer your question on future margin impact, we're looking at circumstances that enhance our margins and benefit our margins. It's rare. I can't even think of a situation where we're closing a theater that actually has a negative margin impact. Generally, when that's happening, it's happening for a reason, and it's for the positive.

Speaker Change: Type of activities to your question on future margin impact, we're looking at circumstances that enhance our margins and benefit our margins. It's rare items can think of I can't even think of a situation, where we're closing a theater that actually has a negative margin impact generally when that's happening.

Speaker Change: Turning for a reason and it's to the positive.

Stephen Laszczyk: Great. Thanks for that. And then, maybe, one for Melissa.

Melissa: Great. Thanks for that and then maybe one for Melissa on the international side Theres been some continued volatility on the inflationary front and some of your markets could you talk a little bit more about the operating environment at the moment and then maybe looking ahead are there any aspects of that environment that you see easing or.

Sean Gamble: Great. Thanks for that.

Melissa Thomas: And then maybe one for Melissa on the international side, there's been some continued volatility on the inflationary front in some of your markets. Could you talk a little bit more about the operating environment at the moment and then maybe looking ahead, are there any aspects of that environment that you see easy or become more difficult over the next couple of quarters. Thank you.

Melissa Thomas: On the international side, there's been some continued volatility on the inflationary front in some of your markets. Could you talk a little bit more about the operating environment at the moment and, maybe, looking ahead, are there any aspects of that environment that you see easing or becoming more difficult over the next couple of quarters? Thank you.

Melissa: Becoming more difficult over the next couple of quarters. Thank you.

Melissa Thomas: Thanks for the question, Stephen. On the international side, we do continue to see volatility in Argentina. So, Argentina continues to contend with FX devaluation, and you're seeing that in our numbers year over year. Argentina is also a highly inflationary environment. So inflation has been providing some offset to the FX devaluation that we're seeing in the country. Now, one of the dynamics that you saw in Q2, when you look at our average ticket price and per cap, we did have promotional activity within the quarter, particularly in the softer box office months of April and May, which led, essentially, our prices to increase at a rate that was slower than the rate of inflation.

Melissa Thomas: Thanks for the question, Steven. So, on the international side, we do continue to see volatility in Argentina. So Argentina continues to contend with FX devaluation, and you're seeing that in our numbers year over year. Now Argentina is also a highly inflationary environment. So inflation has been providing some offset to the FX devaluation that we're seeing in the country. Now, one of the dynamics that we saw in Q2, when you look at our average ticket price and per cap, we did have promotional activity within the quarter, particularly in the softer box office months of April and May, which led essentially our prices to increase at a rate that was slower than the rate of inflation.

Melissa: Thanks for the question Stephen So on the international side, we do continue to see volatility and Argentina.

Speaker Change: Argentina continues to contend with FX devaluation and Youre seeing that.

Melissa: Our numbers year over year now Argentina is also a highly inflationary environment. So inflation has been providing some offset to the FX devaluation that we're seeing in the country now what are the dynamics that you saw in Q2, when you look at our.

Speaker Change: Our average ticket price and per cap.

Speaker Change: Did have promotional activity within the quarter, particularly in the softer box office months of April and May, which led essentially our prices to.

Speaker Change: Increase at a rate that was slower than the rate of inflation. So we did see some pressure in the quarter and international related to that.

Melissa Thomas: So we did see some pressure in the quarter and international related to that. It continues to be a dynamic situation, but again, we have teams on the ground who are highly experienced at navigating the economic landscape in our country.

Melissa Thomas: So, we did see some pressure in the quarter in international markets related to that. It continues to be a dynamic situation, but, again, we have teams on the ground who are highly experienced at navigating the economic landscape in Argentina. I would just add, we've been really pleased.

Speaker Change: Continues to be a dynamic situation, but again, we have teams on the ground who are highly experienced at navigating the economic landscape in Argentina.

Sean Gamble: Tina.

Sean Gamble: I would just add that we've been really pleased with the performance of our Latin American circuit on the whole. I mean, in the midst of the environment that Melissa was just describing, which we know has been somewhat fluid from an economic and political standpoint, the results have been really strong. I mean, again, last year, our overall EBITDA in Latin America was higher than 2019. And in the case of Argentina, which is probably in an extreme situation right now, attendance last year was higher than 2019. So even in the midst of a really challenging environment, we are facing some pressures on what we may be able to do from a pricing standpoint or otherwise just to contend with this market.

Sean Gamble: I would just add we've been really pleased with the performance of our Latin American circuit on the whole. I mean in the midst of the environment that Melissa was just describing, which we know has been somewhat fluid from an economic and political standpoint, the results have been really strong. I mean, again, last year our overall EBITDA in Latin America was higher than 2019, and in the case of Argentina, which is probably the extreme situation right now. Attendance last year was higher than 2019. So even in the midst of a really challenging environment, and we are facing some pressures on what we may be able to do from a pricing standpoint.

Speaker Change: I would just add we've been really pleased with the performance of our Latin American circuit on the whole I mean.

Speaker Change: In the midst of.

Melissa: The environment that Melissa was just describing which we know has been.

Speaker Change: Somewhat fluid from a economic and political standpoint, the results have been really strong I mean again last year. Our overall EBITDA in Latin America was higher than 2019 and in the case of Argentina, which is probably the extreme situation right now.

Speaker Change: Attendance last year was higher than 2019, so even in the midst of a really challenging environment and we are facing some pressures on what we may be able to do from a pricing standpoint, and otherwise just to contend with this market and as Melissa said, we have teams that are very well adept at dealing with that we still see great. Examples.

Sean Gamble: Otherwise, just to contend with this market, and as Melissa, we have teams that are very well adapted dealing with that. We still see great examples of performance in the marketplace here as a result of just our teams; our teams' impact. These are strong movie-going cultures. Again, on the whole, Latin America has actually recovered further than the US at this stage. So, for a while during the pandemic, that lagged due to availability of vaccines, that's changed. Again we look at that as a testament to how strong movie going is in these marketplaces and also to a certain degree how content has resonated.

Melissa Thomas: And as Melissa said, we have teams that are very well adept at dealing with that. We still see great examples of performance in the marketplace here as a result of just our team's impact. These are strong, movie-going cultures. Again, on the whole, Latin America has actually recovered further than the U.S. at this stage. So for a while during the pandemic, that lagged due to the availability of vaccines. But that's changed. And we look at that as a testament to how strong moviegoing is in these marketplaces and also, to a certain degree, how content has resonated. The content that's been released thus far has resonated in those markets. We may face a little bit of pressure on that in the second half, but on the whole, we're really pleased with how Latin America has performed.

Speaker Change: Performance.

Melissa: In the marketplace here as a result of.

Melissa: Of just our teams our teams impact these are strong moviegoing cultures.

Melissa: Again on the whole Latin America has actually recovered further than the U S. At this stage so for a while during the pandemic that lagged due to availability of vaccines. That's changed again, we look at that as a testament to how strong moviegoing is in these marketplaces and also to a certain degree of how content is resonated the content.

Sean Gamble: The content that's been released thus far has resonated in those markets.

Melissa: It's been released thus far is resonating in those markets, we may face a little bit of pressure on that in the second half, but on the whole. We're really pleased with how Latin America has performed.

Sean Gamble: We may face a little bit of pressure on that in the second half, but on the whole we're really pleased with how Latin America has performed.

Stephen Laszczyk: Great. Thank you both.

Speaker Change: Great. Thank you both.

Operator: Thank you.

Speaker Change: Thank you.

Melissa: Thank you we have reached the end of our question and answer session I would now like to turn the floor back over to Sean Gamble for any closing remarks.

Operator: We have reached the end of our question and answer session.

Sean Gamble: Thank you. We have reached the end of our question and answer session. I would now like to turn the floor back over to Sean Gamble for any closing remarks.

Sean Gamble: I would now like to turn the floor back over to Sean Gamble for any closing remarks. Thank you very much. In closing, I'd just like to reiterate once again our enthusiasm about the future of our industry and cinema. Consumer interest in theatrical experiences, as we have discussed, remains robust. The key indicators we continue to see related to a continued recovery of wide release volume are positive, and we continue to believe that cinema is exceptionally well positioned to prosper as we move forward.

Sean Gamble: Thank you very much. In closing, I'd just like to reiterate once again our enthusiasm about the future of our industry and Cinemark. Consumer interest in theatrical experiences, as we have discussed, remains robust. The key indicators we continue to see related to a continued recovery of wide release volume are positive, and we continue to believe that Cinemark is exceptionally well positioned to prosper as we move forward. We appreciate all of you joining us this morning, and we look forward to speaking with you again following our third quarter results. Have a great day.

Sean Gamble: Thank you very much in closing I'd, just like to reiterate once again, our enthusiasm about the future of our industry and cinemark consumer interest in theatrical experiences as we have discussed remains robust. The key indicators. We continue to see related to a continued recovery of wide release volume are positive and we continue.

Speaker Change: We believe that cinemark is exceptionally well positioned to prosper as we move forward. We appreciate all of you joining us this morning, and we look forward to speaking with you again following our third quarter results have a great day.

Operator: Thank you. This does conclude today's teleconference. We appreciate your participation. You may disconnect your lines at this time. Enjoy the rest of your day.

Sean Gamble: We appreciate all of you joining us this morning, and we look forward to speaking with you again following our third quarter results. Have a great day.

Speaker Change: Yeah.

Operator: Thank you.

Operator: This does conclude today's teleconference. We appreciate your participation. You may disconnect your lines at this time. Enjoy the rest of your day. Thank you very much.

Speaker Change: Thank you. This does conclude today's teleconference. We appreciate your participation you may disconnect. Your lines at this time and enjoy the rest of your day.

Speaker Change: Okay.

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