Earnings Per Share

12 Months Ended

Dec. 31, 2021

EARNINGS PER SHARE

The following table presents computations of basic and diluted earnings per share under the two class method:


	Year Ended
	December 31,
	2019			2020			2021
Numerator:
Net income (loss) attributable to Cinemark Holdings, Inc.	$	191,386		$	(616,828	)	$	(422,783	)
(Earnings) loss allocated to participating share-based awards (1)		(1,174	)		4,279			6,058
Net income (loss) attributable to common stockholders	$	190,212		$	(612,549	)	$	(416,725	)

Denominator (shares in thousands):
Basic weighted average shares outstanding		116,306			116,667			117,250
Common equivalent shares for restricted stock units (2)		300			—			—
Common equivalent shares for convertible notes and warrants (3)		—			—			—
Diluted weighted average shares outstanding		116,606			116,667			117,250

Basic earnings (loss) per share attributable to common stockholders	$	1.63		$	(5.25	)	$	(3.55	)
Diluted earnings (loss) per share attributable to common stockholders	$	1.63		$	(5.25	)	$	(3.55	)

(1)

For the years ended December 31, 2019, 2020 and 2021, a weighted average of approximately 721 shares, 815 shares and 1,704 shares, of unvested restricted stock, respectively, are considered participating securities.

(2)

For the years ended December 31, 2020 and 2021, approximately 682 and 4 common equivalent shares for restricted stock units were excluded because they were anti-dilutive.

(3)

For the years ended December 31, 2020 and 2021, diluted loss per share excludes the conversion of the 4.500% Convertible Senior Notes into 32,051 shares of common stock, as well as outstanding warrants, as they would be anti-dilutive. See further discussion below.

The Company considers its unvested share-based payment awards, which contain non-forfeitable rights to dividends, participating securities, and includes such participating securities in its computation of loss per share pursuant to the two-class method. Basic loss per share for the two classes of stock (common stock and unvested restricted stock) is calculated by dividing net loss by the weighted average number of shares of common stock and unvested restricted stock outstanding during the reporting period. Diluted loss per share is calculated using the weighted average number of shares of common stock plus the potentially dilutive effect of common equivalent shares outstanding determined under both the two-class method and the treasury stock method.

The impact of the 4.500% Convertible Senior Notes on diluted loss per share is calculated under the if-converted method, which assumes conversion of the notes at the beginning of the period. The if-converted value of the 4.500% Convertible Senior Notes exceeded the aggregate outstanding principal value of the notes by $172,458. The closing price of the Company's common stock did not exceed the strike price of $18.65 per share (130% of the initial exercise price of $14.35 per share) during at least 20 of the last 30 trading days of the quarter ended December 31, 2021 and, therefore, the 4.500% Convertible Senior Notes will not be convertible during the first quarter of 2022.

As noted in Note 13, the Company entered into hedge transactions with, and sold warrants to, counterparties in connection with the issuance of the 4.500% Convertible Senior Notes. The hedge transactions are generally expected to reduce the potential dilution of any conversion of the 4.500% Convertible Senior Notes and/or offset any cash payments the Company is required to make in excess of the principal amount of converted 4.500% Convertible Senior Notes, as the case may be. The warrants could have a dilutive effect on earnings per share to the extent that the price of the Company’s common stock during a given measurement period exceeds the strike price (initially $22.08 per share).