Segments

3 Months Ended

Mar. 31, 2019

16.

Segments

The Company manages its international market and its U.S. market as separate reportable operating segments, with the international segment consisting of operations in Brazil, Argentina, Chile, Colombia, Peru, Ecuador, Honduras, El Salvador, Nicaragua, Costa Rica, Panama, Guatemala, Bolivia, Curacao and Paraguay. Each segment’s revenue is derived from admissions and concession sales and other ancillary revenues. The Company uses Adjusted EBITDA, as shown in the reconciliation table below, as the primary measure of segment profit and loss to evaluate performance and allocate its resources. The Company does not report total assets by segment because that information is not used to evaluate the performance of or allocate resources between segments.

Below is a breakdown of selected financial information by reportable operating segment:

	Three Months Ended
	March 31,
	2019			2018
Revenues
U.S.	$	557,798		$	599,645
International		159,907			183,628
Eliminations		(2,982	)		(3,302	)
Total revenues	$	714,723		$	779,971

Adjusted EBITDA
U.S.	$	125,759		$	155,844
International		26,495			37,586
Total Adjusted EBITDA	$	152,254		$	193,430

Capital expenditures
U.S.	$	52,339		$	69,971
International		5,230			10,192
Total capital expenditures	$	57,569		$	80,163

The following table sets forth a reconciliation of net income to Adjusted EBITDA:

	Three Months Ended
	March 31,
	2019			2018
Net income	$	33,193		$	62,177
Add (deduct):
Income taxes		11,917			25,097
Interest expense ^{(1) (2)}		25,141			27,115
Other income ⁽³⁾		(8,335	)		(7,273	)
Loss on debt amendments and refinancing		—			1,484
Other cash distributions from equity investees ⁽⁴⁾		14,342			12,323
Depreciation and amortization ⁽²⁾		64,462			64,395
Impairment of long-lived assets		5,584			591
Loss on disposal of assets and other		3,799			3,939
Non-cash rent expense ⁽⁵⁾		(819	)		—
Deferred lease expenses ⁽²⁾		—			(483	)
Amortization of long-term prepaid rents ⁽²⁾		—			639
Share based awards compensation expense		2,970			3,426
Adjusted EBITDA ⁽²⁾	$	152,254		$	193,430

(1)

Includes amortization of debt issue costs.

(2)

Amounts for the three months ended March 31, 2019 were impacted by the adoption of ASC Topic 842 and the resulting change in the classification of certain of the Company’s leases.

(3)

Includes interest income, foreign currency exchange gain, equity in income of affiliates and interest expense - NCM and excludes distributions from NCM.

(4)

Includes cash distributions received from equity investees that were recorded as a reduction of the respective investment balances (see Notes 8 and 9). These distributions are reported entirely within the U.S. operating segment.

(5)

The adoption of ASC Topic 842 impacted how the Company amortizes lease related assets and liabilities such as deferred lease expenses, favorable and unfavorable lease intangible assets, long-term prepaid rents and deferred lease incentives. Beginning January 1, 2019, these items are amortized to facility lease expense for theatre operating leases and utilities and other for equipment operating leases. See Note 3 for discussion of the impact of ASC Topic 842.

Financial Information About Geographic Areas

Below is a breakdown of selected financial information by geographic area:

	Three Months Ended
	March 31,
Revenues	2019			2018
U.S.	$	557,798		$	599,645
Brazil		70,861			80,136
Other international countries		89,046			103,492
Eliminations		(2,982	)		(3,302	)
Total	$	714,723		$	779,971

	As of		As of
Theatre Properties and Equipment-net	March 31, 2019		December 31, 2018
U.S.	$	1,434,000	$	1,479,603
Brazil		122,911		140,570
Other international countries		167,542		212,960
Total	$	1,724,453	$	1,833,133

⁽¹⁾ See Note 3 for discussion of impact of ASC Topic 842 on capital lease assets.