CNK
#I can't speak to when AMC or Regal first spoke to Screening Room.
I know that we spoke to Screening Room very early in the process.
We analyzed it, we looked at it, had multiple conversations both in person and over the phone with these people.
As we analyzed it, it didn't seem to be a good economic decision for Cinemark to move forward and to support.
That is the way we went.
It wasn't a matter of not having a seat at the table.
In fact, I think we may have had one of the first seats at the table and did a very thoughtful analysis and chose to not proceed because we didn't think it was in the interest of our shareholders.
<UNK>, that is a very difficult question to answer in the way that is formatted because we're open to looking at any and all business proposals.
There's no categorical no way, but it is detailed, it is complicated, so I really cannot speak to it in a somewhat hypothetical situation like this.
Let me just say, we're not categorically opposed to any business proposition and we will look very carefully at any proposition that is put before us.
The only other thing I would add too, is we believe these are conversations best had between ourselves and our content providers.
So the concept of a third-party in the middle of that is something that was not favorable to us.
But as <UNK> said, these are conversations we actively have, we believe we'll actively have ongoing with our studio partners.
Pricing is something that we pay particular attention to.
Like we did in 2015, we will look for opportunities to increase price where we think we can do so without impacting attendance.
And again, we did that last year.
When we were approaching this year and looking at the perceived relative strength of the 2016 box office, it is something where we have that on the mind.
We have not so far taken significant price increases in any of our recliner theaters.
It is something that we are contemplating as we look at the demand for those theaters.
So there is some potential there.
We have not yet implemented any type of tax on top concept which some of our other peers have.
Is something we are evaluating, so there may be some opportunity there.
It is something we'll be very prudent about.
But again, our underlying philosophy domestically has been to ideally slightly trail inflation over the long haul, but look for momentary opportunities really driven by strength of content to boost prices or strength of demand in marketplace.
I guess I would say I think there are some pockets of opportunity, but we're just going to be careful as we go forward and do that because we don't want to impact attendance when all is said and done.
We remain bullish on our ability to continue to drive per caps in food and beverage.
We see it with the variety of offerings that we have.
We see it in the layout of our concession stands and modernizing those.
And we also see it as we continue to rollout recliners, we see increases in food and beverage consumption when the recliners are put in.
Part of that I think is reserved seating and it allows the customer to not be under any pressure to get a seat.
So all of those things I think are going to continue to help drive our food and beverage in the coming quarters and years.
That is correct on the local concession per cap in constant currency and the amount of the reclass was about $6 million from film rental and advertising to utilities and other.
It is about 2.5% of our overall film rental and advertising expense.
Really it is the math of foreign exchange and the profile.
Some of it's mix of countries, where the strength is driven.
But our overall benefit in ---+ I'm sorry.
You're talking per cap or overall concession.
Our per cap in constant currency was up about 11.4%.
Our raw concession revenues dollars were up about 30% in constant currency.
It is really predominately driven by screen add increase associated with attendance.
We also had the benefit of some events, promotional events that took place in the quarter connected to Star Wars and some faith-based opportunities.
So those were really the key drivers of other revenues.
What are you referring to.
Competitive changes.
I don't think there is anything material that is going to change there.
Yes, we have some overlap, but it is not that significant.
It is just a matter of having a competitor with Carmike and now we have a competitor that AMC has acquired.
I think what one of the biggest things that has changed in the last several years is the ability from the studios to provide forward-looking tent pole movies into not only the remainder of this year but there was a time when basically release schedules were 12 months out.
Now you have studios literally putting tent poles down 24, 36 and sometimes even 48 months out because they want to reserve the real estate for that particular release date.
I think that is probably the biggest change that has taken place as we look forward.
Clearly, those tent pole movies have become more and more important and in doing so, studios are spending more both on the production side and the ad pub side.
So it is important for them to put the flag in the ground and it is for us it is very advantageous because it allows better planning and we can be more transparent as we look forward of what our earnings potential are going to be.
Yes, because we have confidence in the product flow for not only 2016 and 2017, but we've got a pretty good look into 2018 and even 2019.
James Cameron, <UNK> Cameron, it was really quite interesting.
At Fox's presentation at CinemaCon, <UNK> Gianopulos pulled the classic oh, and one more thing and out walks <UNK> Cameron.
And <UNK> says, Avatar with two movies just wasn't enough and I have decided three.
Then he goes, and you know what.
We laid out the conference room and there is just too much material.
We're going to do four and he basically announced the next four Avatars.
That is incredibly important to us.
These are the types of things that we have experienced over time, both domestically and internationally.
I would say we would look to offset that with price over time where we could.
We would continue to look for ways to increase our productivity through more efficient operations where possible.
Generally, we like to think that overall increases in minimum wage also help us from a patronage point of view, because people have increased disposable income and they will use that to make additional visits to our theater.
So hopefully we would recapture some of that that way.
But those are the types of things we would aim to do.
Like any other cost pressure we might experience, we look to price and productivity as ways to offset it.
I will take the second one.
The first question was about concessions and can we add some more color to what made up the concession increase.
I'll do the second question first and let <UNK> do the first.
Relative to our desire to do acquisitions outside of the United States, our first priority is definitely Latin America because we have got such an established footprint throughout Latin America.
So going deeper within our existing territories would be priority number one.
That does not preclude us from looking at potential opportunities outside of Latin America, especially as it relates to Europe.
Relative to what has happened with tax inversion, that is really not a major consideration of ours.
First and foremost, what we would look at on any potential acquisitions outside of the US, let's just, wherever that might be, would be the quality of the circuit and the potential return on that particular investment.
We would not make an investment driven off of tax benefits.
I apologize.
On your first part of your question, was that particular to the drivers of our US concession per cap.
More about Latin America.
Really the drivers for our Latin America per caps are comparable to the US.
I'd say the bulk of the driver is just strength of volume.
A lot of that was connected to some promotional activities we had associated with some of the blockbuster releases in the marketplace.
Another big piece is inflation.
We continue ---+ in the case of concessions in the case of international, our general approach is to try to slightly exceed inflation.
It is a little bit of a different tactic than in the US, but our aim is to slightly exceed inflation.
We were able to do that internationally.
We've gotten better conversion with our per caps in volume based on the different initiatives we have talked about, whether it be more variety, promotions, strategic floor designs.
But then also a big component is inflation.
Probably about half of the increase is inflation that you are seeing in our concession per cap growth.
The answer to that is yes.
In particular, when movies open on opening weekend, Friday and Saturday nights, since we have effectively reduced capacity in many of these theaters by as much as 50%, yes, we do see sellouts on a particularly regular basis.
And that is why we will be considering and looking at price increases, especially for those high demand time periods once the recliners have been fully established in the marketplace.
We have both.
We have some IMAX in our circuit and of course, we have a significant dedication to XD.
We position XD as a full premium experience from both the visual perspective, to seating and the sound.
It is a full premium experience for us.
Thank you very much for joining us this morning.
We look forward to speaking with you all again following our second quarter.
Thanks everyone.
Bye.
