Good day and thank you for standing by. Welcome to Cinemark’s Third Quarter Earnings Call. [Operator Instructions] I would now like to hand the conference over to your speaker today, Chanda Brashears, Senior Vice President of Investor Relations. Thank you. Please go ahead.

Thank you, Stephanie and good morning everyone. At this time, I would like to welcome you to Cinemark Holdings, Inc.’s third quarter 2021 earnings release conference call, hosted by Mark Zoradi, Chief Executive Officer and Board Director as well as Sean Gamble, President and Chief Financial Officer. In accordance with the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995, certain matters that are addressed by members of management during this call may constitute forward-looking statements. Such statements are subject to risks, uncertainties and other factors that may cause Cinemark’s actual performance to be materially different from the performance indicated or implied by such statements. Such risk factors are set forth in the company’s SEC filings. The company undertakes no obligation to publicly update or revise any forward-looking statements. Today’s call and webcast may include non-GAAP financial measures. A reconciliation of these non-GAAP measures to the most directly comparable GAAP financial measures can be found in today’s press release, within the company’s quarterly filing on Form 10-Q or on the company’s website, investors.cinemark.com. I would now like to turn the call over to Mark Zoradi.

Thank you, Chanda and good morning everyone. We appreciate you joining us to discuss our 2021 third quarter results. I am very pleased to start off by saying that our industry and our company continue to make significant progress in recovering from the effects of the pandemic. We are highly encouraged by the continuing positive trends with increasing consumer demand for the cinematic theatrical experience and growing momentum at the box office. This favorable progress was demonstrated in our third quarter’s 61% growth in worldwide attendance since last quarter in 2Q ‘21. Importantly, that growth in attendance flowed through to our bottom line results in the third quarter, which included positive adjusted EBITDA of $44 million. Our 3Q results marked a significant milestone for Cinemark as it represents our first quarter since the pandemic began with positive total company adjusted EBITDA. Furthermore, every month in 3Q delivered positive EBITDA, which tangibly underscores our company’s resurgence. Strength in the domestic box office was a key driver of our third quarter performance as the North America industry delivered $1.4 billion of gross proceeds on a larger volume of more sizable commercial releases. Top hits in the quarter included Shang-Chi and the Legend of the Ten Rings, Black Widow, Jungle Cruise, Free Guy, Space Jam and the carryover from 2Q’s highly successful release of Fast & Furious 9. And consistent with last quarter, I am thrilled to report that Cinemark once again over-indexed the North America industry box office performance relative to 3Q ‘19 with a substantial outperformance of 700 basis points. This outperformance helped us capture an approximate 15% market share of North America box office, which significantly exceeded our historic average of just under 13%. Our 15% market share achievement is particularly meaningful this quarter as the vast majority of theaters…

Good morning, everyone and thank you Mark for your kind words. You have been a tremendous leader for our company and our industry over the past 6.5 years. And to say you will be missed from our day-to-day operations is clearly an understatement. We all wish you the very best in your next chapter and we are thankful that we’ll have the opportunity to maintain a continued working relationship with you through your ongoing seat in our Board of Directors. On a related note, 3 weeks ago, we announced Melissa Thomas will be joining Cinemark as our next CFO. Melissa was most recently the CFO for Groupon and has a strong and impressive leadership and financial background. We believe she will be a great cultural fit for Cinemark and an excellent complement to our leadership team and finance organization. Melissa will officially start this coming Monday, November 8 and we look forward to formally introducing her in the near future. As Mark already highlighted, the resurgence of theatrical movie going is in full swing and Cinemark delivered another quarter of meaningful financial improvement. During 3Q, our average monthly cash burn reduced to approximately $11 million after normalizing for working capital timing. This rate was in line with the expectation of a $10 million to $15 million monthly cash burn that we communicated on our last earnings call. As of today’s current operating environment, we have now flipped to modestly positive average monthly cash flow and we expect this rate will continue to improve as our industry further rebounds. At the end of the third quarter, we had a global cash balance of $543 million. As of October 31, that balance had increased to approximately $595 million, driven by the strong box office results of Venom: Let There Be Carnage; No…

[Operator Instructions] Our first question comes from the line of Alexia Quadrani with JPMorgan.

Hi. Thank you very much and congratulations, Mark. Best of luck. I have just a couple of questions. The first one is on the commentary you gave about the recovery that seems to be kind of broad-based across both Latin America and in the U.S. But if you sort of drill into the Latin America recovery and look at sort of where they are versus the U.S., can you give us a perspective in terms of if we’re in the seventh inning, they might be in the fourth? I’m just trying to get a sense of relatively how much behind – doesn’t sound like too much, how much behind your LatAm operations are versus the U.S. recovery?

Thank you, Alexia. Well, I like your baseball analogy, but I think I’ll go to more of a number of days and months, if I could. We’ve been very encouraged with the amount of vaccination progress that’s taking place in Latin America just over the last 90 days. I mean, basically now in Argentina and Brazil and in Chile and others of our key territories down there, the rate of vaccination as a percentage of total population is very similar to the U.S. It’s caught up quite significantly in the last 90 days. That said, the business overall is still somewhere between 60 to 120 days behind the U.S. in regards to recovery. So as you – I’m sure noted, the EBITDA in Latin America was just slightly negative this quarter and – but it made a significant improvement from the quarter behind that. So to answer your question specifically, I’d say, somewhere between 60 and 120 days behind the U.S., but very much on a trend that we’re positive about.

Perfect. And then just a quick follow-up, if I may. On the film slate and production delays that we’ve seen, at least with some of the studios like Marvel which pushed out some of the film. In 2022, obviously, you have the backlog of all the delays from ‘21. So it looks like an amazing slate. Is there any reason to be concerned though that if you look further out because things are getting delayed with staff shortages or difficulties sort of getting things done on time, if it comes a bigger issue down the road? Or do you think we have enough time to kind of sort that out given the slight near-term is so thoughtful?

Again, that’s a very interesting question. Sean and I had the opportunity to go out just 2 weeks ago and visit with every one of our content providers in Los Angeles. And they are extremely positive about the ‘22 slate as am I. I’ve been looking at this business for 40 years now, and the ‘22 slate might be as good a slate as any that I can remember over this time. And also, as we look to ‘23, they are all active in putting together release schedules. And so I mean, really from the smallest studio all the way up to the most prolific studio, everybody is working on their ‘23 content. There is not a specific lineup at this point that we’re ready to share with you, but it’s starting to come together, and we see it as very positive as well.

The other thing I would add too is, some of the labor shortages that are going on within the retail sector and other industries, at least we’re not aware of that affecting the movie production cycle at this point in time. So nor does it appear that the current state of the pandemic is having a material effect on that at this point. Production is largely back into full swing.

Yes. Actually, on that too, Sean, just – there was a threat of a labor stoppage, and they were all very, very pleased that, that didn’t take place. So it looks like we’re in good shape.

Good to hear. Okay, thank you.

Thanks, Alexia.

Your next question comes from the line of Eric Handler with MKM Partners.

Good morning and thank you for the question. Two questions for you. First one being, October, U.S. or domestic revenue for the box office was down 20%. But given the market share gains that you’ve seen, given the cost efficiencies that you’re producing, I am curious how close are you to getting back to 2019 profitability or margin levels?

Well, Eric, are you referring to 20% relative to 2019?

In 2019.

In 2019. Got it.

Yes.

Got it. Well, we’re certainly improving on that trajectory. As we indicated in the prepared remarks, we have flipped currently to positive cash flow generation. And you heard how our cash had increased from the end of the third quarter in October already on account of the improvements in box office and just the overall state of movie going, one stat that we didn’t provide, but may give you some directional sense. Our overall occupancy levels for the third quarter were about 13%. In all of 2019, the full year in pre-pandemic terms, our occupancy was about 19%. So we’re continuing to notch closer to that. Obviously, profitability is affected both by that as well as the extent of operating hours, which are still about 25% below what they were in 2019. So there still is a ways to go, but we’re definitely moving in a positive direction. We flipped to positive EBITDA in the third quarter. We expect that to continue to grow and improve as we move forward. Getting all the way back to 2019, obviously, that’s still is dependent on the ongoing improvement in the pandemic and just some of these other evolutionary factors that continue to take place within our industry. But things like our improved market share and some of the other revenue-generating opportunities we’re pursuing, I think those have a good ability to get us close to where we were previously, and if not better over time.

Got it, thank you. And looking at your concession per cap numbers, which continue to climb quite nicely, I’m curious how much of that is a function of volume versus pricing?

Eric, we have not pushed pricing in a real significant way. And in fact, when we first came back online fully, we did welcome back pricing, and we’ve now brought pricing back up to approximately – not the whole way, but approximately, 2019. So we still have an ability, if we so choose, to push pricing a little bit. Most of it has been in terms of increased volume and increased spending on a per cap basis. And I think Sean’s prepared remarks pointed also that since we have a little bit less operating hours, we focus that operating hours more on time frames where people are buying greater and greater amount of concessions.

Great. Thank you very much.

Thanks, Eric.

Your next question comes from Meghan Durkin with Credit Suisse.

Hi, good morning, guys. Can you give us a little more color on your market share gains? Maybe some of the markets where you are outperforming on attendance, what you think is driving that? And maybe who the share could be coming from? And then on the laser projectors, do you have any idea or detail on how many of theaters have this type of amenity and how you expect it to impact your share overtime? It should be a pretty interesting amenity if others don’t have that type of upgrade in their auditorium. So I’m just looking for any color you can give there?

Meghan, I’ll take the first part of your question and Sean will take the second. Regarding market share, this is something that we have focused a tremendous amount of effort on because we just knew that how important it was. In a pre-pandemic world, our market share was approximately 12.75%. And we have been operating of recent in the 15% market share basis, and that’s with all the other theaters opened – in Canada opened up. So that’s a meaningful increase to go from 12.75% to 15%. We focused tremendously on our marketing efforts in order to help achieve that. And you asked about some specific markets. Dallas has been – Dallas and Houston have been very important in that mix. San Francisco, Sacramento, Salt Lake City, these are cities and DMAs in which we have very high penetration, Cleveland, Ohio. And we think that it’s a combination of a lot of things. The marketing effort is one. Two is the way that we’ve approached our customer service from an operational standpoint. Movie Club is another one. Movie Club has been tremendously important, our food and beverage initiatives along with that. So, market share is a combination of all the various elements of our business, film and our ability to get not only the big blockbusters, but also the smaller mid-sized movies that can actually perform very significantly. And so it’s been a combination of things. We feel like the market share growth has been substantial. And as I noted, it’s gone from about 12.75% to 15%.

And with regard to your question on laser projectors, immediately preceding the pandemic actually, we announced a 10-year exclusive agreement with Cinionic to rollout their Barco laser projectors over a 10-year timeframe. And as you pointed out, Meghan, not only do those projectors help to elevate the movie going experience and take our already fantastic cinematic experience to new levels, they also provide meaningful productivity benefits in terms of improved operating expenditures with regard to warranties and maintenance and electricity in parts. Right now, we’ve installed – about 7% of our screens have laser projectors, including the entire DFW marketplace. We have not yet started to heavily promote that in those locations, but that is part of our marketing intent as we move forward. It’s just another premium amenity in the collective of our theaters that we have to help both differentiate ourselves from other forms of both in-home and out-of-home entertainment as well as competition in the marketplace. So we’re really excited about this additional amenity in addition to our reclining seats and our enhanced food and just varied other aspects of the movie going experience that we built into our theaters and the potential it has for future attendance.

And are you actually pricing those rooms at a premium to the other rooms that have not been upgraded?

We have not. We have not. It’s almost akin to – we have not yet, I should say. It’s akin to when we did recliners. When we go into a theater, we’re generally putting lasers in the entire theater, and then that gives us an ability to market the entirety of that theater in the marketplace. So with that and that further differentiation, it will give us pricing power overtime, but it’s not something like a recliner which we might increase the price immediately. It’s something that just helps to – help us with the market share aspect of the first part of your question.

Great. Thanks, guys.

Thanks, Meghan. Appreciate it.

Thank you.

Your next question comes from Steven Cahall with Wells Fargo.

Thanks. Good morning, Maybe first one for me. It looks like the box office maybe for the next year or so is going to be pretty heavily skewed to some really big tentpoles, probably more premium format experiences. So how do you think about the financial trends in the business, if we do start to just see the box office really skew to those big releases?

Well, first, Steven, we’d like to welcome you to the – to our investor group and...

Thanks. Great to be here.

Glad to have your question. For a long time, there is been some area of question regarding concentration of large tentpole movies. I don’t think ‘22 is going to be anything that’s overly different than what we’ve seen in previous years. That’s been going on for quite some time. Our business is clearly driven by the big out-of-home cinematic experience kind of movies, and ‘22 is charter block with that. And listing them out would almost take too long because there is so many of them. But that does not mean if the more mid-range and smaller, independent, specialized movies are necessarily not going to have an opportunity to perform as well. So we’re very, very happy to have those big blockbuster films. We think our circuit is really well positioned for that because of the concentration that we have with the number of XD auditoriums in which we get a $3 upcharge, not only in the United States, but also throughout Latin America. So we’re very well positioned for those, and I don’t think it’s going to be an overly large share that’s going to be detrimental to our business.

Great. And then you talked about the decline in film rents versus where you were in 2019. You talked about being out in L.A. just recently. So as you’re talking to the studios, I know there is a very dynamic discussion going on around windowing. Are you seeing any abatement in the way they are perceiving future rents as the industry kind of makes this transition?

Steven, it’s interesting. The way in which we’re continuing to pay film rental really has not adapted and changed, it’s a scale basis. So the higher the box office, the larger on the scale it is. There is been no significant renegotiation of those scales. So on the one hand, you don’t like to pay a higher film rental. On the other hand, it’s really, really good news when you do because that means that you have a giant box office smash hit. And you pay the higher film rental and you get food and beverage along the way. So, no big change in the way that the deals are being done. It’s on a scale basis. Higher the box office, the higher scale one pays.

The only thing I would add to that, Steven, is which we’ve said in the past, we had previously communicated that we’ve received economic consideration, commensurate with the degree of window modification and subsequent release structure that has taken place. In addition to scale, some largely remained in place, but we have received that type of economic consideration, and we continue to expect similarly align considerations with regard to any future changes in structures that take place going forward.

And I think probably one other key point there is, Sean and I had these discussions, we’re pretty darn confident that we’re going to see exclusive theatrical windows on the vast majority of the releases coming next year, whether that’s a 45-day window or a 30-day window. But that’s an extremely important confirmation that we got across the board with all of our major content suppliers.

Yes. And then maybe just last one for me. You talked about the financing options available to you. Also said you have ample liquidity. So capital markets are pretty healthy right now. Do you have an interest in raising any capital? Or is that just to note that if things take a turn for the worst, you’ve got lots of options.

It’s more of the latter. To the extent – take it to for the rest or opportunities, new opportunities present themselves that we think are strategic to the long-term for our organization. Right now, we’re more focused on de-leverage as well as investing in building the company. If anything, our more near-term focus will be on trying to refinance some of the more recent debt we’ve taken on at higher terms in order to have some savings within there going forward.

Thank you.

Thanks, Steven. Appreciate the questions.

Your next question is from Robert Fishman with MoffettNathanson.

Good morning. A couple of big picture questions for you guys. Mark, you have had a front row seat to lots of changes in the movie industry on both sides of the table with your career at Disney and now Cinemark. What have been the biggest surprises that jump to mind either in general or specifically related to the relationship between the studios and exhibitors? And then Sean, with your own experience at Universal, now leading Cinemark going forward, how do you expect to shape the future of Cinemark and the exhibition industry, including working with the studios on windowing strategies and maybe other aspects of the relationship like leveraging your loyalty program or Movie Club data?

Robert, thank you. Those are interesting questions. Let me start and I will let Sean take the bigger picture going forward. As you have noted, I have been doing this a long time, and I have seen the windows change dramatically over the years. And one thing that was always a concern to exhibition was as windows decrease, our box office go into decline. That hasn’t really happened. That hasn’t turned out to be the case. Windows used to be, as you know, six months, and then there were five months and four months. And now it’s looking more like 45 days. And at least what we have experienced thus far in ‘21, a 45-day window is likely going to be long enough for us to be able to get the vast majority of the theatrical box office potential. So, that’s been, let’s call it, a pleasant surprise. And you never know that until you actually experiment and do it. And I don’t think that necessarily would have happened as quickly as it did if there hadn’t been the pandemic to kind of really shake things up and cause people to not be willing to leave their home for a period of time. So, I think that’s been actually a positive change, and it’s shown the studios that the theatrical business is very, very important to help launch these big franchise movies. And so that’s probably been the single biggest thing. As I look back over the course of it, too, I think this is just a confirmation and that is that people very much want to get out of their house and experience a movie in a big darkened environment with a group of people and be completely concentrated on it. So, the theatrical movie going experience has been going on for 100-plus years through every piece of technology, many of which I had an opportunity to be involved with. Some before me, going back to television and then I jumped into this business in the VHS and beta business, didn’t decline DVD, didn’t decline cable nor streaming. We still have an extremely vibrant business. Theatrical is the locomotive that brings the movie up to the top and then everything else is able to benefit from that theatrical experience.

And Robert, to your question as far as my thoughts on shaping the future of Cinemark, I mean, first – clearly, first and foremost, is fully getting beyond the pandemic and back to more of a dedicated focus on pure execution and evolution and growth of movie going and our business and back to our industry leading results. We have clearly been focusing within that regard on what is the next – what are the next key initiatives to enhance the movie going experience, continue to make that a premium offer that consumers seek out. Along with that, building audiences through marketing and additional types of experiential opportunities and then generating more incremental revenue. As far as collaborating with the studios, the way – and the windows evolution, I guess the way I look at it is, we have been working on that for quite some time. Even before the pandemic, we were having proactive conversations that we initiated about a more flexible window, and obviously, as Mark said, that has accelerated throughout the pandemic. We are going to continue to work actively with the studios on that to try to figure out the best collective solution. The way we look at it is trying to be collaborative partners. Our goal is to work with the studios to grow the pie and be supportive partners. And I know I firmly believe that much like theatrical has always done, it provides a phenomenal way to eventize and elevate content, brand content, differentiated content, which is going to continue to be highly important as these content providers aim to promote their films, promote their streaming platforms and be more in the cultural discussion. So, I think that theatrical will continue to play a meaningful part in that equation. From a marketing standpoint, we have been using Movie Club actively with the studios as a way to help increase the frequency of movie going. I think that – I don’t see any reason why that will change post pandemic. In fact, I think that will continue to grow and build, and we have continued to – as Mark mentioned in his prepared remarks, we continued to enhance the sophistication of our digital and social marketing capabilities in tandem with the studios, which provides for a more targeted way of attracting consumers to our theaters and to movie going. And it all just intertwines back with that concept of helping them be supportive of promoting their content and having a win-win for both sides.

Alright. Thank you both. And Mark, wish you all the best.

Thank you, Robert

Thanks, Rob. Appreciate it.

Your next question comes from Jim Goss with Barrington Research.

Thanks. You mentioned earlier about the gaming initiatives, and I was wondering if this is the moment in the sun for alternative content considerations. And if you plan to do this primarily through sales and are there other things involved such as maybe negotiating sports rights, so you can do sporting events in theaters also?

Jim, it’s a very timely question, thank you. As you know, we made an announcement earlier this – actually, late last week regarding gaming. And we have been experimenting with a variety of gaming initiatives, both from a spectator standpoint and also from a participatory standpoint. We are going to double down on that. We are going to create a unique department. We are going to put a senior level executive in charge of that department to help set up strategic partnerships, content, licensing agreements. We have done some very interesting tests. One of the more recent ones that we talked about was, we did a 25 city tests with critical role and Dungeons & Dragons to outstanding results. I mean there was a tremendous fan base that wanted to go and visit our theaters. We literally sold that out. We have also done testing with League of Legends, with competitions, with the game awards. From a participatory standpoint, we have had private gaming parties in our theaters now for months. We participated with Super League Gaming, which effectively puts one city against another city, and kids can play against each other in a gaming environment in our theaters. We have done a deal with Mission Control. We are clearly looking at e-sports and sporting events. This is on top of what we are doing with other alternative content suppliers like Fathom. It’s not in exchange of, it’s on top of. But we think there is tremendous opportunity to leverage our brick-and-mortar assets with both alternative content and gaming and e-sports.

Okay. And separately on the theater opening side, you have talked about outperforming the industry, but it spends on even opening. Are there any other additional larger markets that have yet to fully reopen that could push this a little further?

Are you referring to additional theaters that are going to open, Jim? I am sorry.

No. I mean, I know New York was lagging for a while, LA. Are there any areas where you might draw attention to where there might be some more impetus for outperformance?

No, I don’t think so. All the markets are now open across the board. So, what we look for everywhere is, we are always looking for, is there a spot to add a new theater in a marketplace that we are not in or that needs additional servicing. But at this point, we don’t anticipate any significant changes in our market share based only upon new market openings because everything is open at this point.

And I would add, it’s been open for multiple months at this point, too.

Canada is fully back up for a while. So, the Eastern Canada wasn’t open, but everybody is open now.

Okay. And then finally, congratulations Mark, one final time here and are there any things in your history you are most proud of you would like to draw some attention to in this panel?

That’s a very interesting question, Jim. So, I actually didn’t fully anticipate it. So, I will give you my thoughts in a candid way. Looking back over the past 6.5 years, I was very fortunate to walk into a really good company. So, the company was not broken in any way when I walked in, but maybe I had an opportunity to walk in with a renewed sense of urgency. But when you walk into a company that Lee Roy Mitchell and all the people that preceded me built, financially strong like we were, it made the job a lot simpler in some ways because we had a good company. But along the way, we developed Movie Club. It was the very first exhibitor subscription program that has been highly successful. We continue to talk about it. And then I think we have recognized early and our team recognized early that one of the most important amenities that consumers were asking for were reclining seats. And so we really doubled down on redoing our theaters, not just the seats, but also the way the snack bars looked and the way our theaters looked. And so we invested very heavily, as you know, in 2016, ‘17, ‘18 and ‘19 in order to grow the amount of recliner seats that we have had. And then I think I am also – I want to throw a nod to what’s happened internationally. We have had a very difficult macroeconomic environment down there, and our teams have not only survived, but have thrived through a very difficult timeframe. And we are well positioned to come out of the marketplace. And I guess maybe the final thing is just the team members that really supported the effort here because this is a big time team…

No. Great answer and best wishes.

Thank you.

Your next question is from Alan Gould with Loop Capital.

Thanks for taking the question. I have a few. First, just to follow-up on Jim’s question about alternative programming, do you guys have rights to either in market or out of market NFL games? Can you put that in your theaters, Sunday, Monday, Thursday night and can you expand a little on the wrestling rights that your – the potential wrestling rights?

The NFL games right now are not available for in-city showing. In other words, we are in Dallas. We are located here in Dallas and the NFL rights are to show games only outside of Dallas. I don’t think that’s proven to be highly successful. At such time that those might become available and we could get the rights in San Francisco to have the 49-ers or in Dallas-Fort Worth to have the Cowboys, then that could really become a big business. We are looking at college sports as well and whether or not in the future, we can get rights to the big local teams and local games. We think that’s the critical part. And relative to wrestling, look, we are just trying to experiment there and get big, high-profile wrestling events and then be able to charge a premium in our theaters. There is an active – very active fan base that wants to come together and enjoy the big time wrestling in our theaters. So, we have put our foot in the water, we have had success and we plan to continue that and expand that into ‘22.

Okay. And Sean, you accrued cash by $52 million in October. How much of that was from working capital versus just core operations?

It’s probably about half and half. I don’t have the number right in front of me, but a big chunk of that was all of the collections that we took in for the films that launched towards the end of the month. And then obviously, we will pay the film out over the subsequent month timeframe. So, just ballpark-ish, I would say, it’s probably about 50-50 in terms of the performance versus the working capital.

Okay. And Mark, one final windows question, when we listen to the studios talk, they keep talking about flexibility on all their conference calls. Clearly, the big films have to go to the theaters. Do you have any sense on whether the – how much the change will be in the number of wide releases we are getting from the studios?

Let’s look at Disney, for example, who has been the most prolific. I mean, when I was there, we cut the lineup from 20 theaters – 20 major pictures down to about 10 or 12, and they are continuing to do that today. Most of those tend to be the big, a wide release movies. Warner Bros. was making as many as 20 pictures. They have indicated that they are going to continue to make 10 to 12, which they would call as the big – high-profile tent-pole movies, and then maybe they are going to make 8 to 10 that are going to be more oriented, more for a television HBO Max release. So, I think it’s going to be a combination. The big movies will hold on to the longer windows. The smaller movies perhaps could have a shortened window with a lower film rental percentage. So, we think it’s going to continue to be a good mix along the way without a significant reduction in the biggest high-profile movies, which really drive the business.

And I would just add, while there have been some talks of some smaller films shifting to streaming platforms, interestingly, those same companies have also talked about content being made for the platforms, potentially being released theatrically when it has the right scale. I think we also feel there is the potential for some segments of types of films like romantic comedies, these mid-tier films that have been more challenged pre-pandemic because of the more rigid window that those may have a new life post pandemic with a more flexible window because they are more financially viable for the studios. And then as we have talked about on past calls, we are also – in addition to the alternative content discussion we have, we are also in conversations with new content providers like the Netflixes and Amazons of the world, which could also provide sources of content to fill whatever gaps we might have of smaller films from the traditional studio providers.

Interesting. Mark, I just want to add, it’s been a pleasure getting to know you. I have got one easy last question for you. Can you give us your final public non-blockbuster film pitch?

You talked for next year?

What’s out there right now?

What’s out there right now, that’s kind of like asking a parent to say, which one of their children they like the best. And that’s always a mistake, believe me. From a veteran parent and a grandparent at this point, you never do that. So, I am going to pass on that one because you can only make one person happy and a lot of people unhappy.

Okay. Thank you.

[Operator Instructions] Your next question is from Benjamin Swinburne with Morgan Stanley.

This is Daniel for Ben. With the current inflationary environment we have been seeing and the strong consumer, do you think this above-average cap spending is sustainable at some level? And you kind of touched on this already, but do you see you can raise ticket prices in ‘22 and beyond above your historical rates? Thank you.

Sure. Thanks for the question, Daniel. Our per caps, we have definitely been pleased, obviously, with the heightened per cap results. And like we said, a good portion of that we do believe we will continue to receive going forward on account of the promotions and initiatives we are pursuing, the new online platform we have. Although, perhaps a third or so might normalize, which is related more to that near-term heightened consumption as consumers come back as well as some of the benefit we are seeing just from selling more of the food and beverage in higher purchase windows. We have reduced our operating hours in some of the earlier times of day and weekday periods, and those tend to be periods that don’t drive as much per cap. So, we are getting a little bit of a mix lift on that. So majority, we believe we will continue to retain going forward and there will be a portion of that, which will normalize. As far as pricing going goes on, I believe it was ticket pricing. We certainly think that there will continue to be opportunities with regard to both our base ticket prices as well as our food and beverage prices. And we are also starting to pursue more a variety of new pricing tactics, and we think dynamic pricing will be something that will present an opportunity over time. At the moment, we are in the midst of a series of tests to ascertain how elasticities have evolved during the course of the pandemic, and how they are going to continue to evolve as we continue to emerge from it, which will help us to further optimize our base pricing levels. Those test results might suggest that we have the ability to take prices up or it may suggest that it makes more sense to lower prices in certain instances. All that being said I would say when it comes to pricing in general, we are going to continue to be careful with the pricing actions we have, certainly as we are aiming to re-stimulate movie going, because we want to make sure that we are not doing anything that could have an adverse consumer perception. We have got to look at it in light of all the inflation that’s happening in the marketplace, but we don’t want to give the impression that going to the movies is expensive. So, that approach has been really successful for us over time. We are going to be opportunistic with pricing, but we are going to continue to be careful.

That all makes sense. Thank you.

Thanks and I appreciate the questions.

At this time, there are no additional questions. I would like to turn it back over to management for closing remarks.

Thank you all very much for joining us this morning. Again, it has been an absolute pleasure getting to know so many of you. While there is many aspects that I have enjoyed being Cinemark’s CEO, working alongside the investment community has truly been one of the highlights. I appreciate your willingness to challenge us along the way and also support us along the way over these many, many years. Thank you all very much.

Thank you. This concludes today’s conference call. You may now disconnect.