Not a dumb question at all. Technically, you can have declining earnings or negative earnings forever as long as you have positive cash flow. In reality it's difficult to implement that because costs can only go down so much, so if revenue starts to decline then eventually the company will be cash flow negative. But it's the cash flow, not earnings, that tells the ability to pay and sustain dividends. More specifically, cash flow from operations (not investing) and adjusted free cash flow. Companies don't have an obligation to pay dividends to common shares, so if after the dividends the company still have free cash flow, then it's a reasonable sign that it's sustainable, as it not only covers the outflow, but also shows that the company has cash left for investments and acquisitions. Hence the importance of a strong balance sheet and being well managed, and Cineplex got that. Given its cyclical nature, the strong cash flow allows them to continue rising dividends even when earnings / revenue aren't that great.