##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2010
 Commission File Number: 001-33401
 CINEMARK HOLDINGS, INC.
 (Exact name of registrant as specified in its charter)
 Delaware
    
    20-5490327(State or other jurisdiction 
of incorporation or organization)
    
    (I.R.S. Employer
Identification No.)3900 Dallas Parkway 
Suite 500
Plano, Texas
(Address of principal executive offices)
    
    75093
(Zip Code)
   þ o
  o o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
  o þ




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##### 



CINEMARK HOLDINGS, INC. AND SUBSIDIARIES
TABLE OF CONTENTS
 PagePART I. FINANCIAL INFORMATIONItem 1. Financial StatementsCondensed Consolidated Balance Sheets as of September 30, 2010
and December 31, 2009 (unaudited)
    
    
    4Condensed Consolidated Statements of Income for the three and
nine months ended September 30, 2010 and 2009 (unaudited)
    
    
    5Condensed Consolidated Statements of Cash Flows for the nine
months ended September 30, 2010 and 2009 (unaudited)
    
    
    6Notes to Condensed Consolidated Financial Statements (unaudited)
    
    
    7Item 2. Managements Discussion and Analysis of Financial Condition and
Results of Operations
    
    
    25Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    37Item 4. Controls and Procedures
    
    
    38PART II. OTHER INFORMATION`Item 1. Legal Proceedings
    
    
    39Item 1A. Risk Factors
    
    
    39Item 6. Exhibits
    
    
    40SIGNATURES
    
    
    41EX-31.1EX-31.2EX-32.1EX-32.2
  2




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##### Table of Contents



Cautionary Statement Regarding Forward-Looking Statements
  3




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 CINEMARK HOLDINGS, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data, unaudited)
 September 30,
    
    
    December 31,2010
    
    
    2009AssetsCurrent assetsCash and cash equivalents
    
    $
    430,467
    
    
    $
    437,936Inventories
    
    
    9,594
    
    
    
    9,854Accounts receivable
    
    
    38,807
    
    
    
    33,110Income tax receivable
    
    
    13,731
    
    
    
    13,025Current deferred tax asset
    
    
    3,344
    
    
    
    3,321Prepaid expenses and other
    
    
    11,013
    
    
    
    10,051Total current assets
    
    
    506,956
    
    
    
    507,297Theatre properties and equipment
    
    
    1,996,860
    
    
    
    1,936,535Less accumulated depreciation and amortization
    
    
    807,669
    
    
    
    716,947Theatre properties and equipment  net
    
    
    1,189,191
    
    
    
    1,219,588Other assetsGoodwill
    
    
    1,120,866
    
    
    
    1,116,302Intangible assets  net
    
    
    332,770
    
    
    
    342,998Investment in NCM
    
    
    65,638
    
    
    
    34,232Investment in DCIP
    
    
    9,875
    
    
    
    640Investment in Real D
    
    
    15,994
    
    
    
    Investments in and advances to affiliates
    
    
    2,918
    
    
    
    2,889Deferred charges and other assets  net
    
    
    68,103
    
    
    
    52,502Total other assets
    
    
    1,616,164
    
    
    
    1,549,563Total assets
    
    $
    3,312,311
    
    
    $
    3,276,448Liabilities and equityCurrent liabilitiesCurrent portion of long-term debt
    
    $
    10,836
    
    
    $
    12,227Current portion of capital lease obligations
    
    
    7,280
    
    
    
    7,340Current liability for uncertain tax positions
    
    
    2,528
    
    
    
    13,229Accounts payable and accrued expenses
    
    
    195,499
    
    
    
    248,036Total current liabilities
    
    
    216,143
    
    
    
    280,832Long-term liabilitiesLong-term debt, less current portion
    
    
    1,524,293
    
    
    
    1,531,478Capital lease obligations, less current portion
    
    
    129,991
    
    
    
    133,028Deferred tax liability
    
    
    111,704
    
    
    
    124,823Liability for uncertain tax positions
    
    
    17,322
    
    
    
    18,432Deferred lease expenses
    
    
    30,530
    
    
    
    27,698Deferred revenue  NCM
    
    
    231,393
    
    
    
    203,006Other long-term liabilities
    
    
    55,543
    
    
    
    42,523Total long-term liabilities
    
    
    2,100,776
    
    
    
    2,080,988Commitments and contingencies (see Note 21)EquityCinemark Holdings, Inc.s stockholders equity:Common stock, $0.001 par value: 300,000,000 shares authorized,
116,797,378 shares issued and 113,437,519 shares outstanding at September 30, 2010; and
114,222,523 shares issued and 110,917,105 shares outstanding at December 31, 2009
    
    
    117
    
    
    
    114Additional paid-in-capital
    
    
    1,031,673
    
    
    
    1,011,667Treasury stock, 3,359,859 and 3,305,418 shares, at cost, at September 30, 2010
and December 31, 2009, respectively
    
    
    (44,725
    )
    
    
    (43,895
    )Retained deficit
    
    
    (13,423
    )
    
    
    (60,595
    )Accumulated other comprehensive income (loss)
    
    
    9,752
    
    
    
    (7,459
    )Total Cinemark Holdings, Inc.s stockholders equity
    
    
    983,394
    
    
    
    899,832Noncontrolling interests
    
    
    11,998
    
    
    
    14,796Total equity
    
    
    995,392
    
    
    
    914,628Total liabilities and equity
    
    $
    3,312,311
    
    
    $
    3,276,448
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CINEMARK HOLDINGS, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, unaudited)
 Three months ended September 30,
    
    
    Nine months ended September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009RevenuesAdmissions
    
    $
    367,662
    
    
    $
    322,915
    
    
    $
    1,063,737
    
    
    $
    941,886Concession
    
    
    170,130
    
    
    
    152,938
    
    
    
    488,464
    
    
    
    441,895Other
    
    
    22,443
    
    
    
    20,972
    
    
    
    64,034
    
    
    
    56,352Total revenues
    
    
    560,235
    
    
    
    496,825
    
    
    
    1,616,235
    
    
    
    1,440,133Cost of operationsFilm rentals and advertising
    
    
    200,495
    
    
    
    175,993
    
    
    
    582,864
    
    
    
    513,945Concession supplies
    
    
    26,565
    
    
    
    23,485
    
    
    
    73,465
    
    
    
    67,229Salaries and wages
    
    
    56,823
    
    
    
    52,675
    
    
    
    165,615
    
    
    
    149,095Facility lease expense
    
    
    66,587
    
    
    
    61,545
    
    
    
    191,292
    
    
    
    176,478Utilities and other
    
    
    64,310
    
    
    
    61,341
    
    
    
    177,179
    
    
    
    164,237General and administrative expenses
    
    
    28,113
    
    
    
    23,517
    
    
    
    78,589
    
    
    
    68,980Depreciation and amortization
    
    
    34,805
    
    
    
    38,207
    
    
    
    103,395
    
    
    
    111,875Amortization of favorable/unfavorable leases
    
    
    179
    
    
    
    301
    
    
    
    595
    
    
    
    970Impairment of long-lived assets
    
    
    1,022
    
    
    
    3,146
    
    
    
    6,057
    
    
    
    8,115Loss on sale of assets and other
    
    
    7,548
    
    
    
    944
    
    
    
    11,906
    
    
    
    2,402Total cost of operations
    
    
    486,447
    
    
    
    441,154
    
    
    
    1,390,957
    
    
    
    1,263,326Operating income
    
    
    73,788
    
    
    
    55,671
    
    
    
    225,278
    
    
    
    176,807Other income (expense)Interest expense
    
    
    (28,938
    )
    
    
    (25,893
    )
    
    
    (83,553
    )
    
    
    (77,006
    )Interest income
    
    
    1,807
    
    
    
    1,036
    
    
    
    4,240
    
    
    
    3,805Foreign currency exchange gain
    
    
    682
    
    
    
    383
    
    
    
    762
    
    
    
    921Loss on early retirement of debt
    
    
    
    
    
    
    (1,083
    )
    
    
    
    
    
    
    (27,878
    )Distributions from NCM
    
    
    4,263
    
    
    
    4,162
    
    
    
    15,541
    
    
    
    15,768Equity in loss of affiliates
    
    
    (1,842
    )
    
    
    (35
    )
    
    
    (4,997
    )
    
    
    (1,055
    )Total other expense
    
    
    (24,028
    )
    
    
    (21,430
    )
    
    
    (68,007
    )
    
    
    (85,445
    )Income before income taxes
    
    
    49,760
    
    
    
    34,241
    
    
    
    157,271
    
    
    
    91,362Income taxes
    
    
    15,877
    
    
    
    12,186
    
    
    
    45,918
    
    
    
    31,149Net income
    
    $
    33,883
    
    
    $
    22,055
    
    
    $
    111,353
    
    
    $
    60,213Less: Net income attributable to noncontrolling
interests
    
    
    551
    
    
    
    1,044
    
    
    
    3,246
    
    
    
    2,967Net income attributable to Cinemark Holdings, Inc.
    
    $
    33,332
    
    
    $
    21,011
    
    
    $
    108,107
    
    
    $
    57,246Weighted average shares outstandingBasic
    
    
    112,179
    
    
    
    108,549
    
    
    
    111,317
    
    
    
    108,499Diluted
    
    
    112,516
    
    
    
    110,372
    
    
    
    111,764
    
    
    
    110,075Earnings per share attributable to Cinemark Holdings, Inc.s common
stockholdersBasic
    
    $
    0.29
    
    
    $
    0.19
    
    
    $
    0.96
    
    
    $
    0.52Diluted
    
    $
    0.29
    
    
    $
    0.19
    
    
    $
    0.96
    
    
    $
    0.52Dividends declared per common share
    
    $
    0.18
    
    
    $
    0.18
    
    
    $
    0.54
    
    
    $
    0.54
  5




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CINEMARK HOLDINGS, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands, unaudited)
 Nine months ended September 30,2010
    
    
    2009Operating activitiesNet income
    
    $
    111,353
    
    
    $
    60,213Adjustments to reconcile net income to cash provided by operating activities:Depreciation
    
    
    100,246
    
    
    
    108,782Amortization of intangible and other assets and unfavorable leases
    
    
    3,744
    
    
    
    4,063Amortization of long-term prepaid rents
    
    
    1,247
    
    
    
    1,074Amortization of debt issue costs
    
    
    3,533
    
    
    
    3,583Amortization of deferred revenues, deferred lease incentives and other
    
    
    (4,844
    )
    
    
    (3,479
    )Amortization of accumulated other comprehensive loss related to interest rate
swap agreement
    
    
    3,475
    
    
    
    3,475Amortization of bond discount
    
    
    578
    
    
    
    180Impairment of long-lived assets
    
    
    6,057
    
    
    
    8,115Share based awards compensation expense
    
    
    5,179
    
    
    
    3,419Loss on sale of assets and other
    
    
    9,873
    
    
    
    2,402Loss on contribution and sale of digital projection systems to DCIP
    
    
    2,033
    
    
    
    Write-off of unamortized debt issue costs related to early retirement of debt
    
    
    
    
    
    
    6,337Accretion of interest on senior discount notes
    
    
    
    
    
    
    8,085Deferred lease expenses
    
    
    2,776
    
    
    
    3,189Deferred income tax expenses
    
    
    (13,005
    )
    
    
    (13,694
    )Equity in loss of affiliates
    
    
    4,997
    
    
    
    1,055Interest paid on repurchased senior discount notes
    
    
    
    
    
    
    (158,349
    )Tax benefit related to stock option exercises
    
    
    1,904
    
    
    
    Increase in deferred revenue related to new U.S. beverage agreement
    
    
    
    
    
    
    6,550Distributions from equity investees
    
    
    3,292
    
    
    
    1,725Changes in assets and liabilities
    
    
    (88,563
    )
    
    
    (16,054
    )Net cash provided by operating activities
    
    
    153,875
    
    
    
    30,671Investing activitiesAdditions to theatre properties and equipment
    
    
    (88,256
    )
    
    
    (85,603
    )Proceeds from sale of theatre properties and equipment
    
    
    3,994
    
    
    
    721Acquisition of theatres in the U.S.
    
    
    
    
    
    
    (48,950
    )Acquisition of theatres in Brazil
    
    
    
    
    
    
    (9,061
    )Investment in joint venture  DCIP, net of cash distributions
    
    
    (1,510
    )
    
    
    (2,500
    )Net cash used for investing activities
    
    
    (85,772
    )
    
    
    (145,393
    )Financing activitiesProceeds from stock option exercises
    
    
    5,559
    
    
    
    372Payroll taxes paid as a result of noncash stock option exercises and restricted stock withholdings
    
    
    (416
    )
    
    
    Dividends paid to stockholders
    
    
    (60,671
    )
    
    
    (58,949
    )Repurchase of senior discount notes
    
    
    
    
    
    
    (261,054
    )Proceeds from issuance of senior notes
    
    
    
    
    
    
    458,532Payment of debt issue costs
    
    
    (8,849
    )
    
    
    (12,601
    )Repayments of long-term debt
    
    
    (9,144
    )
    
    
    (9,436
    )Payments on capital leases
    
    
    (5,422
    )
    
    
    (4,410
    )Other
    
    
    (387
    )
    
    
    (874
    )Net cash provided by (used for)
financing activities
    
    
    (79,330
    )
    
    
    111,580Effect of exchange rate changes on cash and cash equivalents
    
    
    3,758
    
    
    
    12,642Increase (decrease) in cash and cash equivalents
    
    
    (7,469
    )
    
    
    9,500Cash and cash equivalents:Beginning of period
    
    
    437,936
    
    
    
    349,603End of period
    
    $
    430,467
    
    
    $
    359,103
   6




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##### Table of Contents



1. The Company and Basis of Presentation
    2. New Accounting Pronouncements
 Consolidations (Topic 810)  Improvements to Financial
Reporting by Enterprises Involved with Variable Interest
Entities
 Fair Value Measurements and Disclosures:
Improving Disclosures about Fair Value Measurements Fair Value Measurements and Disclosures
 Accounting for Technical Amendments to
Various SEC Rules and Schedules
 Accounting for Various Topics Business Combination
 7




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##### Table of Contents



Consolidation
 3. Earnings Per Share
   Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Numerator:Net income attributable to Cinemark Holdings, Inc.
    
    $
    33,332
    
    
    $
    21,011
    
    
    $
    108,107
    
    
    $
    57,246Earnings allocated to participating share-based awards(1)
    
    
    (368
    )
    
    
    (142
    )
    
    
    (979
    )
    
    
    (318
    )Net income attributable to common stockholders
    
    $
    32,964
    
    
    $
    20,869
    
    
    $
    107,128
    
    
    $
    56,928Denominator(shares in thousands):Basic weighted average common stock outstanding
    
    
    112,179
    
    
    
    108,549
    
    
    
    111,317
    
    
    
    108,499Common equivalent shares for stock options
    
    
    182
    
    
    
    1,770
    
    
    
    236
    
    
    
    1,515Common equivalent shares for restricted stock units
    
    
    155
    
    
    
    53
    
    
    
    211
    
    
    
    61Diluted
    
    
    112,516
    
    
    
    110,372
    
    
    
    111,764
    
    
    
    110,075Basic earnings per share attributable to common stockholders
    
    $
    0.29
    
    
    $
    0.19
    
    
    $
    0.96
    
    
    $
    0.52Diluted earnings per share attributable to common stockholders
    
    $
    0.29
    
    
    $
    0.19
    
    
    $
    0.96
    
    
    $
    0.52
 
 (1)
    
    For the three months ended September 30, 2010 and 2009, a weighted average of
approximately 1,251 and 767 shares of unvested restricted stock, respectively, are considered
participating securities. For the nine months ended September 30, 2010 and 2009, a weighted
average of approximately 1,017 and 606 shares of unvested restricted stock, respectively, are
considered participating securities. 4. Buyout of Colombia Noncontrolling Interest
  8




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5. Equity
  CinemarkHoldings, Inc.Stockholders
    
    
    Noncontrolling
    
    
    TotalEquity

    
    
    Interests

    
    
    EquityBalance at January 1, 2010
    
    $
    899,832
    
    
    $
    14,796
    
    
    $
    914,628Colombia Share Exchange (see Note 4)
    
    
    5,865
    
    
    
    (5,865
    )
    
    
    Share based awards compensation expense
    
    
    5,179
    
    
    
    
    
    
    
    5,179Stock repurchases related to restricted stock that vested during the nine months ended September
30, 2010
    
    
    (299
    )
    
    
    
    
    
    
    (299
    )Exercise of stock options, net of stock withholdings
    
    
    5,442
    
    
    
    
    
    
    
    5,442Tax benefit related to stock option exercises
    
    
    1,904
    
    
    
    
    
    
    
    1,904Dividends paid to stockholders (1)
    
    
    (60,671
    )
    
    
    
    
    
    
    (60,671
    )Dividends accrued on unvested restricted stock unit awards (1)
    
    
    (264
    )
    
    
    
    
    
    
    (264
    )Dividends paid to noncontrolling interests
    
    
    
    
    
    
    (387
    )
    
    
    (387
    )Comprehensive income:Net income
    
    
    108,107
    
    
    
    3,246
    
    
    
    111,353Fair value adjustments on interest rate swap
agreements, net of taxes of $137
    
    
    (226
    )
    
    
    
    
    
    
    (226
    )Amortization of accumulated other comprehensive loss
on terminated swap agreement
    
    
    3,475
    
    
    
    
    
    
    
    3,475Fair value adjustments on available-for-sale securities
    
    
    1,356
    
    
    
    
    
    
    
    1,356Foreign currency translation adjustment
    
    
    13,694
    
    
    
    208
    
    
    
    13,902Balance at September 30, 2010
    
    
    983,394
    
    
    
    11,998
    
    
    
    995,392
 CinemarkHoldings, Inc.Stockholders
    
    
    Noncontrolling
    
    
    TotalEquity
    
    

    Interests
    
    

    EquityBalance at January 1, 2009
    
    $
    811,256
    
    
    $
    12,971
    
    
    $
    824,227Share based awards compensation expense
    
    
    3,419
    
    
    
    
    
    
    
    3,419Exercise of stock options
    
    
    372
    
    
    
    
    
    
    
    372Dividends paid to stockholders (2)
    
    
    (58,949
    )
    
    
    
    
    
    
    (58,949
    )Dividends accrued on unvested restricted stock unit awards (2)
    
    
    (142
    )
    
    
    
    
    
    
    (142
    )Dividends paid to noncontrolling interests
    
    
    
    
    
    
    (780
    )
    
    
    (780
    )Purchase of noncontrolling interest share of an Argentina subsidiary
    
    
    23
    
    
    
    (117
    )
    
    
    (94
    )Comprehensive income:Net income
    
    
    57,246
    
    
    
    2,967
    
    
    
    60,213Fair value adjustments on interest rate swap agreements,
net of taxes of $1,672
    
    
    2,762
    
    
    
    
    
    
    
    2,762Amortization of accumulated other comprehensive loss on terminated swap agreement
    
    
    3,475
    
    
    
    
    
    
    
    3,475Foreign currency translation adjustment
    
    
    47,148
    
    
    
    1,061
    
    
    
    48,209Balance at September 30, 2009
    
    $
    866,610
    
    
    $
    16,102
    
    
    $
    882,712
 
 (1)
    
    On February 25, 2010, the Companys board of directors declared a cash dividend
for the fourth quarter of 2009 in the amount of $0.18 per
share of common stock payable to stockholders of record on March 5, 2010. The dividend was paid
on March 19, 2010 in the total amount of approximately $20,046. On May 13, 2010, the Companys
board of directors declared a cash dividend for the first quarter of 2010 in the amount of $0.18
per share of common stock payable to stockholders of record on June 4, 2010. The dividend was
paid on June 18, 2010 in the total amount of approximately $20,209. On July 29, 2010, the
Companys board of directors declared a cash dividend for the second quarter of 2010 in the
amount of $0.18 per share of common stock payable to stockholders of record on August 17, 2010.
The dividend was paid on September 1, 2010 in the total amount of approximately $20,416.(2)
    
    On February 13, 2009, the Companys board of directors declared a cash dividend for
the fourth quarter of 2008 in the amount of $0.18 per share of common stock payable to
stockholders of record on March 5, 2009. The dividend was paid on March 20, 2009 in the total
amount of approximately $19,595. On May 13, 2009, the Companys board of directors declared a
cash dividend for the first quarter of 2009 in the amount of $0.18 per share of common stock
payable to stockholders of record on June 2, 2009. The dividend was paid on June 18, 2009 in
the total amount of approximately $19,674. On July 29, 2009, the Companys board of directors
declared a cash dividend for the second quarter of 2009 in the amount of $0.18 per share of
common stock payable to stockholders of record on August 17, 2009. The dividend was paid on
September 1, 2009 in the total amount of approximately $19,680. 9




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##### Table of Contents



6. Acquisition of U.S. Theatres
   Theatre properties and equipment
    
    $
    25,575Brandname
    
    
    3,500Noncompete agreement
    
    
    1,630Goodwill
    
    
    44,565Unfavorable lease
    
    
    (3,600
    )Capital lease liability (for one theatre)
    
    
    (22,720
    )Total
    
    $
    48,950
  7. Investment in National CineMedia
  Investment
    
    
    Deferred
    
    
    Distributions
    
    
    Equity
    
    
    Other
    
    
    Cashin NCM
    
    

    Revenue
    
    

    from NCM
    
    

    Earnings
    
    

    Revenue
    
    

    ReceivedBalance as of December 31, 2009
    
    $
    34,232
    
    
    $
    (203,006
    )Receipt of common units due to annual
common unit adjustment
    
    
    30,683
    
    
    
    (30,683
    )
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Change of interest gain due to 2010
extraordinary common unit adjustment
    
    
    271
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Revenues earned under exhibitor
services agreement
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,666
    )
    
    
    3,666Receipt of excess cash distributions
    
    
    (2,686
    )
    
    
    
    
    
    
    (12,474
    )
    
    
    
    
    
    
    
    
    
    
    15,160Receipt under tax receivable agreement
    
    
    (477
    )
    
    
    
    
    
    
    (3,067
    )
    
    
    
    
    
    
    
    
    
    
    3,544Equity in earnings
    
    
    3,615
    
    
    
    
    
    
    
    
    
    
    
    (3,615
    )
    
    
    
    
    
    
    Amortization of deferred revenue
    
    
    
    
    
    
    2,296
    
    
    
    
    
    
    
    
    
    
    
    (2,296
    )
    
    
    Balance as of and for the period
ended September 30, 2010
    
    $
    65,638
    
    
    $
    (231,393
    )
    
    $
    (15,541
    )
    
    $
    (3,615
    )
    
    $
    (5,962
    )
    
    $
    22,370
  10




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Three Months
    
    
    Nine MonthsEnded
    
    
    EndedSeptember 30, 2010
    
    
    September 30, 2010Gross revenues
    
    $
    125,717
    
    
    $
    309,373Operating income
    
    $
    67,081
    
    
    $
    136,791Net earnings
    
    $
    52,530
    
    
    $
    92,723
 8. Investment in Digital Cinema Implementation Partners
    11




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##### Table of Contents



Investment inDCIPBalance as of December 31, 2009
    
    $
    640Cash contributions to DCIP
    
    
    2,567Equipment contributions to DCIP, at fair value
    
    
    16,380Distributions received from DCIP
    
    
    (1,068
    )Equity in losses
    
    
    (8,644
    )Balance as of September 30, 2010
    
    $
    9,875
   9. Investment in Real D
    12




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##### Table of Contents



10. Treasury Stock and Share Based Awards
 Treasury Stock 
 Stock Options 
 Weighted AverageNumber of
    
    
    Weighted Average
    
    
    Grant Date Fair
    
    
    Aggregate IntrinsicOptions
    
    
    Exercise Price
    
    
    Value
    
    
    ValueOutstanding at December 31, 2009
    
    
    1,231,892
    
    
    $
    7.63
    
    
    $
    3.51Exercised
    
    
    (782,824
    )
    
    $
    7.63
    
    
    $
    3.51Outstanding at September 30, 2010
    
    
    449,068
    
    
    $
    7.63
    
    
    $
    3.51
    
    
    $
    3,804Options exercisable at September 30, 2010
    
    
    449,068
    
    
    $
    7.63
    
    
    $
    3.51
    
    
    $
    3,804
   Restricted Stock
 13




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##### Table of Contents



WeightedShares of
    
    
    AverageRestricted
    
    
    Grant DateStock
    
    
    Fair ValueOutstanding at December 31, 2009
    
    
    764,078
    
    
    $
    11.10Granted
    
    
    679,308
    
    
    $
    17.94Forfeited
    
    
    (2,719
    )
    
    $
    11.03Vested
    
    
    (189,885
    )
    
    $
    12.64Outstanding at September 30, 2010
    
    
    1,250,782
    
    
    $
    14.58Unvested restricted stock at
September 30, 2010
    
    
    1,250,782
    
    
    $
    14.58
  Restricted Stock Units
  Number ofShares
    
    
    Value atVesting
    
    
    Grantat IRR of at least 8.5%
    
    
    132,144
    
    
    $
    2,423at IRR of at least 10.5%
    
    
    264,288
    
    
    $
    4,847at IRR of at least 12.5%
    
    
    396,432
    
    
    $
    7,271
  14




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##### Table of Contents



11. Long-Term Debt Activity
 Senior Notes
 3 4
 Cash Tender Offer and Subsequent Call of Cinemark, Inc.s 9 3/4% Senior Discount Notes due 2014
 3 4 3 4 3 4
 Amendment and Extension of Senior Secured Credit Facility
  15




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##### Table of Contents



Fair Value of Long-Term Debt
  12. Interest Rate Swap Agreements
 .
 16




---



##### Table of Contents



2010
    
    
    2009Beginning liability balance   January 1
    
    $
    18,524
    
    
    $
    24,781Total (gain) loss included in accumulated other
comprehensive income (loss)
    
    
    363
    
    
    
    (4,434
    )Ending liability balance  September 30
    
    $
    18,887
    
    
    $
    20,347
  13. Goodwill and Other Intangible Assets
  U.S.
    
    
    InternationalOperating
    
    
    OperatingSegment
    
    
    Segment
    
    
    TotalBalance at December 31, 2009 (1)
    
    $
    948,026
    
    
    $
    168,276
    
    
    $
    1,116,302Foreign currency translation adjustments
    
    
    
    
    
    
    4,564
    
    
    
    4,564Balance at September 30, 2010 (1)
    
    $
    948,026
    
    
    $
    172,840
    
    
    $
    1,120,866
 
 (1)
    
    Balances are presented net of accumulated impairment losses of $214,031 for
the U.S. operating segment and $27,622 for the international operating segment.   17




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##### Table of Contents



Balance at
    
    
    
    
    
    
    Foreign Currency
    
    
    Balance atDecember 31,
    
    
    
    
    
    
    Translation
    
    
    September 30,2009
    
    
    Amortization
    
    
    Adjustments & Other
    
    
    2010Intangible assets with finite lives:Vendor contracts:Gross carrying amount
    
    $
    56,474
    
    
    $
    
    
    
    $
    (10,043
    )
    
    $
    46,431Accumulated amortization
    
    
    (29,870
    )
    
    
    (2,282
    )
    
    
    4,395
    
    
    
    (27,757
    )Net carrying amount
    
    
    26,604
    
    
    
    (2,282
    )
    
    
    (5,648
    )
    
    
    18,674Other intangible assets:Gross carrying amount
    
    
    26,510
    
    
    
    
    
    
    
    (1,865
    )
    
    
    24,645Accumulated amortization
    
    
    (20,596
    )
    
    
    (1,658
    )
    
    
    726
    
    
    
    (21,528
    )Net carrying amount
    
    
    5,914
    
    
    
    (1,658
    )
    
    
    (1,139
    )
    
    
    3,117Total net intangible assets with finite lives
    
    
    32,518
    
    
    
    (3,940
    )
    
    
    (6,787
    )
    
    
    21,791Intangible assets with indefinite lives:Tradename
    
    
    310,480
    
    
    
    
    
    
    
    499
    
    
    
    310,979Total intangible assets  net
    
    $
    342,998
    
    
    $
    (3,940
    )
    
    $
    (6,288
    )
    
    $
    332,770
  For the three months ended December 31, 2010
    
    $
    677For the twelve months ended December 31, 2011
    
    
    4,372For the twelve months ended December 31, 2012
    
    
    4,216For the twelve months ended December 31, 2013
    
    
    3,470For the twelve months ended December 31, 2014
    
    
    2,924Thereafter
    
    
    6,132Total
    
    $
    21,791
 14. Impairment of Long-Lived Assets
    18




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Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009United States theatre properties
    
    $
    424
    
    
    $
    2,817
    
    
    $
    3,265
    
    
    $
    7,482International theatre properties
    
    
    598
    
    
    
    42
    
    
    
    1,661
    
    
    
    275Subtotal
    
    $
    1,022
    
    
    $
    2,859
    
    
    
    4,926
    
    
    $
    7,757Intangible assets
    
    
    
    
    
    
    287
    
    
    
    1,131
    
    
    
    358Impairment of long-lived assets
    
    $
    1,022
    
    
    $
    3,146
    
    
    $
    6,057
    
    
    $
    8,115
 15. Fair Value Measurements
      Carrying
    
    
    Fair ValueDescription
    
    Value
    
    
    Level 1
    
    
    Level 2
    
    
    Level 3Debt (see Note 11)
    
    $
    (1,535,129
    )
    
    $
    
    
    
    $
    (1,568,593
    )
    
    $
    Interest Rate Swaps (see Note 12)
    
    $
    (18,887
    )
    
    $
    
    
    
    $
    
    
    
    $
    (18,887
    )Investment in Real D (see Note 9)
    
    $
    15,994
    
    
    $
    
    
    
    $
    15,994
    
    
    $
    
  Carrying
    
    
    Fair ValueDescription
    
    Value
    
    
    Level 1
    
    
    Level 2
    
    
    Level 3Debt
    
    $
    (1,543,705
    )
    
    $
    
    
    
    $
    (1,513,838
    )
    
    $
    Interest Rate Swaps
    
    $
    (18,524
    )
    
    $
    
    
    
    $
    
    
    
    $
    (18,524
    )
  2010
    
    
    2009Beginning liability balance   January 1
    
    $
    18,524
    
    
    $
    24,781Total (gain) loss included in accumulated other comprehensive income (loss)
    
    
    363
    
    
    
    (4,434
    )Ending liability balance  September 30
    
    $
    18,887
    
    
    $
    20,347
 19




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16. Foreign Currency Translation
         20




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##### Table of Contents



17. Supplemental Cash Flow Information
  Nine Months EndedSeptember 30,2010
    
    
    2009Cash paid for interest (1)
    
    $
    66,857
    
    
    $
    209,198Cash paid for income taxes, net of refunds received
    
    $
    70,762
    
    
    $
    35,277Noncash investing and financing activities:Change in accounts payable and accrued expenses for the acquisition of theatre
properties and equipment (2)
    
    $
    1,748
    
    
    $
    (4,568
    )Theatre properties acquired under capital lease (3)
    
    $
    2,191
    
    
    $
    20,400Change in fair market values of interest rate swap agreements, net of taxes
    
    $
    (226
    )
    
    $
    Investment in NCM  receipt of common units (see Note 7)
    
    $
    30,683
    
    
    $
    15,536Investment in NCM  change of interest gain (see Note 7)
    
    $
    271
    
    
    $
    Equipment contributed to DCIP (see Note 8)
    
    $
    18,090
    
    
    $
    Dividends accrued on unvested restricted stock unit awards
    
    $
    (264
    )
    
    $
    (142
    )Shares issued upon non-cash stock option exercises, at exercise price of $7.63 per share
    
    $
    413
    
    
    $
    Investment in Real D (see Note 9)
    
    $
    14,638
    
    
    $
    Change in fair market value of available-for-sale securities (see Note 9)
    
    $
    1,356
    
    
    $
    Issuance of shares as a result of Colombia Share Exchange (see Note 4)
    
    $
    6,951
    
    
    $
    
 
 (1)
    
    Amount for nine months ended September 30, 2009 includes $158,349 of interest
paid as a result of the repurchase of approximately $419,403 aggregate principal amount of the
Companys 9 3/4% senior discount notes. The interest portion of the repurchase had accreted on
the senior discount notes since issuance during 2004.(2)
    
    Additions to theatre properties and equipment included in accounts payable as of
December 31, 2009 and September 30, 2010 were $7,823 and $9,571, respectively.(3)
    
    Amount recorded during the nine months ended September 30, 2009 was a result of the
acquisition of theatres in the U.S. as discussed in Note 6. 18. Segments
  21




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##### Table of Contents



Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009RevenuesU.S.
    
    $
    400,277
    
    
    $
    378,046
    
    
    $
    1,199,856
    
    
    $
    1,139,065International
    
    
    161,492
    
    
    
    119,866
    
    
    
    420,404
    
    
    
    304,024Eliminations
    
    
    (1,534
    )
    
    
    (1,087
    )
    
    
    (4,025
    )
    
    
    (2,956
    )Total revenues
    
    $
    560,235
    
    
    $
    496,825
    
    
    $
    1,616,235
    
    
    $
    1,440,133Adjusted EBITDAU.S.
    
    $
    87,778
    
    
    $
    77,907
    
    
    $
    273,731
    
    
    $
    260,202International
    
    
    37,299
    
    
    
    26,932
    
    
    
    98,243
    
    
    
    63,417Total Adjusted EBITDA
    
    $
    125,077
    
    
    $
    104,839
    
    
    $
    371,974
    
    
    $
    323,619Capital expendituresU.S.
    
    $
    11,564
    
    
    $
    15,429
    
    
    $
    47,571
    
    
    $
    58,851International
    
    
    19,733
    
    
    
    9,256
    
    
    
    40,685
    
    
    
    26,752Total capital expenditures
    
    $
    31,297
    
    
    $
    24,685
    
    
    $
    88,256
    
    
    $
    85,603
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Net income
    
    $
    33,883
    
    
    $
    22,055
    
    
    $
    111,353
    
    
    $
    60,213Add (deduct):Income taxes
    
    
    15,877
    
    
    
    12,186
    
    
    
    45,918
    
    
    
    31,149Interest expense (1)
    
    
    28,938
    
    
    
    25,893
    
    
    
    83,553
    
    
    
    77,006Loss on early retirement of debt
    
    
    
    
    
    
    1,083
    
    
    
    
    
    
    
    27,878Other income (2)
    
    
    (647
    )
    
    
    (1,384
    )
    
    
    (5
    )
    
    
    (3,671
    )Depreciation and amortization
    
    
    34,805
    
    
    
    38,207
    
    
    
    103,395
    
    
    
    111,875Amortization of favorable/unfavorable leases
    
    
    179
    
    
    
    301
    
    
    
    595
    
    
    
    970Impairment of long-lived assets
    
    
    1,022
    
    
    
    3,146
    
    
    
    6,057
    
    
    
    8,115Loss on sale of assets and other
    
    
    7,548
    
    
    
    944
    
    
    
    11,906
    
    
    
    2,402Deferred lease expenses
    
    
    1,079
    
    
    
    1,067
    
    
    
    2,776
    
    
    
    3,189Amortization of long-term prepaid rents
    
    
    468
    
    
    
    323
    
    
    
    1,247
    
    
    
    1,074Share based awards compensation expense
    
    
    1,925
    
    
    
    1,018
    
    
    
    5,179
    
    
    
    3,419Adjusted EBITDA
    
    $
    125,077
    
    
    $
    104,839
    
    
    $
    371,974
    
    
    $
    323,619
 
 (1)
    
    Includes amortization of debt issue costs.(2)
    
    Includes interest income, foreign currency exchange gain, and equity in loss of
affiliates and excludes distributions from NCM. Distributions from NCM are reported entirely
within the U.S. operating segment. Financial Information About Geographic Areas
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,Revenues
    
    2010
    
    
    2009
    
    
    2010
    
    
    2009U.S. and Canada
    
    $
    400,277
    
    
    $
    378,046
    
    
    $
    1,199,856
    
    
    $
    1,139,065Brazil
    
    
    87,339
    
    
    
    61,132
    
    
    
    226,556
    
    
    
    153,713Mexico
    
    
    20,213
    
    
    
    18,666
    
    
    
    55,310
    
    
    
    48,195Other foreign countries
    
    
    53,940
    
    
    
    40,068
    
    
    
    138,538
    
    
    
    102,116Eliminations
    
    
    (1,534
    )
    
    
    (1,087
    )
    
    
    (4,025
    )
    
    
    (2,956
    )Total
    
    $
    560,235
    
    
    $
    496,825
    
    
    $
    1,616,235
    
    
    $
    1,440,133
 22




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##### Table of Contents



September 30,
    
    
    December 31,Theatre Properties and Equipment-net
    
    2010
    
    
    2009U.S. and Canada
    
    $
    983,700
    
    
    $
    1,040,395Brazil
    
    
    105,993
    
    
    
    91,996Mexico
    
    
    41,251
    
    
    
    39,371Other foreign countries
    
    
    58,247
    
    
    
    47,826Total
    
    $
    1,189,191
    
    
    $
    1,219,588
 19. Related Party Transactions
    20. Income Taxes
  21. Commitments and Contingencies
  22. Subsequent Event  Interest Rate Swap Agreements
  23




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##### Table of Contents



23. Subsequent Event  Dividend Declaration
  24




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##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
  Segment Reporting
 Avatar Alice in Wonderland, How to Train Your Dragon, Clash of
the Titans, Iron Man 2, Shrek Forever After, The Karate Kid, Toy Story 3, The Twilight Saga:
Eclipse Inception, Despicable Me, Grown Ups, The Other Guys, The Expendables Salt. Jackass 3D, Due
Date, Megamind, Little Fockers, Tron: Legacy, Tangled, Yogi Bear, Gullivers Travels, Chronicles of
Narnia: The Voyage of the Dawn Treader Harry Potter
      Recent Developments
   25




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##### Table of Contents



Results of Operations
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,Operating data (in millions):
    
    2010
    
    
    2009
    
    
    2010
    
    
    2009RevenuesAdmissions
    
    $
    367.6
    
    
    $
    322.9
    
    
    $
    1,063.7
    
    
    $
    941.9Concession
    
    
    170.2
    
    
    
    153.0
    
    
    
    488.5
    
    
    
    441.9Other
    
    
    22.4
    
    
    
    20.9
    
    
    
    64.0
    
    
    
    56.3Total revenues
    
    
    560.2
    
    
    
    496.8
    
    
    
    1,616.2
    
    
    
    1,440.1Cost of operationsFilm rentals and advertising
    
    
    200.5
    
    
    
    175.9
    
    
    
    582.8
    
    
    
    513.9Concession supplies
    
    
    26.6
    
    
    
    23.5
    
    
    
    73.5
    
    
    
    67.2Salaries and wages
    
    
    56.8
    
    
    
    52.7
    
    
    
    165.6
    
    
    
    149.1Facility lease expense
    
    
    66.6
    
    
    
    61.6
    
    
    
    191.3
    
    
    
    176.5Utilities and other
    
    
    64.3
    
    
    
    61.4
    
    
    
    177.2
    
    
    
    164.3General and administrative expenses
    
    
    28.1
    
    
    
    23.5
    
    
    
    78.6
    
    
    
    69.0Depreciation and amortization
    
    
    35.0
    
    
    
    38.5
    
    
    
    104.0
    
    
    
    112.8Impairment of long-lived assets
    
    
    1.0
    
    
    
    3.1
    
    
    
    6.0
    
    
    
    8.1Loss on sale of assets and other
    
    
    7.5
    
    
    
    0.9
    
    
    
    11.9
    
    
    
    2.4Total cost of operations
    
    
    486.4
    
    
    
    441.1
    
    
    
    1,390.9
    
    
    
    1,263.3Operating income
    
    $
    73.8
    
    
    $
    55.7
    
    
    $
    225.3
    
    
    $
    176.8Operating data as a percentage of total revenues:RevenuesAdmissions
    
    
    65.6
    %
    
    
    65.0
    %
    
    
    65.8
    %
    
    
    65.4
    %Concession
    
    
    30.4
    %
    
    
    30.8
    %
    
    
    30.2
    %
    
    
    30.7
    %Other
    
    
    4.0
    %
    
    
    4.2
    %
    
    
    4.0
    %
    
    
    3.9
    %Total revenues
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Cost of operations (1)Film rentals and advertising
    
    
    54.5
    %
    
    
    54.5
    %
    
    
    54.8
    %
    
    
    54.6
    %Concession supplies
    
    
    15.6
    %
    
    
    15.4
    %
    
    
    15.0
    %
    
    
    15.2
    %Salaries and wages
    
    
    10.1
    %
    
    
    10.6
    %
    
    
    10.2
    %
    
    
    10.4
    %Facility lease expense
    
    
    11.9
    %
    
    
    12.4
    %
    
    
    11.8
    %
    
    
    12.3
    %Utilities and other
    
    
    11.5
    %
    
    
    12.3
    %
    
    
    11.0
    %
    
    
    11.4
    %General and administrative expenses
    
    
    5.0
    %
    
    
    4.8
    %
    
    
    4.9
    %
    
    
    4.8
    %Depreciation and amortization
    
    
    6.2
    %
    
    
    7.8
    %
    
    
    6.4
    %
    
    
    7.9
    %Impairment of long-lived assets
    
    
    0.2
    %
    
    
    0.7
    %
    
    
    0.4
    %
    
    
    0.6
    %Loss on sale of assets and other
    
    
    1.3
    %
    
    
    0.2
    %
    
    
    0.7
    %
    
    
    0.2
    %Total cost of operations
    
    
    86.8
    %
    
    
    88.8
    %
    
    
    86.1
    %
    
    
    87.7
    %Operating income
    
    
    13.2
    %
    
    
    11.2
    %
    
    
    13.9
    %
    
    
    12.3
    %Average screen count (month end average)
    
    
    4,922
    
    
    
    4,901
    
    
    
    4,905
    
    
    
    4,849Revenues per average screen (dollars)
    
    $
    113,817
    
    
    $
    101,367
    
    
    $
    329,528
    
    
    $
    296,978
 
 (1)
    
    All costs are expressed as a percentage of total revenues, except film
rentals and advertising, which are expressed as a percentage of admissions revenues
and concession supplies, which are expressed as a percentage of concession revenues. 26




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##### Table of Contents



Three months ended September 30, 2010 and 2009
 Revenues.
 U.S. Operating Segment
    
    
    International Operating Segment
    
    
    ConsolidatedThree Months Ended
    
    
    Three Months Ended
    
    
    Three Months EndedSeptember 30,
    
    
    September 30,
    
    
    September 30,%
    
    
    
    
    
    
    
    
    
    
    %
    
    
    
    
    
    
    
    
    
    
    %2010
    
    
    2009
    
    
    Change
    
    
    2010
    
    
    2009
    
    
    Change
    
    
    2010
    
    
    2009
    
    
    ChangeAdmissions revenues (1)
    
    $
    262.5
    
    
    $
    246.9
    
    
    
    6.3
    %
    
    $
    105.1
    
    
    $
    76.0
    
    
    
    38.3
    %
    
    $
    367.6
    
    
    $
    322.9
    
    
    
    13.8
    %Concession revenues (1)
    
    $
    125.0
    
    
    $
    119.8
    
    
    
    4.3
    %
    
    $
    45.2
    
    
    $
    33.2
    
    
    
    36.1
    %
    
    $
    170.2
    
    
    $
    153.0
    
    
    
    11.2
    %Other revenues (1)(2)
    
    $
    11.2
    
    
    $
    10.3
    
    
    
    8.7
    %
    
    $
    11.2
    
    
    $
    10.6
    
    
    
    5.7
    %
    
    $
    22.4
    
    
    $
    20.9
    
    
    
    7.2
    %Total revenues (1)(2)
    
    $
    398.7
    
    
    $
    377.0
    
    
    
    5.8
    %
    
    $
    161.5
    
    
    $
    119.8
    
    
    
    34.8
    %
    
    $
    560.2
    
    
    $
    496.8
    
    
    
    12.8
    %Attendance (1)
    
    
    42.2
    
    
    
    41.0
    
    
    
    2.9
    %
    
    
    23.5
    
    
    
    19.4
    
    
    
    21.1
    %
    
    
    65.7
    
    
    
    60.4
    
    
    
    8.8
    %Revenues per average screen (2)
    
    $
    103,704
    
    
    $
    98,115
    
    
    
    5.7
    %
    
    $
    149,911
    
    
    $
    113,161
    
    
    
    32.5
    %
    
    $
    113,817
    
    
    $
    101,367
    
    
    
    12.3
    %
 
 (1)
    
    Amounts in millions.(2)
    
    U.S. operating segment revenues include eliminations of intercompany transactions
with the international operating segment. See Note 18 of our condensed consolidated financial
statements. 
    
    Consolidated. The increase in admissions revenues of $44.7 million was primarily
attributable to an 8.8% increase in attendance and a 4.7% increase in average ticket price
from $5.35 for the third quarter of 2009 to $5.60 for the third quarter of 2010. The increase
in concession revenues of $17.2 million was primarily attributable to the 8.8% increase in
attendance and a 2.4% increase in concession revenues per patron from $2.53 for the third
quarter of 2009 to $2.59 for the third quarter of 2010. The increase in average ticket price
was primarily due to incremental 3-D and premium pricing and other price increases and the
favorable impact of exchange rates in certain countries in which we operate. The increase in
concession revenues per patron was primarily due to price increases and the favorable impact
of exchange rates in certain countries in which we operate. The 7.2% increase in other
revenues was primarily due to increases in ancillary revenue and the favorable impact of
exchange rates in certain countries in which we operate.
    
    U.S. The increase in admissions revenues of $15.6 million was primarily attributable
to a 2.9% increase in attendance and a 3.3% increase in average ticket price from $6.02 for
the third quarter of 2009 to $6.22 for the third quarter of 2010. The increase in concession
revenues of $5.2 million was primarily attributable to the 2.9% increase in attendance and a
1.4% increase in concession revenues per patron from $2.92 for the third quarter of 2009 to
$2.96 for the third quarter of 2010. The increase in average ticket price was primarily due to
incremental 3-D and premium pricing and other price increases and the increase in concession
revenues per patron was primarily due to price increases. The 8.7% increase in other revenues
was primarily due to increases in ancillary revenue.
    
    International. The increase in admissions revenues of $29.1 million was primarily
attributable to a 21.1% increase in attendance and a 14.0% increase in average ticket price
from $3.92 for the third quarter of 2009 to $4.47 for the third quarter of 2010. The increase
in concession revenues of $12.0 million was primarily attributable to the 21.1% increase in
attendance and a 12.3% increase in concession revenues per patron from $1.71 for the third
quarter of 2009 to $1.92 for the third quarter of 2010. The increase in average ticket price
was primarily due to incremental 3-D and premium pricing and other price increases and the
favorable impact of exchange rates in certain countries in which we operate. The increase in
concession revenues per patron was primarily due to price increases and the favorable impact
of exchange rates in certain countries in which we operate. The 5.7% increase in other
revenues was primarily due to increases in ancillary revenue and the favorable impact of
exchange rates in certain countries in which we operate.
 27




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##### Table of Contents



Cost of Operations.
 International OperatingU.S. Operating Segment
    
    
    Segment
    
    
    ConsolidatedThree Months Ended
    
    
    Three Months Ended
    
    
    Three Months EndedSeptember 30,
    
    
    September 30,
    
    
    September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009
    
    
    2010
    
    
    2009Film rentals and advertising
    
    $
    146.5
    
    
    $
    137.4
    
    
    $
    54.0
    
    
    $
    38.5
    
    
    $
    200.5
    
    
    $
    175.9Concession supplies
    
    
    15.5
    
    
    
    14.8
    
    
    
    11.1
    
    
    
    8.7
    
    
    
    26.6
    
    
    
    23.5Salaries and wages
    
    
    44.4
    
    
    
    43.3
    
    
    
    12.4
    
    
    
    9.4
    
    
    
    56.8
    
    
    
    52.7Facility lease expense
    
    
    45.8
    
    
    
    45.2
    
    
    
    20.8
    
    
    
    16.4
    
    
    
    66.6
    
    
    
    61.6Utilities and other
    
    
    44.5
    
    
    
    45.1
    
    
    
    19.8
    
    
    
    16.3
    
    
    
    64.3
    
    
    
    61.4
 
    
    Consolidated. Film rentals and advertising costs were $200.5 million, or 54.5% of
admissions revenues, for the third quarter of 2010 compared to $175.9 million, or 54.5% of
admissions revenues, for the third quarter of 2009. The increase in film rentals and
advertising costs of $24.6 million was primarily due to a $44.7 million increase in admissions
revenues. Concession supplies expense was $26.6 million, or 15.6% of concession revenues, for
the third quarter of 2010 compared to $23.5 million, or 15.4% of concession revenues, for the
third quarter of 2009. The increase in the concession supplies rate was primarily due to the
increased weighting of our international business which typically has a higher concession
supplies rate.Salaries and wages increased to $56.8 million for the third quarter of 2010 from $52.7 million
for the third quarter of 2009 primarily due to increased minimum wages in both our U.S. and
international segments, increased staffing levels to support the 8.8% increase in attendance and
the impact of exchange rates in certain countries in which we operate. Facility lease expense
increased to $66.6 million for the third quarter of 2010 from $61.6 million for the third
quarter of 2009 primarily due to increased percentage rent and the impact of exchange rates in
certain countries in which we operate. Utilities and other costs increased to $64.3 million for
the third quarter of 2010 from $61.4 million for the third quarter of 2009 primarily due to
increased 3-D equipment rental fees, increased utility expenses and the impact of exchange rates
in certain countries in which we operate.
    
    U.S. Film rentals and advertising costs were $146.5 million, or 55.8% of admissions
revenues, for the third quarter of 2010 compared to $137.4 million, or 55.7% of admissions
revenues, for the third quarter of 2009. The increase in film rentals and advertising costs of
$9.1 million is primarily due to a $15.6 million increase in admissions revenues. Concession
supplies expense was $15.5 million, or 12.4% of concession revenues, for the third quarter of
2010 compared to $14.8 million, or 12.4% of concession revenues, for the third quarter of
2009.Salaries and wages increased to $44.4 million for the third quarter of 2010 from $43.3 million
for the third quarter of 2009 primarily due to increased minimum wages and increased staffing
levels to support the 2.9% increase in attendance. Facility lease expense increased to $45.8
million for the third quarter of 2010 from $45.2 million for the third quarter of 2009 primarily
due to increased percentage rent. Utilities and other costs decreased to $44.5 million for the
third quarter of 2010 from $45.1 million for the third quarter of 2009 primarily due to
decreased utility and theatre supplies expenses, partially offset by increased 3-D equipment
rental fees.
    
    International. Film rentals and advertising costs were $54.0 million, or 51.4% of
admissions revenues, for the third quarter of 2010 compared to $38.5 million, or 50.7% of
admissions revenues, for the third quarter of 2009. The increase in film rentals and
advertising costs of $15.5 million is due to a $29.1 million increase in admissions revenues
which contributed $14.7 million and an increase in the film rentals and advertising rate which
contributed $0.8 million. Concession supplies expense was $11.1 million, or 24.6% of
concession revenues, for the third quarter of 2010 compared to $8.7 million, or 26.2% of
concession revenues, for the third quarter of 2009. The increase in concession supplies
expense was primarily due to a $12.0 million increase in concession revenues, partially offset
by a decrease in the concession supplies rate due to favorable inventory procurement costs and
the successful implementation of price increases.Salaries and wages increased to $12.4 million for the third quarter of 2010 from $9.4 million
for the third quarter of 2009 primarily due to increased staffing levels to support the 21.1%
increase in attendance, increased minimum wages and the impact of exchange rates in certain
countries in which we operate. Facility lease expense increased to $20.8 million for the third
quarter of 2010 from $16.4 million for the third quarter of 2009 primarily due to increased
percentage rent and the impact of exchange rates in certain countries in which we operate.
Utilities and
 28




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##### Table of Contents



other costs increased to $19.8 million for the third quarter of 2010 from $16.3
million for the third quarter of 2009
primarily due to increased 3-D equipment rental fees, increased utility expenses and the impact
of exchange rates in certain countries in which we operate.
 General and Administrative Expenses.
 Depreciation and Amortization.
 Impairment of Long-Lived Asset.
 Loss on Sale of Assets and Other.
 Interest Expense.
 Loss on Early Retirement of Debt. 3 4
 Distributions from NCM.
 Equity in Loss of Affiliates
 Income Taxes.
 29




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##### Table of Contents



Nine months ended September 30, 2010 and 2009
 Revenues.
 U.S. Operating Segment
    
    
    International Operating Segment
    
    
    ConsolidatedNine Months Ended
    
    
    Nine Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,
    
    
    September 30,%
    
    
    
    
    
    
    
    
    
    
    %
    
    
    
    
    
    
    
    
    
    
    %2010
    
    
    2009
    
    
    Change
    
    
    2010
    
    
    2009
    
    
    Change
    
    
    2010
    
    
    2009
    
    
    ChangeAdmissions revenues (1)
    
    $
    791.0
    
    
    $
    748.6
    
    
    
    5.7
    %
    
    $
    272.7
    
    
    $
    193.3
    
    
    
    41.1
    %
    
    $
    1,063.7
    
    
    $
    941.9
    
    
    
    12.9
    %Concession revenues (1)
    
    $
    373.1
    
    
    $
    357.0
    
    
    
    4.5
    %
    
    $
    115.4
    
    
    $
    84.9
    
    
    
    35.9
    %
    
    $
    488.5
    
    
    $
    441.9
    
    
    
    10.5
    %Other revenues (1) (2)
    
    $
    31.7
    
    
    $
    30.5
    
    
    
    3.9
    %
    
    $
    32.3
    
    
    $
    25.8
    
    
    
    25.2
    %
    
    $
    64.0
    
    
    $
    56.3
    
    
    
    13.7
    %Total revenues (1) (2)
    
    $
    1,195.8
    
    
    $
    1,136.1
    
    
    
    5.3
    %
    
    $
    420.4
    
    
    $
    304.0
    
    
    
    38.3
    %
    
    $
    1,616.2
    
    
    $
    1,440.1
    
    
    
    12.2
    %Attendance (1)
    
    
    123.4
    
    
    
    122.2
    
    
    
    1.0
    %
    
    
    61.0
    
    
    
    53.4
    
    
    
    14.2
    %
    
    
    184.4
    
    
    
    175.6
    
    
    
    5.0
    %Revenues per average screen
(2)
    
    $
    311,967
    
    
    $
    298,615
    
    
    
    4.5
    %
    
    
    392,351
    
    
    $
    291,016
    
    
    
    34.8
    %
    
    $
    329,528
    
    
    $
    296,978
    
    
    
    11.0
    %
 
 (1)
    
    Amounts in millions.(2)
    
    U.S. operating segment revenues include eliminations of intercompany transactions
with the international operating segment. See Note 18 of our condensed consolidated financial
statements. 
    
    Consolidated. The increase in admissions revenues of $121.8 million was primarily
attributable to a 5.0% increase in attendance and a 7.6% increase in average ticket price from
$5.36 for the 2009 period to $5.77 for the 2010 period. The increase in concession revenues of
$46.6 million was primarily attributable to the 5.0% increase in attendance and a 5.2%
increase in concession revenues per patron from $2.52 for the 2009 period to $2.65 for the
2010 period. The increase in average ticket price was primarily due to incremental 3-D and
premium pricing and other price increases and the favorable impact of exchange rates in
certain countries in which we operate. The increase in concession revenues per patron was
primarily due to price increases and the favorable impact of exchange rates in certain
countries in which we operate. The 13.7% increase in other revenues was primarily due to
increases in ancillary revenue and the favorable impact of exchange rates in certain countries
in which we operate.
    
    U.S. The increase in admissions revenues of $42.4 million was primarily attributable
to a 4.6% increase in average ticket price from $6.13 for the 2009 period to $6.41 for the
2010 period and a 1.0% increase in attendance. The increase in concession revenues of $16.1
million was primarily attributable to a 3.4% increase in concession revenues per patron from
$2.92 for the 2009 period to $3.02 for the 2010 period and the 1.0% increase in attendance.
The increase in average ticket price was primarily due to incremental 3-D and premium pricing
and other price increases and the increase in concession revenues per patron was primarily due
to price increases. The 3.9% increase in other revenues was primarily due to increases in
ancillary revenue.
    
    International. The increase in admissions revenues of $79.4 million was primarily
attributable to a 14.2% increase in attendance and a 23.5% increase in average ticket price
from $3.62 for the 2009 period to $4.47 for the 2010 period. The increase in concession
revenues of $30.5 million was primarily attributable to the 14.2% increase in attendance and
an 18.9% increase in concession revenues per patron from $1.59 for the 2009 period to $1.89
for the 2010 period. The increase in average ticket price was primarily due to incremental 3-D
and premium pricing and other price increases and the favorable impact of exchange rates in
certain countries in which we operate. The increase in concession revenues per patron was
primarily due to price increases and the favorable impact of exchange rates in certain
countries in which we operate. The 25.2% increase in other revenues was primarily due to
increases in ancillary revenue and the favorable impact of exchange rates in certain countries
in which we operate.
 30




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##### Table of Contents



Cost of Operations.
 International OperatingU.S. Operating Segment
    
    
    Segment
    
    
    ConsolidatedNine Months Ended
    
    
    Nine Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,
    
    
    September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009
    
    
    2010
    
    
    2009Film rentals and advertising
    
    $
    445.7
    
    
    $
    416.2
    
    
    $
    137.1
    
    
    $
    97.7
    
    
    $
    582.8
    
    
    $
    513.9Concession supplies
    
    
    45.0
    
    
    
    45.4
    
    
    
    28.5
    
    
    
    21.8
    
    
    
    73.5
    
    
    
    67.2Salaries and wages
    
    
    131.5
    
    
    
    124.4
    
    
    
    34.1
    
    
    
    24.7
    
    
    
    165.6
    
    
    
    149.1Facility lease expense
    
    
    136.6
    
    
    
    132.9
    
    
    
    54.7
    
    
    
    43.6
    
    
    
    191.3
    
    
    
    176.5Utilities and other
    
    
    124.6
    
    
    
    122.7
    
    
    
    52.6
    
    
    
    41.6
    
    
    
    177.2
    
    
    
    164.3
 
    
    Consolidated. Film rentals and advertising costs were $582.8 million, or 54.8% of
admissions revenues, for the 2010 period compared to $513.9 million, or 54.6% of admissions
revenues, for the 2009 period. The increase in film rentals and advertising costs of $68.9
million was due to a $121.8 million increase in admissions revenues, which contributed $66.5
million, and an increase in our film rentals and advertising rate, which contributed $2.4
million. The increase in the film rentals and advertising rate was primarily due to higher
film rental rates in the U.S. segment due to the increase in the number of blockbuster films
released, including the carryover of Avatar, which generally have higher film rental rates.
Concession supplies expense was $73.5 million, or 15.0% of concession revenues, for the 2010
period, compared to $67.2 million, or 15.2% of concession revenues, for the 2009 period. The
decrease in the concession supplies rate was primarily due to favorable inventory procurement
costs and the successful implementation of price increases.Salaries and wages increased to $165.6 million for the 2010 period from $149.1 million for the
2009 period primarily due to new theatres, increased minimum wages in both our U.S. and
international segments, increased staffing levels to support the 5.0% increase in attendance and
the impact of exchange rates in certain countries in which we operate. Facility lease expense
increased to $191.3 million for the 2010 period from $176.5 million for the 2009 period
primarily due to new theatres, increased percentage rent and the impact of exchange rates in
certain countries in which we operate. Utilities and other costs increased to $177.2 million for
the 2010 period from $164.3 million for the 2009 period primarily due to new theatres, increased
3-D equipment rental fees, increased utility expenses and the impact of exchange rates in
certain countries in which we operate.
    
    U.S. Film rentals and advertising costs were $445.7 million, or 56.3% of admissions
revenues for the 2010 period compared to $416.2 million, or 55.6% of admissions revenues, for
the 2009 period. The increase in film rentals and advertising costs of $29.5 million is due to
a $42.4 million increase in admissions revenues, which contributed $23.6 million and an
increase in our film rentals and advertising rate, which contributed $5.9 million. The
increase in the film rentals and advertising rate was primarily due to the increase in the
number of blockbuster films released, including the carryover of Avatar, which generally have
higher film rental rates. Concession supplies expense was $45.0 million, or 12.1% of
concession revenues, for the 2010 period, compared to $45.4 million, or 12.7% of concession
revenues, for the 2009 period. The decrease in concession supplies expense is primarily due to
a decrease in the concession supplies rate due to favorable inventory procurement costs and
the successful implementation of price increases.Salaries and wages increased to $131.5 million for the 2010 period from $124.4 million for the
2009 period primarily due to new theatres and increased minimum wages. Facility lease expense
increased to $136.6 million for the 2010 period from $132.9 million for the 2009 period
primarily due to new theatres and increased percentage rent. Utilities and other costs increased
to $124.6 million for the 2010 period from $122.7 million for the 2009 period primarily due to
new theatres and increased 3-D equipment rental fees, partially offset by decreased utility
expenses.
    
    International. Film rentals and advertising costs were $137.1 million, or 50.3% of
admissions revenues, for the 2010 period compared to $97.7 million, or 50.5% of admissions
revenues, for the 2009 period. The increase in film rentals and advertising costs was
primarily due to a $79.4 million increase in admissions revenues, partially offset by a lower
film rentals and advertising rate. Concession supplies expense was $28.5 million, or 24.7% of
concession revenues, for the 2010 period compared to $21.8 million, or 25.7% of concession
revenues, for the 2009 period. The increase in concession supplies expense of $6.7 million was
primarily due to a $30.5 million increase in concession revenues, partially offset by a lower
concession supplies rate due to favorable inventory procurement costs and the successful
implementation of price increases.
 31




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##### Table of Contents



Salaries and wages increased to $34.1 million for the 2010 period from $24.7 million for the
2009 period primarily due to new theatres, increased staffing levels to support the 14.2%
increase in attendance, increased minimum wages and the impact of exchange rates in certain
countries in which we operate. Facility lease expense increased to $54.7 million for the 2010
period from $43.6 million for the 2009 period primarily due to new theatres, increased
percentage rent and the impact of exchange rates in certain countries in which we operate.
Utilities and other costs increased to $52.6 million for the 2010 period from $41.6 million for
the 2009 period primarily due to new theatres, increased 3-D equipment rental fees, increased
utility expenses and the impact of exchange rates in certain countries in which we operate.
 General and Administrative Expenses.
 Depreciation and Amortization.
 Impairment of Long-Lived Assets.
 Loss on Sale of Assets and Other.
 Interest Expense.
 Loss on Early Retirement of Debt. 3 4
 Distributions from NCM.
 Equity in Loss of Affiliates
 32




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##### Table of Contents



Income Taxes.
 Liquidity and Capital Resources
 Operating Activities
 3 4
 Investing Activities
   New
    
    
    ExistingPeriod
    
    Theatres
    
    
    Theatres
    
    
    TotalNine Months Ended September 30, 2010
    
    $
    31.1
    
    
    $
    57.2
    
    
    $
    88.3Nine Months Ended September 30, 2009
    
    $
    32.1
    
    
    $
    53.5
    
    
    $
    85.6
   33




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##### Table of Contents



Financing Activities
 3 4
   September 30, 2010
    
    
    December 31, 2009Cinemark, USA, Inc. term loan
    
    $
    1,075.4
    
    
    $
    1,083.6Cinemark USA, Inc. 8 5/8% senior notes due 2019 (1)
    
    
    459.5
    
    
    
    458.9Cinemark USA, Inc. 9% senior subordinated notes due 2013
    
    
    0.2
    
    
    
    0.2Other long-term debt
    
    
    
    
    
    
    1.0Total long-term debt
    
    
    1,535.1
    
    
    
    1,543.7Less current portion
    
    
    10.8
    
    
    
    12.2Long-term debt, less current portion
    
    $
    1,524.3
    
    
    $
    1,531.5
 
 (1)
    
    Includes the $470.0 million aggregate principal amount of the 8.625%
senior notes before the original issue discount, which was $10.5 million as of September
30, 2010.  34




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##### Table of Contents



Payments Due by Period(in millions)Less Than
    
    
    
    
    
    
    
    
    
    
    AfterContractual Obligations
    
    Total
    
    
    One Year
    
    
    1 - 3 Years
    
    
    4 - 5 Years
    
    
    5 YearsLong-term debt (1)
    
    $
    1,545.6
    
    
    $
    10.8
    
    
    $
    175.1
    
    
    $
    18.4
    
    
    $
    1,341.3Scheduled interest payments on long-term debt (2)
    
    
    588.3
    
    
    
    91.5
    
    
    
    177.8
    
    
    
    165.0
    
    
    
    154.0Operating lease obligations
    
    
    1,898.9
    
    
    
    206.0
    
    
    
    411.4
    
    
    
    384.2
    
    
    
    897.3Capital lease obligations
    
    
    137.3
    
    
    
    7.3
    
    
    
    16.8
    
    
    
    21.6
    
    
    
    91.6Scheduled interest payments on capital leases
    
    
    98.5
    
    
    
    13.6
    
    
    
    25.0
    
    
    
    21.1
    
    
    
    38.8Employment agreements
    
    
    11.1
    
    
    
    3.7
    
    
    
    7.4
    
    
    
    
    
    
    
    Purchase commitments (3)
    
    
    118.3
    
    
    
    28.8
    
    
    
    84.4
    
    
    
    5.0
    
    
    
    0.1Current liability for uncertain tax positions (4)
    
    
    2.5
    
    
    
    2.5
    
    
    
    
    
    
    
    
    
    
    
    Total obligations
    
    $
    4,400.5
    
    
    $
    364.2
    
    
    $
    897.9
    
    
    $
    615.3
    
    
    $
    2,523.1
 
 (1)
    
    Includes the 8.625% senior notes in the aggregate principal amount of $470.0
million, excluding the discount of $10.5 million.(2)
    
    Amounts include scheduled interest payments on fixed rate and variable rate debt
agreements. Estimates for the variable rate interest payments were based on interest rates
currently in effect. The average interest rates currently in effect on our fixed rate and
variable rate debt are 7.0% and 3.1%, respectively.(3)
    
    Includes estimated capital expenditures associated with the construction of new
theatres to which we were committed as of September 30, 2010.(4)
    
    The contractual obligations table excludes the long-term portion of our liability
for uncertain tax positions of $17.3 million because we cannot make a reliable estimate of
the timing of the related cash payments. Senior Secured Credit Facility
    35




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##### Table of Contents



Cinemark USA, Inc. 8 5/8% Senior Notes
 3 4
  Cinemark USA, Inc. 9% Senior Subordinated Notes
    Seasonality
  36




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##### Table of Contents



Item 3. Quantitative and Qualitative Disclosures About Market Risk
  Interest Rate Risk
      Expected Maturity for the Twelve-Month Periods Ending September 30,(in millions)Average Interest2011
    
    
    2012
    
    
    2013
    
    
    2014
    
    
    2015
    
    
    Thereafter
    
    
    Total
    
    
    Fair Value
    
    
    RateFixed rate
(1)(2)(3)
    
    $
    
    
    
    $
    
    
    
    $
    0.2
    
    
    $
    
    
    
    $
    
    
    
    $
    1,120.0
    
    
    $
    1,120.2
    
    
    $
    1,148.2
    
    
    
    7.0
    %Variable rate
    
    
    10.8
    
    
    
    10.8
    
    
    
    164.1
    
    
    
    9.2
    
    
    
    9.2
    
    
    
    221.3
    
    
    
    425.4
    
    
    
    420.4
    
    
    
    3.1
    %Total debt
    
    $
    10.8
    
    
    $
    10.8
    
    
    $
    164.3
    
    
    $
    9.2
    
    
    $
    9.2
    
    
    $
    1,341.3
    
    
    $
    1,545.6
    
    
    $
    1,568.6
 
 (1)
    
    Includes $650.0 million of the Cinemark USA, Inc. term loan, which represents
the debt currently hedged with the Companys interest rate swap agreements discussed above.(2)
    
    Includes the 8.625% senior notes in the aggregate principal amount of $470.0
million, excluding the discount of $10.5 million.(3)
    
    Includes the 9% senior subordinated notes in the aggregate principal amount
outstanding of $0.2 million as of September 30, 2010 that were subsequently redeemed in
October 2010. 37




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##### Table of Contents



Foreign Currency Exchange Rate Risk
  
 Item 4. Controls and Procedures
 Evaluation of the Effectiveness of Disclosure Controls and Procedures
  Changes in Internal Controls Over Financial Reporting
  38




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##### Table of Contents



PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors
  39




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##### Table of Contents



Item 6. Exhibits
 *31.1
    
    Certification of Alan Stock, Chief Executive Officer, pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.*31.2
    
    Certification of Robert Copple, Chief Financial Officer, pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.*32.1
    
    Certification of Alan Stock, Chief Executive Officer, pursuant to 18
U.S.C. Section 1350, as added by Section 906 of the Sarbanes-Oxley
Act of 2002.*32.2
    
    Certification of Robert Copple, Chief Financial Officer, pursuant to
18 U.S.C. Section 1350, as added by Section 906 of the
Sarbanes-Oxley Act of 2002.
 
 *
    
    filed herewith. 40




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##### Table of Contents



SIGNATURES
  DATE:November 5, 2010
    CINEMARK HOLDINGS, INC.
Registrant/s/ Alan W. StockAlan W. StockChief Executive Officer/s/ Robert CoppleRobert CoppleChief Financial Officer 41




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##### Table of Contents



EXHIBIT INDEX
 *31.1
    
    Certification of Alan Stock, Chief Executive Officer, pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.*31.2
    
    Certification of Robert Copple, Chief Financial Officer, pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002.*32.1
    
    Certification of Alan Stock, Chief Executive Officer, pursuant to
18 U.S.C. Section 1350, as added by Section 906 of the
Sarbanes-Oxley Act of 2002.*32.2
    
    Certification of Robert Copple, Chief Financial Officer, pursuant
to 18 U.S.C. Section 1350, as added by Section 906 of the
Sarbanes-Oxley Act of 2002.
 
 *
    
    filed herewith.