##### 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 March 31, 2008
 Commission File Number: 001-33401
 CINEMARK HOLDINGS, INC.
 (Exact name of registrant as specified in its charter)
 Delaware
    
    20-5490327(State or other jurisdiction
    
    (I.R.S. Employerof incorporation or organization)
    
    Identification No.)
 3900 Dallas ParkwaySuite 500Plano, Texas
    
    75093(Address of principal executive offices)
    
    (Zip Code)
   þ o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer þ
(Do not check if a smaller reporting company)
    
    Smaller reporting company o
  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 March 31, 2008 and
December 31, 2007 (unaudited)
    
    
    4Condensed Consolidated Statements of Income for the three
months ended March 31, 2008 and 2007 (unaudited)
    
    
    5Condensed Consolidated Statements of Cash Flows for the three
months ended March 31, 2008 and 2007 (unaudited)
    
    
    6Notes to Condensed Consolidated Financial Statements (unaudited)
    
    
    7Item 2. Managements Discussion and Analysis of Financial Condition and
Results of Operations
    
    
    22Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    32Item 4T. Controls and Procedures
    
    
    34PART II. OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    34Item 1A. Risk Factors
    
    
    34Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    34Item 6. Exhibits
    
    
    35SIGNATURES
    
    
    36Amended and Restated 2006 Long-Term Incentive PlanForm of Restricted Stock Unit Award AgreementCertification of Chief Executive Officer Pursuant to Section 302Certification of Chief Financial Officer Pursuant to Section 302Certification of Chief Executive Officer Pursuant to Section 906Certification of Chief Financial Officer Pursuant to Section 906
  2




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Cautionary Statement Regarding Forward-Looking Statements
  3




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CINEMARK HOLDINGS, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 (In thousands, except share data, unaudited)
 March 31,
    
    
    December 31,2008
    
    
    2007ASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    305,004
    
    
    $
    338,043Inventories
    
    
    7,670
    
    
    
    7,000Accounts receivable
    
    
    29,840
    
    
    
    35,368Income tax receivable
    
    
    1,367
    
    
    
    18,339Current deferred tax asset
    
    
    5,270
    
    
    
    5,215Prepaid expenses and other
    
    
    6,908
    
    
    
    10,070Total current assets
    
    
    356,059
    
    
    
    414,035THEATRE PROPERTIES AND EQUIPMENT
    
    
    1,855,998
    
    
    
    1,818,505Less accumulated depreciation and amortization
    
    
    546,056
    
    
    
    504,439Theatre properties and equipment, net
    
    
    1,309,942
    
    
    
    1,314,066OTHER ASSETSGoodwill
    
    
    1,138,675
    
    
    
    1,134,689Intangible assets  net
    
    
    351,902
    
    
    
    353,047Investments in and advances to affiliates
    
    
    3,837
    
    
    
    3,662Deferred charges and other assets  net
    
    
    80,470
    
    
    
    77,393Total other assets
    
    
    1,574,884
    
    
    
    1,568,791TOTAL ASSETS
    
    $
    3,240,885
    
    
    $
    3,296,892LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIESCurrent portion of long-term debt
    
    $
    12,001
    
    
    $
    9,166Current portion of capital lease obligations
    
    
    5,089
    
    
    
    4,684Accounts payable and accrued expenses
    
    
    150,756
    
    
    
    204,472Total current liabilities
    
    
    167,846
    
    
    
    218,322LONG-TERM LIABILITIESLong-term debt, less current portion
    
    
    1,511,931
    
    
    
    1,514,579Capital lease obligations, less current portion
    
    
    123,025
    
    
    
    116,486Deferred income taxes
    
    
    153,034
    
    
    
    168,475Long-term portion FIN 48 liability
    
    
    15,585
    
    
    
    15,500Deferred lease expenses
    
    
    20,506
    
    
    
    19,235Deferred revenue  NCM
    
    
    172,291
    
    
    
    172,696Other long-term liabilities
    
    
    55,496
    
    
    
    36,214Total long-term liabilities
    
    
    2,051,868
    
    
    
    2,043,185COMMITMENTS AND CONTINGENCIES (see Note 19)MINORITY INTERESTS IN SUBSIDIARIES
    
    
    18,148
    
    
    
    16,182STOCKHOLDERS EQUITYCommon stock, $0.001 par value: 300,000,000 shares authorized and
106,983,684 shares issued and outstanding at December 31, 2007 and
107,131,769 shares issued and outstanding at March 31, 2008
    
    
    107
    
    
    
    107Additional paid-in-capital
    
    
    940,237
    
    
    
    939,327Retained earnings
    
    
    33,055
    
    
    
    47,074Accumulated other comprehensive income
    
    
    29,624
    
    
    
    32,695Total stockholders equity
    
    
    1,003,023
    
    
    
    1,019,203TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
    
    $
    3,240,885
    
    
    $
    3,296,892
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CINEMARK HOLDINGS, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF INCOME
 (in thousands except per share data, unaudited)
 Three months ended March 31,2008
    
    
    2007REVENUESAdmissions
    
    $
    262,367
    
    
    $
    243,990Concession
    
    
    122,157
    
    
    
    115,087Other
    
    
    16,492
    
    
    
    18,945Total revenues
    
    
    401,016
    
    
    
    378,022COST OF OPERATIONSFilm rentals and advertising
    
    
    138,140
    
    
    
    128,294Concession supplies
    
    
    18,749
    
    
    
    17,457Salaries and wages
    
    
    42,587
    
    
    
    40,182Facility lease expense
    
    
    56,322
    
    
    
    51,645Utilities and other
    
    
    48,165
    
    
    
    44,193General and administrative expenses
    
    
    20,572
    
    
    
    18,733Depreciation and amortization
    
    
    37,407
    
    
    
    36,875Amortization of favorable leases
    
    
    704
    
    
    
    934Impairment of long-lived assets
    
    
    4,487
    
    
    
    49,730(Gain) loss on sale of assets and other
    
    
    (199
    )
    
    
    305Total cost of operations
    
    
    366,934
    
    
    
    388,348OPERATING INCOME (LOSS)
    
    
    34,082
    
    
    
    (10,326
    )OTHER INCOME (EXPENSE)Interest expense
    
    
    (32,073
    )
    
    
    (41,497
    )Interest income
    
    
    3,744
    
    
    
    3,783Gain on NCM Transaction
    
    
    
    
    
    
    210,773Foreign currency exchange gain (loss)
    
    
    (216
    )
    
    
    220Loss on early retirement of debt
    
    
    (40
    )
    
    
    (7,829
    )Distributions from NCM
    
    
    5,182
    
    
    
    Equity in loss of affiliates
    
    
    (635
    )
    
    
    (1,231
    )Minority interests in income of subsidiaries
    
    
    (1,152
    )
    
    
    (289
    )Total other income (expense)
    
    
    (25,190
    )
    
    
    163,930INCOME BEFORE INCOME TAXES
    
    
    8,892
    
    
    
    153,604Income taxes
    
    
    3,641
    
    
    
    35,393NET INCOME
    
    $
    5,251
    
    
    $
    118,211WEIGHTED AVERAGE SHARES OUTSTANDINGBasic
    
    
    106,965
    
    
    
    92,561Diluted
    
    
    109,197
    
    
    
    94,912NET EARNINGS PER SHAREBasic
    
    $
    0.05
    
    
    $
    1.28Diluted
    
    $
    0.05
    
    
    $
    1.25
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CINEMARK HOLDINGS, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (In thousands, unaudited)
 Three Months Ended March 31,2008
    
    
    2007OPERATING ACTIVITIESNet income
    
    $
    5,251
    
    
    $
    118,211Adjustments to reconcile net income to cash provided by operating activities:Depreciation
    
    
    36,383
    
    
    
    35,871Amortization of intangible and other assets
    
    
    1,728
    
    
    
    1,938Amortization of long-term prepaid rents
    
    
    404
    
    
    
    236Amortization of debt issue costs
    
    
    1,162
    
    
    
    1,191Amortization of debt premium
    
    
    
    
    
    
    (678
    )Amortization of deferred revenues, deferred lease incentives and other
    
    
    (846
    )
    
    
    (266
    )Impairment of long-lived assets
    
    
    4,487
    
    
    
    49,730Share based awards compensation expense
    
    
    861
    
    
    
    733Gain on NCM Transaction
    
    
    
    
    
    
    (210,773
    )(Gain) loss on sale of assets and other
    
    
    (199
    )
    
    
    305Write-off of unamortized bond premiums and unamortized debt issue costs
related to the early retirement of debt
    
    
    193
    
    
    
    (17,098
    )Accretion of interest on senior discount notes
    
    
    10,008
    
    
    
    10,449Deferred lease expenses
    
    
    1,232
    
    
    
    1,607Deferred income tax expenses
    
    
    (8,041
    )
    
    
    (91,026
    )Equity in loss of affiliates
    
    
    635
    
    
    
    1,231Minority interests in income of subsidiaries
    
    
    1,152
    
    
    
    289Changes in assets and liabilities:Inventories
    
    
    (670
    )
    
    
    (330
    )Accounts receivable
    
    
    5,528
    
    
    
    6,206Prepaid expenses and other
    
    
    3,162
    
    
    
    1,692Other assets
    
    
    (3,176
    )
    
    
    (3,570
    )Advances with affiliates
    
    
    190
    
    
    
    (111
    )Accounts payable and accrued expenses
    
    
    (49,194
    )
    
    
    (41,404
    )Interest paid on repurchased senior discount notes
    
    
    (2,929
    )
    
    
    Increase in deferred revenues related to NCM Transaction
    
    
    
    
    
    
    174,001Other long-term liabilities
    
    
    310
    
    
    
    (2,272
    )Income tax receivable/payable
    
    
    17,057
    
    
    
    125,004Net cash provided by operating activities
    
    
    24,688
    
    
    
    161,166INVESTING ACTIVITIESAdditions to theatre properties and equipment
    
    
    (30,801
    )
    
    
    (32,065
    )Proceeds from sale of theatre properties and equipment
    
    
    2,439
    
    
    
    8,359Increase in escrow deposit due to like-kind exchange
    
    
    (2,089
    )
    
    
    Investment in joint venture  DCIP
    
    
    (1,000
    )
    
    
    Net proceeds from sale of NCM stock
    
    
    
    
    
    
    214,842Net cash provided by (used for) investing activities
    
    
    (31,451
    )
    
    
    191,136FINANCING ACTIVITIESProceeds from stock option exercises
    
    
    49
    
    
    
    Dividends paid to stockholders
    
    
    (19,270
    )
    
    
    Repurchase of senior discount notes
    
    
    (6,174
    )
    
    
    Retirement of senior subordinated notes
    
    
    
    
    
    
    (332,000
    )Repayments of other long-term debt
    
    
    (1,266
    )
    
    
    (3,576
    )Payments on capital leases
    
    
    (1,137
    )
    
    
    (868
    )Other
    
    
    (119
    )
    
    
    (48
    )Net cash used for financing activities
    
    
    (27,917
    )
    
    
    (336,492
    )EFFECT OF EXCHANGE RATE CHANGES
ON CASH AND CASH EQUIVALENTS
    
    
    1,641
    
    
    
    186INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
    
    
    (33,039
    )
    
    
    15,996CASH AND CASH EQUIVALENTS:Beginning of period
    
    
    338,043
    
    
    
    147,099End of period
    
    $
    305,004
    
    
    $
    163,095
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CINEMARK HOLDINGS, INC. AND SUBSIDIARIES
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 In thousands, except share and per share data
 1. The Company and Basis of Presentation
     2. New Accounting Pronouncements
 Fair Value Measurements.
 The Fair Value Option for Financial Assets
and Financial Liabilities.
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CINEMARK HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
In thousands, except share and per share data
 Business Combinations
 Noncontrolling Interest in Consolidated
Financial Statements
 Disclosures about Derivative Instruments and
Hedging Activitiesan Amendment of FASB Statement No. 133
 3. Initial Public Offering
 3 4 3 4 3 4 3 4
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CINEMARK HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
In thousands, except share and per share data
 4. Earnings Per Share
  Three MonthsEndedMarch 31,2008
    
    2007Net income
    
    $
    5,251
    
    
    $
    118,211Basic:Weighted average common shares outstanding
    
    
    106,965
    
    
    
    92,561Net income per common share
    
    $
    0.05
    
    
    $
    1.28Diluted:Weighted average common shares outstanding
    
    
    106,965
    
    
    
    92,561Common equivalent shares for stock options(1)
    
    
    2,232
    
    
    
    2,351Weighted average common and common equivalent shares outstanding
    
    
    109,197
    
    
    
    94,912Net income per common and common equivalent share
    
    $
    0.05
    
    
    $
    1.25
 (1)
 5. Dividend Payment
  6. Investment in National CineMedia and Transaction Related to its Initial Public Offering
   9




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CINEMARK HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
In thousands, except share and per share data
       10




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CINEMARK HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
In thousands, except share and per share data
    Gross revenues
    
    $
    62,652Operating income
    
    $
    17,701Net earnings
    
    $
    4,246
 7. Investment in Digital Cinema Implementation Partners
   8. Income Taxes
  9. Share Based Awards
   11




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CINEMARK HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
In thousands, except share and per share data
    Stock Options 
 WeightedNumber
    
    Averageof
    
    ExerciseOptions
    
    PriceOutstanding at December 31, 2007
    
    
    6,323,429
    
    
    $
    7.63Granted
    
    
    
    
    
    
    Exercised
    
    
    (6,500
    )
    
    $
    7.63Forfeited
    
    
    (11,276
    )
    
    $
    7.63Outstanding at March 31, 2008
    
    
    6,305,653
    
    
    $
    7.63Options exercisable at March 31, 2008
    
    
    4,973,962
    
    
    $
    7.63
  Restricted Stock
  12




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CINEMARK HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
In thousands, except share and per share data
   Shares ofRestrictedStockOutstanding at December 31, 2007
    
    
    21,880Granted
    
    
    141,585Forfeited
    
    
    Outstanding at March 31, 2008
    
    
    163,465Unvested restricted stock at March 31, 2008
    
    
    163,465
 Restricted Stock Units
  Number ofShares
    
    Value atVesting
    
    Grantat IRR of at least 8.5%
    
    
    37,819
    
    
    $
    487at IRR of at least 10.5%
    
    
    75,638
    
    
    $
    975at IRR of at least 12.5%
    
    
    113,456
    
    
    $
    1,462
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CINEMARK HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
In thousands, except share and per share data
  10. Early Retirement of Long-Term Debt
  3 4
 11. Interest Rate Swap Agreements
 Accounting for Derivative Instruments and Hedging Activities
  14




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CINEMARK HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
In thousands, except share and per share data
 12. Goodwill and Other Intangible Assets
  U.S.
    
    InternationalOperating
    
    OperatingSegment
    
    Segment
    
    TotalBalance at December 31, 2007
    
    $
    979,148
    
    
    $
    155,541
    
    
    $
    1,134,689Foreign currency translation adjustments (1)
    
    
    (160
    )
    
    
    4,146
    
    
    
    3,986Balance at March 31, 2008
    
    $
    978,988
    
    
    $
    159,687
    
    
    $
    1,138,675
 
 (1)
    
    U.S. operating segment includes one theatre located in Canada. Goodwill and Other Intangible Assets
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CINEMARK HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
In thousands, except share and per share data
  ForeignBalance at
    
    
    
    
    
    Currency
    
    Balance atDecember 31,
    
    
    
    
    
    Translation
    
    March 31,2007
    
    Amortization
    
    Adjustments
    
    2008Intangible assets with finite lives:Capitalized licensing fees:Gross carrying amount
    
    $
    5,138
    
    
    $
    
    
    
    $
    
    
    
    $
    5,138Accumulated amortization
    
    
    (1,565
    )
    
    
    (106
    )
    
    
    
    
    
    
    (1,671
    )Net carrying amount
    
    
    3,573
    
    
    
    (106
    )
    
    
    
    
    
    
    3,467Vendor contracts:Gross carrying amount
    
    
    56,973
    
    
    
    
    
    
    
    292
    
    
    
    57,265Accumulated amortization
    
    
    (23,342
    )
    
    
    (909
    )
    
    
    
    
    
    
    (24,251
    )Net carrying amount
    
    
    33,631
    
    
    
    (909
    )
    
    
    292
    
    
    
    33,014Net favorable leases:Gross carrying amount
    
    
    20,691
    
    
    
    
    
    
    
    (77
    )
    
    
    20,614Accumulated amortization
    
    
    (15,581
    )
    
    
    (704
    )
    
    
    
    
    
    
    (16,285
    )Net carrying amount
    
    
    5,110
    
    
    
    (704
    )
    
    
    (77
    )
    
    
    4,329Other intangible assets:Gross carrying amount
    
    
    69
    
    
    
    
    
    
    
    
    
    
    
    69Accumulated amortization
    
    
    (20
    )
    
    
    (1
    )
    
    
    
    
    
    
    (21
    )Net carrying amount
    
    
    49
    
    
    
    (1
    )
    
    
    
    
    
    
    48Total net intangible assets with finite lives
    
    
    42,363
    
    
    
    (1,720
    )
    
    
    215
    
    
    
    40,858Intangible assets with indefinite lives:Tradename
    
    
    310,681
    
    
    
    
    
    
    
    360
    
    
    
    311,041Other unamortized intangible assets
    
    
    3
    
    
    
    
    
    
    
    
    
    
    
    3Total intangible assets  net
    
    $
    353,047
    
    
    $
    (1,720
    )
    
    $
    575
    
    
    $
    351,902
  For the nine months ended December 31, 2008
    
    $
    4,684For the twelve months ended December 31, 2009
    
    
    5,287For the twelve months ended December 31, 2010
    
    
    5,005For the twelve months ended December 31, 2011
    
    
    4,551For the twelve months ended December 31, 2012
    
    
    3,686Thereafter
    
    
    17,645Total
    
    $
    40,858
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CINEMARK HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
In thousands, except share and per share data
 13. Impairment of Long-Lived Assets
 Accounting for the Impairment or Disposal of Long-Lived
Assets
   14. Foreign Currency Translation
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CINEMARK HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
In thousands, except share and per share data
  15. Comprehensive Income
 Reporting Comprehensive Income
 Three Months EndedMarch 31,2008
    
    2007Net income
    
    $
    5,251
    
    
    $
    118,211Fair value adjustments on interest rate swap
agreements (see Note 11)
    
    
    (11,959
    )
    
    
    (1,206
    )Foreign
currency translation adjustment (see Note 14)
    
    
    8,888
    
    
    
    1,868Comprehensive income
    
    $
    2,180
    
    
    $
    118,873
 16. Supplemental Cash Flow Information
  Three Months EndedMarch 31,2008
    
    2007Cash paid for interest
    
    $
    26,522
    
    
    $
    43,932Cash paid for income taxes, net of refunds received
    
    $
    (5,063
    )
    
    $
    840Noncash investing and financing activities:Change in construction lease obligations related to construction of theatres
    
    $
    
    
    
    $
    2,109Change in accounts payable and accrued expenses for the acquisition of
theatre properties and equipment
    
    $
    (5,104
    )
    
    $
    (3,402
    )Theatre properties acquired under capital lease
    
    $
    7,911
    
    
    $
    
 17. Segments
  18




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CINEMARK HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
In thousands, except share and per share data
  Three Months EndedMarch 31,2008
    
    2007RevenuesU.S.
    
    $
    308,799
    
    
    $
    306,374International
    
    
    93,109
    
    
    
    72,263Eliminations
    
    
    (892
    )
    
    
    (615
    )Total Revenues
    
    $
    401,016
    
    
    $
    378,022Adjusted EBITDAU.S.
    
    $
    64,876
    
    
    $
    66,699International
    
    
    19,284
    
    
    
    13,395Total Adjusted EBITDA
    
    $
    84,160
    
    
    $
    80,094Capital ExpendituresU.S.
    
    $
    25,895
    
    
    $
    24,897International
    
    
    4,906
    
    
    
    7,168Total Capital Expenditures
    
    $
    30,801
    
    
    $
    32,065
  Three Months EndedMarch 31,2008
    
    2007Net income
    
    $
    5,251
    
    
    $
    118,211Add (deduct):Income taxes
    
    
    3,641
    
    
    
    35,393Interest expense (1)
    
    
    32,073
    
    
    
    41,497Gain on NCM Transaction
    
    
    
    
    
    
    (210,773
    )Loss on early retirement of debt
    
    
    40
    
    
    
    7,829Other income
    
    
    (1,741
    )
    
    
    (2,483
    )Depreciation and amortization
    
    
    37,407
    
    
    
    36,875Amortization of favorable leases
    
    
    704
    
    
    
    934Impairment of long-lived assets
    
    
    4,487
    
    
    
    49,730(Gain) loss on sale of assets and other
    
    
    (199
    )
    
    
    305Deferred lease expenses
    
    
    1,232
    
    
    
    1,607Amortization of long-term prepaid rents
    
    
    404
    
    
    
    236Share based awards compensation expense
    
    
    861
    
    
    
    733Adjusted EBITDA
    
    $
    84,160
    
    
    $
    80,094
 
 (1)
    
    Includes amortization of debt issue costs. 19




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##### Table of Contents



CINEMARK HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
In thousands, except share and per share data
 Financial Information About Geographic Areas
  Three Months EndedMarch 31,2008
    
    2007RevenuesU.S. and Canada
    
    $
    308,799
    
    
    $
    306,374Brazil
    
    
    44,634
    
    
    
    34,412Mexico
    
    
    19,402
    
    
    
    16,678Other foreign countries
    
    
    29,073
    
    
    
    21,173Eliminations
    
    
    (892
    )
    
    
    (615
    )Total
    
    $
    401,016
    
    
    $
    378,022
 March 31,
    
    December 31,2008
    
    2007Theatre Properties and Equipment-netU.S. and Canada
    
    $
    1,133,412
    
    
    $
    1,137,244Brazil
    
    
    70,775
    
    
    
    72,635Mexico
    
    
    59,943
    
    
    
    59,201Other foreign countries
    
    
    45,812
    
    
    
    44,986Total
    
    $
    1,309,942
    
    
    $
    1,314,066
 18. Related Party Transactions
     20




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##### Table of Contents



CINEMARK HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
In thousands, except share and per share data
  19. Commitments and Contingencies
  20. Subsequent Event  Dividend Declaration
  21




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##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
   Horton Hears A Who, 10,000 B.C., Cloverfield, Jumper Hannah Montana & Miley Cyrus: Best of Both Worlds. Iron Man, The Chronicles of Narnia: Prince Caspian, Indiana Jones and the
Kingdom of the Crystal Skull, Sex and the City, Kung Fu Panda, Incredible Hulk, Get Smart, Wall-E,
Hancock, The Dark Knight, The Mummy: Tomb of the Dragon Emperor, Quantum of Solace, Madagascar 2:
The Crate Escape, Harry Potter and the Half-Blood Prince Journey to the Center of the Earth Bolt. Monsters vs. Aliens, Ice Age 3: Dawn of the Dinosaurs, Avatar.
      Recent Developments
  22




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##### Table of Contents



Results of Operations
  Three Months EndedMarch 31,Operating data (in millions):
    
    2008
    
    2007RevenuesAdmissions
    
    $
    262.4
    
    
    $
    244.0Concession
    
    
    122.2
    
    
    
    115.1Other
    
    
    16.4
    
    
    
    18.9Total revenues
    
    $
    401.0
    
    
    $
    378.0Theatre operating costs (1)Film rentals and advertising
    
    $
    138.1
    
    
    $
    128.3Concession supplies
    
    
    18.7
    
    
    
    17.5Salaries and wages
    
    
    42.6
    
    
    
    40.2Facility lease expense
    
    
    56.3
    
    
    
    51.6Utilities and other
    
    
    48.2
    
    
    
    44.2Total theatre operating costs
    
    $
    303.9
    
    
    $
    281.8Operating
data as a percentage of
revenues(2):RevenuesAdmissions
    
    
    65.4
    %
    
    
    64.6
    %Concession
    
    
    30.5
    %
    
    
    30.4
    %Other
    
    
    4.1
    %
    
    
    5.0
    %Total revenues
    
    
    100.0
    %
    
    
    100.0
    %Theatre operating costs (1) (2)Film rentals and advertising
    
    
    52.7
    %
    
    
    52.6
    %Concession supplies
    
    
    15.3
    %
    
    
    15.2
    %Salaries and wages
    
    
    10.6
    %
    
    
    10.6
    %Facility lease expense
    
    
    14.0
    %
    
    
    13.7
    %Utilities and other
    
    
    12.0
    %
    
    
    11.7
    %Total theatre operating costs
    
    
    75.8
    %
    
    
    74.6
    %Average screen count (month end average)
    
    
    4,658
    
    
    
    4,481Revenues per average screen (in dollars)
    
    $
    86,101
    
    
    $
    84,356
 
 (1)
    
    Excludes depreciation and amortization expense.(2)
    
    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. 23




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##### Table of Contents



Three months ended March 31, 2008 and 2007
 Revenues.
 International OperatingU.S. Operating Segment
    
    Segment
    
    ConsolidatedThree Months Ended
    
    Three Months Ended
    
    Three Months EndedMarch 31,
    
    March 31,
    
    March 31,%
    
    
    
    
    
    
    
    
    
    %
    
    
    
    
    
    
    
    
    
    %2008
    
    2007
    
    Change
    
    2008
    
    2007
    
    Change
    
    2008
    
    2007
    
    ChangeAdmissions revenues

(in millions)
    
    $
    202.8
    
    
    $
    197.5
    
    
    
    2.7
    %
    
    $
    59.6
    
    
    $
    46.5
    
    
    
    28.2
    %
    
    $
    262.4
    
    
    $
    244.0
    
    
    
    7.5
    %Concession revenues
(in millions)
    
    $
    96.7
    
    
    $
    95.6
    
    
    
    1.2
    %
    
    $
    25.5
    
    
    $
    19.5
    
    
    
    30.8
    %
    
    $
    122.2
    
    
    $
    115.1
    
    
    
    6.2
    %Other revenues

(in millions)
(1)
    
    $
    8.4
    
    
    $
    12.7
    
    
    
    (33.9
    )%
    
    $
    8.0
    
    
    $
    6.2
    
    
    
    29.0
    %
    
    $
    16.4
    
    
    $
    18.9
    
    
    
    (13.2
    %)Total revenues

(in millions)
(1)
    
    $
    307.9
    
    
    $
    305.8
    
    
    
    0.7
    %
    
    $
    93.1
    
    
    $
    72.2
    
    
    
    28.9
    %
    
    $
    401.0
    
    
    $
    378.0
    
    
    
    6.1
    %Attendance

(in millions)
    
    
    34.3
    
    
    
    34.9
    
    
    
    (1.7
    )%
    
    
    15.4
    
    
    
    14.3
    
    
    
    7.7
    %
    
    
    49.7
    
    
    
    49.2
    
    
    
    1.0
    %Revenues per screen

(in dollars)
(1)
    
    $
    84,416
    
    
    $
    86,771
    
    
    
    (2.7
    )%
    
    $
    92,187
    
    
    $
    75,468
    
    
    
    22.2
    %
    
    $
    86,101
    
    
    $
    84,356
    
    
    
    2.1
    %
 
 (1)
    
    U.S. operating segment revenues include eliminations of intercompany transactions
with the international operating segment. See Note 17 of our condensed consolidated financial
statements.  Consolidated.
  U.S.
  International.
 24




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##### Table of Contents



Theatre Operating Costs (excludes depreciation and amortization expense).
 International OperatingU.S. Operating Segment
    
    Segment
    
    ConsolidatedThree Months Ended
    
    Three Months Ended
    
    Three Months EndedMarch 31,
    
    March 31,
    
    March 31,2008
    
    2007
    
    2008
    
    2007
    
    2008
    
    2007Film rentals and advertising
    
    $
    108.9
    
    
    $
    105.5
    
    
    $
    29.2
    
    
    $
    22.8
    
    
    $
    138.1
    
    
    $
    128.3Concession supplies
    
    
    12.5
    
    
    
    12.5
    
    
    
    6.2
    
    
    
    5.0
    
    
    $
    18.7
    
    
    $
    17.5Salaries and wages
    
    
    35.4
    
    
    
    34.3
    
    
    
    7.2
    
    
    
    5.9
    
    
    $
    42.6
    
    
    $
    40.2Facility lease expense
    
    
    41.5
    
    
    
    39.9
    
    
    
    14.8
    
    
    
    11.7
    
    
    $
    56.3
    
    
    $
    51.6Utilities and other
    
    
    36.3
    
    
    
    34.3
    
    
    
    11.9
    
    
    
    9.9
    
    
    $
    48.2
    
    
    $
    44.2Total theatre operating costs
    
    $
    234.6
    
    
    $
    226.5
    
    
    $
    69.3
    
    
    $
    55.3
    
    
    $
    303.9
    
    
    $
    281.8
  Consolidated.
   U.S.
   International.
 25




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##### Table of Contents



General and Administrative Expenses.
 Depreciation and Amortization.
 Impairment of Long-Lived Assets Gain on NCM Transaction
 (Gain) Loss on Sale of Assets and Other.
 Interest Expense.
 Loss on Early Retirement of Debt. 3 4
 Gain on NCM Transaction.
 Distributions from NCM.
 26




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##### Table of Contents



Income Taxes.
 Liquidity and Capital Resources
 Operating Activities
  3 4
 Investing Activities
    New
    
    ExistingPeriod
    
    Theatres
    
    Theatres
    
    TotalThree Months Ended March 31, 2008
    
    $
    24.5
    
    
    $
    6.3
    
    
    $
    30.8Three Months Ended March 31, 2007
    
    $
    21.7
    
    
    $
    10.4
    (1)
    
    $
    32.1
 
 (1)
    
    Includes approximately $2.7 million of expenditures related to the rollout of
digital technology for NCM advertising to the Century theatres acquired.   27




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##### Table of Contents



Financing Activities
   3 4
  December 31,March 31, 2008
    
    2007Cinemark, Inc. 9 3/4% senior discount notes due 2014
    
    $
    416,674
    
    
    $
    415,768Cinemark USA, Inc. term loan
    
    
    1,101,686
    
    
    
    1,101,686Cinemark USA, Inc. 9% senior subordinated notes due 2013
    
    
    184
    
    
    
    184Other long-term debt
    
    
    5,388
    
    
    
    6,107Total long-term debt
    
    $
    1,523,932
    
    
    
    1,523,745Less current portion
    
    
    12,001
    
    
    
    9,166Long-term debt, less current portion
    
    $
    1,511,931
    
    
    $
    1,514,579
 3 4
 28




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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
    
    $
    1,563.6
    
    
    $
    12.0
    
    
    $
    25.5
    
    
    $
    543.4
    
    
    $
    982.7Scheduled interest payments on long-term debt 2
    
    $
    532.0
    
    
    
    62.0
    
    
    
    210.9
    
    
    
    196.2
    
    
    
    62.9Operating lease obligations
    
    $
    1,956.4
    
    
    
    180.4
    
    
    
    354.0
    
    
    
    333.9
    
    
    
    1,088.1Capital lease obligations
    
    $
    128.1
    
    
    
    5.1
    
    
    
    12.0
    
    
    
    13.0
    
    
    
    98.0Scheduled interest payments on capital leases
    
    $
    115.3
    
    
    
    12.7
    
    
    
    23.8
    
    
    
    21.4
    
    
    
    57.4Letters of credit
    
    $
    0.1
    
    
    
    0.1
    
    
    
    
    
    
    
    
    
    
    
    Employment agreements
    
    $
    10.5
    
    
    
    3.5
    
    
    
    7.0
    
    
    
    
    
    
    
    Purchase commitments 3
    
    $
    145.0
    
    
    
    83.5
    
    
    
    60.1
    
    
    
    1.2
    
    
    
    0.2Total obligations 4
    
    $
    4,451.0
    
    
    $
    359.3
    
    
    $
    693.3
    
    
    $
    1,109.1
    
    
    $
    2,289.3
 
 1
    
    Includes the 93/4% senior discount notes in the aggregate principal amount at maturity
of $456.4 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 in
effect on March 31, 2008. The average interest rates on our fixed rate and variable rate debt
were 8.1% and 4.8%, respectively, as of March 31, 2008.3
    
    Includes estimated capital expenditures associated with the construction of new theatres to
which we were committed as of March 31, 2008.4
    
    The contractual obligations table excludes the Companys FIN 48 liabilities of $15.6
million because the Company cannot make a reliable estimate of the timing of the related cash
payments. Cinemark, Inc. 9 3/4% Senior Discount Notes
 3 4 3 4
 3 4
 3 4 3 4 3 4
  3 4
 29




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##### Table of Contents



3 4
 Senior Secured Credit Facility
     30




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##### Table of Contents



3 4
  Accounting for Derivative Instruments and Hedging Activities
 31




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##### Table of Contents



Cinemark USA, Inc. 9% Senior Subordinated Notes
     Seasonality
  
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
  Interest Rate Risk
  Accounting for Derivative Instruments and Hedging
Activities
 32




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##### Table of Contents



Expected Maturity as of March 31, 2008(in millions)AverageInterest2009
    
    2010
    
    2011
    
    2012
    
    2013
    
    Thereafter
    
    Total
    
    Fair Value
    
    RateFixed rate (1)
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    0.2
    
    
    $
    956.3
    
    
    $
    956.5
    
    
    $
    922.4
    
    
    
    8.1
    %Variable rate
    
    
    12.0
    
    
    
    13.5
    
    
    
    12.0
    
    
    
    11.2
    
    
    
    532.0
    
    
    
    26.4
    
    
    
    607.1
    
    
    
    609.3
    
    
    
    4.8
    %Total debt
    
    $
    12.0
    
    
    $
    13.5
    
    
    $
    12.0
    
    
    $
    11.2
    
    
    $
    532.2
    
    
    $
    982.7
    
    
    $
    1,563.6
    
    
    $
    1,531.7
 Expected Maturity as of December 31, 2007(in millions)AverageFair
    
    Interest2008
    
    2009
    
    2010
    
    2011
    
    2012
    
    Thereafter
    
    Total
    
    Value
    
    RateFixed rate (1)
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    966.6
    
    
    $
    966.6
    
    
    $
    940.1
    
    
    
    8.2
    %Variable rate
    
    
    9.2
    
    
    
    13.8
    
    
    
    12.4
    
    
    
    11.2
    
    
    
    271.6
    
    
    
    289.6
    
    
    
    607.8
    
    
    
    612.8
    
    
    
    6.7
    %Total debt
    
    $
    9.2
    
    
    $
    13.8
    
    
    $
    12.4
    
    
    $
    11.2
    
    
    $
    271.6
    
    
    $
    1,256.2
    
    
    $
    1,574.4
    
    
    $
    1,552.9
 
 (1)
    
    Includes $500.0 million of the Cinemark USA, Inc. term loan, which represents the
debt hedged with the Companys interest rate swap agreements. Foreign Currency Exchange Rate Risk
  33




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##### Table of Contents



Item 4T. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
  Changes in Internal Controls Over Financial Reporting
  
 PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors
 
 
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
 3 4
 34




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##### Table of Contents



Item 6. Exhibits
 *4.1
    
    Amended and Restated Cinemark Holdings, Inc. 2006 Long Term Incentive Plan.*4.2
    
    Form of Restricted Stock Unit Award Agreement pursuant to the Amended and
Restated Cinemark Holdings, Inc. 2006 Long Term Incentive Plan.*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 Section
906 of the Sarbanes-Oxley Act of 2002.*32.2
    
    Certification of Robert Copple, Chief Financial Officer, pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
 
 *
    
    filed herewith. 35




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##### Table of Contents



SIGNATURES
  CINEMARK HOLDINGS, INC.RegistrantDATE:May 9, 2008/s/Alan W. StockAlan W. StockChief Executive Officer/s/Robert CoppleRobert CoppleChief Financial Officer
 36




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##### Table of Contents



EXHIBIT INDEX
 Number
    
    Exhibit Title* 4.1
    
    Amended and Restated Cinemark Holdings, Inc. 2006 Long Term Incentive Plan.* 4.2
    
    Form of Restricted Stock Unit Award Agreement pursuant to the Amended and Restated Cinemark Holdings, Inc. 2006 Long Term
Incentive Plan.*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 Section 906 of the Sarbanes-Oxley Act of 2002.*32.2
    
    Certification of Robert Copple, Chief Financial Officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 *
    
    filed herewith.