##### 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, 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
    
    75093(Address of principal executive offices)
    
    (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 March 31, 2010 and
December 31, 2009 (unaudited)
    
    
    4Condensed Consolidated Statements of Income for the three
months ended March 31, 2010 and 2009 (unaudited)
    
    
    5Condensed Consolidated Statements of Cash Flows for the three
months ended March 31, 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
    
    
    23Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    31Item 4. Controls and Procedures
    
    
    32PART II. OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    33Item 1A. Risk Factors
    
    
    33Item 6. Exhibits
    
    
    34SIGNATURES
    
    
    35EX-31.1EX-31.2EX-32.1EX-32.2
  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 31,2010
    
    
    2009AssetsCurrent assetsCash and cash equivalents
    
    $
    433,229
    
    
    $
    437,936Inventories
    
    
    9,817
    
    
    
    9,854Accounts receivable
    
    
    30,526
    
    
    
    33,110Income tax receivable
    
    
    
    
    
    
    13,025Current deferred tax asset
    
    
    3,297
    
    
    
    3,321Prepaid expenses and other
    
    
    9,376
    
    
    
    10,051Total current assets
    
    
    486,245
    
    
    
    507,297Theatre properties and equipment
    
    
    1,934,828
    
    
    
    1,936,535Less accumulated depreciation and amortization
    
    
    743,613
    
    
    
    716,947Theatre properties and equipment, net
    
    
    1,191,215
    
    
    
    1,219,588Other assetsGoodwill
    
    
    1,115,368
    
    
    
    1,116,302Intangible assets  net
    
    
    342,331
    
    
    
    342,998Investment in NCM
    
    
    64,190
    
    
    
    34,232Investment in DCIP
    
    
    16,845
    
    
    
    640Investments in and advances to affiliates
    
    
    2,873
    
    
    
    2,889Deferred charges and other assets  net
    
    
    63,613
    
    
    
    52,502Total other assets
    
    
    1,605,220
    
    
    
    1,549,563Total assets
    
    $
    3,282,680
    
    
    $
    3,276,448Liabilities and equityCurrent liabilitiesCurrent portion of long-term debt
    
    $
    11,475
    
    
    $
    12,227Current portion of capital lease obligations
    
    
    7,270
    
    
    
    7,340Income tax payable
    
    
    8,178
    
    
    
    Current liability for uncertain tax positions
    
    
    8,507
    
    
    
    13,229Accounts payable and accrued expenses
    
    
    211,450
    
    
    
    248,036Total current liabilities
    
    
    246,880
    
    
    
    280,832Long-term liabilitiesLong-term debt, less current portion
    
    
    1,529,321
    
    
    
    1,531,478Capital lease obligations, less current portion
    
    
    131,359
    
    
    
    133,028Deferred tax liability
    
    
    113,957
    
    
    
    124,823Liability for uncertain tax positions
    
    
    17,773
    
    
    
    18,432Deferred lease expenses
    
    
    28,498
    
    
    
    27,698Deferred revenue  NCM
    
    
    233,031
    
    
    
    203,006Other long-term liabilities
    
    
    42,727
    
    
    
    42,523Total long-term liabilities
    
    
    2,096,666
    
    
    
    2,080,988Commitments and contingencies (see Note 17)EquityCinemark Holdings, Inc.s stockholders equity:Common stock, $0.001 par value: 300,000,000 shares authorized,
115,571,013 shares issued and 112,217,578 shares
outstanding at March 31, 2010; and
114,222,523 shares issued and 110,917,105 shares
outstanding at December 31, 2009
    
    
    116
    
    
    
    114Additional paid-in-capital
    
    
    1,020,141
    
    
    
    1,011,667Treasury stock, 3,353,435 and 3,305,418 shares at cost at March 31, 2010
and December 31, 2009, respectively
    
    
    (44,608
    )
    
    
    (43,895
    )Retained deficit
    
    
    (45,606
    )
    
    
    (60,595
    )Accumulated other comprehensive loss
    
    
    (7,087
    )
    
    
    (7,459
    )Total Cinemark Holdings, Inc.s stockholders equity
    
    
    922,956
    
    
    
    899,832Noncontrolling interests
    
    
    16,178
    
    
    
    14,796Total equity
    
    
    939,134
    
    
    
    914,628Total liabilities and equity
    
    $
    3,282,680
    
    
    $
    3,276,448
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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 31,2010
    
    
    2009RevenuesAdmissions
    
    $
    342,990
    
    
    $
    279,883Concession
    
    
    153,104
    
    
    
    130,031Other
    
    
    20,537
    
    
    
    15,886Total revenues
    
    
    516,631
    
    
    
    425,800Cost of operationsFilm rentals and advertising
    
    
    188,819
    
    
    
    147,126Concession supplies
    
    
    22,406
    
    
    
    19,717Salaries and wages
    
    
    52,542
    
    
    
    44,350Facility lease expense
    
    
    62,715
    
    
    
    55,738Utilities and other
    
    
    55,221
    
    
    
    48,728General and administrative expenses
    
    
    25,530
    
    
    
    21,788Depreciation and amortization
    
    
    33,933
    
    
    
    36,133Amortization of favorable/unfavorable leases
    
    
    158
    
    
    
    323Impairment of long-lived assets
    
    
    347
    
    
    
    1,039Loss on sale of assets and other
    
    
    3,167
    
    
    
    272Total cost of operations
    
    
    444,838
    
    
    
    375,214Operating income
    
    
    71,793
    
    
    
    50,586Other income (expense)Interest expense
    
    
    (26,010
    )
    
    
    (25,464
    )Interest income
    
    
    1,053
    
    
    
    1,832Foreign currency exchange gain (loss)
    
    
    (268
    )
    
    
    66Distributions from NCM
    
    
    9,946
    
    
    
    6,579Equity in income (loss) of affiliates
    
    
    27
    
    
    
    (605
    )Total other expense
    
    
    (15,252
    )
    
    
    (17,592
    )Income before income taxes
    
    
    56,541
    
    
    
    32,994Income taxes
    
    
    19,830
    
    
    
    14,643Net income
    
    $
    36,711
    
    
    $
    18,351Less: Net income attributable to noncontrolling interests
    
    
    1,618
    
    
    
    786Net income attributable to Cinemark Holdings, Inc.
    
    $
    35,093
    
    
    $
    17,565Weighted average shares outstandingBasic
    
    
    110,547
    
    
    
    108,463Diluted
    
    
    110,880
    
    
    
    109,566Earnings per share attributable to Cinemark Holdings, Inc.s common stockholdersBasic
    
    $
    0.32
    
    
    $
    0.16Diluted
    
    $
    0.31
    
    
    $
    0.16
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CINEMARK HOLDINGS, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (In thousands, unaudited)
 Three months ended March 31,2010
    
    
    2009Operating activitiesNet income
    
    $
    36,711
    
    
    $
    18,351Adjustments to reconcile net income to cash provided by operating activities:Depreciation
    
    
    32,829
    
    
    
    35,229Amortization of intangible and other assets and unfavorable leases
    
    
    1,262
    
    
    
    1,227Amortization of long-term prepaid rents
    
    
    341
    
    
    
    390Amortization of debt issue costs
    
    
    1,181
    
    
    
    1,193Amortization of deferred revenues, deferred lease incentives and other
    
    
    (1,399
    )
    
    
    (1,002
    )Amortization of accumulated other comprehensive loss related to interest rate
swap agreement
    
    
    1,158
    
    
    
    1,158Amortization of bond discount
    
    
    188
    
    
    
    Impairment of long-lived assets
    
    
    347
    
    
    
    1,039Share based awards compensation expense
    
    
    1,313
    
    
    
    1,578Loss on sale of assets and other
    
    
    1,457
    
    
    
    272Loss on contribution of digital projection systems to DCIP
    
    
    1,710
    
    
    
    Accretion of interest on senior discount notes
    
    
    
    
    
    
    8,085Deferred lease expenses
    
    
    783
    
    
    
    1,088Deferred income tax expenses
    
    
    (10,528
    )
    
    
    (2,422
    )Equity in (income) loss of affiliates
    
    
    (27
    )
    
    
    605Tax benefit related to stock option exercises
    
    
    1,667
    
    
    
    Increase in deferred revenue related to new beverage contract
    
    
    
    
    
    
    6,000Distributions from equity investees
    
    
    1,674
    
    
    
    424Changes in assets and liabilities
    
    
    (26,566
    )
    
    
    (21,740
    )Net cash provided by operating activities
    
    
    44,101
    
    
    
    51,475Investing activitiesAdditions to theatre properties and equipment
    
    
    (19,517
    )
    
    
    (22,872
    )Proceeds from sale of theatre properties and equipment
    
    
    491
    
    
    
    510Acquisition of theatres in the U.S.
    
    
    
    
    
    
    (48,950
    )Investment in joint venture  DCIP, net of cash distributions
    
    
    (644
    )
    
    
    Net cash used for investing activities
    
    
    (19,670
    )
    
    
    (71,312
    )Financing activitiesProceeds from stock option exercises
    
    
    5,081
    
    
    
    192Payroll taxes paid as a result of noncash stock option exercises and restricted stock withholdings
    
    
    (299
    )
    
    
    Dividends paid to stockholders
    
    
    (20,046
    )
    
    
    (19,595
    )Repayments of other long-term debt
    
    
    (3,070
    )
    
    
    (3,147
    )Payments on capital leases
    
    
    (1,739
    )
    
    
    (1,299
    )Payment of debt issue costs
    
    
    (8,706
    )
    
    
    Other
    
    
    
    
    
    
    (94
    )Net cash used for financing activities
    
    
    (28,779
    )
    
    
    (23,943
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    (359
    )
    
    
    (319
    )Decrease in cash and cash equivalents
    
    
    (4,707
    )
    
    
    (44,099
    )Cash and cash equivalents:Beginning of period
    
    
    437,936
    
    
    
    349,603End of period
    
    $
    433,229
    
    
    $
    305,504Supplemental information (see Note 14)
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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
 Interim Disclosures about Fair Value of
Financial Instruments
 March 31, 2010
    
    
    December 31, 2009Carrying Value
    
    
    Fair Value
    
    
    Carrying Value
    
    
    Fair ValueDebt (see Note 9)
    
    $
    1,540,796
    
    
    $
    1,570,479
    
    
    $
    1,543,705
    
    
    $
    1,513,838Interest rate swap
agreements (see
Note 10)
    
    $
    19,356
    
    
    $
    19,356
    
    
    $
    18,524
    
    
    $
    18,524
 Subsequent Events
 The FASB Accounting
Standards Codification and the Hierarchy of Generally Accepted Accounting Principles
 7




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CINEMARK HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
In thousands, except share and per share data
  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
 8




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CINEMARK HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
In thousands, except share and per share data
 3. Earnings Per Share
  Three Months EndedMarch 31,2010
    
    
    2009Numerator:Net income attributable to Cinemark Holdings, Inc.
    
    $
    35,093
    
    
    $
    17,565Earnings allocated to participating share-based awards(1)
    
    
    (232
    )
    
    
    (65
    )Net income attributable to common stockholders
    
    $
    34,861
    
    
    $
    17,500Denominator(shares in thousands):Basic weighted average common stock outstanding
    
    
    110,547
    
    
    
    108,463Common equivalent shares for stock options
    
    
    332
    
    
    
    1,103Common equivalent shares for restricted stock units (2)
    
    
    1
    
    
    
    Diluted
    
    
    110,880
    
    
    
    109,566Basic earnings per share attributable to common stockholders
    
    $
    0.32
    
    
    $
    0.16Diluted earnings per share attributable to common stockholders
    
    $
    0.31
    
    
    $
    0.16
 
 (1)
    
    For the three months ended March 31, 2010 and 2009, a weighted
average of approximately 737 shares and 408 shares of unvested restricted stock,
respectively, are considered participating securities.(2)
    
    Common equivalent shares for restricted stock units of 325 were
excluded from the diluted earnings per share calculation for the three months ended
March 31, 2009 because they were anti-dilutive. 9




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CINEMARK HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
In thousands, except share and per share data
 4. Equity
  CinemarkHoldings, Inc.Stockholders'
    
    
    Noncontrolling
    
    
    TotalEquity
    
    
    Interests
    
    
    EquityBalance at January 1, 2010
    
    $
    899,832
    
    
    $
    14,796
    
    
    $
    914,628Share based awards compensation expense
    
    
    1,313
    
    
    
    
    
    
    
    1,313Stock repurchases related to vested restricted stock
    
    
    (182
    )
    
    
    
    
    
    
    (182
    )Exercise of stock options, net of stock withholdings
    
    
    4,965
    
    
    
    
    
    
    
    4,965Tax benefit related to stock option exercises
    
    
    1,667
    
    
    
    
    
    
    
    1,667Dividends paid to stockholders (1)
    
    
    (20,046
    )
    
    
    
    
    
    
    (20,046
    )Dividends accrued on unvested restricted stock unit awards (1)
    
    
    (58
    )
    
    
    
    
    
    
    (58
    )Comprehensive income:Net income
    
    
    35,093
    
    
    
    1,618
    
    
    
    36,711Fair value adjustments on interest
rate swap agreements, net of taxes of
$314
    
    
    (518
    )
    
    
    
    
    
    
    (518
    )Amortization of accumulated other
comprehensive loss on terminated swap
agreement
    
    
    1,158
    
    
    
    
    
    
    
    1,158Foreign currency translation adjustment
    
    
    (268
    )
    
    
    (236
    )
    
    
    (504
    )Balance at March 31, 2010
    
    $
    922,956
    
    
    $
    16,178
    
    
    $
    939,134
 CinemarkHoldings, Inc.Stockholders'
    
    
    Noncontrolling
    
    
    TotalEquity
    
    
    Interests
    
    
    EquityBalance at January 1, 2009
    
    $
    811,256
    
    
    $
    12,971
    
    
    $
    824,227Share based awards compensation expense
    
    
    1,578
    
    
    
    
    
    
    
    1,578Exercise of stock options
    
    
    192
    
    
    
    
    
    
    
    192Dividends paid to stockholders (2)
    
    
    (19,595
    )
    
    
    
    
    
    
    (19,595
    )Dividends accrued on unvested restricted stock unit awards (2)
    
    
    (25
    )
    
    
    
    
    
    
    (25
    )Dividends paid to noncontrolling interests
    
    
    
    
    
    
    (93
    )
    
    
    (93
    )Comprehensive income:Net income
    
    
    17,565
    
    
    
    786
    
    
    
    18,351Fair value adjustments on interest rate swap agreements, net of taxes
of $(31)
    
    
    52
    
    
    
    
    
    
    
    52Amortization of accumulated other comprehensive loss on terminated
swap agreement
    
    
    1,158
    
    
    
    
    
    
    
    1,158Foreign currency translation adjustment
    
    
    (1,728
    )
    
    
    (821
    )
    
    
    (2,549
    )Balance at March 31, 2009
    
    $
    810,453
    
    
    $
    12,843
    
    
    $
    823,296
 
 (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.(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. 10




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CINEMARK HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
In thousands, except share and per share data
 5. 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
  6. Investment in National CineMedia
  Equity inInvestment
    
    
    Deferred
    
    
    Distributions
    
    
    (Earnings)
    
    
    Other
    
    
    Cashin NCM
    
    
    Revenue
    
    
    from NCM
    
    
    Losses
    
    
    Revenue
    
    
    ReceivedBalance as of December 31, 2009
    
    $
    34,232
    
    
    $
    (203,006
    )Receipt of common units due to 2010 common unit
adjustment
    
    
    30,683
    
    
    
    (30,683
    )
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Revenues earned under exhibitor services agreement
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,190
    )
    
    
    1,190Receipt of excess cash distributions
    
    
    (1,069
    )
    
    
    
    
    
    
    (6,879
    )
    
    
    
    
    
    
    
    
    
    
    7,948Receipt under tax receivable agreement
    
    
    (477
    )
    
    
    
    
    
    
    (3,067
    )
    
    
    
    
    
    
    
    
    
    
    3,544Equity in earnings
    
    
    821
    
    
    
    
    
    
    
    
    
    
    
    (821
    )
    
    
    
    
    
    
    Amortization of deferred revenue
    
    
    
    
    
    
    658
    
    
    
    
    
    
    
    
    
    
    
    (658
    )
    
    
    Balance as of and for the period ended March 31, 2010
    
    $
    64,190
    
    
    $
    (233,031
    )
    
    $
    (9,946
    )
    
    $
    (821
    )
    
    $
    (1,848
    )
    
    $
    12,682
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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
    
    $
    380,667Operating income
    
    $
    168,200Net earnings
    
    $
    128,531
 7. Investment in Digital Cinema Implementation Partners
     12




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CINEMARK HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
In thousands, except share and per share data
  8. 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
    
    
    $
    3.51Granted
    
    
    
    
    
    
    
    
    
    
    Exercised
    
    
    (720,220
    )
    
    $
    7.63
    
    
    $
    3.51Forfeited
    
    
    
    
    
    
    
    
    
    
    Outstanding at March 31, 2010
    
    
    511,672
    
    
    $
    7.63
    
    
    $
    3.51
    
    
    $
    5,480Options exercisable at March 31, 2010
    
    
    511,672
    
    
    $
    7.63
    
    
    $
    3.51
    
    
    $
    5,480
   Restricted Stock
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CINEMARK HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
In thousands, except share and per share data
  Shares of
    
    
    Weighted AverageRestricted
    
    
    Grant DateStock
    
    
    Fair ValueOutstanding at December 31, 2009
    
    
    764,078
    
    
    $
    11.10Granted
    
    
    628,270
    
    
    $
    18.29Forfeited
    
    
    (2,719
    )
    
    $
    11.03Vested
    
    
    (37,818
    )
    
    $
    12.89Outstanding at March 31, 2010
    
    
    1,351,811
    
    
    $
    14.39Unvested restricted stock at March 31, 2010
    
    
    1,351,811
    
    
    $
    14.39
  Restricted Stock Units
  Number of
    
    FairShares
    
    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



CINEMARK HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
In thousands, except share and per share data
    9. Long-Term Debt Activity
 Senior Notes
 3 4
  15




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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
 Amendment and Extension of Senior Secured Credit Facility
    Fair Value of Long-Term Debt
  10. Interest Rate Swap Agreements
  16




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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
   2010
    
    
    2009Beginning liability balance   January 1
    
    $
    18,524
    
    
    $
    24,781Total (gain) loss included in accumulated other comprehensive loss
    
    
    832
    
    
    
    (83
    )Ending liability balance  March 31
    
    $
    19,356
    
    
    $
    24,698
  11. 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
    
    
    
    
    
    
    (934
    )
    
    
    (934
    )Balance at March 31, 2010 (1)
    
    $
    948,026
    
    
    $
    167,342
    
    
    $
    1,115,368
 
 (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



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 31,2009
    
    
    Amortization
    
    
    Adjustments
    
    
    2010Intangible assets with finite lives:Vendor contracts:Gross carrying amount
    
    $
    56,474
    
    
    $
    
    
    
    $
    279
    
    
    $
    56,753Accumulated amortization
    
    
    (29,870
    )
    
    
    (815
    )
    
    
    
    
    
    
    (30,685
    )Net carrying amount
    
    
    26,604
    
    
    
    (815
    )
    
    $
    279
    
    
    
    26,068Other intangible assets:Gross carrying amount
    
    
    26,510
    
    
    
    
    
    
    
    62
    
    
    
    26,572Accumulated amortization
    
    
    (20,596
    )
    
    
    (511
    )
    
    
    
    
    
    
    (21,107
    )Net carrying amount
    
    
    5,914
    
    
    
    (511
    )
    
    
    62
    
    
    
    5,465Total net intangible assets with finite lives
    
    
    32,518
    
    
    
    (1,326
    )
    
    
    341
    
    
    
    31,533Intangible assets with indefinite lives:Tradename
    
    
    310,480
    
    
    
    
    
    
    
    318
    
    
    
    310,798Total intangible assets  net
    
    $
    342,998
    
    
    $
    (1,326
    )
    
    $
    659
    
    
    $
    342,331
  For the nine months ended December 31, 2010
    
    $
    4,283For the twelve months ended December 31, 2011
    
    
    5,279For the twelve months ended December 31, 2012
    
    
    5,123For the twelve months ended December 31, 2013
    
    
    4,377For the twelve months ended December 31, 2014
    
    
    3,831Thereafter
    
    
    8,640Total
    
    $
    31,533
 12. Impairment of Long-Lived Assets
  .
 18




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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
  Three Months EndedMarch 31,2010
    
    
    2009United States theatre properties
    
    $
    347
    
    
    $
    821International theatre properties
    
    
    
    
    
    
    147Subtotal
    
    
    347
    
    
    
    968Intangible assets
    
    
    
    
    
    
    71Impairment of long-lived assets
    
    $
    347
    
    
    $
    1,039
 13. Foreign Currency Translation
       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
 14. Supplemental Cash Flow Information
  Three Months EndedMarch 31,2010
    
    2009Cash paid for interest
    
    $
    12,371
    
    
    $
    15,340Cash paid for income taxes, net of refunds received
    
    $
    12,903
    
    
    $
    2,873Noncash investing and financing activities:Change in construction lease obligations related to construction of theatres
    
    $
    2,370
    
    
    $
    Change in accounts payable and accrued expenses for the acquisition of theatre
properties and equipment (1)
    
    $
    2,543
    
    
    $
    (3,903
    )Theatre properties acquired under capital lease (2)
    
    $
    
    
    
    $
    19,800Change in fair market values of interest rate swap agreements, net of taxes
    
    $
    (518
    )
    
    $
    52Investment in NCM (See Note 6)
    
    $
    30,683
    
    
    $
    15,536Equipment contributed to DCIP (see Note 7)
    
    $
    18,090
    
    
    $
    Dividends accrued on unvested restricted stock unit awards
    
    $
    58
    
    
    $
    25Shares issued upon noncash stock option exercises, at exercise price of $7.63 per share
    
    $
    413
    
    
    $
    
 
 (1)
    
    Additions to theatre properties and equipment included in accounts payable as of
December 31, 2009 and March 31, 2010 were $7,823 and $10,366, respectively.(2)
    
    Amount recorded during the three months ended March 31, 2009 was a result of
the acquisition of theatres in the U.S. as discussed in Note 5. 15. Segments
   Three MonthsMarch 31,2010
    
    
    2009RevenuesU.S.
    
    $
    388,615
    
    
    $
    341,445International
    
    
    129,271
    
    
    
    85,195Eliminations
    
    
    (1,255
    )
    
    
    (840
    )Total Revenues
    
    $
    516,631
    
    
    $
    425,800Adjusted EBITDAU.S.
    
    $
    89,405
    
    
    $
    81,719International
    
    
    32,376
    
    
    
    16,269Total Adjusted EBITDA
    
    $
    121,781
    
    
    $
    97,988Capital ExpendituresU.S.
    
    $
    12,500
    
    
    $
    16,251International
    
    
    7,017
    
    
    
    6,621Total Capital Expenditures
    
    $
    19,517
    
    
    $
    22,872
 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
  Three Months EndedMarch 31,2010
    
    
    2009Net income
    
    $
    36,711
    
    
    $
    18,351Add (deduct):Income taxes
    
    
    19,830
    
    
    
    14,643Interest expense (1)
    
    
    26,010
    
    
    
    25,464Other income (2)
    
    
    (812
    )
    
    
    (1,293
    )Depreciation and amortization
    
    
    33,933
    
    
    
    36,133Amortization of favorable/unfavorable leases
    
    
    158
    
    
    
    323Impairment of long-lived assets
    
    
    347
    
    
    
    1,039Loss on sale of assets and other
    
    
    3,167
    
    
    
    272Deferred lease expenses
    
    
    783
    
    
    
    1,088Amortization of long-term prepaid rents
    
    
    341
    
    
    
    390Share based awards compensation expense
    
    
    1,313
    
    
    
    1,578Adjusted EBITDA
    
    $
    121,781
    
    
    $
    97,988
 
 (1)
    
    Includes amortization of debt issue costs.(2)
    
    Includes interest income, foreign currencyexchange
gain (loss), and equity in income (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 EndedMarch 31,Revenues
    
    2010
    
    
    2009U.S. and Canada
    
    $
    388,615
    
    
    $
    341,445Brazil
    
    
    69,218
    
    
    
    43,258Mexico
    
    
    17,382
    
    
    
    14,217Other foreign countries
    
    
    42,671
    
    
    
    27,720Eliminations
    
    
    (1,255
    )
    
    
    (840
    )Total
    
    $
    516,631
    
    
    $
    425,800
 As of
    
    
    As ofMarch 31,
    
    
    December 31,Theatre Properties and Equipment-net
    
    2010
    
    
    2009U.S. and Canada
    
    $
    1,009,941
    
    
    $
    1,040,395Brazil
    
    
    94,033
    
    
    
    91,996Mexico
    
    
    39,959
    
    
    
    39,371Other foreign countries
    
    
    47,282
    
    
    
    47,826Total
    
    $
    1,191,215
    
    
    $
    1,219,588
 16. Related Party Transactions
  21




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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
    17. Commitments and Contingencies
  18. Subsequent Event  Buyout of Colombia Noncontrolling Interest
  22




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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, Valentines Day Shutter Island. Clash of the Titans, Iron Man 2, Shrek Forever
After, Sex and the City 2, Toy Story 3, Little Fockers, The A Team, Tron: Legacy, Robin Hood,
Prince of Persia: The Sands of Time, Despicable Me, Tangled, Inception Twilight Harry Potter
      23




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##### Table of Contents



Results of Operations
  Three Months EndedMarch 31,Operating data (in millions):
    
    2010
    
    
    2009RevenuesAdmissions
    
    $
    343.0
    
    
    $
    279.9Concession
    
    
    153.1
    
    
    
    130.0Other
    
    
    20.5
    
    
    
    15.9Total revenues
    
    $
    516.6
    
    
    $
    425.8Cost of operationsFilm rentals and advertising
    
    
    188.8
    
    
    
    147.1Concession supplies
    
    
    22.4
    
    
    
    19.7Salaries and wages
    
    
    52.5
    
    
    
    44.4Facility lease expense
    
    
    62.7
    
    
    
    55.7Utilities and other
    
    
    55.2
    
    
    
    48.8General and administrative expenses
    
    
    25.5
    
    
    
    21.8Depreciation and amortization
    
    
    34.1
    
    
    
    36.5Impairment of long-lived assets
    
    
    0.4
    
    
    
    1.0Loss on sale of assets and other
    
    
    3.2
    
    
    
    0.2Total cost of operations
    
    $
    444.8
    
    
    $
    375.2Operating income
    
    $
    71.8
    
    
    $
    50.6Operating data as a percentage of total revenues:RevenuesAdmissions
    
    
    66.4
    %
    
    
    65.7
    %Concession
    
    
    29.6
    %
    
    
    30.5
    %Other
    
    
    4.0
    %
    
    
    3.8
    %Total revenues
    
    
    100.0
    %
    
    
    100.0
    %Cost of operations (1)Film rentals and advertising
    
    
    55.0
    %
    
    
    52.6
    %Concession supplies
    
    
    14.6
    %
    
    
    15.2
    %Salaries and wages
    
    
    10.2
    %
    
    
    10.4
    %Facility lease expense
    
    
    12.1
    %
    
    
    13.1
    %Utilities and other
    
    
    10.7
    %
    
    
    11.5
    %General and administrative expenses
    
    
    4.9
    %
    
    
    5.1
    %Depreciation and amortization
    
    
    6.6
    %
    
    
    8.6
    %Impairment of long-lived assets
    
    
    0.1
    %
    
    
    0.2
    %Loss on sale of assets and other
    
    
    0.6
    %
    
    
    0.0
    %Total cost of operations
    
    
    86.1
    %
    
    
    88.1
    %Operating income
    
    
    13.9
    %
    
    
    11.9
    %Average screen count (month end average)
    
    
    4,891
    
    
    
    4,794Revenues per average screen (dollars)
    
    $
    105,634
    
    
    $
    88,815
 
 (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. 24




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##### Table of Contents



Three months ended March 31, 2010 and 2009
 Revenues.
 U.S. Operating Segment
    
    
    International Operating Segment
    
    
    ConsolidatedThree Months Ended
    
    
    Three Months Ended
    
    
    Three Months EndedMarch 31,
    
    
    March 31,
    
    
    March 31,%
    
    
    
    
    
    
    
    
    
    
    %
    
    
    
    
    
    
    
    
    
    
    %2010
    
    
    2009
    
    
    Change
    
    
    2010
    
    
    2009
    
    
    Change
    
    
    2010
    
    
    2009
    
    
    ChangeAdmissions revenues (1)
    
    $
    259.3
    
    
    $
    225.5
    
    
    
    15.0
    %
    
    $
    83.7
    
    
    $
    54.4
    
    
    
    53.9
    %
    
    $
    343.0
    
    
    $
    279.9
    
    
    
    22.5
    %Concession revenues (1)
    
    $
    118.5
    
    
    $
    106.0
    
    
    
    11.8
    %
    
    $
    34.6
    
    
    $
    24.0
    
    
    
    44.2
    %
    
    $
    153.1
    
    
    $
    130.0
    
    
    
    17.8
    %Other revenues (1) (2)
    
    $
    9.5
    
    
    $
    9.1
    
    
    
    4.4
    %
    
    $
    11.0
    
    
    $
    6.8
    
    
    
    61.8
    %
    
    $
    20.5
    
    
    $
    15.9
    
    
    
    28.9
    %Total revenues (1) (2)
    
    $
    387.3
    
    
    $
    340.6
    
    
    
    13.7
    %
    
    $
    129.3
    
    
    $
    85.2
    
    
    
    51.8
    %
    
    $
    516.6
    
    
    $
    425.8
    
    
    
    21.3
    %Attendance (1)
    
    
    39.6
    
    
    
    37.3
    
    
    
    6.2
    %
    
    
    18.9
    
    
    
    16.8
    
    
    
    12.5
    %
    
    
    58.5
    
    
    
    54.1
    
    
    
    8.1
    %Revenues per average screen (2)
    
    $
    101,264
    
    
    $
    90,610
    
    
    
    11.8
    %
    
    $
    121,325
    
    
    $
    82,295
    
    
    
    47.4
    %
    
    $
    105,634
    
    
    $
    88,815
    
    
    
    18.9
    %
 
 (1)
    
    Amounts in millions.(2)
    
    U.S. operating segment revenues include eliminations of intercompany transactions
with the international operating segment. See Note 15 of our condensed consolidated financial
statements.  Consolidated. Avatar
  U.S. Avatar
  International. Avatar
 25




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##### Table of Contents



Cost of Operations.
 International OperatingU.S. Operating Segment
    
    
    Segment
    
    
    ConsolidatedThree Months Ended
    
    
    Three Months Ended
    
    
    Three Months EndedMarch 31,
    
    
    March 31,
    
    
    March 31,2010
    
    
    2009
    
    
    2010
    
    
    2009
    
    
    2010
    
    
    2009Film rentals and advertising
    
    $
    148.5
    
    
    $
    120.0
    
    
    $
    40.3
    
    
    $
    27.1
    
    
    $
    188.8
    
    
    $
    147.1Concession supplies
    
    
    13.9
    
    
    
    13.4
    
    
    
    8.5
    
    
    
    6.3
    
    
    
    22.4
    
    
    
    19.7Salaries and wages
    
    
    42.4
    
    
    
    37.3
    
    
    
    10.1
    
    
    
    7.1
    
    
    
    52.5
    
    
    
    44.4Facility lease expense
    
    
    45.7
    
    
    
    42.6
    
    
    
    17.0
    
    
    
    13.1
    
    
    
    62.7
    
    
    
    55.7Utilities and other
    
    
    39.6
    
    
    
    36.9
    
    
    
    15.6
    
    
    
    11.9
    
    
    
    55.2
    
    
    
    48.8
  Consolidated. Avatar Alice in Wonderland
   U.S. Avatar Alice in Wonderland
  26




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##### Table of Contents



 International.
  General and Administrative Expenses.
 Depreciation and Amortization.
 Impairment of Long-Lived Assets.
 Loss on Sale of Assets and Other.
 Interest Expense.
 Distributions from NCM.
 Income Taxes.
 27




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##### Table of Contents



Liquidity and Capital Resources
 Operating Activities
  Investing Activities
   New
    
    
    ExistingPeriod
    
    Theatres
    
    
    Theatres
    
    
    TotalThree Months Ended March 31, 2010
    
    $
    5.2
    
    
    $
    14.3
    
    
    $
    19.5Three Months Ended March 31, 2009
    
    $
    7.7
    
    
    $
    15.2
    
    
    $
    22.9
    Financing Activities
   28




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##### Table of Contents



March 31, 2010
    
    
    December 31, 2009Cinemark USA, Inc. term loan
    
    $
    1,080.9
    
    
    $
    1,083.6Cinemark USA, Inc. 8 5/8% senior notes due 2019 (1)
    
    
    459.1
    
    
    
    458.9Cinemark USA, Inc. 9% senior subordinated notes due 2013
    
    
    0.2
    
    
    
    0.2Other long-term debt
    
    
    0.6
    
    
    
    1.0Total long-term debt
    
    $
    1,540.8
    
    
    $
    1,543.7Less current portion
    
    
    11.5
    
    
    
    12.2Long-term debt, less current portion
    
    $
    1,529.3
    
    
    $
    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 $10.9 million as of March 31, 2010.   Payments Due by Period(in millions)Less Than
    
    
    
    
    
    
    
    
    
    
    AfterContractual Obligations
    
    Total
    
    
    One Year
    
    
    1 - 3 Years
    
    
    4 - 5 Years
    
    
    5 YearsLong-term debt (1)
    
    $
    1,551.7
    
    
    $
    11.5
    
    
    $
    95.9
    
    
    $
    98.5
    
    
    $
    1,345.8Scheduled interest payments on long-term debt (2)
    
    
    609.0
    
    
    
    87.7
    
    
    
    173.0
    
    
    
    147.5
    
    
    
    200.8Operating lease obligations
    
    
    1,837.7
    
    
    
    193.1
    
    
    
    377.3
    
    
    
    360.0
    
    
    
    907.3Capital lease obligations
    
    
    138.6
    
    
    
    7.3
    
    
    
    15.5
    
    
    
    19.9
    
    
    
    95.9Scheduled interest payments on capital leases
    
    
    104.4
    
    
    
    13.8
    
    
    
    25.4
    
    
    
    21.8
    
    
    
    43.4Employment agreements
    
    
    11.1
    
    
    
    3.7
    
    
    
    7.4
    
    
    
    
    
    
    
    Purchase commitments (3)
    
    
    104.8
    
    
    
    55.8
    
    
    
    48.5
    
    
    
    0.4
    
    
    
    0.1Current liability for uncertain tax positions (4)
    
    
    8.5
    
    
    
    8.5
    
    
    
    
    
    
    
    
    
    
    
    Total obligations
    
    $
    4,365.8
    
    
    $
    381.4
    
    
    $
    743.0
    
    
    $
    648.1
    
    
    $
    2,593.3
 
 (1)
    
    Includes the 8.625% senior notes in the aggregate principal amount of $470.0
million excluding the discount of $10.9 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, 2010. The average interest rates on our fixed rate and
variable rate debt were 8.1% and 3.3%, respectively, as of March 31, 2010.(3)
    
    Includes estimated capital expenditures associated with the construction
of new theatres to which we were committed as of March 31, 2010.(4)
    
    The contractual obligations table excludes the long-term portion of our
liability for uncertain tax positions of $17.8 million because we cannot make a reliable
estimate of the timing of the related cash payments. 29




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##### Table of Contents



Senior Secured Credit Facility
      Cinemark USA, Inc. 8 5⁄8% Senior Notes
 3 4
  30




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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
   31




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##### Table of Contents



Expected Maturity for the Twelve-Month Periods Ending March 31,(in millions)AverageInterest2011
    
    
    2012
    
    
    2013
    
    
    2014
    
    
    2015
    
    
    Thereafter
    
    
    Total
    
    
    RateFixed rate (1)(2)
    
    $
    
    
    
    $
    
    
    
    $
    0.2
    
    
    $
    
    
    
    $
    
    
    
    $
    770.0
    
    
    $
    770.2
    
    
    
    8.1
    %Variable rate
    
    
    11.5
    
    
    
    10.8
    
    
    
    84.9
    
    
    
    89.3
    
    
    
    9.2
    
    
    
    575.8
    
    
    $
    781.5
    
    
    
    3.3
    %Total debt
    
    $
    11.5
    
    
    $
    10.8
    
    
    $
    85.1
    
    
    $
    89.3
    
    
    $
    9.2
    
    
    $
    1,345.8
    
    
    $
    1,551.7
 
 (1)
    
    Includes $300.0 million of the Cinemark USA, Inc. term loan, which
represents the debt hedged with the Companys interest rate swap agreements(2)
    
    Includes the 8.625% senior notes in the aggregate principal amount of
$470.0 million, excluding the discount of $10.9 million Foreign Currency Exchange Rate Risk
  
 Item 4. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
  Changes in Internal Controls Over Financial Reporting
  32




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##### Table of Contents



PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors
  33




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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. 34




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##### Table of Contents



SIGNATURES
  CINEMARK HOLDINGS, INC.
RegistrantDATE:May 6, 2010
    /s/Alan W. StockAlan W. StockChief Executive Officer/s/Robert CoppleRobert CoppleChief Financial Officer 35




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##### Table of Contents



EXHIBIT INDEX
 Number
    
    Exhibit Title*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.