##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K
 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 For the Fiscal Year Ended December 31, 2006
 Commission
File Number 333-116292
 CINEMARK, INC.
  Delaware
    
    01-0687923(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)
   None
  None
 o þ
 þ o
 þ o
 þ
  o o þ
 o þ




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##### 



Table of Contents
 PageCautionary Statement Regarding Forward-Looking Statements
    
    
    1PART IItem 1. Business
    
    
    2Item 1A. Risk Factors
    
    
    14Item 2. Properties
    
    
    18Item 3. Legal Proceedings
    
    
    19Item 4. Submission of Matters to a Vote of Security Holders
    
    
    19PART IIItem 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
    
    
    20Item 6. Selected Financial Data
    
    
    21Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    23Item 7A. Quantitative and Qualitative Disclosures About Market Risk
    
    
    44Item 8. Financial Statements and Supplementary Data
    
    
    45Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
    
    
    45Item 9A. Controls and Procedures
    
    
    45Item 9B. Other Information
    
    
    46PART IIIItem 10. Directors, Executive Officers and Corporate Governance
    
    
    47Item 11. Executive Compensation
    
    
    49Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
    
    
    60Item 13. Certain Relationships and Related Transactions, and Director Independence
    
    
    62Item 14.
Principal Accounting Fees and Services
    
    
    63PART IVItem 15. Exhibits, Financial Statement Schedules
    
    
    65SIGNATURESCalculation of Earnings to Fixed ChargesSubsidiariesCertification of Chief Executive OfficerCertification of Chief Financial OfficerCertification of Chief Executive OfficerCertification of Chief Financial Officer




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##### Table of Contents



Cautionary Statement Regarding Forward-Looking Statements
  
    
    future revenues, expenses and profitability;
    
    the future development and expected growth of our business;
    
    projected capital expenditures;
    
    attendance at movies generally or in any of the markets in which we operate;
    
    the number or diversity of popular movies released and our ability to successfully
license and exhibit popular films;
    
    national and international growth in our industry;
    
    competition from other exhibitors and alternative forms of entertainment; and
    
    determinations in lawsuits in which we are defendants.
  Certain
Definitions
  1




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##### Table of Contents



PART I
 
 Item 1. Business
 The Company
    www.cinemark.com.
 Description
of Business
    Acquisition of Century Theatres, Inc .
  2




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High Quality Theatres with Strong Operating Performance.
 Strengthens Our Geographic Footprint.
 Leading Share in Attractive Markets.
 Participation in National CineMedia
  
    
    Advertising:NCM develops, produces, sells and distributes a branded, pre-feature
entertainment and advertising program called FirstLook, along with an advertising program
for its lobby entertainment network and various marketing and promotional products in
theatre lobbies;
    
    CineMeetings:NCM provides live and pre-recorded networked and single-site meetings and
events in the theatres throughout its network; and
    
    Digital Programming Events:NCM distributes live and pre-recorded concerts, sporting
events and other non-film entertainment programming to theatres across its digital network.
   3




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##### Table of Contents



Motion Picture Industry Overview
 Domestic Markets
 Spider-Man 3 Shrek the Third, Pirates of the Caribbean: At Worlds
End Harry Potter and the Order of the Phoenix.
  AverageU.S. Box





    TicketYear
    
    Office Revenues

    Attendance
    
    Price($ in millions)

    (in millions)1996
    
    $
    5,912
    


    1,339
    
    $4.421997
    
    $
    6,366
    


    1,388
    
    $4.591998
    
    $
    6,949
    


    1,481
    
    $4.691999
    
    $
    7,448
    


    1,465
    
    $5.062000
    
    $
    7,661
    


    1,421
    
    $5.392001
    
    $
    8,413
    


    1,487
    
    $5.652002
    
    $
    9,520
    


    1,639
    
    $5.802003
    
    $
    9,489
    


    1,574
    
    $6.032004
    
    $
    9,539
    


    1,536
    
    $6.212005
    
    $
    8,991
    


    1,403
    
    $6.412006
    
    $
    9,488
    


    1,449
    
    $6.55
 International Markets
    Drivers of Continued Industry Success
  4




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Importance of Theatrical Success in Establishing Movie Brands and Subsequent Markets.
 Increased Importance of International Markets for Box Office Success . Pirates of the Caribbean: Dead Mans Chest, The Da Vinci Code, Ice Age: The
Meltdown, Mission Impossible III.
 Increased Investment in Production and Marketing of Films by Distributors .
 Stable Long-term Attendance Trends.
 Reduced Seasonality of Revenues.
 Convenient and Affordable Form of Out-Of-Home Entertainment.
 Competitive Strengths
  Strong Operating Performance and
Discipline.
 Leading Position in Our U.S. Markets. fn
 5




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Strategically Located in Heavily Populated Latin American Markets.
 Modern Theatre Circuit.
 Strong
Balance Sheet with Significant Cash Flow from Operating Activities.
 Strong Management with Focused Operating Philosophy.
 Our Strategy
  Establish and Maintain Leading Market Positions.
 Continue
to Focus on Operational Excellence.
 Selectively Build in Profitable, Strategic Latin American Markets.
 Recent Developments
 National CineMedia
    6




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Digital Cinema Implementation Partners LLC




Repurchase
of 9% Senior Subordinated Notes




Amendments to Credit Agreement




Parent
Companys Proposed
Initial Public Offering




Amendment
of Indenture Governing the 9% Senior Subordinated Notes




7



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Theatre Operations
  United States Theatres
 Total
    
    
    TotalState
    
    Theatres
    
    
    ScreensTexas
    
    
    75
    
    
    
    969California
    
    
    64
    
    
    
    729Ohio
    
    
    19
    
    
    
    207Utah
    
    
    12
    
    
    
    155Nevada
    
    
    9
    
    
    
    138Colorado
    
    
    7
    
    
    
    111Illinois
    
    
    8
    
    
    
    106Arizona
    
    
    7
    
    
    
    98Kentucky
    
    
    7
    
    
    
    83Oregon
    
    
    6
    
    
    
    82Pennsylvania
    
    
    5
    
    
    
    73Louisiana
    
    
    5
    
    
    
    68Oklahoma
    
    
    6
    
    
    
    67New Mexico
    
    
    4
    
    
    
    54Virginia
    
    
    4
    
    
    
    52Michigan
    
    
    3
    
    
    
    50Indiana
    
    
    5
    
    
    
    46North Carolina
    
    
    4
    
    
    
    41Mississippi
    
    
    3
    
    
    
    41Florida
    
    
    2
    
    
    
    40Iowa
    
    
    4
    
    
    
    39Arkansas
    
    
    3
    
    
    
    30Georgia
    
    
    2
    
    
    
    27New York
    
    
    2
    
    
    
    27South Carolina
    
    
    2
    
    
    
    22Kansas
    
    
    1
    
    
    
    20Alaska
    
    
    1
    
    
    
    16New Jersey
    
    
    1
    
    
    
    16Missouri
    
    
    1
    
    
    
    14South Dakota
    
    
    1
    
    
    
    14Tennessee
    
    
    1
    
    
    
    14Wisconsin
    
    
    1
    
    
    
    14Massachusetts
    
    
    1
    
    
    
    12Delaware
    
    
    1
    
    
    
    10West Virginia
    
    
    1
    
    
    
    10Minnesota
    
    
    1
    
    
    
    8Montana
    
    
    1
    
    
    
    8Total United States
    
    
    280
    
    
    
    3,511Canada
    
    
    1
    
    
    
    12Total
    
    
    281
    
    
    
    3,523
 8




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International Theatres
 Total
    
    
    TotalCountry
    
    Theatres
    
    
    ScreensBrazil
    
    
    36
    
    
    
    311Mexico
    
    
    30
    
    
    
    293Chile
    
    
    12
    
    
    
    91Central America(1)
    
    
    12
    
    
    
    80Argentina
    
    
    9
    
    
    
    77Colombia
    
    
    8
    
    
    
    50Ecuador
    
    
    4
    
    
    
    26Peru
    
    
    4
    
    
    
    37Total
    
    
    115
    
    
    
    965
 
 (1)
    
    Includes Honduras, El Salvador, Nicaragua, Costa Rica and Panama.   Film Licensing
   9




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Brokeback Mountain Little
Miss Sunshine
 Concessions
  
    
    Optimization of product mix.Concession products are primarily comprised of various
sizes of popcorn, soft drinks and candy. Different varieties and flavors of candy and soft
drinks are offered at theatres based on preferences in that particular geographic region.
Specially priced combos are launched on a regular basis to increase average concession
purchases as well as to attract new buyers. Kids meals are also offered and packaged
towards younger patrons.
    
    Staff training.Employees are continually trained in suggestive-selling and
upselling techniques. This training occurs on-the-job. Consumer promotions conducted at the
concession stand always include a motivational element which rewards theatre staff for
exceptional combo sales during the period.A formalized crew program is in place to reward
front line employees who excel in delivering rapid service. The Speed of Service (SOS)
program is held annually to kick off peak business periods and refresh training and the
importance of speed at the front line.Also, a year-round crew incentive called Pour More &
Score is in place. All concession programs include a points-earning opportunity designed to
primarily drive sales of drinks and popcorn. Theatres compete against their own prior year
performance in an effort to win staff prizes.
    
    Theatre design.Our theatres are designed to optimize efficiencies at the concession
stands, which include multiple service stations to facilitate serving more customers
quicker. We strategically place large concession stands within theatres to heighten
visibility, reduce the length of concession lines, and improve traffic flow around the
concession stands. Centurys
concession areas are designed as individual stations which allow
customers to select their choice of refreshments and proceed to the
cash register. This design presents efficient service, enhanced
choice and superior visibility of concession items. As we continue to
integrate Century into our operations, we will evaluate this
concession design against our historical design to determine the most
optimum layout.
 10




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
    
    Cost control.We negotiate prices for concession supplies directly with concession
vendors and manufacturers to obtain bulk rates. Concession supplies are distributed through
a national distribution network. The concession distributor supplies and distributes
inventory to the theatres, which place volume orders directly with the vendors to replenish
stock. The concession distributor is paid a percentage fee for warehousing and delivery of
concession goods on a weekly basis.
 Marketing
    11




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Online Sales
 www.cinemark.com www.fandango.com.
 Point of Sale Systems
  Competition
   
    
    location, accessibility and capacity of an exhibitors theatre;
    
    theatre comfort;
    
    quality of projection and sound equipment;
    
    level of customer service; and
    
    licensing terms.
   12




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Corporate Operations
   Employees
  Regulations
    Financial Information About Geographic Areas
  Year Ended
    
    
    Year Ended
    
    
    Period from
    
    
    
    Period fromDecember 31,
    
    
    December 31,
    
    
    January 1, 2006 to
    
    
    
    October 5, 2006 to2004
    
    
    2005
    
    
    October 4, 2006
    
    
    
    December 31, 2006(Predecessor)
    
    
    (Predecessor)
    
    
    (Predecessor)
    
    
    
    (Successor)Revenues (1)U.S. and Canada
    
    $
    783,394
    
    
    $
    757,902
    
    
    $
    607,729
    
    
    
    $
    328,955Mexico
    
    
    76,148
    
    
    
    74,919
    
    
    
    55,704
    
    
    
    
    15,885Brazil
    
    
    90,872
    
    
    
    112,182
    
    
    
    98,950
    
    
    
    
    29,605Other foreign countries
    
    
    75,200
    
    
    
    77,213
    
    
    
    68,126
    
    
    
    
    17,584Eliminations
    
    
    (1,372
    )
    
    
    (1,619
    )
    
    
    (1,420
    )
    
    
    
    (524
    )Total
    
    $
    1,024,242
    
    
    $
    1,020,597
    
    
    $
    829,089
    
    
    
    $
    391,505
 December 31,
    
    
    
    December 31,2005
    
    
    
    2006(Predecessor)
    
    
    
    (Successor)Theatres properties and equipment, netU.S. and Canada
    
    $
    634,938
    
    
    
    $
    1,169,456Mexico
    
    
    55,366
    
    
    
    
    51,272Brazil
    
    
    52,371
    
    
    
    
    55,749Other foreign countries
    
    
    47,891
    
    
    
    
    48,095Total
    
    $
    790,566
    
    
    
    $
    1,324,572
 
 (1)
    
    Revenues for all periods presented do not include results of the two United Kingdom theatres or the eleven Interstate
theatres, which were sold during 2004, as the results of operations for these theatres are included as discontinuted operations. 13




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Item 1A. Risk Factors
 Our business depends on film production and performance.
  A deterioration in relationships with film distributors could adversely affect our ability to
obtain commercially successful films.
  We face intense competition for patrons and film licensing which may adversely affect our
business.
  The oversupply of screens in the motion picture exhibition industry and other factors may
adversely affect the performance of some of our theatres.
  An
increase in the use of alternative or downstream film distribution channels and other competing forms of
entertainment may drive down movie theatre attendance and limit ticket price growth.
  14




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Our results of operations may be impacted by shrinking video release windows.
  We have substantial long-term lease and debt obligations, which may restrict our ability to
fund current and future operations.
  
    
    making it more difficult for us to satisfy our obligations;
    
    requiring us to dedicate a substantial portion of our cash flow to payments on our lease
and debt obligations, thereby reducing the availability of our cash flow to fund working
capital, capital expenditures, acquisitions and other corporate requirements and to pay
dividends;
    
    impeding our ability to obtain additional financing in the future for working capital,
capital expenditures, acquisitions and general corporate purposes;
    
    subjecting us to the risk of increased sensitivity to interest rate increases on our
variable rate debt, including our borrowings under our new senior secured credit facility;
and
    
    making us more vulnerable to a downturn in our business and competitive pressures and
limiting our flexibility to plan for, or react to, changes in our business.
  15




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We are subject to various covenants in our debt agreements that restrict our ability to enter
into certain transactions.
  General political, social and economic conditions can adversely affect our attendance.
  Our foreign operations are subject to adverse regulations and currency exchange risk.
  We may not be able to generate additional revenues or realize expected value from our
investment in NCM.
   We are subject to uncertainties related to digital cinema, including potentially high costs of
re-equipping theatres with projectors to show digital movies.
  16




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We are subject to uncertainties relating to future expansion plans, including our ability to
identify suitable acquisition candidates or site locations.
  If we do not comply with the Americans with Disabilities Act of 1990 and a consent order we entered
into with the Department of Justice, we could be subject to further litigation.
  We depend on key personnel for our current and future performance.
  We are subject to impairment losses due to potential declines in the fair value of our assets.
   17




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Goodwill and Other
Intangible Assets.
  Our results of operations vary from period to period based upon the quantity and quality of
the motion pictures that we show in our theatres.
  
 Item 2. Properties
 United States
  International
  18




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Item 3. Legal Proceedings
   
 Item 4. Submission of Matters to a Vote of Security Holders
  19




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PART II
 
 Item 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities
 Market Information and Holder
  Dividends
  Securities Authorized for Issuance under Equity Compensation Plans
  Number ofSecurities RemainingNumber of
    
    
    Weighted
    
    
    Available for FutureSecurities to be
    
    
    Average Exercise
    
    
    Issuance UnderIssued upon
    
    
    Price of
    
    
    EquityExercise of
    
    
    Outstanding
    
    
    Compensation PlansOutstanding
    
    
    Options,
    
    
    (ExcludingOptions, Warrants
    
    
    Warrants and
    
    
    Securities ReflectedPlan Category
    
    and Rights
    
    
    Rights
    
    
    in the First Column)Equity
compensation plans
approved by
security holders
    
    
    2,359,515
    
    
    $
    22.58
    
    
    
    713,920Equity compensation
plans not approved
by security holders
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    2,359,515
    
    
    $
    22.58
    
    
    
    713,920
 20




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Item 6. Selected Financial Data
  SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA
 Year Ended December 31
    
    
    Period fromJanuary 1 to
    
    
    
    Period fromOctober 5 toOctober
4,
    
    
    
    December 31,2002
    
    
    2003
    
    
    2004
    
    
    2005
    
    
    2006
    
    
    
    2006(In thousands, except theatres and screen data)(Predecessor)
    
    
    
    (Successor)Statement of Operations Data(1):Revenues
    
    $
    935,854
    
    
    $
    950,872
    
    
    $
    1,024,242
    
    
    $
    1,020,597
    
    
    $
    829,089
    
    
    
    $
    391,505Theatre operating costs
    
    
    570,948
    
    
    
    582,574
    
    
    
    618,627
    
    
    
    625,496
    
    
    
    496,794
    
    
    
    
    231,637Facility lease expense
    
    
    115,588
    
    
    
    119,517
    
    
    
    126,643
    
    
    
    136,593
    
    
    
    109,513
    
    
    
    
    48,246General and administrative
expenses
    
    
    47,952
    
    
    
    44,286
    
    
    
    51,672
    
    
    
    50,884
    
    
    
    45,958
    
    
    
    
    21,810Stock option compensation and
change of control expenses
related to the MDP Merger
    
    
    
    
    
    
    
    
    
    
    31,995
    
    
    
    
    
    
    
    
    
    
    
    
    Depreciation and amortization
    
    
    66,583
    
    
    
    65,085
    
    
    
    67,051
    
    
    
    76,461
    
    
    
    60,043
    
    
    
    
    34,948Impairment of long-lived assets
    
    
    3,869
    
    
    
    5,049
    
    
    
    1,667
    
    
    
    9,672
    
    
    
    5,741
    
    
    
    
    23,337(Gain) loss on sale of assets
and other
    
    
    470
    
    
    
    (1,202
    )
    
    
    4,851
    
    
    
    2,625
    
    
    
    2,938
    
    
    
    
    2,345Total cost
of operations
    
    
    805,410
    
    
    
    815,309
    
    
    
    902,506
    
    
    
    901,731
    
    
    
    720,987
    
    
    
    
    362,323Operating income
    
    
    130,444
    
    
    
    135,563
    
    
    
    121,736
    
    
    
    118,866
    
    
    
    108,102
    
    
    
    
    29,182Interest expense
    
    
    57,793
    
    
    
    54,163
    
    
    
    72,943
    
    
    
    86,867
    
    
    
    69,191
    
    
    
    
    42,220Income (loss) from continuing
operations before cumulative
effect of an accounting change
    
    
    40,407
    
    
    
    47,389
    
    
    
    23,041
    
    
    
    22,387
    
    
    
    28,686
    
    
    
    
    (20,331
    )Income (loss) from
discontinued operations, net
of taxes
    
    
    (1,542
    )
    
    
    (2,740
    )
    
    
    3,584
    
    
    
    
    
    
    
    
    
    
    
    
    Cumulative effect of an
accounting change
    
    
    (3,390
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net income (loss)
    
    $
    35,475
    
    
    $
    44,649
    
    
    $
    26,625
    
    
    $
    22,387
    
    
    $
    28,686
    
    
    
    $
    (20,331
    )Other Financial Data:Ratio of earnings to fixed
charges
    
    
    1.75
    x
    
    
    1.80
    x
    
    
    1.36
    x
    
    
    1.29
    x
    
    
    0.70
    x
    
    
    
    1.37
    xCash flow provided by (used
for):Operating activities
    
    $
    150,119
    
    
    $
    135,522
    
    
    $
    123,086
    
    
    $
    165,270
    
    
    $
    75,044
    
    
    
    $
    80,653Investing activities(2)
    
    
    (34,750
    )
    
    
    (47,151
    )
    
    
    (116,947
    )
    
    
    (81,617
    )
    
    
    (76,395
    )
    
    
    
    (555,352
    )Financing activities
    
    
    (96,140
    )
    
    
    (45,738
    )
    
    
    (14,443
    )
    
    
    (3,750
    )
    
    
    (38,912
    )
    
    
    
    478,854Capital expenditures
     
    
    (38,032
    )
    
    
    (51,002
     )
    
    
    (81,008
     )
    
    
    (75,605
     )
    
    
    (77,902
     )
    
    
    
    (29,179
    )As ofAs
of December 31,
    
    
    
    
    
    
    December 31,2002
    
    
    2003
    
    
    2004
    
    
    2005
    
    
    
    
    
    
    2006(Predecessor)
    
    
    
    
    
    
    (Successor)Balance
Sheet Data:Cash and cash equivalents
    
    $
    63,719
    
    
    $
    107,322
    
    
    $
    100,248
    
    
    $
    182,199
    
    
    
    
    
    
    
    $
    147,099Theatre properties and
equipment, net
    
    
    791,731
    
    
    
    775,880
    
    
    
    785,595
    
    
    
    790,566
    
    
    
    
    
    
    
    
    1,324,572Total assets
    
    
    916,814
    
    
    
    960,736
    
    
    
    1,016,757
    
    
    
    1,112,288
    
    
    
    
    
    
    
    
    3,171,546Total long-term debt,
including current portion
    
    
    692,587
    
    
    
    658,431
    
    
    
    1,013,674
    
    
    
    1,044,255
    
    
    
    
    
    
    
    
    1,911,653Stockholders equity
(deficiency)
    
    
    27,664
    
    
    
    79,947
    
    
    
    (202,724
    )
    
    
    (158,482
    )
    
    
    
    
    
    
    
    689,262
 21




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As of and for theYear Ended December 31







Cinemark
andCenturyCombined(6)2002
    
    
    2003
    
    
    2004
    
    
    2005
    
    
    
    2006
    


    2006(In thousands, except theatres and screen data)(Predecessor)
    
    
    (Successor)Operating Data:North America
Theatres
operated (at
period end)(3)(5)
    
    
    188
    
    
    
    189
    
    
    
    191
    
    
    
    200
    
    
    
    
    281
    


281Screens
operated (at
period end)
    
    
    2,215
    
    
    
    2,244
    
    
    
    2,303
    
    
    
    2,417
    
    
    
    
    3,523
    


3,523Total attendance(1)
    
    
    111,959
    
    
    
    112,581
    
    
    
    113,646
    
    
    
    105,573
    
    
    
    
    118,714
    


155,981International(4)Theatres
operated (at
period end)
    
    
    92
    
    
    
    97
    
    
    
    101
    
    
    
    108
    
    
    
    
    115
    


115Screens
operated (at
period end)
    
    
    816
    
    
    
    852
    
    
    
    869
    
    
    
    912
    
    
    
    
    965
    


965Total attendance(1)
    
    
    60,109
    
    
    
    60,553
    
    
    
    65,695
    
    
    
    60,104
    
    
    
    
    59,550
    


59,550Worldwide(3)(4)(5)Theatres
operated (at
period end)
    
    
    280
    
    
    
    286
    
    
    
    292
    
    
    
    308
    
    
    
    
    396
    


396Screens
operated (at
period end)
    
    
    3,031
    
    
    
    3,096
    
    
    
    3,172
    
    
    
    3,329
    
    
    
    
    4,488
    


4,488Total attendance(1)
    
    
    172,068
    
    
    
    173,134
    
    
    
    179,341
    
    
    
    165,677
    
    
    
    
    178,264
    


215,531
 
 (1)
    
    Statement of Operations Data (other than net income (loss))
and attendance data exclude the results of the two United Kingdom
theatres and eleven Interstate theatres for all periods presented as
these theatres were sold during 2004. The results of operations for
these theatres in the 2003 and 2004 periods are presented as
discontinued operations. See note 7 to our annual consolidated
financial statements.(2)
    
    Includes the cash portion of the Century acquisition purchase
price of $531.2 million.(3)
    
    The data excludes certain theatres operated by us in the U.S.
pursuant to management agreements that are not part of our
consolidated operations.(4)
    
    The data excludes certain theatres operated internationally
through our affiliates that are not part of our consolidated
operations.(5)
    
    The data for 2003 excludes theatres, screens and attendance
for eight theatres and 46 screens acquired on December 31, 2003,
as the results of operations for these theatres are not included in
our 2003 consolidated results of operations.(6)
    
    The attendance data gives effect to the Century acquisition
as if it occurred on January 1, 2006. 22




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##### Table of Contents



Item
7. Managements Discussion and Analysis of Financial Condition and
Results of Operations
 The following discussion and analysis should be read in conjunction with the financial
statements and
accompanying notes included in this report.
 Overview
       Revenues and Expenses
 Ice Age 2 The Meltdown Pirates of
the Caribbean Dead Mans Chest, The Da Vinci Code, X Men 3, Cars, Talladega Nights Superman
Returns. Spider-Man 3 Shrek the Third Pirates of the Caribbean: At Worlds End Harry Potter and the Order of the
Phoenix
  23




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##### Table of Contents



Critical Accounting Policies
  Revenue and Expense Recognition
    24




---



##### Table of Contents



Impairment of Long-Lived Assets
  
    
    actual theatre level cash flows;
    
    future years budgeted theatre level cash flows;
    
    theatre property and equipment carrying values;
    
    goodwill carrying values;
    
    amortizing intangible asset carrying values;
    
    the age of a recently built theatre;
    
    competitive theatres in the marketplace;
    
    changes in foreign currency exchange rates;
    
    the impact of recent ticket price changes;
    
    available lease renewal options; and
    
    other factors considered relevant in our assessment of impairment of individual theatre assets.
  25




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##### Table of Contents



Impairment
of Goodwill and Intangible Assets
  Acquisitions
 Business
Combinations.
 Income Taxes
 Accounting for Contingencies
 26




---



##### Table of Contents



Recent Developments
 National CineMedia
      Digital
Cinema Implementation Partners, LLC
  27




---



##### Table of Contents



Repurchase
of 9% Senior Subordinated Notes
  Amendments to Credit Agreement
  Parent
Companys Proposed
Initial Public Offering
  Amendment
of Indenture Governing the 9% Senior Subordinated Notes
  28




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##### Table of Contents



Results of Operations
   Year Ended December 31,2004
    
    
    2005
    
    
    2006Operating data (in millions)(1):RevenuesAdmissions
    
    $
    647.0
    
    
    $
    641.2
    
    
    $
    760.3Concession
    
    
    321.6
    
    
    
    320.1
    
    
    
    375.8Other
    
    
    55.6
    
    
    
    59.3
    
    
    
    84.5Total revenues
    
    $
    1,024.2
    
    
    $
    1,020.6
    
    
    $
    1,220.6Theatre
operating costs(2)(3)Film rentals and advertising
    
    $
    348.8
    
    
    $
    347.7
    
    
    $
    406.0Concession supplies
    
    
    53.8
    
    
    
    52.5
    
    
    
    59.0Salaries and wages
    
    
    103.1
    
    
    
    101.5
    
    
    
    118.6Facility lease expense
    
    
    126.6
    
    
    
    136.6
    
    
    
    157.8Utilities and other
    
    
    113.0
    
    
    
    123.8
    
    
    
    144.8Total theatre
operating costs
    
    $
    745.3
    
    
    $
    762.1
    
    
    $
    886.2Operating data as a percentage of total revenues(1):RevenuesAdmissions
    
    
    63.2
    %
    
    
    62.8
    %
    
    
    62.3
    %Concession
    
    
    31.4
    
    
    
    31.4
    
    
    
    30.8
    %Other
    
    
    5.4
    
    
    
    5.8
    
    
    
    6.9
    %Total revenues
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Theatre
operating
costs(2)(3)Film rentals and advertising
    
    
    53.9
    %
    
    
    54.2
    %
    
    
    53.4
    %Concession supplies
    
    
    16.7
    
    
    
    16.4
    
    
    
    15.7Salaries and wages
    
    
    10.1
    
    
    
    9.9
    
    
    
    9.7Facility lease expense
    
    
    12.4
    
    
    
    13.4
    
    
    
    12.9Utilities and other
    
    
    11.0
    
    
    
    12.1
    
    
    
    11.9Total theatre
operating costs
    
    
    72.8
    %
    
    
    74.7
    %
    
    
    72.6
    %Average screen count (month end average)(1)
    
    
    3,135
    
    
    
    3,239
    
    
    
    3,628Revenues per average screen(1)
    
    $
    326,664
    
    
    $
    315,104
    
    
    $
    336,437
 
 (1)
    
    Results exclude our two United Kingdom theatres and our eleven
Interstate theatres sold during 2004. The results of operations for
these theatres are presented as discontinued operations for
2004.(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.(3)
    
    Excludes depreciation and amortization expense. 29




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##### Table of Contents



Comparison of Years Ended December 31, 2006 and December 31, 2005
 Revenues.
 U.S. Operating Segment
    
    
    
    
    
    
    International Operating Segment
    
    
    
    
    
    
    ConsolidatedYear Ended
    
    
    
    
    
    
    Year Ended
    
    
    
    
    
    
    Year EndedDecember 31,
    
    
    
    
    
    
    December 31,
    
    
    
    
    
    
    December 31,2005
    
    
    2006
    
    

%Change
    
    2005
    
    
    2006
    
    
%Change
    
    2005
    
    
    2006
    
    
%ChangeAdmissions revenues (in millions)
    
    $
    472.0
    
    
    $
    577.9
    
    
    
    22.4
    %
    
    $
    169.2
    
    
    $
    182.4
    
    
    
    7.8
    %
    
    $
    641.2
    
    
    $
    760.3
    
    
    
    18.6
    %Concession revenues (in millions)
    
    $
    248.7
    
    
    $
    297.4
    
    
    
    19.6
    %
    
    $
    71.4
    
    
    $
    78.4
    
    
    
    9.8
    %
    
    $
    320.1
    
    
    $
    375.8
    
    
    
    17.4
    %Other
revenues (in millions)
(1)
    
    $
    35.6
    
    
    $
    59.4
    
    
    
    66.9
    %
    
    $
    23.7
    
    
    $
    25.1
    
    
    
    5.9
    %
    
    $
    59.3
    
    
    $
    84.5
    
    
    
    42.5
    %Total
revenues (in millions)
(1)
    
    $
    756.3
    
    
    $
    934.7
    
    
    
    23.6
    %
    
    $
    264.3
    
    
    $
    285.9
    
    
    
    8.2
    %
    
    $
    1,020.6
    
    
    $
    1,220.6
    
    
    
    19.6
    %Attendance (in millions)
    
    
    105.6
    
    
    
    118.7
    
    
    
    12.4
    %
    
    
    60.1
    
    
    
    59.6
    
    
    
    (1.0
    )%
    
    
    165.7
    
    
    
    178.3
    
    
    
    7.6
    %Revenues per
screen (1)
    
    $
    321,833
    
    
    $
    346,812
    
    
    
    7.8
    %
    
    $
    297,316
    
    
    $
    306,459
    
    
    
    3.1
    %
    
    $
    315,104
    
    
    $
    336,437
    
    
    
    6.8
    %
 
 (1)
    
   U.S. operating segment revenues include eliminations of intercompany transactions with the
international operating segment. See note 19 of our consolidated financial statements. 
    
    Consolidated. The
increase in admissions revenues of $119.1 million was attributable to a 7.6% increase
in attendance from 165.7 million patrons for 2005 to
178.3 million patrons for 2006, which contributed
$57.2 million, and a 10.2% increase in average
ticket price from $3.87 for 2005 to $4.26 for 2006, which contributed
$61.9 million.
This increase included additional
admissions revenues for the 77 Century theatres acquired during the
fourth quarter of 2006. The
increase in concession revenues of $55.7 million was attributable to the 7.6% increase
in attendance, which contributed $30.3 million, and a 9.1%
increase in concession revenues per patron from $1.93 for 2005 to
$2.11 for 2006, which contributed $25.4 million. This
increase included additional
concession revenues for the 77 Century theatres acquired during the fourth quarter. The
increase in attendance was attributable to the additional attendance from the 77 Century theatres
acquired, the solid slate of films released during 2006 and new theatre
openings. The increases in average ticket price and concession revenues
per patron were due to the higher ticket price structure at the 77
Century theatres acquired, price increases and
favorable exchange rates in certain countries in which we operate.
The 42.5% increase in other revenues was primarily attributable to
incremental screen advertising revenues resulting from our
participation in the NCM joint venture.
    
    U.S.
The increase in admissions revenues of $105.9 million was attributable to a 12.4% increase in attendance from
105.6 million patrons for 2005 to 118.7 million
patrons for 2006, which contributed $58.7 million, and a 8.9%
increase in average ticket price from $4.47 for 2005
to $4.87 for 2006, which contributed $47.2 million. This increase included additional admissions revenues
for the 77 Century theatres acquired during the fourth quarter of 2006. The increase in
concession revenues of $48.7 million was attributable to
the 12.4% increase in attendance, which contributed
$31.0 million, and a 6.3% increase in concession revenues per
patron from $2.36 for 2005 to $2.51 for 2006, which contributed $17.7 million. This increase included
additional concession revenues for the 77 Century theatres acquired
during the fourth quarter. The increase in attendance was
attributable to additional attendance from the 77 Century theatres
acquired, the solid
slate of films released during 2006 and new theatre openings. The increases in average
ticket price and concession revenues per patron were due to the higher ticket price structure at
the 77 Century theatres acquired and price increases.
The 66.9% increase in other revenues was primarily attributable to incremental screen advertising
revenues resulting from our participation in the joint venture with NCM.
    
    International. The
increase in admissions revenues of $13.2 million was
attributable to an 8.8% increase
in average ticket price from $2.82 for 2005 to $3.06
for 2006, which contributed $14.7 million, partially offset by a
1.0% decrease in attendance, which contributed $(1.5) million.
The decrease in attendance was due to increased competition in
certain markets. The
increase in concession revenues of $7.0 million was attributable to a 10.9% increase
in concession revenues per patron from $1.19 for 2005 to $1.32 for
2006, which contributed $7.7 million, partially
offset by the 1.0% decrease in attendance, which contributed
$(0.7) million. The increases in average
ticket price and concession revenues per patron were due to price
increases and favorable exchange rates in certain countries in which
we operate.
 Theatre
Operating Costs (excludes depreciation and amortization expense).
 U.S. Operating Segment
    
    International Operating Segment
    
    ConsolidatedYear Ended
    
    
    Year Ended
    
    
    Year EndedDecember 31,
    
    
    December 31,
    
    
    December 31,2005
    
    
    2006
    
    
    2005
    
    
    2006
    
    
    2005
    
    
    2006Film rentals and advertising
    
    $
    263.7
    
    
    $
    315.4
    
    
    $
    84.0
    
    
    $
    90.6
    
    
    $
    347.7
    
    
    $
    406.0Concession supplies
    
    
    34.5
    
    
    
    38.7
    
    
    
    18.0
    
    
    
    20.3
    
    
    $
    52.5
    
    
    $
    59.0Salaries and wages
    
    
    80.8
    
    
    
    95.8
    
    
    
    20.7
    
    
    
    22.8
    
    
    $
    101.5
    
    
    $
    118.6Facility lease expense
    
    
    96.0
    
    
    
    114.5
    
    
    
    40.6
    
    
    
    43.3
    
    
    $
    136.6
    
    
    $
    157.8Utilities and other
    
    
    90.7
    
    
    
    108.3
    
    
    
    33.1
    
    
    
    36.5
    

    $
    123.8
    
    
    $
    144.8Total theatre operating costs
    
    $
    565.7
    
    
    $
    672.7
    
    
    $
    196.4
    
    
    $
    213.5
    

    $
    762.1
    
    
    $
    886.2
 30




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##### Table of Contents




    
    Consolidated. Film
rentals and advertising costs were $406.0 million, or 53.4% of
admissions revenues, for 2006 compared to $347.7 million, or
54.2% of admissions revenues, for 2005. The increase in film rentals
and advertising costs for 2006 of $58.3 million is due to
increased admissions revenues, which contributed $65.7 million,
and a decrease in our film rental and advertising rate, which
contributed $(7.4) million. The decrease in film rentals and advertising costs as a percentage of admissions revenues was due to a
more favorable mix of films resulting in lower average film rental
rates in 2006 compared with 2005 which had certain blockbuster films
with higher than average film rental rates. Concession supplies
expense was $59.0 million, or 15.7% of concession revenues, for
2006 compared to $52.5 million, or 16.4% of concession revenues,
for 2005. The increase in concession supplies expense of
$6.5 million is primarily due to increased concession revenues,
which contributed $8.5 million, and a decrease in our concession
supplies rate, which contributed $(2.0) million. The
decrease in concession supplies expense as a percentage of revenues
was primarily due to concession sales price increases.
  
    
    U.S. Film
rentals and advertising costs were $315.4 million, or
54.6% of admissions revenues, for 2006 compared to $263.7
million, or 55.9% of admissions revenues, for 2005. The increase in
film rentals and advertising costs for 2006 of $51.7 million is
due to increased admissions revenues, which contributed
$59.2 million, and a decrease in our film rentals and
advertising rate, which contributed $(7.5) million. The
decrease in film rentals and advertising costs as a percentage of
admissions revenues was due to a more favorable mix of films
resulting in lower average film rental rates in 2006 compared with
2005 which had certain blockbuster films with higher than average
film rental rates. Concession supplies expense was $38.7
million, or 13.0% of concession revenues, for 2006 compared to
$34.5 million, or 13.9% of concession revenues, for
2005. The increase in concession supplies expense of
$4.2 million is due to increased concession revenues, which
contributed $6.7 million, and a decrease in our concession
supplies rate, which contributed $(2.5) million. The
decrease in concession supplies expense as a percentage of revenues
was primarily due to concession sales price increases.
  
    
    International. Film
rentals and advertising costs were $90.6 million, or 49.7% of
admissions revenues, for 2006 compared to $84.0 million, or
49.6% of admissions revenues, for 2005. The increase in film rentals
and advertising costs for 2006 is primarily due to increased
admissions revenues. Concession supplies expense was $20.3
million, or 25.9% of concession revenues, for 2006 compared to
$18.0 million, or 25.2% of concession revenues, for 2005. The
increase in concession supplies expense of $2.3 million is due
to increased concession revenues, which contributed
$1.8 million, and an increase in our concession supplies rate,
which contributed $0.5 million.
  General and Administrative Expenses.
 31




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##### Table of Contents



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


Income
Taxes.


32



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##### Table of Contents



Comparison of Years Ended December 31, 2005 and December 31, 2004
 Revenues.
 U.S.Operating Segment
    
    
    
    
    
    InternationalOperating Segment
    
    
    
    
    
    ConsolidatedYear EndedDecember 31,
    
    
    
    
    
    Year EndedDecember 31,
    
    
    
    
    
    Year EndedDecember 31,2004
    
    2005
    
    %Change
    
    2004
    
    2005
    
    %Change
    
    2004
    
    2005
    
    %ChangeAdmissions revenues (in millions)
    
    $
    489.0
    

    

    $
    472.0
    

    
    
    (3.5
    )%
    

    $
    158.0
    

    

    $
    169.2
    

    
    
    7.1
    %
    

    $
    647.0
    

    

    $
    641.2
    
    
    
    (0.9
    )%Concession revenues (in millions)
    

    $
    255.9
    

    

    $
    248.7
    

    
    
    (2.8
    )%
    

    $
    65.7
    

    

    $
    71.4
    

    
    
    8.7
    %
    
    $
    321.6
    

    

    $
    320.1
    
    
    
    (0.5
    )%Other
revenues (in millions) (1)
    

    $
    37.1
    

    

    $
    35.6
    

    
    
    (4.0
    )%
    

    $
    18.5
    

    

    $
    23.7
    

    
    
    28.1
    %
    

    $
    55.6
    

    

    $
    59.3
    
    
    
    6.7
    %Total
revenues (in millions) (1)
    

    $
    782.0
    

    

    $
    756.3
    

    
    
    (3.3
    )%
    

    $
    242.2
    

    

    $
    264.3
    

    
    
    9.1
    %
    

    $
    1,024.2
    

    

    $
    1,020.6
    
    
    
    (0.4
    )%Attendance (in millions)
    

    
    113.6
    

    

    
    105.6
    

    
    
    (7.1
    )%
    

    
    65.7
    

    

    
    60.1
    

    
    
    (8.5
    )%
    

    
    179.3
    

    

    
    165.7
    
    
    
    (7.6
    )%Revenues per
screen (1)
    

    $
    341,747
    

    

    $
    321,833
    

    
    
    (5.8
    )%
    

    $
    286,364
    

    

    $
    297,316
    

    
    
    3.8
    %
    

    $
    326,664
    

    

    $
    315,104
    
    
    
    (3.5
    )%
 
 (1)
    
   U.S. operating segment revenues include eliminations of intercompany transactions with the
international operating segment. See note 19 to our consolidated financial statements. 
    
    Consolidated. The decrease in admissions
revenues of $5.8 million was due to the 7.6% decline
    in attendance, which contributed $(48.1) million, partially offset by the 7.3% increase in average
    ticket prices, which contributed $42.3 million. The decline in
concession revenues of $1.5 million was also
    attributable to the decline in attendance, which contributed
$(23.7) million  partially offset by
    the 7.7% increase in concession revenues per patron, which
contributed $22.2 million. The decline
    in attendance for 2005 was primarily due to the decline in the
    quality of films released during 2005 compared to 2004. The
    increases in average ticket prices and concession revenues per
    patron were primarily due to price increases and also due to
    favorable exchange rates in certain countries in which we
    operate.
 
    
    U.S. The
decrease in admissions revenues of $17.0 million was attributable to the 7.1% decrease
in attendance from 113.6 million patrons for 2004 to 105.6
million patrons for 2005, which contributed $(34.7) million,
partially offset by a 3.9%
increase in average ticket price from $4.30 for 2004
to $4.47 for 2005, which contributed $17.7 million. The decline in
concession revenues of $7.2 million was
attributable to the 7.1% decrease in attendance, which contributed
$(18.2) million, partially offset by a
4.6% increase in concession
revenues per patron from $2.25 per patron for 2004
to $2.36 per patron for 2005, which contributed $11.0 million.
The decline in attendance for 2005 was primarily due to the decline in the
quality of films released during 2005 compared to 2004. The increases in average ticket prices and
concession revenues per patron were primarily due to price increases.
 
    
    International. The
increase in admissions revenues of $11.2 million was attributable to
a 17.1% increase in average ticket price from $2.40 for 2004 to $2.82
for 2005, which contributed $24.6 million, partially offset by
the 8.5% decrease
in attendance from 65.7 million patrons for 2004 to 60.1
million patrons for 2005, which contributed $(13.4) million.
The increase in concession revenues
of $5.7 million was attributable to an 18.6% increase in concession
revenues per patron from $1.00 per patron for 2004 to $1.19 per
patron for 2005, which contributed $11.2 million, partially offset by
the 8.5% decrease in attendance, which contributed $(5.5) million.
The decline in attendance for 2005 was primarily due to the decline in the
quality of films released during 2005 compared to 2004. The increases in average ticket prices and
concession revenues per patron were primarily due to price increases
and also favorable exchange rates in certain countries in which we
operate.
 33




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##### Table of Contents



Theatre
Operating Costs (excludes depreciation and amortization expense).
 U.S.Operating Segment
    
    InternationalOperating Segment
    
ConsolidatedYear Ended
    
    Year Ended
    
    Year EndedDecember 31,
    
 December 31,
    
December 31,2004
    
2005
    
2004
    
2005
    
2004
    
2005Film rentals and advertising
    
    $
    270.1
    
    
    $
    263.7
    
    
    $
    78.7
    
    
    $
    84.0
    

    
    $
    348.8
    
    
    $
    347.7Concession supplies
    
    
    37.2
    
    
    
    34.5
    
    
    
    16.6
    
    
    
    18.0
    

    
    $
    53.8
    
    
    $
    52.5Salaries and wages
    
    
    84.9
    
    
    
    80.8
    
    
    
    18.2
    
    
    
    20.7
    

    
    $
    103.1
    
    
    $
    101.5Facility lease expense
    
    
    92.8
    
    
    
    96.0
    
    
    
    33.8
    
    
    
    40.6
    
    
    $
    126.6
    
    
    $
    136.6Utilities and other
    
    
    85.2
    
    
    
    90.7
    
    
    
    27.8
    
    
    
    33.1
    

    
    $
    113.0
    
    
    $
    123.8Total theatre operating costs
    
    $
    570.2
    
    
    $
    565.7
    
    
    $
    175.1
    
    
    $
    196.4
    

    
    $
    745.3
    
    
    $
    762.1
 
    
    Consolidated. Film rentals and advertising costs were $347.7 million, or
    54.2% of admissions revenues, for 2005 compared to
    $348.8 million, or 53.9% of admissions revenues, for 2004.
The $1.1 million decrease in film rentals and advertising costs for
2005 is due to decreased admissions revenues, which contributed $(3.8)
million, offset by an increase in our film rentals and advertising
rate, which contributed $2.7 million.
The increase in film rentals and advertising costs as a
    percentage of admissions revenues was primarily related to the
    high film rental costs associated with certain blockbuster films
    released during 2005. Concession supplies expense was $52.5 million, or 16.4% of
    concession revenues, for 2005 compared to $53.8 million, or
    16.7% of concession revenues, for 2004. The decrease in
concession supplies expense of $1.3 million is primarily due to a
decrease in our concession supplies rate. The decrease in
    concession supplies expense as a percentage of concession
    revenues was primarily due to concession sales price increases and an
    increase in concession rebates received from certain vendors.
  
    
    U.S. Film
rentals and advertising costs were $263.7 million, or 55.9% of admissions revenues,
for 2005 compared to $270.1 million, or 55.2% of admissions revenues,
for 2004.
The decrease of $6.4 million in film rentals and advertising costs
for 2005 is due to decreased admissions revenues, which contributed
$(9.4) million, offset by an increase in our film rentals and
advertising rate, which contributed $3.0 million.
The increase in film rentals and advertising costs as a percentage of admissions
revenues was due to high film rental costs associated with certain blockbuster films released during 2005.
 Concession supplies expense was $34.5 million, or 13.9% of concession revenues, for 2005 compared to $37.2 million, or
14.5% of concession revenues, for 2004.
The decrease in concession supplies expense of $2.7 million is due to
decreased concession revenues, which contributed $(1.0) million, and
a decrease in our concession supplies rate, which contributed $(1.7)
million.
The decrease in concession supplies expense as a
percentage of revenues was primarily due to concession sales price
increases.
  
    
    International. Film rentals and advertising costs were $84.0 million, or 49.6% of admissions revenues,
for 2005 compared to $78.7 million, or 49.8% of admissions revenues, for 2004.
The increase in film rentals and advertising costs of $5.3 million
for 2005 is primarily due to increased admissions revenues.
Concession supplies expense was $18.0 million, or 25.2% of
concession revenues, for 2005 compared to $16.6 million, or 25.3% of concession
revenues, for 2004. The increase in concession supplies expense of
$1.4 million is primarily due to increased concession revenues.
  General and Administrative Expenses.
 Stock Option Compensation and Change of Control Expenses related to the MDP Merger.
 Depreciation and Amortization.
 34




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##### Table of Contents



Impairment of Long-Lived Assets.
 Loss
on Sale of Assets and Other.
 Interest Expense. 3 4
 Interest Income.
 Loss on Early Retirement of Debt. 1 2
 Income
Taxes.
 Income from Discontinued Operations, Net of Taxes.
 35




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##### Table of Contents



Liquidity and Capital Resources
 Operating Activities
  3 4
 3 4
 Investing Activities
   New
    
    ExistingPeriod
    
    Theatres
    
    Theatres
    
    TotalYear Ended December 31, 2004
    
    $
    61.5
    
    
    $
    19.5
    
    
    $
    81.0Year Ended December 31, 2005
    
    $
    50.3
    
    
    $
    25.3
    
    
    $
    75.6Year Ended December 31, 2006
    
    $
    68.8
    
    
    $
    38.3
    
    
    $
    107.1
      36




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##### Table of Contents



Financing Activities
   December 31, 2005
(Predecessor)
    
    
    
    

    

December 31, 2006
 (Successor)Cinemark, Inc. 9 3/4% senior discount notes due 2014
    
    $
    423,978
    
    
    
    

    
    $
    434,073Cinemark USA, Inc. 9% senior subordinated notes due 2013
    
    
    353,330
    
    
    
    

    
    
    350,820Cinemark USA, Inc. term loan
    
    
    255,450
    
    
    
    

    
    
    1,117,200Other long-term debt
    
    
    11,497
    
    
    
    

    
    
    9,560Total long-term debt
    
    
    1,044,255
    
    
    
    

    
    
    1,911,653Less current portion
    
    
    6,871
    
    
    
    

    
    
    14,259Long-term debt, less current portion
    
    $
    1,037,384
    
    
    
    

    
    $
    1,897,394
   Payments Due by PeriodLess Than
    
    
    
    
    
    
    
    
    
    
    AfterTotal
    
    
    One Year
    
    
    1-3 Years
    
    
    4-5 Years
    
    
    5 Years(In millions)Long-term
debt(1)(2)
    
    $
    2,013.2
    
    
    $
    14.3
    
    
    $
    27.7
    
    
    $
    23.6
    
    
    $
    1,947.6Scheduled interest payments on
long-term debt
(3)
    
    
    953.4
    
    
    
    112.6
    
    
    
    237.2
    
    
    
    322.6
    
    
    
    281.0Operating lease obligations
    
    
    2,004.2
    
    
    
    163.7
    
    
    
    334.7
    
    
    
    320.1
    
    
    
    1,185.7Capital lease obligations
    
    
    115.8
    
    
    
    3.6
    
    
    
    8.7
    
    
    
    10.4
    
    
    
    93.1Scheduled interest payments on
capital leases
    
    
    119.0
    
    
    
    12.4
    
    
    
    23.5
    
    
    
    21.4
    
    
    
    61.7Letters of credit
    
    
    0.1
    
    
    
    0.1
    
    
    
    
    
    
    
    
    
    
    
    Employment agreements
    
    
    9.3
    
    
    
    3.1
    
    
    
    6.2
    
    
    
    
    
    
    
    Purchase
commitments (4)
    
    
    162.7
    
    
    
    78.1
    
    
    
    71.6
    
    
    
    12.5
    
    
    
    0.5Total
    
    $
    5,377.7
    
    
    $
    387.9
    
    
    $
    709.6
    
    
    $
    710.6
    
    
    $
    3,569.6
 
 (1)
    
    Includes the 93⁄4% senior discount notes in the aggregate principal amount at
maturity of $535.6 million.(2)
    
    On March 6, 2007, we commenced a tender offer for any and all of our 9% senior subordinated notes,
of which $332.2 million aggregate principal amount remained
outstanding. On March 20, 2007, approximately $332.0 million
aggregate principal amount were tendered and repurchased. See note 24 of our
consolidated financial statements.(3)
    
    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 December 31, 2006. The average interest rates on our fixed rate and variable
rate debt were 9.5% and 7.4%, respectively, as of December 31, 2006.(4)
    
    Includes estimated remaining capital expenditures associated with the construction of
new theatres to which we were committed as of December 31, 2006. 37




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##### Table of Contents



Cinemark, Inc. 9 3/4% Senior Discount Notes
 3 4 3 4
 3 4 3 4 3 4
 3 4
 3 4
 38




---



##### Table of Contents



Cinemark USA, Inc. 9% Senior Subordinated Notes
         39




---



##### Table of Contents



Other Debt Transactions in Connection with MDP Merger
 1 2 1 2 1 2 1 2 1 2
  1 2 1 2
 New Senior Secured Credit Facility
    40




---



##### Table of Contents



3 4
   Former Senior Secured Credit Facility
 1 2
  41




---



##### Table of Contents



Covenant Compliance
 3 4 3 4
    Year ended


Year ended


Year endedDecember 31,


December 31,


December 31,2004


2005


2006(In thousands)Net Income

$
26,625


$
22,387


$
8,355Add (deduct):Income taxes


17,302



14,193



12,189Interest expense(1)


72,943



86,867



111,411Other (income) expense


8,450



(4,581
)


5,329Income from discontinued
    operations,
    net of taxes


(3,584
)






Depreciation and amortization


67,051



76,229



94,194Amortization of net favorable
    leases






232



797Amortization of tenant allowances










Impairment of long-lived assets


1,667



9,672



29,078Loss on sale of assets and
    other


4,851



2,625



5,283Deferred lease expenses


1,795



2,511



2,115Stock option compensation and
    change of control expenses related to the MDP Merger


31,995







Amortized compensation 
    stock options


145







2,864Adjusted EBITDA

$
229,240


$
210,135


$
271,615     (1)
    
    Includes amortization of debt issue costs.   Ratings
  Category
    
    Moodys
    
    Standard and PoorsCinemark, Inc. 9 3/4% Senior Discount Notes
    
    
    B3
    
    
    
    CCC
    +Cinemark USA, Inc. Senior Secured Credit Facility
    
    
    Ba
    2
    
    
    BCinemark USA, Inc. 9% Senior Subordinated Notes
    
    
    B2
    
    
    
    CCC
    +
 42




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##### Table of Contents



New Accounting Pronouncements
  Accounting for Uncertainty in
Income Taxes Accounting for Income
Taxes
 Fair
Value Measurements.
 Considering the Effects of Prior Year Misstatements when Quantifying
Misstatements in Current Year Financial Statements
 The Fair Value Option for Financial Assets and
    Financial Liabilities
 43




---



##### Table of Contents



Seasonality
  
 Item 7A. Quantitative and Qualitative Disclosures About Market Risk
  Interest Rate Risk
   44




---



##### Table of Contents



Expected Maturity as of December 31, 2006AverageFair
    
    
    Interest2007
    
    
    2008
    
    
    2009
    
    
    2010
    
    
    2011
    
    
    Thereafter
    
    
    Total
    
    
    Value
    
    
    RateFixed rate
    
    $
    0.1
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    886.4
    
    
    $
    886.5
    
    
    $
    812.1
    
    
    
    9.5
    %Variable rate
    
    
    14.2
    
    
    
    14.9
    
    
    
    12.8
    
    
    
    12.4
    
    
    
    11.2
    
    
    
    1,061.2
    
    
    
    1,126.7
    
    
    
    1,146.8
    
    
    
    7.4
    %Total debt
    
    $
    14.3
    
    
    $
    14.9
    
    
    $
    12.8
    
    
    $
    12.4
    
    
    $
    11.2
    
    
    $
    1,947.6
    
    
    $
    2,013.2
    
    
    $
    1,958.9
 Expected Maturity as of December 31, 2005AverageFair
    
    
    Interest2006
    
    
    2007
    
    
    2008
    
    
    2009
    
    
    2010
    
    
    Thereafter
    
    
    Total
    
    
    Value
    
    
    RateFixed rate
    
    $
    0.1
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    928.7
    
    
    $
    928.8
    
    
    $
    792.8
    
    
    
    9.5
    %Variable rate
    
    
    6.8
    
    
    
    5.5
    
    
    
    4.3
    
    
    
    4.1
    
    
    
    185.1
    
    
    
    61.1
    
    
    
    266.9
    
    
    
    268.4
    
    
    
    6.6
    %Total debt
    
    $
    6.9
    
    
    $
    5.5
    
    
    $
    4.3
    
    
    $
    4.1
    
    
    $
    185.1
    
    
    $
    989.8
    
    
    $
    1,195.7
    
    
    $
    1,061.2
 Foreign Currency Exchange Rate Risk
  
 Item 8. Financial Statements and Supplementary Data
  
 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
  
 Item 9A. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
  45




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##### Table of Contents



Changes in Internal Controls
  
 Item 9B. Other Information
  46




---



##### Table of Contents



PART III
 
 Item 10. Directors, Executive Officers and Corporate Governance
  Name
    
    Age
    
    PositionLee Roy Mitchell
    
    
    70
    
    
    Chairman of the Board; DirectorAlan W. Stock
    
    
    46
    
    
    Chief Executive OfficerTimothy Warner
    
    
    62
    
    
    President; Chief Operating OfficerTandy Mitchell
    
    
    56
    
    
    Executive Vice President; Assistant SecretaryRobert Copple
    
    
    48
    
    
    Executive Vice President; Treasurer; Chief Financial Officer; Assistant SecretaryRobert Carmony
    
    
    49
    
    
    Senior Vice President-OperationsMichael Cavalier
    
    
    40
    
    
    Senior Vice President-General Counsel; SecretaryWalter Hebert, III
    
    
    61
    
    
    Senior Vice President-PurchasingTom Owens
    
    
    50
    
    
    Senior Vice President-Real EstateJohn Lundin
    
    
    57
    
    
    Vice President-Film LicensingDon Harton
    
    
    49
    
    
    Vice President-ConstructionTerrell Falk
    
    
    56
    
    
    Vice President-Marketing and CommunicationsBenjamin D. Chereskin
    
    
    48
    
    
    DirectorJames N. Perry, Jr.
    
    
    46
    
    
    DirectorRobin P. Selati
    
    
    41
    
    
    DirectorVahe A. Dombalagian
    
    
    33
    
    
    DirectorEnrique F. Senior
    
    
    63
    
    
    DirectorPeter R. Ezersky
    
    
    46
    
    
    DirectorRaymond W. Syufy
    
    
    44
    
    
    DirectorJoseph E. Syufy
    
    
    41
    
    
    Director
 Lee Roy Mitchell
 Alan W. Stock
 Timothy
Warner
 Tandy
Mitchell
 Robert Copple
 47




---



##### Table of Contents



Robert Carmony
 Michael Cavalier
 Walter Hebert, III
 Tom Owens
 John Lundin
 Don Harton
 Terrell
Falk
 Benjamin D. Chereskin
 James N. Perry, Jr.
 Robin P. Selati
 Vahe A. Dombalagian
 Enrique
F. Senior
 48




---



##### Table of Contents



Peter R. Ezersky
 Raymond W. Syufy
 Joseph E. Syufy
 Audit Committee
  Code of Ethics
  
 Item 11. Executive Compensation
 Compensation Discussion and Analysis
  Overview of Compensation Program
  49




---



##### Table of Contents



Components of Compensation
 Base Salary
  Annual Performance-Based Cash Incentive Compensation
  .
 Long Term Equity Incentive Compensation
   50




---



##### Table of Contents



Perquisites
  Summary of Compensation for our Named Executive Officers
 Lee Roy Mitchell
  Alan W. Stock, Timothy Warner, Robert Copple and Robert Carmony
  Compensation Committee
  
    
    the allocation between long-term and currently paid out compensation;
    
    the allocation between cash and non-cash compensation, and among different forms of
non-cash compensation;
    
    the allocation among each different form of long-term award;
    
    how the determination is made as to when awards are granted, including awards of
equity-based compensation such as options; and
 51




---



##### Table of Contents




    
    stock ownership guidelines and any policies regarding hedging the economic risk of such
ownership.
 Summary Compensation
  Summary Compensation Table for the Fiscal Year Ended December 31, 2006
 Non-EquityIncentive Plan
    
    
    All OtherSalary
    
    
    Option Awards
    
    
    Compensation
    
    
    Compensation
    
    
    TotalName and Principal Position
    
    Year
    
    
    ($)
    
    
    ($)(1)
    
    
    ($)(2)
    
    
    ($)
    
    
    ($)Lee Roy Mitchell
    
    
    2006
    
    
    $
    763,958
    
    
    $
    
    
    
    $
    385,773
    
    
    $
    24,701
    (4)
    
    $
    1,174,432Chairman of
the Board(3)Alan W. Stock
    
    
    2006
    
    
    
    452,097
    
    
    
    415,761
    
    
    
    227,698
    
    
    
    634,180
    (5)
    
    
    1,729,736Chief
Executive Officer(3)Timothy Warner
    
    
    2006
    
    
    
    366,616
    
    
    
    415,761
    
    
    
    184,645
    
    
    
    14,772
    (6)
    
    
    981,794President
and Chief Operating Officer(3)Robert Copple
    
    
    2006
    
    
    
    330,118
    
    
    
    415,761
    
    
    
    166,263
    
    
    
    16,631
    (7)
    
    
    928,773Executive Vice President and Chief
Financial OfficerRobert Carmony
    
    
    2006
    
    
    
    318,247
    
    
    
    270,244
    
    
    
    160,284
    
    
    
    15,578
    (8)
    
    
    764,353Senior Vice President  Operations
 
 (1)
    
    These amounts represent the dollar amount of compensation cost we
recognized during 2006 for awards granted during 2004 based on the
grant date fair value of the named executive officers option awards
in accordance with SFAS 123(R). See note 4 to our unaudited interim
consolidated financial statements for assumptions used in determining
compensation expense on options granted in accordance with SFAS
123(R).(2)
    
    Bonuses were earned in 2006 and paid in March 2007.(3)
    
    Effective December 12, 2006, Mr. Mitchell stepped down as our Chief
Executive Officer. Mr. Stock was elected to replace Mr. Mitchell as
our Chief Executive Officer. Mr. Mitchell will continue to serve as
our Chairman of the Board of Directors. Mr. Stock had previously
served as our President since March 1993 and as Chief Operating
Officer since March 1992. Effective December 12, 2006, Mr. Warner was
elected to replace Mr. Stock as our President and Chief Operating
Officer. Mr. Warner had previously served as our Senior Vice President
since May 2002 and President of Cinemark International, L.L.C. since
August 1996.(4)
    
    Represents an $11,550 annual matching contribution to Mr. Mitchells
401(k) savings plan, $10,250 representing the value of the use of a
company vehicle for one year and $2,901 of life insurance premiums and
disability insurance paid by us for the benefit of Mr. Mitchell.(5)
    
    Represents an $11,550 annual matching contribution to Mr. Stocks
401(k) savings plan, $3,793 of life insurance premiums and disability
insurance paid by us for the benefit of Mr. Stock and payments of
$618,837 under Mr. Stocks profit participation agreement for certain
of our theatres.(6)
    
    Represents an $11,550 annual matching contribution to Mr. Warners
401(k) savings plan and $3,222 of life insurance premiums and
disability insurance paid by us for the benefit of Mr. Warner.(7)
    
    Represents an $11,550 annual matching contribution to Mr. Copples
401(k) savings plan and $5,081 of life insurance premiums and
disability insurance paid by us for the benefit of Mr. Copple.(8)
    
    Represents an $11,550 annual matching contribution to Mr. Carmonys
401(k) savings plan and $4,028 of life insurance premiums and
disability insurance paid by us for the benefit of Mr. Carmony. 52




---



##### Table of Contents



Grants of Plan-Based Awards
  Employment Agreements
 Lee Roy Mitchell
     53




---



##### Table of Contents



Tandy Mitchell, Alan Stock, Robert Copple, Timothy Warner, Robert Carmony, John Lundin and
Michael Cavalier
     401(k) Plan
  54




---



##### Table of Contents



2006 Long Term Incentive Plan
   Types of Awards.
 Administration.
 Eligibility.
 Shares Subject to the 2006 Plan.
 Terms and Conditions of Options.
  55




---



##### Table of Contents



Restricted Stock Awards.
 Effect of the Sale of Cinemark Holdings, Inc.
 Effect of Mergers, Reorganizations and Consolidations on Awards.
 56




---



##### Table of Contents



Plan Amendments.
 Term of 2006 Plan.
 Outstanding Equity Awards
  Outstanding Equity Awards at December 31, 2006 Table
 Option AwardsNumber of
    
    
    Number ofSecurities
    
    
    SecuritiesUnderlying
    
    
    UnderlyingUnexercised Options
    
    
    Unexercised Options
    
    
    Option(#)
    
    
    (#)
    
    
    Exercise Price
    
    
    Option ExpirationName
    
    Exercisable
    
    
    Unexercisable
    
    
    ($)
    
    
    DateLee Roy Mitchell
    
    
    
    
    
    
    
    
    
    
    
    
    
    N/AAlan W. Stock
    
    
    168,998
    
    
    
    138,501
    
    
    
    22.58
    
    
    September 29, 2014Timothy Warner
    
    
    168,998
    
    
    
    138,501
    
    
    
    22.58
    
    
    September 29, 2014Robert Copple
    
    
    168,998
    
    
    
    138,501
    
    
    
    22.58
    
    
    September 29, 2014Robert Carmony
    
    
    109,848
    
    
    
    90,026
    
    
    
    22.58
    
    
    September 29, 2014
 Option Exercises
  Potential Payments upon Termination or Change-in-Control
  Most Recent
    
    
    Medical /
    
    
    Other
    
    
    GroupSalary
    
    
    Bonus(1)
    
    
    Dental
    
    
    Life
    
    
    Life
    
    
    Disability(2)
    
    
    TotalLee Roy Mitchell
    
    $
    763,958
    
    
    $
    385,773
    
    
    $
    4,864
    
    
    
    
    
    
    $
    648
    
    
    $
    2,253
    
    
    $
    1,157,496Alan W. Stock
    
    
    452,097
    
    
    
    227,698
    
    
    
    11,549
    
    
    
    
    
    
    
    1,080
    
    
    
    2,713
    
    
    
    695,137Timothy Warner
    
    
    366,616
    
    
    
    184,645
    
    
    
    9,753
    
    
    
    
    
    
    
    1,092
    
    
    
    2,130
    
    
    
    564,236Robert Copple
    
    
    330,118
    
    
    
    166,263
    
    
    
    11,549
    
    
    
    890
    
    
    
    1,071
    
    
    
    3,120
    
    
    
    513,011Robert Carmony
    
    
    318,247
    
    
    
    160,284
    
    
    
    4,864
    
    
    
    
    
    
    
    1,080
    
    
    
    2,948
    
    
    
    487,423
 
 (1)
    
    Bonuses were earned in 2006 and paid in March 2007.(2)
    
    Amounts for disability include long-term disability, individual
disability income protection insurance and short-term disability. 57




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##### Table of Contents



Compensation of Directors
  Director Compensation Table for the Fiscal Year Ended December 31, 2006
 FeesEarned orPaid in Cash
    
    
    TotalName
    
    ($)
    
    
    ($)Benjamin D. Chereskin
    
    
    
    
    
    
    James N. Perry, Jr.
    
    
    
    
    
    
    Robin P. Selati
    
    
    
    
    
    
    Vahe A. Dombalagian
    
    
    
    
    
    
    Peter R. Ezersky
    
    
    
    
    
    
    Enrique F. Senior(1)
    
    
    $219,746
    
    
    
    $219,746Raymond W. Syufy(2)
    
    
    
    
    
    
    Joseph E. Syufy(2)
    
    
    
    
    
    
    
 
 (1)
    
    On January 19, 2007, we made a cash payment of $219,746 to Mr. Senior
for his services on our Board of Directors from July 26, 2004 through December 31, 2006.(2)
    
    Effective upon completion of the Century acquisition on October 5,
2006, we appointed Raymond W. Syufy and Joseph E. Syufy to our Board
of Directors.  Compensation Committee Interlocks and Insider Participation
  58




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Compensation Committee Report
  
 59




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##### Table of Contents



Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
  
    
    each person known by us to beneficially hold five percent or more of our outstanding common stock;
    
    each of our directors;
    
    each of our named executive officers; and
    
    all of our executive officers and directors as a group.
  Shares Beneficially
    
    Percent of SharesNames of Beneficial Owner
    
    Owned
    
    Beneficially Owned5%
StockholdersMadison Dearborn Capital Partners IV, L.P.(1)(9)
    
    
    20,733,827
    
    
    
    66.3
    %Quadrangle Capital Partners LP(2)
    
    
    2,213,993
    
    
    
    7.1
    %Syufy Enterprises LP(3)
    
    
    3,388,466
    
    
    
    10.8
    %Directors and Named Executive OfficersLee Roy Mitchell(4)
    
    
    4,427,986
    
    
    
    14.2
    %Alan W. Stock(5)
    
    
    272,574
    
    
    
    
    *Timothy Warner(6)
    
    
    271,940
    
    
    
    
    *Robert Copple(7)
    
    
    263,320
    
    
    
    
    *Robert Carmony(8)
    
    
    122,881
    
    
    
    
    *Benjamin D. Chereskin(9)
    
    
    20,733,827
    
    
    
    66.3
    %James N. Perry, Jr.(9)
    
    
    20,733,827
    
    
    
    66.3
    %Robin P. Selati(9)
    
    
    20,733,827
    
    
    
    66.3
    %Vahe A. Dombalagian(9)
    
    
    20,733,827
    
    
    
    66.3
    %Enrique F. Senior
    
    
    
    
    
    
    Peter R. Ezersky(10)
    
    
    2,213,993
    
    
    
    7.1
    %Raymond W. Syufy(11)
    
    
    3,338,466
    
    
    
    10.8
    %Joseph E. Syufy(11)
    
    
    3,388,466
    
    
    
    10.8
    %All directors and executive officers as a group (20 persons)(12)
    
    
    32,080,392
    
    
    
    99.3
    %
 
 *
    
    Represents less than 1%(1)
    
    Includes 2,214 shares owned by Northwestern University, 11,070 shares owned
by John Madigan and 44,280 shares owned by K&E Investment Partners, L.P. 
2004-B DIF. MDP has an irrevocable proxy to vote these shares in all matters subject
to stockholder approval. The address of Madison Dearborn Capital Partners IV, L.P.
is Three First National Plaza, Suite 3800, 70 West Madison Street, Chicago, Illinois
60602. 60




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##### Table of Contents



(2)
    
    Includes 80,986 shares owned by Quadrangle Select Partners LP, 567,067 shares
owned by Quadrangle Capital Partners A LP and 163,025 shares owned by Quadrangle
(Cinemark) Capital Partners LP. Quadrangle GP Investors LLC is the general partner
of Quadrangle GP Investors LP. Quadrangle GP Investors LP is the general partner of
Quadrangle Capital Partners LP, Quadrangle Select Partners LP, Quadrangle Capital
Partners A LP and Quadrangle (Cinemark) Capital Partners LP. Quadrangle Capital
Partners LP disclaims beneficial ownership of all shares held by Quadrangle Select
Partners LP and Quadrangle Capital Partners A LP. The address of Quadrangle Capital
Partners LP is c/o Quadrangle Group LLC, 375 Park Avenue, New York, New York 10152.(3)
    
    The address of Syufy Enterprises LP is 150 Pelican Way, San Rafael, California 94901.(4)
    
    Includes 2,169,713 shares of common stock owned by the Mitchell Special Trust. Mr.
Mitchell is the co-trustee of the Mitchell Special Trust. Mr. Mitchell expressly
disclaims beneficial ownership of all shares held by the Mitchell Special Trust. Mr.
Mitchells address is c/o Cinemark, Inc., 3900 Dallas Parkway, Suite 500, Plano,
Texas 75093.(5)
    
    Includes 189,048 shares of common stock issuable upon the exercise of options
that may be exercised within 60 days of the date hereof.(6)
    
    Includes 189,048 shares of common stock issuable upon the exercise of options
that may be exercised within 60 days of the date hereof.(7)
    
    Includes 189,048 shares of common stock issuable upon the exercise of options
that may be exercised within 60 days of the date hereof.(8)
    
    Includes 122,881 shares of common stock issuable upon the exercise of options
that may be exercised within 60 days of the date hereof.(9)
    
    The shares beneficially owned by MDCP IV may be deemed to be beneficially owned by
Madison Dearborn Partners IV, L.P. (or MDP IV), the sole general partner of MDCP IV.
Messrs. Chereskin,
Perry and Selati are each limited partners of MDP IV and Managing Directors and
Members of Madison Dearborn Partners, LLC (the general partner of MDP IV), and
therefore may be deemed to share beneficial ownership of the shares beneficially
owned by MDCP IV. Mr. Dombalagian is a limited partner of MDP IV and a Director of
Madison Dearborn Partners, LLC, and therefore may be deemed to share beneficial
ownership of the shares beneficially owned by MDCP IV. Messrs. Chereskin, Perry, Selati and Dombalagian and MDP IV each hereby disclaims
any beneficial ownership of any shares beneficially owned by MDCP IV. The address
for each person named in this footnote is Three First National Plaza, Suite 3800, 70
West Madison Street, Chicago, Illinois 60602.(10)
    
    Mr. Ezersky is a Managing Member of Quadrangle GP Investors LLC, which is the
general partner of Quadrangle GP Investors LP. Quadrangle GP Investors LP is the
general partner of Quadrangle Capital Partners LP, Quadrangle Select Partners LP,
Quadrangle Capital Partners A LP and Quadrangle (Cinemark) Capital Partners LP, and
he may therefore be deemed to share beneficial ownership of the 1,402,915 shares
owned by Quadrangle Capital Partners LP, the 80,986 shares owned by Quadrangle
Select Partners LP, the 567,067 shares owned by Quadrangle Capital Partners A LP
and the 163,025 shares owned by Quadrangle (Cinemark) Capital Partners LP. Mr.
Ezersky expressly disclaims beneficial ownership of the shares owned by Quadrangle
Capital Partners LP, Quadrangle Select Partners LP, Quadrangle Capital Partners A LP
and Quadrangle (Cinemark) Capital Partners LP.(11)
    
    Raymond Syufy and Joseph Syufy are executive officers of the general partner of
Syufy Enterprises LP and they may therefore be deemed to share beneficial ownership
of the 3,388,466 shares owned by Syufy Enterprises LP. Raymond Syufy and Joseph
Syufy expressly disclaim beneficial ownership of the shares owned by Syufy
Enterprises LP.(12)
    
    Includes 1,017,010 shares of common stock issuable upon the exercise of options
that may be exercised within 60 days of the date hereof. 61




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Equity Compensation Plan Information
  
 Item 13. Certain Relationships and Related Transactions, and Director Independence
 Certain Agreements
     Profit Participation
  62




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Review, Approval or Ratification of Transactions with Related Persons
  
 Item 14.
Principal Accounting Fees and Services
  Category
    
    2006
    
    
    2005(in millions)Audit Fees (a)
    
    $
    0.8
    
    
    $
    0.7Audit-Related Fees
    
    
    0.1
    
    
    
    Tax Fees (b)
    
    
    0.1
    
    
    
    0.2All Other Fees (c)
    
    
    
    
    
    
    Total
    
    $
    1.0
    
    
    $
    0.9
 
 (a)
    
    Fees for audit services billed in 2006 and 2005 consisted of the audit of our annual
consolidated financial statements, reviews of our quarterly consolidated financial statements,
statutory audits and comfort letters, consents and other services
related to SEC matters.(b)
    
    Fees for tax services billed in 2006 and 2005 consisted of assistance with our federal,
state, local and foreign jurisdictions income tax returns. We have additionally sought
consultation and advice related to various tax compliance planning projects. 63




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##### Table of Contents



(c)
    
    No material other fees were billed in 2006 or 2005.   64




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PART IV
 
 Item 15. Exhibits, Financial Statement Schedules
 Documents Filed as Part of this Report
 1.
    
    The financial statement schedules and related data listed in the accompanying Index
beginning on page F-1 are filed as a part of this report.2.
    
    The financial statement schedules beginning on S-1 are filed as part of this report.3.
    
    The exhibits listed in the accompanying Index beginning on page E-1 are filed as a part
of this report, which exhibits are bound separately.
 Exhibits
  Financial Statement Schedules
   65




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##### Table of Contents



SIGNATURES
  Dated:
March 28, 2007
    


    CINEMARK, INC.BY:
    
    /s/ Alan W. StockAlan W. Stock 
Chief Executive Officer
 POWER OF ATTORNEY
   Name
    
    Title
    
    Date/s/ Lee Roy Mitchell
Lee Roy Mitchell
    
    Chairman of the Board of Directors and 
Director
    
    March 28, 2007/s/ Alan W. Stock
    
    Chief Executive Officer
    
    March 28, 2007Alan W. Stock
    
    (principal executive officer)/s/ Robert Copple
Robert Copple
    
    Executive Vice President; Treasurer and 

Chief Financial Officer (principal 

financial and accounting officer)
    
    March 28, 2007/s/ Benjamin D. Chereskin
Benjamin D. Chereskin
    
    Director
    
    March 28, 2007/s/ James N. Perry, Jr.
James N. Perry, Jr.
    
    Director
    
    March 28, 2007/s/ Robin P. Selati
Robin P. Selati
    
    Director
    
    March 28, 2007/s/
Vahe A. Dombalagian
Vahe A. Dombalagian
    
    Director
    
    March 28, 2007/s/ Peter R. Ezersky
Peter R. Ezersky
    
    Director
    
    March 28, 2007/s/ Enrique F. Senior
Enrique F. Senior
    
    Director
    
    March 28, 2007/s/ Raymond W. Syufy
Raymond W. Syufy
    
    Director
    
    March 28, 2007/s/ Joseph E. Syufy
Joseph E. Syufy
    
    Director
    
    March 28, 2007




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SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO
SECTION 15(d) OF THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED
SECURITIES PURSUANT TO SECTION 12 OF THE ACT.




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##### Table of Contents



INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
 PageCINEMARK,
INC. AND SUBSIDIARIESCONSOLIDATED FINANCIAL STATEMENTS:Report of Independent Registered Public Accounting Firm
    
    
    F-2Consolidated
Balance Sheets, December 31, 2005 (Predecessor) and 2006
(Successor)
    
    
    F-3Consolidated Statements of Operations for the Years Ended December
31, 2004 (Predecessor) and 2005 (Predecessor), the Period from
January 1, 2006 to October 4, 2006 (Predecessor) and the Period
from October 5, 2006 to December 31, 2006 (Successor)
    
    
    F-4Consolidated
Statements of Stockholders Equity (Deficiency) and Comprehensive
Income (Loss) for the Years Ended December 31, 2004 (Predecessor) and
2005 (Predecessor), the Period from January 1, 2006 to
October 4,
2006 (Predecessor) and the Period from October 5, 2006 to December
31, 2006 (Successor)
    
    
    F-5Consolidated Statements of Cash Flows for the Years Ended December
31, 2004 (Predecessor) and 2005 (Predecessor), the Period from
January 1, 2006 to October 4, 2006 (Predecessor) and the Period
from October 5, 2006 to December 31, 2006 (Successor)
    
    
    F-6Notes to Consolidated Financial Statements
    
    
    F-7SUPPLEMENTARY SCHEDULES REQUIRED BY THE INDENTURE FOR THE SENIOR DISCOUNT NOTESCondensed Consolidating Balance Sheet Information, December 31, 2006 (Successor)
    
    
    S-1Condensed Consolidating Statement of Operations Information for the Period from January 1, 2006 to October 4, 2006 (Predecessor)
    
    
    S-2Condensed Consolidating Statement of Operations Information for the Period from October 5, 2006 to December 31, 2006 (Successor)
    
    
    S-3Condensed Consolidating Statement of Cash Flows Information for the Period from January 1, 2006 to October 4, 2006 (Predecessor)
    
    
    S-4Condensed Consolidating Statement of Cash Flows Information for the Period from October 5, 2006 to December 31, 2006 (Successor)
    
    
    S-5
 F-1




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##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
    Share Based Payment
 Deloitte & Touche LLP
 
 F-2




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##### Table of Contents



CINEMARK, INC. AND SUBSIDIARIES
 
 CONSOLIDATED BALANCE SHEETS
 (In thousands, except share data)
 December 31,
    
    
    
    December 31,2005
    
    
    
    2006(Predecessor)
    
    
    
    (Successor)ASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    182,199
    
    
    
    $
    147,099Inventories
    
    
    4,546
    
    
    
    
    6,058Accounts receivable
    
    
    15,405
    
    
    
    
    31,165Income tax receivable
    
    
    
    
    
    
    
    8,946Current deferred tax asset
    
    
    
    
    
    
    
    4,661Prepaid expenses and other
    
    
    4,538
    
    
    
    
    8,424Total current assets
    
    
    206,688
    
    
    
    
    206,353THEATRE PROPERTIES AND EQUIPMENTLand
    
    
    62,470
    
    
    
    
    104,578Buildings
    
    
    348,038
    
    
    
    
    423,273Property under capital lease
    
    
    
    
    
    
    
    143,776Theatre furniture and equipment
    
    
    559,994
    
    
    
    
    533,775Leasehold interests and improvements
    
    
    413,759
    
    
    
    
    513,191Theatres under construction
    
    
    14,537
    
    
    
    
    18,113Total
    
    
    1,398,798
    
    
    
    
    1,736,706Less accumulated depreciation and amortization
    
    
    608,232
    
    
    
    
    412,134Theatre properties and equipment, net
    
    
    790,566
    
    
    
    
    1,324,572OTHER ASSETSGoodwill
    
    
    42,107
    
    
    
    
    1,205,423Intangible assets  net
    
    
    9,958
    
    
    
    
    360,752Investments in and advances to affiliates
    
    
    8,593
    
    
    
    
    11,354Deferred charges and other assets  net
    
    
    54,376
    
    
    
    
    63,092Total other assets
    
    
    115,034
    
    
    
    
    1,640,621TOTAL ASSETS
    
    $
    1,112,288
    
    
    
    $
    3,171,546LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIENCY)CURRENT LIABILITIESCurrent portion of long-term debt
    
    $
    6,871
    
    
    
    $
    14,259Current portion of capital lease obligations
    
    
    
    
    
    
    
    3,649Accounts payable
    
    
    47,234
    
    
    
    
    47,272Income tax payable
    
    
    13,144
    
    
    
    
    Accrued film rentals
    
    
    21,441
    
    
    
    
    47,862Accrued interest
    
    
    15,333
    
    
    
    
    23,706Accrued payroll
    
    
    11,226
    
    
    
    
    21,686Accrued property taxes
    
    
    16,345
    
    
    
    
    22,165Accrued other current liabilities
    
    
    28,473
    
    
    
    
    50,223Total current liabilities
    
    
    160,067
    
    
    
    
    230,822LONG-TERM LIABILITIESLong-term debt, less current portion
    
    
    1,037,384
    
    
    
    
    1,897,394Capital lease obligations, less current portion
    
    
    
    
    
    
    
    112,178Deferred income taxes
    
    
    15,591
    
    
    
    
    198,320Deferred lease expenses
    
    
    29,518
    
    
    
    
    14,285Deferred revenues and other long-term liabilities
    
    
    11,788
    
    
    
    
    12,672Total long-term liabilities
    
    
    1,094,281
    
    
    
    
    2,234,849COMMITMENTS
AND CONTINGENCIES (see Note 18)
    
    
    
    
    
    
    
    MINORITY INTERESTS IN SUBSIDIARIES
    
    
    16,422
    
    
    
    
    16,613STOCKHOLDERS EQUITY (DEFICIENCY)Class A common stock, $0.001 par value: 40,000,000 shares authorized,
27,896,316 shares issued and outstanding at December 31, 2005 and December 31, 2006
    
    
    28
    
    
    
    
    28Additional paid-in-capital
    
    
    604,443
    
    
    
    
    685,463Retained earnings (deficit)
    
    
    (702,768
    )
    
    
    
    (7,692
    )Accumulated other comprehensive income (loss)
    
    
    (60,185
    )
    
    
    
    11,463Total stockholders equity (deficiency)
    
    
    (158,482
    )
    
    
    
    689,262TOTAL LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIENCY)
    
    $
    1,112,288
    
    
    
    $
    3,171,546
  F-3




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CINEMARK, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
 (In thousands)
 Period from
    
    
    Period fromYear Ended
    
    
    Year Ended
    
    
    January 1, 2006 to
    
    
    October 5, 2006 toDecember 31, 2004
    
    
    December 31, 2005
    
    
    October 4, 2006
    
    
    December 31, 2006(Predecessor)
    
    
    (Predecessor)
    
    
    (Predecessor)
    
    
    (Successor)REVENUESAdmissions
    
    $
    646,999
    
    
    $
    641,240
    
    
    $
    514,183
    
    
    $
    246,092Concession
    
    
    321,621
    
    
    
    320,072
    
    
    
    260,223
    
    
    
    115,575Other
    
    
    55,622
    
    
    
    59,285
    
    
    
    54,683
    
    
    
    29,838Total revenues
    
    
    1,024,242
    
    
    
    1,020,597
    
    
    
    829,089
    
    
    
    391,505COST OF OPERATIONSFilm rentals and advertising
    
    
    348,816
    
    
    
    347,727
    
    
    
    275,005
    
    
    
    130,982Concession supplies
    
    
    53,761
    
    
    
    52,507
    
    
    
    41,863
    
    
    
    17,157Salaries and wages
    
    
    103,084
    
    
    
    101,431
    
    
    
    79,002
    
    
    
    39,614Facility lease expense
    
    
    126,643
    
    
    
    136,593
    
    
    
    109,513
    
    
    
    48,246Utilities and other
    
    
    112,966
    
    
    
    123,831
    
    
    
    100,924
    
    
    
    43,884General and administrative expenses
    
    
    51,672
    
    
    
    50,884
    
    
    
    45,958
    
    
    
    21,810Stock option compensation and change of control expenses related to the MDP merger
    
    
    31,995
    
    
    
    
    
    
    
    
    
    
    
    Depreciation and amortization
    
    
    67,051
    
    
    
    76,229
    
    
    
    59,913
    
    
    
    34,281Amortization of favorable leases
    
    
    
    
    
    
    232
    
    
    
    130
    
    
    
    667Impairment of long-lived assets
    
    
    1,667
    
    
    
    9,672
    
    
    
    5,741
    
    
    
    23,337Loss on sale of assets and other
    
    
    4,851
    
    
    
    2,625
    
    
    
    2,938
    
    
    
    2,345Total cost of operations
    
    
    902,506
    
    
    
    901,731
    
    
    
    720,987
    
    
    
    362,323OPERATING INCOME
    
    
    121,736
    
    
    
    118,866
    
    
    
    108,102
    
    
    
    29,182OTHER INCOME (EXPENSE)Interest expense
    
    
    (69,471
    )
    
    
    (82,883
    )
    
    
    (66,109
    )
    
    
    (41,037
    )Amortization of debt issue costs
    
    
    (3,472
    )
    
    
    (3,984
    )
    
    
    (3,082
    )
    
    
    (1,183
    )Interest income
    
    
    1,970
    
    
    
    6,600
    
    
    
    5,563
    
    
    
    1,477Foreign currency exchange gain (loss)
    
    
    (266
    )
    
    
    (1,276
    )
    
    
    94
    
    
    
    (352
    )Loss on early retirement of debt
    
    
    (5,974
    )
    
    
    (46
    )
    
    
    (3,315
    )
    
    
    (5,782
    )Dividend income
    
    
    
    
    
    
    
    
    
    
    101
    
    
    
    Equity in income (loss) of affiliates
    
    
    173
    
    
    
    227
    
    
    
    (1,800
    )
    
    
    154Minority interests in (income) loss of subsidiaries
    
    
    (4,353
    )
    
    
    (924
    )
    
    
    (1,790
    )
    
    
    321Total other expenses
    
    
    (81,393
    )
    
    
    (82,286
    )
    
    
    (70,338
    )
    
    
    (46,402
    )INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
    
    
    40,343
    
    
    
    36,580
    
    
    
    37,764
    
    
    
    (17,220
    )Income taxes
    
    
    17,302
    
    
    
    14,193
    
    
    
    9,078
    
    
    
    3,111INCOME (LOSS) FROM CONTINUING OPERATIONS AFTER INCOME TAXES
    
    
    23,041
    
    
    
    22,387
    
    
    
    28,686
    
    
    
    (20,331
    )Income from
discontinued operations, net of taxes (See Note 7)
    
    
    3,584
    
    
    
    
    
    
    
    
    
    
    
    NET INCOME (LOSS)
    
    $
    26,625
    
    
    $
    22,387
    
    
    $
    28,686
    
    
    $
    (20,331
    )
  F-4




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##### Table of Contents



CINEMARK, INC. AND SUBSIDIARIES 
 CONSOLIDATED
STATEMENTS OF STOCKHOLDERS EQUITY (DEFICIENCY) AND
COMPREHENSIVE INCOME (LOSS)
 YEARS ENDED DECEMBER 31, 2004 (Predecessor) AND 2005 (Predecessor) AND
 THE PERIODS FROM
JANUARY 1, 2006 TO OCTOBER 4, 2006 (Predecessor) AND OCTOBER 5, 2006 TO DECEMBER 31, 2006 (Successor)
 (In thousands)
 Class A
    
    
    Class B
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    AccumulatedCommon Stock
    
    
    Common Stock
    
    
    Additional
    
    
    Unearned
    
    
    Retained
    
    
    OtherShares
    
    
    
    
    
    
    Shares
    
    
    
    
    
    
    Paid-in
    
    
    Compensation
    
    
    Earnings
    
    
    Comprehensive
    
    
    
    
    
    
    ComprehensiveIssued
    
    
    Amount
    
    
    Issued
    
    
    Amount
    
    
    Capital
    
    
    Stock Options
    
    
    (Deficit)
    
    
    Income (Loss)
    
    
    Total
    
    
    Income (Loss)Predecessor balance at December 31, 2003
    
    
    19,664
    
    
    $
    20
    
    
    
    20,949
    
    
    $
    21
    
    
    $
    40,369
    
    
    $
    (1,740
    )
    
    $
    124,821
    
    
    $
    (86,545
    )
    
    $
    76,946Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    26,625
    
    
    
    
    
    
    
    26,625
    
    
    $
    26,625Amortization of unearned compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    145
    
    
    
    
    
    
    
    
    
    
    
    145MDP merger:Retirement of existing stock
    
    
    (19,664
    )
    
    
    (20
    )
    
    
    (20,949
    )
    
    
    (21
    )
    
    
    (40,369
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (40,410
    )Issuance of stock
    
    
    27,675
    
    
    
    28
    
    
    
    
    
    
    
    
    
    
    
    624,972
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    625,000Write-off of unearned compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,595
    
    
    
    
    
    
    
    
    
    
    
    1,595MDP merger fees, net of tax benefit
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (25,447
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (25,447
    )Impact on retained earnings (deficit)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (876,601
    )
    
    
    
    
    
    
    (876,601
    )Foreign currency translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,423
    
    
    
    9,423
    
    
    
    9,423Predecessor balance at December 31, 2004
    
    
    27,675
    
    
    $
    28
    
    
    
    
    
    
    $
    
    
    
    $
    599,525
    
    
    $
    
    
    
    $
    (725,155
    )
    
    $
    (77,122
    )
    
    $
    (202,724
    )
    
    $
    36,048Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    22,387
    
    
    
    
    
    
    
    22,387
    
    
    $
    22,387Issuance of stock
    
    
    221
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,000Tax adjustment related to MDP Merger fees
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (82
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (82
    )Foreign currency translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    16,937
    
    
    
    16,937
    
    
    
    16,937Predecessor balance at December 31, 2005
    
    
    27,896
    
    
    $
    28
    
    
    
    
    
    
    $
    
    
    
    $
    604,443
    
    
    $
    
    
    
    $
    (702,768
    )
    
    $
    (60,185
    )
    
    $
    (158,482
    )
    
    $
    39,324Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    28,686
    
    
    
    
    
    
    
    28,686
    
    
    $
    28,686Stock option compensation expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,148
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,148Foreign currency translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,872
    
    
    
    3,872
    
    
    
    3,872Predecessor
balance at October 4, 2006
    
    
    27,896
    
    
    $
    28
    
    
    
    
    
    
    $
    
    
    
    $
    606,591
    
    
    $
    
    
    
    $
    (674,082
    )
    
    $
    (56,313
    )
    
    $
    (123,776
    )
    
    $
    32,558Successor
balance at October 5, 2006
    
    
    27,896
    
    
    $
    28
    
    
    
    
    
    
    $
    
    
    
    $
    534,747
    
    
    $
    

    
    
    $
    12,639
    
    
    $
    (734
    )
    
    $
    546,680Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (20,331
    )
    
    
    
    
    
    
    (20,331
    )
    
    $
    (20,331
    )Capital
contribution from Cinemark Holdings, Inc. as a result of Century
acquisition
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    150,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    150,000Stock option compensation expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    716
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    716Foreign currency translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12,197
    
    
    
    12,197
    
    
    
    12,197Successor balance at December 31, 2006
    
    
    27,896
    
    
    $
    28
    
    
    
    
    
    
    $
    
    
    
    $
    685,463
    
    
    $
    
    
    
    $
    (7,692
    )
    
    $
    11,463
    
    
    $
    689,262
    
    
    $
    (8,134
    )
 F-5




---



##### Table of Contents



CINEMARK, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 (In thousands)
 Period from
    
    
    Period fromYear Ended
    
    
    Year Ended
    
    
    January 1, 2006 to
    
    
    October 5, 2006 toDecember 31, 2004
    
    
    December 31, 2005
    
    
    October 4, 2006
    
    
    December 31, 2006(Predecessor)
    
    
    (Predecessor)
    
    
    (Predecessor)
    
    
    (Successor)OPERATING ACTIVITIESNet income
(loss)
    
    $
    26,625
    
    
    $
    22,387
    
    
    $
    28,686
    
    
    $
    (20,331
    )Adjustments
to reconcile net income (loss) to cash provided by operating
activities:Depreciation
    
    
    66,398
    
    
    
    73,796
    
    
    
    58,564
    
    
    
    33,241Amortization of intangible and other assets
    
    
    653
    
    
    
    2,665
    
    
    
    1,479
    
    
    
    1,707Amortization of long-term prepaid rents
    
    
    1,713
    
    
    
    1,258
    
    
    
    816
    
    
    
    197Amortization of debt issue costs
    
    
    3,472
    
    
    
    3,984
    
    
    
    3,082
    
    
    
    1,183Amortization of debt discount and premium
    
    
    (1,535
    )
    
    
    (1,564
    )
    
    
    (1,173
    )
    
    
    (763
    )Amortization of deferred revenues, deferred
lease incentives and other
    
    
    (1,119
    )
    
    
    (963
    )
    
    
    (582
    )
    
    
    (71
    )Impairment of long-lived assets
    
    
    1,667
    
    
    
    9,672
    
    
    
    5,741
    
    
    
    23,337Stock option compensation expense
    
    
    145
    
    
    
    
    
    
    
    2,148
    
    
    
    716Loss on sale of assets and other
    
    
    4,851
    
    
    
    2,625
    
    
    
    2,938
    
    
    
    2,345Write-off unamortized debt issue costs and
debt discount and premium related to the
early retirement of debt
    
    
    938
    
    
    
    46
    
    
    
    1,183
    
    
    
    5,782Write-off unearned compensation related to
the MDP merger
    
    
    1,595
    
    
    
    
    
    
    
    
    
    
    
    Accretion of interest on senior discount
notes
    
    
    26,731
    
    
    
    38,549
    
    
    
    30,222
    
    
    
    10,203Deferred lease expenses
    
    
    309
    
    
    
    1,556
    
    
    
    724
    
    
    
    378Deferred income tax expenses
    
    
    10,105
    
    
    
    (7,547
    )
    
    
    (7,986
    )
    
    
    1,580Equity in
(income) loss of affiliates
    
    
    (173
    )
    
    
    (227
    )
    
    
    1,800
    
    
    
    (154
    )Minority
interests in income (loss) of subsidiaries
    
    
    4,353
    
    
    
    924
    
    
    
    1,790
    
    
    
    (321
    )Other
    
    
    (1,916
    )
    
    
    202
    
    
    
    
    
    
    
    Changes in assets and liabilities:Inventories
    
    
    86
    
    
    
    (309
    )
    
    
    274
    
    
    
    513Accounts receivable
    
    
    3,700
    
    
    
    (4,102
    )
    
    
    (9,174
    )
    
    
    (710
    )Prepaid expenses and other
    
    
    1,587
    
    
    
    (649
    )
    
    
    (1,443
    )
    
    
    3,121Other assets
    
    
    (7,448
    )
    
    
    (12,373
    )
    
    
    (8,394
    )
    
    
    4,812Advances with affiliates
    
    
    54
    
    
    
    (121
    )
    
    
    (189
    )
    
    
    81Accounts payable and accrued liabilities
    
    
    (8,000
    )
    
    
    14,082
    
    
    
    (20,993
    )
    
    
    21,075Interest
paid on repurchased senior discount notes
    
    
    
    
    
    
    
    
    
    
    (5,381
    )
    
    
    Other
long-term liabilities
    
    
    649
    
    
    
    1,198
    
    
    
    484
    
    
    
    5,250Income tax receivable/payable
    
    
    (12,354
    )
    
    
    20,181
    
    
    
    (9,572
    )
    
    
    (12,518
    )Net cash provided by operating activities
    
    
    123,086
    
    
    
    165,270
    
    
    
    75,044
    
    
    
    80,653INVESTING ACTIVITIESAdditions to theatre properties and equipment
    
    
    (81,008
    )
    
    
    (75,605
    )
    
    
    (77,902
    )
    
    
    (29,179
    )Proceeds from sale of theatre properties and equipment
    
    
    12,945
    
    
    
    1,317
    
    
    
    1,236
    
    
    
    5,210Acquisition of Century Theatres, Inc., net of cash acquired
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (531,383
    )Purchase of shares in National CineMedia
    
    
    
    
    
    
    (7,329
    )
    
    
    
    
    
    
    Purchase of minority partner shares in Cinemark Brasil
    
    
    (44,958
    )
    
    
    
    
    
    
    
    
    
    
    Purchase of minority partner shares in Cinemark Mexico
    
    
    (5,379
    )
    
    
    
    
    
    
    
    
    
    
    Other
    
    
    1,453
    
    
    
    
    
    
    
    271
    
    
    
    Net cash used for investing activities
    
    
    (116,947
    )
    
    
    (81,617
    )
    
    
    (76,395
    )
    
    
    (555,352
    )FINANCING ACTIVITIESIssuance of common stock
    
    
    
    
    
    
    5,000
    
    
    
    
    
    
    
    Proceeds from MDP as a result of the merger
    
    
    518,245
    
    
    
    
    
    
    
    
    
    
    
    Net payments to stockholders, option holders and other payments related to the MDP merger
    
    
    (835,704
    )
    
    
    
    
    
    
    
    
    
    
    Issuance of senior discount notes
    
    
    360,000
    
    
    
    
    
    
    
    
    
    
    
    Repurchase of senior discount notes
    
    
    
    
    
    
    (1,302
    )
    
    
    (24,950
    )
    
    
    Repurchase of senior subordinated notes
    
    
    (122,750
    )
    
    
    
    
    
    
    (10,000
    )
    
    
    Proceeds from new senior secured credit facility
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,120,000Proceeds from other long-term debt
    
    
    291,446
    
    
    
    660
    
    
    
    2,273
    
    
    
    57Payoff of long-term debt assumed in Century acquisition
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (360,000
    )Payoff of former senior secured credit facility
    
    
    (163,764
    )
    
    
    
    
    
    
    
    
    
    
    (253,500
    )Repayments of other long-term debt
    
    
    (36,306
    )
    
    
    (6,671
    )
    
    
    (5,009
    )
    
    
    (3,886
    )Payments on capital leases
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (839
    )Debt issue costs
    
    
    (24,354
    )
    
    
    (239
    )
    
    
    
    
    
    
    (22,926
    )Other
    
    
    (1,256
    )
    
    
    (1,198
    )
    
    
    (1,226
    )
    
    
    (52
    )Net cash
provided by (used for) financing activities
    
    
    (14,443
    )
    
    
    (3,750
    )
    
    
    (38,912
    )
    
    
    478,854EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS
    
    
    1,230
    
    
    
    2,048
    
    
    
    268
    
    
    
    740INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
    
    
    (7,074
    )
    
    
    81,951
    
    
    
    (39,995
    )
    
    
    4,895CASH AND CASH EQUIVALENTS:Beginning of period
    
    
    107,322
    
    
    
    100,248
    
    
    
    182,199
    
    
    
    142,204End of period
    
    $
    100,248
    
    
    $
    182,199
    
    
    $
    142,204
    
    
    $
    147,099
   F-6




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##### Table of Contents



CINEMARK, INC. AND SUBSIDIARIES
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 In thousands, except share and per share data
 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Business
 Basis of Presentation 
  Principles of Consolidation
 Cash and Cash Equivalents
 Inventories
 F-7




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##### Table of Contents



CINEMARK HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(In thousands, except share and per share data)
 Theatre Properties and Equipment
 Category
    
    Useful LifeBuildings on owned land
    
    40 yearsBuildings on leased land
    
    Lesser of lease term or useful lifeBuildings under capital lease
    
    Lesser of lease term or useful lifeTheatre furniture and equipment
    
    5 to 15 yearsLeasehold interests and improvements
    
    Lesser of lease term or useful life
  Goodwill and Other Intangible Assets
  Intangible Asset
    
    Amortization MethodGoodwill
    
    Indefinite-livedTradename
    
    Indefinite-livedCapitalized licensing fees
    
    Straight-line method over 15 years. The
remaining terms of the underlying agreements
range from 8 to 13 years.Vendor contracts
    
    Straight-line method over the terms of the
underlying contracts. The remaining terms of
the underlying contracts range from 1 to 16
years.Net favorable leases
    
    Based on the pattern in which the economic
benefits are realized over the terms of the
lease agreements. The remaining terms of the
lease agreements range from 1 to 30 years.Other intangible assets
    
    Straight-line method over the terms of the
underlying agreements. The remaining term of
the underlying agreement is 12 years.
 Deferred Charges and Other Assets
 F-8




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##### Table of Contents



CINEMARK, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
In thousands, except share and per share data
  Lease Accounting Accounting for Leases Accounting for Operating
Leases with Scheduled Rent Increases The Effect
of Lessee Involvement in Asset Construction Accounting for
Leases: Sale-leaseback Transactions Involving Real Estate
 Deferred Revenues
 Revenue and Expense Recognition
  F-9




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##### Table of Contents



CINEMARK, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
In thousands, except share and per share data
 Stock Option Accounting
  Share Based Payment
 F-10




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##### Table of Contents



CINEMARK, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
In thousands, except share and per share data
  Accounting for
Stock-Based Compensation Accounting for Stock-Based Compensation Transition and
Disclosure
 Year Ended
    
    
    Year EndedDecember 31, 2004
    
    
    December 31, 2005(Predecessor)
    
    
    (Predecessor)Net income as reported
    
    $
    26,625
    
    
    $
    22,387Compensation expense included in
reported net income, net of tax(1)
    
    
    87
    
    
    
    Compensation expense under
fair-value method, net of tax
    
    
    (2,219
    )
    
    
    (2,964
    )Pro-forma net income
    
    $
    24,493
    
    
    $
    19,423
 
 (1)
    
    Amount included in net income for the year ended December 31, 2004 excludes compensation
expense of $16,245 related to the MDP Merger. See Note 3. Income
Taxes  Accounting for Contingencies
 Segments Disclosures
About Segments of an Enterprise and Related Information.
 Use of Estimates
 Foreign Currency Translations
 Fair Values of Financial Instruments
 Acquisitions Business Combinations
 F-11




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##### Table of Contents



CINEMARK, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
In thousands, except share and per share data
  Comprehensive
Income (loss) 
 2. NEW ACCOUNTING PRONOUNCEMENTS
  Accounting for Uncertainty in
Income Taxes  an Interpretation of FASB No. 109 Accounting for Income
Taxes
 Fair
Value Measurements.
 Considering the Effects of Prior Year Misstatements
    when Quantifying Misstatements in Current Year Financial
    Statements,
 The Fair Value Option for Financial Assets and
    Financial Liabilities.
 F-12




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##### Table of Contents



CINEMARK, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
In thousands, except share and per share data
 3.
MERGER WITH MADISON DEARBORN PARTNERS, RELATED REFINANCING OF CERTAIN
LONG-TERM DEBT AND RELATED CHANGE IN ACCOUNTING BASIS
  3 4 3 4
   Refinancing of Certain Long-Term Debt Associated with MDP Merger 1 2 1 2
 F-13




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##### Table of Contents



CINEMARK, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
In thousands, except share and per share data
  1 2
  Change
in Accounting Basis 
 Current assets
    
    $
    79,967Fixed assets
    
    
    650,653Goodwill
    
    
    620,540Tradename
    
    
    173,882Net favorable leases
    
    
    31,047Vendor contracts
    
    
    52,012Internally developed software
    
    
    1,626Other long term assets
    
    
    42,384Current liabilities
    
    
    (90,940
    )Other long term liabilities
    
    
    (120,232
    )Long-term debt
    
    
    (922,694
    )Total
    
    $
    518,245
  Net increase in fixed assets
    
    $
    15,013Net increase in goodwill
    
    
    508,760Net increase in intangible assets
    
    
    228,424Net increase
in investments in and advances to affiliates
    
    
    2,600Net decrease in deferred charges and other assets
    
    
    (7,277
    )Net increase in long-term debt
    
    
    (9,059
    )Net increase in deferred income taxes
    
    
    (87,059
    )Net decrease
in deferred lease expense
    
    
    16,561Net decrease in deferred revenues and other long-term liabilities
    
    
    2,493Net increase in stockholders equity
    
    $
    670,456
  F-14




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##### Table of Contents



CINEMARK, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
In thousands, except share and per share data
 4. ACQUISITION OF CENTURY THEATRES, INC. AND RELATED REFINANCING OF CERTAIN LONG-TERM DEBT
  Business
Combinations
 Current
assets (1)
    
    $
    32,635Fixed assets
    
    
    519,053Goodwill
    
    
    658,546Tradename
    
    
    136,000Other long term assets
    
    
    4,956Net unfavorable leases
    
    
    (9,360
    )Current liabilities
    
    
    (74,488
    )Other long term liabilities
    
    
    (218,669
    )Total
    
    $
    1,048,673
    F-15




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##### Table of Contents



CINEMARK, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
In thousands, except share and per share data
  Pro Forma
    
    
    Pro FormaYear Ended
    
    
    Year EndedDecember 31, 2005
    
    
    December 31, 2006(unaudited)RevenuesAdmissions
    
    $
    982,699
    
    
    $
    1,029,881Concession
    
    
    457,190
    
    
    
    487,416Other
    
    
    74,559
    
    
    
    94,807Total revenues
    
    $
    1,514,448
    
    
    $
    1,612,104Cost of operationsFilm rentals and advertising
    
    
    526,002
    
    
    
    546,144Concession supplies
    
    
    72,631
    
    
    
    75,359Salaries and wages
    
    
    154,072
    
    
    
    160,689Facility lease expense
    
    
    192,510
    
    
    
    203,335Utilities and other
    
    
    169,507
    
    
    
    184,699General and administrative expenses (1)
    
    
    77,338
    
    
    
    84,619Depreciation and amortization (2)(3)
    
    
    131,329
    
    
    
    136,936Impairment
of long-lived assets
    
    
    9,672
    
    
    
    29,485Loss on sale of assets and other
    
    
    7,582
    
    
    
    5,345Total cost of operations
    
    
    1,340,643
    
    
    
    1,426,611Operating income
    
    
    173,805
    
    
    
    185,493Interest expense (4)
    
    
    (164,916
    )
    
    
    (170,134
    )Other income (expense)
    
    
    6,105
    
    
    
    (5,370
    )Income before taxes
    
    
    14,994
    
    
    
    9,989Income tax expense (5)
    
    
    6,961
    
    
    
    6,024Net income
    
    $
    8,033
    
    
    $
    3,965
 
 (1)
    
    Gives effect to the elimination of change of control payments of $15,672 to Centurys
management for the year ended December 31, 2006.(2)
    
    Reflects increase in depreciation related to the fair value of the theatre properties and equipment pursuant to purchase accounting for the Century Acquisition.(3)
    
    Reflects the amortization associated with intangible assets recorded pursuant to purchase
accounting for the Century Acquisition.(4)
    
    Reflects interest expense and amortization of debt issue costs resulting from the changes
to the Companys debt structure pursuant to the Century Acquisition.(5)
    
    Reflects the tax effect of the aforementioned proforma adjustments at the Companys
statutory income tax rate of 39%. F-16




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##### Table of Contents



CINEMARK, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
In thousands, except share and per share data
 5. OTHER ACQUISITIONS
 Cinemark Brasil, S.A.
  Net favorable leases
    
    $
    730Vendor contracts
    
    
    2,231Goodwill
    
    
    23,962Reduction of minority interest liability
    
    
    18,806$
    45,729
  Cinemark Mexico
  Vendor contract
    
    $
    439Net favorable leases
    
    
    480Tradename
    
    
    1,179Goodwill
    
    
    1,715Reduction of minority interest liability
    
    
    1,566$
    5,379
  F-17




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##### Table of Contents



CINEMARK, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
In thousands, except share and per share data
 6. INVESTMENT IN NATIONAL CINEMEDIA LLC
     7. DISCONTINUED OPERATIONS
 Accounting for Impairment or Disposal of Long-Lived
Assets.
  F-18




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##### Table of Contents



CINEMARK, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
In thousands, except share and per share data
  Year EndedDecember 31, 2004(Predecessor)Admissions
    
    $
    4,893Concession
    
    
    5,341Other
    
    
    1,137Total revenues
    
    
    11,371Cost of operationsFilm rentals and advertising
    
    
    2,191Concession supplies
    
    
    905Salaries and wages
    
    
    2,266Facility lease expense
    
    
    1,684Utilities and other
    
    
    2,216General and administrative expenses
    
    
    497Depreciation and amortization
    
    
    295Gain on sale of assets and other
    
    
    (2,252
    )Total cost of operations
    
    
    7,802Operating income
    
    
    3,569Minority interests in income of subsidiaries
    
    
    (41
    )Income before income taxes
    
    
    3,528Income taxes
    
    
    (56
    )Income from discontinued operations
    
    $
    3,584
  F-19




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##### Table of Contents



CINEMARK, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
In thousands, except share and per share data
 8. GOODWILL AND OTHER INTANGIBLE ASSETS  NET
  U.S.
    
    
    InternationalOperating
    
    
    OperatingSegment
    
    
    Segment
    
    
    TotalPredecessor balance at December 31,
2004
    
    $
    4,932
    
    
    $
    40,074
    
    
    $
    45,006Impairment charges
    
    
    (667
    )
    
    
    (601
    )
    
    
    (1,268
    )Purchase from minority investors
purchase price allocation
adjustments(1)
    
    
    
    
    
    
    (5,059
    )
    
    
    (5,059
    )Foreign currency translation
adjustments and other
    
    
    
    
    
    
    3,428
    
    
    
    3,428Predecessor balance at December 31, 2005
    
    $
    4,265
    
    
    $
    37,842
    
    
    $
    42,107Foreign currency translation
adjustments and other
    
    
    
    
    
    
    2,066
    
    
    
    2,066Predecessor
balance at October 4, 2006
    
    $
    4,265
    
    
    $
    39,908
    
    
    $
    44,173Net basis
adjustment(2)
    
    
    394,893
    
    
    
    113,867
    
    
    
    508,760Acquisition of Century Theatres, Inc.(1)
    
    
    658,546
    
    
    
    
    
    
    
    658,546Impairment charges
    
    
    (5,116
    )
    
    
    (8,478
    )
    
    
    (13,594
    )Foreign currency translation
adjustments and other
    
    
    4,228
    
    
    
    3,310
    
    
    
    7,538Successor balance at December 31, 2006
    
    $
    1,056,816
    
    
    $
    148,607
    
    
    $
    1,205,423
 
 (1)
    
    See Note 4 regarding the acquisition of Century Theatres, Inc. and Note 5 regarding the
purchase price allocation adjustments for Brazil and Mexico.(2)
    
    Represents net basis adjustments to intangible assets related to the push
down of Cinemark Holdings, Inc.s accounting basis to the Company and
its subsidiaries. See Note 3
for further discussion.  F-20




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##### Table of Contents



CINEMARK, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
In thousands, except share and per share data
  ForeignPredecessor
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    CurrencyBalance at
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Translation
    
    
    Successor Balance atDecember 31,
    
    
    Net Basis
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Adjustments and
    
    
    December 31,2005
    
    
    Adjustment(1)
    
    
    Additions
    
    
    Amortization
    
    
    Impairment
    
    
    Other
    
    
    2006Intangible assets with finite lives:Capitalized licensing fees:Gross carrying amount
    
    $
    8,250
    
    
    $
    (3,112
    )
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    5,138Accumulated amortization
    
    
    (2,591
    )
    
    
    1,971
    
    
    
    
    
    
    
    (519
    )
    
    
    
    
    
    
    
    
    
    
    (1,139
    )Net carrying amount
    
    $
    5,659
    
    
    $

    (1,141
    )
    
    $
    
    
    
    $
    (519
    )
    
    $
    
    
    
    $
    
    
    
    $
    3,999Vendor contracts:Gross carrying amount
    
    
    3,217
    
    
    
    52,957
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    352
    
    
    
    56,526Accumulated amortization
    
    
    (1,703
    )
    
    
    (16,556
    )
    
    
    
    
    
    
    (1,665
    )
    
    
    
    
    
    
    
    
    
    
    (19,924
    )Net carrying amount
    
    $
    1,514
    
        $

    36,401
    
    
    $
    
    
    
    $
    (1,665
    )
    
    $
    
    
    
    $
    352
    
    
    $
    36,602Net favorable leases:Gross carrying amount
    
    
    1,392
    
    
    
    30,045
    
    
    
    (9,360
    )
    
    
    
    
    
    
    
    
    
    
    (78
    )
    
    
    21,999Accumulated amortization
    
    
    (232
    )
    
    
    (9,720
    )
    
    
    
    
    
    
    (797
    )
    
    
    (1,334
    )
    
    
    60
    
    
    
    (12,023
    )Net carrying amount
    
    $
    1,160
    
    
    $

    20,325
    
    
    $
    (9,360
    )
    
    $
    (797
    )
    
    $
    (1,334
    )
    
    $
    (18
    )
    
    $
    9,976Other intangible assets:Gross carrying amount
    
    
    429
    
    
    
    (375
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    16
    
    
    
    70Accumulated amortization
    
    
    (79
    )
    
    
    64
    
    
    
    
    
    
    
    (1
    )
    
    
    
    
    
    
    
    
    
    
    (16
    )Net carrying amount
    
    $
    350
    
    
    $
    (311
    )
    
    $
    
    
    
    $
    (1
    )
    
    $
    
    
    
    $
    16
    
    
    $
    54Total net intangible assets with finite lives
    
    $
    8,683
    
    
    
    55,274
    
    
    $
    (9,360
    )
    
    $
    (2,982
    )
    
    $
    (1,334
    )
    
    $
    350
    
    
    $
    50,631Intangible assets with indefinite lives:Tradename
    
    
    1,259
    
    
    
    173,163
    
    
    
    136,000
    
    
    
    
    
    
    
    
    
    
    
    (304
    )
    
    
    310,118Other unamortized intangible assets
    
    
    16
    
    
    
    (13
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3Total intangible assets  net
    
    $
    9,958
    
    
    $
    228,424
    
    
    $
    126,640
    
    
    $
    (2,982
    )
    
    $
    (1,334
    )
    
    $
    46
    
    
    $
    360,752
 
 (1)
    
    Represents net basis adjustments to intangible assets related to the push
down of Cinemark Holdings, Inc.s accounting basis to the Company and its subsidiaries. See Note 3
for further discussion.   For the year ended December 31, 2007
    
    $
    7,066For the year ended December 31, 2008
    
    
    6,673For the year ended December 31, 2009
    
    
    5,832For the year ended December 31, 2010
    
    
    5,542For the year ended December 31, 2011
    
    
    4,937Thereafter
    
    
    20,581Total
    
    $
    50,631
 F-21




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##### Table of Contents



CINEMARK, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
In thousands, except share and per share data
 9. IMPAIRMENT OF LONG-LIVED ASSETS
 Accounting for the Impairment or Disposal of Long-Lived
Assets
   Year Ended
    
    
    Year Ended
    
    
    
    
    
    
    
    October 5, 2006 toDecember 31,
    
    
    December 31,
    
    
    January 1, 2006 to
    
    
    
    December 31,2004
    
    
    2005
    
    
    October 4, 2006
    
    
    
    2006(Predecessor)
    
    
    (Predecessor)
    
    
    (Predecessor)
    
    
    
    (Successor)United States theatre properties
    
    $
    1,667
    
    
    $
    6,788
    
    
    $
    5,731
    
    
    
    $
    5,315International theatre properties
    
    
    
    
    
    
    1,616
    
    
    
    10
    
    
    
    
    3,094Subtotal
    
    $
    1,667
    
    
    $
    8,404
    
    
    $
    5,741
    
    
    
    $
    8,409Intangible assets (see Note 8)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,334Goodwill (see Note 8)
    
    
    
    
    
    
    1,268
    
    
    
    
    
    
    
    
    13,594Impairment of long-lived assets
    
    $
    1,667
    
    
    $
    9,672
    
    
    $
    5,741
    
    
    
    $
    23,337
 10. DEFERRED CHARGES AND OTHER ASSETS  NET
  Balance at
    
    
    Balance atDecember 31, 2005
    
    
    December 31, 2006(Predecessor)
    
    
    (Successor)Debt issue costs
    
    $
    40,389
    
    
    $
    39,646Less: Accumulated amortization
    
    
    (9,885
    )
    
    
    (4,794
    )Subtotal
    
    
    30,504
    
    
    
    34,852Long-term prepaid rents
    
    
    11,782
    
    
    
    16,283Construction advances and other deposits
    
    
    2,026
    
    
    
    1,869Equipment to be placed in service
    
    
    3,744
    
    
    
    3,990Brazil value added tax deposit
    
    
    3,602
    
    
    
    3,943Other
    
    
    2,718
    
    
    
    2,155Total
    
    $
    54,376
    
    
    $
    63,092
 F-22




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##### Table of Contents



CINEMARK, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
In thousands, except share and per share data
 3 4
 11. LONG-TERM DEBT
  Balance at
    
    
    Balance atDecember 31, 2005
    
    
    December 31, 2006(Predecessor)
    
    
    (Successor)Cinemark, Inc. 9 3/4% senior discount notes due 2014
    
    $
    423,978
    
    
    $
    434,073Cinemark USA, Inc. 9% senior subordinated notes due 2013
    
    
    353,330
    
    
    
    350,820Cinemark USA, Inc. term loan
    
    
    255,450
    
    
    
    1,117,200Other long-term debt
    
    
    11,497
    
    
    
    9,560Total long-term debt
    
    
    1,044,255
    
    
    
    1,911,653Less current portion
    
    
    6,871
    
    
    
    14,259Long-term debt, less current portion
    
    $
    1,037,384
    
    
    $
    1,897,394
 Senior Discount Notes
 3 4 3 4
 3 4 3 4 3 4
 3 4
 F-23




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##### Table of Contents



CINEMARK, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
In thousands, except share and per share data
  3 4 3 4 9
3/4%
 3 4
 Senior Subordinated Notes
 1 2 1 2 1 2
  1 2 1 2
  F-24




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##### Table of Contents



CINEMARK, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
In thousands, except share and per share data
        New Senior Secured Credit Facility
     F-25




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##### Table of Contents



CINEMARK, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
In thousands, except share and per share data
   3 4
    Former Senior Secured Credit Facility
 1 2
 F-26




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##### Table of Contents



CINEMARK, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
In thousands, except share and per share data
  Covenant
Compliance and Debt Maturity
  2007
    
    $
    14,2592008
    
    
    14,9322009
    
    
    12,8032010
    
    
    12,3662011
    
    
    11,200Thereafter
    
    
    1,846,093Total
    
    $
    1,911,653
   12. FOREIGN CURRENCY TRANSLATION
     F-27




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##### Table of Contents



CINEMARK, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
In thousands, except share and per share data
 13. INVESTMENTS IN AND ADVANCES TO AFFILIATES
  December 31,
    
    
    December 31,2005
    
    
    2006(Predecessor)
    
    
    (Successor)Investment in National CineMedia LLC  investment, at equity
    
    $
    7,329
    
    
    $
    5,353Cinemark Theatres Alberta, Inc.  investment, at equity  50% interest
    
    
    303
    
    
    
    617Fandango, Inc.  investment, at cost 7% interest
    
    
    171
    
    
    
    2,142Cinemark  Core Pacific, Ltd. (Taiwan)  investment, at cost  14% interest
    
    
    338
    
    
    
    1,383Other
    
    
    452
    
    
    
    1,859Total
    
    $
    8,593
    
    
    $
    11,354
   14. MINORITY INTERESTS IN SUBSIDIARIES
  December 31, 2005(Predecessor)
    
    
    December 31,2006(Successor)Cinemark Partners II  49.2% interest
    
    $
    8,554
    
    
    $
    8,862Cinemark Equity Holdings Corp. (Central America)  49.9% interest
    
    
    2,577
    
    
    
    2,263Cinemark Colombia, S.A.  49.0% interest
    
    
    2,333
    
    
    
    2,483Greeley Ltd.  49.0% interest
    
    
    1,491
    
    
    
    1,422Cinemark del Ecuador, S.A.  40.0% interest
    
    
    932
    
    
    
    994Cinemark de Mexico, S.A. de C.V.  0.6% interest
    
    
    272
    
    
    
    346Others
    
    
    263
    
    
    
    243Total
    
    $
    16,422
    
    
    $
    16,613
 15. CAPITAL STOCK
 Common and Preferred Stock-
   F-28




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##### Table of Contents



CINEMARK, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
In thousands, except share and per share data
  Stock Option Plans 
    September 30,
    
    
    January 28,2004
    
    
    2005Grant
    
    
    GrantExpected life
    
    6.5 years
    
    6.5 yearsExpected volatility(1)
    
    
    39
    %
    
    
    44
    %Risk-free interest rate
    
    
    3.79
    %
    
    
    3.93
    %Dividend yield
    
    
    0
    %
    
    
    0
    %
 
 (1)
    
    Expected volatility is based on historical volatility of the common
stock price of comparable public companies.    F-29




---



##### Table of Contents



Year Ended
    
    
    Year Ended
    
    
    January 1, 2006 to
    
    
    
    October 5, 2006 toDecember 31, 2004
    
    
    December 31, 2005
    
    
    October 4, 2006
    
    
    
    December 31, 2006(Predecessor)
    
    
    (Predecessor)
    
    
    (Predecessor)
    
    
    
    (Successor)Weighted
    
    
    
    
    
    
    Weighted
    
    
    
    
    
    
    Weighted
    
    
    
    
    
    
    
    WeightedAverage
    
    
    
    
    
    
    Average
    
    
    
    
    
    
    Average
    
    
    
    
    
    
    
    AverageExercise
    
    
    
    
    
    
    Exercise
    
    
    
    
    
    
    Exercise
    
    
    
    
    
    
    
    ExerciseShares
    
    
    Price
    
    
    Shares
    
    
    Price
    
    
    Shares
    
    
    Price
    
    
    
    Shares
    
    
    PriceOutstanding at January 1
    
    
    
    
    
    $
    
    
    
    
    2,361,590
    
    
    $
    22.58
    
    
    
    2,365,665
    
    
    $
    22.58
    
    
    
    
    2,362,590
    
    
    $
    22.58Granted
    
    
    2,361,590
    
    
    $
    22.58
    
    
    
    4,075
    
    
    $
    22.58
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    
    $
    Forfeited
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    
    (3,075
    )
    
    $
    22.58
    
    
    
    
    (1,519
    )
    
    $
    22.58Exercised
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    
    
    (1,556
    )
    
    $
    22.58Outstanding at December 31
    
    
    2,361,590
    
    
    $
    22.58
    
    
    
    2,365,665
    
    
    $
    22.58
    
    
    
    2,362,590
    
    
    $
    22.58
    
    
    
    
    2,359,515
    
    
    $
    22.58Options exercisable at
December 31
    
    
    353,211
    
    
    $
    22.58
    
    
    
    827,603
    
    
    $
    22.58
    
    
    
    1,178,628
    
    
    $
    22.58
    
    
    
    
    1,296,040
    
    
    $
    22.58
   16. SUPPLEMENTAL CASH FLOW INFORMATION
  Year Ended
    
    
    Year Ended
    
    
    January 1, 2006
    
    
    
    October 5, 2006 toDecember 31,
    
    
    December 31,
    
    
    to October 4,
    
    
    
    December 31,2004
    
    
    2005
    
    
    2006
    
    
    
    2006(Predecessor)
    
    
    (Predecessor)
    
    
    (Predecessor)
    
    
    
    (Successor)Cash paid for interest
    
    $
    46,686
    
    
    $
    45,166
    
    
    $
    43,132
    
    
    
    $
    22,584Net cash paid for income taxes
    
    $
    16,682
    
    
    $
    2,911
    
    
    $
    26,616
    
    
    
    
    428Noncash investing and financing activities:Change in construction lease
obligations related to
construction of theatres
    
    $
    6,463
    
    
    $
    (4,312
    )
    
    $
    (2,151
    )
    
    
    $
    2,546Changes in accounts payable
and accrued expenses for the
acquisition of theatre
properties and equipment
    
    $
    (1,149
    )
    
    $
    8,945
    
    
    $
    (7,832
    )
    
    
    $
    11,494Exchange of
theatre properties
    
    $
    
    
    
    $
    
    
    
    $
    5,400
    
    
    
    $
    Capital
contribution from Cinemark Holdings, Inc. related to the
Century acquisition
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    
    $
    150,000
 F-30




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##### Table of Contents



CINEMARK, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
In thousands, except share and per share data
 17. INCOME TAXES
  Year Ended
    
    
    Year Ended
    
    
    January 1, 2006
    
    
    
    October 5, 2006 toDecember 31,
    
    
    December 31,
    
    
    to October 4,
    
    
    
    December 31,2004
    
    
    2005
    
    
    2006
    
    
    
    2006(Predecessor)
    
    
    (Predecessor)
    
    
    (Predecessor)
    
    
    
    (Successor)Income (loss)
from continuing
operations before
income taxes:U.S.
    
    $
    12,390
    
    
    $
    19,838
    
    
    $
    20,546
    
    
    
    $
    (6,213
    )Foreign
    
    
    27,953
    
    
    
    16,742
    
    
    
        17,218
    
    
    
    
        (11,007
    )Total
    
    $
    40,343
    
    
    $
    36,580
    
    
    $
        37,764
    
    
    
    
        (17,220
    )Current:Federal
    
    $
    2,729
    
    
    $
    17,651
    
    
    $
        11,021
    
    
    
    $
        8,266Foreign
    
    
    4,008
    
    
    
    2,115
    
    
    
        5,312
        
    
    
    
        (5,567
        )State
    
    
    460
    
    
    
    1,972
    
    
    
        731
    
    
    
    
        137Total current expense
    
    
    7,197
    
    
    
    21,738
    
    
    
        17,064
    
    
    
    
        2,836Deferred:Federal
    
    
    4,825
    
    
    
    (7,513
    )
    
    
        (3,725
        )
    
    
    
        (8,358
        )Foreign
    
    
    5,474
    
    
    
    356
    
    
    
        (4,905
    )
    
    
    
        8,976State
    
    
    (194
    )
    
    
    (388
    )
    
    
        644
    
    
    
    
        (343
    )Total deferred expense
    
    
    10,105
    
    
    
    (7,545
    )
    
    
        (7,986
        )
    
    
    
        275Income tax expense
    
    $
    17,302
    
    
    $
    14,193
    
    
    $

9,078
    
    
    
    $

3,111
  Year Ended
    
    
    Year Ended
    
    
    January 1, 2006
    
    
    
    October 5, 2006 toDecember 31,
    
    
    December 31,
    
    
    to October 4,
    
    
    
    December 31,2004
    
    
    2005
    
    
    2006
    
    
    
    2006(Predecessor)
    
    
    (Predecessor)
    
    
    (Predecessor)
    
    
    
    (Successor)Computed normal tax expense
    
    $
    14,120
    
    
    $
    12,803
    
    
    $
    13,217
    
    
    
    $
    (6,027
    )Goodwill
    
    
    (42
    )
    
    
    91
    
    
    
        (42
    )
    
    
    
        4,764Foreign inflation adjustments
    
    
    536
    
    
    
    (2,332
    )
    
    
        (1,553
    )
    
    
    
        3,356State and local income taxes,
net of federal income tax
benefit
    
    
    173
    
    
    
    1,030
    
    
    
        893
    
    
    
    
        (134
    )Foreign losses not benefited
and other changes in valuation
allowance
    
    
    (3,201
    )
    
    
    (918
    )
    
    
        (1,909
    )
    
    
    
        1,872Foreign tax rate differential
    
    
    3,963
    
    
    
    (33
    )
    
    
        40
        
    
        
    
        906Foreign
dividends, including Section 965
    
    
    
    
    
    
    3,158
    
    
    
        433
    
    
    
    
        145Other  net
    
    
    1,753
    
    
    
    394
    
    
    
        (2,001
    )
    
    
    
        (1,771
    )Income tax expense
    
    $
    17,302
    
    
    $
    14,193
    
    
    $
        9,078
    
    
    
    $
        3,111
 F-31




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##### Table of Contents



CINEMARK, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
In thousands, except share and per share data
  December 31,
    
    
    
    December 31,2005
    
    
    
    2006(Predecessor)
    
    
    
    (Successor)Deferred liabilities:Theatre properties and equipment
    
    $
    33,657
    
    
    
    $
    125,950Deferred intercompany sale
    
    
    2,961
    
    
    
    
    7,207Intangible asset  contracts
    
    
    
    
    
    
    
    12,394Intangible asset  tradenames
    
    
    
    
    
    
    
    117,019Intangible asset  net favorable leases
    
    
    
    
    
    
    
    3,695Total deferred liabilities
    
    
    36,618
    
    
    
    
    266,265Deferred assets:Deferred lease expenses
    
    
    10,289
    
    
    
    
    3,937Theatre properties and equipment
    
    
    6,772
    
    
    
    
    5,915Deferred gain on sale leasebacks
    
    
    1,220
    
    
    
    
    Property under capital lease
    
    
    
    
    
    
    
    44,477Long term debt
    
    
    
    
    
    
    
    7,598Debt issue costs
    
    
    
    
    
    
    
    2,194Tax loss carryforward
    
    
    13,549
    
    
    
    
    15,535AMT and other credit carryforwards
    
    
    2,159
    
    
    
    
    2,583Other expenses, not currently deductible for tax purposes
    
    
    (4,064
    )
    
    
    
    (771
    )Total deferred tax assets
    
    
    29,925
    
    
    
    
    81,468Net long-term deferred income tax liability before valuation allowance
    
    
    6,693
    
    
    
    
    184,797Valuation allowance
    
    
    8,898
    
    
    
    
    8,862Net long-term deferred income tax liability
    
    $
    15,591
    
    
    
    $
    193,659Net deferred tax liability  Foreign
    
    $
    (2,407
    )
    
    
    $
    11,256Net deferred
tax liability  U.S.
    
    
    17,998
    
    
    
    
    182,403Total of all deferrals
    
    $
    15,591
    
    
    
    $
    193,659
      F-32




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##### Table of Contents



CINEMARK, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
In thousands, except share and per share data
 18. COMMITMENTS AND CONTINGENCIES
 Leases
 Year Ended
    
    
    Year Ended
    
    
    Period from
January 1, 2006 to
    
    
    
    Period from
October 5, 2006 toDecember 31,
    
    
    December 31,
    
    
    October 4,
    
    
    
    December 31,2004
    
    
    2005
    
    
    2006
    
    
    
    2006(Predecessor)
    
    
    (Predecessor)
    
    
    (Predecessor)
    
    
    
    (Successor)Fixed rent expense
    
    $
    104,954
    
    
    $
    110,995
    
    
    $
    89,296
    
    
    
    $
    37,815Contingent rent expense
    
    
    21,689
    
    
    
    25,598
    
    
    
    20,217
    
    
    
    
    10,431Facility lease expense
    
    
    126,643
    
    
    
    136,593
    
    
    
    109,513
    
    
    
    
    48,246Corporate office rent expense
    
    
    1,406
    
    
    
    1,432
    
    
    
    1,067
    
    
    
    
    543Total rent expense
    
    $
    128,049
    
    
    $
    138,025
    
    
    $
    110,580


    
    


    
    $
    48,789
  Operating
    
    
    CapitalLeases
    
    
    Leases2007
    
    $
    163,681
    
    
    $
    16,0622008
    
    
    168,123
    
    
    
    16,0922008
    
    
    166,593
    
    
    
    16,1472009
    
    
    162,273
    
    
    
    16,4012010
    
    
    157,785
    
    
    
    15,362Thereafter
    
    
    1,185,739
    
    
    
    154,783Total
    
    $
    2,004,194
    
    
    $
    234,847Amounts representing interest
    
    
    
    
    
    
    (119,020
    )Present value of future minimum payments
    
    
    
    
    
    $
    115,827Current portion of capital lease obligations
    
    
    
    
    
    
    3,649Capital lease obligations, less current portion
    
    
    
    
    
    $
    112,178
 Employment Agreements
 Lee Roy Mitchell
  F-33




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##### Table of Contents



CINEMARK, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
In thousands, except share and per share data
     Tandy Mitchell, Alan Stock, Robert Copple, Timothy Warner, Robert Carmony, John Lundin and Michael
Cavalier
   F-34




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##### Table of Contents



CINEMARK, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
In thousands, except share and per share data
   Retirement Savings Plan
 Letters of Credit and Collateral
 Litigation and Litigation Settlements United States v. Cinemark USA, Inc.
  F-35




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##### Table of Contents



CINEMARK, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
In thousands, except share and per share data
 19.
 SEGMENTS
 Segments
  Year Ended
    
    
    Year Ended
    
    
    Period fromJanuary 1, 2006
    
    
    Period fromOctober 5, 2006December 31,
    
    
    December 31,
    
    
    to
    
    
    to2004
    
    
    2005
    
    
    October 4, 2006
    
    
    December 31, 2006(Predecessor)
    
    
    (Predecessor)
    
    
    (Predecessor)
    
    
    (Successor)RevenuesU.S.
    
    $
    783,394
    
    
    $
    757,902
    
    
    $
    607,729
    
    
    $
    328,955International
    
    
    242,220
    
    
    
    264,314
    
    
    
    222,780
    
    
    
    63,074Eliminations
    
    
    (1,372
    )
    
    
    (1,619
    )
    
    
    (1,420
    )
    
    
    (524
    )Total revenues
    
    $
    1,024,242
    
    
    $
    1,020,597
    
    
    $
    829,089
    
    
    $
    391,505
 Year Ended
    
    
    Year Ended
    
    
    Period fromJanuary 1, 2006
    
    
    Period fromOctober 5, 2006December 31,
    
    
    December 31,
    
    
    to
    
    
    to2004
    
    
    2005
    
    
    October 4, 2006
    
    
    December 31, 2006(Predecessor)
    
    
    (Predecessor)
    
    
    (Predecessor)
    
    

(Successor)Adjusted EBITDAU.S.
    
    $
    176,737
    
    
    $
    155,987
    
    
    $
    135,300
    
    
    $
    82,545International
    
    
    52,503
    
    
    
    54,148
    
    
    
    45,212
    
    
    
    8,558Total Adjusted EBITDA
    
    $
    229,240
    
    
    $
    210,135
    
    
    $
    180,512
    
    
    $
    91,103
 December 31, 2005
    
    
    December 31, 2006(Predecessor)
    
    
    (Successor)Capital
ExpendituresU.S.
    
    $
    56,262
    
    
    $
    80,786International
    
    
    19,343
    
    
    
    26,295Total
Capital Expenditures
    
    $
    75,605
    
    
    $
    107,081
  Year Ended
    
    
    
    Year Ended
    
    
    Period fromJanuary 1, 2006
    
    
    Period from
 October 5, 2006December 31,
    
    
    
    December 31,
    
    
    to
    
    
    to2004
    
    
    
    2005
    
    
    October 4, 2006
    
    
    December 31, 2006(Predecessor)
    
    
    
    (Predecessor)
    
    
    (Predecessor)
    
    
    (Successor)Net income (loss)
    
    $
    26,625
    
    
    
    $
    22,387
    
    
    $
    28,686
    
    
    $
    (20,331
    )Add (deduct):Income taxes
    
    
    17,302
    
    
    
    
    14,193
    
    
    
    9,078
    
    
    
    3,111Interest expense (1)
    
    
    72,943
    
    
    
    
    86,867
    
    
    
    69,191
    
    
    
    42,220Other (income) expense
    
    
    8,450
    
    
    
    
    (4,581
    )
    
    
    1,147
    
    
    
    4,182Income from discontinued operations, net of taxes
    
    
    (3,584
    )
    
    
    
    
    
    
    
    
    
    
    
    Depreciation and amortization
    
    
    67,051
    
    
    
    
    76,229
    
    
    
    59,913
    
    
    
    34,281Amortization of net favorable leases
    
    
    
    
    
    
    
    232
    
    
    
    130
    
    
    
    667Impairment of long-lived assets
    
    
    1,667
    
    
    
    
    9,672
    
    
    
    5,741
    
    
    
    23,337Loss on sale of assets and other
    
    
    4,851
    
    
    
    
    2,625
    
    
    
    2,938
    
    
    
    2,345Deferred lease expenses
    
    
    1,795
    
    
    
    
    2,511
    
    
    
    1,540
    
    
    
    575Stock option compensation and change of control expenses
related to the MDP Merger
    
    
    31,995
    
    
    
    
    
    
    
    
    
    
    
    
    Amortized compensation-stock options
    
    
    145
    
    
    
    
    
    
    
    
    2,148
    
    
    
    716Adjusted EBITDA
    
    $
    229,240
    
    
    
    $
    210,135
    
    
    $
    180,512
    
    
    $
    91,103
 
  F-36




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##### Table of Contents



CINEMARK, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
In thousands, except share and per share data
 Financial Information About Geographic Areas
  Year Ended
    
    
    Year Ended
    
    
    Period from
    
    
    
    Period fromDecember 31,
    
    
    December 31,
    
    
    January 1, 2006 to
    
    
    
    October 5, 2006 to2004
    
    
    2005
    
    
    October 4, 2006
    
    
    
    December 31, 2006(Predecessor)
    
    
    (Predecessor)
    
    
    (Predecessor)
    
    
    
    (Successor)Revenues (1)U.S. and Canada
    
    $
    783,394
    
    
    $
    757,902
    
    
    $
    607,729
    
    
    
    $
    328,955Mexico
    
    
    76,148
    
    
    
    74,919
    
    
    
    55,704
    
    
    
    
    15,885Brazil
    
    
    90,872
    
    
    
    112,182
    
    
    
    98,950
    
    
    
    
    29,605Other foreign countries
    
    
    75,200
    
    
    
    77,213
    
    
    
    68,126
    
    
    
    
    17,584Eliminations
    
    
    (1,372
    )
    
    
    (1,619
    )
    
    
    (1,420
    )
    
    
    
    (524
    )Total
    
    $
    1,024,242
    
    
    $
    1,020,597
    
    
    $
    829,089
    
    
    
    $
    391,505
 December 31, 2005
    
    
    
    December 31, 2006(Predecessor)
    
    
    
    (Successor)Theatres properties and equipment, netU.S. and Canada
    
    $
    634,938
    
    
    
    $
    1,169,456Mexico
    
    
    55,366
    
    
    
    
    51,272Brazil
    
    
    52,371
    
    
    
    
    55,749Other foreign countries
    
    
    47,891
    
    
    
    
    48,095Total
    
    $
    790,566
    
    
    
    $
    1,324,572
 
 (1)
    
    Revenues for all periods presented do not include results of the two United Kingdom theatres or the eleven Interstate
theatres, which were sold during 2004, as the results of operations for these theatres are included as discontinuted operations. 20. OTHER RELATED PARTY TRANSACTIONS
      F-37




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##### Table of Contents



21. VALUATION AND QUALIFYING ACCOUNTS
  Valuation Allowancefor DeferredTax AssetsPredecessor balance at December 31, 2003
    
    $
    13,017Additions
    
    
    999Deductions
    
    
    (4,200
    )Predecessor balance at December 31, 2004
    
    $
    9,816Additions
    
    
    1,464Deductions
    
    
    (2,382
    )Predecessor balance at December 31, 2005
    
    $
    8,898Additions
    
    
    3,000Deductions
    
    
    (4,909
    )Predecessor
balance at October 4, 2006
    
    $
    6,989Additions
    
    
    1,932Deductions
    
    
    (59
    )Successor balance at December 31, 2006
    
    $
    8,862
 22. SUBSEQUENT EVENT  NATIONAL CINEMEDIA
      F-38




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##### Table of Contents



CINEMARK, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
In thousands, except share and per share data
 23.
SUBSEQUENT EVENT- DIGITAL CINEMA IMPLEMENTATION PARTNERS
  24. SUBSEQUENT EVENT- LONG-TERM DEBT
    25.
SUBSEQUENT EVENT- INITIAL PUBLIC OFFERING
  F-39




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##### Table of Contents



CINEMARK,
INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATING BALANCE SHEETS
AS OF DECEMBER 31, 2006 (SUCCESSOR)
(In thousands, unaudited)
 Restricted
    
    
    UnrestrictedGroup
    
    
    Group
    
    
    Eliminations
    
    
    ConsolidatedASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    147,091
    
    
    $
    8
    
    
    $
    
    
    
    $
    147,099Other current assets
    
    
    59,253
    
    
    
    1
    
    
    
    
    
    
    
    59,254Total current assets
    
    
    206,344
    
    
    
    9
    
    
    
    
    
    
    
    206,353THEATRE PROPERTIES AND EQUIPMENT  net
    
    
    1,324,572
    
    
    
    
    
    
    
    
    
    
    
    1,324,572OTHER ASSETS
    
    
    1,643,493
    
    
    
    5,353
    
    
    
    (8,225
    )
    
    
    1,640,621TOTAL ASSETS
    
    $
    3,174,409
    
    
    $
    5,362
    
    
    $
    (8,225
    )
    
    $
    3,171,546LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIESCurrent portion of long-term debt
    
    $
    14,259
    
    
    $
    
    
    
    $
    
    
    
    $
    14,259Current
portion of capital lease obligations
    
    
    3,649
    
    
    
    
    
    
    
    
    
    
    
    3,649Accounts payable and accrued expenses
    
    
    212,914
    
    
    
    
    
    
    
    
    
    
    
    212,914Total current liabilities
    
    
    230,822
    
    
    
    
    
    
    
    
    
    
    
    230,822LONG-TERM LIABILITIESLong-term debt, less current portion
    
    
    1,897,394
    
    
    
    
    
    
    
    
    
    
    
    1,897,394Other long-term liabilities
    
    
    337,455
    
    
    
    
    
    
    
    
    
    
    
    337,455Total long-term liabilities
    
    
    2,234,849
    
    
    
    
    
    
    
    
    
    
    
    2,234,849COMMITMENTS AND CONTINGENCIES
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    MINORITY INTERESTS IN SUBSIDIARIES
    
    
    16,613
    
    
    
    
    
    
    
    
    
    
    
    16,613STOCKHOLDERS EQUITY
    
    
    692,125
    
    
    
    5,362
    
    
    
    (8,225
    )
    
    
    689,262TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
    
    $
    3,174,409
    
    
    $
    5,362
    
    
    $
    (8,225
    )
    
    $
    3,171,546
  S-1




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##### Table of Contents



CINEMARK, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
FOR THE PERIOD FROM JANUARY 1, 2006 TO OCTOBER 4, 2006 (PREDECESSOR)
(In thousands, unaudited)
 Restricted
    
    
    UnrestrictedGroup
    
    
    Group
    
    
    Eliminations
    
    
    ConsolidatedREVENUES
    
    $
    829,089
    
    
    $
    
    
    
    $
    
    
    
    $
    829,089COST OF
OPERATIONSTheatre operating costs
    
    
    606,307
    
    
    
    
    
    
    
    
    
    
    
    606,307General and administrative expenses
    
    
    45,958
    
    
    
    
    
    
    
    
    
    
    
    45,958Depreciation and amortization
    
    
    60,043
    
    
    
    
    
    
    
    
    
    
    
    60,043Impairment of long-lived assets
    
    
    5,741
    
    
    
    
    
    
    
    
    
    
    
    5,741Loss on sale of assets and other
    
    
    2,938
    
    
    
    
    
    
    
    
    
    
    
    2,938Total cost
of operations
    
    
    720,987
    
    
    
    
    
    
    
    
    
    
    
    720,987OPERATING INCOME
    
    
    108,102
    
    
    
    
    
    
    
    
    
    
    
    108,102OTHER EXPENSE
    
    
    (67,291
    )
    
    
    (1,880
    )
    
    
    (1,167
    )
    
    
    (70,338
    )INCOME (LOSS) BEFORE INCOME TAXES
    
    
    40,811
    
    
    
    (1,880
    )
    
    
    (1,167
    )
    
    
    37,764Income taxes
    
    
    9,078
    
    
    
    
    
    
    
    
    
    
    
    9,078NET INCOME (LOSS)
    
    $
    31,733
    
    
    $
    (1,880
    )
    
    $
    (1,167
    )
    
    $
    28,686
  S-2




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##### Table of Contents



CINEMARK, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
FOR THE PERIOD FROM OCTOBER 5, 2006 TO DECEMBER 31, 2006 (SUCCESSOR)
(In thousands, unaudited)
 Restricted
    
    
    UnrestrictedGroup
    
    
    Group
    
    
    Eliminations
    
    
    ConsolidatedREVENUES
    
    $
    391,505
    
    
    $
    
    
    
    $
    
    
    
    $
    391,505COST OF
OPERATIONSTheatre
operating costs
    
    
    279,883
    
    
    
    
    
    
    
    
    
    
    
    279,883General and administrative expenses
    
    
    21,810
    
    
    
    
    
    
    
    
    
    
    
    21,810Depreciation and amortization
    
    
    34,948
    
    
    
    
    
    
    
    
    
    
    
    34,948Impairment of long-lived assets
    
    
    23,337
    
    
    
    
    
    
    
    
    
    
    
    23,337Loss on sale of assets and other
    
    
    2,345
    
    
    
    
    
    
    
    
    
    
    
    2,345Total cost
of operations
    
    
    362,323
    
    
    
    
    
    
    
    
    
    
    
    362,323OPERATING INCOME
    
    
    29,182
    
    
    
    
    
    
    
    
    
    
    
    29,182OTHER EXPENSE
    
    
    (46,586
    )
    
    
    184
    
    
    
    
    
    
    
    (46,402
    )INCOME (LOSS) BEFORE INCOME TAXES
    
    
    (17,404
    )
    
    
    184
    
    
    
    
    
    
    
    (17,220
    )Income taxes
    
    
    3,111
    
    
    
    
    
    
    
    
    
    
    
    3,111NET INCOME (LOSS)
    
    $
    (20,515
    )
    
    $
    184
    
    
    $
    
    
    
    $
    (20,331
    )
  S-3




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##### Table of Contents



CINEMARK, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
FOR THE PERIOD FROM JANUARY 1, 2006 TO OCTOBER 4, 2006 (PREDECESSOR)
(In thousands, unaudited)
 Restricted
    
    
    UnrestrictedGroup
    
    
    Group
    
    
    Eliminations
    
    
    ConsolidatedOPERATING ACTIVITIESNet income (loss)
    
    $
    31,733
    
    
    $
    (1,880
    )
    
    $
    (1,167
    )
    
    $
    28,686Noncash items in net income (loss)
    
    
    98,866
    
    
    
    1,880
    
    
    
    
    
    
    
    100,746Changes in assets and liabilities
    
    
    (54,659
    )
    
    
    271
    
    
    
    
    
    
    
    (54,388
    )Net cash provided by operating activities
    
    
    75,940
    
    
    
    271
    
    
    
    (1,167
    )
    
    
    75,044INVESTING ACTIVITIESAdditions to theatre properties and equipment
    
    
    (77,902
    )
    
    
    
    
    
    
    
    
    
    
    (77,902
    )Proceeds from sale of theatre properties and equipment
    
    
    1,236
    
    
    
    
    
    
    
    
    
    
    
    1,236Net transactions with affiliates
    
    
    (633
    )
    
    
    271
    
    
    
    633
    
    
    
    271Net cash provided by (used for) investing activities
    
    
    (77,299
    )
    
    
    271
    
    
    
    633
    
    
    
    (76,395
    )FINANCING ACTIVITIESCapital contribution from parent
    
    
    
    
    
    
    633
    
    
    
    (633
    )
    
    
    Retirement of senior discount notes
    
    
    (24,950
    )
    
    
    
    
    
    
    
    
    
    
    (24,950
    )Retirement of senior subordinated notes
    
    
    (10,000
    )
    
    
    
    
    
    
    
    
    
    
    (10,000
    )Proceeds from long-term debt
    
    
    2,273
    
    
    
    
    
    
    
    
    
    
    
    2,273Repayments of long-term debt
    
    
    (5,009
    )
    
    
    
    
    
    
    
    
    
    
    (5,009
    )Other
    
    
    (1,226
    )
    
    
    (1,167
    )
    
    
    1,167
    
    
    
    (1,226
    )Net cash used for financing activities
    
    
    (38,912
    )
    
    
    (534
    )
    
    
    534
    
    
    
    (38,912
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    268
    
    
    
    
    
    
    
    
    
    
    
    268INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
    
    
    (40,003
    )
    
    
    8
    
    
    
    
    
    
    
    (39,995
    )CASH AND CASH EQUIVALENTS:Beginning of period
    
    
    182,199
    
    
    
    
    
    
    
    
    
    
    
    182,199End of period
    
    $
    142,196
    
    
    $
    8
    
    
    $
    
    
    
    $
    142,204
  S-4




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##### Table of Contents



CINEMARK, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
FOR THE PERIOD FROM OCTOBER 5, 2006 TO DECEMBER 31, 2006 (SUCCESSOR)
(In thousands, unaudited)
 Restricted
    
    
    UnrestrictedGroup
    
    
    Group
    
    
    Eliminations
    
    
    ConsolidatedOPERATING ACTIVITIESNet income (loss)
    
    $
    (20,515
    )
    
    $
    184
    
    
    $
    
    
    
    $
    (20,331
    )Noncash items in net income (loss)
    
    
    79,544
    
    
    
    (184
    )
    
    
    
    
    
    
    79,360Changes in assets and liabilities
    
    
    21,624
    
    
    
    
    
    
    
    
    
    
    
    21,624Net cash provided by operating activities
    
    
    80,653
    
    
    
    
    
    
    
    
    
    
    
    80,653INVESTING ACTIVITIESAdditions to theatre properties and equipment
    
    
    (29,179
    )
    
    
    
    
    
    
    
    
    
    
    (29,179
    )Proceeds from sale of theatre properties and equipment
    
    
    5,210
    
    
    
    
    
    
    
    
    
    
    
    5,210Acquisition of Century Theatres, Inc., net of cash acquired
    
    
    (531,383
    )
    
    
    
    
    
    
    
    
    
    
    (531,383
    )Net cash
used for investing activities
    
    
    (555,352
    )
    
    
    
    
    
    
    
    
    
    
    (555,352
    )FINANCING ACTIVITIESProceeds from new senior secured credit facility
    
    
    1,120,000
    
    
    
    
    
    
    
    
    
    
    
    1,120,000Proceeds from other long-term debt
    
    
    57
    
    
    
    
    
    
    
    
    
    
    
    57Payoff of long-term debt assumed in Century acquisition
    
    
    (360,000
    )
    
    
    
    
    
    
    
    
    
    
    (360,000
    )Payoff of former senior secured credit facility
    
    
    (253,500
    )
    
    
    
    
    
    
    
    
    
    
    (253,500
    )Repayments of other long-term debt
    
    
    (3,886
    )
    
    
    
    
    
    
    
    
    
    
    (3,886
    )Payments on capital leases
    
    
    (839
    )
    
    
    
    
    
    
    
    
    
    
    (839
    )Debt issue costs
    
    
    (22,926
    )
    
    
    
    
    
    
    
    
    
    
    (22,926
    )Other
    
    
    (52
    )
    
    
    
    
    
    
    
    
    
    
    (52
    )Net cash
provided by financing activities
    
    
    478,854
    
    
    
    
    
    
    
    
    
    
    
    478,854Effect of exchange rate changes on cash and cash equivalents
    
    
    740
    
    
    
    
    
    
    
    
    
    
    
    740INCREASE IN CASH AND CASH EQUIVALENTS
    
    
    4,895
    
    
    
    
    
    
    
    
    
    
    
    4,895CASH AND CASH EQUIVALENTS:Beginning of period
    
    
    142,196
    
    
    
    8
    
    
    
    
    
    
    
    142,204End of period
    
    $
    147,091
    
    
    $
    8
    
    
    $
    
    
    
    $
    147,099
  S-5




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##### Table of Contents



EXHIBITS
 TO
 FORM 10-K
 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 FOR
 CINEMARK, INC.
 FOR FISCAL YEAR ENDED
DECEMBER 31, 2006




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##### Table of Contents



EXHIBIT INDEX
 Number
    
    Exhibit Title2.1
    
    Stock Contribution and Exchange Agreement, dated as of August 7, 2006, by and
between Cinemark Holdings, Inc., Cinemark, Inc., Syufy Enterprises, LP and
Century Theatres Holdings, LLC (incorporated by reference to Exhibit 10.2 to
Cinemark USA, Inc.s Current Report on Form 8-K, File
No. 033-47040, filed August 11, 2006).2.2
    
    Contribution and Exchange Agreement, dated as of August 7, 2006, by and among
Cinemark Holdings, Inc. and Lee Roy Mitchell, The Mitchell Special Trust, Alan W.
Stock, Timothy Warner, Robert Copple, Michael Cavalier, Northwestern University,
John Madigan, Quadrangle Select Partners LP, Quadrangle Capital Partners A LP,
Madison Dearborn Capital Partners IV, L.P., K&E Investment Partners, LLC 
2004-B-DIF, Piola Investments Ltd., Quadrangle (Cinemark) Capital Partners LP and
Quadrangle Capital Partners LP (incorporated by reference to
Exhibit 10.3 to Cinemark USA, Inc.s
Current Report on Form 8-K, File No. 033-47040, filed August 11, 2006).2.3
    
    Agreement and Plan of Merger dated March 12, 2004, by and between Cinemark, Inc.
and Popcorn Merger Corp. (incorporated by reference to Exhibit 2.1 to Cinemark,
Inc.s Registration Statement on Form S-4, File
No. 333-116292, filed June 8,
2004).2.4
    
    Stock Purchase Agreement dated as of March 12, 2004 by and between Cinemark, Inc.
and Madison Dearborn Capital Partners IV, L.P. (incorporated by reference to
Exhibit 2.2 to Cinemark, Inc.s Registration Statement on
Form S-4, File No.
333-116292, filed June 8, 2004).3.1
    
    Second Amended and Restated Certificate of Incorporation of Cinemark, Inc. filed
with the Delaware Secretary of State on April 2, 2004 (incorporated by reference
to Exhibit 3.1 to Cinemark, Inc.s Registration Statement
on Form S-4, File No.
333-116292, filed June 8, 2004).3.2
    
    Amended and Restated Bylaws of Cinemark, Inc. (incorporated by reference to
Exhibit 3.2 to Cinemark, Inc.s Registration Statement on
Form S-4, File No.
333-116292, filed June 8, 2004).4.1
    
    Exchange and Registration Rights Agreement dated March 31, 2004 among Cinemark,
Inc., certain subsidiary guarantors party thereto and the initial purchasers
named therein (incorporated by reference to Exhibit 4.1 to Cinemark, Inc.s
Registration Statement on Form S-4, File No. 333-116292, filed June 8, 2004).4.2(a)
    
    Indenture, dated as of March 31, 2004, between Cinemark, Inc. and The Bank of New
York Trust Company, N.A. governing the 9 3/4% senior discount notes issued
thereunder (incorporated by reference to Exhibit 4.2(a) to Cinemark, Inc.s
Registration Statement on Form S-4, File No. 333-116292, filed June 8, 2004).4.2(b)
    
    Form of 9 3/4% senior discount notes (contained in the indenture listed as
Exhibit 4.2(a) above) (incorporated by reference to Exhibit 4.2(b) to Cinemark,
Inc.s Registration Statement on Form S-4, File No. 333-116292, filed June 8,
2004).4.3(a)
    
    Indenture, dated as of February 11, 2003, between Cinemark USA, Inc. and The Bank
of New York Trust Company of Florida, N.A. governing the 9% senior subordinated
notes issued thereunder (incorporated by reference to Exhibit 10.2(b) to Cinemark
USA, Inc.s Annual Report on Form 10-K, File No. 033-47040, filed March 19, 2003).4.3(b)
    
    First Supplemental Indenture, dated as of May 7, 2003, between Cinemark USA,
Inc., the subsidiary guarantors party thereto and The Bank of New York Trust
Company of Florida, N.A. (incorporated by reference from Exhibit 4.2(i) to
Cinemark USA, Inc.s Registration Statement on Form S-4/A,
File No. 333-104940,
filed May 28, 2003).4.3(c)
    
    Second Supplemental Indenture dated as of November 11, 2004, between Cinemark
USA, Inc., the subsidiary guarantors party thereto and The Bank of New York Trust
Company of Florida, N.A. (incorporated by reference to Exhibit 4.2(c) to Cinemark
USA, Inc.s Annual Report on Form 10-K, File No. 033-047040, filed March 28,
2005).
 E-1




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##### Table of Contents



Number
    
    Exhibit Title4.3(d)
    
    Third Supplemental Indenture, dated as of October 5, 2006, among Cinemark USA,
Inc., the subsidiaries of Cinemark USA, Inc. named therein, and The Bank of New
York Trust Company, N.A., as trustee (incorporated by reference to Exhibit 10.7
to Cinemark USA, Inc.s Current Report on Form 8-K, File
No. 033-47040, filed  October 12, 2006).4.3(e)
    
    Form of 9% Senior Subordinated Note, Due 2013 (contained in the Indenture listed
as Exhibit 4.3(a) above) (incorporated by reference to Exhibit 10.2(b) to
Cinemark USA, Inc.s Annual Report on Form 10-K, File No.
033-47040, filed March 19,
2003).10.1(a)
    
    Management Agreement, dated December 10, 1993, between Laredo Theatre, Ltd. and
Cinemark USA, Inc. (incorporated by reference to Exhibit 10.14(b) to Cinemark
USA, Inc.s Annual Report on Form 10-K, File No. 033-47040, filed March 31,
1994).10.1(b)
    
    First Amendment to Management Agreement of Laredo Theatre, Ltd., effective as of
December 10, 2003, between CNMK Texas Properties, Ltd. (successor in interest to
Cinemark USA, Inc.) and Laredo Theatre Ltd. (incorporated by reference to Exhibit
10.1(d) to Cinemark, Inc.s Registration Statement on Form S-4, File No.
333-116292, filed June 8, 2004).10.2
    
    Amended and Restated Agreement to Participate in Profits and Losses, dated as of
March 12, 2004, between Cinemark USA, Inc. and Alan W. Stock (incorporated by
reference to Exhibit 10.2 to Cinemark USA, Inc.s Quarterly Report on Form 10-Q,
File No. 033-47040, filed May 14, 2004).10.3
    
    License Agreement, dated December 10, 1993, between Laredo Joint Venture and
Cinemark USA, Inc. (incorporated by reference to Exhibit 10.14(c) to Cinemark
USA, Inc.s Annual Report on Form 10-K, File No. 033-47040, filed March 31,
1994).10.4(a)
    
    Tax Sharing Agreement, between Cinemark USA, Inc. and Cinemark International,
L.L.C. (f/k/a Cinemark II, Inc.), dated as of June 10, 1992 (incorporated by
reference to Exhibit 10.22 to Cinemark USA, Inc.s Annual Report on Form 10-K,
File No. 033-47040, filed March 31, 1993).10.4(b)
    
    Tax Sharing Agreement, dated as of July 28, 1993, between Cinemark USA, Inc. and
Cinemark Mexico (USA) (incorporated by reference to Exhibit 10.10 to Cinemark
Mexico (USA)s Registration Statement on Form S-4, File No. 033-72114, filed on
November 24, 1993).+10.5(a)
    
    Employment Agreement, dated as of March 12, 2004, between Cinemark, Inc. and Lee
Roy Mitchell (incorporated by reference to Exhibit 10.14(a) to Cinemark USA,
Inc.s Quarterly Report on Form 10-Q, File No. 033-47040, filed May 14, 2004).+10.5(b)
    
    First Amendment to Employment Agreement, effective as of December 12, 2006, by
and between Cinemark, Inc. and Lee Roy Mitchell (incorporated by reference to
Exhibit 10.1 to Cinemark, Inc.s Current Report on Form 8-K, File No. 001-31372,
filed December 18, 2006).+10.5(c)
    
    Employment Agreement, dated as of March 12, 2004, between Cinemark, Inc. and Alan
Stock (incorporated by reference to Exhibit 10.14(b) to Cinemark USA, Inc.s
Quarterly Report on Form 10-Q, File No. 033-47040, filed May 14, 2004).+10.5(d)
    
    First Amendment to Employment Agreement, effective as of December 12, 2006, by
and between Cinemark, Inc. and Alan W. Stock (incorporated by reference to
Exhibit 10.2 to Cinemark, Inc.s Current Report on Form 8-K, File No. 001-31372,
filed December 18, 2006).+10.5(e)
    
    Employment Agreement, dated as of
March 12, 2004, between Cinemark, Inc. and Timothy
Warner (incorporated by reference to Exhibit 10.14(c) to Cinemark USA, Inc.s
Quarterly Report on Form 10-Q, File No. 033-47040, filed May 14, 2004).+10.5(f)
    
    First Amendment to Employment Agreement, effective as of December 12, 2006, by
and between Cinemark, Inc. and Timothy Warner (incorporated by reference to
Exhibit 10.3 to Cinemark, Inc.s Current Report on Form 8-K, File No. 001-31372,
filed December 18, 2006).+10.5(g)
    
    Employment Agreement, dated as of March 12, 2004, between Cinemark, Inc. and
Robert Copple (incorporated by reference to Exhibit 10.14(d) to Cinemark USA,
Inc.s Quarterly Report on Form 10-Q, File No. 033-47040, filed May 14, 2004).+10.5(h)
    
    Employment Agreement, dated as of March 12, 2004, between Cinemark, Inc. and Rob
Carmony (incorporated by reference to Exhibit 10.14(e) to Cinemark USA, Inc.s
Quarterly Report on Form 10-Q, File No. 033-47040, filed May 14, 2004).
 E-2




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##### Table of Contents



Number
    
    Exhibit Title+10.5(i)
    
    Employment Agreement, dated as of March 12, 2004, between Cinemark, Inc. and
Tandy Mitchell (incorporated by reference to Exhibit 10.14(f) to Cinemark USA,
Inc.s Quarterly Report on Form 10-Q, File No. 033-47040, filed May 14, 2004).+10.5(j)
    
    First Amendment to Employment Agreement, dated January 25, 2007, between
Cinemark, Inc. and Robert Copple (incorporated by reference to Exhibit 10.5(j) to
Cinemark Holdings, Inc.s Registration Statement on Form S-1, File No 333-140390,
filed February 1, 2007).10.6(a)
    
    Credit Agreement, dated as of October 5, 2006, among Cinemark Holdings, Inc.,
Cinemark, Inc., CNMK Holding, Inc., Cinemark USA, Inc., the several banks and
other financial institutions or entities from time to time parties to the
Agreement, Lehman Brothers Inc. and Morgan Stanley Senior Funding, Inc., as joint
lead arrangers and joint bookrunners, Morgan Stanley Senior Funding, Inc., as
syndication agent, BNP Paribas and General Electric Capital Corporation as
co-documentation agents, and Lehman Commercial Paper Inc., as administrative
agent (incorporated by reference to Exhibit 10.5 to Current Report on Form 8-K,
File No. 033-47040, filed by Cinemark USA, Inc. with the SEC on October 12,
2006).10.6(b)
    
    Amendment to Credit Agreement
effective as of March 14, 2007 among Cinemark Holdings, Inc.,
Cinemark, Inc., CNMK Holding, Inc., Cinemark USA, Inc., the several banks and other financial
institutions or entities from time to time parties to the Agreement, Lehman Brothers Inc. and
Morgan Stanley Senior Funding, Inc., as joint lead arrangers and joint bookrunners, Morgan
Stanley Senior Funding, Inc., as syndication agent, BNP Paribas and General Electric Capital
Corporation as co-documentation agents, and Lehman Commercial Paper Inc., as administrative
agent (incorporated by reference to Exhibit 10.1 to Cinemark
Inc.s Current Report on Form 8-K, File No. 001-31372,
filed on March 20, 2007).10.6(c)
    
    Guarantee and Collateral Agreement, dated as of October 5, 2006, among Cinemark
Holdings, Inc., Cinemark, Inc., CNMK Holding, Inc., Cinemark USA, Inc. and each
subsidiary guarantor party thereto (incorporated by reference to
Exhibit 10.6 to Cinemark USA, Inc.s
Current Report on Form 8-K, File No. 033-47040, filed October 12, 2006).+10.7(a)
    
    Cinemark Holdings, Inc. 2006 Long Term Incentive Plan, dated December 22, 2006
(incorporated by reference to Exhibit 10.7(a) to Cinemark Holdings, Inc.s
Registration Statement on Form S-1, File No 333-140390, filed February 1, 2007).+10.7(b)
    
    Form of Stock Option Agreement (incorporated by reference to Exhibit 10.7(b) to
Cinemark Holdings, Inc.s Registration Statement on Form S-1, File No 333-140390,
filed February 1, 2007).10.8
    
    Exhibitor Services Agreement, dated
as of February 13, 2007, by
and between Cinemark Media, Inc. and National CineMedia, LLC
(incorporated by reference to Exhibit 10.8 to
Cinemark Holdings, Inc.s Amendment No. 1 to Registration Statement on Form S-1, File No 333-140390,
filed March 16, 2007).10.9
    
    Third Amended and Restated Limited Liability Company Operating Agreement, dated as of
February 12, 2007, by and between Cinemark Media, Inc., American Multi-Cinema, Inc., Regal
CineMedia, LLC and National Cine Media, Inc. (incorporated by
reference to Exhibit 10.9 to
Cinemark Holdings, Inc.s Amendment No. 1 to Registration Statement on Form S-1, File No 333-140390,
filed March 16, 2007).10.10
    
    Fourth Supplemental Indenture dated
as of March 20, 2007, between Cinemark USA, Inc., the subsidiary
guarantors party thereto and the  Bank of New York Trust Company,
N.A. (incorporated by
reference to Exhibit 4.1 to
Cinemark USA, Inc.s  Current Report on Form 8-K, File No.
033-47040,
filed March 26, 2007).*12
    
    Calculation of Earnings to Fixed Charges*21
    
    Subsidiaries of the registrant.*24
    
    Power of Attorney (included on the
signature page of this Form 10-K).*31.1
    
    Certification of Chief Executive Officer of Cinemark, Inc., pursuant to Rule
13a-14(a) promulgated under the Securities Exchange Act of 1934, as amended.*31.2
    
    Certification of Chief Financial Officer of Cinemark, Inc. pursuant to Rule
13a-14(a) promulgated under the Securities Exchange Act of 1934, as amended.*32.1
    
    Certification of Chief Executive Officer of Cinemark, Inc. pursuant to Rule
13a-14(b) promulgated under the Securities Exchange Act of 1934, as amended, and
Section 1350 of Chapter 63 of Title 18 of the United States Code.*32.2
    
    Certification of Chief Financial Officer of Cinemark, Inc. pursuant to Rule
13a-14(b) promulgated under the Securities Exchange Act of 1934, as amended, and
Section 1350 of Chapter 63 of Title 18 of the United States Code.
 
 *
    
    Filed herewith.+
    
    Management contract, compensatory plan or arrangement. E-3